Strategic Medical Equipment Solutions LLC v. Atlas Research LLC

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Judge Raymond P. Moore Civil Action No. 21-cv-00749-RM-KMT STRATEGIC MEDICAL EQUIPMENT SOLUTIONS, LLC, a Colorado limited liability company, Plaintiff, v. ATLAS RESEARCH, LLC, a Delaware limited liability company, Defendant. ______________________________________________________________________________ ORDER TO SHOW CAUSE ______________________________________________________________________________ This matter is before the Court sua sponte after reviewing the Notice of Removal (“Notice”) alleging removal is proper based on diversity subject matter jurisdiction (ECF No. 1).

Amazon, Inc. v. Dirt Camp, Inc., 273 F.3d 1271, 1276 (10th Cir. 2001) (A federal court has an independent obligation to examine its own jurisdiction at every stage of the proceeding.).

Pursuant to 28 U.S.C. § 1332(a) district courts have diversity jurisdiction where the civil action is “between…citizens of different States.” Here, Defendant alleges it is a limited liability company whose “members are Ryung Suh and the Suh Family Generational Trust.” Defendant further alleges that Mr. Suh is a resident of Houston, Texas, and the sole trustee of the Suh Family Generational Trust (“Trust”) is Mr. Suh’s wife, Yono Suh, who is also a resident of Houston, Texas. (ECF No. 1, ¶ 3.) The Court finds such allegations are insufficient to show the Trust is a citizen of Texas and, accordingly, that complete diversity exists.

For an unincorporated entity, the general rule is that “diversity jurisdiction in a suit by or against the entity depends on the citizenship of all its members.” Americold Realty Tr. v. Conagra Foods, Inc., -- U.S. --, 136 S. Ct. 1012, 1015, 194 L. Ed. 2d 71 (2016) (citation and internal quotation marks and brackets omitted). In Conagra Foods, Americold, a real estate investment trust, argued that anything called a “trust” possessed the citizenship of its trustees.

After considering the law under which Americold was organized, the Supreme Court found that was not so. Specifically, the Supreme Court found that Americold’s members included its shareholders; therefore, Americold’s citizenship was determined by the citizenship of its shareholders. In other words, an entity’s membership is not limited to its trustees “just because it happens to call itself a trust.” Americold, 136 S. Ct. at 1016. It is therefore ORDERED that on or before Tuesday, April 13, 2021, Defendant shall SHOW CAUSE why this action should not be remanded to the District Court of El Paso County, Colorado, for lack of subject matter jurisdiction.

DATED this 6th day of April, 2021.

BY THE COURT: United States District Judge