Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_14-cv-08189/USCOURTS-azd-3_14-cv-08189-0/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

Joel H. Eisenberg, et ux.,

 Plaintiffs,

vs.

Harvey Gerstman, et al.,

 Defendants.

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No. CV-14-08189-PCT-PGR 

 ORDER

 

 

In a complaint filed on October 6, 2014, the plaintiffs allege that the Court has

diversity of citizenship jurisdiction over this action pursuant to 28 U.S.C. § 1332.

Having reviewed the complaint, the Court finds that the jurisdictional allegations

therein are insufficient as a matter of law to establish the existence of subject matter

jurisdiction. The Court will therefore require the plaintiffs to file an amended

complaint properly stating a jurisdictional basis for this action. See 28 U.S.C. § 1653;

see also, Smith v. McCullough, 270 U.S. 456, 459, 46 S.Ct. 338, 339 (1926) ("The

established rule is that 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 having the defect called to its

attention or on discovering the same, must dismiss the case, unless the defect be

Case 3:14-cv-08189-PGR Document 12 Filed 10/22/14 Page 1 of 3
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corrected by amendment.")

The existence of diversity jurisdiction is not evident from the face of the

complaint inasmuch as the complaint fails to properly allege the citizenship of any

party. First, all of the individual parties are merely alleged to be residents of certain

states. All of these allegations are deficient because it is black letter law that an

allegation of residency does not suffice for purposes of §1332. See Steigleder v.

McQuesten, 198 U.S. 141, 143, 25 S.Ct. 616, 617 (1905) ("It has long been settled

that residence and citizenship [are] wholly different things within the meaning of the

Constitution and the laws defining and regulating the jurisdiction of the ... courts of

the United States; and that a mere averment of residence in a particular state is not

an averment of citizenship in that state for the purpose of jurisdiction."); accord,

Kanter v. Warner-Lambert Co., 265 F.3d 853, 857-58 (9th Cir. 2001) (Plaintiffs'

complaint ... state[s] that Plaintiffs were 'residents' of California. But the diversity

jurisdiction statute, 28 U.S.C. § 1332, speaks of citizenship, not of residency. ...

[The] failure to specify Plaintiffs' state of citizenship was fatal to [the] assertion of

diversity jurisdiction.") 

Second, the complaint improperly attempts to allege the citizenship of

defendant Active Products LLC as if it were a corporation notwithstanding that it has

been clearly established for years that a limited liability company cannot be treated

as a corporation for purposes of alleging citizenship under § 1332. See Johnson

v. Columbia Properties Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006)

("Notwithstanding LLCs' corporate traits, ... every circuit that has addressed the

question treats them like partnerships for the purposes of diversity jurisdiction. ... We

therefore join our sister circuits and hold that, like a partnership, an LLC is a citizen

of every state of which its owners/members are citizens.") Since the complaint fails

Case 3:14-cv-08189-PGR Document 12 Filed 10/22/14 Page 2 of 3
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1

 Since only a corporation or an individual may be a citizen for purposes

of § 1332 jurisdiction, the amended complaint must set forth any sub-layers of

partners or members Active Products may have.

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to set forth the citizenship of any member of Active Products, the Court will require

the plaintiffs to specifically identity in its amended complaint each LLC member by

name, specifically allege the type of business entity that any non-individual member

is, and affirmatively allege the state of citizenship of each member.1

The plaintiff are advised that their failure to timely or sufficiently comply with

this Order will result in the dismissal of this action for lack of subject matter

jurisdiction. Therefore,

IT IS ORDERED that the complaint in this action is dismissed for lack of

subject matter jurisdiction.

IT IS FURTHER ORDERED that the plaintiffs shall file an amended complaint

properly stating a jurisdictional basis for this action no later than November 14,

2014. 

IT IS FURTHER ORDERED that the plaintiffs shall immediately provide a copy

of this Order to any defendant already served with process.

DATED this 22nd day of October, 2014.

Case 3:14-cv-08189-PGR Document 12 Filed 10/22/14 Page 3 of 3