Louisiana Mid-Stream Terminals, LLC v. Caterpillar Inc.
Filing
23
ORDER ON MOTION FOR LEAVE TO AMEND COMPLAINT: The plaintiff shall have 10 days to supplement its Motion to Amend Complaint by filing a proposed amended complaint which properly alleges the citizenship of Louisiana Machinery Company, LLC. Amended Pleadings due by 9/15/2014. Signed by Magistrate Judge Stephen C. Riedlinger on 9/4/2014. (SMG) Modified to edit text on 9/4/2014 (SMG).
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
LOUISIANA MID-STREAM
TERMINALS, LLC
CIVIL ACTION
VERSUS
NUMBER 13-403-JWD-SCR
CATERPILLAR, INC.
ORDER ON MOTION FOR LEAVE TO AMEND COMPLAINT
Before the court is the plaintiff’s Motion to Amend Complaint.
Record document number 18.
The motion is opposed.1
Plaintiff seeks to join Louisiana Machinery Company, LLC
(hereafter, “LMC”) as a defendant.
Plaintiff’s proposed Amended
Complaint alleges that LMC is “a Louisiana limited liability
company domiciled in St. John the Baptist Parish,” Louisiana.2
Plaintiff is also a Louisiana citizen.
This court’s subject matter jurisdiction is based on diversity
of citizenship under 28 U.S.C. § 1332.3
Neither the plaintiff’s
motion nor the supporting memorandum cite or specifically address
1
Record document number 19.
Plaintiff filed a supporting
memorandum. Record document number 22.
2
Record document number 18-1, proposed Amended Complaint, p.
1, ¶ 1(b). Plaintiff acknowledges that joining LMC as a defendant
may destroy diversity jurisdiction. The court agrees that it may if any member of LMC is a Louisiana Citizen.
3
Record document number 1, Notice of Removal, p. 3, ¶ VII.
the application of 28 U.S.C. § 1447(e),4 which provides as follows:
If after removal the plaintiff seeks to join additional
defendants whose joinder would destroy subject matter
jurisdiction, the court may deny joinder, or permit
joinder and remand the action to the State court.
Hensgens v. Deere & Company, 833 F.2d 1179 (5th Cir. 1987),
appeal after remand, 869 F.2d 879 (5th Cir. 1989), directs this
court to consider several factors in deciding whether to grant a
motion for leave to amend when doing so will require remanding the
case.
In this situation, justice requires that the district
court consider a number of factors to balance the
defendant’s interests in maintaining the federal forum
with the competing interests of not having parallel
lawsuits. For example, the court should consider the
extent to which the purpose of the amendment is to defeat
federal jurisdiction, whether plaintiff has been dilatory
in asking for amendment, whether plaintiff will be
significantly injured if amendment is not allowed, and
any other factors bearing on the equities.
Hensgens at 1182.
See, Depriest v. BASF Wyandotte Corp., 119
F.R.D. 639 (M.D.La. 1988).
The first step is to determine the citizenship of the proposed
new defendant, LMC.
When jurisdiction depends on citizenship, the
citizenship of each party must be distinctly and affirmatively
alleged in accordance with § 1332(a) and (c).5
Under § 1332, for
4
Plaintiff’s supporting memorandum addresses the timing of
the motion, discovery of the factual basis for the claim against
LMC, and its motive for joining LMC.
5
Stafford v. Mobil Oil Corp., 945 F.2d 803, 804 (5th Cir.
1991), citing, McGovern v. American Airlines, Inc., 511 F.2d 653,
(continued...)
2
purposes of diversity, the citizenship of a limited liability
company is determined by considering the citizenship of all its
members.6
Thus, to properly
allege the citizenship of a limited
liability company, each of the members must be identified and the
citizenship of each member must be alleged in accordance with the
requirements of § 1332(a) and (c).7
Where a limited liability
company is domiciled and has its principal place of business does
not determine its citizenship. Joining LMC would destroy diversity
jurisdiction if any of is members is a Louisiana citizen.
But the
plaintiff’s jurisdictional allegation in its proposed Amended
Complaint is not sufficient to determine the citizenship of LMC.8
Absent a proper allegation of LMC’s citizenship, the court cannot
determine
what
jurisdiction.
effect
joining
it
would
have
on
diversity
The court should not be making jurisdictional
rulings based on assumptions about a proposed party’s citizenship.
5
(...continued)
654 (5th Cir. 1975)(quoting 2A Moore’s Federal Practice ¶ 8.10, at
1662).
6
Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077, 1080 (5th
Cir. 2008); Carden v. Arkoma Associates, 494 U.S. 185, 110 S.Ct.
1015, 1021 (1990).
7
The same requirement applies to any member of a limited
liability company which is also a limited liability company.
Turner Bros. Crane and Rigging, LLC v. Kingboard Chemical Holding
Ltd., 2007 WL 2848154 (M.D. La. Sept. 24, 2007)(when partners or
members are themselves entities or associations, citizenship must
be traced through however many layers of members or partners there
are).
8
Compare the plaintiff’s jurisdictional allegation of LMC’s
domicile to the defendant’s jurisdictional allegations in its
Notice of Removal, record document number 1, pp. 2-3, ¶ V.
3
Defendant also argued that motion should be denied because it
is untimely and the proposed claim against LMC is futile because it
is prescribed under state law,9 but also argued that if the motion
is granted the court would still have subject matter jurisdiction
under general maritime law even though the case could not have been
removed on that basis.
Plaintiff addressed these arguments in its
supporting memorandum. However, the court does not need to address
these
arguments
until
the
plaintiff
properly
alleges
the
citizenship of LMC.
At this point, the better course is to require the
plaintiff
to supplement its motion with a proposed amended complaint that
properly alleges the citizenship of LMC.
Then, if the court finds
that joining LMC would destroy diversity jurisdiction, the court
will address the defendant’s arguments.
Therefore;
IT IS ORDERED that the plaintiff shall have 10 days to
supplement its
amended
Motion to Amend Complaint by filing a proposed
complaint
which
properly
alleges
the
citizenship
of
Louisiana Machinery Company, LLC.
Baton Rouge, Louisiana, September 4, 2014.
STEPHEN C. RIEDLINGER
UNITED STATES MAGISTRATE JUDGE
9
It is well settled that under Rule 15, Fed.R.Civ.P., a
proposed amendment may be denied when the amendment would not
survive a Rule 12(b)(6), Fed.R.Civ.P., motion.
4
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