Shinbachew v. Global Parking Systems, LLC

Background

Global Parking Systems, LLC and SP Plus Corporation removed Daniel Shinbachew’s case from the Superior Court for the County of San Mateo to federal court. They asserted diversity jurisdiction under 28 U.S.C. § 1332(a), which generally requires complete diversity: no plaintiff may be a citizen of the same state as any defendant.

The defendants asserted that Shinbachew was a California citizen, that Global Parking Systems was a Louisiana citizen, and that SP Plus was a citizen of Delaware and Illinois. They described Global Parking Systems as a corporation formed under Louisiana law.

Court’s Analysis

Judge Joseph C. Spero observed that Global Parking Systems’ name suggested that it was a limited liability company rather than a corporation. Under Ninth Circuit precedent, an LLC is a citizen of every state in which its owners or members are citizens. Its citizenship is not determined the same way as a corporation’s citizenship, based on incorporation and headquarters.

Because the notice of removal did not identify the citizenship of Global Parking Systems’ members, the court stated that it was not clear whether federal jurisdiction was proper.

Order

The court issued an order to show cause why the case should not be remanded to state court. It ordered the defendants to file, no later than December 22, 2021, either a declaration addressing the citizenship of each Global Parking Systems member or, if the entity was actually a corporation despite its name, a declaration stating that fact. The opinion does not state a final remand ruling.