13 F. Supp. 3d 415
D.N.J.2014Background
- Plaintiff Lincoln Benefit Life sues all Defendants seeking declaratory judgment voiding two life insurance policies based on alleged misrepresentations and lack of insurable interest.
- ALS Capital Ventures and AEI Life are LLCs; Innovative Brokers and JRJ Services are other entities named in the suit.
- Plaintiff bases federal jurisdiction on complete diversity under 28 U.S.C. § 1332 and an amount in controversy exceeding $75,000.
- Defendants move to dismiss for lack of subject matter jurisdiction (12(b)(1)) and, for AEI and ALS, lack of personal jurisdiction (12(b)(2)) or, alternatively, to dismiss for lack of jurisdiction.
- Plaintiff cannot identify the members of the LLCs, and thus has not pled the citizenship of ALS and AEI as required for complete diversity.
- Court denies jurisdictional discovery as a cure and dismisses the Complaint without prejudice for lack of subject matter jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the complaint properly pled subject matter jurisdiction under §1332 | Plaintiff contends complete diversity exists and §1332 applies. | ALS and AEI are LLCs; Plaintiff failed to plead members' citizenship, breaking diversity. | Subject matter jurisdiction not established; dismiss and deny discovery. |
| Whether jurisdictional discovery is appropriate to cure diversity defects | Discovery could reveal members' citizenship to achieve diversity. | Jurisdictional discovery is not appropriate to establish diversity in this context. | Jurisdictional discovery denied. |
| Whether the LLC defendants' citizenship can be adequately pled by stating nominal domicile of the LLCs | Allegation that AEI and ALS are domiciled where identified should suffice. | Domicile of the LLCs themselves is insufficient; must plead members' citizenship. | Allegations are insufficient; not proper to establish complete diversity. |
Key Cases Cited
- Johnson v. SmithKline Beecham Corp., 724 F.3d 337 (3d Cir. 2013) (LLC citizenship determined by members' citizenship)
- Swiger v. Allegheny Energy, Inc., 540 F.3d 179 (3d Cir. 2008) (diversity requires complete diversity for LLCs)
- Emerald Investors Trust v. Gaunt Parsippany Partners, 492 F.3d 192 (3d Cir. 2007) (tests for determining trust citizenship; relevance to complexity of citizenship)
- Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324 (3d Cir. 2009) (jurisdictional discovery pertinent to personal jurisdiction; not directly to diversity)
- DaimlerChrysler Corp. v. Cuno, 547 U.S. 332 (U.S. 2006) (burden on plaintiff to prove jurisdiction; independent obligation to determine jurisdiction)
- Massachusetts School of Law at Andover, Inc. v. American Bar Ass’n, 107 F.3d 1026 (3d Cir. 1997) (jurisdictional discovery generally available in personal jurisdiction; not controlling for diversity)
- Emerald Investors Trust v. Gaunt Parsippany Partners, 492 F.3d 192 (3d Cir. 2007) (reiterated approach to determining complex citizenship for diversity)