Century Metal Recycling, Pvt. Ltd. v. Dacon Logistics, LLC et al

Filing 15

ORDER (see attached) - In order to determine whether it has subject matter jurisdiction in this action, the Court hereby ORDERS Plaintiff to establish, by affidavit, both its own citizenship and the citizenship of both Defendants to this action for diversity purposes as of the date this action was commenced by the filing of Plaintiff's Complaint, 1 , i.e., January 18, 2013. Plaintiff shall file and serve such affidavit regarding citizenship on or before Monday, November 25, 2013. All ca se deadlines shall be stayed pending the Court's review of this affidavit. If, upon review, the Court determines that it possesses subject matter jurisdiction, the action may proceed. Otherwise, in the absence of such jurisdiction, the Court s hall dismiss the action without prejudice. Decision on the pending motion for Default Judgment is accordingly deferred until the existence vel non of the Court's subject matter jurisdiction is clarified. Signed by Judge Charles S. Haight, Jr. on 11/4/13.(Hornstein, A)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF CONNECTICUT
CENTURY METAL RECYCLING, PVT.
LTD,
Plaintiff,

3:13-cv-00093 (CSH)

v.
DACON LOGISTICS, LLC, AND DAVID
H. LARR,
Defendants.

ORDER

HAIGHT, Senior District Judge:
I.

INTRODUCTION
In this action for breach of contract and related damage claims, a Motion for Default

Judgment is currently pending against Defendants Dacon Logistics, LLC and David H. Larr, CEO
and Chairman of Dacon Locistics LLC (hereinafter, collectively "Defendants").

Plaintiff's

Complaint, filed on January 18, 2013, alleges as a basis for subject matter jurisdiction in this Court
a complete diversity of citizenship between the parties as of that date. [Doc. 1] at ¶ 6. Specifically,
Plaintiff states that it "is a private limited company ... registered to do business in India and in
Connecticut, with offices at 120 College Street, 600 Plaza Middlesex, Middletown, Connecticut
06457." [Doc. 1] at ¶ 2. Plaintiff also states that "[u]pon information and belief, Dacon's corporate
offices are located at 31 Mountain Boulevard, Warren, New Jersey 07059," and that "Dacon is a
limited liability company registered in the State of New Jersey," id. at ¶¶ 4, 6, and, further, that
"[u]pon information and belief, Larr's address is 60 Evergreen Lane, Watchung, New Jersey 07069,"
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and therefore "Defendant David H. Larr is a citizen of the State of New Jersey." Id. at ¶¶ 5-6.
Plaintiff thus concludes: "This Court has jurisdiction over this matter pursuant to U.S.C. § 1332(a)
because Century Metal has an American office in the State of Connecticut, and Dacon is a limited
liability company registered in the State of New Jersey and ... David H. Larr is a citizen of the state
of New Jersey." Id. at ¶ 6.
Clarification on subject matter jurisdiction, however, is required, as Plaintiff's Complaint
does not sufficiently allege complete diversity of citizenship. This failure to sufficiently allege the
parties' diversity of citizenship is clearly established by authority that, while by now familiar, is
nonetheless often disregarded by counsel, as did counsel for Plaintiff in the case at bar. Decision on
the pending motion for Default Judgment is accordingly deferred until the existence vel non of the
Court's subject matter jurisdiction is clarified.
II.

SUBJECT MATTER JURISDICTION
In general, if subject matter jurisdiction is lacking in an action before a court, the action must

be dismissed. Fed. R. Civ. P. 12(h)(3) ("If the court determines at any time that it lacks
subject-matter jurisdiction, the court must dismiss the action."). As the Second Circuit recently
noted, "[w]here jurisdiction is lacking, ... dismissal is mandatory." Lovejoy v. Watson, 475 F. App'x
792, 792 (2d Cir. 2012) (internal quotations and citation omitted).
Consequently a federal court must determine with certainty whether it has subject matter
jurisdiction over a case pending before it. If necessary, the court has an obligation to consider its
subject matter jurisdiction sua sponte. Joseph v. Leavitt, 465 F.3d 87, 89 (2d Cir.2006) (“Although
neither party has suggested that we lack appellate jurisdiction, we have an independent obligation
to consider the presence or absence of subject matter jurisdiction sua sponte.”), cert. denied, 549
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U.S. 1282 (2007); see also, e.g., Univ. of South Alabama v. American Tobacco Co., 168 F.3d 405,
410 (11th Cir. 1999) (“a federal court is obligated to inquire into subject matter jurisdiction sua
sponte whenever it may be lacking”); Transatlantic Marine Claims Agency, Inc. v. Ace Shipping
Corp., 109 F.3d 105, 107-08 (2d Cir. 1997) (holding that district court may raise issue of subject
matter jurisdiction sua sponte at any time). It is, in fact, "common ground that in our federal system
of limited jurisdiction any party or the court sua sponte, at any stage of the proceedings, may raise
the question of whether the court has subject matter jurisdiction; and, if it does not, dismissal is
mandatory." Manway Constr. Co. v. Housing Auth. of Hartford, 711 F.2d 501, 503 (2d Cir. 1983).
In order for requisite diversity of citizenship to exist under 28 U.S.C. § 1332(a), a plaintiff's
citizenship must be diverse from the citizenship of all defendants to an action. See, e.g., St. Paul
Fire and Marine Ins. Co. v. Universal Builders Supply, 409 F.3d 73, 80 (2d Cir. 2005) ("Diversity
is not complete if any plaintiff is a citizen of the same state as any defendant.") (citing Owen
Equipment & Erection Co. v. Kroger, 437 U.S. 365, 373-74 (1978)). Such complete diversity "must
exist at the time the action is commenced," Universal Licensing Corp. v. Lungo, 293 F.3d 579, 581
(2d Cir. 2002) (emphasis added), which in the case at bar is January 18, 2013, the date on which
Plaintiff's initial Complaint, i.e., [Doc. 1], was filed.
Plaintiff states that Defendant "Dacon's corporate offices are located at 31 Mountain
Boulevard, Warren, New Jersey 07059," and that "Dacon is a limited liability company registered
in the State of New Jersey." [Doc. 1] at ¶¶ 4, 6. However, a limited liability company's "citizenship
for diversity purposes ... [is] the citizenship of each of its members." Wise v. Wachovia Securities,
LLC, 450 F.3d 265, 267 (7th Cir. 2006)(emphasis added), cert. denied, 549 U.S. 1047 (2006).
Therefore the Court need not look to "the state in which [this Defendant] is organized or has its
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principal place of business, but rather, each of the states in which it has members." Lewis v. Allied
Bronze LLC, No. 07 Civ. 1621(BMC), 2007 WL 1299251, at *1-2 (E.D.N.Y. May 2, 2007) (citation
omitted); see also, e.g., Handelsman v. Bedford Village Associates Ltd. Partnership, 213 F.3d 48,
51-52 (2d Cir. 2000); City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 127 n. 13 (2d
Cir. 2011); Marks Group, LLC v. Schiciano, No. 3:10-CV-01898, 2011 WL 6816552 at *2 (D. Conn.
2011).
Plaintiff's statements concerning both Plaintiff's own citizenship and the citizenship of
Defendant David H. Larr's citizenship also fall short of demonstrating the Court's subject matter
jurisdiction for the following reasons.
Plaintiff alleges that upon information and belief the address of Defendant David H. Larr "is
60 Evergreen Lane, Watchung, New Jersey 07069," and conclusively states that "Defendant David
H. Larr is a citizen of the State of New Jersey." [Doc. 1] at ¶¶ 5-6. Even construing the former of
these two quoted averments to assert that David H. Larr resides at such aforementioned Watchung,
New Jersey address, an individual's citizenship for diversity purposes is determined by his or her
domicile, not his or her residence. See, e.g., Palazzo v. Corio, 232 F.3d 38, 42 (2d Cir. 2000).
Courts have "long ... held that a statement of residence, unlike domicile, tells the court only where
the parties are living and not of which state they are citizens." John Birch Soc. v. Nat'l Broadcasting
Co., 377 F.2d 194, 199 (2d Cir. 1967) (emphasis added). Thus it is "well-established that allegations
of residency alone cannot establish citizenship." Canedy v. Liberty Mut. Ins. Co., 126 F.3d 100, 10203 (2d Cir. 1997) (citing Leveraged Leasing Admin. Corp. v. PacifiCorp Capital, Inc., 87 F.3d 44,
47 (2d Cir. 1996)). Plaintiff's assertions fall short of showing Defendant Larr's domicile.
The differences between a domicile and a residence are straightforward. "In general, the
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domicile of an individual is his true, fixed and permanent home and place of habitation," which is
to say, "the place to which, whenever he is absent, he has the intention of returning." Martinez v.
Bynum, 461 U.S. 321, 331 (1983); see also, e.g., Palazzo v. Corio, 232 F.3d at 42. In contrast, the
United States Supreme Court has described "residency" as occurring "when a person takes up his
abode in a given place, without any present intention to remove therefrom." Martinez v. Bynum, 461
U.S. at 331. A "residency," therefore, may be taken up for personal or business reasons and may be
either permanent or solely for a period of time. Id. The test for an individual's residency is thus
significantly less stringent than the "more rigorous domicile test." Id.
Given that "one can reside in one place but be domiciled in another," for jurisdictional
purposes, the term "'[d]omicile' is not necessarily synonymous with [the term] 'residence.'"
Mississippi Band of Choctaw Indians v. Holyfield, 490 U.S. 30, 48 (1989) (citations omitted). For
the reasons explicated supra, a court may not and cannot simply infer the latter from the former. See,
e.g., Realty Holding Co. v. Donaldson, 268 U.S. 398, 399 (1925).
Lastly, Plaintiff states that it "is a private limited company ... registered to do business in
India and in Connecticut, with offices at 120 College Street, 600 Plaza Middlesex, Middletown,
Connecticut 06457" – and, moreover, seems to assert that Plaintiff is a citizen of the State of
Connecticut "because [Plaintiff] has an American office in the State of Connecticut." [Doc. 1] at ¶
2, 6. It is not clear from such statements where Plaintiff's principal place of business is located or
even where or under what country's law Plaintiff is organized or incorporated. Plaintiff should
therefore clarify under what country's law it is organized or incorporated, and whether as an entity
it is structured or organized as an equivalent to either a corporation or a limited liability company
under United States law. As discussed supra, if Plaintiff is an LLC-equivalent, Plaintiff's citizenship
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would be determined by the citizenship of its members; if Plaintiff is a corporation-equivalent,
pursuant to 28 U.S.C. § 1332(c)(1) Plaintiff is deemed to be a citizen of the state(s) where it is
incorporated and where it has its principal place of business. See, e.g., SJ Properties Suites v.
Specialty Finance Group, LLC, 772 F.Supp. 2d 1021, 1030-1031 (E.D.Wis. 2010) (directing
plaintiffs to offer similar clarification for purposes of determining diversity and subject matter
jurisdiction with respect to two entities described as "private limited companies" and organized
under Icelandic law);1 see also, e.g., Simon Holdings PLC Group of Companies U.K. v. Klenz, 878
F.Supp. 210, 211 (M.D. Fla. 1995) (treating a private limited company "incorporated under the laws
of the United Kingdom" as a corporation for diversity and subject matter jurisdiction purposes
pursuant to a determination of its citizenship under 28 U.S.C. § 1332); Chok v. S&W Berisford, PLC,
624 F.Supp. 440, 441 (S.D.N.Y. 1985) (in which the court accepts the parties' agreement that a
British private limited company "is a corporation formed under the laws of the United Kingdom,"
and therefore treats it as a corporation for purposes of diversity determination).
Accordingly, the citizenship of all parties to this action must be confirmed.
III.

CONCLUSION
In order to determine whether it has subject matter jurisdiction in this action, the Court

hereby ORDERS Plaintiff to establish, by affidavit, both its own citizenship and the citizenship of
both Defendants to this action for diversity purposes as of the date this action was commenced by
the filing of Plaintiff's Complaint, [Doc. 1], i.e., January 18, 2013.
1

The Court notes that elsewhere in the Complaint Plaintiff states that it is "doing
business in the United States as CMR America, LLC " – see, e.g., [Doc. 1] at 1 – however,
Plaintiff has not brought this action through such an entity and has not sought to demonstrate this
entity's citizenship (which, assuming, as its name suggests, it is a limited liability company,
would be determined through the citizenship of each of its members).
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Plaintiff shall file and serve such affidavit regarding citizenship on or before Monday,
November 25, 2013. All case deadlines shall be stayed pending the Court’s review of this affidavit.
If, upon review, the Court determines that it possesses subject matter jurisdiction, the action may
proceed. Otherwise, in the absence of such jurisdiction, the Court shall dismiss the action without
prejudice.
It is SO ORDERED.

Dated: New Haven, Connecticut
November 4, 2013
/s/ Charles S. Haight, Jr.
Charles S. Haight, Jr.
Senior United States District Judge

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