Stevens Engineers and Constructors Inc. v. MarkWest Liberty Midstream and Resources LLC

Filing 17

ORDER granting 10 Motion to Dismiss. by Judge R. Brooke Jackson on 6/27/14.(jdyne, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge R. Brooke Jackson
Civil Action No. 14-cv-00054-RBJ
STEVENS ENGINEERS AND CONSTRUCTORS, INC.,
Plaintiff,
v.
MARKWEST LIBERTY MIDSTREAM AND RESOURCES LLC,
Defendant.

ORDER

This matter is before the Court on Defendant’s Motion to Dismiss for Lack of Subject
Matter Jurisdiction [ECF No. 10]. After issuing three extensions of time to respond to the
motion [ECF Nos. 12, 14, & 16] per the request of the plaintiff [ECF Nos. 11, 13, & 15], the
plaintiff did not file a Response to the motion. For the following reasons, the motion is granted.
The plaintiff Stevens Engineers and Constructors, Inc. (“Stevens”) filed a complaint
against the defendant MarkWest Liberty Midstream and Resources, LLC (“MarkWest”) on
January 7, 2014 alleging breach of contract. [ECF No. 1]. Stevens asserted that this Court has
diversity jurisdiction over the matter pursuant to 28 U.S.C. §§ 1332(a)(1) and (c)(1). Id. at ¶ 3.
Under 28 U.S.C. § 1332(a)(1), “[t]he district courts shall have original jurisdiction of all civil
actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of
interest and costs, and is between citizens of different States.” Under 28 U.S.C. § 1332(c)(1), “a
corporation shall be deemed to be a citizen of every State and foreign state by which it has been

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incorporated and of the State or foreign state where it has its principal place of business” for
purposes of determining diversity of citizenship.
Stevens contends that it is a citizen of Ohio because it is an Ohio corporation with its
principal place of business in Ohio. Complaint [ECF No. 1] at ¶¶ 1, 3. It further claims that
MarkWest is a citizen of Delaware and Colorado because it is a Delaware corporation with its
principal place of business in Colorado. Id. at ¶¶ 2–3. MarkWest contends that there is no
subject matter jurisdiction over this case because the parties are not in fact diverse. In particular,
it notes that MarkWest is a limited liability company, not a corporation, and therefore its
citizenship is based on the citizenship of its partners. According to MarkWest, at least one of its
partners is a citizen of Ohio.
“The party invoking federal jurisdiction bears the burden of establishing such jurisdiction
as a threshold matter.” Radil v. Sanborn W. Camps, Inc., 384 F.3d 1220, 1224 (10th Cir. 2004).
“While, for diversity purposes, ‘a corporation shall be deemed to be a citizen of every State and
foreign state by which it has been incorporated and of the State or foreign state where it has its
principal place of business,’ these considerations are irrelevant to the determination of an LLC’s
citizenship.” Burge v. Sunrise Med. (US) LLC, No. 13-CV-02215-PAB-MEH, 2013 WL
6467994, at *2 (D. Colo. Dec. 9, 2013) (citation omitted); see also See U.S. Advisor, LLC v.
Berkshire Prop. Advisors, No. 09-cv-00697-PAB-CBS, 2009 WL 2055206, at * 2 (D. Colo. July
10, 2009) (collecting cases). “[A] limited liability company is a citizen of the states of which its
members are citizens, and is not a citizen of the state in which it was organized unless one of its
members is a citizen of that state.” Hale v. MasterSoft Int'l Pty. Ltd., 93 F. Supp. 2d 1108, 1112
(D. Colo. 2000) (collecting cases).

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“[W]hen an entity consists of multiple tiers of ownership and control, the entire structure
must be considered for diversity purposes. In other words, when an entity is composed of
multiple layers of constituent entities, the citizenship determination requires an exploration of the
citizenship of the constituent entities as far down as necessary to unravel fully the citizenship of
the entity before the court.” Burge, 2009 WL 2055206 at *2. MarkWest declares, via affidavit
of its general counsel, that it has one member, MarkWest Liberty Gas Gathering, LLC. Affidavit
of C. Corwin Bromley [ECF No. 10-1] at ¶ 2. MarkWest Liberty Gas Gathering, LLC has one
member, MarkWest Energy Operating Company, LLC. Id. MarkWest Energy Operating
Company, LLC has one member, MarkWest Energy Partners, L.P. Id. According to the sworn
declaration of the affiant, MarkWest Energy Partners, L.P. is a publicly traded master limited
partnership with limited partners in Ohio. Id.
“Limited partnerships are deemed citizens of every state where any partner resides.”
Ravenswood Inv. Co., L.P. v. Avalon Corr. Servs., 651 F.3d 1219, 1222 (10th Cir. 2011) (citing
Carden v. Arkoma Assocs., 494 U.S. 185, 195–96 (1990)). That MarkWest Energy Partners, L.P.
is a master limited partnership is an irrelevant distinction. See Trafigura AG v. Enter. Products
Operating LLC, CIV.A. H-13-2712, 2014 WL 501962, at *3 (S.D. Tex. Jan. 21, 2014).
According to the affidavit filed by MarkWest, which the Court has no reason to question,
MarkWest is a citizen of Ohio. Therefore, there is no diversity between the parties and the Court
cannot assert subject matter jurisdiction over this case.
For the foregoing reasons, Defendant’s Motion to Dismiss [ECF No. 10] is GRANTED
and Plaintiff’s Complaint [ECF No. 1] is DISMISSED WITHOUT PREJUDICE.
DATED this 27th day of June, 2014.
BY THE COURT:

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___________________________________
R. Brooke Jackson
United States District Judge

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