Signature Holdco, LLC v. Riverstreet Center OPCO, LLC et al

Filing 26

DECISION AND ORDER: For the reasons stated in the decision and order, the amended complaint is dismissed without prejudice for lack of subject matter jurisdiction, and the motion to dismiss filed by defendant Panacea Health Corp., Docket Item 19 , i s DENIED without prejudice as moot. The plaintiff, Signature Holdco, LLC, may amend its complaint within 30 days of the date of this decision and order to allege facts showing that this Court has jurisdiction over its claims. If it fails to do so, the Clerk of the Court shall close this case without further order. SO ORDERED. Issued by Hon. Lawrence J. Vilardo on 3/7/2025. (CRT)Clerk to Follow up

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK

SIGNATURE HOLDCO, LLC,
Plaintiff,
23-CV-1191-LJV
DECISION & ORDER

v.
RIVERSTREET CENTER OPCO, LLC,
and PANACEA HEALTH CORP.,
Defendants.

On November 17, 2023, the plaintiff, Signature Holdco, LLC (“Signature”),
commenced this action for breach of contract, unjust enrichment, and quantum meruit
damages against the defendants, Riverstreet Center OPCO, LLC (“Riverstreet”), and
Panacea Health Corp. (“Panacea”). Docket Item 1. A few months later, Signature filed
an amended complaint, Docket Item 12; Riverstreet answered the amended complaint,
Docket Item 17; and Panacea moved to dismiss it, Docket Item 19.
Panacea did not raise lack of subject matter jurisdiction in its motion to dismiss;
instead, it says that Signature has failed to state a claim on which relief can be granted.
See id. But federal district courts have an independent duty to confirm that they have
subject matter jurisdiction, even when no party has challenged it. Henderson ex rel.
Henderson v. Shinseki, 562 U.S. 428, 434 (2011) (“[F]ederal courts have an
independent obligation to ensure that they do not exceed the scope of their jurisdiction,
and therefore they must raise and decide jurisdictional questions that the parties either
overlook or elect not to press.”). And for the reasons that follow, Signature has failed to
establish that this Court has jurisdiction here.

DISCUSSION
The party invoking a federal court’s subject matter jurisdiction “bears the burden
of proving that the case is properly” within that jurisdiction. United Food & Com.
Workers Union, Loc. 919 v. CenterMark Props. Meriden Square, Inc., 30 F.3d 298, 301
(2d Cir. 1994). In the amended complaint, Signature alleges that this Court has subject
matter jurisdiction over this case under 28 U.S.C. § 1332 based on diversity of
citizenship. See Docket Item 12 at 3, ¶ 1.1 That statute provides that “[t]he district
courts shall have original jurisdiction of all civil actions where the matter in controversy
exceeds the sum or value of $75,000, exclusive of interest and costs, and is between
. . . citizens of different [s]tates.” 28 U.S.C. § 1332(a).
The first of those two requirements is met here: The amended complaint
explicitly states that Signature is seeking $97,992.89, absent attorney’s fees and
interest, which is the amount that the defendants allegedly owe to it under a contract.
Docket Item 12 at 4, ¶¶ 9-11. That allegation sufficiently establishes the amount in
controversy. See Wood v. Maguire Auto., LLC, 508 F. App’x 65, 65 (2d Cir. 2013)
(summary order) (“Pleading that the amount in controversy exceeds $75,000 creates ‘a
rebuttable presumption that the face of the complaint is a good faith representation of
the actual amount in controversy.’” (quoting Scherer v. Equitable Life Assurance Soc’y
of U.S., 347 F.3d 394, 397 (2d Cir.2003))).

1 Page numbers in docket citations refer to ECF pagination.

Because the
complaint and amended complaint contain several sets of paragraph numbers, see
Docket Items 1 and 12, this Court refers to both the page and paragraph number when
citing those documents.
2

On the other hand, the first requirement—diversity of citizenship—is not met on
the face of the pleadings here. See 28 U.S.C. § 1332(a). As noted above, Signature
asserts in conclusory fashion that the parties here are of diverse citizenship. Docket
Item 12 at 3, ¶ 1. But the allegations regarding each party’s citizenship are insufficient
to support that assertion.
More specifically, the amended complaint says that Signature is a limited liability
company that is “incorporated in Delaware” and has a “principal place of business” in
Texas. Id. at 2, ¶ 1. And it says that Panacea is a “Pennsylvania corporation” that
“transact[s] business” in Pennsylvania, while Riverstreet is a Delaware limited liability
company that also “transact[s] business” in Pennsylvania.2 Id. at 2, ¶¶ 4-5. But those
assertions are insufficient to show the citizenship of the parties and therefore to
establish that this Court has diversity jurisdiction.
As just noted, Signature says that both it and Riverstreet are limited liability
companies, while Panacea is a corporation. Id. at 2, ¶¶ 1, 4-5. “[A] limited liability
company . . . takes the citizenship of each of its members.” Bayerische Landesbank v.

2 It is true that “[i]n an action in which jurisdiction is premised on diversity of

citizenship, diversity must exist at the time the action is commenced,” rather than at the
time that the amended complaint is filed. See Universal Licensing Corp. v. Paola del
Lungo S.p.A., 293 F.3d 579, 581 (2d Cir. 2002); Roche Cyrulnik Freedman LLP v.
Cyrulnik, 582 F. Supp. 3d 180, 187 (S.D.N.Y. 2022) (“Even where the plaintiff files an
amended complaint, the relevant frame of reference for diversity jurisdiction is the time
of the filing of the original complaint.” (emphasis omitted) (collecting cases)).
But the original complaint contains nearly the same jurisdictional allegations as
the amended complaint. Compare Docket Item 1 at 2, ¶¶ 1-6, with Docket Item 12 at 2,
¶¶ 1-5. More specifically, the original complaint provides the same information about
Panacea’s and Riverstreet’s places of incorporation and where they transact business,
but it describes Signature only as “an incorporated domestic limited liability company
with a registered address at 28 Liberty Street, New York, [New York].” See Docket Item
1 at 2, ¶¶ 1, 5-6; see also Docket Item 12 at 2, ¶¶ 1, 4-5. That is simply not enough.
3

Aladdin Cap. Mgmt. LLC, 692 F.3d 42, 49 (2d Cir. 2012); see also Agility Logistics Corp.
v. Elegant USA, LLC, 2009 WL 3094898, at *1 (S.D.N.Y. Sept. 25, 2009) (“For the
purposes of diversity jurisdiction, a limited liability company’s . . . citizenship is
determined not by the LLC’s place of incorporation or principal place of business, but by
the citizenship of each member of the LLC.”). And “a corporation [is] deemed to be a
citizen of every [s]tate and foreign state by which it has been incorporated and of the
[s]tate or foreign state where it has its principal place of business.” 28 U.S.C.
§ 1332(c)(1); Carter v. HealthPort Techs., LLC, 822 F.3d 47, 60 (2d Cir. 2016) (“For
purposes of diversity jurisdiction, a corporation is deemed . . . to be a citizen both of the
state in which it has its principal place of business and of any state in which it is
incorporated.”).
Signature has pleaded no facts showing the citizenship of either its own or
Riverstreet’s members; indeed, it has not even identified who those members are.3 See

3 For reasons that are not entirely clear to this Court, Signature attached to its

amended complaint an alternate version of that complaint with edits in track changes.
Docket 12 at 34-40. Among other things, those edits name an additional plaintiff and
include additional jurisdictional information. See id. But that does not change the
analysis here for at least two reasons. First, that draft pleading—or whatever it may
be—is not the operative pleading and thus not properly before the Court. Second, while
in light of the first point, the Court need not and thus does not reach the issue, even the
supplemental jurisdictional information does not appear to be enough. If a party in a
diversity case is a limited liability company that has members that are themselves
limited liability companies, the plaintiff must provide the citizenship of the members of
those limited liability companies (and so on). See Avant Cap. Partners, LLC v. W108
Dev. LLC, 387 F. Supp. 3d 320, 322-23 (S.D.N.Y. 2016); see also Kruglov v. Copart of
Conn., Inc., 771 F. App’x 117, 118 (2d Cir. 2019) (summary order). In the draft
pleading, Signature describes its membership structure as not unlike that of a set of
Russian nesting dolls. See Docket Item 12 at 35, ¶¶ 1-5. But it does not provide any
allegations regarding the citizenship of the innermost doll: It ends the chain with five
limited liability companies that it simply asserts are not citizens of either Pennsylvania or
New York. Id. That still is not enough.
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Docket Item 12; see also Docket Item 1. This Court therefore is unable to determine the
citizenship of either Signature or Riverstreet. And while Signature says that Panacea is
a “Pennsylvania corporation”—presumably meaning that it is incorporated in
Pennsylvania—it does not identify that entity’s principal place of business. See Docket
Item 12 at 2, ¶ 4; see also 28 U.S.C. § 1332(c)(1). Because that critical information is
missing, this Court is unable to determine Panacea’s citizenship as well.
For those reasons, the allegations of the amended complaint do not establish the
citizenship of each party, and they therefore do not establish the diversity required for
this Court to exercise jurisdiction. See Docket Item 12; see also 28 U.S.C. § 1332.
Stated another way, Signature has not met its “burden of proving that the case is
properly” within this Court’s jurisdiction. United Food & Com. Workers Union, Loc. 919,
30 F.3d at 301; see Premium Merch. Funding 18, LLC v. Honan, 2024 WL 4931940, at
*4 (S.D.N.Y. Dec. 2, 2024) (holding that plaintiffs, two limited liability companies, had
failed to establish diversity jurisdiction when they had not provided any information
about their members’ citizenship nor had they provided any information about several of
the defendant limited liability companies’ members); see also Pena v. Osaigbovo, 2024
WL 3666379, at *2 (S.D.N.Y. Aug. 6, 2024) (holding that defendants failed to establish
diversity jurisdiction in notice of removal where the court lacked information about
citizenship of members of defendant limited liability company).
The amended complaint therefore is dismissed without prejudice for lack of
subject matter jurisdiction, and Panacea’s motion to dismiss the amended complaint,
Docket Item 19, is denied without prejudice as moot. Nevertheless, within 30 days,
Signature may amend its complaint to allege facts showing that this Court has

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jurisdiction over its claims. Durant, Nichols, Houston, Hodgson & Cortese-Costa P.C. v.
Dupont, 565 F.3d 56, 64 (2d Cir. 2009) (stating that because a plaintiff’s failure to
adequately plead diversity jurisdiction does not necessarily mean that it does not exist,
a court may, “where the facts necessary to the establishment of diversity jurisdiction are
subsequently determined to have obtained all along . . . allow a complaint to be
amended to assert those necessary facts” (quoting Herrick Co., Inc. v. SCS Commc’ns,
Inc., 251 F.3d 315, 329 (2d Cir.2001))). In any amended complaint, Signature must
allege facts detailing its own citizenship as well as the citizenship of Riverstreet and
Panacea. See Premium Merchant Funding 18, 2024 WL 4931940, at *5. If Signature
does not file an amended complaint within 30 days, the Clerk of the Court will close this
case.

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CONCLUSION
For the reasons stated above, the amended complaint is dismissed without
prejudice for lack of subject matter jurisdiction, and Panacea’s motion to dismiss,
Docket Item 19, is DENIED without prejudice as moot. Signature may amend its
complaint within 30 days of the date of this decision and order to allege facts
showing that this Court has jurisdiction over its claims. If it fails to do so, the Clerk of
the Court shall close this case without further order.

SO ORDERED.
Dated: March 7, 2025
Buffalo, New York

/s/ Lawrence J. Vilardo
LAWRENCE J. VILARDO
UNITED STATES DISTRICT JUDGE

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