Mangham et al v. Westin Hotel Management, L.P.(DE) et al
Filing
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OPINION AND ORDER directing that Defendants file, on or before November 4, 2016, an amended notice of removal properly alleging the citizenship of each Defendant. Failure to do so will result in dismissal of this action. Signed by Judge William S. Duffey, Jr on 10/21/16. (ddm)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
ANDERSON MANGHAM, as
surviving spouse of Carolyn
Robinson Manhgam, deceased, and
as proposed administrator of the
Estate of Carolyn Mangham,
Plaintiff,
v.
1:16-cv-3725-WSD
WESTIN HOTEL MANAGEMENT,
LP, and SLC ATLANTA, LLC,
Defendants.
OPINION AND ORDER
On October 5, 2016, Defendants Westin Hotel Management, LP and
SLC Atlanta, LLC (together, “Defendants”) filed their Notice of Removal [1] of
this action from the State Court of Fulton County, Georgia. On October 7, 2016,
the Court entered its order finding that the Notice of Removal failed to adequately
plead Defendants’ citizenship. ([4] (“October 7th Order”)). The Court ordered
Defendants to file an amended notice of removal that properly alleged their
citizenship. (Id.). The Court cautioned Defendants that their failure to do so
would result in dismissal of this action for lack of subject matter jurisdiction. (Id.).
On October 20, 2016, Defendants filed their Amended Notice of Removal [5.1].
The Amended Notice of Removal asserts that the Court has diversity
jurisdiction pursuant to 28 U.S.C. § 1332. (Amended Notice of Removal ¶¶ 1, 9).
As the Court noted in its October 7th Order, federal courts “have an independent
obligation to determine whether subject-matter jurisdiction exists, even in the
absence of a challenge from any 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). In this case, the
Complaint [1.2] raises only questions of state law and the Court only could have
diversity jurisdiction over this matter. The notice of removal must, therefore,
properly and fully allege the citizenship of all the parties, including Defendants, in
this case.
Diversity jurisdiction exists where the amount in controversy exceeds
$75,000 and the suit is between citizens of different states. 28 U.S.C § 1332(a).
“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
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determined at the time the suit is filed.” MacGinnitie v. Hobbs Grp., LLC,
420 F.3d 1234, 1239 (11th Cir. 2005). The burden of establishing diversity
jurisdiction “rests with the defendant seeking removal.” Scimone v. Carnival
Corp., 720 F.3d 876, 882 (11th Cir. 2013); City of Vestavia Hills v. Gen. Fidelity
Ins. Co., 676 F.3d 1310, 1313 n.1 (11th Cir. 2012) (“The removing party bears the
burden of proof regarding the existence of federal subject matter jurisdiction.”).
“[F]or purposes of diversity of citizenship, a limited partnership is a citizen
of each state in which any of its partners, limited or general, are citizens.”
Rolling Greens MHP, L.P. v. Comcast SCH Holdings L.L.C., 374 F.3d 1020, 1021
(11th Cir. 2004). The citizenship of a limited liability company (“LLC”) is
determined differently than the citizenship of a corporation. An LLC is a citizen of
any state of which one of its members is a citizen, not of the state where the
company was formed or has it principal office. See id. at 1022. “To sufficiently
allege the citizenships of these unincorporated business entities, a party must list
the citizenships of all the members of the limited liability company.” Id. If an
LLC defendant has members that are themselves LLCs, the citizenship of each
LLC member must be alleged.1
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If that member is also an LLC, the citizenship of that member LLC also
must be alleged, and so on.
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Defendants’ Amended Notice of Removal does not adequately plead the
citizenship of either Defendant because it merely lists the citizenship of
Defendants’ incorporated and LLC members. The Amended Notice of Removal
alleges that Defendant Westin Hotel Management, L.P.’s partners are Starwood
Hotels & Resorts Worldwide, Inc., “a citizen of Maryland”; Starwood Hotels &
Resorts Worldwide, LLC, “a citizen of Maryland”; and WHLP Acquisition, LLC,
“a citizen of Delaware.” (Amended Notice of Removal ¶ 6). The Amended Notice
of Removal further alleges that Defendant SLC Atlanta LLC’s “sole member” is
SLC Acquisition LLC, “a citizen of Delaware.” (Amended Notice of Removal ¶
8). These allegations do not meet Defendants’ pleading requirements and the
Court is unable, based on them, to determine if there is diversity of citizenship in
this action. Defendants must “provide specific factual allegations to support the
citizenship of each member of the LLC or unincorporated entity.” Standing
Instructions Regarding Civil Litigation 2, http://www.gand.uscourts.gov/sites/
default/files/WSD_Standing_Order_re_Civil_Litigation.pdf.
Defendants are reminded that “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,
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LLC v. Star Home Builders, Inc., No. 2:10-cv-207, 2011 WL 6019904, at *3 (N.D.
Ga. Dec. 2, 2011). To properly allege the citizenship of Starwood Hotels &
Resorts Worldwide, Inc., a partner in Defendant Westin Hotel Management, L.P.,
Defendants must identify “every State and foreign state by which it has been
incorporated and . . . the State or foreign state where it has its principal place of
business.” 28 U.S.C. § 1332(c)(1) (emphasis added); see Wylie v. Red Bull N.
Am., Inc., 627 F. App’x 755, 757 (11th Cir. 2015) (“For diversity jurisdiction
purposes, a corporation is a citizen of every State by which it has been
incorporated and of the State where it has its principal place of business.”). To
properly allege the citizenship of Defendants’ members Starwood Hotels &
Resorts Worldwide, LLC, WHLP Acquisition, LLC, and SLC Acquisition LLC,
the notice of removal must identify the members of these entities and adequately
plead the citizenship of those members. What is required to properly plead the
citizenship of Defendants’ members’ members will depend on their corporate
form.
Defendants are again required to file an amended notice of removal properly
alleging their citizenship. Unless Defendants do so, the Court must dismiss this
action for lack of subject matter jurisdiction. See Travaglio, 735 F.3d at 1268-69
(holding that the district court must dismiss an action for lack of subject matter
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jurisdiction unless the pleadings or record evidence establishes jurisdiction). No
additional opportunities to establish diversity jurisdiction will be given.
For the foregoing reasons,
IT IS HEREBY ORDERED that Defendants shall file, on or before
November 4, 2016, an amended notice of removal properly alleging the citizenship
of each Defendant. Failure to do so will result in dismissal of this action.
SO ORDERED this 21st day of October, 2016.
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