Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_06-cv-03012/USCOURTS-azd-2_06-cv-03012-0/pdf.json

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

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

SAN JACINCTO OIL & GAS )

EXPLORATION, LLC, a Nevada ) No. CIV 06-3012 PHX RCB

limited liability company, )

 )

Plaintiff, ) O R D E R

 )

vs. ) 

 )

FAMCOR OIL, Inc., a Texas )

corporation, )

 )

Defendant. ) )

This matter arises out of a securities fraud and breach of

contract action originally filed by Plaintiff San Jacincto Oil &

Gas Exploration, LLC (“San Jacincto”) in the Superior Court of

Arizona in Maricopa County, and removed to this Court by Defendant

Famcor Oil, Inc. (“Famcor”). Notice (doc. 1), Ex. A, pt. 1. On

January 16, 2007, Famcor moved to dismiss all counts. Mot. (doc. #

8). Soon thereafter, San Jacincto filed an amended complaint (doc.

# 9). Currently before the Court are Famcor’s second motion to

dismiss (doc. # 11) directed at the amended complaint, and San

Jacincto’s motion for partial summary judgment (doc. # 15). In

connection with the latter, Famcor has also filed a motion to

Case 2:06-cv-03012-RCB Document 42 Filed 08/31/07 Page 1 of 5
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strike new evidence submitted with San Jacincto’s reply memorandum

(doc. # 38), and a motion seeking a continuance pursuant to Rule

56(f) of the Federal Rules of Civil Procedure to conduct further

discovery in the event that the current record is found not to

raise any genuine issue of material fact (doc. # 31). Having

carefully reviewed the matter, it occurs to the Court that the

existence of diversity jurisdiction, which is the sole basis of

removal, is not readily apparent from any of the pleadings.

It is undisputed that “a [district] court has an obligation to

inquire sua sponte into its subject matter jurisdiction, and to

proceed no further if such jurisdiction is wanting.” Feldman v.

Allstate Ins. Co., 322 F.3d 660, 665 (9th Cir. 2003); Fed. R. Civ.

P. 12(h)(3). The subject matter jurisdiction of the federal

district courts is defined by Congress. U.S. Const. art. III, § 1;

Livingston v. Story, 34 U.S. (9 Pet.) 632, 656 (1835). Generally,

if a defendant has improperly removed a case to federal court over

which the federal court lacks complete diversity jurisdiction, the

district court must remand the case to state court. 28 U.S.C. §

1447(c); Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 403-04

(9th Cir. 1996).

The diversity jurisdiction of the federal courts exists in all

civil actions between citizens of different states in which the

amount in controversy exceeds $75,000. 28 U.S.C. § 1332(a)(1). In

order to proceed on the basis of diversity jurisdiction, there must

be sufficient allegations from which the district court may

ascertain the actual citizenship of the parties to determine

whether there exists complete diversity. Kanter v. Warner-Lambert

Co., 265 F.3d 853, 857 (9th Cir. 2001); Shaw v. Quincy Mining Co.,

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145 U.S. 444, 447 (1892). In Kanter, the Ninth Circuit explained

the simple allegations needed to establish a natural person's state

of citizenship: 

To be a citizen of a state, a natural person

must first be a citizen of the United States. .

. . . The natural person's state citizenship

is then determined by her state of domicile,

not her state of residence. A person's

domicile is her permanent home, where she

resides with the intention to remain or to

which she intends to return. . . . . A person

residing in a given state is not necessarily

domiciled there, and thus is not necessarily a

citizen of that state.

Kanter, 265 F.3d at 857 (citations omitted) (emphasis added). The

distinction between domicile and residence is an uncontroversial

principle to which the Supreme Court has spoken long ago:

. . . [A]n averment that a party resided within

the State or the district in which the suit was

brought was not sufficient to support the

jurisdiction, because in the common use of

words a resident might not be a citizen, and

therefore it was not stated expressly and

beyond ambiguity that he was a citizen of the

State, which was the fact on which the

jurisdiction depended under the provisions of

the Constitution and of the Judiciary Act.

Shaw, 145 U.S. at 447 (1892). Finally, for purposes of diversity

jurisdiction, “an LLC is a citizen of every state of which its

owners/members are citizens.” Johnson v. Columbia Props.

Anchorage, Ltd. P’ship, 437 F.3d 894, 899 (9th Cir. 2006).

Famcor removed the present case on the basis of diversity

jurisdiction. Notice (doc. # 1) at 1-2. However, neither the

original complaint filed in the state court nor the amended

complaint filed in this Court properly avers the citizenship of any

of San Jacincto’s members or managers such that Plaintiff’s

citizenship may be properly ascertained. Rather, it has only been

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pled (1) that San Jacincto is a Nevada limited liability company

with offices in Maricopa County, Arizona; (2) that it is managed by

an Arizona limited liability company known as Hankerson Management

Company, LLC (“Hankerson Management”); and (3) that the manager of

Hankerson Management is “a resident of Phoenix, Arizona.” Notice

(doc. # 1), Ex. A-1 ¶ 1; Am. Compl. (doc. # 9) ¶ 1.

Without knowing the state of citizenship of any of the

constituent members of either San Jacincto or Hankerson Management,

it is impossible to know whether complete diversity exists. See

Johnson, 437 F.3d at 899; Kanter, 265 F.3d at 857. Famcor has

simply assumed “[o]n information and belief” that none of the

members of San Jacincto Oil & Gas Exploration LLC is a citizen of

Texas.” Notice (doc. # 1) at 1-2. Although a defendant may remove

a civil action from state court within 30 days of its receipt of

any “paper from which it may first be ascertained that the case is

one which is or has become removable,” there is no provision for

anticipatory removal of the kind that Famcor apparently seeks. See

28 U.S.C. § 1446(b). Because the face of the pleadings has never

“affirmatively reveal[ed] information to trigger removal based on

diversity jurisdiction,” its removal was improper. See Harris v.

Bankers Life & Cas. Co., 425 F.3d 689, 695-96 (9th Cir. 2005). 

Accordingly, the matter will be remanded. 28 U.S.C. § 1447(c).

IT IS THEREFORE ORDERED remanding this case the Superior Court

of Arizona for Maricopa County.

IT IS FURTHER ORDERED that San Jacincto’s motion for hearing

(doc. # 22) is DENIED and dismissed as moot.

IT IS FURTHER ORDERED that Famcor’s first motion to dismiss

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(doc. # 8) is DENIED and dismissed as moot.

IT IS FURTHER ORDERED that Famcor’s second motion to dismiss

(doc. # 11) is DENIED and dismissed as moot.

IT IS FURTHER ORDERED that San Jacincto’s motion for partial

summary judgment (doc. # 15) is DENIED and dismissed as moot.

IT IS FURTHER ORDERED that Famcor’s motion in the alternative

for a Rule 56(f) continuance (doc. # 31) is DENIED and dismissed as

moot.

IT IS FURTHER ORDERED that Famcor’s motion to strike

Plaintiff’s new evidence (doc. # 38) is DENIED and dismissed as

moot.

IT IS FINALLY ORDERED directing the Clerk of the Court to send

the file in this Case to the Superior Court of Arizona for Maricopa

County.

DATED this 31st day of August, 2007.

Copies to counsel of record

Case 2:06-cv-03012-RCB Document 42 Filed 08/31/07 Page 5 of 5