An LLC Does Not Have, For Purposes of Diversity Jurisdiction, a Principal Place of Business

An LLC Does Not Have, For Purposes of Diversity Jurisdiction, a Principal Place of Business

      In a recent decision from Alabama, there was reiterated the test for what is the citizenship of an LLC. In the course of that review, it was again made express that an LLC’s principal place of business does not impact upon diversity jurisdiction analysis. Glovis Alabama, LLC v. Richway Transportation Services Inc., Civil Action 18-00521-KD-N, 2019 WL 4039626 (S.D. Ala. August 27, 2019).

      In this instance, the court had to repeat (it had apparently gone over the same point earlier in the lawsuit) the rules for determining, for purposes of diversity jurisdiction, the citizenship of an LLC.  The plaintiff kept looking to where an LLC has its principal place of business. Rather, only the citizenship of the LLC’s members is relevant. In this instance, the sole member of the LLC was a business corporation, and its principal place of business would be attributed to the LLC:

For diversity purposes, Glovis is a California citizen only – not Alabama. This is because the principal place of business of an LLC is irrelevant (LLC citizenship is only determined by the citizenship of the LLC’s members – not the state of the LLC’s incorporation or the LLC’s principal place of business). As such, only the principal place of business of Glovis’ member that is a corporation (Glovis America, Inc. -- Irvine, California) is relevant.

 

2019 WL 4039626, *6

 

       In support of the above quoted language, there were cited a number of authorities including to Ribstein and Keatinge on Limited Liability Companies §13:6, which was quoted for the proposition that “While an LLC is a citizen of every state in which a member is a citizen, unlike a corporation, it is not a citizen of its state of organization or of its principal place of business for diversity purposes unless a member is a citizen of that state.”