Covington v. Barrett-Jackson Holdings LLC

• Court: District Court, D. Arizona
• Decided: September 26, 2025
• Docket: 2:25-cv-03271
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 John Covington, et al., No. CV-25-03271-PHX-MTL

10 Plaintiff, ORDER

11 v.

12 Barrett-Jackson Holdings LLC,

13 Defendant. 14 15 The Court has reviewed Defendant Barrett-Jackson Holdings, LLC’s Notice of 16 Removal (Doc. 1) and subsequent Disclosure Statement (Doc. 9). The Notice of Removal 17 asserts diversity jurisdiction under the Class Action Fairness Act (“CAFA”), 28 U.S.C. 18 § 1332(d). (Doc. 1 at 2 ¶ 1.) 19 The Court has “an independent obligation to determine whether subject-matter 20 jurisdiction exists.” Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006). The removing party 21 bears the burden of properly alleging the facts necessary to establish jurisdiction under 22 CAFA. Lewis v. Verizon Commc’ns, Inc., 627 F.3d 395, 399 (9th Cir. 2010). 23 Under CAFA, federal jurisdiction exists where there is minimal diversity, an 24 aggregate amount in controversy exceeding $5,000,000, and at least 100 putative class 25 members. § 1332(d)(2), (d)(5)(B). Minimal diversity is satisfied when “any member of a 26 class of plaintiffs is a citizen of a State different from any defendant[.]” Id. § 1332(d)(2)(A). 27 Even where the CAFA requirements are met, jurisdiction may be defeated if a CAFA 28 exception applies. See id. § 1332(d)(3)-(4). To evaluate both minimal diversity and 1 potential exceptions, the Court must know the citizenship of each defendant. See 2 Rosenwald v. Kimberly-Clark Corp., No. 24-299, 2025 WL 2715322, at *3 (9th Cir. Sept. 3 24, 2025). 4 For a limited liability company (“LLC”), citizenship is determined by the 5 citizenship of its members, not by its state of organization or principal place of business. 6 See Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006). LLC 7 ownership must also be traced through each layer “until reaching a natural person or a 8 corporation.” City of E. St. Louis, Ill. v. Netflix, Inc., 83 F.4th 1066, 1070 (7th Cir. 2023). 9 Here, Defendant’s Notice of Removal is deficient because it alleges only that 10 Defendant is “a Delaware limited liability company with a principal place of business in 11 Arizona.” (Doc. 1 at 9 ¶ 33.) That allegation is insufficient because an LLC’s citizenship 12 is determined by the citizenship of its members, not by its state of organization or principal 13 place of business. Johnson, 437 F.3d at 899. 14 The subsequently filed Disclosure Statement (Doc. 9) does not cure the deficiency. 15 Federal Rule of Civil Procedure (“Rule”) 7.1(a)(2) provides that “[i]n an action in which 16 jurisdiction is based on diversity under § 1332(a),” a party must file a disclosure statement 17 naming—and identifying the citizenship of—every individual or entity whose citizenship 18 is attributed to that party. Although Rule 7.1(a)(2) refers to § 1332(a), the Court finds that, 19 as to Defendant, the same disclosure obligation appropriately applies in cases invoking 20 jurisdiction under § 1332(d). Here, the Disclosure Statement lists several parent companies 21 but does not identify the members of Barrett-Jackson Holdings, LLC or the citizenship of 22 those members. Without this information, the Court cannot determine whether minimal 23 diversity exists or whether a CAFA exception may apply. 24 . . . . 25 . . . . 26 . . . . 27 . . . . 28 . . . . 1 IT IS THEREFORE ORDERED that, on or before October 6, 2025, Defendant 2|| Barrett-Jackson Holdings, LLC must file a supplemental jurisdictional statement that || (1) identifies each member of Barrett-Jackson Holdings, LLC as of the date of removal, 4|| and (2) sets forth the citizenship of each member. Failure to comply may result in remand 5 || of this action for lack of subject-matter jurisdiction under 28 U.S.C. § 1447(c). 6 IT IS FURTHER ORDERED that on or before October 6, 2025, Defendant must file a disclosure statement that fully complies with Rule 7.1 and LRCiv 7.1.1. 8 Dated this 26th day of September, 2025. 9 Wichal T. Hburde i Michael T. Liburdi 12 United States District Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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