PC Specialists, Inc. v. Made Technology LLC
3:17-cv-01710
S.D. Cal.Sep 5, 2017Background
- Plaintiff PC Specialists, Inc. dba Technology Integration Group (TIG) filed suit in federal court alleging diversity jurisdiction under 28 U.S.C. § 1332.
- TIG alleged it was a California corporation with its principal place of business in San Diego.
- The original complaint failed to properly allege the citizenship of defendant Made Technology LLC; it merely stated on information and belief that Made Technology was a New Jersey LLC with no California members.
- The court issued an Order to Show Cause (OSC) why the case should not be dismissed for lack of subject-matter jurisdiction due to incomplete citizenship allegations.
- TIG responded that publicly available information about Made Technology’s members was limited and filed a First Amended Complaint alleging, on information and belief, that all members of Made Technology are citizens of New Jersey.
- The court concluded that, given the FAC allegation, complete diversity appears to exist and vacated the OSC.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of diversity allegations | TIG contended it could not allege specific member citizenship due to limited public information and alleged members are New Jersey citizens on information and belief | Made Technology did not have a specific disputed argument on record; original complaint lacked definitive member citizenship facts | Court found FAC’s allegation that all members are New Jersey citizens sufficient to show apparent complete diversity and vacated the OSC |
| Standard for pleading LLC citizenship | TIG relied on information and belief where membership info was limited | Implicit risk that conclusory or vague allegations fail to meet pleading requirements | Court applied authority requiring affirmative allegations of actual citizenship and found FAC remedied the defect |
Key Cases Cited
- Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894 (9th Cir. 2006) (an LLC is a citizen of every state of which its members are citizens)
- Kanter v. Warner-Lambert Co., 265 F.3d 853 (9th Cir. 2001) (plaintiff must affirmatively allege actual citizenship of parties to establish diversity jurisdiction)
- Whitmire v. Victus Ltd., 212 F.3d 885 (5th Cir. 2000) (in diversity actions plaintiffs must state all parties’ citizenships so complete diversity can be confirmed)
- Chemical Leaman Tank Lines, Inc. v. Aetna Cas. & Sur. Co., 177 F.3d 210 (3d Cir. 1999) (similar requirement that citizenship of parties be affirmatively pled)