Hsieh v. Wu
- Nathanael Cousins
- 5:20-cv-00543
- U.S. District Court · Northern District of California
- 3
In Hsieh v. Wu, Judge Cousins dismissed the case without prejudice after finding no federal diversity jurisdiction because a plaintiff was a member of defendant Sunrise Inn Food Plaza.
Daniel Hsieh and Teresa Chiu’s federal case against Joe Wu, Gloria Wu, Sunrise Inn Food Plaza, LP, and United Venture Regional Center, LLC was dismissed without prejudice for lack of subject matter jurisdiction.
What happened
Hsieh v. Wu involved Daniel Hsieh and Teresa Chiu, who sued Joe Wu, Gloria Wu, Sunrise Inn Food Plaza, and United Venture Regional Center in federal court. They said the court had diversity jurisdiction, which generally concerns disputes involving citizens of different states or countries.
The court questioned whether the parties were citizens of different places because the complaint did not identify the citizenship of the owners or members of Sunrise Inn Food Plaza or United Venture Regional Center. The parties then stated that Chiu was a Canadian citizen and a limited partner of Sunrise Inn Food Plaza, while that partnership had members who were citizens of California, Washington State, and Canada.
The court ruled that Chiu’s membership in Sunrise Inn Food Plaza prevented diversity jurisdiction under the Supreme Court’s rule for partnerships. Judge Cousins dismissed the case without prejudice for lack of subject matter jurisdiction.
The detailed version
- Hsieh v. Wu · No. 5:20-cv-00543
- Nathanael Cousins
- Apr. 28, 2020
Background
Daniel Hsieh and Teresa Chiu sued Joe Wu, Gloria Wu, Sunrise Inn Food Plaza, LP, and United Venture Regional Center, LLC. The complaint alleged federal diversity jurisdiction under 28 U.S.C. § 1332(a). It identified Sunrise Inn Food Plaza as a limited liability partnership and United Venture Regional Center as a limited liability corporation, but it did not identify the citizenship of either entity’s owners or members.
The court ordered the parties to explain why it had subject matter jurisdiction, meaning legal authority to hear the case. In a joint response, the parties stated that United Venture Regional Center had two members, Joe Wu and Gloria Wu, who were both citizens of California. They also stated that Sunrise Inn Food Plaza had five members who were citizens of California, Washington State, and Canada. The parties stated that Hsieh and Chiu were citizens of Canada and that Chiu was a limited partner of Sunrise Inn Food Plaza.
Jurisdictional Analysis
The court relied on the Supreme Court’s decision in Carden v. Arkoma Associates, which held that a limited partnership has the citizenship of every state of which its partners are citizens, regardless of whether they are general or limited partners. The court also cited Ninth Circuit authority stating that an unincorporated association has the citizenship of all its members.
The parties suggested that diversity jurisdiction would exist if an exception allowed a limited partner to claim diversity jurisdiction when suing the partnership, but they could not identify such an exception. The court stated that it was aware of no exception. It also cited Ninth Circuit authority holding that the type of a member’s partnership interest does not change the partnership’s citizenship.
Ruling
The court found that it lacked subject matter jurisdiction because Chiu, a citizen of Canada, was both a plaintiff and a limited member of defendant Sunrise Inn Food Plaza. The court stated that jurisdiction would exist if the plaintiffs dismissed Sunrise Inn Food Plaza and continued only against United Venture Regional Center, Joe Wu, and Gloria Wu. The parties’ response indicated that the plaintiffs did not wish to dismiss Sunrise Inn Food Plaza.
Judge Nathanael M. Cousins therefore dismissed the case without prejudice for lack of subject matter jurisdiction.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.