Dupuis et al v. Lisco

Filing 15

MEMORANDUM RULING re 7 MOTION to Remand filed by L R C Energy L L C, Casey Dupuis. Considering the evidence, the law, and the arguments of the parties, and for the reasons fully explained herein, the motion is GRANTED. Signed by Magistrate Judge Patrick J Hanna on 10/27/2015. (crt,Alexander, E)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
LAFAYETTE DIVISION
CASEY REED DUPUIS AND
LRC ENERGY, LLC

CIVIL ACTION NO. 6:15-CV-02137

VERSUS

JUDGE DOHERTY

ERICA LISCO

MAGISTRATE JUDGE HANNA

MEMORANDUM RULING

Currently pending before the Court is the motion to remand (Rec. Doc. 7),
which was filed by the plaintiffs, Casey Reed Dupuis and LRC Energy, LLC. The
motion is opposed. Oral argument was held on October 27, 2015. Considering the
evidence, the law, and the arguments of the parties, and for the reasons fully
explained below, the motion is GRANTED.
BACKGROUND
This lawsuit originated in the 27th Judicial District Court, St. Landry Parish,
Louisiana. The plaintiffs, Casey Reed Dupuis and LRC Energy, LLC, filed a petition
for declaratory judgment against defendant Erica Lisco. The petition seeks a
judgment declaring that Ms. Dupuis is the sole member of LRC Energy, LLC.
Alternatively, if Ms. Lisco is found to be a member of the company, the petition seeks
dissolution of the company. Ms. Lisco removed the action to this forum on the basis

that the parties are diverse in citizenship and the amount in controversy exceeds the
jurisdictional minimum of $75,000. The plaintiffs then filed the instant motion to
remand.
THE CONTENTIONS OF THE PARTIES
In support of their motion to remand, the plaintiffs argue that the parties are not
diverse in citizenship and that the amount-in-controversy requirement is not satisfied.
Ms. Lisco argues, to the contrary, that the parties to the suit are diverse in
citizenship and that the amount in controversy exceeds the jurisdictional threshold.
ANALYSIS
Federal courts exercise limited jurisdiction.1 For that reason, a suit is presumed
to lie outside a federal court's jurisdiction until the party invoking federal-court
jurisdiction establishes otherwise.2 Because “the effect of removal is to deprive the
state court of an action properly before it, removal raises significant federalism
concerns.”3 The removal statute is therefore to be strictly construed, and any doubt
about the propriety of removal must be resolved in favor of remand and against

1

Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); Howery v.
Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001).
2

Kokkonen v. Guardian Life, 511 U.S. at 377; Howery v. Allstate, 243 F.3d at 916.

3

Carpenter v. Wichita Falls Indep. Sch. Dist., 44 F.3d 362, 365 (5th Cir. 1995).
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federal-court jurisdiction.4 Similarly, any ambiguities must be construed against
removal.5 To determine whether jurisdiction is present for removal, the court must
consider the claims in the state court petition as they existed at the time of removal.6
The party invoking the court's subject-matter jurisdiction has the burden of
establishing the court's jurisdiction.7 Therefore, when a lawsuit is removed from state
court, as this suit was, the removing party must bear that burden.8 Accordingly, Ms.
Lisco, the removing party, has the burden of establishing that this Court has
subject-matter jurisdiction over this action.
Ms. Lisco removed this action under 28 U.S.C. § 1332, the statute concerning
diversity jurisdiction. To remove a case based on diversity jurisdiction, a defendant
must demonstrate “that all of the prerequisites of diversity jurisdiction contained in
28 U.S.C. § 1332 are satisfied.”9 Subject-matter jurisdiction is evaluated at the time
4

Carpenter v. Wichita Falls, 44 F.3d at 366; Acuna v. Brown & Root Inc., 200 F.3d
335, 339 (5 Cir. 2000).
th

5

Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002).

6

Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d at 723, citing Cavallini v.
State Farm Mut. Auto Ins. Co., 44 F.3d 256, 264 (5th Cir. 1995).
7

St. Paul Reinsurance Co., Ltd. v. Greenberg, 134 F.3d 1250, 1253–54 (5th Cir. 1998);
Gaitor v. Peninsular & Occidental S.S. Co., 287 F.2d 252, 253 (5th Cir. 1961).
8

Boone v. Citigroup, Inc., 416 F.3d 382, 388 (5th Cir. 2005); Shearer v. Southwest
Service Life Ins. Co., 516 F.3d 276, 278 (5th Cir. 2008).
9

Smallwood v. Illinois Central Railroad Co., 385 F.3d 568, 572 (5th Cir. 2004) (en

banc).
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of removal. Therefore, “diversity of citizenship must exist both at the time of filing
in state court and at the time of removal to federal court.”10
The jurisdictional statute that Ms. Lisco is relying upon, 28 U.S.C. § 1332(a),
requires complete diversity of citizenship; that is, a district court cannot exercise
subject matter jurisdiction if any plaintiff shares the same citizenship as any
defendant.11 When a lawsuit is initiated, it is sufficient for the plaintiff to allege the
citizenship of the parties. Once subject-matter jurisdiction is challenged, however,
the party invoking the court’s diversity jurisdiction has the burden of proving that
complete diversity of citizenship exists.12 Therefore, the burden is on Ms. Lisco to
prove the citizenship of each and every person or entity that was a party to the suit at
the time of removal.
The plaintiffs’ petition names three parties. Ms. Dupuis and LRC are the
plaintiffs, while Ms. Lisco is the defendant. The petition contains no allegation
concerning Ms. Dupuis’s citizenship. In the memorandum in support of the motion
to remand, however, the plaintiffs allege that Ms. Dupuis is a Louisiana resident and

10

Coury v. Prot, 85 F.3d 244, 249 (5th Cir. 1996).

11

Corfield v. Dallas Glen Hills LP, 355 F.3d 853, 857 (5th Cir. 2003), citing
Strawbridge v. Curtiss, 3 Cranch 267, 7 U.S. 267, 2 L.Ed. 435 (1806).
12

Getty Oil Corp. v. Insurance Co. of North America, 841 F.2d 1254, 1259 (5th Cir.
1988); Guerrero v. State Farm Mut. Auto. Ins. Co., 181 F.3d 97, 97 (5th Cir. 1999).
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domiciliary. (Rec. Doc. 7-1 at 1). The citizenship of a natural person is determined
by the state in which she is domiciled.13 Therefore, the plaintiffs alleged that Ms.
Dupuis is a Louisiana citizen, and that allegation is supported by an affidavit (Rec.
Doc. 7-2 at 1). Accordingly, the court finds that Ms. Dupuis is a Louisiana citizen.
There is no allegation in the original petition regarding Ms. Lisco’s citizenship,
although a Florida address was provided as her service address. The citizenship of
a natural person is determined by the state in which she is domiciled, and domicile
is a combination of both a person's residence and her intent to remain there
permanently.14 Therefore, “an allegation that a party is a resident of a certain state is
not a sufficient allegation of his citizenship in that state.”15 But the petition does not
allege that Ms. Lisco resides at the address given. It merely alleges that she can be
served at that address. Therefore, the petition does not establish Ms. Lisco’s
citizenship. In her memorandum opposing the plaintiffs’ motion to remand, Ms.
Lisco alleges that she is a Florida citizen (Rec. Doc. 12 at 1), but the allegation is not
supported by an affidavit or any other evidence.

13

Hollinger v. Home State Mut. Ins. Co., 654 F.3d 564, 571 (5th Cir. 2011).

14

Hollinger v. Home State Mut. Ins. Co., 654 F.3d at 571.

15

Delome v. Union Barge Line Co., 444 F.2d 225, 233 (5th Cir. 1971).
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In the original petition, it is alleged that plaintiff LRC Energy, LLC is a limited
liability company incorporated in the State of Louisiana with its principal place of
business in St. Landry Parish, Louisiana. (Rec. Doc. 1-1 at 2). This is insufficient
to establish the citizenship of the company. Although a corporation is a citizen of the
state in which it was incorporated and the state in which it has its principal place of
business,16 the rule regarding limited liability companies is different. A limited
liability company is a citizen of every state in which any member of the company is
a citizen,17 and “the citizenship of a LLC is determined by the citizenship of all of its
members.”18 Therefore, the diversity analysis for a limited liability company requires
a determination of the citizenship of every member of the company.19 Ms. Dupuis
contends that she is the sole member of LRC. If so, then LRC is a citizen of
Louisiana only. But Ms. Lisco contends that she is also a member of LRC. If so,

16

28 U.S.C. § 1332(c)(1).

17

See, Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077, 1080 (5th Cir. 2008).

18

Harvey v. Grey Wolf, 542 F.3d at 1080. [Emphasis added.]

19

See, Harvey v. Grey Wolf, 542 F.3d at 1080; Grupo Dataflux v. Atlans Global Group,
L.P., 541 U.S. 567, 585, n. 1 (2004) (noting that courts of appeal have held that the citizenship of
each member of a limited liability company counts for diversity purposes); Carden v. Arkoma
Assocs., 494 U.S. 185, 196 (1990) (holding that the citizenship of an unincorporated entity or
association is based upon the citizenship of all of its members). See also Wright v. JPMorgan Chase
Bank, NA, No. 09-cv-0482, 2009 WL 854644, at *1 (W.D. La. Mar. 26, 2009) (“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.”)
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then LRC is a citizen of both Louisiana and Florida. Ms. Lisco has the burden of
proving that this Court has subject-matter jurisdiction. Therefore, she has the burden
of proving LRC’s citizenship. This, she has not done.
In the original petition, it is alleged that plaintiff LRC Energy, LLC is a limited
liability company incorporated in the State of Louisiana with its principal place of
business in St. Landry Parish, Louisiana. This is insufficient to establish the
citizenship of the company. Although a corporation is a citizen of the state in which
it was incorporated and the state in which it has its principal place of business,20 the
rule regarding limited liability companies is different. A limited liability company
is a citizen of every state in which any member of the company is a citizen,21 and “the
citizenship of a LLC is determined by the citizenship of all of its members.”22
Therefore, the diversity analysis for a limited liability company requires a
determination of the citizenship of every member of the company.23 Ms. Dupuis

20

28 U.S.C. § 1332(c)(1).

21

See, Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077, 1080 (5th Cir. 2008).

22

Harvey v. Grey Wolf, 542 F.3d at 1080. [Emphasis added.]

23

See, Harvey v. Grey Wolf, 542 F.3d at 1080; Grupo Dataflux v. Atlans Global Group,
L.P., 541 U.S. 567, 585, n. 1 (2004) (noting that courts of appeal have held that the citizenship of
each member of a limited liability company counts for diversity purposes); Carden v. Arkoma
Assocs., 494 U.S. 185, 196 (1990) (holding that the citizenship of an unincorporated entity or
association is based upon the citizenship of all of its members). See also Wright v. JPMorgan Chase
Bank, NA, No. 09-cv-0482, 2009 WL 854644, at *1 (W.D. La. Mar. 26, 2009) (“If the members are
themselves partnerships, LLCs, corporations or other form of entity, their citizenship must be alleged
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contends that she is the sole member of LRC. If so, then LRC is a citizen of
Louisiana only. But Ms. Lisco contends that she is also a member of LRC. If so,
then LRC is a citizen of both Louisiana and Florida. Ms. Lisco has the burden of
proving that this Court has subject-matter jurisdiction. Therefore, she has the burden
of proving LRC’s citizenship. This, she has not done.
In her removal notice, Ms. Lisco denied the allegation that Ms. Dupuis is the
sole member of LRC (Rec. Doc. 1 at 1), and she argued that LRC’s citizenship should
be determined on the basis of the allegations set forth in the plaintiffs’ petition (Rec.
Doc. 1 at 1). Ms. Lisco reiterated this argument in her opposition to the plaintiffs’
motion to remand, arguing that the plaintiffs are bound by the allegations set forth in
their petitions. (Rec. Doc. 12 at 2). Given the well-settled law applied to the the
allegations of the petition, it is beyond dispute that the allegations are insufficient to
establish the citizenship of the LLC (as well as Ms. Lisco). Therefore, this argument
lacks merit because it ignores the fact that Ms. Lisco has the burden of proving, by
a preponderance of the evidence, the citizenship of the parties.
In her counterclaim, Ms. Lisco alleges she is a part owner of the LLC. [Rec.
Doc. 4 at 4.]. At the oral argument on this motion, Ms. Lisco’s counsel represented

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.”)
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that Ms. Lisco is a member of the LLC and that he has documentation from the
government supporting his representation. Yet, he argued in open court that this
evidence need not be presented with regard to the instant jurisdictional issue. As the
removing party and the party invoking this Court’s jurisdiction, Ms. Lisco cannot rest
on the plaintiffs’ insufficient allegations as to the citizenship of the parties. Although
she has the burden of proving the citizenship of all of the parties to the suit, she
argued and alleged inconsistent positions with regard to material facts. In at least
one other case from this district, a court provided with contradictory evidence and
inconsistent evidence regarding the facts relevant to a party’s citizenship concluded
that the party submitting the evidence had “failed to carry its burden to support
removal and defeat remand.”24 That same conclusion is inescapable in this case. Ms.
Lisco has not proven that the parties are diverse in citizenship. “[A]ny doubt about
the propriety of removal must be resolved in favor of remand.”25 Ms. Lisco’s failure
to prove LRC’s citizenship by a preponderance of the evidence requires that this
matter be remanded without the court considering whether the amount-in-controversy
requirement has been satisfied.

24

Fogleman v. Meaux Surface Prot., Inc., No. 07-1485, 2008 WL 4001861, at *7 (W.D.
La. Aug. 27, 2008).
25

Gasch v. Hartford Acc. & Indem. Co., 491 F.3d 278, 281–82 (5th Cir. 2007).
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CONCLUSION
For the foregoing reasons, the plaintiffs’ motion to remand (Rec. Doc. 7) is
GRANTED, and this action will be remanded to the 27th Judicial District Court, St.
Landry Parish, Louisiana.
Signed at Lafayette, Louisiana, on October 27, 2015.

____________________________________
PATRICK J. HANNA
UNITED STATES MAGISTRATE JUDGE

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