GMC Semitech Co., Ltd. v. Capital Asset Exchange and Trading, LLC

• Court: District Court, N.D. California
• Decided: February 18, 2025
• Docket: 5:24-cv-09451
• Status: Unknown

Opinion

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

10 GMC SEMITECH CO., LTD., et al., Case No. 24-cv-09451-NC 11 Plaintiffs, ORDER FOR PLAINTIFFS TO 12 SHOW CAUSE ESTABLISHING v. DIVERSITY JURISDICTION 13 CAPITAL ASSET EXCHANGE AND Re: Dkt. No. 1 14 TRADING, LLC, 15 Defendant. 16 17 Plaintiffs GMC Semitech Co., Ltd., and Suzhou Cycas Microelectronics Co., Ltd., 18 allege contract claims against Defendant Capital Asset Exchange and Trading, LLC. ECF 19 1. Pending before the Court is Defendant’s motion to dismiss certain claims alleged in 20 Plaintiffs’ complaint. ECF 9, 14, 15. 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. Diversity jurisdiction requires that parties are citizens of different 26 states and the amount in controversy exceeds $75,000. 28 U.S.C. § 1332(a). There must 27 be “complete diversity” of citizenship for diversity jurisdiction to exist in actions between, 1 foreign state. Carden v. Arkoma Assoc., 494 U.S. 185, 187 (1990); 28 U.S.C. § 1332(a). 2 || However, diversity jurisdiction does not exist in actions between citizens of foreign states. 3 Nike, Inc. v. Comercial Iberica de Exclusivas Deportivas, S.A., 20 F.3d 987, 991 (9th Cir. 4 || 1994). For diversity jurisdiction, “a corporation is a citizen only of (1) the state [or foreign 5 || state] where its principal place of business is located, and (2) the state [or foreign state] in 6 || which it is incorporated.” Johnson vy. Columbia Props. Anchorage, LP, 437 F.3d 894, 899; 7 || 28 U.S.C. § 1332(c)(1). In contrast, “an LLC is a citizen of every state [or foreign state] of 8 which its owners/members are citizens.” Id.; Carden, 494 U.S. at 195—96. 9 “Federal courts have an independent obligation” to assess subject matter 10 || jurisdiction. Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428, 434 (2011). Here, 11 |} the complaint alleges subject matter jurisdiction based on diversity. ECF 1 4 6. Plaintiffs 12 || allege their own corporate citizenship based on their places of incorporation and principal 13 || places of business. ECF 1 9] 3, 4. However, Defendant is alleged to be a limited liability 14 || company whose citizenship therefore depends on that of each of its members. See ECF 1 { 3 15 || 5. Plaintiffs allege that “to the best of Plaintiffs’ knowledge and information, each of the Z 16 || members of Defendant CAET is either a citizen of the State of California (or another 5 17 || state), such that complete diversity of citizenship exists between Plaintiffs and Defendant,” 5 18 |} but do not provide additional information on each of the LLC’s members and their 19 || citizenships. See ECF 1 J 6. 20 Because the Court must ensure subject matter jurisdiction exists in this matter 21 || before deciding the pending motion, Plaintiffs are ordered to show cause in writing by 22 || March 4, 2025, providing sufficient information to establish diversity jurisdiction. 23 || Plaintiffs may move the Court for leave to conduct limited jurisdictional discovery as 24 || needed. See Laub v. U.S. Dep’t of Interior, 342 F.3d 1080, 1093 (9th Cir. 2003). 25 IT IS SO ORDERED. 26 27 Dated: February 18, 2025 NATHANAEL M. COUSINS 28 United States Magistrate Judge