Court Opinion

ID: 4257917
Source: CourtListenerOpinion
Date Created: 2018-03-23 20:01:36.105182+00
Date Added: 2024-06-11T14:28:15.967651
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                            MAR 23 2018
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

STALWART CAPITAL, LLC, a New                     No.   16-35079
Jersey limited liability company,
                                                 D.C. No. C14-01128 TSZ
              Plaintiff-Appellant,

 v.
                                                 MEMORANDUM*
ICAP PACIFIC NORTHWEST
OPPORTUNITY AND INCOME FUND,
LLC, a Delaware limited liability company
et al.,

              Defendants-Appellees.

                    Appeal from the United States District Court
                      for the Western District of Washington
                     Thomas S. Zilly, District Judge, Presiding

                       Argued and Submitted March 6, 2018
                               Seattle, Washington

Before: RAWLINSON and CHRISTEN, Circuit Judges, and BENCIVENGO,**
District Judge.

         *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
         **
             The Honorable Cathy Ann Bencivengo, United States District Judge
for the Southern District of California, sitting by designation.
      Appellant Stalwart Capital, LLC (“Stalwart”) appeals the district court’s

judgment in favor of Appellees following a jury trial. We have jurisdiction under

28 U.S.C. § 1291. Because we find the record insufficient to establish subject

matter jurisdiction, we remand for further findings regarding whether there was

diversity jurisdiction when the case was filed, and therefore do not reach the merits

of the appeal. Snell v. Cleveland, Inc., 316 F.3d 822, 826 (9th Cir. 2002) (“Federal

Rule of Civil Procedure 12(h)(3) provides that a court may raise the question of

subject matter jurisdiction, sua sponte, at any time during the pendency of the

action, even on appeal.”); Matheson v. Progressive Specialty Ins. Co., 319 F.3d
1089, 1091 (9th Cir. 2003)(“We cannot consider the merits of the appeal before

assuring ourselves that the district court had jurisdiction.”)

      Stalwart filed this case in the district court on the basis of diversity

jurisdiction under 28 U.S.C. § 1332(a). “For a federal court to exercise diversity

jurisdiction under § 1332(a), the amount in controversy must exceed $75,000, and

the parties must be citizens of different states.” Rainero v. Archon Corp., 844 F.3d
832, 839 (9th Cir. 2016). The latter requirement is at issue.

      Appellant and three of the Appellees are limited liability companies

(“LLCs”), meaning each one “is a citizen of every state of which its

owners/members are citizens.” Johnson v. Columbia Properties Anchorage, LP,

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437 F.3d 894, 899 (9th Cir. 2006). Because the record on appeal was silent as to

the membership of the LLC parties and the citizenship of those members, this court

ordered supplemental briefing concerning subject matter jurisdiction. Although

the parties’ briefs included details about the citizenship of the members of several

of the LLC parties, the supplemental briefing was not complete as to the

citizenship of all members. When a question about jurisdiction is raised sua sponte

by the court on appeal, and the appellate record is incomplete, it is common to

remand to the district court to conduct fact-finding about the parties’ citizenship.

Matheson, 319 F.3d at 1091.

      Accordingly, we remand to the district court to ascertain the citizenship of

all the parties and determine if there was complete diversity of citizenship at the

time the complaint was filed. Neither side shall recover costs.

      REMANDED WITH INSTRUCTIONS.

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