Red Wing Aeroplane Company v. Lira, Gustavo et al

Filing 4

ORDER Regarding Jurisdiction. Plaintiff Red Wing Aeroplane Company may have until May 19, 2017, 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. Proof of Diversity of Citizenship due 5/19/2017. Signed by District Judge James D. Peterson on 5/8/2017. (voc)

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

RED WING AEROPLANE COMPANY,
Plaintiff,
v.

ORDER

GUSTAVO LIRA and
JETOPTIONS PRIVATE JETS, LLC,

17-cv-308-jdp

Defendants.
Plaintiff Red Wing Aeroplane Company has filed suit against defendants Gustavo Lira
and JetOptions Private Jets, LLC, alleging claims for defamation and interference with
prospective contractual relationships. Dkt. 1. Red Wing alleges that the court has subject
matter jurisdiction over the case pursuant to 28 U.S.C. § 1332, because the parties are
completely diverse and the amount in controversy exceeds $75,000. But because the complaint
does not contain enough information about JetOptions, the court cannot confirm that the
parties are completely diverse. The court will direct Red Wing to file an amended complaint.
“Federal courts are courts of limited jurisdiction.” Int’l Union of Operating Eng’rs, Local
150 v. Ward, 563 F.3d 276, 280 (7th Cir. 2009). Unless the party invoking federal jurisdiction
establishes complete diversity of citizenship among the parties and an amount in controversy
exceeding $75,000, or raises a federal question, the court must dismiss the case for lack of
jurisdiction. Smart v. Local 702 Int’l Bhd. of Elec. Workers, 562 F.3d 798, 802 (7th Cir. 2009).
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). The party invoking federal jurisdiction bears the burden of establishing that
jurisdiction is proper. Smart, 562 F.3d at 802-03.
Here, Red Wing alleges that diversity jurisdiction exists because: (1) the amount in
controversy exceeds $75,000; and (2) the parties are diverse. For the latter to be true, the
parties must be completely diverse, meaning Red Wing cannot be a citizen of the same state
as any defendant. Id. at 803. Although Red Wing satisfactorily alleges that it is a Wisconsin
citizen and that Lira is a Texas citizen,1 it does not adequately allege JetOptions’s citizenship.
JetOptions is a limited liability company. “[T]he 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). Red Wing does not allege the names or citizenships of any of JetOptions’s members.
Instead, Red Wing alleges that JetOptions is “a Texas limited liability company with its
principal place of business in Dallas County, Texas, and it is a citizen of Texas.” Dkt. 1, ¶ 6.
But an LLC’s principal place of business is not relevant to deciding its citizenship. Hukic v.
Aurora Loan Servs., 588 F.3d 420, 429 (7th Cir. 2009).
Before dismissing this case for lack of subject matter jurisdiction, the court will allow
Red Wing to file an amended complaint that establishes subject matter jurisdiction by alleging
the names and citizenships of each of JetOptions’s members. In alleging JetOptions’s
citizenship, Red Wing should be aware that if any members of the LLC are themselves an LLC,
partnership, or other similar entity, then Red Wing must allege the individual citizenship(s) of
each of those members as well: “the citizenship of unincorporated associations must be traced

“Red Wing is a Wisconsin corporation with its principal place of business in Pierce County,
Wisconsin, and it is a citizen of Wisconsin.” Dkt. 1, ¶ 5.
1

“Lira is domiciled in and a citizen of Texas.” Id. ¶ 6.

2

through however many layers of partners or members there may be.” Meyerson v. Harrah’s E.
Chi. Casino, 299 F.3d 616, 617 (7th Cir. 2002).
Because the citizenship of the members of a defendant LLC may not be something easily
discoverable by plaintiff, the allegations of citizenship may be made on information and belief.

ORDER
IT IS ORDERED that:
1. Plaintiff Red Wing Aeroplane Company may have until May 19, 2017, 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 timely amend will result in prompt dismissal of this matter for lack of
subject matter jurisdiction.
Entered May 8, 2017.
BY THE COURT:
/s/
________________________________________
JAMES D. PETERSON
District Judge

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