Background

• Sienna Ventures, LLC (New York LLC; sole member a New York citizen) sued Halley Equipment Leasing, LLC on January 11, 2018 for breach of an Aircraft Purchase Agreement, invoking diversity jurisdiction under 28 U.S.C. § 1332.
• The original complaint identified Halley as a Texas LLC but did not allege the citizenship/domicile of Halley’s members.
• The Court ordered Plaintiff to show cause why the case should not be dismissed for lack of subject matter jurisdiction; Plaintiff filed an amended complaint and a response but still failed to allege the members’ citizenship.
• Plaintiff’s lone jurisdictional assertion was that Halley is a Texas LLC; no facts about the individual members’ domiciles were provided.
• The Court concluded that diversity was not properly pleaded because an LLC’s citizenship depends on the citizenship of each member, and Plaintiff had multiple opportunities to cure the deficiency but did not do so.

Issues

Key Cases Cited

• Pennsylvania Pub. Sch. Employees’ Ret. Sys. v. Morgan Stanley & Co., Inc., 772 F.3d 111 (2d Cir. 2014) (party asserting diversity bears the burden of proving it)
• Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546 (U.S. 2005) (diversity requires complete diversity between all plaintiffs and all defendants)
• Leveraged Leasing Admin. Corp. v. PacificCorp Capital, Inc., 87 F.3d 44 (2d Cir. 1996) (diversity must be distinctly and positively averred)
• Linardos v. Fortuna, 157 F.3d 945 (2d Cir. 1998) (individual citizenship depends on domicile)
• Bayerische Landesbank, New York Branch v. Aladdin Capital Mgmt. LLC, 692 F.3d 42 (2d Cir. 2012) (LLC’s citizenship is determined by citizenship of each member)
• Handelsman v. Bedford Vill. Assocs. Ltd. P’ship, 213 F.3d 48 (2d Cir. 2000) (complaint must allege citizenship of natural persons who are LLC members)
• Bishop v. Toys "R" Us–NY LLC, 414 F. Supp. 2d 385 (S.D.N.Y. 2006) (same rule for pleading LLC citizenship)