Ruf v. Raging Waters San Jose

Background

The defendant removed the case from Santa Clara County Superior Court to the U.S. District Court for the Northern District of California. Removal means moving a case from state court to federal court. The party seeking federal jurisdiction—in this case, the defendant—has the burden of showing that federal subject matter jurisdiction exists.

The court had previously ordered the defendant to provide additional information supporting removal by April 3, 2023. The defendant filed supplemental information, but the court concluded that the filing did not establish diversity jurisdiction.

Jurisdiction issue

For diversity jurisdiction, the parties must be citizens of different states, and the amount-in-controversy requirement must also be met. The court focused on the citizenship of the defendant, Festival Fun Parks, LLC. An LLC is a citizen of every state in which its members are citizens. The defendant identified Palace Entertainment Holdings, LLC as its member, but did not provide information about every state of which Palace Entertainment Holdings, LLC’s owners or members are citizens.

The court also cited a prior related proceeding in which the ownership chain was traced through Palace Entertainment Holdings, LLC to Centaur United States Holdings, Inc., and the defendant was found to be a California citizen. The court stated that, if the same information applied here, diversity would not exist because Bonnie Ruf was also alleged to be a California citizen.

Order

The court ordered the defendant to show cause in writing by April 17, 2023, why the case should not be remanded—sent back—to Santa Clara County Superior Court for failure to establish federal subject matter jurisdiction. The order required an explanation; it did not itself state that the case had been remanded.