Empire Petroleum Partners, LLC v. Patel et al
Filing
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OPINION AND ORDER that the 4 Amended Complaint is DISMISSED for lack of subject matter jurisdiction. Signed by Judge William S. Duffey, Jr on 10/11/2013. (anc)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
EMPIRE PETROLEUM
PARTNERS, LLC,
Plaintiff,
v.
1:13-cv-3236-WSD
SURENDRA PATEL et al.,
Defendants.
OPINION AND ORDER
This matter is before the Court on Plaintiff’s Amended Complaint [4].
I.
BACKGROUND
On September 27, 2013, Plaintiff Empire Petroleum Partners, LLC
(“Plaintiff”) filed this action against Defendants Surendra Patel, Rajani Kant Patel,
Detesash Patel a/k/a Tejashkumar Patel, and Katan Patel (collectively,
“Defendants”). Plaintiff’s Complaint [1], alleging that Defendants failed to make
certain payments to Plaintiff under a fuel supply contract, asserts causes of action
for breach of contract and unjust enrichment.
On October 2, 2013, the Court, after reviewing Plaintiff’s Complaint, issued
an order [3] (the “October 2nd Order”) addressing the Court’s subject matter
jurisdiction over this matter. The Court found that, as alleged in the Comlpaint, the
Court could have only diversity jurisdiction because the Complaint asserts only
state law causes of action. The Court further found, however, that the Complaint
failed to establish diversity jurisdiction because Plaintiff failed to identify, and
allege the citizenship of, its members and thus failed to allege sufficient facts to
show its own citizenship. The Court specifically explained that the citizenship of a
limited liability company, like Plaintiff, is based on the citizenship of its members.
The Court ordered Plaintiff to file either an amended complaint alleging its
citizenship or evidence establishing its citizenship.
On October 3, 2013, Plaintiff filed its Amended Complaint [4] in response to
the October 2nd Order. In it, Plaintiff alleges that is has five members, including
two corporations (the “Corporation Members”), two limited liability companies
(the “LLC Members”), and one limited partnership (the “LP Member”). (See Am.
Compl. [4] ¶ 2.) The Corporation Members are alleged to be incorporated in Texas
and to have their principal places of business in Texas. The Amended Complaint
does not identify the members of the LLC Members or the partners of the LP
Member.
II.
DISCUSSION
Federal courts “have an independent obligation to determine whether
subject-matter jurisdiction exists, even in the absence of a challenge from any
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party.” Arbaugh v. Y&H Corp., 546 U.S. 500, 501 (2006). The Eleventh Circuit
consistently has held that “a court should inquire into whether it has subject matter
jurisdiction at the earliest possible stage in the proceedings. Indeed, it is well
settled that a federal court is obligated to inquire into subject matter jurisdiction
sua sponte whenever it may be lacking.” Univ. of S. Ala. v. Am. Tobacco Co.,
168 F.3d 405, 410 (11th Cir. 1999).
As discussed in the October 2nd Order, it is clear, and Plaintiff does not
dispute, that the Court has subject-matter jurisdiction in this matter, asserting only
state law causes of action, only if there is diversity jurisdiction. See 28 U.S.C.
§ 1332(a). Diversity jurisdiction exists where the amount in controversy exceeds
$75,000 and the suit is between citizens of different states. Id. “Diversity
jurisdiction, as a general rule, requires complete diversity—every plaintiff must be
diverse from every defendant.” Palmer Hosp. Auth. of Randolph Cnty., 22 F.3d
1559, 1564 (11th Cir. 1994). “Citizenship for diversity purposes is determined at
the time the suit is filed.” MacGinnitie v. Hobbs Grp., LLC, 420 F.3d 1234, 1239
(11th Cir. 2005). “The burden to show the jurisdictional fact of diversity of
citizenship [is] on the . . . plaintiff.” King v. Cessna Aircraft Co., 505 F.3d 1160,
1171 (11th Cir. 2007) (alteration and omission in original) (quoting Slaughter v.
Toye Bros. Yellow Cab Co., 359 F.2d 954, 956 (5th Cir. 1966)).
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“[A] limited liability company is a citizen of any state of which a member
of the company is a citizen.” Rolling Greens MHP, L.P. v. Comcast SCH
Holdings L.L.C., 374 F.3d 1020, 1022 (11th Cir. 2004). In its Amended
Complaint, Plaintiff has shown that it has five members: the Corporation Members,
the LLC Members, and the LP Member. As the Court expressly explained in the
October 2nd Order, “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.” RES-GA Creekside Manor, LLC v. Star Home
Builders, Inc., No. 2:10-CV-207-RWS, 2011 WL 6019904, at *3 (N.D. Ga. Dec. 2,
2011) (quoting Multibank 2009-1 RES-ADC Venture, LLC v. CRM Ventures,
LLC, No. 10-cv-02001-PAB-CBS, 2010 WL 3632359, at *1 (D. Colo. Sept. 10,
2010)). To determine Plaintiff’s citizenship, therefore, the Court looks to the
citizenship of each of its members.
As to the Corporation Members, the Amended Complaint alleges that they
are incorporated in Texas and have their principal places of business in Texas.
These allegations are sufficient to show that the Corporation Members are citizens
of Texas. See 28 U.S.C. § 1332(c)(1). As to the LLC Members and the LP
Member, the Amended Complaint does not contain any information to show their
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citizenship. Unincorporated business entities are citizens of any state of which a
member of the business is a citizen. Rolling Greens, 374 F.3d at 1022. This rule
applies to all non-corporate associations, including limited liability companies and
limited partnerships. See id.1
Information about the citizenship of the LLC and LP Members is uniquely
available to Plaintiff—the party who asserts this action and who must show that
this Court has jurisdiction over it. Because Plaintiff has not shown the citizenship
of three of its five members, Plaintiff has not satisfied its burden “to show the
jurisdictional fact of diversity of citizenship,” and this action is required to be
dismissed for lack of subject matter jurisdiction. See King, 505 F.3d at 1171
(quoting Slaughter, 359 F.2d at 956); see also Travaglio v. Am. Express Co., No.
11-15292, 2013 WL 4406389, at *2–3 (11th Cir. Aug. 19, 2013) (publication
pending) (holding that court must dismiss action for lack of subject matter
jurisdiction unless pleadings or “sworn” evidence establishes jurisdiction).
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The Amended Complaint states that none of Plaintiff’s members “were
incorporated in Georgia or have their principal place of business in Georgia.” This
“negative” allegation does not satisfy Plaintiff’s burden to “specifically allege each
party’s citizenship.” See Am. Motorists Ins. Co. v. Am. Emp’rs’ Ins. Co., 600
F.2d 15, 16 (5th Cir. 1979) (per curiam). This allegation fails even to show that
Plaintiff is not a Georgia citizen because the state of incorporation and state of
principal place of business are not relevant to the citizenship of non-corporations—
the LLC and LP Members for whom Plaintiff failed to show jurisdiction. See
Rolling Greens, 374 F.3d at 1022.
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III.
CONCLUSION
Accordingly, for the foregoing reasons,
IT IS HEREBY ORDERED that this action is DISMISSED for lack of
subject matter jurisdiction.
SO ORDERED this 11th day of October, 2013.
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