HomeLife in the Gardens, LLC et al v. Landry

Filing 45

ORDER denying 37 Motion to Dismiss for Lack of Jurisdiction. Signed by Judge Lance M Africk on 7/27/2017. (blg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
HOMELIFE IN THE GARDENS,
LLC ET AL.

CIVIL ACTION

VERSUS

No. 16-15549

LEIGH LANDRY

SECTION I
ORDER

Before the Court is defendant Leigh Landry’s motion 1 to dismiss the abovecaptioned matter for lack of subject matter jurisdiction.

Plaintiffs—who base

jurisdiction on 28 U.S.C. § 1332 (diversity of citizenship)—oppose 2 the motion.
For the foregoing reasons, the Court denies the motion.
Section 1332(a)(1) provides that “[t]he district courts shall have original
jurisdiction of all civil actions where the matter in controversy exceeds the sum or
value of $75,000, exclusive of interest and costs, and is between . . . citizens of
different States.” Courts have long understood § 1332 to demand complete diversity.
See Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267 (1806).

Complete diversity

“requires that all persons on one side of the controversy be citizens of different states

R. Doc. No. 37. Landry’s motion is styled as a motion to dismiss pursuant to Rules
12(b)(1) (lack of subject matter jurisdiction), 12(b)(2) (lack of personal jurisdiction),
and 12(b)(3) (improper venue) of the Federal Rules of Civil Procedure. See id.
However, Landry limits her argument to Rule 12(b)(1) in her memorandum in
support of her motion. See R. Doc. No. 37-1. Therefore, the Court will also limit its
analysis to Rule 12(b)(1).
2 R. Doc. No. 39.
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than all persons on the other side.” McLaughlin v. Mississippi Power Co., 376 F.3d
344, 353 (5th Cir. 2004).
All parties agree, and the Court does not dispute, that Landry is a citizen of
Louisiana. Landry argues that one of the plaintiffs—HomeLife in the Gardens, LLC
(“HomeLife”)—is also a Louisiana citizen, thereby violating the complete diversity
rule. 3
“[T]he 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).
According to Landry, F. Evans Schmidt—a Louisiana citizen and HomeLife’s counsel
in this case—is a member of HomeLife. 4 As such, Landry contends that complete
diversity does not exist.
After inquiry by the Court, 5 Schmidt declared under penalty of perjury that he
was indeed a member of HomeLife until October 7, 2016, when he sold his interest in
the company. 6 Schmidt also submitted a bank record documenting the transfer of
funds pursuant to the sale on that date. 7 The Court may accept Schmidt’s declaration
and bank record as competent evidence in its jurisdictional inquiry. See Menchaca v.
Chrysler Credit Corp., 613 F.2d 507, 511 (5th Cir. 1980) (When a party “challenges
the existence of subject matter jurisdiction in fact,” the Court may consider “matters
outside the pleadings, such as testimony and affidavits,” to determine whether

See R. Doc. No. 37-1.
Id. at 4
5 See R. Doc. No. 42.
6 See R. Doc. No. 43-1, ¶¶ 2-3.
7 See R. Doc. No. 43-2.
3
4

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jurisdiction exists.). The Court therefore concludes that Schmidt was not a member
of HomeLife as of October 14, 2016, the filing date of the present case.
As such, complete diversity existed in this case on the date of filing. 8 Looking
to that date, the Court possesses subject matter jurisdiction over the case. See
Thompson v. Greyhound Lines, Inc., 574 Fed. App’x 407, 408 (5th Cir. 2014)
(“Diversity jurisdiction is based on the facts at the time of filing.”).
Accordingly,
IT IS ORDERED that Landry’s motion to dismiss for lack of subject matter
jurisdiction is DENIED.

New Orleans, Louisiana, July 27, 2017.

_______________________________________
LANCE M. AFRICK
UNITED STATES DISTRICT JUDGE

The Court notes that the present case is not the first case to feature a dispute
between these parties. On September 27, 2016, these same plaintiffs filed suit
against Landry in this Court asserting substantially the same claims as in the
present case. See Rankey et al. v, Landry, No. 16-14968, Dkt. 1 (E.D. La. 2016). This
first case was voluntarily dismissed by the plaintiffs on October 7, 2016—the same
day that Schmidt sold his stake in HomeLife. See id., Dkt. 11. Schmidt represents
to the Court that the dismissal of the first case was to permit “additional time” to
“investigate the citizenship of the parties.” Case No. 16-15549, R. Doc. No. 43-1, ¶ 9.
Schmidt stretches the term “investigate” to its breaking point: Schmidt did not
want time to “investigate the citizenship of the parties,” but rather wanted time to
refile the case after changing HomeLife’s citizenship. By first selling off his interest
in HomeLife and then refiling the case, Schmidt created the complete diversity that—
it is now obvious—was lacking in the first case. While Schmidt and HomeLife should
have been more forthright with the Court, current law permitted them to act as they
did. See Grupo Dataflux v. Atlas Global Group, L.P., 541 U.S. 567, 581 (2004).
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