AGM Painting, LLC v. Sherwin-Williams Company, The
2:19-cv-02242
| D. Kan. | Jun 11, 2019Background
- AGM Painting, LLC filed a breach of contract action in Johnson County, Kansas against The Sherwin‑Williams Company related to a painting project.
- Sherwin‑Williams removed the case to federal court, asserting diversity jurisdiction under 28 U.S.C. § 1332(a)(1).
- The removal pleading did not allege sufficient facts to establish the citizenship of AGM Painting’s individual members (AGM is an LLC) or definitively identify Sherwin‑Williams’ principal place of business.
- The court explained the governing rules: corporations are citizens of their state of incorporation and principal place of business; unincorporated entities (like LLCs) take the citizenship of each member.
- Because the notice of removal and attached petition failed to establish the parties’ citizenships, the court lacked a clear basis to confirm diversity jurisdiction.
- The court ordered the parties to file a joint status report with affidavits demonstrating each party’s citizenship and to show cause why the case should not be dismissed for lack of jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court has diversity jurisdiction | AGM’s petition identifies plaintiff’s incorporation in Kansas but does not identify LLC members’ citizenship (implicit: diversity exists or can be shown) | Sherwin‑Williams’ notice asserts diversity and lists Ohio incorporation and a principal office in Ohio (implicit: diversity exists) | Court held neither filing pleaded facts sufficient to establish citizenship for diversity; further proof required |
| Proper method to determine business entity citizenship | LLC citizenship determined by each member’s citizenship | Corporation citizenship determined by state of incorporation and principal place of business | Court reiterated these legal standards and required factual allegations/affidavits to apply them |
| Court’s duty when jurisdiction is uncertain | Plaintiff implicitly argues removal was proper by filing in federal court | Defendant relied on removal notice asserting diversity | Court emphasized its independent obligation to confirm subject‑matter jurisdiction and ordered submission of affidavits or risk dismissal |
| Remedy for insufficient jurisdictional allegations | AGM seeks to proceed in federal court | Sherwin‑Williams seeks federal adjudication via removal | Court ordered joint status report with affidavits by deadline; warned case may be dismissed if jurisdiction not established |
Key Cases Cited
- Newsome v. Gallacher, 722 F.3d 1257 (10th Cir.) (corporate citizenship includes state of incorporation and principal place of business)
- Americold Realty Trust v. Conagra Foods, Inc., 136 S. Ct. 1012 (2016) (unincorporated entities’ citizenship is determined by the citizenship of each member)
- Siloam Springs Hotel, LLC v. Century Sur. Co., 781 F.3d 1233 (10th Cir.) (LLC citizenship follows its members)
- Meyerson v. Showboat Marina Casino P’ship, 312 F.3d 318 (7th Cir.) (unchallenged rule on unincorporated entity citizenship)
- Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428 (2011) (court has independent obligation to ensure subject‑matter jurisdiction)
- Penteco Corp. Ltd. P’ship v. Union Gas Sys., Inc., 929 F.2d 1519 (10th Cir.) (court must dismiss when jurisdiction is lacking)