County of Santa Clara v. Wang

Background

The People of the State of California and County of Santa Clara brought a public-nuisance action in the Santa Clara County Superior Court against Ke “Jason” Wang, Chunyan “Cathy” Ge, Woodside Capital LLC, Walnut Venture LLC, and Morgan Venture LLC. The plaintiffs alleged that the defendants created or allowed public nuisances on five properties in unincorporated Morgan Hill, including alleged illegal conversion of protected agricultural land into junkyards, trucking facilities, and recreational-vehicle parks. They also alleged violations involving grading, building permits, fire codes, hazardous materials, environmental health, and county zoning provisions.

The state court issued a temporary restraining order after a July 28, 2020 hearing. The defendants later removed the case to this court, asserting diversity jurisdiction under 28 U.S.C. § 1332. The plaintiffs filed a motion to return the case to state court. They argued that the defendants were domiciled in California and had not provided evidence otherwise. The defendants claimed that they and the members of the defendant limited liability companies were citizens and residents of the People’s Republic of China.

Jurisdictional analysis

Diversity jurisdiction generally requires more than $75,000 in controversy and complete diversity, meaning every plaintiff must be diverse from every defendant. The court noted that a limited liability company is a citizen of every state of which its members are citizens.

The court did not need to resolve where the defendants were located. It held that the defendants’ characterization of the plaintiffs as California citizens was legally incorrect. Public-nuisance actions are brought on behalf of the people of California, so the State of California was the real party in interest. A state is not a citizen of itself for purposes of diversity jurisdiction. Therefore, diversity jurisdiction did not exist, and the defendants identified no other basis for federal removal jurisdiction.

Disposition

The court remanded the case to the Santa Clara County Superior Court for lack of federal subject-matter jurisdiction. The plaintiffs’ pending motion to remand, Docket No. 29, and administrative motion concerning the temporary restraining order, Docket No. 30, were terminated as moot. Judge Edward J. Davila issued the order.