Woodard Consulting Services L L C, et al v. Exco Operating Co, L P

Filing 3

MEMORANDUM ORDER. The complaint does not appear to meet the burden of diversity jurisdiction, so Plaintiffs will be allowed an opportunity to file an amended complaint that complies with the rules set forth in the Memorandum Order. Signed by Magistrate Judge Mark L Hornsby on 4/17/2017. (crt,Keller, J)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
SHREVEPORT DIVISION

WOODARD CONSULTING SERVICES,
LLC, ET AL

CIVIL ACTION NO. 17-cv-0520

VERSUS

JUDGE JAMES

EXCO OPERATING CO., LP

MAGISTRATE JUDGE HORNSBY

MEMORANDUM ORDER
Jimmy Woodward and Woodard Consulting Services, LLC filed this suit in federal
court against Exco Operating Company, LP. Plaintiffs brought the suit in federal court based
on an assertion of diversity jurisdiction, which puts the burden on them to set forth particular
facts that establish complete diversity of citizenship. The complaint does not appear to meet
that burden, so Plaintiffs will be allowed an opportunity to file an amended complaint that
complies with the rules set forth below.
Jimmy Woodard describes himself as a “resident” of Louisiana, but it is domicile
rather than mere residency that decides citizenship for diversity purposes, and “[i]t is well
established that an allegation of residency does not satisfy the requirement of an allegation
of citizenship.” Great Plains Trust Co. v. Morgan Stanley, 313 F.3d 305, 310 n. 2 (5th Cir.
2002), quoting Strain v. Harrelson Rubber Co., 742 F.2d 888 (5th Cir. 1984). Mr. Woodard
will need to allege the state in which he has his domicile and, therefore, his citizenship.
Woodard Consulting describes itself as an LLC organized under Louisiana law with
its principal place of business in Louisiana. The 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 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); Adams v. WalMart Stores, Inc., 2014 WL 2949404 (W.D. La. 2014).
The complaint describes Exco as a foreign limited partnership. When a limited
partnership is a party, the court must consider the citizenship of each partner, both limited
and general. Carden v. Arkoma Associates, 110 S.Ct. 1015 (1990); Whalen v. Carter, 954
F.2d 1087, 1094 (5th Cir. 1994). As with the LLC, if partners are themselves entities or
associations, the citizenship must be traced through however many layers of partners or
members there may be.
The court understands that Plaintiffs may not have the citizenship information for
Exco, so no deadline is set for filing the amended complaint. But counsel for Plaintiff should
reach out to counsel for Exco at the earliest opportunity and attempt to obtain the necessary
information so that the citizenship issue may be resolved at an early stage. The need to nail
down citizenship with specificity at an early stage of the case was recently emphasized in
Settlement Funding, LLC v. Rapid Settlements, Limited, ____ F.3d ____, 2017 WL1088275
(5th Cir. 2017), where four years of litigation in federal court were wasted because the

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plaintiff did not meet its burden of pleading citizenship in the district court. A complaint or
notice of removal that relies on diversity jurisdiction must set forth the citizenship of all
parties in detail to avoid such problems.
Federal Rule of Civil Procedure 15 governs the filing of amended complaints. If
Plaintiffs amend within the time permitted by the rule, they may do so without leave of court.
If, however, they delay their attempt to amend they will have to file a motion for leave and
state therein whether there is any opposition from a defendant. Once the complaint is
amended (assuming it establishes that the court has subject-matter jurisdiction) and all
defendants have filed an answer, the court will issue instructions with regard to scheduling.
THUS DONE AND SIGNED in Shreveport, Louisiana, this 17th day of April, 2017.

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