Hazzard's Excavating and Trucking Inc. v. West Virginia Coal Reclamation Company LLC

Filing 5

MEMORANDUM OPINION AND ORDER: The court ORDERS defendant West Virginia Coal Reclamation Company, LLC to file an Amended Notice of Removal within ten days from entry of this Memorandum Opinion and Order to satisfy its burden of preserving removal. Signed by Senior Judge David A. Faber on 3/5/2018. (cc: counsel of record) (arb)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
AT BLUEFIELD
HAZZARD’S EXCAVATING AND
TRUCKING, INC.,
Plaintiff,
v.

CIVIL ACTION NO: 1:18-00062

WEST VIRGINIA COAL
RECLAMATION COMPANY, LLC,
Defendant.
MEMORANDUM OPINION AND ORDER
This matter is before the court pursuant to a sua sponte
review of the court’s 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.
(4th Cir. 2016).

Doe v. Blair, 819 F.3d 64, 66-67

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 West Virginia Coal

Reclamation Company, LLC (“WVCRC”) fails to meet its burden.
Applicable Law
Since 1990, federal courts have used the Carden principle
for determining an unincorporated association’s citizenship for
purposes of federal diversity jurisdiction.

1

See Carden v. Arkoma

Associates, 494 U.S. 185, 195 (1990).

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.

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.

Indeed,

the Fourth Circuit and federal district courts within the Fourth
Circuit have specifically held that, for purposes of federal
diversity jurisdiction, a limited liability company is a citizen
of each of the states where its members are citizens.

See Gen.

Tech. Applications, Inc. v. Exro Ltda, 388 F.3d 114, 120 (4th
Cir. 2004); 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.”).
Discussion
The Notice of Removal identifies WVCRC as a “limited
liability company foreign to the state of West Virginia. . . .
Specifically, the Defendant is a Delaware corporation whose
headquarters and principal place of business are located in the
state of Illinois.

Thus, the Defendant is a citizen or resident

of either the State of Illinois or the State of Delaware for
purposes of determining diversity of citizenship.”
2

Notice of

Removal at p. 2 (ECF No. 1).

WVCRC cannot be both a corporation

and a limited liability company at the same time. WVCRC attempts
to apply the principal place of business test for corporate
citizenship to “West Virginia Coal Reclamation Company, 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 ORDERS WVCRC to file an Amended
Notice of Removal within ten days from entry of this Memorandum
Opinion and Order to satisfy its burden of preserving removal.
Specifically, WVCRC should clearly establish (1) whether it is a
corporation or limited liability company, (2) if WVCRC 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.
The Clerk is directed to send copies of this Memorandum
Opinion and Order to counsel of record.
IT IS SO ORDERED on this 5th day of March, 2018.
ENTER:

David A. Faber
Senior United States District Judge

3