United States District Court, N.D. California
ORDER DIRECTING DEFENDANT FLUENT, LLC TO SHOW CAUSE
WHY ACTION SHOULD NOT BE REMANDED; CONTINUING HEARING ON
SAUPHTWARE, INC.'S MOTION TO DISMISS
M. CHESNEY United States District Judge
the Court is defendant Fluent, LLC's ("Fluent")
Notice of Removal, filed March 22, 2017, by which said
defendant has removed the above-titled action on the asserted
basis of diversity jurisdiction. Having read and considered
the Notice, the Court, for the reasons set forth below, will
direct Fluent to show cause why said action should not be
remanded for lack of subject matter jurisdiction.
district court has diversity jurisdiction where "the
matter in controversy exceeds the sum or value of $75, 000,
exclusive of interest and costs" and the parties are
diverse in citizenship. See 28 U.S.C. §
1332(a). Diversity of citizenship exists where, inter
alia, the matter is between "citizens of different
States, " see 28 U.S.C. § 1332(a)(1), or
"citizens of different States and in which citizens or
subjects of a foreign state are additional parties, "
see 28 U.S.C. § 1332(a)(3).
in the operative complaint, the First Amended Complaint
("FAC"), plaintiffs allege against thirteen named
defendants a single cause of action under § 17529.5 of
the California Business & Professions Code, as to which
claim plaintiffs seek damages of "at least $1, 265,
000." (See FAC, Prayer for Relief, ¶ B.)
Plaintiffs also allege that each plaintiff is a citizen of
California. (See Compl. ¶¶ 8-17.)
Consequently, as the amount in controversy exceeds $75, 000,
removal is proper if none of the thirteen defendants is a
citizen of California.
support of its assertion that the parties are diverse, Fluent
states that defendant Andres Mary, whom plaintiffs allege is
a citizen of California, is in fact a citizen of Argentina,
and that "[a]ll of the defendants, other than Andres
Mary, are alleged to be non-California citizens."
(See Notice of Removal ¶ 6.) As to eleven of
the twelve other defendants, however, the FAC does not allege
sufficient facts to show those parties are citizens of states
other than California.
as to Fluent itself, the FAC alleges said defendant is
"a Delaware corporation with its principal place of
business in New York." (See Compl. ¶ 19.)
As a corporation is a citizen of the state in which it is
incorporated and the state in which it maintains its
principal place of business, see 28 U.S.C. §
1332(c)(1), said allegation, if true, would suffice to
establish Fluent is diverse in citizenship from plaintiffs.
In its Notice of Removal, however, Fluent states it is an
"LLC, " i.e., a limited liability company.
(See Notice of Removal ¶ 3.) An LLC "is a
citizen of every state of which its owners/members are
citizens." See Johnson v. Columbia Properties
Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006).
Consequently, a district court cannot determine the
citizenship of an LLC in the absence of a showing as to the
identify and citizenship of each of its members. See
id. Further, "because a member of [an LLC] may
itself have multiple members - and thus may itself have
multiple citizenships - the federal court needs to know the
citizenship of each 'sub-member' as well."
See V & M Star, LP v. Centimark Corp., 596 F.3d
354, 356 (6th Cir. 2010) (internal quotation and citation
omitted). Here, the FAC does not identify the members of
Fluent, let alone each member's state(s) of citizenship,
and, as to any member that is not an individual or
corporation, the FAC does not identify each sub-member's
state(s) of citizenship. Consequently, Fluent's reliance
on the FAC to establish its citizenship is unavailing.
as to the defendants identified in the FAC as LLCs,
specifically, Reward Zone USA, LLC, RewardsFlow, LLC, and
American Prize Center, LLC, the sole allegation therein is
that each is a "Delaware limited liability
company." (See Compl. ¶¶ 20-22.) The
FAC does not identify the members/sub-members of any of these
three LLCS, let alone each member/sub-member's state(s)
of citizenship. Consequently, Fluent's reliance on the
FAC to establish the citizenship of Reward Zone, USA, LLC,
RewardsFlow, LLC, and American Prize Center, LLC is
four defendants, specifically, AdReaction, Anglo Iditech,
FortAnalysis8 Develop and Concept Network, each of which is
identified in the FAC as a "business entity of unknown
formation, " the FAC alleges only that such defendants
have their "principal place of business" in,
respectively, the United Arab Emirates, New Jersey, Louisiana
and Washington. (See Compl. ¶¶ 26-29.) To
the extent any of these four defendants is a corporation, the
FAC does not identify the state of incorporation, and, to the
extent any of these four defendants is an LLC, the FAC does
not identify the LLC's members/sub-members or their
state(s) of citizenship. Consequently, Fluent's reliance
on the FAC to establish the citizenship of AdReaction, Anglo
Iditech, FortAnalysis8 Develop and Concept Network is
the remaining three defendants, each of whom is identified in
the FAC as an individual, the FAC alleges only that Mohit
Singla "resides in New York" (see Compl.
¶ 23), that Diego Rufino has "a principal place of
business in Atlanta, Georgia" (see Compl.
¶ 30), and that Priscila Arekelian has "a principal
place of business in Las Vegas, Nevada (see Compl.
¶ 31). The FAC does not identify the respective states
of which said individuals are citizens. See Kanter v.
Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001)
(holding "person residing in a given state is not
necessarily domiciled there, and thus is not necessarily a
citizen of that state"); Hester v. Tressard Fabrics,
Inc., 203 U.S.P.Q. 817, 1978 WL 21364, at *3 (C.D. Cal.
February 6, 1978) (holding "allegations of residence are
insufficient to confer diversity of citizenship";
further holding "complaint identif[ying] plaintiff as an
individual doing business with his principal place of
business in California" at best "qualif[ies] as an
allegation of residence"). Consequently, Fluent's
reliance on the FAC to establish the citizenship of Mohit
Singla, Diego Rufino and Priscila Arekelian is unavailing.
in light of the deficiencies in the Notice of Removal
identified above, Fluent is hereby ORDERED TO SHOW CAUSE, in
writing and no later than April 17, 2017, why the
above-titled action should not be remanded for lack of
subject matter jurisdiction. If plaintiffs wish to file a
reply to Fluent's response, plaintiffs shall do so no
later than April 24, 2017.
as the Court must resolve the issue of subject matter
jurisdiction prior to considering any other issues raised by
the parties, the May 5, 2017, hearing on defendant
Saughtware, Inc.'s motion to dismiss is hereby VACATED,
and will be reset, as appropriate, following the Court's
determination as to subject matter jurisdiction.