1 2 3 4 IN THE UNITED STATES DISTRICT COURT 5 FOR THE NORTHERN DISTRICT OF CALIFORNIA 6 7 HUOBI CO., LTD, Case No. 21-cv-04804-MMC

8 Plaintiff, ORDER DIRECTING PLAINTIFF TO

SHOW CAUSE WHY ACTION

9 v. SHOULD NOT BE DISMISSED;

EXTENDING BRIEFING SCHEDULE

10 MARTO HG DIGITAL ASSET GROUP AND CONTINUING HEARING ON FUND I GP, LLC, et al., DEFENDANTS' MOTION TO COMPEL 11 ARBITRATION OR TO DISMISS Defendants. 12

13 Before the Court is defendants' "Motion to Compel Arbitration and Stay This Action 14 Pending Arbitration or, in the Alternative, to Dismiss Pursuant to Fed. R. Civ. P. 12(b)(6)," 15 filed August 16, 2021. The Court notes, however, there is a preliminary issue of subject 16 matter jurisdiction. In particular, although plaintiff Huobi Co., Ltd. ("Huobi") asserts 17 diversity jurisdiction exists over its state law claims against defendants, Huobi's 18 allegations as to diversity of citizenship are, as discussed below, insufficient. 19 Where, as here, the plaintiff is a citizen of a foreign state (see Compl. ¶ 1 (alleging 20 Huobi is corporation "registered under the laws of the Republic of Korea," with its 21 "principal place of business in Seoul, South Korea")), and the amount in controversy 22 exceeds $75,000 (see Compl. ¶ 46 (alleging Huobi seeks to recover "not less than $2 23 million")), diversity jurisdiction exists only if all defendants are "citizens of a State." See 24 28 U.S.C. § 1332(a)(2).1 Although Huobi alleges defendant Taotao He, an individual, is a 25 citizen of New York (see Compl. ¶¶ 5, 9), the allegations pertaining to defendants Marto 26 1 For purposes of § 1332, a "citizen of a State" means the party must "be a citizen 27 of the United States and be domiciled within [a] State." See Newman-Green, Inc. v. 1 HG Digital Asset Group, LLC ("MHG LLC"), Marto HG Digital Asset Group Fund I, GP, 2 LLC ("MHG GP"), and Marto HG Digital Asset Group Fund I, LP ("MHG LP") are 3 deficient. 4 MHG LLC and MHG GP are, according to Huobi, limited liability corporations 5 ("LLC"). (See Compl. ¶¶ 3, 4.) An LLC "is a citizen of every [S]tate of which its owners/ 6 members are citizens." See Johnson v. Columbia Properties Anchorage, LP, 437 F.3d 7 894, 899 (9th Cir. 2006). The Complaint does not, however, identify the owners/ 8 members of MGH LLC, let alone each owner's/member's citizenship, and, consequently, 9 fails to allege sufficient facts to support a finding that MGH LP is a citizen of a State or 10 States. Although the Complaint alleges MGH GP is "a 100% owned subsidiary of MGH 11 LLC" (see Compl. ¶ 4), i.e., that MGH GP's sole owner is MGH LLC, Huobi's failure to 12 allege sufficient facts to support a finding that MGH LLC is a citizen of a State or States 13 likewise constitutes a failure to sufficiently allege MGH GP is a citizen of a State or 14 States. 15 MHG LP is, according to Huobi, a "limited partnership" ("LP"). (See Compl. ¶ 2.) 16 An LP is a citizen of every State of which its "general partners" and its "limited partners," 17 are citizens. See Carden v. Arkoma Associates, 494 U.S. 185, 192, 195-96 (1990). 18 Here, although the Complaint alleges "the general partner" of MGH LP is MGH GP (see 19 Compl. ¶ 4), the Complaint, as noted above, fails to allege facts to support a finding that 20 MGH GP is a citizen of a State or States. In addition, the Complaint fails to identify the 21 limited partners of MGH LP, let alone each limited member's citizenship. 22 Accordingly, Huobi is hereby ORDERED TO SHOW CAUSE, in writing and no 23 later than September 3, 2021, why the above-titled action should not be dismissed 24 without prejudice for lack of subject matter jurisdiction. See Fed. R. Civ. P 12(h)(3) 25 (providing "[i]f the court determines at any time that it lacks subject-matter jurisdiction, it 26 must dismiss the action"). 27 Lastly, although Huobi's opposition to defendants' motion ordinarily would be due 1 and the hearing date on defendants' motion, presently September 24, 2021, is hereby 2 || CONTINUED, the particular dates to be reset, if necessary, after resolution of the above- 3 || referenced jurisdictional issue. 4 IT IS SO ORDERED. 5 6 || Dated: August 19, 2021 .

IME M. CHESNEY

7 United States District Judge 8 9 10 11 12

13 ©

16

17 18 19 20 21 22 23 24 25 26 27 28