Obsidian Specialty Insurance Company v. AM Exteriors LLC
2:25-cv-01077
W.D. Wash.Jun 16, 2025Background
- Obsidian Specialty Insurance filed a complaint in the Western District of Washington, invoking federal diversity jurisdiction.
- Plaintiff alleged it was incorporated in Delaware, but did not specify its principal place of business or clarify if it should be treated as incorporated or unincorporated for diversity purposes.
- Defendant AM Exteriors LLC was described only as a Washington limited liability company, with no information about its members' citizenship.
- The complaint stated that the amount in controversy exceeded $75,000 but did not provide factual support for this assertion.
- The court, on its own motion (sua sponte), reviewed whether it had subject matter jurisdiction over the case.
- The court dismissed the complaint without prejudice, granting plaintiff leave to amend the deficiencies in its pleadings by June 30, 2025.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Adequacy of jurisdictional pleading | Parties are diverse; threshold met | Not addressed | No; factual allegations insufficient re: citizenship, amount |
| Citizenship of Plaintiff (Insurance Co.) | Incorporated in Delaware | Not addressed | Must plead both place of incorporation, principal place |
| Citizenship of Defendant (LLC) | LLC organized in Washington | Not addressed | Must identify citizenship of all LLC members |
| Amount in Controversy | Summarily alleged over $75,000 | Not addressed | Conclusory allegations insufficient; factual basis required |
Key Cases Cited
- Arbaugh v. Y&H Corp., 546 U.S. 500 (federal courts have an independent obligation to determine subject-matter jurisdiction)
- Exxon Mobil Corp. v. Allapattah Services, Inc., 545 U.S. 546 (diversity requires complete diversity between all plaintiffs and all defendants)
- Americold Realty Tr. v. Conagra Foods, Inc., 577 U.S. 378 (citizenship of unincorporated entities is based on membership)
- Hunt v. Wash. State Apple Advert. Comm’n, 432 U.S. 333 (amount in controversy in declaratory/injunctive relief is measured by the value of the object of litigation)
- Johnson v. Columbia Properties Anchorage, LP, 437 F.3d 894 (LLCs have citizenship of all their owners/members)