Kitchens Brothers Manufacturing Co v. Tristate Land & Minerals L L C et al

Filing 9

MEMORANDUM ORDER : Plaintiff shall file a motion for leave to amend its complaint to adequately allege the citizenship of the parties by 3/31/09. Signed by Magistrate Judge Mark L Hornsby on 3/3/09. (crt,Kennedy, Tara)

UNITED STATES DISTRICT COURT W E S T ER N DISTRICT OF LOUISIANA S H R E V EP O R T DIVISION

K I T C H E N S BROTHERS M A N U F A C T U R IN G CO. VERSUS T R I S T A T E LAND & M I N E R A L S , L L C , ET AL

CIVIL ACTION NO. 09-cv-0098

J U D G E HICKS M A G I S T R A T E JUDGE HORNSBY

M E M O R A N D U M ORDER K i t c h e n s Brothers Manufacturing Company filed this action based on an assertion of divers ity jurisdiction. Thus, there is a burden on Kitchens to allege facts that ensure the e x i s te n c e of subject-matter jurisdiction. Kitchens, to meet that burden, will need to file a m o t i o n for leave to amend its complaint to adequately allege the citizenship of the parties. T h e deadline for doing so is March 31, 2009. K i t c h e n s describes itself as a M ississipp i corporation that operates sawmills in M i s s iss i p p i and Louisiana, with a "principal office" in Mississippi. Kitchens perhaps intends to allege that it has its principal place of business in Mississippi, as a corporation is a citizen o f both its state of incorporation and its principal place of business. 28 U.S.C. § 1332(c)(1). If that is Kitchens' intent, it should be clear and use the language that is found in the statute. If Kitchens has any doubts about where its principal place of business is located (and the l o c a ti o n of the main office is not always the principal place of business), the rules can be f o u n d in cases such as Teal Energy USA, Inc. v. GT, Inc., 369 F.3d 873 (5th Cir. 2004).

K i t c h e n s properly alleges that defendant Lamar Smith is domiciled in Louisiana, w h i c h is adequate to allege his citizenship. The other two defendants are Tristate Land and M i n e r a l s , LLC and Tristate Company, LLC. Those parties are described only as Louisiana l i m it e d liability companies, and the answer filed by those entities did not add any additional i n f o r m a ti o n relevant to their citizenship. T h e citizenship of an LLC is determined by the citizenship of all of its members, with its state of organization or principal place of business being irrelevant. Harvey v. Grey Wolf D r i l li n g Co., 542 F.3d 1077 (5th Cir. 2008). If the members are themselves partnerships, L L C s , corporations or other form of entity, their citizenship must be alleged in accordance with the rules applicable to that entity, and the citizenship must be traced through however m a n y layers of members or partners there may be. Feaster v. Grey Wolf Drilling Co., 2007 W L 3146363 (W.D. La. 2007). The need for such detail was recently demonstrated by Mullins v. Testamerica, Inc., 2 0 0 8 WL 4888576 (5th Cir. 2008), when the court refused to consider the merits of an appeal until the record distinctly and affirmatively alleged the citizenship of a limited partnership, t h e citizenship of which is determined by the same rules applicable to an LLC. The Mullins o p i n i o n also makes clear that general allegations that all members or partners are of diverse citizens hip from the parties on the other side, without factual specificity, is not sufficient. This court has seen a number of cases where the parties were confident there was divers ity because "all members of the LLC are citizens of" diverse states, but diversity and

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s u b j e c t matter jurisdiction unraveled when the court required the parties to allege citizenship in detail. Requiring those allegation early in the case avoids the waste of time and resources t h a t have been seen in cases such as Howery v. Allstate, 243 F.3d 912 (5th Cir. 2001), where Allstate saw a favorable judgment slip away on appeal because it neglected to plead its p r i n c ip a l place of business when in district court and Elliot v. Tilton, 62 F.3d 725, 729 (5th C i r . 1995) (vacating judgment and chastising district court for not engaging in this kind of inq uiry early in the case). Plaintiff may not have access to the citizenship information for the defendants. Parties in the defendants' position ordinarily provide the citizenship information voluntarily, and t h e y are encouraged to do so in this case so that this preliminary issue may be resolved as quick ly and efficiently as possible. If the defendants will not voluntarily provide the info rma tion , the plaintiffs are granted leave to conduct discovery on the issue. The court will review the case after the March 31 deadline for amending the j u r is d i c ti o n a l allegations. If facts are alleged that provide a basis for subject matter juris dicti on, a scheduling conference will be set in due course. THUS DONE AND SIGNED in Shreveport, Louisiana, this 3rd day of March, 2009.

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