Lashanna Grant v. Self Upgrade Ventures LLC
2:20-cv-09366
C.D. Cal.Oct 19, 2020Background
- Plaintiffs (eight named individuals) sued in Los Angeles Superior Court; defendant Self-Upgrade Ventures, LLC removed the action to federal court asserting diversity jurisdiction.
- Removing Defendant alleged diversity under 28 U.S.C. § 1332 and stated Gotham Club LLC is a New Jersey LLC headquartered in New York.
- The Notice further alleged Gotham Club LLC’s sole member is domiciled in New York but did not identify whether that sole member is an individual or another entity.
- Federal diversity requires complete diversity and proper pleading of each party’s citizenship; an LLC’s citizenship is the citizenship of all its members.
- The removing party bears the burden of establishing federal jurisdiction and must allege the actual citizenship of relevant parties.
- The Court found the Notice of Removal failed to adequately allege Gotham Club LLC’s citizenship and remanded the case to state court for lack of subject matter jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal diversity jurisdiction supports removal | Removal inadequate because defendant failed to allege complete citizenship of all parties | Removal proper because Gotham Club LLC’s sole member is domiciled in New York, creating diversity | Removal denied; remanded for lack of subject matter jurisdiction |
| Whether citizenship of an LLC was adequately pleaded | Gotham Club LLC’s citizenship not established because the Notice omitted the nature of the sole member (individual or entity) | Alleged sole member domiciled in New York is sufficient | Insufficient: court requires affirmative, specific allegations of the actual citizenship of LLC members |
| Whether the amount in controversy was satisfied | Not addressed by court due to defective pleading on citizenship | Defendant did not carry burden on jurisdictional facts | Not reached; remand ordered because diversity was not established |
Key Cases Cited
- Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375 (1994) (federal courts have limited subject-matter jurisdiction)
- Prize Frize, Inc. v. Matrix (U.S.) Inc., 167 F.3d 1261 (9th Cir. 1999) (removing party bears burden to establish federal jurisdiction; removal statute strictly construed)
- Gaus v. Miles, Inc., 980 F.2d 564 (9th Cir. 1992) (if any doubt exists, federal jurisdiction should be rejected)
- Kantor v. Wellesley Galleries, Ltd., 704 F.2d 1088 (9th Cir. 1983) (individual citizenship for diversity determined by domicile)
- Kanter v. Warner-Lambert Co., 265 F.3d 853 (9th Cir. 2001) (domicile requires residence plus intent to remain or return)
- Indus. Tectonics, Inc. v. Aero Alloy, 912 F.2d 1090 (9th Cir. 1990) (corporation is citizen of state of incorporation and principal place of business)
- Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894 (9th Cir. 2006) (an LLC is a citizen of every state of which its members are citizens)