Greenway Station, SPE, LLC v. NGC Investment Group, LLC

Filing 9

Opinion and Order. On or before 9/6/2010 plaintiff shall file an amended complaint containing allegations sufficient to establish plaintiff's and defendant's citizenship for purposes of determining subject matter jurisdiction under 28 U.S.C. Section 1332. Signed by District Judge William M. Conley on 8/23/2010. (lak)

Gr e e nw ay Station, SPE, LLC v. NGC Investment Group, LLC

Doc. 9

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WISCONSIN

GREENWAY STATION SPE, LLC, Plaintiff, v. 10-cv-302-wmc NGC INVESTMENT GROUP, LLC and FRANK CAPRI, Defendants. This is a civil action in which plaintiff Greenway Station SPE, LLC alleges that d efen dan t NGC Investment Group, LLC breached its lease agreement with plaintiff and defendan t Frank Capri breached his guaranty with plaintiff. In its complaint, plaintiff alleges that the court has jurisdiction to decide this state law breach of contract case under the diversity jurisdiction statute, 28 U.S.C. § 1332(a)(1) (dkt. #1). The court, however, is un able to determine whether diversity jurisdiction actually exists and, therefore, plaintiff m ust file an amended complaint containing the necessary allegations to establish diversity ju r i s d ic t i o n . "Federal courts are courts of limited jurisdiction." Int'l Union of Operating Eng'r, Local 150, AFL-CIO v. Ward, 563 F.3d 276, 280 (7th Cir. 2009) (citation omitted). Unless a com plaint raises a federal question or there is complete diversity of citizenship among the p arties and the amount in controversy exceeds $75,000, the case must be dismissed for want of jurisdiction. Smart v. Local 702 Int'l Bhd. of Elec. Workers, 562 F.3d 798, 802 (7th Cir. 20 09 ). Because jurisdiction is limited, federal courts "have an independent obligation to determ ine whether subject-matter jurisdiction exists, even when no party challenges it." H ertz Corp. v. Friend, 130 S. Ct. 1181, 1193 (2010). Further, the party seeking to invoke OPINION AND ORDER

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federal jurisdiction bears the burden of establishing that jurisdiction is present. Smart, 562 F .3 d at 802-03. H ere, plaintiff alleges in its complaint that diversity jurisdiction exists because the am ou nt in controversy exceeds $75,000 and the parties are diverse. (Compl., dkt. #1, ¶4.) The allegations in the complaint, however, fail to support a claim to complete diversity. S pecifically, plaintiff fails to provide the relevant information necessary to determine both defendan ts' and its citizenship. For diversity jurisdiction to exist there must be complete diversity, meaning plaintiff cannot be a citizen of the same state as any defendant. Smart, 56 2 F.3d at 803. On the record before the court, both plaintiff's and defendants' citizenship are unknown. "F or diversity jurisdiction purposes, the citizenship of an LLC is the citizenship of each of its members." Camico Mut. Ins. Co. v. Citizens Bank, 474 F.3d 989, 992 (7th Cir. 2 0 0 7). Plaintiff alleges nothing about defendant NGC Investment's or its members, nor abo ut the citizenship of the members. Instead, plaintiff alleges it is a Delaware limited liability company with its principal place of business in Middleton, Wisconsin, and that defendan t NGC Investment is an Arizona limited liability company with its principal place of business in Scottsdale, Arizona. (Compl., dkt. #1, ¶¶1-2.) Where the LLCs maintain their principal places of business and where they are organized is irrelevant in deciding the citizenship of limited liability companies. Hukic v. Aurora Loan Serv., 588 F.3d 420, 429 (7th C ir. 2009). In amending the allegations in the complaint for those parties that are LLCs, plaintiff should keep in mind that if the member or members of an LLC are themselves a limited liability company, partnership, or other similar entity, then the citizenship of those members

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an d partners must also be provided. "[T]he citizenship of unincorporated associations must be traced through however many layers of partners or members there may be." Meryerson v. H arrah's E. Chi. Casino, 299 F.3d 616, 617 (7th Cir. 2002). Fina lly, there are no allegations establishing defendant Capri's citizenship for jurisdictional purposes. Plaintiff has only provided the alleged residency of Capri, while the co urt must know his citizenship because "residence and citizenship are not synonyms and it is the latter that matters for purposes of diversity jurisdiction." Id.1 As the party invoking federal jurisdiction, therefore, plaintiff must provide sufficient factual allegations to establish that actual diversity exists before this court can exercise jurisdiction over this case.

ORDER IT IS ORDERED that on or before Monday, September 6, 2010, plaintiff shall file w ith the court an amended complaint containing allegations sufficient to establish plaintiff's an d defendants' citizenship for purposes of determining subject matter jurisdiction under 2 8 U.S.C. § 1332. E n tered this 23rd day of August, 2010. B Y THE COURT: /s/ _ _ _ __ _ _ __ _ _ __ _ _ __ _ _ __ _ _ __ _ _ __ _ _ __ _ W IL L IA M M. CONLEY D istrict Judge

Plaintiff should also keep this maxim about citizenship versus residency in mind w hen alleging the jurisdictional facts about any of the members of the limited liability com pan ies who are actual people.

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