Graham v. Pinnergy Ltd et al
MEMORANDUM ORDER - Plaintiff will need to clarify in his amended complaint Pinnergys type of entity (whether a corporation or partnership) and set forth its citizenship in accordance with the rules outlined in this Memorandum Order. Signed by Magistrate Judge Mark L Hornsby on 9/9/2020. (crt,Bunting, M)
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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
CIVIL ACTION NO. 20-cv-1147
JUDGE ELIZABETH E. FOOTE
PINNERGY LTD ET AL
MAGISTRATE JUDGE HORNSBY
Bernard Graham (“Plaintiff”) filed this civil action after he was injured while
performing work on a rig allegedly owned by Pinnergy, Ltd. (“Pinnergy”) and
manufactured by Schramm, Inc. (“Schramm”). Plaintiff filed the suit on the basis of
diversity jurisdiction, which puts the burden on him to allege facts that show complete
diversity of citizenship of the parties and an amount in controversy over $75,000. Before
the court can assess whether subject matter jurisdiction exists, more information is needed
regarding the citizenship of the two defendants.
The complaint alleges that Schramm is “foreign corporation[s] authorized to do and
doing business in the State of Louisiana.” A corporation is deemed to be a citizen of (1)
the state in which it was incorporated and (2) the state where it has its principal place of
business. 28 U.S.C. § 1332(c)(1). To establish diversity jurisdiction, a complaint or notice
of removal must set forth “with specificity” a corporate party’s state of incorporation and
its principal place of business. “Where the plaintiff fails to state the place of incorporation
or the principal place of business of a corporate party, the pleadings are inadequate to
establish diversity.” Joiner v. Diamond M Drilling Co., 677 F.2d 1035, 1039 (5th Cir.
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1982). The Fifth Circuit requires strict adherence to these straightforward rules. Howery
v. Allstate Ins. Co., 243 F.3d 912, 919 (5th Cir. 2001). Accordingly, Plaintiff will need to
file an amended complaint that alleges Schramm’s state of incorporation and principal
place of business.
The complaint alleges that Pinnergy is a “foreign corporation,” but the Louisiana
Secretary of State’s website indicates that it is a non-Louisiana partnership. When a
partnership is a party, the court must consider the citizenship of each partner, whether
limited or general. Carden v. Arkoma Associates, 110 S.Ct. 1015 (1990). Neither the state
of organization nor principal place of business is relevant. The Carden rule applies to
common law limited partnerships and a Louisiana partnership in commendam. Whalen v.
Carter, 954 F.2d 1087, 1095 (5th Cir. 1994); Newport Limited v. Sears, Roebuck and Co.,
941 F.2d 302 (5th Cir. 1991). If partners are themselves partnerships, LLC’s or other form
of association, the citizenship must be traced through however many layers of members or
partners there may be, and failure to do so can result in dismissal for want of jurisdiction.
Mullins v. Testamerica, Inc., 2008 WL 4888576 (5th Cir. 2008) (court refused to consider
the merits of an appeal until the record distinctly and affirmatively alleged the citizenship
of a limited partnership). Plaintiff will need to clarify in his amended complaint Pinnergy’s
type of entity (whether a corporation or partnership) and set forth its citizenship in
accordance with the rules outlined above.
Because Plaintiff’s counsel may not have access to that information at this stage of
the proceedings, the court will not set a deadline for filing an amended complaint. Once
counsel for Plaintiff has had an opportunity to confer with counsel for Defendants, Plaintiff
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will need to file an amended complaint that properly alleges the citizenship of the
defendants. Alternatively, the defendants may include that information in their answer(s).
A scheduling conference will not be held until a basis for jurisdiction is established.
It is especially important to determine quickly whether this court has jurisdiction in
a case that a plaintiff files in federal court. That is because prescription is interrupted on a
Louisiana claim by filing suit only if the court in which suit is filed is one of competent
jurisdiction and venue. La. Civ. Code art. 3462. If this court must dismiss for lack of
jurisdiction, prescription may not have been interrupted by the filing of the complaint.
Tally v. Lovette, 332 So.2d 924 (La. App. 3rd Cir. 1976).
THUS DONE AND SIGNED in Shreveport, Louisiana, this 9th day of September,
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