Stanic v. Orthofix US LLC
- Maxine Chesney
- 3:21-cv-08063
- U.S. District Court · Northern District of California
- 2
In Stanic v. Orthofix, Judge Cousins ordered Orthofix to explain why diversity jurisdiction exists or the case should be sent back.
Orthofix US, LLC had to explain the basis for federal jurisdiction and provide information about its members and Ken Hiebert’s citizenship. All parties were affected by the deadline to consent to or decline magistrate-judge jurisdiction, and the case could have been sent back to state court if jurisdiction was not established.
What happened
Stanic v. Orthofix US LLC began in Santa Clara County Superior Court and was moved to federal court by Orthofix US, LLC. Orthofix said federal jurisdiction existed because the parties were citizens of different states or countries.
The court identified problems with that explanation. Orthofix treated itself like a corporation, even though limited liability companies require information about all of their members. Orthofix also did not provide enough information about Ken Hiebert’s citizenship to determine whether federal jurisdiction existed.
Judge Nathanael M. Cousins ordered Orthofix to explain in writing by October 27, 2021, why the case should not be sent back to state court. The order did not itself remand the case. It also reminded the parties to state by October 28 whether they consented to a magistrate judge’s jurisdiction.
The detailed version
- Stanic v. Orthofix US LLC · No. 3:21-cv-08063
- Maxine Chesney
- Oct. 20, 2021
Background
Orthofix US, LLC removed the case from Santa Clara County Superior Court on October 14, 2021. Its removal notice asserted diversity jurisdiction under 28 U.S.C. § 1332(a)(3), which can allow a federal court to hear certain disputes involving citizens of different states or foreign countries.
Jurisdictional concerns
The court identified two problems with the removal notice. First, Orthofix applied the citizenship test for corporations to itself, although it is a limited liability company. For diversity-jurisdiction purposes in the Ninth Circuit, a limited liability company is treated like a partnership. Orthofix therefore needed to identify the citizenship of all its members and evaluate whether the parties were diverse.
Second, Orthofix did not provide enough information about Defendant Ken Hiebert’s citizenship. The court explained that if Hiebert were a Canadian resident and Canadian citizen, the court could exercise jurisdiction over him as a foreign citizen under § 1332(a)(3). But if he were a Canadian resident and United States citizen, he would be considered "stateless" for purposes of that provision, and diversity jurisdiction would not exist.
Order
The court ordered Orthofix to show cause in writing by October 27, 2021, why the case should not be remanded to state court. This was an order requiring an explanation; it was not itself a remand order. The court also reminded all parties to consent to or decline the jurisdiction of a magistrate judge by October 28, 2021. The order was signed by Nathanael M. Cousins, United States Magistrate Judge.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.