1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 THE TRAVELERS INDEMNITY Case No.: 24-CV-264 TWR (MSB) COMPANY OF CONNECTICUT, a 12 Connecticut Corporation, ORDER (1) GRANTING LIMITED 13 JURISDICTIONAL DISCOVERY; (2) Plaintiff, ORDERING DEFENDANT BAYWA 14 v. R.E., LLC TO SUPPLEMENT ITS 15 CORPORATE DISCLOSURE BAYWA R.E. EPC, LLC, a Delaware STATEMENT; AND (3) ORDERING 16 Limited Liability Company; GM DEFENDANT HONEY BEE RANCH, ENGINEERING, INC., a California 17 LLC TO SUPPLEMENT ITS Corporation; CHRIS AMBUUL; CORPORATE DISCLOSURE 18 DONALD M. SANDERS; HONEY BEE STATEMENT RANCH, a California Limited Liability 19 Company; FINANCIAL PACIFIC (ECF Nos. 14, 20, 22) 20 INSURANCE GROUP, a California corporation; and DOES 1 through 10 21 inclusive, 22 Defendants. 23 24 25 Presently before the Court is Plaintiff The Travelers Indemnity Company of 26 Connecticut’s Response to Order to Show Cause re Subject-Matter Jurisdiction. (“Resp.,” 27 ECF No. 22.) In its Response, Plaintiff argues that the Court has subject matter jurisdiction 28 over Defendants BayWa R.E. EPC, LLC (“BayWa”) and Honey Bee Ranch, LLC (“Honey 1 Bee”) in light of certain representations each Defendant has made in this action. (See id. 2 at 2, 4–5.) 3 As the Court previously explained in its March 11, 2024 Order to Show Cause 4 (“Order,” ECF No. 10), a limited liability company “is a citizen of every state of which its 5 owners/members are citizens.” See Johnson v. Columbia Properties Anchorage, LP, 437 6 F.3d 894, 899 (9th Cir. 2006). Where a limited liability company has as its member another 7 limited liability company, a plaintiff must allege the citizenship of that limited liability as 8 well. See id. “This process continues until every layer of limited liability company 9 membership has been reduced to the citizenship of its individual members.” Hooks v. 10 Spire Hospitality, LLC, No. 23-cv-389, 2023 WL 2611795, at *1 (W.D. Wash. Mar. 23, 11 2023). To demonstrate complete diversity, Plaintiff must allege the citizenship of each of 12 Defendants BayWa and Honey Bee. (See Order at 2.) 13 With respect to Defendant BayWa, Plaintiff points to the statements in BayWa’s 14 corporate disclosure statement (ECF No. 14) as evidence of the citizenship of BayWa’s 15 members. (See Resp. at 2, 4–5.) BayWa’s corporate disclosure statement provides: 16 Defendant BAYWA R.E. EPC, LLC is a Delaware limited liability company 17 with its principal place of business located in Irvine, California, and has BayWa R.E. Solar Projects, LLC as its sole member. BayWa R.E. Solar 18 Projects, LLC, a Delaware limited liability company, has BayWa R.E. USA 19 LLC as its sole member. BayWa R.E. USA LLC, a Delaware limited liability company, has BayWa R.E. AG as its sole member. BayWa R.E. AG is a 20 German corporation owned 51% by BayWa EEH GmbH and 49% by Ruby 21 Renewables Invest GmbH. BayWa EEH GmbH is a German wholly-owned subsidiary of BayWa AG, a German corporation traded on the Frankfurt Stock 22 Exchange. No company owns more than 10% of the stock of BayWa AG. 23 24 (ECF No. 14.) In its current form, BayWa’s corporate disclosure statement is 25 deficient because it fails to identify affirmatively the state of incorporation or principal 26 place of business of BayWa R.E. AG. See 28 U.S.C. § 1332(c)(1); see also Kovac v. 27 Transamerica Fin. Life Ins. Co., No. 22-cv-8220, 2023 WL 2347439, at *1 (C.D. Cal. Jan. 28 26, 2023) (“If a member of an LLC is a corporation, then the state of incorporation and its 1 principal place of business must be shown.”); ThermoLife Int’l, LLC v. Werteks Closed 2 Stock, No. 19-cv-9671, 2019 WL 8198213, at *1 (C.D. Cal. Nov. 14, 2019) (dismissing 3 complaint for lack of subject matter jurisdiction where complaint alleged defendant was a 4 “Russian company with a princip[al] place of business in Russia at 196135, Saint 5 Petersburg, Moskovski District, Tipanova Street, Bldg 8, Apartment 100” because “it is 6 unclear which state(s) or foreign state(s) in which Defendant has been incorporated”). The 7 Court, accordingly, ORDERS Defendant BayWa to supplement its corporate disclosure 8 statement.1 Because Plaintiff relies solely on Defendant BayWa’s deficient corporate 9 disclosure statement to demonstrate BayWa’s citizenship as an LLC, Plaintiff has not 10 satisfied the Court that it properly may exercise subject-matter jurisdiction over this action. 11 With respect to Defendant Honey Bee, Plaintiff points to a statement in Defendants 12 Chris Ambuul, Donald M. Sanders, and Honey Bee’s Answer (“Answer,” ECF No. 20), in 13 which it admitted that Defendant Chris Ambuul “is an individual domiciled in the State of 14 California, and resident of the County of San Diego.” (Resp. at 5 (citing Answer ¶ 4)); 15 (see also “Compl.,” ECF No. 1, at ¶ 4.). In light of this admission, Plaintiff argues it is 16 “informed and believes that the sole member of Honey Bee Ranch, LLC is Chris Ambuul.” 17 (Resp. at 5.) This is insufficient. First, Plaintiff alleges in its Complaint that “Defendants 18 [Chris Ambuul], [Donald M. Sanders] and [Honey Bee] are collectively referred to as 19 HONEY BEE PLAINTIFFS.” (Compl. ¶ 6.) It is unclear why, in light of this allegation, 20 Plaintiff now alleges on information and belief that Defendant Chris Ambuul is the sole 21 member of Defendant Honey Bee. Further, “[j]urisdictional allegations based on 22 information and belief are insufficient to confer jurisdiction.” Oto Analytics, Inc. v. N. Am. 23 Bancard, LLC, No. 24-cv-2113, 2024 WL 1323558, at *1 (C.D. Cal. Mar. 27, 2024) (citing 24 Kanter v. Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001) (“Absent unusual 25
26 1 The Court would prefer that Defendant BayWa’s amended corporate disclosure statement 27 expressly state the “citizenship” of “every individual or entity whose citizenship is attributed to that party 28 [.]” Fed. R. Civ. P. 7.1(a)(2). 1 circumstances, a party seeking to invoke diversity jurisdiction should be able to allege 2 affirmatively the actual citizenship of the relevant parties.”); then citing America’s Best 3 Inns, Inc. v. Best Inns of Abilene, L.P., 980 F.2d 1072, 1074 (7th Cir. 1992) (holding that 4 statements made “to the best of my knowledge and belief” are insufficient)). Absent 5 affirmative allegations concerning all of Honey Bee’s owners and members, the Court 6 cannot determine whether Plaintiff has properly invoked the Court’s subject-matter 7 jurisdiction. 8 Finally, Honey Bee’s corporate disclosure statement (ECF No. 20-1) likewise fails 9 to comply with Federal Rule of Civil Procedure 7.1(a)(2) because it fails to “name—and 10 identify the citizenship of—every individual or entity whose citizenship is attributed to that 11 party[.]” The Court, therefore, ORDERS Defendant Honey Bee to supplement its 12 corporate disclosure statement. 13 Plaintiff argues in the alternative that it should be permitted to conduct limited 14 discovery into the domicile of Defendants BayWa and Honey Bee. (Resp. at 5.) 15 “Jurisdictional discovery ‘should ordinarily be granted where ‘pertinent facts bearing on 16 the question of jurisdiction are controverted or where a more satisfactory showing of the 17 facts is necessary.’” Digital Media Solutions, LLC v. Zeetgroup, LLC, No. 22-cv-01184, 18 2022 WL 17419359, at *2 (S.D. Cal. Dec. 5, 2022) (quoting Butcher’s Union Loc. No. 498, 19 United Food & Com. Workers v.
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 THE TRAVELERS INDEMNITY Case No.: 24-CV-264 TWR (MSB) COMPANY OF CONNECTICUT, a 12 Connecticut Corporation, ORDER (1) GRANTING LIMITED 13 JURISDICTIONAL DISCOVERY; (2) Plaintiff, ORDERING DEFENDANT BAYWA 14 v. R.E., LLC TO SUPPLEMENT ITS 15 CORPORATE DISCLOSURE BAYWA R.E. EPC, LLC, a Delaware STATEMENT; AND (3) ORDERING 16 Limited Liability Company; GM DEFENDANT HONEY BEE RANCH, ENGINEERING, INC., a California 17 LLC TO SUPPLEMENT ITS Corporation; CHRIS AMBUUL; CORPORATE DISCLOSURE 18 DONALD M. SANDERS; HONEY BEE STATEMENT RANCH, a California Limited Liability 19 Company; FINANCIAL PACIFIC (ECF Nos. 14, 20, 22) 20 INSURANCE GROUP, a California corporation; and DOES 1 through 10 21 inclusive, 22 Defendants. 23 24 25 Presently before the Court is Plaintiff The Travelers Indemnity Company of 26 Connecticut’s Response to Order to Show Cause re Subject-Matter Jurisdiction. (“Resp.,” 27 ECF No. 22.) In its Response, Plaintiff argues that the Court has subject matter jurisdiction 28 over Defendants BayWa R.E. EPC, LLC (“BayWa”) and Honey Bee Ranch, LLC (“Honey 1 Bee”) in light of certain representations each Defendant has made in this action. (See id. 2 at 2, 4–5.) 3 As the Court previously explained in its March 11, 2024 Order to Show Cause 4 (“Order,” ECF No. 10), a limited liability company “is a citizen of every state of which its 5 owners/members are citizens.” See Johnson v. Columbia Properties Anchorage, LP, 437 6 F.3d 894, 899 (9th Cir. 2006). Where a limited liability company has as its member another 7 limited liability company, a plaintiff must allege the citizenship of that limited liability as 8 well. See id. “This process continues until every layer of limited liability company 9 membership has been reduced to the citizenship of its individual members.” Hooks v. 10 Spire Hospitality, LLC, No. 23-cv-389, 2023 WL 2611795, at *1 (W.D. Wash. Mar. 23, 11 2023). To demonstrate complete diversity, Plaintiff must allege the citizenship of each of 12 Defendants BayWa and Honey Bee. (See Order at 2.) 13 With respect to Defendant BayWa, Plaintiff points to the statements in BayWa’s 14 corporate disclosure statement (ECF No. 14) as evidence of the citizenship of BayWa’s 15 members. (See Resp. at 2, 4–5.) BayWa’s corporate disclosure statement provides: 16 Defendant BAYWA R.E. EPC, LLC is a Delaware limited liability company 17 with its principal place of business located in Irvine, California, and has BayWa R.E. Solar Projects, LLC as its sole member. BayWa R.E. Solar 18 Projects, LLC, a Delaware limited liability company, has BayWa R.E. USA 19 LLC as its sole member. BayWa R.E. USA LLC, a Delaware limited liability company, has BayWa R.E. AG as its sole member. BayWa R.E. AG is a 20 German corporation owned 51% by BayWa EEH GmbH and 49% by Ruby 21 Renewables Invest GmbH. BayWa EEH GmbH is a German wholly-owned subsidiary of BayWa AG, a German corporation traded on the Frankfurt Stock 22 Exchange. No company owns more than 10% of the stock of BayWa AG. 23 24 (ECF No. 14.) In its current form, BayWa’s corporate disclosure statement is 25 deficient because it fails to identify affirmatively the state of incorporation or principal 26 place of business of BayWa R.E. AG. See 28 U.S.C. § 1332(c)(1); see also Kovac v. 27 Transamerica Fin. Life Ins. Co., No. 22-cv-8220, 2023 WL 2347439, at *1 (C.D. Cal. Jan. 28 26, 2023) (“If a member of an LLC is a corporation, then the state of incorporation and its 1 principal place of business must be shown.”); ThermoLife Int’l, LLC v. Werteks Closed 2 Stock, No. 19-cv-9671, 2019 WL 8198213, at *1 (C.D. Cal. Nov. 14, 2019) (dismissing 3 complaint for lack of subject matter jurisdiction where complaint alleged defendant was a 4 “Russian company with a princip[al] place of business in Russia at 196135, Saint 5 Petersburg, Moskovski District, Tipanova Street, Bldg 8, Apartment 100” because “it is 6 unclear which state(s) or foreign state(s) in which Defendant has been incorporated”). The 7 Court, accordingly, ORDERS Defendant BayWa to supplement its corporate disclosure 8 statement.1 Because Plaintiff relies solely on Defendant BayWa’s deficient corporate 9 disclosure statement to demonstrate BayWa’s citizenship as an LLC, Plaintiff has not 10 satisfied the Court that it properly may exercise subject-matter jurisdiction over this action. 11 With respect to Defendant Honey Bee, Plaintiff points to a statement in Defendants 12 Chris Ambuul, Donald M. Sanders, and Honey Bee’s Answer (“Answer,” ECF No. 20), in 13 which it admitted that Defendant Chris Ambuul “is an individual domiciled in the State of 14 California, and resident of the County of San Diego.” (Resp. at 5 (citing Answer ¶ 4)); 15 (see also “Compl.,” ECF No. 1, at ¶ 4.). In light of this admission, Plaintiff argues it is 16 “informed and believes that the sole member of Honey Bee Ranch, LLC is Chris Ambuul.” 17 (Resp. at 5.) This is insufficient. First, Plaintiff alleges in its Complaint that “Defendants 18 [Chris Ambuul], [Donald M. Sanders] and [Honey Bee] are collectively referred to as 19 HONEY BEE PLAINTIFFS.” (Compl. ¶ 6.) It is unclear why, in light of this allegation, 20 Plaintiff now alleges on information and belief that Defendant Chris Ambuul is the sole 21 member of Defendant Honey Bee. Further, “[j]urisdictional allegations based on 22 information and belief are insufficient to confer jurisdiction.” Oto Analytics, Inc. v. N. Am. 23 Bancard, LLC, No. 24-cv-2113, 2024 WL 1323558, at *1 (C.D. Cal. Mar. 27, 2024) (citing 24 Kanter v. Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001) (“Absent unusual 25
26 1 The Court would prefer that Defendant BayWa’s amended corporate disclosure statement 27 expressly state the “citizenship” of “every individual or entity whose citizenship is attributed to that party 28 [.]” Fed. R. Civ. P. 7.1(a)(2). 1 circumstances, a party seeking to invoke diversity jurisdiction should be able to allege 2 affirmatively the actual citizenship of the relevant parties.”); then citing America’s Best 3 Inns, Inc. v. Best Inns of Abilene, L.P., 980 F.2d 1072, 1074 (7th Cir. 1992) (holding that 4 statements made “to the best of my knowledge and belief” are insufficient)). Absent 5 affirmative allegations concerning all of Honey Bee’s owners and members, the Court 6 cannot determine whether Plaintiff has properly invoked the Court’s subject-matter 7 jurisdiction. 8 Finally, Honey Bee’s corporate disclosure statement (ECF No. 20-1) likewise fails 9 to comply with Federal Rule of Civil Procedure 7.1(a)(2) because it fails to “name—and 10 identify the citizenship of—every individual or entity whose citizenship is attributed to that 11 party[.]” The Court, therefore, ORDERS Defendant Honey Bee to supplement its 12 corporate disclosure statement. 13 Plaintiff argues in the alternative that it should be permitted to conduct limited 14 discovery into the domicile of Defendants BayWa and Honey Bee. (Resp. at 5.) 15 “Jurisdictional discovery ‘should ordinarily be granted where ‘pertinent facts bearing on 16 the question of jurisdiction are controverted or where a more satisfactory showing of the 17 facts is necessary.’” Digital Media Solutions, LLC v. Zeetgroup, LLC, No. 22-cv-01184, 18 2022 WL 17419359, at *2 (S.D. Cal. Dec. 5, 2022) (quoting Butcher’s Union Loc. No. 498, 19 United Food & Com. Workers v. SDC Inv., Inc., 788 F.2d 535, 540 (9th Cir. 1986)). 20 Because “a more satisfactory showing of the facts is necessary,” the Court concludes that 21 limited jurisdictional discovery into the citizenship of Defendants’ BayWa and Honey 22 Bee’s owners/members is appropriate. The Court therefore GRANTS Plaintiff’s request 23 for limited jurisdictional discovery. Specifically, Defendant BayWa MAY FILE a 24 declaration concerning the citizenship of its members and/or owners within seven (7) days 25 of the electronic docketing of this Order. Should Defendant BayWa decline to file a 26 declaration, Plaintiff MAY CONDUCT a single, remote deposition of a corporate 27 representative of Defendant BayWa that is limited to the citizenship of Defendant BayWa’s 28 members and/or owners within twenty-eight (28) days of the electronic docketing of this 1 ||Order. Regardless of whether Defendant BayWa files a declaration, it MUST FILE a 2 ||supplemental corporate disclosure statement, as set forth above, within seven (7) days of 3 || the electronic docketing of this Order. 4 Additionally, Defendant Honey Bee MAY FILE a declaration concerning the 5 || citizenship of its members and/or owners within seven (7) days of the electronic docketing 6 ||of this Order. Should Defendant Honey Bee decline to file a declaration, Plaintiff MAY 7 || CONDUCT a single, remote deposition of a corporate representative of Defendant Honey 8 || Bee that is limited to the citizenship of Defendant Honey Bee’s members and/or owners 9 || within twenty-eight (28) days of the electronic docketing of this Order. Regardless of 10 whether Defendant Honey Bee files a declaration, it MUST FILE a supplemental 11 || corporate disclosure statement, as set forth above, within seven (7) days of the electronic 12 || docketing of this Order. 13 IT IS SO ORDERED. 14 Dated: April 23, 2024 15 | (2 re 16 Honorable Todd W. Robinson 7 United States District Judge 18 19 20 21 22 23 24 25 26 27 28