United States District Court, D. Colorado
FOUR WINDS DISTRIBUTION, LLC, a Colorado corporation, Plaintiff,
v.
THE CINCINNATI INSURANCE COMPANY, an Ohio corporation, Defendant.
ORDER TO SHOW CAUSE
Philip
A. Brimmer, Chief United States District Judge.
The
Court takes up this matter sua sponte on the Notice
of Removal [Docket No. 1]. Defendant states that this Court
has jurisdiction pursuant to 28 U.S.C. § 1332. Docket
No. 1 at 3-4, ¶ 11.
In
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. See
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. Tuck v. United Servs. Auto. Ass'n, 859
F.2d 842, 844 (10th Cir. 1988). Second, regarding subject
matter jurisdiction, “the consent of the parties is
irrelevant, principles of estoppel do not apply, and a party
does not waive the requirement by failing to challenge
jurisdiction.” Ins. Corp. of Ireland v. Compagnie
des Bauxites de Guinee, 456 U.S. 694, 702 (1982)
(internal citations omitted). Finally, delay in addressing
the issue only compounds the problem if, despite much time
and expense having been dedicated to the case, a lack of
jurisdiction causes it to be dismissed. 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).
“The
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 asserts that this Court has
diversity jurisdiction under 28 U.S.C. § 1332. Pursuant
to that section, “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.” 28 U.S.C. § 1332(a). The facts
presently alleged are insufficient to establish
plaintiff's citizenship.
Defendant
alleges that “[p]laintiff is a limited liability
company organized under the laws of the State of Colorado
with its principal place of business” in Colorado and
that, “[u]pon information and belief, none of
Plaintiff's members are citizens of the state of
Ohio.” Docket No. 1 at 2, ¶¶ 4-5. These
allegations are deficient for two reasons. First, the
citizenship of a limited liability company is determined not
by its state of organization or principal place of business,
but by the citizenship of all of its members. See Siloam
Springs Hotel, LLC 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.”). Accordingly, whether plaintiff is
“organized under the laws” of Colorado with its
principal place of business in the state is irrelevant to the
issue of plaintiff's citizenship. Second, the Court reads
defendant's averment “upon information and
belief” to mean that defendant does not have
affirmative knowledge of plaintiff's citizenship. Such
unsupported allegations do not confer subject matter
jurisdiction over this case. See Yates v. Portofino Real
Estate Props. Co., LLC, No. 08-cv-00324-PAB-MJW, 2009 WL
2588833, at *3 (D. Colo. Aug. 17, 2009) (requiring plaintiff
to “address the citizenship of each of
[defendant's] members without resorting merely to their
‘information and belief' as to the same”);
U.S. Fire Ins. Co., 2009 WL 2338116, at *3 (finding
allegations based on “information and belief”
insufficient to confer subject matter jurisdiction). To
establish diversity jurisdiction as a threshold matter,
defendant must address the citizenship of each of
plaintiff's members without resorting to its
“information and belief” as to the same. See
Yates, 2009 WL 2588833, at *3.
Because
defendant's allegations are presently insufficient to
allow the Court to determine the citizenship of plaintiff 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.”
(internal quotation marks omitted)), it is
ORDERED
that, on or before 5:00 p.m. on Friday, August 30,
2019, defendant shall show cause why this case
should not be remanded to state court due to the ...