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Jackson v. Hotchalk, Inc.

United States District Court, N.D. California

July 24, 2015

HOTCHALK, INC., Defendant.


NATHANAEL M. COUSINS, Magistrate Judge.

Federal courts are courts of limited jurisdiction and are presumptively without jurisdiction. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). In fact, before examining the merits of a case, a court may dismiss an action sua sponte for lack of subject matter jurisdiction. Fiedler v. Clark, 714 F.2d 77, 78-79 (9th Cir. 1983). Here, while plaintiffs' complaint asserts that jurisdiction is proper under 28 U.S.C. § 1332, there appears to be no basis for this Court's jurisdiction. The Court, therefore, orders plaintiffs Sheila Jackson and Alysia Silvers to show cause why this case should not be dismissed for lack of subject matter jurisdiction.

The Class Action Fairness Act gives federal district courts original jurisdiction over class actions in which the class members number at least 100, at least one plaintiff is diverse in citizenship from any defendant, and the aggregate amount in controversy exceeds $5, 000, 000, exclusive of interest and costs. 28 U.S.C. § 1332(d). Notably, CAFA "abandons the complete diversity rule for covered class actions." Abrego v. Dow Chem. Co., 443 F.3d 676, 680 (9th Cir. 2006). As a result, "minimal diversity" is all that CAFA requires; this exists if "any member of a class of plaintiffs is a citizen of a State different from any defendant." 28 U.S.C. § 1332(d).

Still, it remains that "[a] party asserting diversity jurisdiction bears the burden of proof." Lew v. Moss, 797 F.2d 747, 749 (9th Cir. 1986). Moreover, pleading minimal diversity under § 1332 requires the asserting party to specify the state citizenship of the diverse parties-alleging a party's residency in another state is not enough. See Kanter v. Warner-Lambert Co., 265 F.3d 853, 857-58 (holding that because "the diversity jurisdiction statute, 28 U.S.C. § 1332, speaks of citizenship, not of residency" the defendant's failure to specify state citizenship was "fatal to defendants' assertion of diversity jurisdiction"). Residency is inadequate because "a person residing in a given state is not necessarily domiciled there." Id. (to determine a person's citizenship, courts look to a person's domicile, which is "her permanent home, where she resides with the intention to remain or to which she intends to return").

Here, plaintiffs' complaint does not sufficiently allege citizenship to satisfy the requirement of minimal diversity under CAFA. Although plaintiffs allege that HotChalk is "a Delaware corporation with its principal place of business" in California, they do not specify both plaintiffs' state citizenship. Dkt. No. 1 at ¶ 5. Indeed, while the complaint asserts, "Silvers is a citizen of the state of California, " it fails to assert whether Jackson is a citizen of a state different from HotChalk's state citizenship. Dkt. No. 1 at ¶¶ 2 ("Plaintiff Sheila Jackson is a resident of Tucson, Arizona."), 10 (asserting Silvers' citizenship). Silvers herself does not satisfy the minimal diversity requirements because she has the same state citizenship as HotChalk: California. See 28 U.S.C. § 1332(c)(1) (a corporation is deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business). Without knowledge regarding the state citizenship of Jackson, the Court cannot determine whether plaintiffs meet the minimal diversity requirement under CAFA.

Accordingly, the Court orders plaintiffs to show cause within 14 days, why the Court should not dismiss this case for lack of subject matter jurisdiction. Alternatively, plaintiffs may file an amended complaint within 14 days that cures the deficiencies discussed above. In the meantime, HotChalk's motion to dismiss plaintiffs' complaint remains under submission. Dkt. No. 19.


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