Thursday, October 31, 2019

Might Diversity Jurisdiction be Simplified?

Might Diversity Jurisdiction be Simplified?

In any lawsuit involving an unincorporated business organization such as a limited liability company, it can be difficult to determine whether or not the suit may be brought in or removed to federal court on the basis of “diversity jurisdiction.” This difficulty arises from the fact that whether or not diversity jurisdiction is available is dependent in part upon who are the members of the LLC, information that is typically not available. This difficulty in determining the LLC membership (the same problem arises in connection with, for example, general and limited partnerships) has at times led to gamesmanship; essentially, one of the parties asserts “you have to say who all of our members are but we don’t have to tell you.”

Earlier this year that was proposed an amendment to the Federal Rules of Civil Procedure that would require each party to a lawsuit to disclose the information necessary to determine its citizenship. Chris Schaefer and I have recently published a short article on this topic in Business Law Today, that article titled Proposed Change to Federal Rules of Civil Procedure Could Reduce Questions as to Federal Diversity Jurisdiction. HERE IS A LINK to that article. We hope you find it of interest.

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