Covert v. Bob and Brad, LLC

• Court: District Court, N.D. California
• Decided: August 21, 2025
• Docket: 5:25-cv-06936
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 MICHAEL W. COVERT and 11 LUDWIGA E. COVERT, Case No. 25-cv-06936 NC

12 Plaintiffs, ORDER TO DEFENDANTS TO SHOW CAUSE WHY CASE 13 v. SHOULD NOT BE REMANDED BACK TO STATE COURT FOR 14 BOB AND BRAD, LLC, and others, LACK OF FEDERAL SUBJECT MATTER JURISDICTION 15 Defendants. Re: ECF 1 16

17 Defendants Bob and Brad, LLC, Robert Schrupp, and Brad Heineck removed this 18 civil case to this court from Santa Clara County Superior Court on August 15, 2025. ECF 19 1. This Order requires the Defendants to “show cause” by filing a written response by 20 August 29, 2025, explaining why the case should not be remanded back to Superior Court 21 for lack of federal subject matter jurisdiction. 22 The federal courts are courts of “limited jurisdiction” and only have jurisdiction as 23 authorized by the Constitution and Congress. Owen Equip. & Erection Co. v. Kroger, 437 24 U.S. 365, 374 (1978). The party seeking to invoke federal court jurisdiction (here, the 25 Defendants) has the burden of establishing that federal subject matter jurisdiction exists. 26 Scott v. Breeland, 792 F.2d 925, 927 (9th Cir. 1986). The Court must presume a lack of 27 jurisdiction until the party asserting jurisdiction establishes otherwise. Id. 1 In the removal notice, Defendants assert that federal subject matter jurisdiction is 2 fulfilled through “diversity jurisdiction” under 28 U.S.C. § 1332. Removal Notice, ECF 1 3 ¶ 14. “Diversity jurisdiction” under 28 U.S.C. § 1332 requires complete diversity of 4 citizenship between each plaintiff and each defendant and the “amount in controversy” in 5 the suit also must exceed $75,000. 6 Defendants claim that there is diversity of citizenship because Plaintiffs are citizens 7 of California, while Defendant Heineck is a resident of Wisconsin; Defendant Schrupp is 8 deceased and was a resident of Minnesota; Defendant Bob and Brad, LLC is a corporation 9 organized and with its principal place of business in Minnesota; and Defendant Flige 10 Products, LLC is a corporation organized and with its principal place of business in 11 Colorado. Removal Notice ¶¶ 2-6. But “for the purposes of diversity . . . an LLC is a 12 citizen of every state of which its owners/members are citizens.” Johnson v. Columbia 13 Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006). Defendants must provide 14 information on the citizenship of the owners/members of Bob and Brad, LLC and Flige 15 Products, LLC for this Court to be able to assess whether complete diversity exists. 16 The Removal Notice does provide sufficient information to establish that the 17 amount in controversy threshold is satisfied. Removal Notice ¶ 13. 18 If a case removed from state court lacks subject matter jurisdiction, then the federal 19 court must remand it back to state court. 28 U.S.C. § 1447(c). An order remanding may 20 require payment of just costs and actual expenses, including attorney’s fees, incurred as a 21 result of the removal. 28 U.S.C. § 1447(c). 22 In conclusion, Defendants have not established that federal subject matter 23 jurisdiction is satisfied because they provide the incorrect test for citizenship of an LLC 24 and do not provide sufficient facts. This Order requires the Defendants to “show cause” by 25 filing a written response by August 29, 2025, explaining why the case should not be 26 remanded back to Superior Court. Plaintiffs may respond by September 5, 2025.

27 1 2 IT IS SO ORDERED. 3 4 || Dated: August 21, 2025 □□□ _ NATHANAEL M. COUSINS 5 United States Magistrate Judge 6 7 8 9 10 11 12

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