AMOROSO v. SCHMITT et al
Filing
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OPINION filed. Signed by Judge Mary L. Cooper on 11/13/2013. (eaj)
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
:
JAYSON AMOROSO (individually and : CIVIL ACTION NO. 13-5297 (MLC)
in his capacity as 50 percent
:
owner of NEW WAY RECRUITING LLC), :
MEMORANDUM OPINION
:
Plaintiff,
:
:
v.
:
:
TERESA SCHMITT (individually and :
in her capacity as 50 percent
:
owner of NEW WAY RECRUITING LLC), :
et al.,
:
:
Defendants.
:
:
THE PLAINTIFF, Jayson Amoroso, brings this action in his
individual capacity and in his capacity as 50 percent owner of
New Way Recruiting LLC (“NWRLLC”), against the defendants, (1)
Teresa Schmitt, in her individual capacity and in her capacity as
50 percent owner of NWRLLC, (2) Kylmar Solutions LLC (“KSLLC”),
and (3) “John and Jane Does 1-10”.
(See dkt. entry no. 1,
Compl.; dkt. entry no. 3, Am. Compl.)
Amoroso seeks to recover
damages for (1) breach of fiduciary duty, (2) misappropriation,
(3) fraudulent misrepresentation, (4) breach of management
duties, (5) tortious interference with prospective economic
advantage, (6) unfair competition, and (7) conspiracy to commit a
tort.
(See Am. Compl. at 7-10.)
AMOROSO brought the action on September 4, 2013.
generally dkt. entry no. 1 (noting filing date).)
(See
He asserts
subject-matter jurisdiction under 28 U.S.C. § 1332(a)(1)
(“Section 1332(a)(1)”) .
(See Am. Compl. at 2.)
THE COURT intends to dismiss the Amended Complaint without
prejudice, as the plaintiff’s allegations are deficient on
several grounds.
See Fed.R.Civ.P. 12(h)(3) (instructing district
court to dismiss complaint if jurisdiction is lacking).
AMOROSO fails to allege his own citizenship or Schmitt’s
citizenship.
Amoroso merely alleges that he “resides” in New
Jersey and that Schmitt “resides” in Pennsylvania.
Compl. at 2.)
(See Am.
See McNair v. Synapse Grp., 672 F.3d 213, 219 n.4
(3d Cir. 2012) (stating allegation as to mere residency is
“jurisdictionally inadequate” in action brought under Section
1332(a)(1)); see also O’Brien v. Nowicki, 490 Fed.Appx. 506, 508
n.2 (3d Cir.) (stating “[o]f course, citizenship and residency
are not synonymous”), cert. denied, 133 S.Ct. 2376 (2013).
AMOROSO fails to properly allege KSLLC’s citizenship.
Amoroso alleges, without more, that (1) KSLLC “is a Limited
Liability Company formed under the laws of . . . Pennsylvania”
with “a principal place of business [in] Pennsylvania”, and (2)
Schmitt has an ownership interest in KSLLC.
(Am. Compl. at 2.)
But limited liability companies are unincorporated associations.
Thus, they are deemed to be citizens of the states in which all
of their members are citizens, not the states in which (1) they
were formed, (2) they have their principal places of business,
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and (3) only one of the members is a citizen.
Zambelli Fireworks
Mfg. Co. v. Wood, 592 F.3d 412, 418-20 (3d Cir. 2010).
The
citizenship of each membership layer must be traced and analyzed
to determine a limited liability company’s citizenship.
420.
Id. at
The name and citizenship of each member must be
specifically alleged.
See S. Freedman & Co. v. Raab, 180
Fed.Appx. 316, 320 (3d Cir. 2006) (stating citizenship is to be
alleged “affirmatively and distinctly”); Vail v. Doe, 39
F.Supp.2d 477, 477 (D.N.J. 1999) (stating citizenship allegation
that is based upon information and belief “does not convince the
Court that there is diversity among the parties”).
AMOROSO fails to allege the citizenship of “John and Jane
Does 1-10”, even though he asserts substantive allegations
against them.
(See Am. Compl. at 1, 9-11.)
Here, Amoroso must
allege the citizenship of each fictitious defendant in order to
demonstrate that the Court has subject-matter jurisdiction under
Section 1332(a)(1).
See Howell v. Tribune Entm’t Co., 106 F.3d
215, 218 (7th Cir. 1997) (stating that “because the existence of
diversity jurisdiction cannot be determined without knowledge of
every defendant’s place of citizenship, ‘John Doe’ defendants are
not permitted in federal diversity suits”); Abels v. State Farm
Fire & Cas. Co., 770 F.2d 26, 31-32 (3d Cir. 1985) (concluding
“that the Doe allegations here are sufficient on their face to
defeat diversity jurisdiction” because they were asserted “[w]ith
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[a] degree of specificity”, and thus “we cannot say that the Doe
defendants are mere ‘phantoms’ who ‘live not and are accused of
nothing’”).
IT ALSO APPEARS that Amoroso brings this action on behalf of
NWRLLC against Schmitt in her capacity as a member of NWRLLC.1
This is not jurisdictionally permissible.
See Techstar Inv.
P’ship v. Lawson, No. 94-6279, 1995 WL 739701, at *3 (E.D. Pa.
Dec. 8, 1995) (stating there is common citizenship on both sides
of action when unincorporated entity and member of that entity
are adversaries); DPCC, Inc. v. Cedar Fair, L.P., 21 F.Supp.2d
488, 490 (E.D. Pa. 1998) (granting motion to remand where
unincorporated entity and member of that entity are adversaries);
Nomura Asset Capital v. Overland Co., No. 02-1604, 2003 WL
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Amoroso makes several allegations on behalf of NWRLLC.
(See, e.g., Am. Compl. at ¶ 21 (“Neither Mr. Amoroso nor New Way
approved of or knew about this agreement.”); ¶ 23 (“Neither Mr.
Amoroso nor New Way approved of or knew about this agreement.”);
¶ 53 (“Ms. Schmitt intentionally made false statements of fact
and failed to communicate material facts to Mr. Amoroso so that
she could engage in transactions that would personally benefit
her individually, while damaging Mr. Amoroso and New Way.”); ¶ 67
(“Kylmar Solutions LLC and Jane and John Does 1-10 jointly,
severally and/or alternatively intentionally, tortiously and
unjustifiably interfered with the relationships between New Way
and its clients as part of the scheme to divert business away
from Plaintiff and New Way for their own benefit.”); ¶ 76 (“New
Way (and, as 50% owner, Plaintiff) has suffered a loss of and/or
harm to its competitive advantage and reputation, loss of the
confidentiality of its information, and/or loss of fair
competition.”).)
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138093, at *1-3 (D. Del. Jan. 8, 2003) (same).
When the first
member on behalf of an unincorporated entity brings an action
against the second member in the second member’s capacity as a
member of the same unincorporated entity, “the doors of the
federal courts” are “effectively close[d]” to that action.
Bankston v. Burch, 27 F.3d 164, 168-69 (5th Cir. 1994).
Furthermore, it appears that NWRLLC’s presence is required in
this action.
See Fed.R.Civ.P. 19(a)(1).
AMOROSO has failed to show that complete diversity of
citizenship exists here.
See Lincoln Prop. Co. v. Roche, 546
U.S. 81, 89 (2005) (requiring complete diversity between each
plaintiff and each defendant).
Thus, the Court will dismiss the
Amended Complaint, but will do so without prejudice to Amoroso to
exercise one of two options within thirty days.
Amoroso may
recommence the action in state court, as the limitations period
for the cause of action is tolled by the filing of a federal
complaint.
See Jaworowski v. Ciasulli, 490 F.3d 331, 333-36 (3d
Cir. 2007); Galligan v. Westfield Ctr. Serv., 82 N.J. 188, 191-95
(1980).
Or Amoroso may move in accordance with both the Federal
Rules of Civil Procedure and the Local Civil Rules to reopen the
action in federal court, with supporting documentation:
(1) demonstrating which state he was a citizen of
specifically on September 4, 2013;
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(2) demonstrating which state Schmitt was a citizen of
specifically on September 4, 2013;
(3) listing each member — including each non-managing and
non-individual member — within KSLLC on September 4, 2013, and
analyzing the citizenship of each member within KSLLC as it
existed specifically on September 4, 2013;
(4) demonstrating which states “John and Jane Does 1-10”
were citizens of specifically on September 4, 2013; and
(5) addressing the apparent jurisdictional bar to this
action in federal court.
IF AMOROSO opts to move to reopen in federal court, then he
will do so at his own peril, as the Court will not further extend
the thirty-day period to proceed in state court.
Amoroso is also
advised that jurisdiction is measured “against the state of facts
that existed at the time of filing”, and thus he must explicitly
allege citizenship as it existed on September 4, 2013.
Grupo
Dataflux v. Atlas Global Grp., 541 U.S. 567, 571 (2004).
THE COURT cautions Amoroso — if he opts to move to reopen —
against restating the allegations from the Amended Complaint.
The Court advises Amoroso that an allegation as to where any
individual party resides, is licensed, or has a place of business
— as opposed to is a citizen or is domiciled — will not properly
invoke the Court’s jurisdiction.
See McCracken v. ConocoPhillips
Co., 335 Fed.Appx. 161, 162-63 (3d Cir. 2009); Cruz v.
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Pennsylvania, 277 Fed.Appx. 160, 162 (3d Cir. 2008).
The Court
also advises Amoroso that an allegation based upon information
and belief, an assertion that is not specific (e.g., citizen of
“a state other than New Jersey”), or a request for time to
discern jurisdiction will result in denial of a motion to reopen,
as Amoroso should have ascertained subject-matter jurisdiction
before choosing to bring the action in federal court.
AS AMOROSO is represented by counsel, the Court “should not
need to underscore the importance of adequately pleading and
proving diversity”.
CGB Occupational Therapy v. RHA Health
Servs., 357 F.3d 375, 382 n.6 (3d Cir. 2004).
The Court will
issue an appropriate order and judgment.
s/ Mary L. Cooper
MARY L. COOPER
United States District Judge
Dated: November 13, 2013
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