1:11-cv-00478
N.D. Ill.Aug 14, 2012Background
- Tru-Grind, Inc. filed suit against Swiss-Tech, LLC in the Northern District of Illinois arising from a business dispute.
- Swiss-Tech, LLC removed the case to federal court on January 21, 2011, alleging diversity jurisdiction under 28 U.S.C. § 1332.
- Plaintiff is an Illinois corporation with principal place of business in Palatine, Illinois; Swiss-Tech is a Delaware LLC with principal place of business in Delavan, Wisconsin.
- The removal notice did not properly allege Swiss-Tech’s citizenship, raising questions about complete diversity.
- The court must determine whether diversity exists by tracing the citizenship of Swiss-Tech’s members, per Seventh Circuit precedent for LLCs treated like partnerships for purposes of diversity.
- The court orders Swiss-Tech to file an amended notice of removal by August 22, 2012; failure to do so will result in remand to state court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is complete diversity present to support removal? | Tru-Grind argues lack of complete diversity due to Swiss-Tech’s improper citizenship pleading. | Swiss-Tech contends it satisfies diversity if proper member citizenship is established. | Proceedings hinge on amended removal showing proper citizenship; pending ruling on diversity. |
| Whether Swiss-Tech, LLC’s citizenship was properly pled for diversity purposes | Lacks proper articulation of LLC member citizenship establishing complete diversity. | Ambiguity in pleading can be cured by amendment to show member citizenship. | Amended notice required to properly allege the requisite citizenship of Swiss-Tech, LLC. |
| Should the case be remanded if diversity is not properly pled? | N/A | If diversity is not shown, removal invalid and case should be remanded. | If amendment is not filed by August 22, 2012, remand will occur. |
| What is the effect if there is diversity on the pending summary judgment motion? | N/A | Court may rule on the motion if diversity is established. | Court will consider the pending summary judgment motion as soon as practicable if diversity exists. |
Key Cases Cited
- Cosgrove v. Bartolotta, 150 F.3d 729 (7th Cir. 1998) (LLC treated like partnership for diversity; determine citizenship from members)
- Hart v. Terminex Int'l, 336 F.3d 541 (7th Cir. 2003) (citizenship of unincorporated associations traced through all members)
- Meyerson v. Harrah's East Chicago Casino, 299 F.3d 616 (7th Cir. 2002) (multilevel citizenship must be traced to determine diversity)
- Hukic v. Aurora Loan Servs., 588 F.3d 420 (7th Cir. 2009) (state of LLC's principal place of business irrelevant to citizenship)
- Craig v. Ontario Corp., 543 F.3d 872 (7th Cir. 2008) (courts may raise sua sponte jurisdictional issues at any stage)
- Sadat v. Mertes, 615 F.2d 1176 (7th Cir. 1980) (support for sua sponte jurisdiction challenges)