1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 Case No.: 2:24-cv-00798-JAD-EJY Xpress Diesel & Auto LLC, et al., 4 Plaintiffs Order Granting Motion for 5 v. Reconsideration and Dismissing Case for Lack of Subject Matter Jurisdiction 6 John Sorget, [ECF No. 29] 7 Defendant
8 Plaintiffs Xpress Diesel & Auto LLC and Jesse Shelton sue John Sorget for breaching an 9 agreement to relinquish his interest in Xpress Diesel, among other state-law claims. In August 10 2024, I asked the plaintiffs to file a supplemental brief explaining why this court has subject- 11 matter jurisdiction over this case because it appeared that all parties were Nevada residents. The 12 plaintiffs responded, arguing (without any supporting declarations or documents) that they 13 believed Sorget was domiciled in Michigan when they filed the complaint, based on a private 14 investigation and unspecified statements that Sorget had made in communications with the 15 plaintiffs. Sorget didn’t respond, so on January 22, 2025, I concluded that the plaintiffs had 16 satisfied “their obligation to demonstrate that Sorget was a citizen of Michigan at the time the 17 complaint was filed.”1 18 About three months later, Sorget moved to set aside three orders, asserting that he did not 19 receive notice of any of them.2 I confirmed with the Clerk of Court’s office that Sorget was 20 indeed not sent the court’s correspondence until January 26, 2025.3 So, although I denied his 21 22 1 ECF No. 19. 23 2 ECF No. 24. 3 ECF No. 28 at 3. 1 motion to set aside because it didn’t set out the applicable standards or clearly articulate the relief 2 he sought, I permitted him to file new motions if he could correct those deficiencies.4 3 Sorget then filed a motion to reconsider my order finding that the plaintiffs had 4 adequately shown that diversity jurisdiction exists in this case.5 He attaches evidence to show 5 that he sold his Michigan house, leased an apartment in Henderson, Nevada, registered his
6 children for school within the Clark County School District, and got a Nevada commercial 7 driver’s license before the complaint was filed in this case.6 The plaintiffs respond that Sorget’s 8 motion doesn’t meet the standards for reconsideration. But because Sorget was unable to raise 9 these issues earlier due to court error, I find that he has properly shown that the court’s decision 10 was manifestly unjust. And based on the new evidence that Sorget provides, I find that my 11 determination of jurisdiction was erroneous. So, because it is now clear that the parties are not 12 diverse in this state-law case, I dismiss it. 13 Discussion
14 A. Sorget’s reconsideration motion is properly brought.
15 Sorget asks that I reconsider my finding that the plaintiffs have adequately shown that 16 diversity jurisdiction binds this case to this court. Local Rule 59-1 permits reconsideration of 17 interlocutory orders if “(1) there is newly discovered evidence that was not available when the 18 original motion or response was filed, (2) the court committed clear error or the initial decision 19 was manifestly unjust, or (3) if there is an intervening change in controlling law.”7 20 21 4 Id. at 3–4. 22 5 ECF No. 29. 23 6 Id. 7 L.R. 59-1(a). 1 The plaintiffs contend that Sorget’s motion fails because he could have raised his 2 arguments earlier but chose not to. They say that “[n]either the [c]ourt [n]or the Clerk has ever 3 verified that a clerical error took place with regard to [the court’s order finding jurisdiction] or 4 any other matters in this case” and assert that “the Clerk’s office, electronic service[,] and the 5 like have all done their job.”8 The plaintiffs are wrong. In my order denying Sorget’s motion to
6 set aside, I explained: “The Clerk’s office has confirmed that Sorget is right about this lack of 7 notice. The court didn’t start sending him anything until after he filed his answer and 8 counterclaim on January 26, 2025.”9 And I permitted Sorget to file new motions under the 9 proper legal standard, containing specific requests for relief. His motion for reconsideration has 10 done that. And because Sorget was unable to respond to orders that he was not aware of, it 11 would be manifestly unjust for this court to prevent him from raising his arguments now. 12 The plaintiffs also argue that the motion for reconsideration must be denied because it 13 was not filed within 28 days of the order Sorget asks the court to reconsider.10 But the 28-day 14 deadline, found in Federal Rule of Civil Procedure 59(e), applies to motions to alter or amend
15 judgment, not to motions to reconsider interlocutory orders. A district court “possesses the 16 inherent procedural power to reconsider, rescind, or modify an interlocutory order for cause seen 17 by it to be sufficient[,]” so long as it has jurisdiction.11 This power “is derived from the common 18 law, not from the Federal Rules of Civil Procedure.”12 And there is no rule that this court is 19 20 8 ECF No. 31. 21 9 ECF No. 28 at 3. 22 10 ECF No. 31 at 2–3. 11 City of L.A., Harbor Div. v. Santa Monica Baykeeper, 254 F.3d 882, 885 (9th Cir. 2001) 23 (quoting Melancon v. Texaco, Inc., 659 F.2d 551, 553 (5th Cir. 1981)). 12 Id. at 886. 1 aware of that imposes a firm deadline on reconsideration motions of interlocutory orders. 2 Instead, this court’s local rules permit such reconsideration motions to be brought “within a 3 reasonable time.”13 And here, Sorget filed his motion for reconsideration within a month of 4 receiving my order explaining what he needed to do to properly challenge my earlier 5 jurisdictional order. I find that he brought this motion within a reasonable time, so I consider the
6 merits of his reconsideration motion. 7 B. Sorget has shown that this court lacks subject-matter jurisdiction. 8 “Courts have an independent obligation to determine whether subject-matter jurisdiction 9 exists, even when no party challenges it.”14 The party asserting federal jurisdiction has the 10 burden of establishing that it exists,15 and Rule 12(h)(3) requires the court to dismiss a complaint 11 if subject-matter jurisdiction is lacking.16 The plaintiffs invoke this court’s federal jurisdiction 12 based on diversity.17 For diversity jurisdiction to exist, the citizenship of the plaintiffs and 13 defendants must have been completely diverse at the time the complaint was filed.18 14 A person’s state of “citizenship is determined by [his] state of domicile. A person’s
15 domicile is [his] permanent home, where []he resides with the intention to remain or to which 16 []he intends to return.”19 “The courts have held that the determination of an individual’s 17 domicile involves a number of factors (no single factor controlling) including: current residence, 18 19 13 L.R. 59-1(c). 20 14 Hertz Corp. v. Friend, 559 U.S. 77, 94 (2010). 21 15 Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 104 (1998). 16 Fed. R. Civ. P. 12(h)(3). 22 17 ECF No. 1 at 2–3, ¶ 8. 23 18 Lincoln Prop. Co. v. Roche, 546 U.S. 81, 89 (2005). 19 Kanter v. Warner-Lambert Co.,
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1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 Case No.: 2:24-cv-00798-JAD-EJY Xpress Diesel & Auto LLC, et al., 4 Plaintiffs Order Granting Motion for 5 v. Reconsideration and Dismissing Case for Lack of Subject Matter Jurisdiction 6 John Sorget, [ECF No. 29] 7 Defendant
8 Plaintiffs Xpress Diesel & Auto LLC and Jesse Shelton sue John Sorget for breaching an 9 agreement to relinquish his interest in Xpress Diesel, among other state-law claims. In August 10 2024, I asked the plaintiffs to file a supplemental brief explaining why this court has subject- 11 matter jurisdiction over this case because it appeared that all parties were Nevada residents. The 12 plaintiffs responded, arguing (without any supporting declarations or documents) that they 13 believed Sorget was domiciled in Michigan when they filed the complaint, based on a private 14 investigation and unspecified statements that Sorget had made in communications with the 15 plaintiffs. Sorget didn’t respond, so on January 22, 2025, I concluded that the plaintiffs had 16 satisfied “their obligation to demonstrate that Sorget was a citizen of Michigan at the time the 17 complaint was filed.”1 18 About three months later, Sorget moved to set aside three orders, asserting that he did not 19 receive notice of any of them.2 I confirmed with the Clerk of Court’s office that Sorget was 20 indeed not sent the court’s correspondence until January 26, 2025.3 So, although I denied his 21 22 1 ECF No. 19. 23 2 ECF No. 24. 3 ECF No. 28 at 3. 1 motion to set aside because it didn’t set out the applicable standards or clearly articulate the relief 2 he sought, I permitted him to file new motions if he could correct those deficiencies.4 3 Sorget then filed a motion to reconsider my order finding that the plaintiffs had 4 adequately shown that diversity jurisdiction exists in this case.5 He attaches evidence to show 5 that he sold his Michigan house, leased an apartment in Henderson, Nevada, registered his
6 children for school within the Clark County School District, and got a Nevada commercial 7 driver’s license before the complaint was filed in this case.6 The plaintiffs respond that Sorget’s 8 motion doesn’t meet the standards for reconsideration. But because Sorget was unable to raise 9 these issues earlier due to court error, I find that he has properly shown that the court’s decision 10 was manifestly unjust. And based on the new evidence that Sorget provides, I find that my 11 determination of jurisdiction was erroneous. So, because it is now clear that the parties are not 12 diverse in this state-law case, I dismiss it. 13 Discussion
14 A. Sorget’s reconsideration motion is properly brought.
15 Sorget asks that I reconsider my finding that the plaintiffs have adequately shown that 16 diversity jurisdiction binds this case to this court. Local Rule 59-1 permits reconsideration of 17 interlocutory orders if “(1) there is newly discovered evidence that was not available when the 18 original motion or response was filed, (2) the court committed clear error or the initial decision 19 was manifestly unjust, or (3) if there is an intervening change in controlling law.”7 20 21 4 Id. at 3–4. 22 5 ECF No. 29. 23 6 Id. 7 L.R. 59-1(a). 1 The plaintiffs contend that Sorget’s motion fails because he could have raised his 2 arguments earlier but chose not to. They say that “[n]either the [c]ourt [n]or the Clerk has ever 3 verified that a clerical error took place with regard to [the court’s order finding jurisdiction] or 4 any other matters in this case” and assert that “the Clerk’s office, electronic service[,] and the 5 like have all done their job.”8 The plaintiffs are wrong. In my order denying Sorget’s motion to
6 set aside, I explained: “The Clerk’s office has confirmed that Sorget is right about this lack of 7 notice. The court didn’t start sending him anything until after he filed his answer and 8 counterclaim on January 26, 2025.”9 And I permitted Sorget to file new motions under the 9 proper legal standard, containing specific requests for relief. His motion for reconsideration has 10 done that. And because Sorget was unable to respond to orders that he was not aware of, it 11 would be manifestly unjust for this court to prevent him from raising his arguments now. 12 The plaintiffs also argue that the motion for reconsideration must be denied because it 13 was not filed within 28 days of the order Sorget asks the court to reconsider.10 But the 28-day 14 deadline, found in Federal Rule of Civil Procedure 59(e), applies to motions to alter or amend
15 judgment, not to motions to reconsider interlocutory orders. A district court “possesses the 16 inherent procedural power to reconsider, rescind, or modify an interlocutory order for cause seen 17 by it to be sufficient[,]” so long as it has jurisdiction.11 This power “is derived from the common 18 law, not from the Federal Rules of Civil Procedure.”12 And there is no rule that this court is 19 20 8 ECF No. 31. 21 9 ECF No. 28 at 3. 22 10 ECF No. 31 at 2–3. 11 City of L.A., Harbor Div. v. Santa Monica Baykeeper, 254 F.3d 882, 885 (9th Cir. 2001) 23 (quoting Melancon v. Texaco, Inc., 659 F.2d 551, 553 (5th Cir. 1981)). 12 Id. at 886. 1 aware of that imposes a firm deadline on reconsideration motions of interlocutory orders. 2 Instead, this court’s local rules permit such reconsideration motions to be brought “within a 3 reasonable time.”13 And here, Sorget filed his motion for reconsideration within a month of 4 receiving my order explaining what he needed to do to properly challenge my earlier 5 jurisdictional order. I find that he brought this motion within a reasonable time, so I consider the
6 merits of his reconsideration motion. 7 B. Sorget has shown that this court lacks subject-matter jurisdiction. 8 “Courts have an independent obligation to determine whether subject-matter jurisdiction 9 exists, even when no party challenges it.”14 The party asserting federal jurisdiction has the 10 burden of establishing that it exists,15 and Rule 12(h)(3) requires the court to dismiss a complaint 11 if subject-matter jurisdiction is lacking.16 The plaintiffs invoke this court’s federal jurisdiction 12 based on diversity.17 For diversity jurisdiction to exist, the citizenship of the plaintiffs and 13 defendants must have been completely diverse at the time the complaint was filed.18 14 A person’s state of “citizenship is determined by [his] state of domicile. A person’s
15 domicile is [his] permanent home, where []he resides with the intention to remain or to which 16 []he intends to return.”19 “The courts have held that the determination of an individual’s 17 domicile involves a number of factors (no single factor controlling) including: current residence, 18 19 13 L.R. 59-1(c). 20 14 Hertz Corp. v. Friend, 559 U.S. 77, 94 (2010). 21 15 Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 104 (1998). 16 Fed. R. Civ. P. 12(h)(3). 22 17 ECF No. 1 at 2–3, ¶ 8. 23 18 Lincoln Prop. Co. v. Roche, 546 U.S. 81, 89 (2005). 19 Kanter v. Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001). 1 voting registration and practices, location of personal and real property, location of brokerage 2 and bank accounts, location of spouse and family, membership in unions and other organizations, 3 place of employment or business, driver’s license and automobile registration, and payment of 4 taxes.”20 If a person recently changed his domicile, the Ninth Circuit applies a presumption in 5 favor of the older, established domicile instead of the newly acquired one.21 This presumption
6 shifts the burden of production of evidence to the defendant, but the plaintiff continues to bear 7 the burden of proof to show that diversity jurisdiction exists.22 8 I initially raised lack-of-jurisdiction concerns when it became clear that Sorget was filing 9 his pleadings from a Nevada address. So I ordered the plaintiffs to show cause why this case 10 shouldn’t be dismissed for lack of jurisdiction, and permitted Sorget to file a response. In 11 response, the plaintiffs explained without any supporting declarations or evidence that they 12 conducted a background investigation into Sorget’s location and discovered “active business 13 interests” and a home address in Michigan.23 The plaintiffs also claimed that they had 14 conversations with Sorget in which he “made statements indicating [that] he lived in
15 Michigan.”24 Sorget did not file a response, so I concluded that the plaintiffs had “met their 16 obligation to demonstrate that Sorget was a citizen of Michigan at the time the complaint was 17 filed.”25 18 19
20 20 Lew v. Moss, 797 F.2d 747, 750 (9th Cir. 1986). 21 21 Id. at 751. 22 Id. 22 23 ECF No. 17 at 3. 23 24 Id. 25 ECF No. 19 (minute order discharging order to show cause). 1 But we now know that Sorget didn’t respond because, due to inadvertent error, he was 2 not receiving the court’s orders.26 In his motion for reconsideration, he provides evidence 3 showing that he sold his Michigan house and signed a lease for a home in Nevada in February 4 2024. He also enrolled his kids to attend school within the Clark County School District and got 5 a Nevada commercial driver’s license in March 2024. These documents show that Sorget
6 maintained a physical presence in Nevada before the complaint was filed in April 2024 and 7 intends to remain here. And the plaintiffs have not met their burden of proof to show that Sorget 8 is not a Nevada resident. Their initial showing was weak and did not rely on any supporting 9 evidence or declarations to suggest that Sorget was a Michigan citizen. Their response to 10 Sorget’s reconsideration motion does not provide any additional information to combat Sorget’s 11 evidence showing an intent to reside in Nevada. So I conclude that complete diversity does not 12 exist between the plaintiffs and defendant, all of whom are Nevada residents. Because this court 13 thus lacks subject-matter jurisdiction over this case,27 I dismiss it.28 14
15 16 26 ECF No. 28 at 3. 17 27 In the plaintiffs’ initial response to the order to show cause concerning jurisdiction, they 18 suggested that federal-question jurisdiction may exist because some of the allegations in the complaint pertain to Sorget’s interactions with the IRS. ECF No. 17 at 4. But federal-question 19 jurisdiction only exists for civil actions “arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. The plaintiffs admit that their claims—for breach of contract, 20 unjust enrichment, specific performance, and breach of the implied covenant of good faith and fair dealing—are state-law claims. Because the plaintiffs’ claims unequivocally arise under state 21 law, federal-question jurisdiction does not exist here. 28 In earlier briefings, the plaintiffs also asked the court to remand this case to state court if it 22 found that it lacks jurisdiction. ECF No. 17 at 5. But remand is available only if the case was initially filed in state court and then removed to federal court. See 28 U.S.C. § 1447. Because 23 this case originated in federal court, it cannot be remanded. 1 Conclusion 2 IT IS THEREFORE ORDERED that John Sorget’s motion for reconsideration [ECF No. is GRANTED. This case is DISMISSED without prejudice for lack of subject-matter 4|| jurisdiction. The Clerk of Court is directed to CLOSE THIS CASE. 5
USS. Distri yige jenifer Dorsey 7 Noveniber 17, 2025 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23