Team Marketing Group Inc et al v. Hyde et al

Filing 63

MEMORANDUM ORDER: Team Marketing Group Inc is directed to file a motion for leave to amend its complaint again and set forth the required allegations about the citizenship of Budget Mobile L L C. Counsel for Budget Mobile are directed to cooperate in providing the membership/citizenship information so this preliminary issue may be resolved efficiently. The deadline for seeking leave to amend is 3/26/2018. The proposed amended complaint must allege the state in which Robert Daniel Hyde III is domiciled. ( Second Compliance Deadline set for 3/26/2018.) Signed by Magistrate Judge Mark L Hornsby on 3/8/2018. (crt,Putch, A)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
SHREVEPORT DIVISION

TEAM MARKETING GROUP, INC., ET AL

CIVIL ACTION NO. 17-cv-1389

VERSUS

JUDGE ROBERT G. JAMES

ROBERT DANIEL HYDE, ET AL

MAGISTRATE JUDGE HORNSBY

MEMORANDUM ORDER
Team Marketing Group, Inc. filed this civil action in the Middle District of
Tennessee based on an assertion of diversity jurisdiction, which puts the burden on Team
to set forth specific facts that show there is complete diversity of citizenship. The
Tennessee court reviewed the original complaint and noted that it did not have sufficient
information about the members of defendant Class Marketing Services, LLC. The court
noted that the citizenship of a limited liability company is determined based on the
citizenship of each member, so the court needs to know the citizenship of each member
and any sub-members. Doc. 8. Team responded (Doc. 9) by identifying two Colorado
individuals who are the members of the LLC.
Team later filed an amended complaint (Doc. 12) that added Budget Mobile, LLC
as a defendant. The amended complaint alleged that Budget Mobile was an alter ego of
original defendant Budget Prepay, Inc., but it did not set forth the identity or citizenship of
the members of the LLC. The Fifth Circuit follows the same rule that the Tennessee court
explained earlier in the case. “A party seeking to establish diversity jurisdiction must
specifically allege the citizenship of every member of every LLC or partnership involved

in a litigation.” Settlement Funding, L.L.C. v. Rapid Settlements, Ltd., 851 F.3d 530, 536
(5th Cir. 2017). 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 Tennessee court later transferred venue of the case to this court. It does not
appear that Budget Mobile’s answer or any of the other subsequent filings have provided
the needed citizenship information with respect to Budget Mobile, LLC. Accordingly,
Team is directed to file a motion for leave to amend its complaint again and set forth the
required allegations about the citizenship of Budget Mobile, LLC. Counsel for Budget
Mobile are directed to cooperate in providing the membership/citizenship information so
that this preliminary issue may be resolved efficiently. The deadline for seeking leave to
amend is March 26, 2018.
The original and amended complaint allege that defendant Robert Daniel Hyde,
III is believed to be a resident of Bossier Parish, Louisiana. 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). A person may be a resident
of multiple states, but he has only one domicile, and that domicile controls for diversity

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purposes. Accordingly, the proposed amended complaint must allege that state in which
Mr. Hyde is domiciled.
THUS DONE AND SIGNED in Shreveport, Louisiana, this 8th day of March,
2018.

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