United States District Court, S.D. New York
December 15, 2004.
CHARHOND MacKASON and KEVIN ROBERTS, Plaintiffs,
DIAMOND FINANCIAL LLC and DIAMOND HOLD, JV, Defendants.
The opinion of the court was delivered by: CHARLES HAIGHT, District Judge
MEMORANDUM OPINION AND ORDER
This is an action for personal injuries allegedly suffered by
the plaintiffs when an interior ceiling collapsed in a building
in the Bronx owned and operated by the defendants. Plaintiffs
commenced their action in the Supreme Court of the State of New
York, Bronx County. Defendants removed the case to this Court on
the ground of diversity of citizenship under
28 U.S.C. § 1332(a)(1). The case was assigned by lot to the undersigned.
Defendants state in their notice of removal dated December 9,
2004 at ¶ 3 that diversity is present because the plaintiffs
"reside in New York, New York" and both defendants "have their
principal place of business in Englewood Cliffs, New Jersey."
With respect to the plaintiffs, these averments track the
complaint, which alleges that plaintiff Charhond Mackason "was
and still is a resident of the City of New York, County of Bronx,
State of New York," ¶ 1, and that plaintiff Kevin Roberts "was
and still is a resident of the City of New York, County of Kings,
State of New York," ¶ 2. There are no allegations in the
complaint about the defendants' principal places of business.
Presumably counsel for defendants, in drafting the notice of
removal, relied for these averments upon information supplied by the defendants themselves.
Federal district courts are courts of limited jurisdiction. A
district court is required to raise sua sponte the question
whether diversity of citizenship is adequately pleaded,*fn1
either by the complaint where a plaintiff commences an action in
a federal court, or by the notice of removal where a defendant
removes to a federal court an action commenced by a plaintiff in
a state court. The case at bar presents the latter situation; and
it is clear that defendants' notice of removal does not
adequately allege diversity of citizenship.
As for the two plaintiffs, all that is alleged is their New
York residences. But it is settled law that with respect to
individual parties, citizenship for diversity purposes "depends
upon their places of domicile. Even though a party may have
several places of residence, he or she may have only one domicile
at a given time." Chapelle v. Beacon Communications Corp.,
863 F.Supp. 179, 181 (S.D.N.Y. 1994) (citing cases). "[A]llegations
of residence are insufficient to establish diversity
jurisdiction. It is well-established that when the parties allege
residence but not citizenship, the court must dismiss the suit."
Held v. Held, 137 F.3d 998, 1000 (7th Cir. 1996) (citation and
internal quotation marks omitted). See also Automotive Finance
Corp. v. Automax of Northern Illinois, Inc., 194 F.Supp.2d 796,
797 (N.D. Ill. 2002) (complaint's jurisdictional allegations
insufficient where plaintiff "identifies only his state of
residence and not his state of citizenship, even though by
definition the latter is the relevant fact.") (emphases in
original). Accordingly the allegations in the complaint with
respect to the plaintiffs' places of residence are insufficient
to establish diversity jurisdiction.
As for the two defendants, the complaint alleges that defendant
Diamond Financial L.L.C. "is a foreign limited liability
company," ¶ 3, and defendant Diamond Hold, J.V. is "a foreign
joint venture," ¶ 4. Defendants's notice of removal does not
question those characterizations; it simply recites that both
defendants have their principal places of business in New Jersey.
In the case at bar, the defendants' principal places of
business are irrelevant to diversity analysis. Defendants may
have in mind the provision in 28 U.S.C. § 1332(c)(1) that for
diversity purposes "a corporation shall be deemed to be a
citizen of any State by which it has been incorporated and of the
State where it has its principal place of business" (emphasis
added), but limited liability companies and joint ventures are
not regarded as corporations within the meaning of the diversity
For diversity purposes, the citizenship of a limited liability
company ("LLC") depends upon the citizenship of its members. See
Handelsman v. Bedford Village Assoc. Ltd. P'Ship, 213 F.3d 48,
51 (2d Cir. 2000) ("[D]efendants Bedford Partnership and Bedford
LLC are, for diversity purposes, citizens of Florida because both
entities have Florida members."), citing with approval Cosgrove
v. Bartolotta, 150 F.3d 729, 731 (7th Cir. 1998) (holding that
because an LLC resembled a limited partnership and "members of
associations are citizens for diversity purposes unless Congress
provides otherwise," an LLC's citizenship "for purposes of
diversity jurisdiction is the citizenship of its members.").
The rule is the same for joint ventures. "For diversity
purposes, the citizenship of a joint venture is the citizenship
of each of its members." Schiavone Constr. Co. v. City of New
York, 99 F.3d 546, 548 (2d Cir. 1996). See also 13B Wright,
Miller & Cooper, Federal Practice and Procedure, at § 3360, pp. 683-89 (West 1984) (whenever "a joint
venture . . . brings suit or is sued in a federal court, the
actual citizenship of each of its members must be considered in
determining whether diversity jurisdiction exists.").
It follows that the defendants' averments in their notice of
removal with respect to their own citizenship are equally
insufficient to establish diversity jurisdiction in this Court.
In these circumstances, the Court makes the following Order:
1. On or before January 7, 2005, plaintiffs are
directed to file and serve affidavits sworn to by
them personally, giving the details necessary under
relevant case law to demonstrate their domicile at
the time they commenced their action.
2. On or before January 7, 2005, defendants are
directed to file and serve affidavits executed by
officers or representatives with knowledge of the
facts, identifying each member of the defendant LLC
and of the defendant joint venture, and setting
forth with respect to each such member facts
sufficient to demonstrate citizenship.
If these submissions do not resolve the issue of this Court's
subject matter jurisdiction, the Court will conduct an
evidentiary hearing limited to that issue. While I do not suggest
that they would attempt to do so, plaintiffs cannot engineer a
return to the court of their initial choice by failing to comply
with ¶ 1 of this Order. Such non-compliance would result in a
hearing before the Court at which their attendance would be
compelled by subpoena. If defendants do not comply with ¶ 2 of
this Order, the case will be remanded to the state court. The foregoing is SO ORDERED.