First Sales LLC v. Water Right, Inc.

Filing 5

OPINION AND ORDER: The Court ORDERS Plaintiff to file, on or before 2/20/2018, a supplemental jurisdictional statement that properly alleges the citizenship of all of the parties as stated in this Order. Signed by Magistrate Judge Paul R Cherry on 2/6/18. (ksp)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
FORT WAYNE DIVISION
FIRST SALES LLC,
Plaintiff,
v.
WATER RIGHT, INC.,
Defendant.

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CAUSE NO.: 1:18-CV-22-WCL-PRC

OPINION AND ORDER
This matter is before the Court sua sponte. The Court must continuously police its subject
matter jurisdiction. Hay v. Ind. State Bd. of Tax Comm’rs, 312 F.3d 876, 879 (7th Cir. 2002). The
Court must dismiss this action if the Court lacks subject matter jurisdiction. Fed. R. Civ. P. 12(h)(3).
Currently, the Court is unable to determine if it has subject matter jurisdiction over this litigation.
Plaintiff First Sales LLC invoked this Court’s subject matter jurisdiction via diversity
jurisdiction by filing this litigation in federal court. As the party seeking federal jurisdiction, Plaintiff
has the burden of establishing that subject matter jurisdiction exists. Smart v. Local 702 Int’l Bhd.
of Elec. Workers, 562 F.3d 798, 802-03 (7th Cir. 2009).
For the Court to have diversity jurisdiction, Plaintiff and Defendant Water Right, Inc. must
be citizens of different states, and the amount in controversy must be more than $75,000. Plaintiff
has alleged a sufficient amount in controversy. The allegations are insufficient as to the citizenship
of Plaintiff and Defendant.
The Complaint alleges only that Plaintiff is “a domestic limited liability company organized
under and existing under the laws of the state of Indiana.” (Compl. ¶ 1, ECF No. 1). This allegation
is insufficient for the purpose of determining citizenship. For limited liability companies, the state
whose laws under which the company was organized is not used to determine citizenship. A limited

liability company is analogous to a partnership and takes the citizenship of its members. Belleville
Catering Co. v. Champaign Mkt. Place, LLC, 350 F.3d 691, 692 (7th Cir. 2003). If the members of
the limited liability company are themselves limited liability companies, Plaintiff must also plead
the citizenship of those members as of the date the complaint was filed. Thomas v. Guardsmark,
LLC, 487 F.3d 531, 534 (7th Cir. 2007) (“[A]n LLC’s jurisdictional statement must identify the
citizenship of each of its members as of the date the complaint or notice of removal was filed, and,
if those members have members, the citizenship of those members as well.”). Plaintiff must allege
the citizenship of Plaintiff’s members, members of members, and so forth, tracing through all layers
of ownership.
Next, Plaintiff alleges that Defendant is “a Wisconsin corporation which maintains its
business operations [in Appleton, Wisconsin].” (Compl. ¶ 2, ECF No. 1). A corporation takes its
citizenship from its state of incorporation and from the state where its principal place of business
is located. 28 U.S.C. § 1332(c)(1). Given the importance of determining the Court’s jurisdiction to
hear this case, Plaintiff must allege Defendant’s principal place of business and not only the location
of business operations.
Therefore, the Court ORDERS Plaintiff to FILE, on or before February 20, 2018, a
supplemental jurisdictional statement that properly alleges the citizenship of all of the parties as
stated above.
SO ORDERED this 6th day of February, 2018.
s/ Paul R. Cherry
MAGISTRATE JUDGE PAUL R. CHERRY
UNITED STATES DISTRICT COURT

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