Dobest Semiconductor Technology (Suzhou) Co., Ltd. v. Capital Asset Exchange and Trading, LLC

• Court: District Court, N.D. California
• Decided: February 18, 2025
• Docket: 5:24-cv-09045
• Status: Unknown

Opinion

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9

10 DOBEST SEMICONDUCTOR Case No. 24-cv-09045-NC 11 TECHNOLOGY (SUZHOU) CO., LTD., ORDER FOR PLAINTIFF TO 12 Plaintiff, SHOW CAUSE ESTABLISHING SUBJECT MATTER 13 v. JURISDICTION

14 CAPITAL ASSET EXCHANGE AND Re: Dkt. No. 1 TRADING, LLC, 15 Defendant. 16

17 Plaintiff Dobest Semiconductor Technology (Suzhou) Co., Ltd. alleges various 18 contract and fraud claims against Defendant Capital Asset Exchange and Trading, LLC. 19 ECF 1. Pending before the Court is Defendant’s motion to dismiss certain claims alleged 20 in Plaintiff’s complaint. ECF 9, 14, 16. 21 Because federal courts are courts of limited jurisdiction, a plaintiff must adequately 22 allege that a court has subject matter jurisdiction to hear their case. Kokkonen v. Guardian 23 Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). To do so, a complaint must meet the 24 requirements for either (1) federal question jurisdiction or (2) diversity jurisdiction. 28 25 U.S.C. §§ 1331, 1332. 26 Diversity jurisdiction requires that parties are citizens of different states and the 27 amount in controversy exceeds $75,000. 28 U.S.C. § 1332(a). There must be “complete 1 diversity” of citizenship for diversity jurisdiction to exist in actions between, for example, 2 citizens of different states or citizens of a state and citizens or subjects of a foreign state. 3 Carden v. Arkoma Ass’n, 494 U.S. 185, 187 (1990); 28 U.S.C. § 1332(a). However, 4 diversity jurisdiction does not exist in actions between citizens of foreign states. Nike, Inc. 5 v. Comercial Iberica de Exclusivas Deportivas, S.A., 20 F.3d 987, 991 (9th Cir. 1994). For 6 purposes of diversity jurisdiction, “a corporation is a citizen only of (1) the state [or 7 foreign state] where its principal place of business is located, and (2) the state [or foreign 8 state] in which it is incorporated.” Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 9 894, 899; 28 U.S.C. § 1332(c)(1). In contrast, “an LLC is a citizen of every state [or 10 foreign state] of which its owners/members are citizens.” Id.; Carden, 494 U.S. at 195–96. 11 Federal question jurisdiction exists for “all civil actions arising under the 12 Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. 13 “Federal courts have an independent obligation” to assess subject matter 14 jurisdiction. Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428, 434 (2011). Here, 15 the complaint alleges subject matter jurisdiction based on both diversity and federal 16 question jurisdiction. ECF 1 ¶¶ 7, 8. As to diversity jurisdiction, Plaintiff alleges its own 17 corporate citizenship based on its place of incorporation and principal place of business. 18 ECF 1 ¶ 5. Plaintiff alleges Defendant is “a California limited liability company with its 19 principal place of business in Santa Clara County, California” and incorporated in 20 California. ECF 1 ¶¶ 6, 9. But the citizenship of a limited liability company depends on 21 that of each of its members, which Plaintiff does not provide. As to federal question 22 jurisdiction, Plaintiff alleges jurisdiction exists because “the transactions at issue are 23 governed in whole or in part by the 1980 United Nations Convention on Contracts for the 24 International Sale of Goods (CISG), a federal treaty.” ECF 1 ¶ 8. However, Plaintiff does 25 not mention the CISG elsewhere in the complaint and thus fails to allege facts sufficient to 26 establish that the CISG applies to this action such that federal question jurisdiction exists. 27 See ECF 1; Asante Techs., Inc. v. PMC-Sierra, Inc., 164 F. Supp. 2d 1142, 1147 (N.D. Cal. 1 Because the Court must ensure subject matter jurisdiction exists in this matter 2 || before deciding the pending motion, Plaintiff is ordered to show cause in writing by March 3 || 4, 2025, providing sufficient information to establish diversity and/or federal question 4 || jurisdiction. Plaintiff may move the Court for leave to conduct limited jurisdictional 5 discovery as needed. See Laub vy. U.S. Dep’t of Interior, 342 F.3d 1080, 1093 (9th Cir. 6 |} 2003). 7 IT IS SO ORDERED. 8 9 || Dated: February 18, 2025 □ f{eee— NATHANAEL M. COUSINS 10 United States Magistrate Judge 11 12

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