United States District Court, D. Colorado
ORDER TO SHOW CAUSE
A. BRIMMER United States District Judge.
Court takes up this matter sua sponte on the
Interpleader Complaint [Docket No. 1] filed by the Prudential
Insurance Company of America (“Prudential”).
Prudential states that the Court has subject matter
jurisdiction over this lawsuit pursuant to 28 U.S.C. §
1331 and 28 U.S.C. § 1335. Docket No. 1 at 2,
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, 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). Prudential invokes 28 U.S.C. § 1331 and 28 U.S.C.
§ 1335 as independent bases for the Court's
jurisdiction. Docket No. 1 at 2, ¶¶ 6-7.
28 U.S.C. § 1331, the Court has subject matter
jurisdiction over cases “arising under” federal
law. 28 U.S.C. § 1331. A case arises under federal law
if two conditions are met. “First, a question of
federal law must appear on the face of plaintiff's
well-pleaded complaint. Second, plaintiff's cause of
action must either be (1) created by federal law, or (2) if
it is a state-created cause of action, its resolution must
necessarily turn on a substantial question of federal
law.” Nicodemus v. Union Pac. Corp., 318 F.3d
1231, 1235 (10th Cir. 2003) (citations omitted). Prudential
states that the Court has original jurisdiction over this
dispute “as the underlying claims at issue involve
rights and liabilities governed by federal law, specifically,
the Servicemembers' Group Life Insurance Statute, 38
U.S.C. § 1965, et seq.” Docket No. 1 at 2, ¶
6. However, the mere fact that this case involves a federal
statute does not confer federal question jurisdiction.
White v. Lancaster, 2015 WL 7176106, at *1 (W.D.
Okla. Nov. 13, 2015) (“This Court, therefore, finds it
does not have jurisdiction over plaintiff's claims simply
because they involve FSGLI benefits.”); Bakkeby v.
Prudential Ins. Co. of Am., 2013 WL 4807163, at *3 (N.D.
Okla. Sept. 9, 2013) (finding that federal question
jurisdiction did not exist in military group life insurance
dispute where “the complaint makes no allegations that
the government has breached any obligations under 38 U.S.C.
§ 1965, et seq.”). The complaint in this
case presents a dispute over the interpretation of a
beneficiary designation form, which does not appear to
require the interpretation of the underlying federal statute.
See Docket No. 1 at 3-4, ¶¶ 12-21. Because
this dispute does not require the resolution of a federal
question, the Court does not have subject matter jurisdiction
under 28 U.S.C. § 1331.
Court now considers an alternative basis for subject matter
jurisdiction. Under 28 U.S.C. § 1335, the Court has
subject matter jurisdiction when “1) the plaintiff has
possession of $500 or more of property; 2) two or more
adverse claimants of diverse citizenship claim rights to the
property; and 3) the plaintiff has deposited the disputed
money or property, or a bond equivalent to the value of the
disputed property, into the Court registry.”
Schneider v. Cate, 405 F.Supp.2d 1254, 1265 (D.
Colo. 2005); see also 28 U.S.C. § 1335. The
diversity requirement is met “if at least two of the
adverse claimants are citizens of different states, without
regard to the citizenship of other claimants or the
stakeholder.” N.Y. Life Ins. Co. v. Connecticut
Dev. Auth., 700 F.2d 91, 95 n.5 (2d Cir. 1983) (citing
State Farm Fire & Casualty Co. v. Tashire, 386
U.S. 523, 530-31 (1967)). Plaintiff has possession of a death
benefit in the amount of $50, 000.00, Docket No. 1 at 3,
¶ 11, and has stated its willingness to deposit the
death benefit as designated by the Court. Id. at 5,
¶ 24. Thus, two of the three factors are met. The facts
as presently averred, however, do not provide sufficient
information regarding the diversity of the adverse claimants.
adverse claimants in this action are defendants Jackie Brand,
Natalie Brand, Nia Brand Traxler, and Timothy Brand.
Id. at 4, ¶¶ 17-20. The complaint states
that, “[u]pon information and belief, ” Jackie
Brand is a resident of Wyoming, Natalie Brand is a resident
of Texas, Nia Brand Traxler is a resident of Arizona, and
Timothy Brand is a resident of Colorado. Id. at 1-2,
¶¶ 2-5. These jurisdictional allegations are
defective in two regards. First, jurisdictional allegations
made on “information and belief” do not satisfy
plaintiff's burden of establishing subject matter
jurisdiction. Villanuevo v. Lowe's Home Centers,
LLC, No. 16-cv-02613-PAB-KLM, 2016 WL 7320393, at *2 (D.
Colo. Dec. 16, 2016) (citing Fifth Third Bank v. Flatrock
3, LLC, 2010 WL 2998305, at *3 (D.N.J. July 21, 2010));
Pinkard Constr. Co., 2009 WL 2338116, at *3. Second,
the complaint alleges the residences for each adverse
claimant, but domicile, not residency, is determinative of
citizenship. See Crowley v. Glaze, 710 F.2d 676, 678
(10th Cir. 1983). Accordingly, the Court is unable to
determine whether it has subject matter jurisdiction over the
foregoing reasons, it is ORDERED that, on or before 5:00 p.m.
on June 12, 2017, plaintiff Prudential Insurance Company of
America shall show cause why this case should not be