Smith v. Blitz U.S.A., Inc. et al

Filing 84

ORDER that on or before May 23, 2012, Plaintiff shall serve and file a new Amended Complaint pleading with specificity the citizenship of all parties. (Written Opinion). Signed by Judge Richard H. Kyle on 05/10/12. (kll)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

Robyn Smith for Devan VanBrunt, a minor,
by his mother and natural guardian,
Plaintiff,
Civ. No. 11-1771 (RHK/LIB)
ORDER

v.
Blitz U.S.A., Inc., et al.,
Defendants.

This matter is before the Court sua sponte.
This is a personal-injury action in which Plaintiff’s son purportedly was injured by
the explosion of a gas can manufactured by Defendant Blitz U.S.A., Inc. (“Blitz”) and
purchased at a Wal-Mart store. Plaintiff commenced this action in June 2011 in the Clay
County, Minnesota District Court, naming as Defendants (1) Blitz and (2) Wal-Mart
Stores, Inc., Wal-Mart Stores East, LP, and Wal-Mart Stores East, Inc. (collectively,
“Wal-Mart”). Invoking diversity jurisdiction, Defendants timely removed the action to
this Court.
In November 2011, Blitz filed for bankruptcy, rendering the claims against it
automatically stayed under 11 U.S.C. § 362. Shortly thereafter, Plaintiff moved for leave
to amend her Complaint to add as Defendants Kinderhook Capital Fund II, L.P. (the
“Fund”) and Kinderhook Industries, LLC (“Kinderhook,” and together with the Fund, the
“Kinderhook Entities”), which she alleged were the “corporate entities that have been
used to funnel the corporate assets and profits out of” Blitz. (Doc. No. 26 at 2.) The

proposed Amended Complaint contained detailed allegations regarding the relationship
between Blitz and the Kinderhook Entities, against which Plaintiff intended to assert a
claim for piercing the corporate veil. (See Proposed Am. Compl. ¶¶ 88-116 (Doc. No.
26, Ex. A).) As no opposition was filed, the Magistrate Judge granted the Motion on
March 2, 2012. (See Doc. No. 60.) Plaintiff then filed her First Amended Complaint,
invoking diversity jurisdiction under 28 U.S.C. § 1332 and naming as Defendants Blitz,
Wal-Mart, and the Kinderhook Entities. (Doc. No. 61.)
The First Amended Complaint, however, has left it unclear whether diversity
jurisdiction remains over this case. Plaintiff has adequately pleaded that she is (and her
son is) a citizen of Minnesota, that Blitz is a citizen of Oklahoma, and that Wal-Mart is a
citizen of Delaware and Arkansas. (See First Am. Compl. ¶¶ 5-7.) But the First
Amended Complaint also asserts claims against (1) the Fund, which is alleged to be a
“limited partnership organized under the laws of Delaware with its principal place of
business in New York, New York” (Doc. No. 83, ¶ 4; accord First Am. Compl. ¶ 8), and
(2) Kinderhook, which is alleged to be a “Delaware limited liability company with its
principal place of business in New York, New York” (Doc. No. 83, ¶ 3; accord First Am.
Compl. ¶ 8). Yet, the citizenship of a limited partnership is determined by that of its
general and limited partners, Carden v. Arkoma Assocs., 494 U.S. 185, 195-97 (1990),
and the citizenship of a limited liability company is determined by that of its members,
OnePoint Solutions, LLC v. Borchert, 486 F.3d 342, 346 (8th Cir. 2007); GMAC
Commercial Credit LLC v. Dillard Dep’t Stores, Inc., 357 F.3d 827, 829 (8th Cir. 2004).
Because the First Amended Complaint provides no information regarding the Fund’s

-2-

partners or Kinderhook’s members, it is impossible to discern whether diversity
jurisdiction continues to exist in this case. And in the absence of subject-matter
jurisdiction, the Court cannot proceed. 28 U.S.C. § 1447(c) (“If at any time before final
judgment it appears that the district court lacks subject matter jurisdiction, the case shall
be remanded.”).
Based on the foregoing, and all the files, records, and proceedings herein, IT IS
ORDERED that, on or before May 23, 2012, Plaintiff shall serve and file a new
Amended Complaint pleading with specificity the citizenship of all parties. As noted
above, that requires her to, inter alia, identify and plead the citizenship of each of the
Fund’s partners and each of Kinderhook’s members. 1

Date: May 10, 2012

s/Richard H. Kyle
RICHARD H. KYLE
United States District Judge

1

If the new Amended Complaint reveals that adding the Kinderhook Entities to this case would
destroy diversity jurisdiction, the Court will revisit its decision granting Plaintiff leave to amend.
The Eighth Circuit has counseled that “when a trial court grants a plaintiff leave to amend the
complaint by naming additional defendants, and the plaintiff fails to inform the court that one or
more of those defendants will destroy diversity,” the amendment “should be considered a nullity
and the Court given an opportunity to consider whether justice requires that [the plaintiff] be
permitted to join [the additional] defendant.” Bailey v. Bayer CropScience, L.P., 563 F.3d 302,
307 (8th Cir. 2009). That is consistent with 28 U.S.C. § 1447(e), which provides: “If after
removal the plaintiff seeks to join additional defendants whose joinder would destroy subject
matter jurisdiction, the court may deny joinder, or permit joinder and remand the action.”
-3-