Lilu's Garden, LTD v. United Science LLC
1:18-cv-00842
D. Colo.May 2, 2018Background
- Plaintiffs Lilu’s Garden, Ltd. and SLC1, LLC sued United Science LLC in federal court asserting diversity jurisdiction under 28 U.S.C. § 1332.
- Plaintiffs’ original pleading failed to identify the members and citizenship of the parties’ members, prompting an April 13, 2018 show-cause order.
- Plaintiffs filed an amended complaint averring, “on information and belief,” that United Science’s sole member was Jonathan Thompson, a Minnesota citizen.
- The court found the “on information and belief” allegation insufficient to establish subject-matter jurisdiction and issued a second show-cause order.
- Plaintiffs requested a 30-day extension and permission to depose Thompson to obtain members’ names and citizenship for jurisdictional proof.
- The court denied jurisdictional discovery, dismissed the case without prejudice for lack of subject-matter jurisdiction, and closed the case.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs have carried their burden to establish diversity jurisdiction | Plaintiffs argued they should be allowed limited discovery (depose Thompson) to prove members’ citizenship and obtain names to support diversity | Defendant argued plaintiffs’ pleading was insufficient and discovery was unnecessary; burden rests with plaintiff to plead jurisdictional facts | Court held plaintiffs failed to establish jurisdiction; denied jurisdictional discovery and dismissed case without prejudice |
Key Cases Cited
- Celli v. Shoell, 40 F.3d 324 (10th Cir. 1994) (presumption that federal courts lack jurisdiction unless plaintiff pleads sufficient facts)
- Radil v. Sanborn W. Camps, Inc., 384 F.3d 1220 (10th Cir. 2004) (party invoking federal jurisdiction bears burden of establishing it)
- Wallace v. HealthOne, 79 F. Supp. 2d 1230 (D. Colo. 2000) (proponent of jurisdiction must prove citizenship by preponderance of evidence)
- Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676 (9th Cir. 2006) (jurisdictional discovery is discretionary and courts may remand rather than permit discovery)
- Sizova v. Nat’l Inst. of Standards & Tech., 282 F.3d 1320 (10th Cir. 2002) (denial of jurisdictional discovery is an abuse of discretion only if it causes prejudice)
- Lowery v. Ala. Power Co., 483 F.3d 1184 (11th Cir. 2007) (court need not allow plaintiffs to conduct discovery to find facts they should have had before filing)