United States District Court, D. Idaho
MICHAEL ALLEN, an individual; CAMP BENCH HOLDINGS, LLC, an Idaho limited liability company; CAMP RIVER HOLDINGS, LLC, an Idaho limited liability company; and CAMPBELL FARMS, INC., an Idaho corporation, Plaintiffs,
NEIL CAMPBELL, an individual, and CAMPBELL CONTRACTING, LTD., a Nevada limited liability company, Defendants.
MEMORANDUM DECISION AND ORDER
LYNN WINMILL U.S. DISTRICT COURT JUDGE.
pending are several motions related to the subject-matter
jurisdiction of this Court. The Court originally remanded
this case on February 19, 2019, granted attorney's fees
to Plaintiffs, but invited Defendants to “file an
amended notice of removal if they believe they can cure the
jurisdictional defect in the original notice.” (Dkts.
21, 27). Defendants filed an Amended Notice of Removal on
February 22, 2019 (Dkt. 29). Plaintiffs then filed a Motion
to Remand and for Attorney's Fees and Costs Rule 11
Sanctions (Dkt. 31) and a Motion to Expedite Decision on
Motion to Remand (Dkt. 32).
to a civil action brought in state court may remove that
action to federal court if the district court would have had
original jurisdiction at the time of both commencement of the
action and removal. See 28 U.S.C. § 1441(a);
Charles Alan Wright & Arthur R. Miller, Federal Practice
and Procedure § 3723 (4th ed. 2013). Once removed, the
case can be remanded to state court for either lack of
subject matter jurisdiction or defects in the removal
procedure. See 28 U.S.C. § 1447(c). District courts have
diversity jurisdiction where no plaintiff and defendant are
citizens of the same state and the amount in controversy is
greater than $75, 000. See 28 U.S.C. § 1332(a)(1);
Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996).
“The party seeking to invoke the district court's
diversity jurisdiction always bears the burden of both
pleading and proving diversity jurisdiction.”
NewGen, LLC v. Safe Cig, LLC, 840 F.3d 606, 613-14
(9th Cir. 2016).
courts analyze a challenge to removal jurisdiction under the
same standard applied to a motion to dismiss for lack of
subject matter jurisdiction. See Leite v. Crane Co.,
749 F.3d 1117, 1121 (9th Cir. 2014) (“Challenges to the
existence of removal jurisdiction should be resolved within
[the Rule 12(b)(1)] framework, given the parallel nature of
the inquiry.”). A challenge to the Court's subject
matter jurisdiction can be either facial or factual.
Id. “A facial attack accepts the truth of the
plaintiff's allegations but asserts that they are
insufficient on their face to invoke federal
jurisdiction.” Id. In contrast, a factual
attack “contests the truth of the plaintiff's
factual allegations, usually by introducing evidence outside
the pleadings.” Id.
Plaintiffs challenge the factual allegations Defendants make
in support of removal, so bring a “factual
attack” on this Court's subject-matter
jurisdiction. When the defendant raises a factual attack, the
plaintiff must support her jurisdictional allegations with
“competent proof, ” Hertz Corp. v.
Friend, 559 U.S. 77, 96-97 (2010), under the same
evidentiary standard that governs in the summary judgment
context. See Norse v. City of Santa Cruz, 629 F.3d
966, 973 (9th Cir.2010) (en banc). The plaintiff bears the
burden of proving by a preponderance of the evidence that
each of the requirements for subject-matter jurisdiction has
been met. Harris, 682 F.3d at 851.
their Amended Notice of Removal, Defendants attempt to cure
the jurisdictional defect from their first Notice of Removal
by showing Defendant Neil Campbell is not a member of
Plaintiffs Camp Bench Holdings, LLC and Camp River Holding,
LLC. To do so, Defendants filed a declaration from Mr.
Campbell that, “[a]s of January 3, 2019, [he] was no
longer a member of [the LLC] Plaintiffs.” Dkt. 29, Ex.
6. Defendants bolster their allegation that Mr. Campbell was
not a member with several pieces of circumstantial evidence
pointing to Mr. Campbell's noninvolvement with the LLCs.
See Dkt. 34. Plaintiffs counter that Defendants'
evidence does not establish that Mr. Campbell in fact
withdrew from the LLCs as required by Idaho Code §
Plaintiffs have mounted a factual attack, Defendants must
support their jurisdictional allegations with competent
proof. See Safe Air for Everyone, 373 F.3d at 1039.
And Defendants bear the burden of proving these facts by a
preponderance of the evidence. See Leite 749 F.3d at
Mr. Campbell Was a Member of Plaintiff LLCs as of September
their prior Motion to Remand, Plaintiffs argued that
Defendant Neil Campbell is a member of the two LLC
plaintiffs, which destroys diversity jurisdiction and
justifies remand of this case to state court. Dkt. 31-1 at 2.
The diversity statute, “28 U.S.C. § 1332(a), . . .
applies only to cases in which the citizenship of each
plaintiff is diverse from the citizenship of each
defendant.” Caterpillar Inc. v. Lewis, 519
U.S. 61, 68 (1996). Because an LLC is a citizen of every
state of which its owners/members are citizens, if Neil
Campbell is in fact a member of Plaintiffs Camp Bench and
Camp River LLCs, there is not complete diversity under §
1332. See Johnson v. Columbia Properties Anchorage,
LP, 437 F.3d 894, 899 (9th Cir. 2006).
point to several pieces of evidence in support of their
argument that Mr. Campbell was, and still is, a member of
both LLCs. First, Plaintiffs highlight the LLC operating
agreements, which identify Mr. Campbell and Mr. Allen as the
only two members. Dkt. 18-1, Exs. B, E. Neither LLC agreement
contains a special provision for withdrawal. See Id.
Therefore, Idaho Code § 30-25-602 governs whether a
member has withdrawn from an LLC: “a person is
dissociated as a member when: The limited liability company
knows or has notice of the person's express will to
withdraw as a member.” Neither party's briefing
identifies an instance where Mr. Campbell expressed his will
to withdraw, either directly to his co-member Mr. Allen or in
any capacity tied to the LLCs. Instead, both sides argue that
circumstantial evidence points in their favor. The Court
considers each party's evidence of withdrawal to
determine whether Defendants have met their burden of showing
Mr. Campbell withdrew from the Plaintiff LLCs under I.C.
Plaintiffs' Evidence Tends to Show Mr. Campbell Did Not
Plaintiffs present evidence that suggests Mr. Campbell was
still a member of the LLCs when the amended notice of removal
was filed. Plaintiffs first note that Defendants filed an
initial notice of removal with the Court that identified Mr.
Campbell as a current member of the Plaintiff LLCs. Dkt. 35
at 5 (“Defendant Neil Campbell is a member of Plaintiff
Camp Bench Holdings, LLC and Camp River Holdings,
LLC.”). Plaintiffs also show that the proposed
settlement agreement between the parties refers to Mr.
Campbell agreeing to surrender “all of his ownership
interests in the Entities [which includes the two LLCs],
whether in the form of shares, membership units, options, or
otherwise.” Dkt. 34 at 18. Finally, Plaintiff Mr. Allen
submitted a declaration which confirmed his belief concerning
Mr. Campbell's membership: “to this day, to the
best of my knowledge and belief, Neil Campbell remains a