Kelly v. LCL Construction Services LLC
2:23-cv-07566
| E.D.N.Y | Jun 27, 2025Background
- Plaintiffs Michael and Bonnie Kelly sued LCL Construction Services LLC ("LCL Construction") and related individuals in federal court, asserting state law claims and invoking diversity jurisdiction.
- The court dismissed the case for lack of subject matter jurisdiction as the complaint failed to adequately plead the citizenship of all members of LCL Construction, a required showing for diversity jurisdiction involving LLCs.
- Plaintiffs attempted to establish LCL Construction's citizenship using Florida LLC public filings and statements about the company's management and ownership.
- The January 10, 2025 dismissal noted that such public filings, like LLC annual reports, are insufficient to establish the full membership/citizenship of an LLC under controlling law.
- Plaintiffs then moved for reconsideration, arguing both clear error and manifest injustice, particularly because of LLC members' limited public disclosure and Defendants' default.
- Judge Choudhury denied the motion, holding there was no clear error, new evidence, or manifest injustice that would warrant reconsideration under Rule 59(e).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of LLC Public Filings | Public filings and certifications show Moscardi is sole member; no evidence of more | Public filings don’t show all members | Insufficient to establish all members or diversity jurisdiction |
| Role of Defendants’ Default | Default prevented jurisdictional discovery; default should not block federal court | Not specifically addressed | Default does not excuse failure to establish jurisdiction |
| Manifest Injustice | Dismissal allows defendants to benefit from default; no way to satisfy diversity | Not specifically addressed | There is no manifest injustice; federal law is clear on jurisdictional limits |
| Application of Legal Standard | Court clearly erred in applying strict standard with available evidence | Court applied law correctly | No clear error; denial of reconsideration justified |
Key Cases Cited
- Carter v. HealthPort Techs., LLC, 822 F.3d 47 (2d Cir. 2016) (LLC citizenship determined by the citizenship of all its members)
- Metzler Inv. Gmbh v. Chipotle Mexican Grill, Inc., 970 F.3d 133 (2d Cir. 2020) (standard for reconsideration: intervening law, new evidence, or clear error/manifest injustice)
- Analytical Survs., Inc. v. Tonga Partners, L.P., 684 F.3d 36 (2d Cir. 2012) (Rule 59(e) is not for relitigating issues or new theories)
- Corsair Special Situations Fund, L.P. v. Nat’l Res., 595 F. App’x 40 (2d Cir. 2014) (manifest injustice is a high bar, rarely met)