Kasal v. Encana Oil & Gas (USA), Inc.
3:12-cv-00810
N.D. Tex.Mar 30, 2012Background
- Kasal and SLMR 2006 Ltd. sue Encana Oil & Gas (USA) Inc., Chesapeake Operating, Inc., and Chesapeake Exploration, L.L.C. in a diversity-based federal matter.
- Plaintiffs allege Kasal is a Texas resident and SLMR is a Texas-domiciled limited partnership; defendants are a Delaware corporation with HQ in Denver and two Oklahoma entities.
- The court must assess subject matter jurisdiction on its own and determine if complete diversity exists among plaintiffs and defendants.
- The complaint does not clearly establish each party’s citizenship or each entity’s principal place of business, limiting the court’s ability to confirm diversity.
- The court directs amendment to plead citizenship for Kasal and the states of incorporation/principal places of business for Encana and Chesapeake entities, plus the members of SLMR and Chesapeake Exploration.
- If not amended timely, the case will be dismissed without further notice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is there complete diversity between parties as pleaded? | Kasal/SMLR allege diverse citizenship from parties. | Citizenship not proven due to unclear composition. | Amendment required to determine diversity. |
| Does Kasal's residency establish citizenship? | Kasal is a Texas resident. | Residency is not sufficient for citizenship. | Residency alone does not establish citizenship. |
| How is corporate/LLC citizenship determined for Encana and Chesapeake Operating? | Citizenship should reflect incorporation and principal place of business. | Same rule applies but needs clarity in pleadings. | Citizenship determined by incorporation plus principal place of business. |
| Must the members of SLMR and Chesapeake Exploration be identified for citizenship? | Members' citizenships determine SLMR and LLCs’ citizenship. | Member identities must be pled. | Yes; must plead names and citizenship of each member. |
| What is the remedy if the complaint is deficient for lack of diversity? | Amend to cure jurisdictional defects. | Amendment required; dismissal if not timely filed. | Amend within ten days or case will be dismissed. |
Key Cases Cited
- Torres v. Southern Peru Copper Corp., 113 F.3d 540 (5th Cir. 1997) (court may sua sponte address subject-matter jurisdiction)
- Strawbridge v. Curtiss, 7 U.S. 267 (1806) (necessary to establish complete diversity)
- Carden v. Arkoma Associates, 494 U.S. 185 (1990) (control of corporate citizenship based on incorporations and principal places of business)
- Harvey v. Grey Wolf Drilling Co., 542 F.2d 1077 (5th Cir. 2008) (applies citizenship rules to LLCs and partnerships)
- Strain v. Harrelson Rubber Co., 742 F.2d 888 (5th Cir. 1984) (residency alone does not establish citizenship)