FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CAROLINA CASUALTY INSURANCE

CO., an Iowa corporation,

Plaintiff-Appellant,

v.

TEAM EQUIPMENT, INC., a California

corporation; BELL HOP CLEANERS OF

CALIFORNIA, INC., a New Mexico

corporation; GAMET ENTERPRISES,

LLC, a New Mexico limited liability

company; U.S. DRY CLEANING

SERVICES CORP., a Delaware

corporation, DBA U.S. Dry Cleaning

Corporation; STEAM PRESS

HOLDINGS, INC., a Hawaii

corporation, DBA Young Laundry

and Dry Cleaning; CLEANERS CLUB

ACQUISITIONS, INC., a California

corporation, DBA Boston Cleaners;

USDCC CVR MERGER SUB, LLC, a

California limited liability company,

DBA Roadrunner Cleaners; USDC

PORTSMOUTH, INC., a California

corporation; USDC TUCHMAN

INDIANA, INC., a California

corporation; USDC FRESNO, INC., a

California corporation; USDC

FRESNO 2, INC., a California

Nos. 12-56203

12-56235

D.C. No.

2:12-cv-03133-

JFW-JEM

OPINION
2 CAROLINA CAS. INS. CO. V. TEAM EQUIP., INC.

corporation; TIMOTHY DENARI, an

individual; RIAZ CHATAUNI, an

individual; ROBERT Y. LEE, an

individual, AKA Robbie Lee;

MARTIN BRILL, an individual;

MICHAEL DRACE, an individual; KIM

COX, an individual; EARL

GREENBERG, an individual;

ANTHONY J.A. BRYAN, an

individual,

Defendants-Appellees.

Appeal from the United States District Court

for the Central District of California

John F. Walter, District Judge, Presiding

Argued and Submitted

November 8, 2013—Pasadena, California

Filed February 4, 2014

Before: Raymond C. Fisher and Richard R. Clifton, Circuit

Judges, and James K. Singleton, Senior District Judge.*

Opinion by Judge Clifton

* The Honorable James K. Singleton, Senior District Judge for the U.S.

District Court for the District of Alaska, sitting by designation.
CAROLINA CAS. INS. CO. V. TEAM EQUIP., INC. 3

SUMMARY**

Diversity Jurisdiction

The panel reversed the district court’s dismissal based on

failure to establish diversity jurisdiction.

The panel held that the original complaint should not have

been dismissed without leave to amend because the district

court did not find that any attempt to amend the complaint

would be futile. The panel also held that when information

regarding a defendant that is necessary to establish diversity

of citizenship is not reasonably available to a plaintiff, the

plaintiff should be permitted to plead jurisdictional

allegations as to those defendants on information and belief

and without affirmatively asserting specific details regarding

the citizenship of those defendants.

COUNSEL

James K. Thurston, Melissa A. Murphy-Petros (argued),

Wilson Elser Moskowitz Edelman & Dicker LLP, Chicago,

Illinois, for Plaintiff-Appellant.

Jonathan B. Sokol, Los Angeles, California, for DefendantAppellee Team Equipment, Inc.

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.
4 CAROLINA CAS. INS. CO. V. TEAM EQUIP., INC.

OPINION

CLIFTON, Circuit Judge:

This appeal concerns the sufficiency of allegations

required to plead diversity jurisdiction under 28 U.S.C.

§ 1332. Plaintiff-Appellant Carolina Casualty Insurance Co.

(“Carolina”) filed suit asserting federal jurisdiction based on

diversity and thus bore the burden of establishing the

diversity. Before the complaint was served, the district court

dismissed it without leave to amend because Carolina had

failed to allege the citizenship of any of the members of the

defendants that were limited liability companies (“LLCs”),

had alleged that certain individual defendants were residents

rather than citizens of a state, and had made its jurisdictional

allegations on information and belief. Carolina then filed a

proposed amended complaint. The court did not accept this

complaint as sufficient because Carolina still pled its

jurisdictional allegations on information and belief and still

failed to establish the citizenship of some defendants,

including the LLCs.

We reverse and remand. Because the district court did

not conclude that any amendment would be futile, it should

have dismissed the initial complaint with leave for Carolina

to amend it to correct, as far as possible, the defective

jurisdictional allegations. Furthermore, the district court

should not have dismissed the complaint for failure to plead

allegations of citizenship affirmatively and on knowledge,

rather than on information and belief, when the necessary

information was not reasonably available to Carolina.
CAROLINA CAS. INS. CO. V. TEAM EQUIP., INC. 5

I. Background

Despite its name, Carolina is an insurance company

incorporated in Iowa and with its principal place of business

in Florida. Carolina issued a corporate liability and directors

and officers’ liability insurance policy to U.S. Dry Cleaning

Corp. (“Dry Cleaning”) that was effective between January

2009 and January 2011. The policy excluded from coverage

losses “for which the Insureds are not financially liable or

which are without legal recourse to the Insureds.”

Dry Cleaning purchased dry cleaning stores from Team

Equipment, Inc. and two affiliated entities (collectively,

“Team Equipment”) in February 2008. For partial payment

of the purchase price, Dry Cleaning issued notes to Team

Equipment. Two years later, Team Equipment filed an action

against DryCleaning and certain of its officers, directors, and

affiliated entities (collectively, the “Underlying Defendants”)

to enforce the notes. Team Equipment settled its claims

against Dry Cleaning in June 2011 and agreed to “limit the

enforcement of any judgment or award . . . , including

attorney’s fees, solely to the proceeds of [Dry Cleaning’s]

Insurance Policy.” Team Equipment also released its claims

against the Underlying Defendants.

Carolina filed a complaint in the United States District

Court for the Central District of California against Team

Equipment, Dry Cleaning, and the other Underlying

Defendants for a declaratory judgment that Carolina was not

liable under Dry Cleaning’s insurance policy. Carolina

alleged that, because the defendants had agreed to limit the

enforcement of the judgment to the proceeds from Dry

Cleaning’s insurance policy, the settlement constituted a loss

for which there was no recourse to the Insureds and which
6 CAROLINA CAS. INS. CO. V. TEAM EQUIP., INC.

was therefore outside the scope of coverage. The asserted

basis of jurisdiction was diversity of citizenship under

28 U.S.C. § 1332.

The district court dismissed the complaint, without prior

notice to Carolina, seventeen days after it was filed. Carolina

had not yet served the complaint, nor had any of the

defendants responded to it. The district court ruled that

Carolina had “not adequately alleged the facts essential for

. . . subject matter jurisdiction.” First, the district court

observed that two of the entity defendants were LLCs, but

Carolina had not alleged the citizenship of the LLCs by

alleging the citizenship of their members. See Johnson v.

Columbia Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir.

2006) (“[A]n LLC is a citizen of every state of which its

owners/members are citizens.”). Instead, Carolina had

alleged the states under whose laws the LLCs were organized

and where they had their principal places of business, as if the

LLCs were corporations. See 28 U.S.C. § 1332(c)(1). As to

the individual defendants, the district court noted that

Carolina had alleged their states of residency and not their

states of citizenship, as required for diversity jurisdiction. 

Finally, the court observed that Carolina had made its

allegations “on information and belief,” not on knowledge,

and held that this was insufficient to allege jurisdiction. The

court dismissed the complaint under Federal Rule of Civil

Procedure 12(h)(3), which provides that “[i]f the court

determines at any time that it lacks subject-matter

jurisdiction, the court must dismiss the action.”

Carolina filed a motion to alter or amend the judgment

under Federal Rule of Civil Procedure 59(e). As part of the

motion, Carolina submitted a proposed amended complaint. 

Carolina advised the court in its moving papers that it was
CAROLINA CAS. INS. CO. V. TEAM EQUIP., INC. 7

unable to determine the citizenship of the LLCs, because their

organizational filings did not list their members. As a result,

Carolina alleged simply that the members of the LLCs were

“citizens of neither Iowa nor Florida.” As to the eight

individual defendants, Carolina alleged that four of them

were citizens of California and that four of them were citizens

of neither Iowa nor Florida. Carolina continued to make its

allegations on information and belief but made clear that the

basis for its allegations were the four complaints or proposed

complaints filed in the underlying action.

The district court denied the motion for reconsideration

and held that the proposed amended complaint also suffered

from jurisdictional defects. The district court pointed out that

Carolina had not alleged the principal place of business of

one of the corporate defendants, USDC Tuchman Indiana,

Inc., and had simply stated that it was “unknown.”1 The court

faulted Carolina for not being able to specify the citizenship

of the members of the LLCs and held that it was insufficient

to allege simply that they were not citizens of Iowa or

 

1 The original complaint also suffered from this problem, although the

district court did not explicitly point that out in its first order. Carolina’s

motion for reconsideration stated that in the underlying action the

corporation had been identified as “a California corporation with its

corporate headquarters in California but doing business in the State of

Virginia.” Notwithstanding the company’s name, that should have given

Carolina enough to allege, at least on information and belief, that the

company’s principal place of business was in California. See Hertz Corp.

v. Friend, 559 U.S. 77, 92–93 (2010). Yet the proposed amended

complaint submitted with the motion for reconsideration alleged only, as

the district court noted, that the corporation’s principal place of business

was “unknown,” an allegation that is insufficient. It would be appropriate

to make Carolina allege more than “unknown,” but, as discussed below,

that is a correctable defect and would not justify ultimate dismissal of the

action, unless Carolina failed to correct it.
8 CAROLINA CAS. INS. CO. V. TEAM EQUIP., INC.

Florida. And, the court again rejected Carolina’s attempt to

plead jurisdictional allegations on information and belief.

Carolina appealed, arguing that the district court should

not have dismissed the complaint or denied Carolina leave to

amend.

II. Discussion

We review a district court’s decision to dismiss a

complaint for lack of subject-matter jurisdiction de novo.

Carter v. Health Net of Cal., Inc., 374 F.3d 830, 833 (9th Cir.

2004). The district court’s decision to deny leave to amend a

complaint is reviewed for abuse of discretion. Universal

Mortg. Co. v. Prudential Ins. Co., 799 F.2d 458, 459 (9th Cir.

1986).

We conclude that the district court should not have

dismissed Carolina’s original complaint without leave to

amend, because it did not find that any attempt to amend the

complaint would be futile. In addition, because the

information necessary to establish the diversity of the

citizenship of some of the defendants was not reasonably

available to plaintiff, we conclude that the court should have

permitted Carolina to plead its jurisdictional allegations as to

those defendants on information and belief and without

affirmatively asserting those defendants’ citizenship. The

diversity issues can be better considered by the court after the

defendants have been served and had an opportunity to

respond.
CAROLINA CAS. INS. CO. V. TEAM EQUIP., INC. 9

A. Dismissal without leave to amend 

A complaint should not be dismissed without leave to

amend unless amendment would be futile. McQuillion v.

Schwarzenegger, 369 F.3d 1091, 1099 (9th Cir. 2004). The

court should “freely give leave” to amend a complaint when

justice so requires. Fed. R. Civ. P. 15(a)(2).

In dismissing the complaint, the court relied on the plain

language of Rule 12(h)(3) and the proposition that “the

subject matter of the district court is not a waivable matter.” 

Emerich v. Touche Ross & Co., 846 F.2d 1190, 1194 n.2 (9th

Cir. 1988). But the district court did not conclude that

amendment would be futile, nor did it give any reason that

might support such a conclusion. The defects in the original

complaint were not of a kind that were uncorrectable, if

Carolina had or could obtain the necessary information. A

plaintiff should be permitted to amend a complaint to cure

“technical” defects. Lopez v. Smith, 203 F.3d 1122, 1129 (9th

Cir. 2000) (en banc). The technical defects in this case

include alleging diversity jurisdiction based on residency

rather than citizenship, and failing to allege the principal

place of business of a corporation.

Even where, as here, the district court entertained a

motion for reconsideration after denying the complaint,

dismissing the complaint without leave to amend was still

improper. The district court noted that a motion for

reconsideration is an “extraordinary remedy, to be used

sparingly.” Carroll v. Nakatani, 342 F.3d 934, 945 (9th Cir.

2003) (internal quotation marks omitted). Even though the

court went on to consider Carolina’s new jurisdictional

allegations, the application of the Rule 59(e) standard could

have affected the court’s decision to reject the proposed
10 CAROLINA CAS. INS. CO. V. TEAM EQUIP., INC.

amended complaint. At least in theory, if perhaps not in

practice in this case, that Rule 59(e) standard is much tougher

than the Rule 15(a)(2) standard for granting leave to amend

a complaint. In its initial dismissal, the district court should

have permitted Carolina to attempt to cure the defects by

amending the complaint.

B. Pleading jurisdiction when the jurisdictional facts are

in the control of the opposing party

The novel issue presented by this case is how a plaintiff

may allege diversity jurisdiction where the facts supporting

jurisdiction are not reasonably ascertainable by the plaintiff. 

Carolina explained in its motion for reconsideration that it

had made efforts to determine the citizenship of the two LLCs

and four of the eight individual defendants but it was unable

to do so from publicly available information. The business

filings that Carolina submitted to the district court show that

information necessary to determining the citizenship of the

LLCs could not be determined from the public filings of those

companies. Furthermore, Carolina reported that it was not

able to allege the citizenship of some of the individual

defendants based on their residency, as there was no

information about their residency in the underlying

complaints.2See Mondragon v. Capital One Auto Fin.,

736 F.3d 880, 886 (9th Cir. 2013) (“[A] court should consider

the entire record to determine whether evidence of residency

2

If Carolina is unable to determine the residence of those individual

defendants, it can be anticipated that serving a complaint and summons on

them might also pose a problem, but that problem is not before us at this

time. We presume that Carolina may obtain the information it needs via

discovery from the defendants it can locate.
CAROLINA CAS. INS. CO. V. TEAM EQUIP., INC. 11

can properly establish citizenship.” (internal quotation marks

omitted)).

Carolina made a showing that at least some of the

information necessary to establish the diversity of the parties’

citizenship was within the defendants’ control and argued that

it should have been excused from the general requirement

that it must plead diversity affirmatively and on knowledge. 

We have already noted that in “unusual circumstances” a

party need not affirmatively allege the citizenship of an

opposing party. Kanter v. Warner-Lambert Co., 265 F.3d

853, 857 (9th Cir. 2001). We conclude that in this situation

it was sufficient for Carolina to allege simply that the

defendants were diverse to it. Relatedly, we hold that

Carolina should have been permitted to plead its allegations

on the basis of information and belief. See 5 Charles Alan

Wright et al., Federal Practice and Procedure: Federal Rules

of Civil Procedure § 1224 (3d ed., updated 2013) (noting that

permitting allegations to be pled on information and belief “is

a practical necessity”); id. § 1206 (observing that it would be

“unduly restrictive” to prevent a party from pleading

jurisdiction on information and belief).

Other circuit courts have also adopted the sensible

principle that, at this early stage in the proceedings, a party

should not be required to plead jurisdiction affirmatively

based on actual knowledge. In Medical Assurance Co. v.

Hellman, 610 F.3d 371, 376 (7th Cir. 2010), the Seventh

Circuit held that a plaintiff was permitted to plead on

information and belief that the defendants were citizens of

different states. The defendants could not object that the

plaintiff had not proven their citizenship, because they had

not proffered any evidence rebutting the factual premise of

the jurisdictional allegations. Id. Instead, the court held that
12 CAROLINA CAS. INS. CO. V. TEAM EQUIP., INC.

the complaint could stand and the district court should

reevaluate its jurisdiction if contrary information emerged

later. Id. In Lewis v. Rego Co., 757 F.2d 66, 68–69 (3d Cir.

1985), the Third Circuit held that three of the four defendants

were permitted to allege in a removal petition “on

information and belief” that the fourth defendant, who had

not joined the removal petition, was “not a citizen of

Pennsylvania,” and that this was “sufficient to establish

diversity jurisdiction.”

The cases cited in the district court’s order do not support

a contrary conclusion. In America’s Best Inns, Inc. v. Best

Inns of Abilene, L.P., 980 F.2d 1072, 1074 (7th Cir. 1992)

(per curiam), for example, the Seventh Circuit held that an

affidavit of citizenship made “to the best of [the plaintiff’s]

knowledge and belief” was insufficient to establish diversity

jurisdiction. But in remanding the case with instructions to

dismiss, the court noted that the parties had had “chance after

chance to establish diversity of citizenship.” Id. Thus, the

complaint was not dismissed until after the plaintiff had

served its complaint, the defendant had answered, and the

parties had been specifically reminded of the need to establish

diversity of citizenship. Id. at 1073–74. The approach of the

Seventh Circuit does not support the district court’s dismissal

of the complaint without leave to amend.

The district court also quoted the Supreme Court’s

decision in Smith v. McCullough, 270 U.S. 456, 459 (1926),

that “a plaintiff . . . must show in his pleading, affirmatively

and distinctly, the existence of whatever is essential to federal

jurisdiction.” But the district court did not quote the end of

this sentence, in which the Court noted that a district court

need not dismiss a defective complaint if “the defect [can] be

corrected by amendment.” Id. Here, it is possible that
CAROLINA CAS. INS. CO. V. TEAM EQUIP., INC. 13

Carolina will be able to amend its complaint adequately if the

defendants respond.

If and when the defendants respond to the complaint, the

district court can revisit the jurisdictional allegations. If the

defendants deny that the court has jurisdiction, the district

court should evaluate the record created by the parties to

determine its jurisdiction. See Mondragon, 736 F.3d at 886. 

Jurisdictional discovery may be appropriate. See Harris

Rutsky & Co. Ins. Servs., Inc. v. Bell & Clements Ltd.,

328 F.3d 1122, 1135 (9th Cir. 2003). Even if the defendants

concede jurisdiction, the district court may still conclude that

some further showing of citizenship may be required to

confirm its jurisdiction. See Am.’s Best Inns, 980 F.2d at

1074. But it should not be assumed at this stage that a proper

basis for jurisdiction cannot be established.3

III. Conclusion

We conclude that the original complaint should not have

been dismissed without leave to amend. We also hold that

when information regarding a defendant that is necessary to

establish diversity of citizenship is not reasonably available

to a plaintiff, the plaintiff should be permitted to plead

jurisdictional allegations as to those defendants on

information and belief and without affirmatively asserting

3

It is, to be sure, possible that none of the defendants, after service, will

respond to the complaint. Given the nature of this action and these

defendants, that seems highly unlikely, however. What should happen in

that unlikely event is not a question that is before us.
14 CAROLINA CAS. INS. CO. V. TEAM EQUIP., INC.

specific details regarding the citizenship of those defendants.

The diversity issue is better addressed after the defendants

have had an opportunity to respond to the complaint.

REVERSED AND REMANDED.