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Diversity Jurisdiction Exists
Defendant asserts federal court has subject matter jurisdiction based on diversity of citizenship under 28 U.S.C. § 1332(a), claiming plaintiffs are Virginia LLCs whose members are not residents of Nevada or North Carolina, and amount exceeds $75,000
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In its Notice of Removal, Defendant asserts that Plaintiffs are both "Virginia limited liability company[ies] and its members are not residents of Nevada or North Carolina." (Doc. 1 11 13-14 (citations omitted).) Defendant states that "Plaintiffs' Application seeks $1,149,866.85 in money damages pursuant to a Sister-State Judgment from the Commonwealth of Virginia."
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Court Lacks Subject Matter Jurisdiction
Court claims it may lack subject matter jurisdiction because the application may not constitute a 'civil action' and the judgment amount may not be 'in controversy' as required by diversity statute
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Notwithstanding these assertions, the Court is not convinced the Application constitutes a "civil action" or that the amount is "in controversy" as required under Section 1332(a).
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Plaintiffs Lack Article III Standing
Court asserts plaintiffs may lack constitutional standing because they did not allege injury caused by defendant's conduct that would be redressable by federal court
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Specifically, the Court has doubts as to whether Plaintiffs have asserted any injuries caused by Defendant's alleged conduct and redressable by a federal court to confer Article III standing.
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Atlantic Wave Holdings, LLC
Plaintiff entity, Virginia limited liability company, judgment creditor seeking to enforce Virginia state court judgment in California
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On March 5, 2024, Plaintiffs Atlantic Wave Holdings, LLC and Secure Community, LLC (collectively, "Plaintiffs") filed an Application for Entry of Judgment on Sister-State Judgment
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Secure Community, LLC
Plaintiff entity, Virginia limited liability company, co-judgment creditor with Atlantic Wave Holdings
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Plaintiffs Atlantic Wave Holdings, LLC and Secure Community, LLC (collectively, "Plaintiffs")
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Cyberlux Corporation
Defendant entity, judgment debtor, removed case to federal court claiming diversity jurisdiction
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On March 11, 2024, Defendant Cyberlux Corporation ("Defendant") removed the action to this Court
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Judge Ruth Bermudez Montenegro
United States District Judge for the Southern District of California presiding over this matter
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HON. RUTH BERMUDEZ MONTENEGRO UNITED STATES DISTRICT JUDGE
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California Sister State Judgment
Judgment entered by San Diego Superior Court on March 5, 2024 in the amount of $1,149,866.85 based on Virginia state court judgment
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The same day, the San Diego Superior Court entered judgment against Defendant in the amount of $1,149,866.85 (the "California Sister State Judgment").
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Application for Sister-State Judgment Filed
Plaintiffs filed application in San Diego Superior Court to register Virginia judgment under California's Sister State Money Judgments Act on March 5, 2024
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On March 5, 2024, Plaintiffs Atlantic Wave Holdings, LLC and Secure Community, LLC (collectively, "Plaintiffs") filed an Application for Entry of Judgment on Sister-State Judgment in the Superior Court of California, County of San Diego ("San Diego Superior Court") pursuant to California's Sister State Money Judgments Act, Cal. Code Civ. Proc. § 1710.10 et seq.
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State Court Entry of Judgment
San Diego Superior Court entered judgment against Cyberlux for $1,149,866.85 on March 5, 2024, same day as application filing
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The same day, the San Diego Superior Court entered judgment against Defendant in the amount of $1,149,866.85 (the "California Sister State Judgment").
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Notice of Removal Filed
Defendant removed the case from San Diego Superior Court to federal district court on March 11, 2024, six days after state court judgment entry
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On March 11, 2024, Defendant Cyberlux Corporation ("Defendant") removed the action to this Court ("Notice of Removal").
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Motion to Vacate Filed
Defendant filed Motion to Vacate the Sister State Judgment on April 10, 2024, which remains pending before the court
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On April 10, 2024, Defendant filed a Motion to Vacate the Sister State Judgment ("Motion to Vacate") (Doc. 9), which is still pending before the Court.
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Sua Sponte Order to Show Cause Issued
Court issued order to show cause on its own motion on February 27, 2025, questioning subject matter jurisdiction and Article III standing
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Invoking its inherent power to raise the issue of subject matter jurisdiction sua sponte, and for the reasons discussed below, the Court ORDERS DEFENDANT TO SHOW CAUSE
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Constitutional Standing Requirements
Three-element test for Article III standing as articulated by court
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The irreducible constitutional minimum of Article III standing contains three elements. First, the plaintiff must have suffered an "injury in fact" that is "concrete and particularized" and "actual or imminent." Second, there must be a causal connection between the injury and the conduct complained of, such that the injury is fairly traceable to the action challenged. "Third, it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision."
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Sister State Proceeding Characterization
California courts' characterization of sister-state judgment applications as special proceedings rather than civil actions
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California state courts have previously determined that filing an application pursuant to Section 1710.20 of the Act is generally considered a "special proceeding," not a civil action.
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No Pleadings Required for Registration
California law on simplified procedure for sister-state judgment registration
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The registration procedure established by the [Act] is designed to allow parties to avoid the normal trappings of an original action, e.g., the necessity for pleadings.
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