EnVen Energy Ventures L L C v. Gemini Insurance Co
6:17-cv-01573
W.D. La.Apr 6, 2018Background
- EnVen Energy Ventures, LLC sued Gemini Insurance Company over insurer defense and indemnity obligations arising from an incident off the coast of Louisiana.
- Plaintiff invoked federal jurisdiction alternatively under diversity (28 U.S.C. § 1332) and the Outer Continental Shelf Lands Act (OCSLA).
- Complaint alleged Gemini is a Delaware corporation with principal place of business in Connecticut; EnVen alleged it is an LLC formed in Louisiana with principal place of business in Texas.
- The complaint did not identify each member of EnVen or state each member’s citizenship.
- Plaintiff alleged the amount in controversy exceeds $75,000.
- The Court deferred ruling on defendant’s motion to transfer and instead raised subject-matter jurisdiction sua sponte, ordering EnVen to submit evidence supporting diversity or OCSLA jurisdiction and to address choice-of-law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of diversity jurisdiction | Diversity exists because Gemini is DE & CT and EnVen’s principal place of business is TX, with amount > $75,000 | Diversity lacking because EnVen failed to allege citizenship of each LLC member | Court: Plaintiff failed to establish diversity; must identify every member's citizenship to show complete diversity |
| Amount in controversy | Alleged > $75,000 in good faith | No challenge to the good-faith allegation | Court: Amount-in-controversy requirement satisfied based on plaintiff’s good-faith allegation |
| OCSLA provides jurisdiction | OCSLA covers disputes arising from an offshore incident; thus federal jurisdiction exists | Court questioned whether OCSLA's grant covers a standalone insured–insurer contract dispute without an underlying injury claim | Court: Not convinced OCSLA clearly covers this contract dispute; plaintiff must cite statutory/jurisprudential authority if relying on OCSLA |
| Applicable substantive law | If diversity: state substantive law (Louisiana) applies; if OCSLA: OCSLA choice-of-law analysis controls | Defendant implicitly contests scope/application of OCSLA and choice-of-law | Court: Directed plaintiff to brief which law should apply (state, federal, or maritime) depending on established jurisdiction |
Key Cases Cited
- Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574 (1999) (federal courts must ensure subject-matter jurisdiction and may raise it sua sponte)
- Howery v. Allstate Ins. Co., 243 F.3d 912 (5th Cir. 2001) (party invoking federal jurisdiction bears burden of proof)
- Tewari De-Ox Sys., Inc. v. Mountain States/Rosen, L.L.C., 757 F.3d 481 (5th Cir. 2014) (LLC citizenship determined by citizenship of all members)
- Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077 (5th Cir. 2008) (same—unincorporated entities’ citizenship traced to all members)
- Carden v. Arkoma Assocs., 494 U.S. 185 (1990) (citizenship of unincorporated entity based on citizenship of all members)
- Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938) (federal courts apply state substantive law in diversity cases)