Erik Schweiss v. Greenway Health LLC
8:19-cv-00644
C.D. Cal.May 29, 2019Background
- Plaintiff Eric Schweiss sued former employer Greenway Health, LLC in Orange County Superior Court asserting wrongful termination and other California law claims.
- Greenway, an LLC organized in Delaware with principal place of business in Florida, removed the case to federal court based on diversity jurisdiction.
- Plaintiff moved to remand, arguing Greenway failed to plead the citizenship of all LLC members (an LLC takes citizenship of each member).
- The court ordered Greenway to amend its notice of removal to identify each member and their citizenship/principal place of business. Greenway filed an amended notice but omitted full membership and principal-place information for several entities.
- The court found Greenway did not meet its burden to establish complete diversity and granted remand to Orange County Superior Court.
- The court awarded plaintiff $3,002 in attorneys’ fees under 28 U.S.C. § 1447(c), finding Greenway’s removal was not objectively reasonable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal diversity jurisdiction exists | Greenway failed to identify all LLC members and their citizenships; removal improper | Removal was filed in good faith; complex ownership layers made full pleading difficult | Remand granted — Greenway did not establish complete diversity |
| Whether Greenway adequately identified ultimate and intermediate members | Greenway failed to identify members of Vista Equity Partners Fund IV GP, LLC and other entities | Greenway provided some membership detail and would supplement if needed | Court found membership disclosures incomplete and insufficient |
| Whether Greenway stated principal place of business for members | Greenway omitted principal places of business for identified members, so citizenship unclear | Greenway argued timeline and complexity justified omissions | Court held omissions fatal to establishing diversity jurisdiction |
| Entitlement to attorney's fees under § 1447(c) | Fees warranted because removal lacked an objectively reasonable basis; counsel documented time and costs | Removal was made in good faith under tight timeline; not for delay | Fees awarded ($3,002) because removal was unreasonable |
Key Cases Cited
- Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894 (9th Cir.) (LLC assumes citizenship of each member)
- NewGen, LLC v. Safe Cig, LLC, 840 F.3d 606 (9th Cir.) (complete membership citizenship must be pled for LLCs)
- Gaus v. Miles, Inc., 980 F.2d 564 (9th Cir.) (removal statute construed strictly; defendant bears burden)
- Lew v. Moss, 797 F.2d 747 (9th Cir.) (party invoking federal jurisdiction bears burden)
- Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365 (U.S. Sup. Ct.) (complete diversity requirement explained)
- City of Chicago v. Int’l Coll. of Surgeons, 522 U.S. 156 (U.S. Sup. Ct.) (removal proper only when original jurisdiction exists)
- Martin v. Franklin Capital Corp., 546 U.S. 132 (U.S. Sup. Ct.) (attorney’s fees under § 1447(c) only when removal lacked an objectively reasonable basis)