Diversity Jurisdiction and Series
It
is possible that a suit currently pending
in Louisiana
will provide some direction as to how citizenship
is assessed
for purposes of the availability (or not) of diversity jurisdiction
when one of the parties is a series entity. On the other hand, maybe this opportunity will
be lost. Alphonse v. Arch Bay Holdings, LLC, Civil Act. No. 12-330 (E.D. Louisiana).
This lawsuit arose out of a plain-vanilla foreclosure action
wherein Alphonse challenged
the loss of his home pursuant to a “confession of judgment clause” in his note. That note was held by Arch Bay Holdings, L.L.C.-Series 2010B, a series of a Delaware LLC. In a prior decision
of the Fifth Circuit Court
of Appeals, a
number of points were addressed, including the court leaving open the possibility
that the internal shield
of liabilities
between the series might not be respected under
Louisiana law. As of now that question remains
open. That earlier decision
WAS REVIEWED HERE.
The most
recent decision
rendered in this case addresses supplemental
jurisdiction and
diversity.
Alphonse v. Arch Bay Holdings, LLC, 2014 WL 4792181 (E.D. La. Sept. 24, 2014). In this decision, the Court noted that Arch Bay Holdings, as well as another
defendant, Specialized Loan
Servicing, LLC, had failed to comply with an earlier order identifying their
respective citizenships. Only if there is actual diversity can the Court exercise supplemental
jurisdiction over
the state law claims remaining
in this dispute. To that end, the parties were ordered to file the necessary information
as to citizenship.
The interesting question
is whether
Arch Bay Holdings is obligated
to provide information as
to the citizenship of
all of its members, irrespective
of association
with any particular series, or whether citizenship
will be determined at the series level, in which case presumably
only the citizenship of
those persons
associated with
that series
will be relevant. Either way, the answer will be interesting.
No comments:
Post a Comment