UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES – GENERAL

Case No. 5:23-cv-02030-JLS-KK Date: October 20, 2023 Title: State National Insurance Company v. Michael Murphy et al

Present: Honorable JOSEPHINE L. STATON, UNITED STATES DISTRICT JUDGE

Gabby Garcia N/A Deputy Clerk Court Reporter

Attorneys Present for Plaintiffs: Attorneys Present for Defendant:

Not Present Not Present

PROCEEDINGS: (IN CHAMBERS) ORDER TO SHOW CAUSE RE SUBJECT-

MATTER JURISDICTION

The Court may sua sponte raise the issue of subject-matter jurisdiction. See Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1116 (9th Cir. 2004). As the party invoking federal jurisdiction, the plaintiff bears the burden of establishing subject-matter jurisdiction. See Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994).

To fall within the Court’s diversity jurisdiction, an action’s “matter in controversy [must] exceed[] the sum or value of $75,000.” 28 U.S.C. § 1332(a)(1). “In actions seeking declaratory or injunctive relief, it is well established that the amount in controversy is measured by the value of the object of the litigation.” Hunt v. Wash. State Apple Advert. Comm’n, 432 U.S. 333, 347 (1977).

Here, Plaintiff State National Insurance Company seeks rescission of two insurance policies: a property-insurance policy and a general-liability policy. (See Compl., Doc. 1 ¶¶ 12, 26–39; Commercial Property Policy, Doc. 12-3; Commercial General Liability Policy, Doc. 12-4.) Plaintiff invokes diversity jurisdiction and alleges ______________________________________________________________________________

CIVIL MINUTES – GENERAL 1

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES – GENERAL

Case No. 5:23-cv-02030-JLS-KK Date: October 20, 2023 Title: State National Insurance Company v. Michael Murphy et al

that it has satisfied the amount-in-controversy requirement because each insurance policy that it seeks to rescind has a coverage limit that exceeds $75,000. 1 (Id. ¶ 5.)

Plaintiff is ORDERED to show cause in writing no later than seven (7) days from the date of this Order why the coverage-limit is the relevant benchmark for determining the amount in controversy in an action seeking to rescind a property-insurance or general- liability policy. Defendants have seven (7) days thereafter to submit any response. No further briefing will be allowed. Each side’s briefing shall not exceed five (5) pages. Following submission of the briefing, the matter will be deemed under submission and the Court will thereafter issue an order.

Initials of Deputy Clerk: gga

1 Plaintiff contends that the Court also has federal-question jurisdiction under the Declaratory Judgment Act (“DJA”). (See id. ¶ 6.) However, the DJA “does not ‘extend’ the ‘jurisdiction’ of the federal courts.” Medtronic, Inc. v. Mirowski Fam. Ventures, LLC, 571 U.S. 191, 197 (2014) (citing Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671 (1950)). ______________________________________________________________________________

CIVIL MINUTES – GENERAL 2