United States District Court, E.D. Kentucky, Central Division, Lexington
OPINION AND ORDER
E. WIER UNITED STATES DISTRICT JUDGE.
Opinion, the Court (1) evaluates the basis for (and
ultimately assures itself of the existence of) diversity
jurisdiction in this case, and (2) dismisses Defendant Scully
under Rule 4(m). The topics arise from the issuance of two
show-cause orders, see DE ##22 & 34, and an
order providing notice to Plaintiff of the potential 4(m)
dismissal, see DE #33. The Court has evaluated full
record, including the parties' briefing on the issues.
See DE ##23, 24, 35, 36, & 37. The matters are
ripe for consideration.
FACTUAL AND PROCEDURAL BACKGROUND
August 2016, Jason Howard sued Pearl Interactive Network,
Inc. (Pearl), Robert (Todd) Scully, Merry Korn, and Diane
Schrimpf in Clark Circuit Court. See DE #1-1
(Complaint). Within a month, Pearl, Korn, and Schrimpf
(collectively, Removing Defendants) removed the case to this
court, putatively premised on the diversity of the parties.
See DE #1 (Notice of Removal); see also DE
#4 (Answer). Judge Caldwell ultimately instituted a
case schedule, DE #13 (Scheduling Order), and the case
proceeded on a normal course of litigation. The Complaint
centers on Howard's allegedly tumultuous employment
relationship with Pearl (including, at least initially,
accusations of discrimination, harassment, intentional
infliction of emotional distress, retaliation, and breach of
contract), which came to a head during the period between
September 2014 and December 2015. Todd Scully, Howard's
“former supervisor, ” DE #23, at 1, though
enduring as a named defendant, has never appeared or
participated in the case.
mid-discovery call, in September 2017, the undersigned (then
the case's referred magistrate judge) raised some
“doubts” concerning the existence of diversity
jurisdiction. See DE #22, at 1. Specifically, as
relevant here, the Court flagged the issue that considering
Scully's citizenship “would destroy complete
diversity, ” id. at 2-3, and ordered briefing
on any relevant topic. The parties complied, DE ##23 &
24, and Judge Caldwell's case transfer, DE #31, sent the
issues to the undersigned. Post-transfer, the Court
identified yet another basis to doubt the existence of
subject-matter jurisdiction and, again, ordered briefing. DE
#34. The parties, again, complied. DE ##35 & 37.
LAW & ANALYSIS
scenario necessitates consideration of a number of related or
interlocking jurisdiction-related concepts. The ultimate
question is whether the Court has diversity jurisdiction in
Background Legal Principles
courts “have original jurisdiction of all civil actions
where the matter in controversy exceeds the sum or value of
$75, 000, exclusive of interest and costs, and is between,
” as relevant here, “citizens of different
States.” 28 U.S.C. § 1332(a)(1); see also
U.S. Const. Art. III § 2 (“The judicial power
shall extend . . . to controversies . . . between citizens of
different states[.]”). Courts refer to this concept as
“diversity jurisdiction, ” a form of
subject-matter jurisdiction in a case. See Grupo Dataflux
v. Atlas Global Grp., LP, 124 S.Ct. 1920, 1925-26
diversity jurisdiction “require[s] complete diversity
of citizenship, ” i.e., “the citizenship
of each plaintiff” must be “diverse from the
citizenship of each defendant.” Caterpillar Inc. v.
Lewis, 117 S.Ct. 467, 472 (1996). Thus, phrased another
way, for diversity to exist, “no plaintiff” can
be “a citizen of the same state as any
defendant.” V & M Star, LP v. Centimark
Corp., 596 F.3d 354, 355 (6th Cir. 2010).
“[C]omplete diversity, ” though, “is not a
constitutional requirement.” Owen Equip. &
Erecting Co. v. Kroger, 98 S.Ct. 2396, 2402 n.13 (1978).
“Federal courts are courts of limited jurisdiction,
” and “the burden of establishing” a
jurisdictional basis “rests upon the party asserting
jurisdiction.” Kokkonen v. Guardian Life Ins. Co.
of Am., 114 S.Ct. 1673, 1675 (1994). Based on these
foundational principles, the Court has an omnipresent
“duty to consider [its] subject matter jurisdiction in
regard to every case and may raise the issue sua
sponte.” Answers in Genesis of Ky., Inc. v.
Creation Ministries Int'l, Ltd., 556 F.3d 459, 465
(6th Cir. 2009). Indeed, that is just what the Court did in
DE ##22 & 34 and continues to do in this Opinion. See
also Hertz Corp. v. Friend, 130 S.Ct. 1181, 1193 (2010)
(“Courts have an independent obligation to determine
whether subject-matter jurisdiction exists, even when no
party challenges it.”). The Court resolves “all
doubts” concerning the existence of subject-matter
jurisdiction “against removal.” Her Majesty
The Queen in Right of the Province of Ontario v. City of
Detroit, 874 F.2d 332, 339 (6th Cir. 1989); Fenger
v. Idexx Labs., Inc., 194 F.Supp.2d 601, 602-03
(E.D. Ky. 2002) (“Where there is doubt as to federal
jurisdiction, the doubt should be construed in favor of
remanding the case to the State court[.]”).
Pearl is a citizen only of Ohio.
Court first addresses Pearl's citizenship. The parties
initially made conflicting citizenship allegations as to
Pearl. Compare DE #1, at ¶ 7 (Pearl alleging
Ohio citizenship), and DE #4, at ¶ 2
(same), with DE #1-1, at ¶ 2 (Howard alleging
facts that would establish Kentucky and Ohio citizenships).
Neither party presented proof on the issue. If Pearl, in
fact, has Kentucky citizenship, it would not be diverse from
Howard, see DE #22, at 1, leaving the Court without
defendant removing a case has the burden of proving the
diversity jurisdiction requirements.” Rogers v.
Wal-Mart Stores, Inc., 230 F.3d 868, 871 (6th Cir.
2000). When “allegations of jurisdictional facts are
challenged, ” the party invoking the Court's
jurisdiction “bears the burden of supporting the
allegations by competent proof.” Janzen v.
Goos, 302 F.2d 421, 424 (8th Cir. 1962). Here,
conflicting record allegations suggested an equal likelihood
that Pearl is, or is not, a citizen of Kentucky. See,
e.g., Walden v. Broce Constr. Co., 357 F.2d
242, 244 (10th Cir. 1966) (repeating prior holding that
“an allegation of diversity of citizenship alone, when
challenged, is not enough”); cf. Citizens Bank v.
Plasticware, LLC, 830 F.Supp.2d 321, 325 (E.D. Ky. 2011)
(holding that Plasticware “prove[d] its citizenship
lies outside of Kentucky by a preponderance” when
Citizens Bank “did not contradict” the
briefing the show-cause order prompted, Pearl contended, per
a specific analysis, that it is a citizen only of Ohio. DE
#35, at 2-3. In support, Pearl attached an affidavit of its
CEO, a certificate of good standing from the Ohio Secretary
of State, and various other documents. DE #35-1, at 1-6.
These items of proof do, indeed, support the claim that Pearl
possesses solely Ohio citizenship. Howard, assessing the same
evidentiary offerings, concedes the point and no longer
claims Pearl has Kentucky citizenship. See DE #37,
at 1. Accordingly, per Pearl's (now) unchallenged
assertion of solely Ohio citizenship and the solid proof
Pearl tendered, the Court concludes, under the applicable
standard, that Pearl is a citizen only of Ohio.
The Court must consider the citizenship of Scully, an
unserved and nonparticipating defendant, ...