Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_16-cv-00162/USCOURTS-caed-1_16-cv-00162-1/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Insurance Contract

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

On February 3, 2016, Defendants removed this case from the Kern County Superior Court

on the basis of diversity jurisdiction. See Doc. No. 1. Defendants alleged that they are citizens of 

Bermuda and New Jersey, and indicated that Plaintiff is a citizen of California and Delaware. See

id. The allegations concerning Plaintiff’s citizenship were based on Plaintiff’s place of 

incorporation and principal place of business. See id. However, Plaintiff is an LLC. As an LLC, 

Plaintiff is “a citizen of every state of which its owners/members are citizens;” it is not a citizen of 

its place of “incorporation” or its principal place of business. Johnson v. Columbia Props. 

Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006). Because Defendants made no relevant 

allegations as to the citizenship of Plaintiff’s members, Plaintiff’s citizenship was unknown. As a 

result, Defendant was ordered to show cause why the case should not be remanded for lack of 

subject matter jurisdiction. See Doc. No. 19. On April 29, 2016, Defendants filed their response. 

MT. POSO COGENERATION CO., LLC,

Plaintiff

v.

ASSOCIATED ELECTRIC & GAS 

INSURANCE SERVICES LIMITED a 

Bermuda Corporation, and AEGIS 

INSURANCE SERVICES, INC., a New 

Jersey Corporation

Defendants

_____________________________________

AND RELATED COUNTERCLAIMS

CASE NO. 1:16-CV-0162 AWI JLT 

ORDER DISCHARGING ORDER TO 

SHOW CAUSE

Case 1:16-cv-00162-AWI-JLT Document 23 Filed 05/03/16 Page 1 of 5
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I. SHOW CAUSE

Plaintiff has two members, both of whom are LLC’s – DTE Mt. Poso, LLC (“DTEMP”) 

and Macpherson Green Power Co., LLC (“Macpherson Green”). See Doc. No. 12. 

1. Macpherson Green

Macpherson Green is owned by two entities, Macpherson Energy Corporation 

(“Macpherson Energy”) and National Petroleum Associates, LP (“NPA”).

a. Macpherson Energy

Macpherson Energy is a California corporation with its principal place of business in 

California. See Cannizzaro Dec. Exs B, F. Therefore, Macpherson Energy is a citizen only of 

California. See Hertz Corp. v. Friend, 559 U.S. 77, 80-81 (2010).

b. NPA

NPA is a limited partnership, which means that its citizenship is the same as each of its 

partners. Johnson, 437 F.3d at 899; Kuntz v. Lamar Corp., 385 F.3d 1177, 1182 (9th Cir. 2004). 

i. General Partner

Macpherson Oil Company (“Macpherson Oil”) is the general partner of NPA. See

Cannizzaro Dec. Exs. B, F. Macpherson Oil is a California corporation, and it appears that its 

principal place of business is in California. See id. at Exs. G, I. Therefore, Macpherson Oil 

appears to be a citizen only of California. See Hertz, 559 U.S. at 80-81.

ii. Limited Partners

Donald Macpherson, Sr. appears to have been a limited partner. See Cannizzaro Dec. Ex. 

G. However, he died in Santa Monica, California in 1999, well before this suit was filed. See id.

at Ex. J. Therefore, Donald Macpherson, Sr.’s former citizenship is irrelevant. 

Donald Macpherson, Jr. appears to be a limited partner. See id. at Exs. G, L. Donald 

Macpherson, Jr. appears to be a citizen of California. See id. at Exs. L, K. 

iii. Other Partners

Based on information and belief and the public records that have been obtained to this 

point, Defendants believe that there are no other limited partners and that no limited partner is a 

citizen of New Jersey or Bermuda.

Case 1:16-cv-00162-AWI-JLT Document 23 Filed 05/03/16 Page 2 of 5
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iv. Citizenship of NPA

The evidence submitted by Defendants is sufficient to support allegations that, on 

information and belief, NPA is not a citizen of New Jersey or Bermuda, but is a citizen only of 

California. See Carolina Cas. Ins. Co. v. Team Equip., Inc., 741 F.3d 1082, 1084, 1087-88 (9th 

Cir. 2014) (positively citing Lewis v. Rego Co., 757 F.2d 66 (3d Cir. 1985) and permitting 

allegations of citizenship to be made on information and belief where necessary information is not 

reasonably in the pleading party’s possession); Lewis v. Rego Co., 757 F.2d 66, 68-69 (3d Cir. 

1985) (permitting allegations of citizenship to be made on information and belief in the context of

a notice of removal). Therefore, at this time NPA is considered a citizen only of California. 

c. Macpherson Green’s Citizenship

At this time, Macpherson Green is considered to be a citizen only of California.

2. DTEMP

Defendants have submitted evidence that several LLC’s and corporations are involved in 

the ownership structure of DTEMP. DTEMP is a wholly owned subsidiary of DTE Woodlands, 

LLC (“DTEW”). See Cazzarrino Dec. Ex. A at p. 102j. DTEW is a wholly owned subsidiary of 

DTE Energy Services Corp. (“DTEES”). See id. DTEES is a Michigan Corporation with its 

principal place of business in Michigan, see id. at p. 102d; Cazzarino Dec. Ex. B at p.5, which 

means that it is a citizen only of Michigan. Hertz, 559 U.S. at 80-81.

For purposes of this motion, the Court takes the term “wholly owned subsidiary” to mean 

that there are no other members or “owners” besides the identified owning entity. Therefore, the 

only member of DTEMP is DTEW, and the only member of DTEW is DTEES. Under this 

structure, DTEMP and DTEW have the same citizenship as DTEES. Therefore, DTEMP, DTEW, 

and DTEES are citizens only of Michigan.1 

 

1 Defendants have submitted additional information beyond the citizenship of DTEES. The evidence shows that 

DTEES is a wholly owned subsidiary of DTE Energy Resources, LLC (“DTEER”), and that DTEER is a wholly 

owned subsidiary of DTE Energy Company (“DTEEC”), which is a Michigan corporation whose principal place of 

business is Michigan. See Cazzarrino Dec. Ex. A at p.102a; Doc. No. 21 at 3:9-15. Because DTEES is a corporation, 

and a corporation’s citizenship is determined by place of incorporation and principal place of business, information 

beyond DTEES is unnecessary. However, even if the Court considered DTEER and DTEEC, the result would not 

change. The information regarding these entities shows that they are citizens only of Michigan. See id.

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3. Plaintiff’s Citizenship

Plaintiff appears to be a citizen of Michigan and California. 

4. Discharge

It appears that complete diversity exists because Plaintiff is not a citizen of New Jersey or 

Bermuda. See Allstate Ins. Co. v. Hughes, 358 F.3d 1089, 1095 (9th Cir. 2003). At this time, 

Defendants have sufficiently established diversity jurisdiction. See Carolina Cas., 741 F.3d at 

1084, 1087-88; Lewis, 757 F.2d at 68-69. The Court will discharge the order to show cause and 

will not remand the case back to the Kern County Superior Court.

II. Further Proceedings

A scheduling conference in this matter has been reset to May 18, 2016. As part of the 

scheduling conference, the parties should be prepared to address subject matter jurisdiction with 

the Magistrate Judge. As discussed above, Defendants have not conclusively established 

citizenship, but have instead relied on documents that strongly indicate citizenship or have made 

allegations on the basis of information and belief. Because of the importance of subject matter 

jurisdiction, the Court would like the issue settled shortly after discovery closes, at the latest. The 

scheduling order should make provision for Defendants to establish the parties’ citizenships, such 

as through a motion for partial summary judgment on that limited issue.2 The partial summary 

judgment motion (or similar motion) should be accompanied by evidence, and may include 

stipulations.3The Court will require that the “citizenship motion” be filed before any motions for 

summary judgment or other motions for partial summary judgment are filed. The “citizenship 

motion” also must be filed before trial proceeds in this matter. The Court will not expend scarce

judicial resources on a trial or summary judgment motions until the issue of jurisdiction, and in 

particular citizenship, is resolved. 

 

2

It is Defendants’ burden to establish subject matter jurisdiction. See K2 Am. Corp. v. Roland Oil & Gas, 653 F.3d 

1024, 1027 (9th Cir. 2011); Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009). 

3 The stipulations can only be as to facts. Parties cannot simply stipulate that jurisdiction exists. Holman v. LauloRowe Agency, 994 F.2d 666, 668 n.1 (9th Cir. 1993).

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ORDER

Accordingly, IT IS HEREBY ORDERED that:

1. The order to show cause (Doc. No. 19) is DISCHARGED; and

2. This matter is referred to the Magistrate Judge for further proceedings.

IT IS SO ORDERED.

Dated: May 3, 2016 

 SENIOR DISTRICT JUDGE

Case 1:16-cv-00162-AWI-JLT Document 23 Filed 05/03/16 Page 5 of 5