Avant Capital Partners, LLC v. W108 Dev. LLC
Avant Capital Partners, LLC v. W108 Dev. LLC
Opinion of the Court
This memorandum addresses points which are somewhat esoteric, but important because they affect the presence or absence of diversity jurisdiction: the difference between "citizens" and "residents." Diversity jurisdiction depends on different citizenship, and on the citizenship of each member of a limited liability company.
Article III, Section 2 of the Constitution gives the federal courts jurisdiction to controversies "between Citizens of different States" (not residents), a distinction which is echoed in
*322The complaint relies upon this court's diversity jurisdiction:
Jurisdiction is based upon diversity of citizenship among the parties. The amount in controversy exceeds $75,000, exclusive of costs. This Court thus has original subject matter jurisdiction over this action pursuant to28 U.S.C. § 1332 .
Compl. ¶ 5.
For the reasons that follow, the complaint does not adequately allege the existence of diversity jurisdiction. Accordingly, plaintiffs are directed to file, on or before July 22, 2016 affidavits or an amended complaint adequately establishing the existence of subject-matter jurisdiction.
DISCUSSION
Plaintiff Avant and defendant W108 are limited liability companies. Compl. ¶¶ 2, 4. A limited liability company takes the citizenship of its members. Bayerische Landesbank, New York Branch v. Aladdin Capital Mgmt. LLC,
The complaint gives the principal places of business of these limited liability companies, and whether their members reside in Connecticut:
Plaintiff Avant Capital Partners LLC is a Delaware Limited Liability Company with its principal place of business at 700 Canal Street, 5th Floor, Stamford, Connecticut 06902. All of its members reside in the State of Connecticut.
...
Defendant W108 Development LLC is a New York Limited Liability Company registered with the New York Secretary of State with its principal place of business at 2025 Broadway #12K, New York NY 10023. Upon information and belief, no member of this LLC resides in Connecticut.
Compl. ¶¶ 2, 4.
But "The allegations of the residences of the individuals-and there is not even that as to one of them-are not equivalent to allegations of citizenship and therefore are insufficient." Krause v. Forex Exch. Mkt., Inc.,
Furthermore, if either of the LLC-parties have members which are LLC's, the citizenship of the members of those LLC's must also be given, and must be diverse: "Consequently, an LLC's 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 *323well." Thomas v. Guardsmark, LLC,
Nor does the blanket assertion that none of W108's members resides in Connecticut suffice, not only because it deals only with the residence (rather than citizenship), but also because "Stating merely that the party is not a citizen of his adversaries' states of citizenship leaves open the prospect that he is not a citizen of any state: he could be a U.S. citizen domiciled abroad. If so, he could neither sue nor be sued under Section 1332(a)(1)'s requirement for diversity between 'citizens of different States.' " Prospect Funding Holdings, LLC v. Fennell, No. 15 Civ. 4176 (LLS),
CONCLUSION
"Defective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts."
So ordered.
Reference
- Full Case Name
- AVANT CAPITAL PARTNERS, LLC v. W108 DEVELOPMENT LLC and Orly Gilat
- Cited By
- 29 cases
- Status
- Published