Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_07-cv-00936/USCOURTS-azd-2_07-cv-00936-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

The Biltmore Bank of Arizona, an Arizona

corporation, 

Plaintiff, 

vs.

First National Mortgage Sources, L.L.C.,

a foreign limited liability corporation, 

Defendant. 

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No. CV-07-936-PHX-LOA

ORDER TO SHOW CAUSE

Pending for ruling are the parties’ dispositive motions. A district court, however,

lacks discretion to consider the merits of a case over which it lacks jurisdiction. Firestone

Tire & Rubber Co. v. Risjord, 449 U.S. 368, 379 (1981). 

“[S]ubject matter jurisdiction is mandatory and, as such, should be given

appropriate attention and scrutiny by all parties to the litigation before removal. The Court

poignantly illustrated the potential harm that may arise if subject matter jurisdiction is

addressed in haste when it related the facts of Belleville Catering Co. v. Champaign Market

Place, L.L.C., 350 F.3d 691 (7th Cir. 2003).” Team Transp. Services, Inc. v. The ElderBeerman Stores Corp., 2006 WL 753166 (D. Ariz. 2006). For Defendant First National

Mortgage Sources, L.L.C. (“the Broker”) to have properly removed this case to federal court

on the basis of diversity of citizenship, there be “complete diversity between all named

plaintiffs and all named defendants.” Lincoln Property Co. v. Roche, 546 U.S. 81, 84 (2005);

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Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996) (finding 28 U.S.C. § 1332(a) applicable

“only to cases in which the citizenship of each plaintiff is diverse from the citizenship of each

defendant”).

The parties claim that jurisdiction in this case is predicated upon complete

diversity of citizenship and an amount in controversy in excess of $75,000 pursuant to 28

U.S.C. § 1332(a)(1). (docket # 7 at 3) The parties represent in their Case Management Plan

that the Broker is a limited liability company organized under the laws of the State of Kansas,

with its principal place of business in Hays, Kansas. Id. For purposes of diversity jurisdiction

and unlike corporations, limited liability companies “are analogized to partnerships, which

take the citizenship of every general and limited partner. Lincoln Property Co., 546 U.S. at

84 n. 1 (citing Carden v. Arkoma Associates, 494 U.S. 185, 189 (1990) (“for diversity

purposes, a partnership entity, unlike a corporation, does not rank as a citizen; to meet the

complete diversity requirement, all partners, limited as well as general, must be diverse from

all parties on the opposing side.”)); Belleville Catering Co. v. Champaign Market Place,

L.L.C., 350 F.3d 691, 692 (7th Cir. 2003); Hart v. Terminex Int'l, 336 F.3d 541, 543 (7th Cir.

2003) (stating citizenship of unincorporated association to be traced through each layer).

“Diversity jurisdiction is based on citizenship, not residency.” Kalinowski v.

Davol, Inc., 2006 WL 2615894 * 2 (D. Ariz. 2006) (emphasis in original). “To be a citizen

of a particular state, a natural person must both be a citizen of the United States and be

domiciled within that state.” Id. (citing Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S.

826, 828 (1989)). “A person’s domicile is his or her permanent home, where he or she

resides with the intention to remain or to return.” Id. (citing Lew v. Moss, 797 F.2d 747, 749

(9th Cir.1986)). A person residing in a given state, however, is not necessarily domiciled

there, and is not necessarily a citizen of that state. Kanter v. Warner-Lambert Co., 265 F.3d

853, 857 (9th Cir. 2001). 

Federal jurisdiction must be rejected if there is any doubt as to the right of

 removal in the first instance. Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th

Cir. 1979) (citing Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir.1992) (per curiam). “The

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‘strong presumption’ against removal jurisdiction means that the defendant always has the

burden of establishing that removal is proper.” Id. (citations omitted); McNutt v. General

Motors Acceptance Corp., 298 U.S. 178, 189(1936).

On the Court’s own motion and because no verified information has been

provided to the Court in the Broker’s Answer, the Case Management Plan or elsewhere,

identifying every general and limited partner of the Broker, each partner’s citizenship and

state of domicile,

IT IS ORDERED that Defendant First National Mortgage Sources, L.L.C. show

cause in writing on or before Monday, February 25, 2008 why this action should not be

remanded to state court for lack of jurisdiction under 28 U.S.C. § 1332. Broker may

discharge this OSC by attaching, if appropriate, a written declaration under penalty of perjury

to its response to this OSC, identifying every general and limited partner of the Broker, each

partner’s citizenship and state of domicile. Absent good cause shown, failure to timely

comply with this order shall result in a REMAND of this case to state court.

Dated this 11th day of February, 2008.

Case 2:07-cv-00936-LOA Document 32 Filed 02/11/08 Page 3 of 3