1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 ESTATE DESIGN AND No. 2:25-cv-10399-JAK (BFMx) 11 CONSTRUCTION, INC.,

12 Plaintiff,

ORDER TO SHOW CAUSE RE:

13 v. SUBJECT-MATTER JURISDICTION 14 REVAMP PANELS, LLC, et al., 15 Defendants. 16

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27 1 2 I. INTRODUCTION 3 On September 22, 2025, Estate Design and Construction, Inc. (“Plaintiff”) brought 4 this action in the Los Angeles Superior Court against Revamp Panels, LLC 5 (“Defendant”) and Does 1 through 20. Dkt. 1 at 7–18 (“Complaint”). The Complaint 6 advances five causes of action: (1) breach of contract; (2) breach of the implied covenant 7 of good faith and fair dealing; (3) promissory fraud; (3) negligent misrepresentation; and 8 (4) unfair business practices in violation of the California Unfair Competition Law, Cal. 9 Bus & Prof. Code § 17200, et seq. See id. at 11–17. On October 29, 2025, Defendant 10 filed a notice of removal based on diversity jurisdiction under 28 U.S.C. §§ 1332, 1441, 11 and 1446. Dkt. 1 (“Notice of Removal”). On November 6, 2025, Defendant filed a 12 Motion to Dismiss Complaint or to Transfer Venue, which is set for hearing on 13 December 15, 2025. Dkt. 9 (“Motion to Dismiss”). 14 The Notice of Removal states that diversity of citizenship is satisfied because 15 Plaintiff is a California corporation and Defendant is a Washington limited liability 16 company (“LLC”). Dkt. 1 at 2 ¶¶ 4–6. No information is provided as to the citizenship of 17 Defendant’s members, which is an element of determining whether there is complete 18 diversity between the parties. Id. Further, the Notice of Removal states that the amount- 19 in-controversy is satisfied because the Complaint alleges damages exceeding $35,000 20 and the alleged “total contract value” is $90,631.99. Id. at 2–3 ¶¶ 7. Accordingly, the 21 Notice of Removal states that the value of the remedies sought by Plaintiff, including 22 actual damages, punitive damages, injunctive relief, and other remedies, exceeds 23 $75,000, which is the minimum requirement to establish diversity jurisdiction. Id. 24 II. LEGAL STANDARDS 25 “A federal court has a duty to consider jurisdiction sua sponte.” Nome Eskimo 26 Cmty. v. Babbitt, 67 F.3d 813, 815 (9th Cir. 1995). In a case that has been removed 27 based on a claim of diversity jurisdiction, the removal statute is “construe[d]” such that 1 jurisdiction “must be rejected if there is any doubt as to the right of removal in the first 2 instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). “The ‘strong 3 presumption’ against removal jurisdiction means that the defendant always has the 4 burden of establishing that removal is proper” by a preponderance of the evidence. Id. 5 (quoting Nishimoto v. Federman-Bachrach & Assocs., 903 F.2d 709, 712 n.3 (9th Cir. 6 1990). 7 “Diversity removal requires complete diversity, meaning that each plaintiff must 8 be of a different citizenship from each defendant.” Grancare, LLC v. Thrower by & 9 through Mills, 889 F.3d 543, 548 (9th Cir. 2018) (citing Caterpillar Inc. v. Lewis, 519 10 U.S. 61, 68 (1996)). The citizenship of an LLC includes the citizenship of each of its 11 members. See Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 12 2006) (“[L]ike a partnership, an LLC is a citizen of every state of which its 13 owners/members are citizens.”). “[T]he place of organization of an L.L.C. is not relevant 14 to its citizenship for diversity purposes.” TPS Utilicom Servs., Inc. v. AT&T Corp., 223 15 F. Supp. 2d 1089, 1102 (C.D. Cal. 2002). 16 When an action is removed based on diversity jurisdiction, the removing party 17 also bears the burden of showing by a preponderance of the evidence that “the matter in 18 controversy exceeds the sum or value of $75,000, exclusive of interest and costs.” 28 19 U.S.C. § 1332(a). “[T]he amount in controversy includes all relief claimed at the time of 20 removal to which the plaintiff would be entitled if she prevails.” Chavez v. JPMorgan 21 Chase & Co., 888 F.3d 413, 418 (9th Cir. 2018). Thus, “[t]he amount in controversy 22 may include ‘damages (compensatory, punitive, or otherwise) and the cost of complying 23 with an injunction, as well as attorneys’ fees awarded under fee shifting statutes.’ ” Id. 24 at 416 (quoting Gonzales v. CarMax Auto Superstores, LLC, 840 F.3d 644, 648–49 (9th 25 Cir. 2016)). “If the plaintiff’s complaint, filed in state court, demands monetary relief of 26 a stated sum, that sum, if asserted in good faith, is ‘deemed to be the amount in 27 1 controversy.’” Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 84 2 (2014) (quoting 28 U.S.C. § 1446(c)(2)). 3 III. ANALYSIS 4 Through the Notice of Removal, Defendant asserts that diversity of citizenship is 5 satisfied because Defendant is a Washington limited liability company, and Plaintiff is a 6 California corporation. Dkt. 1 at 2 ¶¶ 4–6. However, that is not sufficient to show that 7 there is complete diversity of citizenship. As noted, a limited liability company’s 8 citizenship includes the citizenship of each of its members, not the State in which the 9 company is organized. Therefore, Defendant has not yet established that diversity of 10 citizenship is satisfied here because the state in which each member of Defendant is a 11 citizen has not been identified or shown through any proffered evidence. 12 Similarly, the Notice of Removal asserts that the amount-in-controversy is at least 13 $90,631.99 because that sum is alleged in the Complaint to be the “total contract value,” 14 i.e., the sum that Plaintiff was obligated to pay Defendant under the contract. Dkt. 1 at 2– 15 3 ¶ 7 (citing Dkt. 1 at 9 ¶ 9). However, it is unclear whether Plaintiff seeks to recover the 16 entire value of the contract between the parties. The Complaint seeks actual damages of 17 “$27,000, or in a greater amount to be proven at trial,” Dkt. 1 at 18, with the $27,000 18 identified as the amount of the deposit that Plaintiff paid to Defendant when the contract 19 was entered. Id. at 9 ¶ 11; id. at 11 ¶ 20. The deposit was allegedly paid prior to any 20 claimed breach of the contract by Defendant. Dkt. 1 at 9–10 ¶¶ 11–16. In the 21 Complaint’s Prayer for Relief, Plaintiff does not seek to rescind or void the contract. Id. 22 at 12. 23 Under these circumstances, there could be substantial “doubt” as to whether the 24 $75,000 amount-in-controversy is satisfied. See Gaus, 980 F.2d at 566. Plaintiff appears 25 to be seeking a recovery of the alleged $27,000 deposit paid to Defendant, which based 26 on a review of the Complaint, is the amount of actual damages that are sought. See 27 Acosta v. Brave Quest Corp., 733 F. Supp. 3d 920, 925 (C.D. Cal. 2024) (“Acosta paid a 1 $42,372.32 deposit. He alleges the contract is void and requests a full refund. Were he to 2 prevail on this theory at trial, he would recover the full amount for this item of 3 damages—i.e., $42,372.32.” (citations omitted)). Accordingly, it is unclear whether the 4 full value of the contract is at issue in this action. See id. (calculating actual damages as 5 the value of deposit, not the value of the contract); see also Env’t Tectonics Corp. v. 6 Summer Lake Int’l Enters. Corp., No. 02-cv-1715, 2002 WL 32348286, at *2 (E.D. Pa. 7 Aug. 15, 2002) (“In this case, the object of Plaintiff’s claim is not the full contract value 8 of $400,000, but instead, only the unpaid balance.”). It may be immaterial that the 9 Complaint alleges damages of a “greater amount [than $27,000] to be proven at trial” 10 because indeterminate damages are not always included in calculating the amount-in- 11 controversy. See Salazar v. Johnson & Johnson Consumer Inc., No. 18-cv-05884, 2018 12 WL 4560683, at *3 (C.D. Cal. Sept. 19, 2018). 13 The Notice of Removal also states that the punitive damages sought by Plaintiff 14 lead to a total amount-in-controversy that exceeds $75,000. The Complaint does advance 15 causes of action for which punitive damages could be recovered. However, “the mere 16 fact that a plaintiff seeks punitive damages does not necessarily establish the requisite 17 amount in controversy.” Guzetta v. Ford Motor Co., No. 21-cv-09151, 2022 WL 18 1044173, at *7 (C.D. Cal. Apr. 5, 2022). The Notice of Removal cites two California 19 cases where substantial punitive damages have been awarded. Dkt. 1 at 2–3 ¶ 7 (first 20 citing Bertero v. Nat’l Gen. Corp., 13 Cal. 3d 43, 65 (1974); and then citing Neal v. 21 Farmers Ins. Exch., 21 Cal. 3d 910, 927 (1978)). One involved claims as to bad faith 22 denial by an insurer, Neal, 21 Cal. 3d at 922–23, and the other a malicious prosecution 23 claim, Bertero, 13 Cal. 3d at 65–66. It is not clear whether analogous issues are 24 presented by the Complaint in this action. Accordingly, an issue is presented as to 25 whether punitive damages are at issue for purposes of determining the amount in 26 controversy. 27 1 Finally, the Notice of Removal states that the remaining remedies sought in the 2 || Complaint -- injunctive relief, costs, and “such other and further relief as the Court deems just and proper” -- show that the amount-in-controversy 1s satisfied. Dkt. 1 at 2-3 4 | 47 (quoting Dkt. 1 at 18). The Complaint does not specify the particular injunctive relief 5 || sought, the costs allegedly incurred by Plaintiff, or the form of any other requested 6 || relief. Accordingly, an issue is presented as to the amount at issue presented by these 7 || other remedies. 8 In light of the foregoing, the pending motion to dismiss and the obligation of the 9 || Court to ensure that there is jurisdiction over an action, Defendant is ORDERED TO 10 || SHOW CAUSE why there is subject matter jurisdiction over this matter. Defendant 11 || shall file a response to this Order to Show Cause, not to exceed ten pages, on or before 12 || November 25, 2025. Plaintiff may, but is not required to file any response not to exceed 13 || ten pages, on or before December 4, 2025. Based on a review of the filing(s), the matter 14 || will be taken under submission or set for hearing at the same time as the pending Motion 15 || to Dismiss. 16 17. | ITISSO ORDERED.

19 || Datea: 11/19/2025 John A. Kronstadt United States District Judge