US CONSULTING GROUP v. ALDI, INC. et al

Filing 17

OPINION. Signed by Chief Judge Jerome B. Simandle on 3/27/2012. (dmr)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

U.S. CONSULTING GROUP,
Plaintiff,

HON. JEROME B. SIMANDLE
Civil No. 11-2778 (JBS/KMW)

v.
OPINION
ALDI, INC. & UNIDENTIFIED
ENTITIES A THROUGH Z,
Defendants.

APPEARANCES:
Ross H. Schmierer, Esq.
PARIS ACKERMAN & SCHMIERER LLP
101 Eisenhower Parkway
Roseland, NJ 07068
Counsel for Plaintiff
Walter John Fleischer, Jr., Esq.
Deirdre Russo Kole, Esq.
DRINKER, BIDDLE & REATH, LLP
500 Campus Drive
Florham Park, NJ 07932
Counsel for Defendant Aldi, Inc.

SIMANDLE, Chief Judge:
I.

INTRODUCTION
This matter is before the Court on Defendant Aldi, Inc.’s

motion to dismiss the Complaint because of Plaintiff’s failure to
properly register with the State of New Jersey so as to be
eligible to sue in New Jersey Courts.

[Docket Item 4.]

The

principal issue is whether Plaintiff has subsequently paid all
fees and penalties owing in order to be able to bring suit.

II.

BACKGROUND
According to the Complaint, Plaintiff U.S. Consulting Group

performed consulting work for Defendant Aldi, Inc., a grocery
store chain.

Plaintiff alleges that Aldi breached an agreement

to use Plaintiff's services on a national scale and
misappropriated Plaintiff's intellectual property with respect to
waste removal and recycling practices.

Plaintiff filed a

complaint for breach of contract, misappropriation, unjust
enrichment, fraud, and breach of implied duties against Aldi and
unnamed defendants in New Jersey Superior Court, and Aldi removed
this matter to this Court based on diversity of citizenship
pursuant to 28 U.S.C. § 1332.

Notice of Removal ¶ 4.

Aldi is a

corporation organized and existing under the laws of the state of
Illinois, whose principal place of business is located in
Illinois; the Complaint alleged that Plaintiff was a Nevada
corporation, which, as will be seen, was incorrect.
Defendant filed a motion to dismiss pursuant to Rule
12(b)(6), Fed. R. Civ. P., asserting that New Jersey rescinded
Plaintiff’s authority to transact business here because Plaintiff
failed to file annual reports two years in a row.

Fleischer

Cert. ¶¶ 3-4; N.J. Stat. Ann. § 14A:13-14 to 14A:13-23.
Defendant also noted that Plaintiff appears to be a limited
liability company rather than a corporation, in which case
Plaintiff was barred from suit by N.J. Stat. Ann. § 42:2B–57a for

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similar reasons.

See N.J. Stat. Ann. § 14A:13-11(1) (prohibiting

corporations from "maintain[ing] any action or proceeding in any
court of this State, until such corporation shall have obtained a
certificate of authority."); N.J. Stat. Ann. § 42:2B-57 (barring
foreign limited liability companies from maintaining actions in
New Jersey until properly registered).
In response to the motion to dismiss, Plaintiff explained
that the pleadings were in error and that Plaintiff is indeed a
Nevada limited liability company, and that since the time of
filing this action Plaintiff has brought itself into compliance
with New Jersey’s requirements and may bring suit under N.J.
Stat. Ann. § 42:2B–57a.

See Epstein Aff. ¶¶ 5-8.

III. DISCUSSION
A.

Stipulation to Amendment to Pleading

It is axiomatic that the pleadings cannot be amended by
representations made by counsel in motion briefing.

See Com.of

Pa. ex rel. Zimmerman v. PepsiCo, Inc., 836 F.2d 173, 181 (3d
Cir. 1988).

For the sake of efficiency, the parties have agreed

at a hearing on March 26, 2012 to stipulate to an amendment to
the pleadings correctly identifying Plaintiff as a Nevada limited

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liability company with no Illinois members, and to apply
Defendant’s motion to that pleading.1

B.

Compliance with § 42:2B-57

Defendant concedes that because Plaintiff is a limited
liability company, not a corporation, the sole question is
Plaintiff’s compliance with N.J. Stat. Ann. § 42:2B-57.2
The statute provides that a foreign limited liability
company may not maintain suit in New Jersey “until it has
registered in this State, and has paid to this State all fees and
penalties for the years or parts thereof, during which it did
business in this State without having registered.”
Ann. § 42:2B-57a.

N.J. Stat.

However, New Jersey courts read the statute to

1

In the Third Circuit, “the citizenship of an LLC is
determined by the citizenship of its members.” Zambelli
Fireworks Mfg. Co., Inc. v. Wood, 592 F.3d 412, 420 (3d Cir.
2010). Since neither the Complaint nor removal petition
contained information about the membership of Plaintiff, the
Court inquired into whether any of the members of U.S. Consulting
Group were citizens of Illinois, the location of Defendant’s
citizenship. At oral argument on March 5, 2012, Plaintiff
represented and Defendant agreed that U.S. Consulting Group does
not have any members who are citizens of Illinois. Therefore,
there is complete diversity sufficient for jurisdiction under 28
U.S.C. § 1332.
2

Because there is no suggestion that Plaintiff is a
corporation under the definition provided in N.J. Stat. Ann. §
14A:13-17, neither § 14A:13-20(b) nor § 14A:13-11(1) are
applicable. See N.J. Stat. Ann. § 14A:13-17 (defining
“corporation” as “any corporation, joint-stock company or
association and any business conducted by a trustee or trustees
wherein interest or ownership is evidenced by a certificate of
interest or ownership or similar written instrument.”).
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permit a company to register and repair its past failures during
the pendency of the suit to avoid dismissal.

See Danka Funding,

L.L.C. v. Page, Scrantom, Sprouse, Tucker & Ford, P.C., 21 F.
Supp. 2d 465, 473 (D.N.J. 1998).
Acknowledging this, Defendant contends that Plaintiff has
not proved that it “paid to this State all fees and penalties for
the years or parts thereof, during which it did business in this
State without having registered.”

§ 42:2B-57a.3

Defendant

contends that based on an attachment to Plaintiff’s accountant’s
affidavit, all that has been paid is $250 for five years of
annual reports, $25 for an agent change, and $275 for
reinstatement.

Pls.’ Ex. A1.

But these payments are all the statute requires to be paid
for reinstatement.

N.J. Stat. Ann. § 42:2B-8.1(b)(3) provides

that if a certificate has been revoked, “the certificate shall be
reinstated by proclamation of the Secretary of State upon payment
of all fees due to the Secretary of State, consisting of a
reinstatement filing fee, current annual report fee, all
delinquent annual report fees, and a late filing fee.”

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§ 42:2B-

Defendant contends that N.J. Stat. Ann. § 14:13-20(c)
lists the requirements of post-filing compliance to include “the
burden of establishing that: (1) the failure to file a timely
report was done in ignorance of the requirement to file, such
ignorance was reasonable in all circumstances; and (2) all taxes,
interest and civil penalties due the State for all periods have
been paid, or provided for by adequate security or bond approved
by the director, before the suit may proceed." N.J. Stat. Ann. §
14:13-20(c). However, Title 42 has no analogous requirement.
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8.1(b)(3); see also N.J. Stat. Ann. § 42:2B-65(a)(7) (providing
for a fee “[u]pon requesting a reinstatement of a certificate of
a limited liability company” including “a late filing fee of
$200.00 and a reinstatement filing fee of $75.00.”).
Defendant does not identify any additional penalty that
would apply and is unpaid.

To the extent that it is Plaintiff’s

burden to show that there are no such penalties, this burden is
met by Plaintiff’s accountant’s sworn statement that “I spoke to
the Department of Treasury to ascertain what, if any, fees and
penalties USCG owed to the State of New Jersey,” Matteo Aff. ¶ 5,
and that “I paid all of the fees and penalties USCG owed to the
State of New Jersey.”

Id. ¶ 6.

The Court therefore concludes

that Plaintiff has taken all necessary action to repair its past
failures, in accordance with N.J. Stat. Ann. § 42:2B-8.1(b)(3),
so dismissal is not warranted.

See Danka Funding, 21 F. Supp. 2d

at 473.

IV.

CONCLUSION
The parties have agreed to permit this Court to consider the

pending motion as applied to the stipulated version of the
pleadings declaring Plaintiff to be a Nevada limited liability
company.

Because no member of the company is an Illinois

citizen, this Court has subject matter jurisdiction.

And because

Plaintiff has paid to New Jersey all fees and penalties for the

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period of its registration delinquency, this suit may proceed.
The Court will deny the motion and order Plaintiff to file the
stipulated-to amended pleading within seven days.

The

accompanying Order will be entered.

March 27, 2012
Date

s/ Jerome B. Simandle
JEROME B. SIMANDLE
Chief U.S. District Judge

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