Tate v. LP Memphis III, LLC et al

Filing 63

ORDER DISMISSING CASE. Signed by Judge S. Thomas Anderson on 3/7/17. (Anderson, S.)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
______________________________________________________________________________
MAE TATE, Next of Kin and Administrator
ad Litem of Estate of Willie Bell White,
Deceased, and on behalf of the Wrongful Death
Beneficiaries of Willie Bell White,

)
)
)
)
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Plaintiff,
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v.
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No. 15-2569-STA-dkv
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LP MEMPHIS III, LLC d/b/a SIGNATURE
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HEALTHCARE AT ST. PETER’S VILLA;
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SIGNATURE HEALTHCARE CONSULTING )
SERVICES, LLC f/k/a SIGNATURE
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CONSULTING SERVICES, LLC;
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LPMM, INC.; LP MANAGER, LLC;
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LP O HOLDINGS, LLC; SIGNATURE
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HEALTHCARE CLINICAL CONSULTING
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SERVICES, LLC f/k/a SIGNATURE
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CLINICAL CONSULTING SERVICES, LLC; )
SIGNATURE HEALTHCARE, LLC; and
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SERENITY HEALTHCARE, LLC d/b/a
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SHC SERENITY HEALTHCARE, LLC,
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Defendants.
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______________________________________________________________________________
ORDER DISMISSING CASE FOR LACK OF SUBJECT-MATTER JURISDICTION
______________________________________________________________________________
In a series of orders previously issued by the Court, the Court raised sua sponte the issue
of its subject-matter jurisdiction to hear this case. The Court set out the procedural history of the
case in those orders and need not review it in full here. Briefly, Plaintiff Mae Tate filed her
Complaint (ECF No. 1) for negligence under the Tennessee Healthcare Liability Act, ordinary
negligence, and survival and wrongful death on August 28, 2015. Plaintiff’s Complaint alleges
that this Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332 by virtue of the
amount in controversy and the diversity of citizenship of the parties. Defendant Signature
1

HealthCARE, LLC owns and operates through its subsidiaries a nursing home in Memphis,
Tennessee, where Plaintiff’s decedent resided until shortly before her death. (Compl. ¶¶ 2, 19.)
According to the Complaint, the various Defendants are the alter egos, agents, and/or joint
enterprise of Defendant Signature HealthCARE, LLC. (Id. ¶¶ 16-18.) The Complaint makes
certain jurisdictional allegations that each LLC Defendant is a “foreign limited liability
company.” (Id. ¶¶ 4-5, 7-11.)
Because the Complaint did not allege the identity of the members of each LLC Defendant
or the citizenship of the members, the Court directed the parties to address the issue of
jurisdiction by filing a joint jurisdictional statement. The Sixth Circuit has concluded that
jurisdictional allegations like the ones in Plaintiff’s Complaint regarding the citizenship of an
LLC are “deficient” for purposes of establishing subject matter jurisdiction.1 “When diversity
jurisdiction is invoked in a case in which a limited liability company is a party, the court needs to
know the citizenship of each member of the company. And because a member of a limited
liability company may itself have multiple members—and thus may itself have multiple
citizenships—the federal court needs to know the citizenship of each ‘sub-member’ as well.”2
The Court therefore ordered the parties to provide the Court with information about the identities
and citizenship of each member of the LLC Defendants named in the Complaint and all of the
facts necessary for the Court to determine the citizenship of that member for purposes of
diversity jurisdiction.

1

Delay v. Rosenthal Collins Grp., LLC, 585 F.3d 1003, 1004-1005 (6th Cir. 2009)
(holding that a notice of removal alleging diversity jurisdiction under § 1332 based on the fact
that the LLC defendant was an LLC “organized under the laws of Illinois, with its principal place
of business in Illinois” was “deficient” without information about the citizenship of each member
of the LLC).
2

Id. at 1005 (emphasis added).
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Defendants eventually filed for in camera review the jurisdictional information, including
member operating agreements for each of the following LLCs: St. George HC Investments,
LLC; LPSNF, LLC; Las Palmas SNF, LLC; and Signature HealthCARE, LLC. The Court
ordered that while Defendants would initially file the agreements in camera, the Court would
subsequently make all relevant information as it relates to jurisdiction available to Plaintiff
unless the Court determined otherwise after its review of the documents. The Court convened a
hearing on the jurisdictional issue on April 18, 2016, and took the entire matter under
advisement.
Then on May 6, 2016, the parties filed a Notice of Settlement (ECF No. 58). In light of
their settlement of the dispute, the Court ordered the parties to show why production of the
jurisdictional information to Plaintiff was necessary under the circumstances.

Plaintiff

responded, stating that she had agreed as part of the settlement not to seek production of the
jurisdictional information. However, Plaintiff argued that the information was relevant to the
Court’s jurisdiction in other cases the same attorneys had filed in this Court on behalf of other
plaintiffs against some of the same LLC Defendants: Roy v. Signature HealthCARE, LLC, et al.,
(civil case no. 2:15-cv-02765-JPM-tmp) and Gibbs v. Signature HealthCARE, LLC, et al., (civil
case no. 2:16-cv-02142-SHL-cgc). Defendants did not take a position on the matter.
The other pending cases cited in Plaintiff’s response have since come to a conclusion,
though not before the parties joined the issue of subject-matter jurisdiction in each of the cases.
In Gibbs, the parties simply filed a stipulation of dismissal pursuant to Federal Rule of Civil

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Procedure 41(a)(1)(A)(ii) and therefore did not need additional approval from the Court.3 In
Roy, Defendants filed proof under seal that at least one member of the relevant LLC entities was
a Tennessee resident at all times relevant to the action. Based on this proof, the Court dismissed
Roy for lack of subject-matter jurisdiction.4
For the same reasons that the Court dismissed Roy, the Court holds that complete
diversity of citizenship is lacking in the case at bar.

“In the absence of subject-matter

jurisdiction, a federal court must dismiss the lawsuit—no matter how far along the litigation has
progressed (including to the last-available appeal), no matter whether the parties forfeited the
issue, no matter indeed whether the parties have waived it.”5 The proof filed in Roy shows that
at least one individual member of St. George HC Investments, LLC is, like Plaintiff in this case,
a resident of the state of Tennessee. The Court concluded in Roy that it lacked subject-matter
jurisdiction over the claims in that case due to the lack of complete diversity. The proof
submitted for in camera review in the case at bar is consistent with the proof filed in Roy. The
same individual member of St. George HC Investments, LLC identified as a Tennessee resident
in Roy was also named as a member in the St. George HC Investments, LLC operating
agreement in effect at the time Plaintiff filed her Complaint in August 2015. Therefore, the
Court concludes that it lacks subject-matter jurisdiction in this case.
Furthermore, the Court finds that Plaintiff’s request to receive the jurisdictional

3

Dillon-Barber v. Regents of Univ. of Mich., 51 F. App’x 946, 951 (6th Cir. 2002) (“[A]
properly stipulated dismissal under Rule 41(a)(1)(ii) is self-executing and does not require
judicial approval[.]”) (quoting Green v. Nevers, 111 F.3d 1295, 1301 (6th Cir. 1997)).
4

Order Granting Mot. to Dismiss for Lack of Subj. Matter Juris. (ECF No. 81, civil no.
15-2765-JPM-tmp).
5

Herr v. U.S. Forest Serv., 803 F.3d 809, 813-14 (6th Cir. 2015) (citing Henderson ex
rel. Henderson v. Shinseki, 562 U.S. 428, 434-35 (2011) and Fed. R. Civ. P. 12(h)(3)).
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information filed in camera by Defendants is now moot. There no longer appears to be any need
to produce the jurisdictional information for use in Gibbs or Roy because the Court has entered
judgment in both cases. Having made a determination of the remaining issues in this case,
Plaintiff’s Complaint must be dismissed sua sponte and without prejudice to re-file in the proper
forum.
IT IS SO ORDERED.
s/ S. Thomas Anderson
S. THOMAS ANDERSON
UNITED STATES DISTRICT JUDGE
Date: March 7, 2017.

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