Lake Bistineau Royalty Co L L C v. Chesapeake Louisiana L P et al
Filing
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MEMORANDUM ORDER: Counsel for Defendants are directed to provide counsel for Plaintiff, by 4/17/2015, with detailed citizenship information for each entity they represent. Plaintiff is directed to file by 4/24/2015 a document that sets forth with specificity the citizenship of each defendant. Signed by Magistrate Judge Mark L Hornsby on 4/10/15. (crt,Delgado, S)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
SHREVEPORT DIVISION
LAKE BISTINEAU ROYALTY CO., LLC
CIVIL ACTION NO. 15-cv-0414
VERSUS
JUDGE HICKS
CHESAPEAKE LOUISIANA, LP, ET AL
MAGISTRATE JUDGE HORNSBY
MEMORANDUM ORDER
Lake Bistineau Royalty Co., LLC (“Plaintiff”) filed this civil action against five
defendants who are either limited partnerships or limited liability companies. The complaint
relies upon diversity jurisdiction, which places the burden on Plaintiff to set forth the facts
sufficient to establish that there is complete diversity of citizenship.
Plaintiff alleged in its complaint that it is a limited liability company whose members
are citizens of Louisiana, California, Vermont, and Arizona. Plaintiff then filed under seal
a document (Doc. 8) in which it set forth with specificity the identity of the various members
and states in which they are citizens. Plaintiff’s allegations were necessary because the
citizenship of an LLC is determined by the citizenship of all of its members. Harvey v. Grey
Wolf Drilling Co., 542 F.3d 1077 (5th Cir. 2008).
If the members are themselves
partnerships, LLCs, 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 many layers of members or partners there may be. Feaster v. Grey Wolf Drilling
Co., 2007 WL 3146363 (W.D. La. 2007).
The need for such detail was demonstrated by Mullins v. TestAmerica, Inc., 2008 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, the
citizenship of which is determined by the same rules applicable to an LLC. The Court turned
to the merits only after the citizenship had been traced, with specificity, “down the various
organizational layers” and in accordance with the rules that apply to the various forms of
entities. Mullins v. TestAmerica Inc., 564 F.3d 386, 397-98 (5th Cir. 2009).
Plaintiff did not provide such detail with respect to the citizenship of the five
defendants. The complaint alleges the states in which the entities are organized, where they
have their principal places of business, or where they are registered to do business, but none
of those facts are relevant to the citizenship of an LLC or limited partnership.
It is understandable that Plaintiff did not allege the details of the membership/partners
of the defendant entities because such information is not usually in the public record. It is
beneficial in such cases if the entity-defendant will provide the necessary information in its
answer or other filing so the preliminary issue of diversity can be resolved efficiently. But
it does not appear that any of the defendants provided all necessary information about
themselves in either their answer or corporate disclosure statements.
Chesapeake Louisiana, LP did state in its corporate disclosure statement that its
general partner is fellow defendant Chesapeake Operating, LLC, and its limited partner is
Chesapeake Energy Louisiana Corporation. Chesapeake Energy Louisiana Corporation is
said to be a corporation organized under the laws of Oklahoma, but the disclosure statement
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does not set forth the corporation’s principal place of business as required by 28 U.S.C. §
1332 and as defined in Hertz Corp. v. Friend, 130 S.Ct. 1181 (2010). Chesapeake Operating,
LLC is alleged to have a single member, Chesapeake Energy Corporation, which is organized
under Oklahoma law. The statement does not allege the state in which Chesapeake Energy
Corporation has its principal place of business.
It does not appear that Jamestown Resources, LLC included citizenship information
in its answer. Its corporate disclosure statement alleges that its two members are Aubrey K.
McClendon and Kathleen B. McClendon, but the statement does not allege the state in which
those two persons are domiciled.
Freeport McMoran Oil & Gas, LLC and PXP Louisiana, LLC recently filed a
joint answer. It does not appear to set forth the citizenship information with respect to either
of those entities.
Counsel for Defendants are directed to provide counsel for Plaintiff, by April 17,
2015, with detailed citizenship information for each entity they represent. Plaintiff is
directed to file by April 24, 2015 a document that sets forth with specificity the citizenship
of each defendant. This information is necessary to ensure the court has subject-matter
jurisdiction and that neither the court nor the parties are wasting time proceeding with this
case in federal court. Counsel are asked to avoid the need for such procedures in future
diversity cases by setting forth with specificity the citizenship of their clients in the
complaint, answer, or other early filing. Orders such as this should not be necessary;
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litigation involving LLCs and partnerships has long been commonplace, and the law
regarding their citizenship is well settled.
THUS DONE AND SIGNED in Shreveport, Louisiana, this 10th day of April, 2015.
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