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Jack v. Asbestos Corporation Ltd.

United States District Court, W.D. Washington

May 24, 2017

PATRICK JACK, et al., Plaintiffs,
v.
ASBESTOS CORPORATION LTD., et al., Defendants.

          ORDER DIRECTING SUPPLEMENTAL BRIEFING

          JAMES L. ROBART United States District Judge

         I. INTRODUCTION

         Before the court is Plaintiffs Patrick and Leslie Jack's response to the court's order to show cause regarding subject matter jurisdiction and Defendants M.W. Custom Papers, LLC (“M.W.”), Hennessy Industries, LLC's (“Hennessy”), Crosby Valve, LLC (“Crosby”), and Goulds Pumps, LLC's (“Goulds”) supplemental corporate disclosure statements. (SMJ Resp. (Dkt. # 136); M.W. Supp. Statement (Dkt. # 133); Crosby Supp. Statement (Dkt. # 134); Hennessy Supp. Statement (Dkt. # 135); Goulds Supp. Statement (Dkt. # 141).) Based on these filings and the May 23, 2017, hearing at which the court ordered supplemental briefing on whether the court has subject matter jurisdiction over Hennessy and Crosby, the court issues this order to clarify its May 23, 2017, oral ruling directing supplemental briefing.

         II. BACKGROUND & ANALYSIS

         A. Legal Background

         A federal court has diversity jurisdiction over cases where the citizenship of the adverse parties is completely diverse and the amount in controversy exceeds $75, 000.00. 28 U.S.C. § 1332. For purposes of assessing diversity jurisdiction, the court must consider the domicile of all members of a limited liability company (“LLC”). Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006) (“[A]n LLC is a citizen of every state of which its owners/members are citizens.”); see also Local Rules W.D. Wash. LCR 8(a). If a member of an LLC is another LLC, the court considers the domicile of the members of that LLC. See Johnson, 437 F.3d at 899. If a member of an LLC is a corporation, the court must consider the corporation's place of incorporation and principal place of business in assessing domicile for purposes of diversity jurisdiction. 28 U.S.C. § 1332(c)(1).

         B. Factual Background

         The Jacks assert that the court's jurisdiction is based on diversity of citizenship. (See Compl. (Dkt. # 1) ¶ 40 (citing 28 U.S.C. § 1332).) In their complaint, the Jacks name certain defendants as corporations (Compl. ¶¶ 11, 19-20, 26 (naming Crosby Valve, Inc., Goulds Pumps, Inc., MeadWestvaco Corporation, and Hennessy Industries, Inc., as defendants)), but those defendants-Goulds, M.W., Hennessy, and Crosby (collectively, “LLC Defendants”)-state that they are in fact LLCs (Goulds Statement (Dkt. # 41) at 1 (stating that Goulds Pumps, Inc., is now known as Goulds Pumps LLC); M.W. Statement (Dkt. # 57) at 1 (stating that the Jacks improperly named M.W. Custom Papers, LLC, as MeadWestvaco Corporation); Hennessy Statement (Dkt. # 106) at 1 (stating that the Jacks improperly named Hennessy Industries, LLC, as Hennessy Industries, Inc.); Crosby Statement (Dkt. # 124) at 1 (stating that the Jacks improperly named Crosby Valve, LLC, as Crosby Valve, Inc.). Goulds, M.W., and Crosby did not state who their members are or where those members are domiciled (see Goulds Statement at 1; M.W. Statement at 1; Crosby Statement at 1), and although Hennessy stated that Fortive Corporation (“Fortive”) is its sole member, Hennessy did not state the domicile of Fortive (see Hennessy Statement at 1).

         Based on its review of the docket, the court found that Goulds, M.W., Hennessy, and Crosby's corporate disclosure statements called into question the court's subject matter jurisdiction on the basis of diversity of citizenship. (See 5/22/17 Order (Dkt. # 126); Goulds Statement; M.W. Statement; Hennessy Statement; Crosby Statement; Compl. ¶ 40 (asserting diversity jurisdiction).) Accordingly, the court ordered the Jacks to file a response of no more than three pages addressing where LLC Defendants' members are domiciled and ordered LLC Defendants to appear at the May 23, 2017, hearing in person or telephonically. (5/22/217 Order; 5/18/17 Order (Dkt. # 110) (setting hearing for May 23, 2017).)

         On May 23, 2017, the Jacks responded to the court's order and LLC Defendants filed supplemental corporate disclosure statements. (See SMJ Resp.; M.W. Supp. Statement; Crosby Supp. Statement; Hennessy Supp. Statement; Goulds Supp. Statement.) Based on the Jacks' response and the supplemental statements, the court continues to question whether the court has subject matter jurisdiction over the Jacks' claims against Hennessy and Crosby.[1] The court addresses each of the deficiencies in turn.

         1. Hennessy

         The Jacks state that Hennessy's sole member is Fortive Corporation, which is incorporated in Delaware and has its principal place of business in Washington. (SMJ Resp. at 2; Hennessy Supp. Statement at 2.) Hennessy's Washington citizenship destroys complete diversity, see 28 U.S.C. § 1332(a), which the Jacks do not dispute (see SMJ Resp. at 2-3). Rather, the Jacks move the court to dismiss Hennessy from the case pursuant to Federal Rule of Civil Procedure 21. (See id.)

         Generally, diversity jurisdiction must exist at the time a plaintiff files a case. See Grupo Dataflux v. Atlas Glob. Grp., L.P., 541 U.S. 567, 570-71 (2004). However, Federal Rule of Civil Procedure 21 “‘invests district courts with authority to allow a dispensable nondiverse party to be dropped at any time, even after judgment has been rendered.'” Id. at 572 (quoting Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 832 (1989)); see also Fed. R. Civ. P. 21 (“Misjoinder of parties is not a ground for dismissing an action. On motion or on its own, the court may at any time, on just terms, add or drop a party.”). In moving to dismiss Hennessy, the Jacks ...


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