Ankor E&P Holdings Corporation v. Yazoo Venture, LLC

Filing 8

Order for the Plaintiff to file and serve, by 3/3/2016, an amended complaint that sufficiently alleges the citizenship of the Defendant LLC for purposes of diversity under § 1332(a), as further set out. Signed by Magistrate Judge Katherine P. Nelson on 2/18/2016. copies to parties. (sdb)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
ANKOR E&P HOLDINGS
CORPORATION,
Plaintiff,
v.
YAZOO VENTURE, LLC,
Defendant.

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CIVIL ACTION NO. 16-00049-CB-N

ORDER
This action is before the Court sua sponte on review of its subject matter
jurisdiction.1 The Plaintiff 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.

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 [the]
case exists. Taylor v. Appleton, 30 F.3d 1365, 1367 (11th Cir. 1994).
Those allegations, when federal jurisdiction is invoked based upon
diversity, 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;
“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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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) (emphasis added)
(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)).2
For purposes of sua sponte review, the undersigned finds that the Complaint
sufficiently alleges (1) the Plaintiff’s states of citizenship (Delaware and Louisiana),3
and (2) that § 1332(a)’s requisite amount in controversy is satisfied. However, the
“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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The Plaintiff alleges that it is a corporation organized in Delaware and with its principal
place of business in Louisiana. See (Doc. 1 at 1, ¶ 1); 28 U.S.C. § 1332(c)(1).

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undersigned finds that the Plaintiff has failed to sufficiently plead the Defendant’s
citizenship.
As the Plaintiff acknowledges, the Defendant is a limited liability company
(LLC).

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)). As such, for purposes of diversity jurisdiction,
“a limited liability company is a citizen 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).
As to the citizenships of the Defendant’s members, the Complaint alleges only
that, “[u]pon information and belief, none of the members of Yazoo are citizens of
Delaware or Louisiana.”

(Doc. 1 at 1, ¶ 2). This vague allegation does not assure

the undersigned that complete diversity of citizenship exists for purposes of §
1332(a). Travaglio, 735 F.3d at 1268. In order to establish the citizenship of the
Defendant LLC, the Plaintiff “must list the citizenships of all the members of the
limited liability company . . .”

Rolling Greens, 374 F.3d at 1022. See also S.D. Ala.

CivLR 8 (“A pleading or notice of removal asserting jurisdiction based on diversity of
citizenship must identify the citizenship of each party to the litigation … If any party
is an unincorporated association, limited liability company, or partnership, the
pleading or notice must identify the citizenship of all members.”). This “can require

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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 Plaintiff is hereby ORDERED to file and serve, no later than Thursday,
March 3, 2016, an amended complaint that sufficiently alleges the citizenship of the
Defendant LLC for purposes of diversity under § 1332(a) (or some alternative basis
for subject matter jurisdiction). The failure to do so will result in the entry of a
recommendation under 28 U.S.C. § 636(b)(1), Federal Rule of Civil Procedure
72(b)(1), and S.D. Ala. GenLR 72(a)(2)(S) that this action be dismissed for lack of
subject matter jurisdiction under Federal Rule of Civil Procedure 12(h)(3) (“If the
court determines at any time that it lacks subject-matter jurisdiction, the court must
dismiss the action.”). The amended complaint, if filed, shall reproduce the entire
original complaint as amended, see S.D. Ala. CivLR 15(a) (“Any amendment to a

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pleading … must reproduce the entire pleading as amended and may not incorporate
any prior pleading by reference.”), and will become the operative complaint in this
action.4
DONE and ORDERED this the 18th day of February 2016.
/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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