University Accounting Services LLC v. ScholarChip Card LLC

Filing 39

ORDER signed by Judge J.P. Stadtmueller on 9/26/2017 ORDERING that within 14 days, each party file an affidavit identifying the citizenship of its members. See Order. (cc: all counsel)(jm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
UNIVERSITY ACCOUNTING
SERVICE LLC,
Case No. 17-CV-901-JPS
Plaintiff,
v.

ORDER

SCHOLARCHIP CARD LLC,
Defendant.

The operative complaint in this matter, the Second Amended
Complaint, was filed on August 23, 2017. (Docket #23). In this complaint,
Plaintiff, a limited liability company, alleges that it is a citizen of
Wisconsin, while Defendant, also an LLC, is alleged to be a citizen of New
York, based on the parties’ states of organization and principal places of
business. Id. at 2–3. Plaintiff raises in this action breach-of-contract and
related state-law claims against Defendant. Because there are no claims
asserted under federal law, the Court’s subject-matter jurisdiction in this
matter is premised solely on diversity of citizenship under 28 U.S.C. §
1332.
This creates a problem, however, as the parties fail to appreciate
that since they are both LLCs, their citizenship for purposes of Section
1332 is not determined by their places of organization or their principal
places of business. Thomas v. Guardsmark, LLC, 487 F.3d 531, 534 (7th Cir.
2007). Rather, an LLC, like any other unincorporated association, has the
citizenship of each of its members. Id. The parties have nowhere disclosed
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who their members are, or the citizenship of those members. While the
briefing on Defendant’s pending motion to dismiss for lack of personal
jurisdiction touches on the parties’ ownership structures, see (Docket #27
at 6–7); (Docket #36 at 7), there is no clear statement of each entity’s
citizenship as the term is used in Section 1332.
In order to satisfy itself that it has subject-matter jurisdiction in this
case, as it must, see Thomas, 487 F.3d at 533, the Court will direct each
party to file an affidavit identifying each of its members and the
citizenship of each. If a party has an unincorporated association as a
member, the members of that association must be disclosed as well. (And
so on, if necessary.) If it is plain from the face of the affidavits that
diversity is lacking, the case will be dismissed. See Fed. R. Civ. P. 12(h)(3).
If further briefing is required after the notices are filed, the Court will
order it.
Accordingly,
IT IS ORDERED that each party shall file, within fourteen (14)
days of the date of this Order, an affidavit identifying the citizenship of its
members and, if necessary, those members’ citizenship, as directed in this
Order.
Dated at Milwaukee, Wisconsin, this 26th day of September, 2017.
BY THE COURT:

J.P. Stadtmueller
U.S. District Judge

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