Williams v. State National Insurance Co et al
JURISDICTIONAL REVIEW ORDER - Compliance Deadline set for 5/30/2017. Signed by Magistrate Judge Joseph H L Perez-Montes on 5/22/2017. (crt,Tice, Y)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
CIVIL ACTION NO. 16-CV-01049
CHIEF JUDGE DRELL
STATE NATIONAL INSURANCE
CO., et al.
MAGISTRATE JUDGE PEREZ-MONTES
JURISDICTIONAL REVIEW ORDER
Before the Court is a Complaint removed from a Louisiana state court by
Defendants Timothy L. Herrington, Southern Tire Mart, L.L.C., and State National
Defendants premise federal jurisdiction on diversity of
Defendants were ordered to clarify the parties’ citizenship to establish the
basis for diversity jurisdiction (Doc. 22).
Defendants contend that Defendant Southern Tire Mart, L.L.C. is a limited
liability company owned by two trusts: the Thomas Milton Duff Individual Trust and
the James Ernest Duff Individual Trust (Doc. 25). Defendants allege that both trusts
are “residents of Mississippi” (Doc. 25). Defendants also contend that Thomas Duff
and James Duff are both residents of Mississippi (Doc. 25).
The “citizens” upon whose diversity a party grounds jurisdiction must be real
and substantial parties to the controversy. See Navarro Sav. Ass'n v. Lee, 446 U.S.
458, 460 (1980). A federal court must disregard nominal or formal parties and rest
jurisdiction only upon the citizenship of real parties to the controversy. Navarro Sav.
Ass'n, 446 U.S. at 461.
Traditionally, a trust is not considered a distinct legal entity, but a “fiduciary
relationship” between multiple people. See Americold Realty Trust v. Conagra Foods,
Inc., 136 S. Ct. 1012, 1016 (2016). Trusts do not have “members.” Rather, a trust
exists where a settlor transfers title of property to a trustee to hold in trust for the
benefit of beneficiaries. See Hometown 2006-1 1925 Valley View, L.L.C. v. Prime
Income Asset Mgmt., L.L.C., 847 F.3d 302, 307 (5th Cir.2017) (citing Americold, 136
S. Ct. at 1016). A trustee is a real party to the controversy for purposes of diversity
jurisdiction when he possesses certain customary powers to hold, manage, and
dispose of assets for the benefit of others. See Navarro Sav. Ass'n, 446 U.S. at 464
(citing Bullard v. Cisco, 290 U.S. 179, 189 (1933).
However, many States have applied the “trust” label to a variety of
unincorporated entities that have little in common with the traditional trust
template. Since such an entity is unincorporated, it possesses the citizenship of all
its members. Americold Realty Trust, 136 S. Ct. at 1016 (citing C.T. Carden v.
Arkoma Associates, 494 U.S. 185, 195 (1990)).
The citizenship of Southern Tire Mart, L.L.C. is the citizenship of its members,
the Thomas Milton Duff Individual Trust and the James Ernest Duff Individual
Trust. Defendants have not shown whether the Thomas Milton Duff Individual Trust
and the James Ernest Duff Individual Trust are traditional trusts or are business
entities that have been designated as trusts.
Depending on which they are,
Defendants must show either the identities and residences of the trustees, or the
identities and residences of the beneficiaries or members of the trusts.
Accordingly, Defendants have through May 30, 2017 to amend their response
to the Court’s order (Doc. 22) to show the citizenship of Southern Tire Mart, L.L.C.
THUS DONE AND SIGNED in chambers in Alexandria, Louisiana, this _____
day of May, 2017.
Joseph H.L. Perez-Montes
United States Magistrate Judge
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