PGS USA, LLC v. Popi Trading, Inc.
Filing
14
ORDER AND REASONS. It is ORDERED that Defendant's 7 Motion to Dismiss for Lack of Subject Matter Jurisdiction is DENIED. Signed by Judge Carl Barbier. (gec)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
PGS USA, LLC
CIVIL ACTION
VERSUS
NO: 16-6669
POPI TRADING, INC.
SECTION: “J”(1)
ORDER & REASONS
Before the Court is a Motion to Dismiss for Lack of Subject
Matter Jurisdiction (Rec. Doc. 7) filed by Defendant, Popi Trading,
Inc., and an opposition thereto (Rec. Doc. 12) filed by Plaintiff,
PGS USA, LLC. Having considered the motion and legal memoranda,
the record, and the applicable law, the Court finds that the motion
should be DENIED.
FACTS AND PROCEDURAL BACKGROUND
On May 20, 2016, PGS USA, LLC (PGS) filed this suit to
recover money allegedly owed by Defendant. On June 20, 2016,
Defendant filed the present motion alleging that this Court lacks
subject matter jurisdiction. In short, Defendant argues that while
Plaintiff has brought suit in this Court under 28 U.S.C. § 1332,
from Plaintiff’s complaint, it is unclear whether there is complete
diversity between the parties. (Rec. Doc. 7-1.) On August 2, 2016,
Plaintiff filed a timely memorandum in opposition to Defendant’s
motion to dismiss. (Rec. Doc. 12.) Plaintiff’s memorandum seeks to
clarify that there is complete diversity between the parties and
that this Court has subject matter jurisdiction over this dispute.
Id. The motion is now before the Court on the briefs.
PARTIES’ ARGUMENTS
1.
Defendant’s Argument
Defendant argues that Plaintiff’s complaint does not clearly
and specifically allege the citizenship of the parties and thus
this Court does not have subject matter jurisdiction over this
dispute. (Rec. Doc. 7-1 at 1.) Defendant is a New York corporation
with its principal place of business and primary executive offices
in New York. Id. Defendant argues that while it is clear that
Plaintiff
is
a
limited
Louisiana
limited
liability
liability
company,
company,
and
whose
that
member
the
is
a
Louisiana
limited liability company’s sole member is an Italian società a
responsabilità limitata, the members of the Italian entity are
unknown. Id. at 2. Defendant argues that if Plaintiff cannot show
complete diversity of citizenship that this case must be dismissed
for lack of subject matter jurisdiction. Id. at 10.
2.
Plaintiff’s Argument
Plaintiff
argues
that
there
is
complete
diversity
of
citizenship and that this Court has subject matter jurisdiction
over this dispute. (Rec. Doc. 12.) First, Plaintiff argues that
Defendant does not dispute that the amount in controversy exceeds
the $75,000 threshold required to bring suit in federal court. Id.
at 2. Thus, Plaintiff argues that there is no dispute that the
2
amount in controversy element to satisfy diversity jurisdiction is
satisfied.
Second, Plaintiff argues that there is complete diversity
between the parties. Id. Plaintiff argues that PGS is a Louisiana
limited liability company with its principal place of business in
New Orleans, Louisiana. Id. Further, Plaintiff argues that PGS is
a single-member limited liability company whose sole member is PGS
USA Holding, LLC. Plaintiff argues that PGS USA Holding, LLC 1 is
also a single-member limited liability company whose sole member
is B. Pacorini, S.r.l. (B. Pacorini) with its principal place of
business in New Orleans, Louisiana. Id. According to Plaintiff, B.
Pacorini is a società a responsabilità limitata organized under
the laws of Italy with its registered office in Trieste, Italy,
which is also where its officers and managers direct, control, and
coordinate B. Pacorini’s business. Id. Plaintiff further claims
that B. Pacorini has no offices in the United States and that its
owners are Emea, S.r.l., Luisa Pacorini, and Riccardo Marchesi.
Id. at 3. Louisa Pacorini and Riccardo Marchesi are citizens of
Italy and do not reside and are not domiciled in New York. Id.
Further,
Plaintiff
argues
that
Emea,
S.r.l.
is
a
società
a
responsabilità limitata organized under the laws of Italy, with
its registered office and principal place of business located in
1
PGS USA Holding, LLC was formerly known as Pacorini Holding, LLC.
3
Trieste, Italy, which is also where its officers and managers
direct,
control,
and
coordinate
Emea,
S.r.l.’s
business
activities. Finally, Plaintiff argues that Emea, S.r.l. does not
have an office in the United States and its owners are all
residents and citizens of Italy and do not reside nor are domiciled
in New York. Id. Accordingly, Plaintiff argues that because the
amount of controversy exceeds $75,000, and there is complete
diversity of citizenship between the parties, this Court has
subject matter jurisdiction over this dispute.
LEGAL STANDARD
For a federal court to have diversity jurisdiction over a
claim 28 U.S.C. § 1332 requires that the amount in controversy
“exceed [ ] the sum or value of $75,000, exclusive of interest and
costs” in the case of individual claims. Additionally, 28 U.S.C.
§ 1332 requires complete diversity, mandating that all persons on
one side of the controversy be citizens of different states than
all persons on the other side. McLaughlin v. Mississippi Power
Co., 376 F.3d 344, 353 (5th Cir. 2004) (citing Harrison v. Prather,
404 F.2d 267, 272 (5th Cir. 1968)). As to limited liability
companies, the Fifth Circuit has concluded that:
Supreme Court precedent, case law from other circuits,
and the statutory language of both Section 1332 and
Louisiana
Revised
Statutes
§
12:1301(a)(10)
overwhelmingly support the position that a [limited
liability company] should not be treated as a
corporation for purposes of diversity jurisdiction.
4
Rather, the citizenship of a LLC is determined by the
citizenship of all of its members.
Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077, 1080 (5th Cir.
2008). In contrast, a corporation’s citizenship is determined by
every state and foreign state in which it is incorporated and every
state and foreign state where it has its principal place of
business.
28
U.S.C.
§
1332(c)(1).
Further,
a
corporation’s
principal place of business is “where the corporation’s high level
officers
direct,
control,
and
coordinate
the
corporation’s
activities.” Swindol v. Aurora Flight Sci. Corp., 805 F.3d 516,
519 (5th Cir. 2015) (quoting Hertz Corp. v. Friend, 559 U.S. 77,
80 (2010)).
DISCUSSION
Defendant does not challenge this Court’s jurisdiction based
on the amount in controversy. (Rec. Doc. 7.) Further, it appears
that the $75,000 amount in controversy threshold is satisfied in
this case. 2 Therefore, the sole issue this Court must resolve is
whether there is complete diversity of citizenship between the
parties in accordance with 28 U.S.C. § 1332. Because PGS is a
limited liability corporation, its citizenship is determined by
the citizenship of its members. Harvey, 542 F.3d at 1080. PGS is
a single-member limited liability company whose sole member is PGS
USA Holding, LLC. (Rec. Doc. 12 at 2.) Therefore, this Court must
2
Plaintiff’s Complaint seeks $102,680.25 for money allegedly owed for breach
of a rice shipping contract. (Rec. Doc. 1.)
5
determine the citizenship of PGS USA Holding, LLC’s members. PGS
USA Holding, LLC is also a single-member limited liability company
whose sole member is B Pacorini, S.r.l. Id.
To resolve whether there is complete diversity of citizenship
between the parties, the Court must determine the citizenship of
B. Pacorini. The citizenship of B. Pacorini turns on whether a
società
a
corporation
responsabilità
or
a
limited
limitata
liability
should
company
be
treated
for
as
purposes
a
of
diversity jurisdiction. This determination is important because
the citizenship of a limited liability company is determined by
the citizenship of its members, whereas the citizenship of a
corporation is determined by every state and foreign state in which
it is incorporated and every state and foreign state where it has
its principal place of business. 28 U.S.C. § 1332(c)(1).
The Fifth Circuit and other courts have referred to a società
a responsabilità limitata as a corporation, 3 while other courts
have referred to these entities as limited liability companies.
Compare Anderson-Tully Lumber Co. v. Int’l Forest Prods., S.R.L.,
306 F. App’x 858, 858 (5th Cir. 2009) (referring to International
Forest Products, S.r.l. as an Italian corporation); Med. Mktg.
Int’l, Inc. v. Internazionale Medico Scientifica, S.R.L., No. 99-
3
The references to a società a responsabilità limitata as a corporation were
dicta and unessential to the courts’ holdings. The only decision which the
parties cite and that this Court could locate referencing a società a
responsabilità limitata in a diversity of citizenship context was the Eastern
District of New York’s decision in Icestone. 2011 WL 4460505, at *1.
6
0380, 1999 WL 311945, at *1 (E.D. La. May 17, 1999) (referring to
Internazionale
Medico
Scientifica,
S.r.l.
as
an
Italian
corporation); Icestone, LLC v. MATEC, S.R.L., No. 09-1292, 2011 WL
4460505, at *1 (E.D.N.Y. Sept. 9, 2011) (referring to MATEC, S.r.l.
as
an
Italian
corporation
for
purposes
of
diversity
of
citizenship); with In re ARTIMM, S.r.L., 278 B.r. 832, 835, n. 1
(Bankr. C.D. Cal. 2002) (“S.r.l. is the acronym for ‘societá di
responsibilitá limitata,’ which translated literally from Italian
means ‘company with limited liability.’ An S.r.l. is typically a
privately-held company and is a procedurally less stringent form
of company than an Italian stock corporation, or Società per
Accione (S.p.A.). An S.r.l. is somewhat analogous to an American
limited liability company, and is similar to a French société de
responsibilité limitée (S.R.L.) and a German gesellschaft mit
Beschrankter Haftung (GmBH)”); The Gerffert Co. v. James Dean, 41
F.Supp.3d 201, 204 (E.D.N.Y 2014) (noting that an S.r.l. is the
Italian equivalent of a limited liability company); HT S.R.L. v.
Velasco, 125 F.Supp.3d 211, 216 (D.D.C. 2015) (labeling Petitioner
HT as an Italian limited liability company). Therefore, the Court
shall determine if it has subject matter jurisdiction to resolve
this dispute under both scenarios: (1) B. Pacorini as a limited
liability company, and (2) B. Pacorini as a corporation.
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1.
Whether this Court has Subject Matter Jurisdiction if B.
Pacorini is a Limited Liability Company
If a società a responsabilità limitata is a limited liability
company
then
B.
Pacorini’s
citizenship
is
determined
by
the
citizenship of its members. Harvey, 542 F.3d at 1080. B. Pacorini’s
members are Emea, S.r.l., Luisa Pacorini, and Riccardo Marchesi.
(Rec. Doc. 12 at 5; Rec. Doc. 12-1 at 2.) Luisa Pacorini and
Riccardo Marchesi are citizens of Italy and reside in Italy. Id.
However, Emea, S.r.l. is also a società a responsabilità limitata.
Id. Therefore, if a società a responsabilità limitata is a limited
liability company, the Court must also determine the citizenship
of Emea, S.r.l.’s members. Emea, S.r.l.’s members are Roberto
Pacorini, Alessandra Pacorini, Elisa Pacorini, Enrico Pacorini,
and
Massimo
Pacorini.
(Rec.
Doc.
12-1
at
3.)
All
of
these
individuals are citizens of Italy who do not reside in and are not
domiciled in New York. Id. Thus, if a società a responsabilità
limitata is treated as a limited liability company, then Emea
S.r.l. is a citizen of Italy. If Emea, S.r.l. is a citizen of Italy
then B. Pacorini is considered a citizen of Italy because all of
its members are citizens of Italy. Consequently, if a società a
responsabilità limitata is treated as a limited liability company
there is complete diversity of citizenship between the parties and
this Court has subject matter jurisdiction over this dispute.
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2.
Whether this Court has Subject Matter Jurisdiction if B.
Pacorini is a Corporation
If
a
società
a
responsabilità
limitata
is
considered
a
corporation then B. Pacorini’s citizenship is determined by every
state and foreign state in which it is incorporated and every state
and foreign state where it has its principal place of business. 28
U.S.C. § 1332(c)(1). Again, a corporation’s principal place of
business is “where the corporation’s high level officers direct,
control, and coordinate the corporation’s activities.” Swindol,
805 F.3d at 519 (quoting Friend, 559 U.S. at 80). B. Pacorini is
organized under the laws of Italy. (Rec. Doc. 12-1 at 2.) Further,
its officers and managers direct, control and coordinate its
activities from its office in Triesta, Italy. Id. Accordingly,
Triesta, Italy is B. Pacorini’s principal place of business.
Therefore, if a società a responsabilità limitata is treated as a
corporation then B. Pacorini is a citizen of Italy, there is
complete diversity of citizenship, and this Court has subject
matter jurisdiction over this dispute.
CONCLUSION
For purposes of this motion it is immaterial whether a società
a responsabilità limitata is treated as a limited liability company
or a corporation. Further, this Court makes no determination as to
whether a società a responsabilità limitata should be considered
a limited liability company or corporation. As explained above,
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regardless of whether a società a responsabilità limitata is
treated as a limited liability company or a corporation, there is
complete diversity of citizenship between Plaintiff and Defendant
in this case and this Court has subject matter jurisdiction over
this dispute. Accordingly,
IT IS HEREBY ORDERED that Defendant’s Motion to Dismiss for
Lack of Subject Matter Jurisdiction (Rec. Doc. 7) is DENIED.
New Orleans, Louisiana, this 12th day of August, 2016.
CARL J. BARBIER
UNITED STATES DISTRICT JUDGE
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