CTI Systems, S.A. v. Global Finishing Solutions, LLC
Filing
7
OPINION & ORDER Regarding Jurisdiction. Proof of Diversity Citizenship due 1/5/2015. Signed by District Judge James D. Peterson on 12/22/14. (jat)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
CTI SYSTEMS, S.A.,
v.
Plaintiff,
OPINION & ORDER
14-cv-744-jdp
GLOBAL FINISHING SOLUTIONS, LLC,
Defendant.
Plaintiff CTI Systems, S.A., brings this civil action for a breach of contract, alleging
diversity of citizenship as grounds for this court’s subject matter jurisdiction. CTI Systems
alleges that defendant Global Finishing Solutions, LLC, (GFS) breached a contract between the
parties by improperly installing air-handling units into an environmental room. CTI Systems
now seeks money damages for the breach. But the allegations in the complaint are insufficient to
determine if the parties are truly diverse, and thus, whether jurisdiction is proper under 28
U.S.C. § 1332(a). The court will therefore give CTI Systems an opportunity to file an amended
complaint containing the necessary factual allegations to establish diversity jurisdiction.
ANALYSIS
“Federal courts are courts of limited jurisdiction.” Int’l Union of Operating Eng’rs, Local
150, AFL-CIO v. Ward, 563 F.3d 276, 280 (7th Cir. 2009). Unless a complaint alleges complete
diversity of citizenship among the parties and an amount in controversy exceeding $75,000, or
raises a federal question, 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. 2009). Because jurisdiction is limited,
federal courts “have an independent obligation to determine whether subject-matter jurisdiction
exists, even when no party challenges it.” Hertz Corp. v. Friend, 559 U.S. 77, 94 (2010). Further,
the party seeking to invoke federal jurisdiction bears the burden of establishing that jurisdiction
is present. Smart, 562 F.3d at 802-03. Here, CTI Systems contends that the court has
jurisdiction because the parties are diverse. Dkt. 1, ¶ 3. Unfortunately, CTI Systems’s allegations
are insufficient to allow this court to determine GFS’s citizenship.
GFS is a limited liability company, and “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. 2007).
However, CTI Systems has not alleged the citizenship of GFS’s members, making it impossible
to determine whether complete diversity exists in this case. Instead, CTI Systems alleges that
GFS “is a foreign corporation organized under the laws of the State of Delaware with a principal
office located at 12731 Norway Road, Osseo WI.” Dkt. 1, ¶ 2. 1 As the Seventh Circuit has
instructed, this information is not relevant when deciding the citizenship of a limited liability
company. Hukic v. Aurora Loan Servs., 588 F.3d 420, 427 (7th Cir. 2009).
Before dismissing this action for lack of subject matter jurisdiction, CTI Systems may
have leave to file within 14 days of this order an amended complaint that establishes subject
matter jurisdiction by alleging the names and citizenships of each of GFS’s members. In alleging
GFS’s citizenship, CTI Systems should be aware that if any of the LLC’s members are
themselves limited liability companies, partnerships, or other similar entities, then the
citizenship of those members and partners must be alleged as well. See Meryerson v. Harrah’s E.
Chi. Casino, 299 F.3d 616, 617 (7th Cir. 2002) (per curiam) (“[T]he citizenship of
unincorporated associations must be traced through however many layers of partners or
members there may be.”).
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GFS admitted CTI Systems’s diversity allegations. Dkt. 4, ¶¶ 2-3. This appears to have been an
oversight, and in any event, the court has an independent obligation to ensure that it has subject
matter jurisdiction. Hertz, 559 U.S. at 94.
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ORDER
IT IS ORDERED that:
1. Plaintiff CTI Systems, S.A. shall have until January 5, 2015, to file and serve an
amended complaint containing good faith allegations sufficient to establish complete
diversity of citizenship for purposes of determining subject matter jurisdiction under
28 U.S.C. § 1332.
2. Failure to amend timely will result in prompt dismissal of this matter for lack of
subject matter jurisdiction.
Entered this 22nd day of December, 2014.
BY THE COURT:
/s/
________________________________________
JAMES D. PETERSON
District Judge
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