Univalor Trust, SA et al v. Columbia Petroleum, LLC et al

Filing 6

Order that plaintiffs are to file an Amended Pleadings by 8/31/2015 that sufficiently alleges the citizenship of the LLC defendants for purposes of diversity. Plaintiffs are to file their Disclosure Statement by 8/31/2015. Signed by Magistrate Judge Katherine P. Nelson on 8/17/2015. (srr)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
UNIVALOR TRUST, SA, et al.,
Plaintiffs,
v.
COLUMBIA PETROLEUM, LLC,
et al.,
Defendants.

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CIVIL ACTION NO. 15-00414-N

ORDER
This action is before the Court sua sponte on review of its subject matter
jurisdiction.1 The Plaintiffs initiated this action by filing a Complaint (Doc. 1) with
the Court, alleging diversity of citizenship under 28 U.S.C. § 1332(a) as the sole
basis for jurisdiction.2

See Fed. R. Civ. P. 8(a)(1) (“A pleading that states a claim for

relief must contain a short and plain statement of the grounds for the court’s
jurisdiction…”).
When a plaintiff files suit in federal court, [the plaintiff] must allege
facts that, if true, show federal subject matter jurisdiction over her case
exists. Taylor v. Appleton, 30 F.3d 1365, 1367 (11th Cir. 1994). Those
allegations, when federal jurisdiction is invoked based upon diversity,
“It is . . . axiomatic that the inferior federal courts are courts of limited jurisdiction. They
are ‘empowered to hear only those cases within the judicial power of the United States as
defined by Article III of the Constitution,’ and which have been entrusted to them by a
jurisdictional grant authorized by Congress.” Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d
405, 409 (11th Cir. 1999) (quoting Taylor v. Appleton, 30 F.3d 1365, 1367 (11th Cir. 1994)).
Accordingly, “it is well settled that a federal court is obligated to inquire into subject matter
jurisdiction sua sponte whenever it may be lacking.” Id. at 410. “[A] court should inquire
into whether it has subject matter jurisdiction at the earliest possible stage in the
proceedings.” Id.

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The Plaintiffs have brought this action under the federal Declaratory Judgment Act, 28
U.S.C. § 2201. However, it is well established that this Act is not an independent basis for
subject matter jurisdiction. See, e.g., Medtronic, Inc. v. Mirowski Family Ventures, LLC,
134 S. Ct. 843, 848 (2014) (“[T]he Declaratory Judgment Act does not extend the jurisdiction
of the federal courts.” (quotation marks omitted)).

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must include the citizenship of each party, so that the court is satisfied
that no plaintiff is a citizen of the same state as any defendant. Triggs
v. John Crump Toyota, Inc., 154 F.3d 1284, 1287 (11th Cir. 1998)
(“Diversity jurisdiction requires complete diversity; every plaintiff must
be diverse from every defendant.”). Without such allegations, district
courts are constitutionally obligated to dismiss the action altogether if
the plaintiff does not cure the deficiency. Stanley v. C.I.A., 639 F.2d
1146, 1159 (5th Cir. Unit B Mar. 1981); see also DiMaio v. Democratic
Nat'l Comm., 520 F.3d 1299, 1303 (11th Cir. 2008) (“Where dismissal
can be based on lack of subject matter jurisdiction and failure to state a
claim, the court should dismiss on only the jurisdictional grounds.”
(internal quotation marks omitted)). That is, if a complaint's factual
allegations do not assure the court it has subject matter jurisdiction,
then the court is without power to do anything in the case. See
Goodman ex rel. Goodman v. Sipos, 259 F.3d 1327, 1331, n.6 (11th Cir.
2001) (“ ‘[A district] court must dismiss a case without ever reaching
the merits if it concludes that it has no jurisdiction.’ ” (quoting Capitol
Leasing Co. v. FDIC, 999 F.2d 188, 191 (7th Cir. 1993))); see also Belleri
v. United States, 712 F.3d 543, 547 (11th Cir. 2013) (“We may not
consider the merits of [a] complaint unless and until we are assured of
our subject matter jurisdiction.”).
Travaglio v. Am. Exp. Co., 735 F.3d 1266, 1268 (11th Cir. 2013) (footnote omitted).
See also, e.g., Ray v. Bird & Son & Asset Realization Co., Inc., 519 F.2d 1081, 1082
(5th Cir. 1975) (“The burden of pleading diversity of citizenship is upon the party
invoking federal jurisdiction . . .” (citing Mas v. Perry, 489 F.2d 1396 (5th Cir.
1974)).3
The Plaintiffs have alleged sufficient facts demonstrating their own
citizenship, as each Plaintiff, a “foreign corporate entity,” has alleged “every State
and foreign state by which it has been incorporated and of the State or foreign state
“In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981) (en banc), [the
Eleventh Circuit] adopted as binding precedent all decisions of the former Fifth Circuit
handed down prior to the close of business on September 30, 1981.” Travaglio, 735 F.3d at
1268 n.1.

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where it has its principal place of business…”

28 U.S.C. § 1332(c)(1); (Doc. 1 at 2 –

3, ¶ 4 – 5). As such, for purposes of diversity jurisdiction, Plaintiff Univalor Trust,
SA is deemed a citizen of Switzerland,4 and Plaintiff Forvest Financial Services
Corporation is deemed a citizen of Canada.
The Plaintiffs have also alleged that the natural person Defendant, Chester F.
English, III, is a “citizen” of New Jersey (Doc. 1 at 4, ¶ 11) and have thus alleged
sufficient facts to establish his citizenship. See, e.g., Taylor v. Appleton, 30 F.3d
1365, 1367 (11th Cir. 1994) (“Citizenship, not residence, is the key fact that must
be alleged . . . to establish diversity for a natural person.” (emphasis added)).5
However, the Plaintiffs have failed to allege facts showing the citizenships of
the five limited liability company (LLC) Defendants. The Plaintiffs have treated
the LLC Defendants like corporations for purposes of diversity, alleging the states in
which they were formed and where their principal places of business are located.
This is not acceptable, however.

The general rule for diversity is “that the

citizenship of an artificial, unincorporated entity generally depends on the
citizenship of all the members composing the organization.”

Rolling Greens, MHP,

L.P. v. Comcast SCH Holdings, L.L.C., 374 F.3d 1020, 1021 (11th Cir. 2004) (per
curiam) (citing Carden v. Arkoma Assocs., 494 U.S. 185, 195-96 (1990)).

For

purposes of assessing diversity of citizenship, “a limited liability company is a citizen

See generally Danjaq, S.A. v. Pathe Commc'ns Corp., 979 F.2d 772 (9th Cir. 1992) (treating
a Swiss S.A. as a “corporation” for purposes of diversity).

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The Plaintiffs have also alleged that § 1332(a)’s minimum amount in controversy is
satisfied (see Doc. 1 at 2, ¶ 2), and nothing in the Complaint gives the Court reason to doubt
that it is.

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of any state of which a member of the company is a citizen.”

Id. at 1022. Accord

Mallory & Evans Contractors & Eng’rs, LLC v. Tuskegee Univ., 663 F.3d 1304, 1305
(11th Cir. 2011) (per curiam). Therefore, to sufficiently allege the citizenship of an
LLC, “a party must list the citizenships of all the members of the limited liability
company . . .”

Rolling Greens, 374 F.3d at 1022. This “can require tracing through

several layers.”

BouMatic, LLC v. Idento Operations, BV, 759 F.3d 790, 791 (7th

Cir. 2014) (citing Cosgrove v. Bartolotta, 150 F.3d 729 (7th Cir. 1998) (citizenship of
an LLC depends on citizenship of its members, traced through as many levels as
necessary to reach corporations or natural persons)).

See also Azzo v. Jetro Rest.

Depot, LLC, No. 3:11-CV-324-J-34JRK, 2011 WL 1357557, at *2 n.2 (M.D. Fla. Apr.
11, 2011) (in pleading the citizenships of the members, “each member's citizenship
must [also ]be properly alleged, be it an individual, corporation, LLC, or other
entity”).
“Defective allegations of jurisdiction may be amended, upon terms, in the trial
or appellate courts.”

28 U.S.C. § 1653. “[L]eave to amend should be freely granted

when necessary to cure a failure to allege jurisdiction properly.”

Majd-Pour v.

Georgiana Cmty. Hosp., Inc., 724 F.2d 901, 903 n.1 (11th Cir. 1984)). Accordingly,
the Plaintiffs hereby ORDERED to file and serve, no later than Monday, August
31, 2015, an amended complaint that sufficiently alleges the citizenships of the LLC
Defendants for purposes of diversity under § 1332(a). The failure to timely do so
may result in the dismissal of this action for lack of subject matter jurisdiction.

See

Fed. R. Civ. P. 12(h)(3) (“If the court determines at any time that it lacks

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subject-matter jurisdiction, the court must dismiss the action.”).

The amended

complaint, if filed, shall become the operative complaint in this action.6 Federal
Rule of Civil Procedure 15(a)(3) shall govern the time for responsive pleadings to the
amended complaint.
Additionally, the Plaintiffs have not filed disclosure statement in accordance
with S.D. Ala. CivLR 7.17 and (for “nongovernmental corporate” parties) Federal
Rule of Civil Procedure 7.1. The Plaintiffs are ORDERED to do so no later than
Monday, August 31, 2015.
DONE and ORDERED this the 17th day of August 2015.8
/s/ Katherine P. Nelson
KATHERINE P. NELSON
UNITED STATES MAGISTRATE JUDGE

“As a general matter, ‘[a]n amended pleading supersedes the former pleading; the original
pleading is abandoned by the amendment, and is no longer a part of the pleader's averments
against his adversary.’ ” Pintando v. Miami-Dade Hous. Agency, 501 F.3d 1241, 1243 (11th
Cir. 2007) (per curiam) (quoting Dresdner Bank AG, Dresdner Bank AG in Hamburg v. M/V
OLYMPIA VOYAGER, 463 F.3d 1210, 1215 (11th Cir. 2006) (citation and quotation
omitted)). See also, e.g., Fritz v. Standard Sec. Life Ins. Co. of New York, 676 F.2d 1356,
1358 (11th Cir. 1982) (“Under the Federal Rules, an amended complaint supersedes the
original complaint.”).

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http://www.alsd.uscourts.gov/court-info/local-rules-and-orders

Under S.D. Ala. GenLR 73(c), this civil action has been randomly assigned to the
undersigned Magistrate Judge to conduct all proceedings in accordance with 28 U.S.C. §
636(c). The Clerk of Court is DIRECTED to enter the Court’s standard Notice of
Assignment of Case to a Magistrate Judge for Trial.

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