H.C. Duke & Son, LLC v. Prism Marketing Corporation et al

Filing 104

ORDER denying 65 Motion to Strike and 100 Motion to Strike. See written order. Entered by Magistrate Judge John A. Gorman on 7/25/13. (WW, ilcd)

E-FILED

Thursday, 25 July, 2013 11:03:33 AM
Clerk, U.S. District Court, ILCD
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF ILLINOIS
H.C. Duke & Son, LLC,
Plaintiff

)
)
)
v.
)
)
Prism Marketing Corp., Superior
)
Quality Equipment, Inc., and Steve )
Levine,
)
Defendants
)

Case No. 11-4006

ORDER
Now before the Court are several motions to strike (#65 and #100). Both motions
relate to the jurisdiction of this Court, a matter raised by the Court several months ago.
Because I conclude that jurisdiction has now been properly asserted, those motions are
denied.
The complaint in this matter, filed on February 2, 2011, asserted the diversity
jurisdiction of this Court. In support of that assertion, Plaintiff stated (as is pertinent here)
that Plaintiff H.C. Duke & Son, LLC (hereinafter “Duke”) was “a citizen of the State of
Delaware, with its principal place of business in the State of Illinois” and that Defendant
Steve Levine was a “resident” of the State of Washington. (Complaint, Doc. #1, ¶1).
Diversity jurisdiction requires that the citizenship of all plaintiffs be diverse from
the citizenship of all defendants. 28 USC §1332. Citizenship of an individual, such as
Defendant Levine, is based on domicile, not on residence. See, America's Best Inns, Inc.
v Best Inns of Abilene, L.P., 980 F2d 1072, 1074 (7th Cir 1992) (per curiam). See the
discussion in 24 Hour Fitness USA, Inc. v Bally Total Fitness Holding Corp, 2008 WL
4671748 (ND Ill), explaining the difference between residence and domicile.

The citizenship of a limited liability company like Duke is that of its
members. See Cosgrove v Bartolotta, 150 F3d 729 (7th Cir 1998), which may
include partnerships, corporations, and other entities that have multiple
citizenships. See Carden v Arkoma Associates, 494 US 185, 110 S Ct 1015, 108 L
Ed 157 (1990). A federal court thus needs to know each member’s citizenship,
and if necessary each member’s members’ citizenship. Hicklin Eng'g, L.C. v
Bartell, 439 F3d 346, 348 (7th Cir 2006).
At a hearing on May 30, 2013, the Court raised the issue of jurisdiction, an issue
that had been missed during the early proceedings in the case. Plaintiff was directed to
submit a jurisdictional supplement. Plaintiff then filed two documents. The first (#98)
dealt with the citizenship of Duke. It stated that Duke “is” a Delaware Limited Liability
company owned by Ali Group NA, which is incorporated in Delaware with its principal
place of business in North Carolina. The second (#99) dealt solely with Levine’s
citizenship, stating that Levine was and had been a citizen and resident domiciled in the
State of Washington since before the lawsuit was filed.
Defendant moved to strike (#100) the supplement relating to Duke, pointing out
that it did not state that Ali Group was the “sole” member of Duke and that the test
requires citizenship as of the date the lawsuit was filed, not some subsequent date.
Plaintiff then amended the supplement (#101). This amendment stated that Ali
Group N.A. Corporation was the sole owner of Duke and that Ali Group was
incorporated in Delaware and had its principal place of business in North Carolina as of
the date the complaint was filed.

Defendant then filed a supplement (#102) to its motion to strike. In that
supplement, Defendant stated that there does not appear to be a corporation named “Ali
Group N.A. Corporation” that is incorporated in Delaware; that assertion is supported by
a printout from the Delaware web site, which lists The Ali Group Inc. and Ali Group
North America Corporation as being incorporated in Delaware. Defendant points out that
“N.A.” usually means “National Association” not “North America”. Defendant also filed
a printout of the North Carolina web site, showing that there is no “Ali Group N.A.
Corporation” licensed to do business in that state. The only company that might be
related is Ali Group Inc., which is incorporated in NC, not DE.

None of these

companies, according to Defendant, corresponds to the “sole owner” identified by Duke.
In its response, Plaintiff asserts that in the name “Ali Group N.A. Corporation”,
the “N.A.” is an abbreviation for “North America” and that Ali Group N.A. Corporation
is simply an AKA for Ali Group North America Corporation.
I find that Plaintiff’s explanation is credible and that “Ali Group N.A.
Corporation” and “Ali Group North America Corporation” are the same entity. This
entity is and was on February 2, 2011, the sole owner of Duke. This entity was
incorporated in Delaware and had its principal place of business in North Carolina as of
February 2, 2011. Whether that entity is “registered” in North Caroline is irrelevant to the
issue of diversity jurisdiction.
Accordingly, the citizenship of the parties has now been properly established, as
Duke (a citizen of DE and NC) is not a citizen of the same state as Prism (NE), Superior
(CA) or Levine (WA), and the amount in controversy exceeds $75,000. The original
motion to strike (#65) and the supplemental motion to strike (#100) are therefore

DENIED. So that the record is clear, Plaintiff is directed to file an amended complaint
that sets out the proper jurisdictional allegations, as directed at today’s hearing.
ENTERED: July 25, 2013
s/ John A. Gorman
JOHN A. GORMAN
UNITED STATES MAGISTRATE JUDGE