Eaton et al v. Meathe

Filing 65

ORDER TO SHOW CAUSE: parties to show cause by 12/8/2011 why this case should not be remanded to the Ingham County Circuit Court for lack of subject-matter jurisdiction; expiration of discovery and motion cutoff dates is stayed pending further order of court; plf's motion for sanctions 57 is dismissed as moot; signed by Magistrate Judge Joseph G. Scoville (Magistrate Judge Joseph G. Scoville, mmh)

UNITED STATES OF AMERICA
UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

A. GREGORY EATON, et al.,

)
)
Plaintiffs,
)
)
v.
)
)
CULLAN F. MEATHE,
)
)
Defendant.
)
____________________________________)

Case No. 1:11-cv-178
Honorable Robert Holmes Bell

ORDER TO SHOW CAUSE

This is a civil action alleging claims for fraud, breach of an operating agreement, and
conversion. Plaintiffs are Lansing Farms, LLC, a limited liability company, and A. Gregory Eaton,
a member of the limited liability company. Defendant is Cullan F. Meathe, the other member of the
plaintiff LLC. By notice of removal filed February 18, 2011, defendant removed the matter from
the Ingham County Circuit Court to this court, allegedly on the basis of complete diversity of
citizenship. 28 U.S.C. § 1332(a). The notice of removal (docket # 1, ¶ 3) identifies plaintiff Lansing
Farms, LLC as a citizen of the State of Michigan, based on the state of its incorporation and its
principal place of business.
Upon review of the notice of removal, I conclude that this court may lack subjectmatter jurisdiction on the basis of diversity of citizenship. Under controlling law, a limited liability
corporation does not derive its citizenship from its states of incorporation and principal place of
business. See Delay v. Rosenthal Collins Group, LLC, 585 F.3d 1003, 1005 (6th Cir. 2009). Rather,
a limited liability corporation has the citizenship of each of its members. Id.; accord V&M Star, L.P.

v. Centimark Corp., 596 F.3d 354, 356 (6th Cir. 2010). Under these authorities, plaintiff Lansing
Farms, LLC has the citizenship of each of its two members: Michigan (derived from its member
plaintiff A. Gregory Eaton) and Florida (derived from its other member, defendant Cullan Meathe).
Because Mr. Meathe is a citizen of the State of Florida, as is plaintiff, diversity of citizenship
apparently does not exist.
The parties are hereby ordered to show cause, if any they have, why this case should
not be remanded to the Ingham County, Michigan, Circuit Court for lack of subject-matter
jurisdiction pursuant to 28 U.S.C. § 1447(c). The parties must show cause no later than December
8, 2011, by filing a brief, supported by evidentiary materials if desired, demonstrating the existence
of complete diversity of citizenship. After the time for response of this order has expired, the district
judge will review the record and determine whether this court has subject-matter jurisdiction.
Pending resolution of the jurisdictional issue, discovery shall proceed. The expiration
of the discovery cutoff and motion cutoff dates is hereby STAYED, pending further order of the
court. Plaintiff’s motion for sanctions (docket # 57) is hereby DISMISSED as moot.

DONE AND ORDERED this 28th day of November, 2011.

/s/ Joseph G. Scoville
United States Magistrate Judge

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