Ultra Lane, Ltd. v. DRC Emergency Services, LLC
3:17-cv-00430
M.D. La.Sep 5, 2017Background
- Ultra Lane sued to recover amounts under a sub‑subcontract for flood debris removal related to an August 2016 East Baton Rouge Parish contract; prime contractor was DRC, subcontractor RPF, sub‑subcontractor Ultra Lane.
- Ultra Lane alleged DRC forced extra work and sought recovery (unjust enrichment and statutory liability as general contractor).
- Complaint invoked diversity jurisdiction; amount in controversy undisputedly satisfied.
- DRC moved to dismiss for lack of subject‑matter jurisdiction and failure to state a claim, arguing Ultra Lane failed to plead party citizenship properly and that DRC is a Texas citizen destroying diversity.
- Ultra Lane filed an unopposed motion to drop the non‑diverse defendant (DRC) and to amend the complaint to properly allege party citizenship; DRC did not oppose amendment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Adequacy of diversity allegations | Ultra Lane: will amend to allege citizenships; is a Texas partnership with Texan domiciliary; RPF/Cahaba are Alabama LLCs | DRC: original complaint fails to distinctly and affirmatively plead citizenship of plaintiff and LLC defendants | Court: original complaint inadequate; allowed amendment under Rule 15 and required further amendment re: Hartford's incorporation |
| Citizenship of LLCs and corporations | Ultra Lane: proposed First Amended Complaint alleges LLC members' domiciles and Hartford's principal place of business | DRC: argued citizenship of DRC (an LLC) shows lack of complete diversity | Court: LLC citizenship must be pleaded by identifying each member; Hartford's state of incorporation not alleged—ordered second amendment to supply it |
| Dropping non‑diverse party under Rule 21 vs. Rule 19 | Ultra Lane: seeks to drop DRC as non‑diverse party to preserve diversity jurisdiction | DRC: (implicitly) challenged jurisdiction; parties did not brief indispensability under Rule 19 | Court: granted leave to amend and dismissed DRC without prejudice; declined to decide Rule 21 dismissal for misjoinder because indispensability under Rule 19 not briefed, leaving Rule 12(b)(7) relief available later |
| Motion to dismiss as moot | Ultra Lane: amendment and dismissal of DRC will cure jurisdictional defect | DRC: moved to dismiss on jurisdiction and merits | Court: DRC's motion to dismiss denied as moot after Plaintiff's amendments and DRC's dismissal without prejudice |
Key Cases Cited
- Stafford v. Mobil Oil Corp., 945 F.2d 803 (5th Cir. 1991) (pleading requirement that citizenship be alleged distinctly and affirmatively)
- McGovern v. American Airlines, Inc., 511 F.2d 653 (5th Cir. 1975) (same)
- McLaughlin v. Mississippi Power Co., 376 F.3d 344 (5th Cir. 2004) (complete diversity requirement explained)
- Mas v. Perry, 489 F.2d 1396 (5th Cir. 1974) (diversity must exist when complaint is filed)
- Getty Oil Corp. v. Ins. Co. of N. Am., 841 F.2d 1254 (5th Cir. 1988) (burden on party invoking diversity to prove complete diversity)
- Newman‑Green, Inc. v. Alfonzo‑Larrain, 490 U.S. 826 (U.S. 1989) (dropping non‑diverse party to preserve diversity reviewed with Rule 19 indispensability principles)
- Ralli‑Coney, Inc. v. Gates, 528 F.2d 572 (5th Cir. 1976) (addressing dismissal of non‑diverse parties to preserve diversity)
- Martin's Herend Imports, Inc. v. Diamond & Gem Trading U.S.A. Co., 195 F.3d 765 (5th Cir. 1999) (Rule 15 bias in favor of granting leave to amend)
- Dussouy v. Gulf Coast Inv. Corp., 660 F.2d 594 (5th Cir. 1981) (same)
- Illinois Central Gulf R.R. Co. v. Pargas, Inc., 706 F.2d 633 (5th Cir. 1983) (corporate citizenship depends on state of incorporation and principal place of business)