United States District Court, D. Kansas
MEMORANDUM AND ORDER
KATHRYN H. VRATIL, UNITED STATES DISTRICT JUDGE
February 21, 2019, Alice Achee-Sharp filed suit against ten
defendants, alleging that she sustained injuries when she
fell on ice located in their parking lot. Complaint
(Doc. #1). On June 10, 2019, pursuant to a joint stipulation,
the Court dismissed all defendants except Lenexa Real Estate
Portfolio Partners LLC. See Stipulation Of Dismissal
(Doc. #46) filed June 7, 2019. With the Court's
permission, on July 15, 2019, plaintiff filed an Amended
Complaint (Doc. #53), which added Snowmen 365 LLC as a
defendant and asserted that the Court had subject matter
jurisdiction based on diversity of citizenship under 28
U.S.C. § 1332. Plaintiff's amended complaint did not
allege facts regarding the citizenship of all members of
Snowmen 365, which is an LLC.
October 29, 2019, Magistrate Judge Teresa J. James ordered
plaintiff to show cause in writing why the Court should not
dismiss this case for lack of subject matter jurisdiction.
Notice And Order to Show Cause (Doc #79). This
matter is before the Court on Plaintiff's Response To
Court's Notice And Order To Show Cause (Doc. #82)
filed November 15, 2019. For reasons stated below, although
plaintiff failed to establish subject matter jurisdiction,
the Court finds that Snowmen 365 is a dispensable party and
that the jurisdictional defect may be cured by dismissing it
as a defendant.
may exercise jurisdiction only when specifically authorized
to do so, see Castaneda v. INS, 23 F.3d 1576, 1580
(10th Cir. 1994), and must dismiss the action “at any
time that it lacks subject-matter jurisdiction.”
Fed.R.Civ.P. 12(h)(3). Because federal courts have limited
jurisdiction, the law imposes a presumption against
jurisdiction. Marcus v. Kan. Dep't of Revenue,
170 F.3d 1305, 1309 (10th Cir. 1999). Therefore, plaintiff
bears the burden of showing that jurisdiction is proper and
must demonstrate that the Court should not dismiss the case.
Id. Conclusory allegations of jurisdiction are not
enough. Jensen v. Johnson Cty. Youth Baseball
League, 838 F.Supp. 1437, 1439-40 (D. Kan. 1993).
asserts that the Court has subject matter jurisdiction based
on diversity of citizenship under 28 U.S.C. § 1332.
Section 1332 requires complete diversity between all
plaintiffs and all defendants. See Radil v. Sanborn W.
Camps, Inc., 384 F.3d 1220, 1225 (10th Cir. 2004). For
diversity purposes, a person is a citizen of the state in
which she is domiciled, while the citizenship of a business
depends on its organizational structure. Smith v.
Cummings, 445 F.3d 1254, 1260 (10th Cir. 2006). If the
business is a limited liability company, it takes the
citizenship of each of its members. See Siloam Springs
Hotel, LLC v. Century Sur. Co., 781 F.3d 1233, 1234
(10th Cir. 2015).
the parties are not completely diverse. Although plaintiff
and Lenexa are diverse, plaintiff and Snowmen 365 are not. Like
plaintiff, Snowmen 365 is a citizen of Missouri - the
domicile of both of its members. Plaintiff concedes that
complete diversity does not exist, but asserts that the Court
should nonetheless exercise subject matter jurisdiction
pursuant to its “discretionary jurisdictional
power.” Plaintiff's Response To Court's
Notice And Order To Show Cause (Doc. #82) at 2. In
support, plaintiff relies exclusively on Morgan v. Serro
Travel Trailer Co., a case which represented the
minority view in 1975 that the Court does not need
independent subject matter jurisdiction over plaintiff's
claims against a third-party defendant. 69 F.R.D. 697, 698
(D. Kan. 1975) (explaining that “large majority”
of cases held the opposite); see Wright &
Miller, 6 Fed. Prac. & Proc. (Civ.) §
1444.1 (3d ed.). According to plaintiff, Morgan
means that the Court “has the discretion to consider
each case to determine whether under the circumstances, [it]
should exercise its jurisdictional power and hear the whole
case at one time.” Morgan, 69 F.R.D. at 698.
exclusive reliance on Morgan exhibits a fundamental
misunderstanding of both current law and the jurisdictional
question at issue in this case. Even if plaintiff had
accurately described the law governing a plaintiff's
claims against third-party defendants, which she did not,
is irrelevant to the present case - plaintiff is not
asserting claims against a third-party
defendant.Plaintiff brought Snowmen 365 into this
case as a defendant by suing it directly in her amended
complaint. Lenexa later filed a cross-claim against
Snowmen, alleging that Snowmen agreed to indemnify it on
these claims. See Answer Of Lenexa Real Estate Portfolio
Partners, LLC To First Amended Complaint (Doc. #58)
filed August 6, 2019 at 7. In short, Snowmen is not a
third-party defendant. Accordingly, the issue is not whether
the Court has subject matter jurisdiction over claims against
a third-party defendant, but whether the Court has subject
matter jurisdiction over plaintiff's claims against the
plaintiff sues multiple defendants and one of the defendants
destroys complete diversity, the Court looks to Fed.R.Civ.P.
21. Under Rule 21, the Court “can dismiss a dispensable
nondiverse party . . . to cure a jurisdictional defect at any
point in the litigation.” Ravenswood Inv. Co., L.P.
v. Avalon Corr. Servs., 651 F.3d 1219, 1223 (10th Cir.
2011); see Jett v. Phillips & Assocs., 439 F.2d
987, 989-90 (10th Cir. 1971) (Court may drop parties
“in order to achieve the requisite diversity of
citizenship if their presence is not essential to a just and
meaningful adjudication”). To determine whether the
nondiverse party is dispensable, the Court assesses the
factors that Rule 19(b) specifies. CU Capital Mkt. Sols.,
LLC v. Olden Lane Sec., LLC, No. 18-2597-DDC, 2019 WL
2612940, at *9 (D. Kan. June 26, 2019). These factors require
the Court to consider (1) the extent to which a judgment
rendered in the party's absence might be prejudicial to
the party or other parties, (2) the extent to which
protective provisions in the judgment, the shaping of relief,
or other measures can lessen or avoid the prejudice, (3)
whether a judgment rendered in the person's absence will
be adequate and (4) whether plaintiff will have an adequate
remedy if the Court dismisses for nonjoinder. Id.
(citing Lenon v. St. Paul Mercury Ins. Co., 136 F.3d
1365, 1372-73 (10th Cir. 1998). Whether a party is
dispensable considering these factors is a matter left to the
Court's discretion. Id.
365 is a dispensable party. Plaintiff apparently concedes
this point. In response to Judge James's order to show
cause, plaintiff bluntly asserts that “Snowmen 365, LLC
was brought into the case because it might be liable to the
third-party plaintiff, not because [it] might be liable to
plaintiff.” Plaintiff's Response (Doc.
#82) at 4-5. In other words, Snowmen 365 could be liable to
Lenexa, but not to plaintiff. By plaintiff's own logic,
dismissing Snowmen 365 would not prejudice her ability to
recover - Snowmen 365 would not be liable to her regardless
whether it remains as a defendant. Because Snowmen 365 is a
dispensable nondiverse party, the Court dismisses it to
perfect complete diversity. As a result, the Court has
subject matter jurisdiction.
IS THEREFORE ORDERED that Snowmen 365 is
DISMISSED. Having perfected complete
diversity, the Court has subject matter jurisdiction in this