Palmiotti v. JAF Carrier L.L.C. d/b/a Bagir Trucking et al
Filing
98
ORDER re: [50,59] : The motions of defendants are granted to the extent that this case is remanded to the Supreme Court, Suffolk Court. Plaintiffs motion to amend her complaint is denied. See attached Memorandum & Order. Ordered by Judge Denis R. Hurley on 3/28/2017. (Gapinski, Michele)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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WINONA MAE PALMIOTTI,
Plaintiff,
-against-
MEMORANDUM & ORDER
15-CV-2365 (DRH)(ARL)
JAF CARRIER L.L.C. d/b/a Bagir Trucking, C.H.
ROBINSON COMPANY INC., C.H. ROBINSON
TRANSPORTATION COMPANY, C.H.
ROBINSON WORLDWIDE, INC., JOSE
CARANZA a/k/a Jose Cruz, and JETRO CASH
AND CARRY ENTERPRISE, LLC,
Defendants.
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APPEARANCES:
Jaroslawicz & Jaros
Attorneys for Plaintiff
225 Broadway, 24th Floor
New York, NY 10007
By:
David Jaroslawicz, Esq.
Norman E. Frowley, Esq.
Dopf, P.C.
Attorneys for Defendant JAF Carrier, LLC, s/h/a JAF Carrier, L.L.C. d/b/a Bagir Trucking
440 Ninth Avenue
New York, NY 10001
By:
Martin B. Adams, Esq.
Wilson, Elser, Moskowitz, Edelman & Dicker LLP
Attorneys for Defendants C.H. Robinson Company, Inc., C.H. Robinson Transportation
Company Inc. and C.H. Robinson Worldwide, Inc.
1133 Westchester Avenue
White Plains, NY 10604
By:
Lindsay J. Kalick, Esq.
Morris Duffy Alonso & Faley
Attorneys for Defendant Jetro Cash and Carry Enterprises, LLC s/h/a Jetro Cash and Carry
Enterprise, LLC
Two Rector Street, 22d Floor
New York, NY 10006
By:
Mark Healy, Esq.
HURLEY, Senior District Judge:
This is an action to recover for personal injuries sustained by Plaintiff Winona Mae
Palmiotti (“Plaintiff” or “Palmiotti”). Presently before the Court is a motion by the defendants
challenging the existence of diversity subject matter jurisdiction and a motion by Plaintiff to
amend her complaint. For the reasons set forth below, defendants’ motion is granted to the
extent that this matter is remanded to the Supreme Court, Suffolk County, and Plaintiff’s motion
is denied.
PROCEDURAL BACKGROUND
As commenced in state court, the complaint named as defendants JAF Carrier, LLC, s/h/a
JAF Carrier, L.L.C. d/b/a Bagir Trucking (“JAF”), C.H. Robinson Company, Inc., C.H. Robinson
Transportation Company Inc. and C.H. Robinson Worldwide, Inc. (collectively “Robinson
Defendants”) and Jose Caranza a/k/a Jose Cruz (“Caranza”). That complaint identified the parties
as follows: Plaintiff as a resident of New York; JAF as a “foreign limited liability company”
organized under the laws of Virginia; and the Robinson defendants as foreign corporations
organized under the laws of Minnesota (Company and Transportation) and Delaware
(Worldwide). On April 27, 2015, the Robinson Defendants removed the action to this Court on
the ground of diversity of citizenship.1
By stipulation of the parties approved by the Court, plaintiff filed an amended complaint
on December 3, 2015 adding Jetro Cash and Carry Enterprise, LLC (“Jetro”) as a defendant. The
1
While the state court complaint did not allege the citizenship of Caranza, the notice of
removal identified him as a citizen of Virginia. After the action was removed, Plaintiff dismissed
her claims against Caranza.
Page 2 of 12
amended complaint alleges that Jetro “is a domestic limited liability company, duly organized
and existing under and by virtue of the laws of the State of New York.” (DE 25 at ¶ 11.)2
Shortly after answers to the amended complaint were filed, JAF sought leave to file a
motion directed to subject matter jurisdiction and seeking dismissal of this action and its remand
to state court. Similar requests by Jetro and the Robinson Defendants soon followed, as well as a
request by plaintiff to file a motion to amend her complaint. Leave was granted and the following
motions have been filed: (1) a motion to dismiss by JAF, in which the Robinson Defendants join;
(2) a motion to dismiss and remand by Jetro; and (3) a motion to amend the complaint by
plaintiff. The motions by JAF and Jetro both focus on Jetro’s citizenship.
DISCUSSION
I.
Standard of Review
A.
Federal Rule of Civil Procedure 12(b)(1)
“A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1)
when the district court lacks the statutory or constitutional power to adjudicate it.” Makarova v.
United States, 201 F.3d 110, 113 (2d Cir. 2000). “The party invoking federal jurisdiction bears
the burden of proving facts to establish that jurisdiction.” Linardos v. Fortuna, 157 F.3d 945, 947
(2d Cir. 1998). “In resolving a motion to dismiss for lack of subject matter jurisdiction, the Court
may consider affidavits and other materials beyond the pleadings to resolve jurisdictional
questions.” Cunningham v. Bank of New York Mellon, N.A., 2015 WL 4101839, * 1 (E.D.N.Y.
July 8, 2015) (citing Morrison v. Nat'l Australia Bank, Ltd., 547 F.3d 167, 170 (2d Cir. 2008)).
2
The Court notes that Jetro’s answer denies the allegation that it was organized under the
laws of New York.
Page 3 of 12
B.
28 U.S.C. § 1447
28 U.S.C.§ 1447 provides for the procedure after a case has been removed to federal
court. Subsection (c) explainns that “[i]f at any time before final judgment it appears that the
district court lacks subject matter jurisdiction, the case shall be remanded.” 28 U.S.C.§ 1447(c).
It is the appropriate standard to apply where, as here, a complaint has been amended to add a
party and it is claimed that the amendment has destroyed complete diversity thereby divesting the
court of jurisdiction. Rosenfeld v. Lincoln Life Ins. Co., – F. Supp.3d –, 2017 WL 945114, *2
(E.D.N.Y. Mar. 9, 2017).
C.
Principles Regarding Diversity Jurisdiction
Diversity jurisdiction exists when all plaintiffs are citizens of states diverse from those of
all defendants. Pennsylvania Pub. Sch. Employees' Ret. Sys. v. Morgan Stanley & Co., Inc., 772
F.3d 111, 117- 18 (2d Cir. 2014) (citing Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S.
546, 553 (2005)). The party asserting diversity jurisdiction has the burden to prove the same.
Pennsylvania Pub. Sch. Employees' Ret. Sys., 772 F.3d at 118. "[D]iversity of citizenship should
be distinctly and positively averred in the pleadings, or should appear with equal distinctness in
other parts of the record[.]" Leveraged Leasing Admin. Corp. v. PacificCorp Capital, Inc., 87
F.3d 44, 47 (2d Cir. 1996) (internal quotation marks omitted). "A conclusory allegation in the
Complaint regarding diversity of citizenship does not extinguish the Court's responsibility to
determine, on its own review of the pleadings, whether subject matter jurisdiction exists."
Richmond v. International Bus. Machs. Corp., 919 F. Supp. 107, 108 (E.D.N.Y. 1996), aff'd, 841
F.2d 1116 (2d Cir. 1988). For the purpose of diversity jurisdiction, "a statement of the parties'
residence is insufficient to establish their citizenship." Davis v. Cannick, 2015 WL 1954491, at
Page 4 of 12
*2 (E.D.N.Y. 2015); Young-Gibson v. Patel, 476 F. App'x 482, 483 (2d Cir. June 12, 2012)).
“For purposes of diversity jurisdiction, [an individual’s] citizenship depends on his
domicile.” Linardos v. Fortuna, 157 F.3d 945, 948 (2d Cir. 1998).
A corporation is deemed to be a citizen of the state in which it is incorporated and of the
state or foreign state where it has its principal place of business. 28 U.S.C. 1332(c)(1); Carter v.
HealthPort Tech., LLC, 882 F.3d 47, 60 (2d Cir. 2016). “A corporation's principal place of
business under § 1332 is ‘the place where a corporation's officers direct, control, and coordinate
the corporation's activities.’ In practice, this ‘should normally be the place where the corporation
maintains its headquarters—provided that the headquarters is the actual center of direction,
control, and coordination, i.e., the nerve center.’” OneWest Bank, N.A. v. Melina, 827 F.3d 214,
218 (2d Cir. 2016) (quoting Hertz Corp. v. Friend, 559 U.S. 77, 92–93 (2010)).
The citizenship of a limited liability company (“LLC”) is determined by the citizenship of
each of its members. See, e.g., Bayerische Landesbank, New York Branch v. Aladdin Capital
Management LLC, 692 F.3d 42, 49 (2d Cir. 2012); Handelsman v. Bedford Vill. Assocs. Ltd
P’ship, 213 F.3d 48, 51–52 (2d Cir. 2000). “A complaint premised upon diversity of citizenship
must allege the citizenship of natural persons who are members of a limited liability company
and the place of incorporation and principal place of business of any corporate entities who are
members of the limited liability company.” New Millennium Capital Partners, III, LLC v.
Juniper Grp. Inc., 2010 WL 1257325, at *1 (S.D.N.Y. Mar. 26, 2010), (citing Handelsman, 213
F.3d at 51–52); Bishop v. Toys “R” Us-NY LLC, 414 F. Supp.2d 385, 389 n.1 (S.D.N.Y. 2006),
aff’d, 385 Fed. App’x 38 (2d Cir. 2010). If the member or members of a limited liability
company are themselves a limited liability company, citizenship is determined by an upstream
Page 5 of 12
analysis of its members and structure. Bayerische, 692 F.3d at 49.
II.
Diversity Jurisdiction and the Amended Complaint
The first issue to be addressed is whether this Court has subject matter based on the
current pleading, viz. the amended complaint. The allegations in that pleading as to the named
parties are as follows:
1.
At all times hereinafter mentioned, plaintiff is a resident of
the State of New York, County of Suffolk.
2.
At all times hereinafter mentioned, defendant JAF Carriers
L.L.C. ("JAF") is a foreign limited liability company, duly
organized and existing under and by virtue of the laws of the State
of Virginia.
3.
At all times hereinafter mentioned, defendant JAF is a
trucking company doing business in the State of New York
4.
At all times hereinafter mentioned, upon information and
belief, defendant JAF does business under Bagir Trucking.
5.
At all times hereinafter mentioned, defendant C.H.
Robinson Company Inc. is a foreign corporation, duly organized
and existing under and by virtue of the laws of the State of
Minnesota, authorized to do business and doing business in the
State of New York.
6.
At all times hereinafter mentioned, defendant C.H.
Robinson Transportation Company is a foreign corporation, duly
organized and existing under and by virtue of the laws of the State
of Minnesota, authorized to do business and doing business in the
State of New York.
7.
At all times hereinafter mentioned, defendant C.H.
Robinson Worldwide, Inc. is a foreign corporation, duly organized
and existing under and by virtue of the laws of the State of
Delaware, doing business in the State of New York.
8.
At all times hereinafter mentioned, the C.H. Robinson
defendants act as truck brokers.
9.
At all times hereinafter mentioned, defendant Jose Caranza
("Caranza") is also known as Jose Cruz was acting as an agent,
servant, and/ or employee of defendant JAF in further of its
business .
10.
At all times hereinafter mentioned, defendant Caranza was
acting as an agent, servant, and/ or employee of the C.H. Robinson
defendants in furtherance of their business.
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11.
At all times hereinafter mentioned, defendant Jetro Cash
and Carry Enterprise, LLC ("Jetro") is a domestic limited liability
company, duly organized and existing under and by virtue of the
laws of the State of New York.
12.
At all times hereinafter mentioned, defendant Jetro owned
the premises known as 1349 132nd Street in College Point, New
York.
13.
At all times hereinafter mentioned, defendant Jetro
operated the aforementioned premises.
14.
At all times hereinafter mentioned, defendant Jetro
maintained the aforementioned premises.
15.
At all times hereinafter mentioned, defendant Jetro
managed the aforementioned premises
Amended Complaint (DE 25) ¶¶ 1-15.
Even a cursory review of the above allegations reveals that they are facially insufficient to
establish diversity subject matter jurisdiction. First, that plaintiff is a “resident” of New York
does not constitute a sufficient allegation of her state of domicile. Avant Capital Partners, LLC v.
W108 Dev. LLC, 2016 WL 366056 (S.D.N.Y. June 30, 2016); Davis, 2015 WL 1954491, at *2;
Young-Gibson, 476 F. App'x at 483. Second, lacking are allegations as to the principal place of
business of all three of the Robinson defendants. See Carter, 882 F.3d at 60. Third, there is no
allegation as to the domicile of Caranza. See Leveraged Leasing, 87 F.3d 44, 47 (“[D]iversity of
citizenship should be distinctly and positively averred in the pleadings, or should appear with
equal distinctness in other parts of the record[.]" ). Lastly, as both JAF and Jetro are “LLC’s” the
allegations with respect to where they are “duly organized and existing under” does not state their
citizenship. New Millennium Capital Partners, 2010 WL 1257325, at *1.
As the amended complaint was already filed, the above deficiencies require remand, as
opposed to dismissal, see Rosenfeld, 2017 WL 945114, at *2, unless subject matter exists under
the proposed (second) amended complaint. Accordingly, the Court now turns to that pleading.
Page 7 of 12
III.
Diversity Jurisdiction and the Proposed (Second) Amended Complaint.
The Proposed (Second) Amended Complaint (“PAC”) contains the following allegations
regarding the parties:
1.
At all times hereinafter mentioned, plaintiff is a resident of
the State of New York, County of Suffolk.
2.
At all times hereinafter mentioned, defendant JAF Carriers
L.L.C. ("JAF") is a foreign limited liability company, duly
organized and existing under and by virtue of the laws of the State
of Virginia.
3.
At all times hereinafter mentioned, defendant JAF is a
trucking company doing business in the State of New York.
4.
At all times hereinafter mentioned, upon information and
belief defendant JAF does business under Bagir Trucking.
5.
At all times hereinafter mentioned, defendant C.H.
Robinson Company Inc. is a foreign corporation, duly organized
and existing under and by virtue of the laws of the State of
Minnesota, authorized to do business and doing business in the
State of New York.
6.
At all times hereinafter mentioned, defendant C.H.
Robinson Transportation Company is a foreign corporation, duly
organized and existing under and by virtue of the laws of the State
of Minnesota, authorized to do business and doing business in the
State of New York.
7.
At all times hereinafter mentioned, defendant C.H.
Robinson Worldwide, Inc. is a foreign corporation, duly organized
and existing under and by virtue of the laws of the State of
Delaware, doing business in the State of New York.
8.
At all times hereinafter mentioned, the C.H. Robinson
defendants act as truck brokers.
9.
At all times hereinafter mentioned, defendant Jose Caranza
("Caranza") is also known as Jose Cruz was acting as an agent,
servant, and/ or employee of defendant JAF in further of its
business.
10.
At all times hereinafter mentioned, defendant Caranza was
acting as an agent, servant, and/ or employee of the C.H. Robinson
defendants in furtherance of their business.
11.
At all times hereinafter mentioned, defendant Jetro Cash
and Carry Enterprise, LLC ("Jetro") is a foreign corporation
organized under the laws of Delaware with a principal place of
business outside of New York within the meaning of 28 USC
Page 8 of 12
Section 1332.
Ex. U to Frowley Aff. (DE 65-21) ¶¶ 1-11.
A comparison of the allegations regarding the parties contained in the amended complaint
to the allegations recited above readily reveals that the only difference relates to Jetro. Thus, the
deficiencies noted with respect to Plaintiff, the Robinson Defendants, Caranza and JAF remain
and thus remand remains appropriate.
Nonetheless, given that based on the allegations in the notice of removal3 plaintiff may
well be able to cure these deficiencies, the Court will address the issue raised by the parties - the
citizenship of Jetro for diversity purposes.
Jetro maintains that diversity does not exist because it, like Plaintiff, is a citizen of New
York. In support of its position, it submits the affidavit of Brian E. Emmert, an officer of Jetro
and of JRD Unico, Inc. (“JRD Unico”). Emmert Aff. (DE 61-7) ¶1. According to that affidavit,
(1) the sole member of Jetro is Jetro Holdings, LLC (“ Jetro Holdings”), a Delaware limited
liability company; (2) the sole member of Jetro Holdings is JRD Holdings, LLC (“JRD
Holdings”), another limited liability company; (3) the sole member of JRD Holdings is JRD
Unico, which is a Delaware corporation; and (4) the principal place of business of Jetro “and all
of the aforementioned entities is located in the State of New York at 15-24 132nd Street in
College Point.” Id. at ¶ 2. It is further averred: “The decision making and coordination for all of
the aforementioned Jetro entities takes place in the State of New York at the College Point
location. . . . JRD Unico, Inc.’s officers direct, control and coordinate the corporation’s activities
3
According to the notice of removal, Plaintiff is a citizen of New York, the principle
places of business of all the Robinson Defendants is Minnesota and Caranza is a citizen of
Virginia. [DE 1.]
Page 9 of 12
solely from the College Point headquarters at 15-24 132nd Street. The College Point, New York
headquarters is the nerve center of JRD Unico, Inc.” Id. at ¶¶ 2,4.
Plaintiff’s response to the assertion that New York is the principal place of business of
JRD Unico and therefore diversity jurisdiction does not exist is best exemplified by the following
excerpt from her reply brief:
Although it has taken some "digging" to get to the bottom
of the "nerve center" issue, counsel for Jetro's suggestion that JRD
Unico, Inc. is at the "top of the corporate structure" has led us to
discover we were incorrect in some of our allegations on this
motion but correct in the more essential ones. JRD Unico Inc. is
not at the top of the corporate structure, as defense counsel for
Jetro alleges. It is evidently just one of about 28 different
companies, ten of which are active, including Restaurant Depot,
LLC, Restaurant Depot Enterprises, LLC and Jetro Management
and Development Corp. all of which are overseen by one Stanley
Fleishman, as CEO (Exhibit "A").
But all of these entities are either owned in whole or
significant part and are controlled by a South African holding
company called Kirsh Holdings (Exhibit "B"). Kirsh Holdings is
owned and controlled by a South African billionaire named Nathan
"Natie" Kirsh who at one time sold 80 percent of his business to
the Swiss supermarket conglomerate Metro Holding, now called
Grospart. But that company later sold its share back to him. So we
were incorrect in our allegation that at the time of this occurrence
the defendant Jetro was owned by Grospart. But, most
respectfully, we were not incorrect in our allegation that Jetro is
part of a large group of corporations whose nerve center is in a
foreign country. The foreign country in this case is South Africa
where Kirsh Holdings is located.
. . . Plaintiff is not claiming that diversity is based on the
citizenship of Jetro's corporate parent. Instead, it is plaintiff's
assertion based on the reality of the circumstances that Jetro's
"nerve center" for jurisdictional purposes is outside of New York.
The fact that the entire Jetro organization is owned and
inferentially controlled by a holding corporation overseas is
substantial proof that Jetro' s nerve center is not in Queens, New
York, but in a foreign jurisdiction.
Page 10 of 12
Frowley Reply Aff. (DE 66) at ¶¶ 4-6.
Putting aside that Plaintiff’s assertions regarding these other companies and their
relationship to Jetro are supported by internet articles, the veracity of which cannot be verified,
the citizenship of the shareholder of JRD Unico or where the shareholder is located is irrelevant
to the citizenship of Jetro. The upstream analysis mandated by Bayerische does not go on ad
infinitum. As the Circuit’s discussion makes clear, the analysis stops when there are no more
entities whose citizenship is dependent on another entity. See 692 F.3d at 49 (“Defendant
Aladdin is a limited liability company that takes the citizenship of each of its members.
Defendant Aladdin has one member: ACH. ACH, [an LLC,] in turn, has ten members: four
United States citizens who are domiciled in states of the United States and are thus citizens of
those states; four companies with domestic places of incorporation and principal places of
business; one limited partnership with its principal place of business and all three of its
U.S.-citizen partners domiciled in Connecticut; and a company incorporated in Delaware with its
principal place of business in Tokyo, Japan.”) (internal citations omitted).
Nor do the materials submitted by Plaintiff support its assertion that JRD Unico’s
principal place of business is “outside New York.” Jetro has properly supported its position that
JRD Unico’s principal place of business is in New York. The evidence as to the locale, activities,
and other corporate holdings of JRD Unico’s shareholder, in addition to being inadmissible
hearsay, is not relevant in this case to JRD Unico’s principal place of business and ergo Jetro’s
citizenship for diversity purposes. See OneWest Bank, N.A. v. Melina, 2015 WL 5098635, *2
(E.D.N.Y. Aug. 31, 2015) (“[T]he citizenship of any actual or proposed parent of OneWest does
not control OneWest's citizenship for purposes of diversity jurisdiction.”) (citing Frisone v.
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Pepsico, Inc., 369 F. Supp.2d 464, 472 (S.D.N.Y. 2005) (“As a general rule, a separately
incorporated entity is . . . considered to have its own principal place of business.”) (internal
quotation marks omitted); Charles Alan Wright et al., 13F Federal Practice & Procedure § 3625
(3d ed.) (“The general rule applied by the federal courts in numerous cases in this situation is that
a subsidiary corporation has its own principal place of business for purposes of diversity of
citizenship jurisdiction, unless it is merely an ‘alter ego’ or agent of the parent corporation.”)),
aff’d, 827 F.3d 214 (2016).
CONCLUSION
For the reasons set forth above, the motions of defendants are granted to the extent that
this case is remanded to the Supreme Court, Suffolk Court. Plaintiff’s motion to amend her
complaint is denied.
SO ORDERED.
Dated: Central Islip, New York
March 28, 2017
/s Denis R. Hurley
Denis R. Hurley
United States District Judge
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