Pebble Beach Investment Group, LLC v. Square One Starts, LLC
- Vince Chhabria
- 3:21-cv-00522
- U.S. District Court · Northern District of California
- 2
In Pebble Beach Investment Group v. Square One Starts, Judge Demarch ordered Square One to show that diversity jurisdiction exists by identifying both LLCs’ members.
Square One Starts, LLC must provide evidence identifying the citizenship of the owners or members of both LLCs; the jurisdiction of the federal court over the case remains unresolved.
What happened
Pebble Beach Investment Group, LLC sued Square One Starts, LLC in state court, and Square One removed the case to federal court based on diversity jurisdiction.
The court explained that an LLC’s citizenship depends on the citizenship of all its owners or members. The removal papers did not clearly identify the members of either LLC, so the court could not determine whether federal jurisdiction existed.
Judge Demarch ordered Square One to respond by February 8, 2021, identifying each LLC’s owners or members and supporting that information with evidence. The order did not decide whether federal jurisdiction ultimately exists.
The detailed version
- Pebble Beach Investment Group, LLC v. Square One Starts, LLC · No. 3:21-cv-00522
- Vince Chhabria
- Jan. 25, 2021
Background
Square One Starts, LLC removed the case from the Santa Cruz County Superior Court to the federal district court on January 21, 2021. It claimed diversity jurisdiction under 28 U.S.C. § 1332, which can allow a federal court to hear disputes involving citizens of different states.
Jurisdiction issue
The court stated that an LLC is treated like a partnership for diversity-jurisdiction purposes. An LLC is therefore considered a citizen of every state where its owners or members are citizens. The notice of removal did not clearly identify all owners or members of Square One Starts or Pebble Beach Investment Group. As a result, the court could not determine whether subject-matter jurisdiction existed based on diversity of citizenship.
Order
The court ordered Square One Starts to file a response by February 8, 2021, identifying the citizenship of each LLC’s owners or members. The response had to be supported by evidence, such as a declaration. The order was an order to show cause regarding removal; it did not make a final determination that federal jurisdiction existed or did not exist.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.