Stelly v. Tesla, Inc.

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 BRUCE STELLY, Case No. 25-cv-08933-JSC 8 Plaintiff, ORDER TO SHOW CAUSE RE: 9 v. DIVERSITY JURISDICTION 10 TESLA, INC. et al, Defendants. 11 12 13 Plaintiff, a California citizen, filed this state-law action against Tesla, Inc. (“Tesla”), “TY 14 (LAST NAME UNKNOWN),” and “TONY (LAST NAME UNKNOWN)” in state court. (Dkt. 15 No. 1-1 ¶¶ 7-9.) 1 Tesla removed the action to federal court on diversity jurisdiction grounds. 16 (Dkt. No. 1.) 17 A defendant may remove an action from state court to federal court so long as the federal 18 court has original jurisdiction. See 28 U.S.C. § 1441(a). Federal subject matter jurisdiction under 19 28 U.S.C. § 1332(a)(1) requires complete diversity of citizenship and an amount in controversy in 20 excess of $75,000. The defendant seeking removal “bears the burden of establishing that removal 21 is proper,” and the “removal statute is strictly construed against removal jurisdiction.” Provincial 22 Gov’t of Marinduque v. Placer Dome, Inc., 582 F.3d 1083, 1087 (9th Cir. 2009). Further, when a 23 case is removed to federal court, the court has an independent obligation to satisfy itself it has 24 federal subject matter jurisdiction. See Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1116 (9th Cir. 25 2004). A case removed to federal court must be remanded to state court “if at any time before 26 final judgment it appears that the district court lacks subject matter jurisdiction.” 28 U.S.C. § 27 1 1447(c). 2 Tesla argues complete diversity exists because it is incorporated and headquartered in 3 Texas, and Plaintiff has not served the individual defendants, who “[u]pon information and belief . 4 . . reside in Alameda County.” (Dkt. No. 1 at 5-6 (quoting Dkt. No. 1-1 ¶ 9).) According to Tesla, 5 because an action otherwise removable based on diversity jurisdiction “may not be removed if any 6 of the parties in interest properly joined and served as defendants is a citizen of the State in which 7 such action is brought,” removal is appropriate when, as here, individual defendants are California 8 citizens but have not been served. See 28 U.S.C. § 1441(b)(2) (emphasis added). 9 But 28 U.S.C. § 1441(b)(2) does not eliminate the Court’s obligation to ensure it has 10 subject matter jurisdiction, here, diversity jurisdiction under 28 U.S.C. § 1332(a)(1). In fact, 11 section 1441(b)(2) only applies to actions “otherwise removable [] on the basis of the jurisdiction 12 under section 1332(a).” See 28 U.S.C. § 1441(b)(2); see also Lively v. Wild Oats Markets, Inc., 13 456 F.3d 933, 938-39 (9th Cir. 2006) (explaining section 1441(b)(2) is a “procedural, [] non- 14 jurisdictional, rule” “[s]eparate and apart from the statute conferring diversity jurisdiction, 28 15 U.S.C. § 1332”). Furthermore, “[t]he Supreme Court and Ninth Circuit have expressly rejected 16 [Tesla’s] apparent position that an unserved defendant’s citizenship is not considered in 17 determining whether complete diversity exists.” JD v. Mitchell, No. 18-CV-06261-HSG, 2019 18 WL 1749521, at *2 (N.D. Cal. Apr. 19, 2019) (citing Pullman Co. v. Jenkins, 305 U.S. 534, 541 19 (1939); Lopez v. Gen. Motors Corp., 679 F.2d 1328, 1331 (9th Cir. 1983); Clarence E. Morris, 20 Inc. v. Vitek, 412 F.2d 1174, 1176 (9th Cir. 1969) (“Whenever federal jurisdiction in a removal 21 case depends on complete diversity, the existence of diversity is determined from the fact of 22 citizenship of the parties named and not from the fact of service.”)). Tesla relies on Urquidez v. 23 Hyatt Corporation, No. 3:24-CV-01975-CAB-MMP, 2025 WL 89725 (S.D. Cal. Jan. 15, 2025), 24 but that court never specified the plaintiff was a California citizen such that consideration of the 25 unserved defendant, a California citizen, would eliminate complete diversity. Id. at *1-2. Tesla 26 therefore cites no authority supporting its argument an unserved defendant’s citizenship is 27 disregarded for purposes of diversity jurisdiction. And as explained above, binding Ninth Circuit 1 Accordingly, on or before November 10, 2025, Tesla is ORDERED TO SHOW CAUSE 2 || why this action should not be remanded for lack of subject matter jurisdiction. The Court will 3 advise Plaintiff if a response is required. 4 IT IS SO ORDERED. 5 Dated: November 3, 2025 6 ne JAGQUELINE SCOTT CORL 7 United States District Judge 8 9 10 11 12 15 16 17 Z 18 19 20 21 22 23 24 25 26 27 28