MAG US LOUNGE MANAGEMENT, LLC, a Delaware limited liability company v. Ontario International Airport Authority, a California joint powers authority

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
MAG US LOUNGE MANAGEMENT,
LLC, a Delaware limited liability company,
Plaintiff-Appellant,
v.
ONTARIO INTERNATIONAL AIRPORT
AUTHORITY, a California joint powers
authority,
Defendant-Appellee.
No. 22-55230
D.C. No. 2:21-cv-04909-ODW-RAO
MEMORANDUM*
Appeal from the United States District Court
for the Central District of California
Otis D. Wright II, District Judge, Presiding
Argued and Submitted December 6, 2022
Pasadena, California
Before: KELLY,** M. SMITH, and COLLINS, Circuit Judges.
Invoking the district court’s diversity jurisdiction under 28 U.S.C. § 1332,
Plaintiff-Appellant MAG US Lounge Management, LLC (“MAG US”) sued
Defendant-Appellee Ontario International Airport Authority (“OIAA”) in federal
court for breach of contract and related claims. After issuing two orders to show
* This disposition is not appropriate for publication and is not precedent except as
provided by Ninth Circuit Rule 36-3.
** The Honorable Paul J. Kelly, Jr., United States Circuit Judge for the U.S. Court
of Appeals for the Tenth Circuit, sitting by designation.
FILED
DEC 14 2022
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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cause, the district court ultimately held that diversity jurisdiction had not been
proved and dismissed the case. We have appellate jurisdiction under 28 U.S.C.
§ 1291, and we reverse.
1. The district court clearly erred in concluding that MAG US’s evidentiary
presentation failed to establish its citizenship by a preponderance of the evidence.
See Wilkins v. United States, 13 F.4th 791, 793 (9th Cir. 2021) (stating that factual
determinations made in the course of determining subject matter jurisdiction are
reviewed for clear error); Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014)
(“The plaintiff bears the burden of proving by a preponderance of the evidence that
each of the requirements for subject-matter jurisdiction has been met.”).
For diversity jurisdiction purposes, “an LLC is a citizen of every state of
which its owners/members are citizens.” Johnson v. Columbia Props. Anchorage,
LP, 437 F.3d 894, 899 (9th Cir. 2006). MAG US introduced uncontroverted
evidence of its citizenship in the form of a declaration from its CEO, Martin Jones.
Jones averred that MAG US is an LLC with one and only one member and owner,
viz., Manchester Airport Group US Holdings Inc. (“MAG Holdings”). Under
Johnson, the citizenship of MAG US therefore turns on the citizenship of MAG
Holdings. As to the latter point, Jones averred that MAG Holdings is a corporation
“organized and existing under the laws of Delaware”; that it “maintains a principal
place of business at 100 N. LaSalle Street, Chicago, Illinois 60602”; and that

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“MAG Holdings does not maintain any other principal places of business except its
headquarters in Illinois.” Online records from the Secretaries of State of Illinois
and Delaware were also submitted to the district court, and they confirm that Jones
is also the President of MAG Holdings; that the address of the President and
Secretary of MAG Holdings is “100 N. LaSalle St. Suite 900 Chicago IL 60602”;
and that MAG Holdings is a corporation organized under the laws of Delaware.
OIAA did not submit any contradictory evidence concerning the citizenship of
MAG US or MAG Holdings. This record amply and indisputably establishes that
MAG Holdings—and therefore MAG US—is a citizen of Delaware (the State of
its incorporation) and of Illinois (the State of its only principal place of business).
See 28 U.S.C. § 1332(c)(1).
In concluding otherwise, the district court held that MAG US had not made
a sufficient “showing” as to Jones’s “personal knowledge of the facts” that Jones
set forth as to MAG US and MAG Holdings. The district court erred. Jones was
the CEO of MAG US and the President of MAG Holdings, and we have followed
the common-sense rule that “[p]ersonal knowledge can be inferred from an
affiant’s position” in a company. Self-Realization Fellowship Church v. Ananda
Church of Self-Realization, 206 F.3d 1322, 1330 (9th Cir. 2000). Jones attested to
his personal knowledge of these matters under penalty of perjury, and OIAA
presented no contrary evidence on these points. On this record, there was no

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reasonable basis for concluding that Jones lacked personal knowledge of the basic
points of corporate structure to which he averred.
In its second order to show cause, which preceded its dismissal order, the
district court also rejected the online record that MAG US submitted from the
website of the Secretary of State of Delaware. However, the court lacked any
reasonable basis for doing so. That record was submitted with a request for
judicial notice in which counsel confirmed that it was a “true and accurate copy” of
the “State of Delaware’s Entity Details” as to MAG Holdings. The document on
its face shows that it was printed from the “Delaware.gov” website and that it sets
forth the “Entity Details” for MAG Holdings from the “Department of State:
Division of Corporations.” And contrary to the district court’s speculation that the
Delaware report did not show that MAG Holdings was organized under the laws of
Delaware “at the time [MAG US] brought suit,” that report is dated January 14,
2022 and shows that MAG Holdings was incorporated in Delaware as of February
18, 2015. Notably, after wrongly rejecting this report, the district court stated that
“[b]etter evidence, such as a declaration from a competent director or officer of
MAG Holdings, is required” to show MAG Holdings’s state of incorporation. But,
as we have explained, when MAG US thereafter presented just such a declaration,

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the district court wrongly found that inadequate as well.1
Accordingly, MAG US has amply established, by a preponderance of the
evidence, that it is a citizen of Delaware and of Illinois. The district court’s
contrary conclusion was clearly erroneous.
2. The district court also clearly erred in concluding that MAG US had
failed to show that the defendant—OIAA—was a “citizen” of California rather
than an arm of the State of California. See Moor v. County of Alameda, 411 U.S.
693, 717 (1973) (holding that, although “a State is not a ‘citizen’ for purposes of
the diversity jurisdiction,” a “political subdivision of a State” is considered to be a
“citizen,” “unless it is simply ‘the arm or alter ego of the State’”).
OIAA is a “joint powers authority” formed by the County of San Bernardino
and the City of Ontario under California’s Joint Exercise of Powers Act. See CAL.
GOV. CODE § 6500.1. That Act allows two or more public agencies to work
together to accomplish a common objective by entering into an “agreement” under
which they “may jointly exercise any power common to the contracting parties.”
Id. § 6502. As in this case, such an agreement may “provide[] for the creation of
1 The district court also initially concluded that the printout from the Illinois
Secretary of State’s office, which stated that the address of the President and
Secretary of MAG Holdings was located in Chicago, Illinois, was insufficient by
itself to establish that MAG Holdings’s principal place of business was in Illinois.
Even assuming that conclusion was correct, we note that the information contained
in that printout was consistent with, and provided yet further corroboration for, the
facts subsequently set forth by Jones in his declaration.

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an agency or entity that is separate from the parties to the agreement.” Id.
§ 6503.5; see also id. § 6506. When such an agency is created, it is deemed to be
“a public entity separate from the parties to the agreement.” Id. § 6507. Such an
entity “shall have the power to sue and be sued in its own name,” and it may
“make and enter contracts” and “incur debts, liabilities or obligations.” Id. § 6508.
Any such “debts, liabilities, and obligations of the agency shall be debts, liabilities,
and obligations of the parties to the agreement, unless the agreement specifies
otherwise.” Id. § 6508.1; see also Tucker Land Co. v. State of California, 114 Cal.
Rptr. 2d 891, 897 (Ct. App. 2001) (rejecting the notion that the act imposes
nondelegable “liability on constituent members for the contractual obligations of
the [joint powers authority]”).
Against this backdrop, there was no conceivable basis for the district court’s
speculation that OIAA was an arm of the State of California. OIAA was formed
by two local government entities that are each citizens for purposes of diversity
jurisdiction, and the joint entity that these local governments created is likewise not
an arm of the State. As a creature of two local government entities, OIAA can
only exercise those powers possessed in common by the city and the county. CAL.
GOV. CODE § 6502. Moreover, OIAA is controlled by the local government
entities that created it: the agency is governed by a five-member commission in
which four members are appointed by the Ontario City Council and one member

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by the County of San Bernardino. And OIAA is responsible for its own debts.
Although the Joint Exercise of Powers Act establishes a default rule that the public
entities creating the joint agency are liable for its debts, the Act also states that the
agreement creating the joint agency may “specif[y] otherwise.” Id. § 6508.1.
Here, the agreement creating the OIAA states that the “debts, liabilities, and
obligations of [OIAA] shall be those of [OIAA], and do not constitute debts,
liabilities, or obligations” of the City of Ontario or the County of San Bernardino.
Moreover, the primary function of OIAA—the operation of an airport—is one that
the Supreme Court has recognized as among those commonly exercised by local
governments. See Moor, 411 U.S. at 719–20 (noting that California counties “are
authorized to provide a variety of public services such as . . . airport facilities”).
OIAA is thus an entity created by local governments to exercise local
government powers; it is governed by a board controlled by local government
entities; it may sue and be sued in its own name; and its debts are its own and not
those of the other local governments (much less the State of California). Given
these considerations, there is no arguable sense in which OIAA may be deemed an
“arm” of the State of California. See Mitchell v. Los Angeles Cmty. Coll. Dist., 861
F.2d 198, 201 (9th Cir. 1988) (articulating factors that must be considered in
determining whether an entity is an arm of the State for Eleventh Amendment
purposes); Ronwin v. Shapiro, 657 F.2d 1071, 1073 (9th Cir. 1981) (noting that “a

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similar rule controls the determination of diversity jurisdiction”). Indeed, in the
district court proceedings, OIAA never even contended that it was an arm of the
State of California. Accordingly, OIAA is a citizen of the State of California for
purposes of diversity jurisdiction.
Because MAG US is a citizen of Delaware and Illinois and OIAA is a
citizen of California, there was complete diversity of citizenship. Because it is
undisputed (and indisputable) that the amount in controversy exceeds $75,000, the
district court had diversity jurisdiction under § 1332(a).2
3. In “unusual circumstances,” reassignment to a different judge on remand
may be appropriate, where necessary “to preserve the appearance of justice.”
United States v. Sears, Roebuck & Co., 785 F.2d 777, 780 (9th Cir. 1986). We
conclude that, in the unique circumstances presented, the assigned district judge
should not preside over these parties’ dispute. Here, the district court has shown
“adamance in making erroneous rulings,” id., including by ignoring the obvious
implications of uncontested facts, raising specious objections to the evidence and
arguments presented, and moving the goalposts in its successive orders to show
cause (e.g., by asking for a declaration to establish undisputed facts and then
rejecting the requested declaration on baseless grounds). We therefore order
reassignment to a new judge to preserve “the healthy administration of the judicial
2 MAG US’s motion to amend its jurisdictional allegations is denied as moot.

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and appellate processes, as well as the appearance of justice.” Id.
REVERSED AND REMANDED. The Clerk of the District Court is
instructed to reassign this case forthwith to a new district judge.
The mandate shall issue forthwith.

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