Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_12-cv-02621/USCOURTS-casd-3_12-cv-02621-0/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

SOUTHERN DISTRICT OF CALIFORNIA

VISTA UNIFIED SCHOOL DISTRICT,

Plaintiff,

v.

GOLDEN EAGLE INSURANCE

CORPORATION, et al.,

Defendants.

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Case No. 12-cv-2621-L(NLS)

ORDER DISMISSING ACTION

WITHOUT PREJUDICE FOR LACK

OF SUBJECT MATTER

JURISDICTION

On October 29, 2012, Plaintiff Vista Unified School District (“District”) commenced this

action against Defendants Golden Eagle Insurance Corporation (“Golden Eagle”) and Peerless

Insurance Company (“Peerless”), asserting various claims arising from an insurance-coverage

dispute. Plaintiff appears to have filed this action based upon federal diversity jurisdiction,

though the precise grounds of jurisdiction are not alleged in complaint. (See Compl. ¶ 4.) 

For the following reasons, the Court finds that Plaintiff’s complaint is facially deficient

and DISMISSES WITHOUT PREJUDICE this action in its entirety for lack of subject matter

jurisdiction.

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I. LEGAL STANDARD

“Federal courts are courts of limited jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of

Am., 511 U.S. 375, 377 (1994). “They possess only that power authorized by Constitution or a

statute, which is not to be expanded by judicial decree.” Id. (internal citations omitted). “It is to

be presumed that a cause lies outside this limited jurisdiction and the burden of establishing the

contrary rests upon the party asserting jurisdiction.” Id. (internal citations omitted); see also

Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 684 (9th Cir. 2006). 

“Subject matter jurisdiction based upon diversity of citizenship requires that no defendant

have the same citizenship as any plaintiff.” Tosco Corp. v. Communities for a Better Env’t, 236

F.3d 495, 499 (9th Cir. 2001) (per curiam), abrogated on other grounds by Hertz Corp v. Friend,

130 S. Ct. 1181 (2010). “A plaintiff suing in federal court must show in his pleading,

affirmatively and distinctly, the existence of whatever is essential to federal jurisdiction, and, if

he does not do so, the court . . . on discovering the [defect], must dismiss the case, unless the

defect be corrected by amendment.” Tosco, 236 F.3d at 499 (quoting Smith v. McCullough, 270

U.S. 456, 459 (1926)).

Although there has not been a request for dismissal, it is well-established that “a district

court’s duty to establish subject matter jurisdiction is not contingent upon the parties’

arguments.” See United Investors Life Ins. Co. v. Waddell & Reed Inc., 360 F.3d 960, 966 (9th

Cir. 2004). Courts may consider the issue sua sponte. Demery v. Kupperman, 735 F.2d 1139,

1149 n.8 (9th Cir. 1984). Indeed, the Supreme Court has emphasized that “district courts have

an ‘independent obligation to address subject-matter jurisdiction sua sponte.’” Grupo Dataflux

v. Atlas Global Grp., L.P., 541 U.S. 567, 593 (2004) (quoting United States v. S. Cal. Edison

Co., 300 F. Supp. 2d 964, 972 (E.D. Cal. 2004)).

II. ANALYSIS

In attempting to invoke this Court’s diversity jurisdiction, the plaintiff must prove that

there is complete diversity of citizenship between the parties and that the amount in controversy

exceeds $75,000. 28 U.S.C. § 1332. “Subject matter jurisdiction based upon diversity of

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citizenship requires that no defendant have the same citizenship as any plaintiff.” Tosco Corp. v.

Communities for a Better Env’t, 236 F.3d 495, 499 (9th Cir. 2001) (per curiam), abrogated on

other grounds by Hertz Corp v. Friend, 130 S. Ct. 1181 (2010). “In determining whether there

is diversity between corporate parties, ‘a corporation shall be deemed to be a citizen of any State

by which it has been incorporated and of the State where it has its principal place of business.’”

Id. (quoting 28 U.S.C. § 1332(c)(1)). “[W]here corporations are involved, the party seeking

jurisdiction must allege the state of the corporation’s principal place of business as well as the

state of incorporation.” United States v. Aldridge, 56 F.3d 73 (9th Cir. 1995) (unpublished table

decision) (emphasis added). 

In its complaint, Plaintiff defines the parties involved in this action as follows: (1) “[The

District] is a California public entity within the County of San Diego, State of California”; (2)

“[Peerless] is a Massachusetts Corporation doing business in the County of San Diego, State of

California”; and (3) “[Golden Eagle] is a New Hampshire Corporation doing business in the

County of San Diego, State of California[.]” (Compl. ¶¶ 1–3.) These definitions are followed

by the sole allegation addressing jurisdiction, which states that “Jurisdiction and venue are

proper within this jurisdiction as this is where the claim arose.” (Id. ¶ 4.) Aside from the wholly

insufficient statement of jurisdiction, Plaintiff fails to allege Defendants’ principal places of

business. This failure casts doubt as to whether this Court properly has subject-matter

jurisdiction over this case because the Court cannot conclude that there is complete diversity

between the parties. See Tosco, 236 F.3d at 499.

Alternatively, Plaintiff may have meant the “doing business in” language to indicate

Defendants’ principal places of business. However, under that interpretation, and given that

both Defendants are “doing business in” California, that would make both Defendants also

citizens of California. See Aldridge, 56 F.3d at 73. Plaintiff is also a California citizen based on

the allegations in the complaint. (Compl. ¶ 1.) Consequently, Plaintiff would fail to satisfy the

complete-diversity-of-citizenship requirement under 28 U.S.C. § 1332.

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III. CONCLUSION & ORDER

Accordingly, because the complaint does not allege facts necessary to establish diversity

jurisdiction as required by 28 U.S.C. § 1332, the Court DISMISSES WITHOUT PREJUDICE

this action in its entirety for lack of subject-matter jurisdiction. See Tosco, 236 F.3d at 499. If

Plaintiff can correct this deficiency in the complaint, it may file an amended complaint by

November 19, 2012. See 28 U.S.C. § 1653.

IT IS SO ORDERED.

DATED: November 5, 2012

M. James Lorenz

United States District Court Judge

COPY TO: 

HON. NITA L. STORMES

UNITED STATES MAGISTRATE JUDGE

ALL PARTIES/COUNSEL

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