Bank of America, N.A. v. Fulcrum Enterprises, L.L.C.

Filing

NON DISPOSITIVE UNPUBLISHED OPINION FILED. Judge: CES , Judge: CH , Judge: NJB Awaiting District Court Action deadline due on 08/28/2015 Case 14-20532 placed in abeyance for limited remand in 4:12CV313 from the Southern District of Texas [14-20532]

Case: 14-20532

Document: 00513097628

Page: 1

Date Filed: 06/29/2015

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit

No. 14-20532

FILED
June 29, 2015
Lyle W. Cayce
Clerk

BANK OF AMERICA, N.A.,
Plaintiff – Appellee,

v.
FULCRUM ENTERPRISES, LLC,

Defendant - Appellant

Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:12-CV-313
Before STEWART, Chief Judge, HAYNES, Circuit Judge, and BROWN,
District Judge.*
PER CURIAM:**
This case is before this court on Fulcrum Enterprises, LLC’s appeal of
the district court’s judgment. In the district court, Plaintiff asserted
jurisdiction based upon diversity of citizenship, which was not challenged. On
appeal, we raised, sua sponte, the question of subject matter jurisdiction.
The citizenship of a limited liability company “is determined by the
citizenship of all of its members.” Harvey v. Grey Wolf Drilling Co., 542 F.3d
*

District Judge of the Eastern District of Louisiana, sitting by designation.

Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should
not be published and is not precedent except under the limited circumstances set forth in
5TH CIR. R. 47.5.4.
**

Case: 14-20532

Document: 00513097628

Page: 2

Date Filed: 06/29/2015

No. 14-20532
1077, 1079–80 (5th Cir. 2008). The original and amended complaints in this
suit identify Fulcrum as “a limited liability company organized and existing
under the laws of the State of Nevada.” However, the record contains no
mention of Fulcrum’s members, let alone their respective states of
citizenship. Under Harvey, these allegations are facially insufficient to
establish the existence of diversity jurisdiction.
Following supplemental briefing and discussion at oral argument, and
pursuant to 28 U.S.C. § 1653, which allows amendment of jurisdictional
allegations on appeal, we requested that Fulcrum identify the state(s) of
citizenship of each of its members. In its response to our request, Fulcrum
alleges, for the first time, that its members when this suit was filed were
citizens of Georgia, Nevada, New York, and North Carolina. Notably, this
allegation conflicts with Fulcrum’s previous assertions that it is a Nevada
citizen. If Fulcrum’s allegation is true, diversity jurisdiction does not exist
because Plaintiff-Appellee Bank of America, N.A. is also a citizen of North
Carolina.
This Court has permitted direct amendments to pleadings on appeal
only when “our discretionary examination of the record as a whole discloses
at least a substantial likelihood that jurisdiction exists....” Nadler v. Am.
Motors Sales Corp., 764 F.2d 409, 413 (5th Cir. 1985) (granting leave to
amend because allegations regarding the plaintiffs’ state of “residence”
suggested where they resided for diversity purposes, and deposition
testimony in the record indicated that the defendant corporation was
incorporated in a different state); see also, e.g., Carlton v. Baww, Inc., 751
F.2d 781, 789 (5th Cir. 1985) (allowing amendment on appeal when the
record plainly reflected that jurisdiction existed). Here, we find no evidence in
the record, and Fulcrum has cited none, supporting Fulcrum’s recent
assertion that it is a citizen of North Carolina. In light of this situation, Bank
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Case: 14-20532

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No. 14-20532
of America has requested remand for the limited purpose of discovery on this
issue.
Under these circumstances, the appropriate course is to remand the
case to the district court for amendment of the jurisdictional allegations,
supplementation of the record (if necessary), a hearing (if necessary), and
findings by the district court on the citizenship of the parties. See Molett v.
Penrod Drilling Co., 872 F.2d 1221, 1227-29 (5th Cir. 1989) (per curiam);
Strain v. Harrelson Rubber Co., 742 F.2d 888, 889-90 & n. 2 (5th Cir. 1984)
(per curiam). If the district court concludes that diversity jurisdiction does
not exist, it should vacate the judgment and so notify this court.
Conclusion
We therefore REMAND this case in full to the district court. The Clerk
of this court shall provide the district court with copies of our April 29, 2015
and June 4, 2015 requests, the parties’ letter responses, and this opinion. We
will retain the record in this court unless it is requested by the district court.
If the district court concludes that it has diversity jurisdiction, the Clerk of
the district court shall promptly supplement the appellate record with copies
of the new filings below and the district court’s opinion on jurisdiction and
forward the supplemental record to this court. The parties will be required to
file a new notice of appeal (and cross-appeal, if necessary) covering the entire
case. However, no further briefing will be necessary unless a party elects to
appeal the district court’s finding of jurisdiction, in which case supplemental
letter briefs may be filed addressing this issue on a short briefing schedule to
be established by the Clerk of this court. The case will be returned to this
panel for disposition.
REMANDED.

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