United States District Court, D. New Mexico
MAGISTRATE JUDGE'S PROPOSED FINDINGS AND
RECOMMENDED DISPOSITION TO DENY PLAINTIFFS' MOTION FOR
STEPHAN M. VIDMAR UNITED STATES MAGISTRATE JUDGE
MATTER is before me on Plaintiffs' Motion for Remand and
Memorandum in Support [Doc. 7], filed on October 7, 2019.
Defendant responded on October 17, 2019. [Doc. 10].
Plaintiffs never replied, and the time for doing so has
passed. The Honorable Martha Vázquez, United States
District Judge, referred this Motion to me for analysis and a
recommended disposition. [Doc. 15]. I have considered the
briefing, the relevant portions of the record, and the
relevant law. Being otherwise fully advised in the premises,
I recommend that the Motion be DENIED.
case arises from a car accident and the resulting actions of
Plaintiff Arline Gregoire's insurance company, United
Services Automobile Association Casualty Insurance Company
(“USAA CIC” or Defendant). See [Doc.
1-1] at 7. USAA CIC is a wholly owned subsidiary of United
Services Automobile Association (“USAA”). [Doc.
6] at 1. On April 16, 2014, Gregoire's car collided with
a motorcycle operated by Plaintiff Steven Sanders, who
suffered various injuries as a result of the crash.
Id. Sanders attempted to settle his claim against
Gregoire, but his efforts failed after Defendant declined to
execute an affidavit confirming that no additional liability
coverage existed to compensate Sanders for his injuries.
Id. at 7-8. Sanders therefore sued Gregoire in May
of 2015. Id. at 6-8. Sanders and Gregoire later
settled their lawsuit. Id. at 9. As a part of the
settlement agreement, Gregoire assigned to Sanders 50% of her
rights to pursue extra-contractual claims against Defendant
for its failure to execute the affidavit. Id. at
August 19, 2019, Gregoire and Sanders sued USAA CIC, and only
USAA CIC, alleging various state-law claims. Id. at
10-18. On September 25, 2019, Defendant removed the case to
federal court on the basis of diversity jurisdiction. [Doc.
1] at 3-4. Defendant asserts that it is a citizen of Texas,
id. at 3, Plaintiffs are citizens of New Mexico,
see id., and the amount in controversy exceeds $75,
000, id. at 3-4. Plaintiffs filed the instant Motion
for Remand on October 7, 2019, arguing that diversity
jurisdiction does not exist because Defendant is a citizen of
all 50 States. [Doc. 7] at 1.
removing party bears the burden of establishing that
subject-matter jurisdiction exists. Baby C v. Price,
138 Fed.Appx. 81, 83 (10th Cir. 2005). Additionally, the
district court must be satisfied that, indeed, it has
subject-matter jurisdiction. State Farm Mut. Auto. Ins.
Co. v. Narvaez, 149 F.3d 1269, 1270-71 (10th Cir. 1998).
Subject-matter jurisdiction cannot be waived and thus may be
raised by the parties or the court sua sponte at any time.
Louisville & Nashville R.R. Co. v. Mottley, 211
U.S. 149, 152 (1908).
district courts have original jurisdiction of all civil
actions between citizens of different States where the amount
in controversy exceeds the sum or value of $75, 000,
exclusive of interest and costs. 28 U.S.C. § 1332(a)
(2018). Because federal courts are courts of limited
jurisdiction, “[r]emoval statutes are to be strictly
construed, and all doubts are to be resolved against
removal.” Fajen v. Found. Reserve Ins. Co.,
683 F.2d 331, 333 (10th Cir. 1982) (citation omitted).
the citizenship of a corporation is different from
determining the citizenship of an unincorporated association
under § 1332. A corporation is deemed to be a citizen of
the State(s) in which it is incorporated and in which it
maintains its principal place of business. See
§ 1332(c). An unincorporated association, on the other
hand, is deemed to be a citizen of every State of which its
members are citizens. Grynberg v. Kinder Morgan Energy
Partners, L.P., 805 F.3d 901, 905-06 (10th Cir. 2015);
Siloam Springs Hotel, L.L.C. v. Century Sur. Co.,
781 F.3d 1233, 1237-38 (10th Cir. 2015).
are citizens of New Mexico. [Doc. 7] at 4. They claim that
Defendant is an unincorporated association and thus deemed a
citizen of every State of which its members are citizens.
Id. at 1. They argue further that Defendant's
members include citizens from every State, including New
Mexico, thereby defeating diversity jurisdiction.
Id. at 4.
misconceive USAA CIC's corporate status. They cite cases
suggesting that USAA is an unincorporated
association, see Id. at 2-3, but USAA is not a
defendant in this action; USAA CIC is the Defendant. [Doc.
1-1] at 6. USAA CIC is not an unincorporated association; it
is a corporation. [Doc. 10-1] at 1-2. USAA CIC “is a
wholly owned subsidiary of [USAA], ” [Doc. 6] at 1, and
the two business entities are distinct. None of the evidence
cited by Plaintiffs challenges this distinction. Though
Plaintiffs cite a 2009 affidavit from an assistant vice
president at USAA claiming that USAA is an
unincorporated association, the affidavit does not mention
USAA CIC, and the case in which the affidavit was filed
involved only USAA, not USAA CIC. See [Doc. 7-1] at
1. Plaintiffs attach a report on the USAA Insurance Group,
but the report appears to list USAA and USAA CIC as two
separate entities. See [Doc. 7-2] at 6-7. Thus, I
will treat USAA CIC as a corporation for diversity purposes.
CIC was incorporated in Texas and has its principal place of
business in Texas. [Doc. 6] at 1; [Doc. 10-1] at 1-2.
Therefore, it is a citizen of Texas. See Grynberg,
805 F.3d at 905. The parties do not dispute that Plaintiffs
are citizens of States other than Texas. See [Doc.
1] at 3; [Doc. 7] at 4; [Doc. 10] at 7. Neither do the
parties dispute that the amount in controversy exceeds $75,
000. See [Doc. 1] at 3-4; [Doc. 7]. I therefore
recommend finding that diversity jurisdiction exists and
denying Plaintiffs' Motion. Because I recommend denying
Plaintiffs' Motion, I also recommend denying their
request for fees, costs, and sanctions. See [Doc. 7]
requests that the Court award it its attorneys' fees
incurred in responding to the Motion. [Doc. 10] at 9. It
argues that Plaintiffs' counsel made no attempt to confer
in good faith with defense counsel before filing the Motion,
as required by Local Rule 7.1(a). Id. at 7. Had they
done so, Defendant argues, its counsel would have corrected
Plaintiffs' misconception about its State of citizenship,
thus averting the filing of the Motion. Id. at 7-9.
Defendant also argues that Plaintiffs' Motion is
frivolous because Plaintiffs could have easily determined the
accuracy of Defendant's citizenship allegations by
researching publicly available information. Id. at
8. Defendant seeks sanctions against Plaintiffs under the
Court's inherent authority and against Plaintiffs'
counsel under 28 U.S.C. § 1927. Id. at 8-9.
Plaintiffs failed to ...