Another Smack Down on How to Plead Diversity Jurisdiction

Another Smack Down on How to Plead Diversity Jurisdiction

      In a decision rendered last week in Texas, the court was quite explicit as to what is necessary to plead diversity jurisdiction. In this case, the plaintiff had entirely failed to satisfy those obligations. Tiro Solutions, L.L.C. v. Beacon Hill Staffing Group, L.L.C., Civ. Act. No. 3:17-CV-0934-L, 2018 WL 1368809 (N.D. Texas March 16, 2018).

      Tiro Solutions filed this action in federal court against Beacon Hill. As for itself, it disclosed that it is a Texas limited liability company with its principal place of business in Texas. As to the defendant Beacon Hill, it was asserted that it is an LLC organized under the laws of Massachusetts with its principal place of business in Boston, Massachusetts. The complaint was dismissed on the grounds of a lack of diversity on the following bases:

An LLC is a citizen of every state in which all of its members are citizens. According to the Complaint, Tiro is an LLC organized under the laws of the state of Texas, and its principal place of business is in Dallas, Texas. The Complaint, however, is silent regarding the citizenship of Tiro’s members. The Complaint also states that Beacon is an LLC organized under the laws of Massachusetts, and its principal place of business is in Boston, Massachusetts; however, once again, the Complaint is silent regarding the citizenship of Beacon’s members.

 This failure alone is fatal regarding diversity because the citizenship of each member of the LLC is omitted. The principal place of business is irrelevant insofar as determining the citizenship of an LLC. What must be set forth are the names of each member of the limited liability company and the citizenship of each member. The Complaint does not “affirmatively and distinctly” set forth this information regarding Tiro or Beacon.

 The court is, therefore, unable to ascertain whether complete diversity exists.

In light of the insufficient allegations made by Tiro with respect to the citizenships of the parties to this litigation, the court is unable to ascertain the citizenship of all parties. Therefore, Tiro has failed to carry its burden and set forth allegations that “distinctly and affirmatively” state the citizenship of each party to this action, and the court, therefore, is unable to ascertain whether complete diversity of citizenship exists between the parties. As Tiro failed to carry its burden and show that complete diversity exists between the parties, the court lacks subject matter jurisdiction over this action. Accordingly, the court will dismiss this action without prejudice.

2018 WL 1368809, *3 (citation omitted).