3:17-cv-01995
M.D. Penn.Nov 6, 2017Background
- Plaintiffs (Lucille Joyner as administratrix of Janet M. Rains’ estate, Robert Dressler, and Jason McCloe) sued several defendants (Twiss Transport, Inc.; BT-Twiss Transport, LLC; Bulova Technologies Group, Inc.; Disney Worldwide Services, Inc.; and Robert Edwin Haines) asserting diversity jurisdiction under 28 U.S.C. § 1332.
- Complaint alleges residences and that corporate defendants are Florida entities with principal places of business in Largo/Lake Buena Vista, Florida.
- Plaintiffs asserted the amount in controversy exceeds $75,000 and claimed complete diversity.
- The court reviewed subject-matter jurisdiction sua sponte and found plaintiffs’ pleadings insufficient to establish citizenship (domicile) for natural persons and proper citizenship allegations for entities.
- Specific defects: (1) natural persons’ pleadings state residence, not domicile; (2) individual defendant Haines’ residence only; (3) corporations’ pleadings state they are Florida corporations with “a principal place of business” rather than alleging each corporation’s principal place of business (nerve center); (4) LLC defendant’s members and their citizenships are not identified or traced through membership layers.
- Court dismissed for lack of demonstrated subject-matter jurisdiction under Rule 12(h)(3) but granted plaintiffs 21 days to file an amended complaint curing jurisdictional defects or face dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal diversity jurisdiction exists | Plaintiffs alleged diversity under §1332 by stating residences and corporate incorporation/principal place of business in Florida and amount in controversy > $75,000 | Defendants did not assert contrary facts; court examined adequacy of plaintiffs’ jurisdictional allegations sua sponte | Complaint fails to allege citizenship (domicile) of natural persons, the nerve-center principal place of business for corporations, and the identities/citizenship of LLC members; jurisdiction not shown |
| Adequacy of alleging individuals’ citizenship | Alleged residence addresses for plaintiffs and decedent | Residence is insufficient to establish domicile for diversity purposes | Residence allegations are inadequate; plaintiffs must plead domicile (state citizenship) |
| Adequacy of alleging corporations’ citizenship | Alleged corporations are Florida corporations with principal places of business in Florida | Saying “a principal place of business” is insufficient; must plead each corporation’s principal place of business (nerve center) | Pleading deficient; must allege the corporation’s principal place of business (nerve center) |
| Adequacy of alleging LLC citizenship | Alleged BT-Twiss is a Florida LLC with principal place of business in Florida | Saying LLC is a Florida LLC and giving an address is insufficient; citizenship depends on each member’s citizenship and requires tracing through membership layers | Pleading deficient; must identify LLC members and their citizenships (trace through layers) |
Key Cases Cited
- Shaffer v. GTE N., Inc., 284 F.3d 500 (3d Cir.) (federal courts must address subject-matter jurisdiction sua sponte)
- Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365 (U.S.) (complete diversity requirement)
- Packard v. Provident Nat'l Bank, 994 F.2d 1039 (3d Cir.) (party asserting jurisdiction bears burden at all stages)
- Krasnov v. Dinan, 465 F.2d 1298 (3d Cir.) (residence is prima facie evidence but not conclusive of domicile)
- Hertz Corp. v. Friend, 559 U.S. 77 (U.S.) (corporation’s principal place of business is its nerve center)
- Zambelli Fireworks Mfg. Co., Inc. v. Wood, 592 F.3d 412 (3d Cir.) (LLC citizenship determined by citizenship of each member)
- Lincoln Ben. Life Co. v. AEI Life, LLC, 800 F.3d 99 (3d Cir.) (must trace citizenship through membership layers for entities)