Independent Financial Group, LLC v. Quest Trust Company
- William Orrick
- 3:21-cv-00537
- U.S. District Court · Northern District of California
- 2
In Independent Financial Group v. Quest Trust, Judge Cousins ordered Quest to explain why the removed case should not return to state court.
Quest Trust Company was required to explain why the case should remain in federal court. Independent Financial Group, LLC and Quest were also required to state whether they consented to a magistrate judge’s jurisdiction.
What happened
Independent Financial Group, LLC v. Quest Trust Company concerns Quest Trust Company’s removal of a case from Monterey County Superior Court to federal court based on diversity jurisdiction.
The court said Quest used the wrong citizenship rule for Independent Financial Group because it is a limited liability company. Quest was required to identify all of the company’s members and their citizenship before evaluating whether diversity jurisdiction existed.
Judge Nathanael M. Cousins ordered Quest to explain in writing by February 10, 2021, why the case should not be sent back to state court. The court did not order remand in this opinion and also required the parties to state by February 5, 2021, whether they consented to a magistrate judge’s jurisdiction.
The detailed version
- Independent Financial Group, LLC v. Quest Trust Company · No. 3:21-cv-00537
- William Orrick
- Jan. 27, 2021
Background
Quest Trust Company removed the case from Monterey County Superior Court on January 22, 2021. Quest asserted that federal jurisdiction existed because the parties were citizens of different states under 28 U.S.C. § 1332.
Court’s analysis
The court stated that Quest applied the citizenship test for corporations to Independent Financial Group, LLC. For diversity-jurisdiction purposes, a limited liability company is treated like a partnership. The court explained that Quest should have listed the citizenship of every member of Independent Financial Group and then evaluated whether the parties were diverse.
Order
The court ordered Quest Trust Company to show cause in writing by February 10, 2021, why the case should not be remanded, meaning returned, to state court. The opinion does not itself order remand. The court also ordered all parties to consent or decline the jurisdiction of a magistrate judge by February 5, 2021.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.