United States District Court, D. Colorado
December 16, 2016
LUCY AYALA VILLANUEVO, Plaintiff,
LOWE'S HOME CENTERS, LLC, d/b/a Lowe's, Defendant.
ORDER TO SHOW CAUSE
A. BRIMMER UNITED STATES DISTRICT JUDGE
Court takes up this matter sua sponte on
defendant's notice of removal [Docket No. 1]. Defendant
states that the Court has subject matter jurisdiction over
this lawsuit pursuant to 28 U.S.C. § 1332. Docket No. 1
at 2, ¶ 3.
every case and at every stage of the proceeding, a federal
court must satisfy itself as to its own jurisdiction, even if
doing so requires sua sponte action. Citizens
Concerned for Separation of Church & State v. City &
County of Denver, 628 F.2d 1289, 1297 (10th Cir. 1980).
Absent an assurance that jurisdiction exists, a court may not
proceed in a case. See Cunningham v. BHP Petroleum Great
Britain PLC, 427 F.3d 1238, 1245 (10th Cir. 2005).
Courts are well-advised to raise the issue of jurisdiction on
their own, regardless of parties' apparent acquiescence.
First, it is the Court's duty to do so. See Laughlin
v. Kmart Corp., 50 F.3d 871, 873 (10th Cir. 1995),
abrogated on other grounds by Dart Cherokee Basin
Operating Co., LLC v. Ow ens, __ U.S. __, 135 S.Ct. 547
(2014) (“[I]f the parties fail to raise the question of
the existence of jurisdiction, the federal court has the duty
to raise and resolve the matter.”). Second,
“[s]ubject matter jurisdiction cannot be conferred or
waived by consent, estoppel, or failure to challenge
jurisdiction early in the proceedings.” Id.
Finally, delay in addressing the issue only compounds the
problem if it turns out that, despite much time and expense
having been dedicated to a case, a lack of jurisdiction
causes it to be dismissed or remanded regardless of the stage
it has reached. See U.S. Fire Ins. Co. v. Pinkard Constr.
Co., No. 09-cv-00491-PAB-MJW, 2009 WL 2338116, at *3 (D.
Colo. July 28, 2009).
well established that “[t]he party invoking federal
jurisdiction bears the burden of establishing such
jurisdiction as a threshold matter.” Radil v.
Sanborn W. Camps, Inc., 384 F.3d 1220, 1224 (10th Cir.
2004). Defendant invokes 28 U.S.C. § 1332 as the basis
for this Court's diversity jurisdiction. Docket No. 1 at
2, ¶ 3. Section 1332(a)(1) states: “The district
courts shall have original jurisdiction of all civil actions
where the matter in controversy exceeds the sum or value of
$75, 000, exclusive of interest and costs, and is between 
citizens of different States.” The facts as presently
averred, however, do not provide sufficient information
regarding defendant Lowe's Home Centers, LLC's
notice of removal identifies defendant Lowe's Home
Centers, LLC as a North Carolina corporation with its
principal place of business in North Carolina. Docket No. 1
at 3, ¶ 10. Notwithstanding defendant's claim that
it is a corporation, the allegation is almost certainly
incorrect. Compare N.C. Gen. Stat. Ann. §
55D-20(a)(1) (“The name of a corporation must contain
the word ‘corporation', ‘incorporated',
‘company', or ‘limited', or the
abbreviation ‘corp.', ‘inc.',
‘co.', or ‘ltd.'.”) with
N.C. Gen. Stat. Ann. § 55D-20(a)(2) (“The name of
a limited liability company must contain the words
‘limited liability company' or the abbreviation
‘L.L.C.' or ‘LLC'”). The Court will
assume that defendant is a limited liability company
(“LLC”), not a corporation.
for diversity purposes, “a corporation shall be deemed
to be a citizen of every State and foreign state by which it
has been incorporated and of the State or foreign state where
it has its principal place of business, ” 28 U.S.C.
§ 1332(c)(1); see Carden v. Arkoma Assocs., 494
U.S. 185, 196 (1990),  these considerations are irrelevant to the
determination of the citizenship of an LLC. The consensus
throughout the circuits is that an LLC, much like a
partnership, is deemed to be a citizen of all of the states
of which its members are citizens. See Siloam Springs
Hotel, L.L.C. v. Century Sur. Co., 781 F.3d 1233,
1237-38 (10th Cir. 2015) (“[I]n determining the
citizenship of an unincorporated association for purposes of
diversity, federal courts must include all the entities'
members.”); see also Zambelli Fireworks Mfg. Co. v.
Wood, 592 F.3d 412, 419-20 (3d Cir. 2010) (citing cases
from eight circuits for the proposition that “every
federal court of appeals to address the question has
concluded that a limited liability company, as an
unincorporated business entity, should be treated as a
partnership for purposes of establishing citizenship”).
when an entity consists of multiple tiers of ownership and
control, the entire structure must be considered for
diversity purposes. In other words, when an entity is
composed of multiple layers of constituent entities, the
citizenship determination requires an exploration of the
citizenship of the constituent entities as far down as
necessary to unravel fully the citizenship of the entity
before the court. See U.S. Advisor, LLC, 2009 WL
2055206, at *2; SREI-Miami, LLC v. Thomas, No.
08-cv-00730-MSK-BNB, 2008 WL 1944322, at *1 (D. Colo. May 2,
2008); see also Hicklin Eng'g, L.C. v. Bartell,
439 F.3d 346, 347 (7th Cir. 2006); Turner Bros. Crane
& Rigging, LLC v. Kingboard Chem. Holding Ltd., 2007
WL 2848154, at *4-5 (M.D. La. Sept. 24, 2007); cf.
Carden, 494 U.S. at 195 (“[W]e reject the
contention that to determine, for diversity purposes, the
citizenship of an artificial entity, the court may consult
the citizenship of less than all of the entity's
has not identified its members or the citizenship of those
members. Cf. Fifth Third Bank v. Flatrock 3, LLC,
2010 WL 2998305, at *3 (D.N.J. July 21, 2010) (concluding
that an allegation that “upon information and belief,
the members of [an LLC] are citizens of New York” was
insufficient because plaintiff “failed to identify or
trace the citizenship of each individual member” of the
LLC (internal quotation marks omitted)). The Court is
therefore unable to determine the citizenship of defendant
and whether the Court has jurisdiction. See United States
ex rel. General Rock & Sand Corp. v. Chuska Dev.
Corp., 55 F.3d 1491, 1495 (10th Cir. 1995) (“The
party seeking the exercise of jurisdiction in his favor must
allege in his pleading the facts essential to show
jurisdiction.”) (citations and internal quotation marks
foregoing reasons, it is ORDERED that, on or before 5:00 p.m.
on December 22, 2016, defendant shall show cause why this
case should not be remanded due to the Court's lack of
subject matter jurisdiction.
A corporation's “principal
place of business” is “the place where a
corporation's officers direct, control, and coordinate
the corporation's activities.” Hertz Corp. v.
Friend, 559 U.S. 77, 92-93 (2010).
This Court has previously noted that,
“[w]hile various state legislatures have decided to
permit the members of LLCs to remain anonymous to the public
at large, Congress has not created an exception to the
requirements of diversity jurisdiction which would allow the
members of LLCs to remain anonymous in federal court.”
U.S. Advisor, LLC, 2009 WL 2055206, at *3 (citing
Carden, 494 U.S. at 196).