Laudermilt v. Taggart Global, LLC et al
Filing
48
MEMORANDUM OPINION AND ORDER: the court GRANTS Defendant Taggart ten days from entry of this Memorandum Opinion and Order to satisfy its burden of preserving removal. Signed by Judge David A. Faber on 9/12/2012. (cc: counsel of record) (mjp)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
AT BLUEFIELD
PAUL E. LAUDERMILT,
Plaintiff,
v.
CIVIL ACTION NO: 1:11-0288
TAGGART GLOBAL, LLC,
Defendant.
MEMORANDUM OPINION AND ORDER
The court now considers sua sponte dismissal of this case
based on lack of subject matter jurisdiction.
A federal court
has an obligation to sua sponte remand a case removed from state
court if the federal court lacks subject matter jurisdiction
over the case.
Crawford v. Mokhtari, 842 F. Supp. 840 (D. Md.
1994), aff’d, 30 F.3d 129 (4th Cir. 1994); see also Wisconsin
Dept. of Corrections v. Schacht, 524 U.S. 381 (1998)
(acknowledging that when removal is defective for lack of
subject matter jurisdiction, remand may occur without motion to
remand)(emphasis added).
Additionally, the party seeking to
preserve removal has the burden of showing removal requirements
have been met.
See In re Blackwater Sec. Consulting, LLC, 460
F.3d 576, 583 (4th Cir. 2006).
Here, Defendant Taggart Global,
LLC (“Taggart”) fails to meet its burden.
1
Applicable Law
Since 1990, federal courts have used the Carden principle
for determining an unincorporated association’s citizenship for
purposes of federal diversity jurisdiction.
Arkoma Associates, 494 U.S. 185 (1990).
See Carden v.
Federal courts broadly
interpret the Carden principle as stating that an unincorporated
association is a citizen of each state where its constituent
members are citizens.
For example, the unincorporated
association in Carden was a limited partnership, id., but
federal courts have extended Carden to apply to joint ventures,
joint stock companies, labor unions, religious or charitable
organizations, governing boards of unincorporated institutions,
and similar associations.
§ 3630.1 Application of the
Citizenship Rule For Unincorporated Associations, 13F Fed. Prac.
& Proc. Juris. § 3630.1 (3d ed.).
The Carden principle likewise extends to limited liability
companies, which have characteristics of both corporations and
partnerships, but are nonetheless unincorporated as that term
applies to the traditional corporate form.1
Indeed, the Fourth
Circuit and federal district courts within the Fourth Circuit
have specifically held that, for purposes of federal diversity
1
Compare 15 Pa. Cons. Stat. Ann. § 8914(a) (requiring the filing
of a certificate of organization to form a Pennsylvania limited
liability company) with 15 Pa. Cons. Stat. Ann. § 1306(a)
(requiring the filing of articles of incorporation by
incorporators in order to form a Pennsylvania corporation).
2
jurisdiction, a limited liability company is a citizen of each
of the states where its members are citizens.
See General
Technology Applications, Inc. v. Exro Ltda, 388 F.3d 114 (4th
Cir. 2004); Saxon Fibers, LLC. v. Wood, 118 F. App'x 750, 751
(4th Cir. 2005); O'Connor v. Columbia Gas Transmission Corp.,
CIV 3:09CV00022, 2009 WL 1491035 (W.D. Va. May 26,
2009)(“limited liability company is a citizen of every state in
which any one of the owners of the company is a citizen.”).
Accordingly, this extension of the Carden principle applies in
this district and this court will follow it.
Discussion
Taggart has, confusingly, been referred to from the
beginning of this case as “Taggart Global, LLC, a Pennsylvania
corporation.”2
See Doc. No. 1, p. 1 (Taggart’s Notice of
Removal); Doc. No. 47, p. 1 (Taggart’s most recent motion before
this court).
Taggart cannot be both a corporation and a limited
liability company at the same time.
In fact, Pennsylvania law
indicates that Taggart can only be a limited liability company
by its name “Taggart Global, LLC.”3
2
Moreover, a search of
Taggart has done nothing to clear up this confusion. In its
Answer, Taggart admits to the assertion in Plaintiff’s Complaint
that Taggart “is a Pennsylvania corporation whose principal
place of business is Canonsburg, Pennsylvania . . . .” Doc. No.
1, Ex. B, p. 1, ¶ 2.
3
Compare 15 Pa. Cons. Stat. Ann. § 1303(a)(1)(requiring, for
example, “corporation,” “company,” “incorporated,” “limited,” or
any abbreviation of those words in a corporation’s name) with 15
3
Pennsylvania’s Department of State’s Business Entity database
reveals that the only entity named “Taggart Global, LLC,” is, in
fact, a limited liability company.4
Nevertheless, Taggart attempts to apply the principal place
of business test for corporate citizenship to “Taggart Global,
LLC.”
This test simply does not apply to limited liability
companies.
Instead, as outlined above, a limited liability
company is a citizen of each of the states where its members are
citizens.
Accordingly, the court GRANTS Defendant Taggart ten days
from entry of this Memorandum Opinion and Order to satisfy its
burden of preserving removal.
Specifically, Taggart should
clearly establish (1) whether it is a corporation or limited
liability company under Pennsylvania law, (2) if Taggart is a
limited liability company, the citizenship of each of its
members, and (3) any other facts that would help this court
determine whether federal subject matter jurisdiction exists in
this case.
Should Defendant Taggart not so respond within the
ten days allotted, the court will proceed to remand this case,
Pa. Cons. Stat. Ann. § 8905(a)(2)(disallowing a limited
liability company to use a name “rendered unavailable for use by
a corporation.”).
4
Currently, Pennsylvania’s Business Entity database search
function can be accessed at
https://www.corporations.state.pa.us/corp/soskb/csearch.asp.
4
sua sponte, to the Circuit Court of McDowell County, West
Virginia.
The Clerk is directed to send copies of this Memorandum
Opinion and Order to counsel of record.
IT IS SO ORDERED on this 12th day of September, 2012.
ENTER:
David A. Faber
Senior United States District Judge
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