Pratt v. Higgins

Background

Defendants Robert C. Higgins, Sharon Higgins, and Green Garden Group, LLC moved to remand the case to Sonoma County Superior Court. They had originally removed the case under the federal diversity-jurisdiction statute, 28 U.S.C. § 1332(a). The defendants later argued that removal was improper because David Pratt and Green Garden Group, LLC were both California citizens. The opinion states that Pratt was a member of the company.

Jurisdiction and Remand

The court explained that a limited liability company is a citizen of every state in which its members are citizens. Thus, Pratt’s California citizenship also applied to Green Garden Group, LLC, even though Pratt had identified the company as a nominal defendant. Because Pratt and one defendant were citizens of the same state, complete diversity was absent, and the federal court lacked subject matter jurisdiction. The court also noted that, even if Green Garden Group, LLC were treated as the plaintiff for the derivative claim, the opinion stated that there still would not be complete diversity because there would be a Canadian plaintiff and Canadian defendants.

The court granted the defendants’ motion to remand and remanded the case to Sonoma County Superior Court. The clerk was directed to remand the case and close the federal file.

Vacatur of Prior Dismissal Order

Pratt asked the court to vacate its earlier order dismissing defendants 3GI and EHI for lack of personal jurisdiction. He argued that vacatur was necessary to prevent prejudice because the court had determined that it lacked jurisdiction over the case from the beginning. Relying on a Ninth Circuit decision involving a similar sequence of rulings, the court concluded that the earlier dismissal order should be vacated. The court therefore vacated that order.

Attorneys’ Fees

Pratt also requested attorneys’ fees under 28 U.S.C. § 1447(c). The court stated that fees may be awarded only when the removing party lacked an objectively reasonable basis for removal. It denied the request because Pratt had not shown that the defendants lacked such a basis. The court cited the complication created by Pratt’s identification of Green Garden Group, LLC as a nominal defendant and noted that Pratt had previously asserted that the federal court had jurisdiction based on complete diversity. The court denied the fee request.

Disposition

Judge Haywood S. Gilliam, Jr. granted the motion to remand, remanded the case to Sonoma County Superior Court, vacated the prior dismissal order, denied Pratt’s request for attorneys’ fees, and directed the clerk to close the federal file.