Smith v. Blitz U.S.A., Inc., 0:11-cv-01771

Robyn Smith, on behalf of minor Devan VanBrunt, filed a personal-injury suit arising from a gas-can explosion alleged to be manufactured by Blitz U.S.A., Inc. and sold at Wal-Mart.
Defendants Blitz and Wal-Mart removed the case to this Court under diversity jurisdiction after filing in Minnesota state court.
Blitz later filed for bankruptcy, triggering an automatic stay under 11 U.S.C. § 362.
Plaintiff moved to amend to add Kinderhook Capital Fund II, L.P. and Kinderhook Industries, LLC, asserting veil-piercing theories against them.
The Magistrate Judge granted leave to amend; Plaintiff filed a First Amended Complaint naming Blitz, Wal-Mart, the Kinderhook Entities as defendants.
The Court found the amended complaint insufficient to establish complete diversity because the Fund and Kinderhook’s citizenships could not be determined from the pleadings.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether diversity jurisdiction exists given the amended pleadings	Plaintiff asserts complete diversity among Minnesota, Oklahoma, Delaware, and Arkansas defendants.	Defendants contend lack of ascertainable citizenship for the Fund and Kinderhook precludes diversity.	Diversity jurisdiction unclear; court cannot proceed without identifying citizenship of Fund and Kinderhook.
Whether adding the Kinderhook Entities would destroy diversity	Plaintiff contends joinder does not defeat diversity as pled.	Joinder could destroy diversity given lack of citizenship information.	Court retains authority to revisit if amendment reveals loss of diversity; jurisdiction remains uncertain.
What remedy the court should employ given potential lack of subject-matter jurisdiction	Affirmative relief to proceed with amended pleadings to cure jurisdictional defects.	If diversity is destroyed, remand may be appropriate; jurisdiction must be reassessed.	Court orders a further amended complaint identifying all partners/members by May 23, 2012; jurisdiction to be reassessed thereafter.

Bailey v. Bayer CropScience, L.P., 563 F.3d 302 (8th Cir. 2009) (when amendment destroys diversity, leave to amend may be treated as nullity and remand considered)
Carden v. Arkoma Assocs., 494 U.S. 185 (U.S. 1990) (citizenship of limited partnerships determined by partners)
OnePoint Solutions, LLC v. Borchert, 486 F.3d 342 (8th Cir. 2007) (LLC citizenship determined by members)
GMAC Commercial Credit LLC v. Dillard Dep’t Stores, Inc., 357 F.3d 827 (8th Cir. 2004) (LLC citizenship based on members)