United States District Court, C.D. California
ORDER REMANDING ACTION
Fernando M. Olguin United States District Judge.
September 3, 2019, plaintiff Dawna Brady
(“plaintiff”), filed a Complaint in the Riverside
County Superior Court against defendants Michael Leahy,
Xudle, Inc. (“Xudle”), Xudle Software, LLC
(“Xudle Software”), and Fullsteam Holdings, LLC
“defendants”). (See Dkt. 1, Notice of
Removal (“NOR”) at ¶ 1). On October 4, 2019,
defendants Xudle Software and Fullsteam removed that action
on diversity jurisdiction grounds pursuant to 28 U.S.C.
§ 1332. (See id. at ¶ 9).
courts are courts of limited jurisdiction. They possess only
that power authorized by Constitution and statute[.]”
Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S.
375, 377, 114 S.Ct. 1673, 1675 (1994). The courts are
presumed to lack jurisdiction unless the contrary appears
affirmatively from the record. See DaimlerChrysler Corp.
v. Cuno, 547 U.S. 332, 342 n. 3, 126 S.Ct. 1854, 1861
(2006). Federal courts have a duty to examine jurisdiction
sua sponte before proceeding to the merits of a
case, see Ruhrgas AG v. Marathon Oil Co., 526 U.S.
574, 583, 119 S.Ct. 1563, 1569 (1999), “even in the
absence of a challenge from any party.”
Arbaugh v. Y&H Corp., 546 U.S. 500,
514, 126 S.Ct. 1235, 1244 (2006).
right of removal is entirely a creature of statute and a suit
commenced in a state court must remain there until cause is
shown for its transfer under some act of Congress.”
Syngenta Crop Protection, Inc. v. Henson, 537 U.S.
28, 32, 123 S.Ct. 366, 369 (2002) (internal quotation marks
omitted). Where Congress has acted to create a right of
removal, those statutes, unless otherwise stated, are
strictly construed against removal
jurisdiction. See id. Unless otherwise
expressly provided by Congress, “any civil action
brought in a State court of which the district courts of the
United States have original jurisdiction, may be removed by
the defendant or the defendants, to the district
court[.]” 28 U.S.C. § 1441(a); see Dennis v.
Hart, 724 F.3d 1249, 1252 (9th Cir. 2013) (same). A
removing defendant bears the burden of establishing that
removal is proper. See Abrego Abrego v. The Dow Chem.
Co., 443 F.3d 676, 684 (9th Cir. 2006) (per
curiam) (noting the “longstanding, near-canonical
rule that the burden on removal rests with the removing
defendant”); Gaus v. Miles, Inc., 980 F.2d
564, 566 (9th Cir. 1992) (“The strong presumption
against removal jurisdiction means that the defendant always
has the burden of establishing that removal is
proper.”) (internal quotation marks omitted). Moreover,
if there is any doubt regarding the existence of subject
matter jurisdiction, the court must resolve those doubts in
favor of remanding the action to state court. See
Gaus, 980 F.2d at 566 (“Federal jurisdiction must
be rejected if there is any doubt as to the right of removal
in the first instance.”).
the plain terms of § 1441(a), in order properly to
remove [an] action pursuant to that provision, [the removing
defendant] must demonstrate that original subject-matter
jurisdiction lies in the federal courts.” Syngenta
Crop Protection, 537 U.S. at 33, 123 S.Ct. at 370.
Failure to do so requires that the case be remanded, as
“[s]ubject matter jurisdiction may not be waived, and.
. . the district court must remand if it lacks
jurisdiction.” Kelton Arms Condo. Owners Ass'n,
Inc. v. Homestead Ins. Co., 346 F.3d 1190, 1192 (9th
Cir. 2003). Indeed, “[i]f at any time before final
judgment it appears that the district court lacks subject
matter jurisdiction, the case shall be remanded.” 28
U.S.C. § 1447(c); see Emrich v. Touche Ross &
Co., 846 F.2d 1190, 1194 n. 2 (9th Cir. 1988) (“It
is elementary that the subject matter jurisdiction of the
district court is not a waivable matter and may be raised at
anytime by one of the parties, by motion or in the responsive
pleadings, or sua sponte by the trial or reviewing
court.”); Washington v. United Parcel Serv.,
Inc., 2009 WL 1519894, *1 (C.D. Cal. 2009) (a district
court may remand an action where the court finds that it
lacks subject matter jurisdiction either by motion or sua
court's review of the NOR and the attached state court
Complaint makes clear that this court does not have subject
matter jurisdiction over the instant matter. See 28
U.S.C. § 1441(a); Caterpillar, Inc. v.
Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 2429 (1987)
(“Only state-court actions that originally could have
been filed in federal court may be removed to federal court
by the defendant.”) (footnote omitted). In other words,
plaintiff could not have originally brought this action in
federal court, as plaintiff does not competently allege facts
supplying diversity jurisdiction. See 28 U.S.C.
federal subject matter jurisdiction is predicated on
diversity of citizenship pursuant to 28 U.S.C. 1332(a),
complete diversity must exist between the opposing parties.
See Caterpillar Inc. v. Lewis, 519 U.S. 61, 68, 117
S.Ct. 467, 472 (1996) (stating that the diversity
jurisdiction statute “applies only to cases in which
the citizenship of each plaintiff is diverse from the
citizenship of each defendant”). Defendants contend
that complete diversity exists “because [Xudle]
Software, Fullsteam, Leahy, and Xudle are citizens of and/or
domiciled in Delaware, Alabama, New York, and/or Arizona,
while Plaintiff is a citizen of, and domiciled in,
California.” (Dkt. 1, NOR at ¶ 9). However,
defendants improperly rely on the standard applicable to
corporations to assert the citizenship of Xudle Software and
Fullsteam, which are both limited liability companies.
(See id. at ¶¶ 5-6) (asserting that Xudle
Software's members are limited liability companies
“organized under the laws of [Delaware] with their
principal places of business in Auburn, Alabama and/or New
York” and Fullsteam's members are “limited
liability companies organized under the laws of [Delaware]
with their principal places of business in New York”).
liability companies (“LLCs”) are treated like
partnerships rather than corporations for the purpose of
determining citizenship, and are deemed “a citizen of
every state of which its owners/members are citizens.”
Johnson v. Columbia Props. Anchorage, LP, 437 F.3d
894, 899 (9th Cir. 2006); see Grupo Dataflux v. Atlas
Global Grp., L.P., 541 U.S. 567, 569, 124 S.Ct. 1920,
1923 (2004) (“[A] partnership . . . is a citizen of
each State or foreign country of which any of its partners is
a citizen.”). “There is no such thing as ‘a
[Delaware, Alabama, or New York] limited partnership' for
purposes of . . . diversity jurisdiction. There are only
partners, each of which has one or more citizenships.”
Hart v. Terminex Int'l, 336 F.3d 541, 544 (7th
Cir. 2003) (internal quotation marks omitted). Moreover,
“[a]n LLC's principal place of business [or] state
of organization is irrelevant” for purposes of
diversity jurisdiction. See Buschman v. Anesthesia
Business Consultants LLC, 42 F.Supp.3d 1244, 1248 (N.D.
Cal. 2014); Tele Munchen Fernseh GMBH & Co
Produktionsgesellschaft v. Alliance Atlantis Int'l
Distribution, LLC, 2013 WL 6055328, *4 (C.D. Cal. 2013)
(“As a limited liability company, [defendant]'s
principal place of business is irrelevant for purposes of
diversity jurisdiction.”). If a member of an LLC is
another LLC, then the citizenship of that LLC's members
must be shown.
NOR fails to set forth its proper citizenship and that of its
members. (See, generally, Dkt. 1,
NOR). In short, it fails to show that complete diversity of
the parties exists. Given that any doubt regarding the
existence of subject matter jurisdiction must be resolved in
favor of remanding the action to state court, see
Gaus, 980 F.2d at 566, the court is not persuaded, under
the circumstances here, that defendants have met their
burden. Therefore, there is no basis for diversity
order is not intended . Nor is it intended to be included in
or submitted to any online service such as Westlaw or Lexis.
on the foregoing, IT IS ORDERED that:
1. The above-captioned action shall be
remanded to the Superior Court of the State
of California for the County of Riverside, Southwest Justice
Center, 30755-D Auld Road, Murrieta, CA 92563, for lack of
subject matter jurisdiction pursuant to 28 U.S.C. §
2. The Clerk shall send a certified copy of this Order to the