United States District Court, N.D. Illinois, Eastern Division
FARMERS INSURANCE EXCHANGE, as subrogee Alisa Martin Plaintiff,
ONE SAMPLE, LLC., d/b/a Magic Inmotion and FRY'S ELECTRONICS, INC., Defendants.
MEMORANDUM OPINION AND ORDER
E. Bucklo, United States District Judge.
Farmers Insurance Exchange filed this action in the Circuit
Court of Cook County to recover monies it paid to its insured
for property damage caused by a defective product
manufactured and sold by defendants. Defendant One Sample
removed the case to this court under 28 U.S.C. §
1332(c). Because the record does not support the existence of
diversity jurisdiction, the complaint is dismissed without
prejudice and the case remanded to the state court.
outset, One Sample's notice of removal is facially
defective because it fails properly to allege the citizenship
of the parties. In particular, the notice states that Farmers
“is an insurance company licensed to do business in the
State of Illinois and licensed to issue property insurance
policies to homeowners in Illinois.” Notice of Removal
at ¶ 3. Presumably, One Sample intends this statement to
allege that Farmers is a citizen of Illinois. But
Farmers' state of licensure is not what matters to the
citizenship inquiry. Because Farmers is an entity rather than
a natural person, its citizenship depends on either its state
of incorporation and principal place of business (if it is a
corporation), see Dalton v. Teva N. Am., 891 F.3d
687, 690 (7th Cir. 2018) (“what matters for the
citizenship of a corporation is its state of incorporation
and its principal place of business”), or the
citizenship of its members (if it is an unincorporated
association), Thomas v. Guardsmark, LLC, 487 F.3d
531, 534 (7th Cir. 2007) (to allege the citizenship of an
unincorporated association, the “jurisdictional
statement must identify the citizenship of each of its
members as of the date the complaint or notice of removal was
filed, and, if those members have members, the citizenship of
those members as well.”). Yet One Sample's notice
of removal fails even to allege the kind of entity it claims
Farmers to be, much less does it provide the information
necessary to allege Farmers' citizenship for diversity
fills the gap in its remand motion with evidence that it is
“an inter-insurance exchange, organized and existing
under the California Insurance Code, with its principal place
of business in Woodland Hills, California.” Mot., Exh.
A at ¶ 4. One Sample does not dispute these facts. As
numerous courts have held, “California inter-insurance
exchanges  are intended to be treated as unincorporated
associations.” Rockford Mut. Ins. Co. v. Truck Ins.
Exch., No. 12 C 7549, 2013 WL 1154462, at *3 (N.D. Ill.
Mar. 19, 2013); McKenzie v. Farmers Ins. Exch., No.
CV 17-4011, 2018 WL 801597, at *3 (D.S.D. Feb. 8, 2018)
(analyzing the California Insurance Code to conclude that
inter-insurance exchange was an unincorporated association
and “a citizen of each state in which [its] members are
citizens.”) (citing cases). Because One Step alleges
affirmatively that both defendants are citizens of
California, see Notice of Removal at ¶¶
5-6,  and does not dispute that Farmers'
policyholders include citizens of California, see
Mot., Exh. A at ¶ 8, the only question is whether
Farmers' policyholders are “members” for
purposes of the jurisdictional analysis. On this record, I
conclude that the answer is “yes.” diversity
required for subject-matter jurisdiction is absent.
v. Farmers Ins. Exch., 121 F.Supp.2d 667 (N.D. Ill.
2000), does not compel a contrary conclusion. It is true that
in that case, I concluded that Farmers' policyholders
were not members for citizenship purposes. Id. at
669. Although Farmers claimed to be a citizen of Illinois, it
offered no evidence of the citizenship of its policyholders,
id. at 669, nor did it claim to be organized under
the laws of any state. These factors made it impossible to
perform the type of analysis that led the Rockford
and McKenzie courts to conclude that the
policyholders of a California inter-insurance exchange (as
Farmers undisputedly is here) are appropriately considered
its “members” for citizenship purposes. See
Rockford, 2013 WL 1154462, at *3; McKenzie,
2018 WL 801597, at *2-3. In this case, by contrast, Farmers
offers uncontroverted evidence that its policyholders include
California citizens, who are appropriately considered its
“members” under the laws of state in which it is
foregoing reasons, Farmers' motion for remand is granted.
 One Sample's change of heart about
its own identity does not alter the analysis. In response to
Farmers' remand motion, One Sample states that it is
“a Wyoming corporation, but has its principal place of
business in California.” Resp. at 6. Because One
Sample's principal place of business is in California, it
is a citizen of ...