Opinion
No. CV-12-2516-PHX-LOA
11-28-2012
MD Propertyco, LLC, a Texas limited liability company, Plaintiff, v. Mad Dog Saloon AZ, L.L.C., an Arizona limited liability company; Boulder Junction-Greenfield, Inc., a Wisconsin corporation; Thomas Lalicata, an adult individual, Defendants.
ORDER
This action arises on the Court's review of Plaintiff's Complaint, filed on November 26, 2012 by Texas counsel, Christianne L. Edlund, who has moved for admission pro hac vice to represent Plaintiff in the District Court of Arizona per LRCiv 83.1(b)(2). (Docs. 1, 6)
The Complaint violates the District Court of Arizona's civil Rules of Practice ("Local Rules" or "LRCiv") because it was not properly filed in text-searchable format per LRCiv 7.1(c), 5.5(b), and the definition of ".pdf," in the District Court's ECF Manual, at I(A), p. 4. The Court will strike the Complaint without prejudice with leave to file an Amended Complaint. Moreover, Plaintiff alleges federal jurisdiction is predicated, in part, on "28 U.S.C. § 1332 as the matter in controversy exceeds the sum or value of $75,000 and is between citizens of different states." (Doc. 1, ¶ 5 at 3) As discussed below, the Complaint's citizenship allegations as to MD Propertyco, LLC, a Texas limited liability company, and Defendant Mad Dog Saloon AZ, L.L.C., an Arizona limited liability company, are insufficient to establish complete diversity.
A. Local Rules
The Ninth Circuit has "explain[ed], yet again, the importance of following the court's local rules. 'District courts have broad discretion in interpreting and applying their local rules.'" Simmons v. Navajo Cnty, 609 F.3d 1011, 1017 (9th Cir. 2010) (quoting Miranda v. S. Pac. Transp. Co., 710 F.2d 516, 521 (9th Cir. 1983)). Local rules have "the force of law." Hollingsworth v. Perry, 558 U.S. 183, 130 S.Ct. 705, 710 (2010) (quoting Weil v. Neary, 278 U.S. 160, 169 (1929)). They "are binding upon the parties and upon the court, and a departure from local rules that affects substantial rights requires reversal." Professional Programs Group v. Department of Commerce, 29 F.3d 1349, 1353 (9th Cir. 1994) (internal quotation marks omitted).
The Complaint was not properly filed electronically in text-searchable .pdf format. LRCiv 7.1(c) mandates that "[d]ocuments submitted for filing in the ECF System shall be in a Portable Document Format(PDF)." LRCiv 7.1(c). Compliance with the District Court's electronic filing format and the ECF Manual is not a petty requirement. Improperly filing pleadings, motions, briefs or other documents in non-text searchable format precludes judges, law clerks and adverse counsel from, among others, highlighting a portion of a pleading or brief and copying it onto another document or order. Thus, use of unauthorized formatting forces extremely busy District of Arizona judges, law clerks and adverse counsel to unnecessarily retype portions of a filed document to be quoted or referenced and causes unnecessary delay in the creation of orders and responsive briefs. Compliance with LRCiv 7.1(c) and the ECF Manual by lawyers is not optional.
B. Citizenship of Limited Liability Companies
A federal district court is a court of limited jurisdiction, and the burden of establishing jurisdiction is on the party claiming jurisdiction. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) ("Federal courts are courts of limited jurisdiction. . . . It is to be presumed that a cause lies outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction.") (citations omitted). Here, "Plaintiff has the burden of establishing the Court's jurisdiction." San Carlos Irrigation and Drainage Dist. v. U.S., 2005 WL 3434704, at *1 (D. Ariz. Dec. 14, 2005) (citations omitted). "A [district] court has an obligation to inquire sua sponte into its subject matter jurisdiction, and to proceed no further if such jurisdiction is wanting." Feldman v. Allstate Ins. Co., 322 F.3d 660, 665 (9th Cir. 2003).
When there is complete diversity between the parties and the amount in controversy is over $75,000.00, a district court may property assert subject-matter jurisdiction over a case pursuant to 28 U.S.C. § 1332. In cases where entities, like corporations, rather than individuals are litigants, diversity jurisdiction depends on the form of the entity. In Hertz Corp. v. Friend, ___ U.S. ___, 130 S. Ct. 1181, 1192 (2010), the Supreme Court held that, for diversity jurisdiction purposes, a complaint or removal notice must allege both the corporation's state of incorporation and location of the principal place of business, which is its "nerve center," i.e., "the place where a corporation's officers direct, control, and coordinate the corporations activities." At the pleading stage and absent unusual circumstances, a party seeking to invoke diversity jurisdiction should affirmatively allege, but need not prove, the actual citizenship of the parties. Kanter v. Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001) ("[I]n a diversity action, the plaintiff must state all parties' citizenships such that the existence of complete diversity can be confirmed.") (citation omitted). The Ninth Circuit has recently established that a complaint that follows the general framework set forth in Form 7(a) in the Appendix of Forms to the Federal Rules of Civil Procedure is sufficient to satisfy Rule 8(a)(1)'s jurisdictional pleading requirement. Harris v. Rand, 682 F.3d 846, 850-52 (9th Cir. 2012).
Federal Rules of Civil Procedure Form 7(a) in the Appendix of Forms sets out a proposed format for alleging diversity:
The plaintiff is [a citizen of Michigan ] [a corporation incorporated under the laws of Michigan with its principal place of business in Michigan ]. The defendant is [a citizen of New York ] [a corporation incorporated under the laws of New York with its principal place of business in New York ]. The amount in controversy, without interest and costs, exceeds the sum or value specified by 28 U.S.C. § 1332.
For purposes of diversity jurisdiction and unlike corporations, limited liability companies "are analogized to partnerships, which take the citizenship of every general and limited partner. Lincoln Prop. Co., 546 U.S. at 84 n. 1 (citing Carden v. Arkoma Assocs., 494 U.S. 185, 189 (1990) ("for diversity purposes, a partnership entity, unlike a corporation, does not rank as a citizen; to meet the complete diversity requirement, all partners, limited as well as general, must be diverse from all parties on the opposing side.")); Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006) ("[E]very circuit that has addressed the question treats [an LLC] like partnerships for the purposes of diversity jurisdiction.") (citations omitted). "We therefore join our sister circuits and hold that, like a partnership, an LLC is a citizen of every state of which its owners/members are citizens." Id. A complaint "must expressly identify each member of any limited partnerships, and/or limited liability companies, along with each member's citizenship. Such jurisdictional allegations are necessary for this Court to conclude whether diversity jurisdiction is satisfied." Liberty Propane, L.P. v. Feheley, 2006 WL 2553396, at *1 n. 1 (D. Ariz. Aug. 29, 2006).
"Diversity jurisdiction is based on citizenship, not residency." Kalinowski v. Davol, Inc., 2006 WL 2615894, at *2 (D. Ariz. Sept. 11, 2006) (emphasis in original). "To be a citizen of a particular state, a natural person must both be a citizen of the United States and be domiciled within that state." Id. (citing Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 828 (1989)). "A person's domicile is his or her permanent home, where he or she resides with the intention to remain or to return." Id. (citing Lew v. Moss, 797 F.2d 747, 749 (9th Cir. 1986)). A person residing in a given state, however, is not necessarily domiciled there, and is not necessarily a citizen of that state. Kanter, 265 F.3d at 857.
On the Court's own motion and because the Clerk of Court is not authorized to strike a non-conforming pleading or filing, Rule 5(d)(4), Fed.R.Civ.P.,
IT IS ORDERED that Plaintiff's Complaint, doc. 1, is hereby STRICKEN without prejudice. If Plaintiff timely and fully complies with this Order, Plaintiff's Amended Complaint shall relate back to its initial filing date pursuant to Rule 15, Fed.R.Civ.P. If Plaintiff elects to base jurisdiction on 28 U.S.C. § 1332, the Amended Complaint must expressly identify each member of each limited liability company, along with each member's citizenship.
IT IS FURTHER ORDERED that Plaintiff may file an Amended Complaint on or before Monday, December 10, 2012 which shall comply in all respects with this Order and the District Court's Local Rules.
IT IS FURTHER ORDERED that counsels' pleadings, motions, memoranda, or other filings in this case shall be created via personal computer with a word processing application, e.g., Microsoft Word® or Corel WordPerfect®, then converted to portable document format (.pdf). See LRCiv 7.1(c) and definition of ".pdf", ECF Manual, at I(A), p. 4. ("[E]lectronic documents must be converted to .pdf directly from a word processing program (e.g., Microsoft Word® or Corel WordPerfect®) and must be text searchable."). Such filings shall not be printed to paper and then scanned and saved as portable document format (.pdf). Documents which exist only in paper form, like exhibits or certain attachments to pleadings may, however, be scanned from a paper copy and saved in a portable document format (.pdf).
IT IS FURTHER ORDERED that counsel shall hereinafter comply with the Rules of Practice for the United States District Court for the District of Arizona, as amended on December 1, 2012. The District's Rules of Practice may be found on the District Court's internet web page at www.azd.uscourts.gov/. All other rules may be found at www.uscourts.gov/rules/. Counsel are also reminded of the certification to comply with the Local Rules and Standards of Professional Conduct with admission to practice pro hac vice in this District Court. The Standards of Professional Conduct are located on the District's website, click on link "Attorney Information," and then click on link "Attorney Admissions Information."
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Lawrence O. Anderson
United States Magistrate Judge
Fed.R.Civ.P. Form 7(a) (2007) (brackets in original).