Waterbridge Texas Operating, LLC v. Petro Guardian, LLC
4:23-cv-00035
W.D. Tex.Aug 18, 2024Background
- Waterbridge Texas Operating, LLC and Waterbridge Holdings, LLC sued Petro Guardian, LLC in Texas state court.
- Petro Guardian, a Louisiana LLC with two members (Stephen and Robert Morris), removed the case to federal court based on claimed diversity jurisdiction.
- Waterbridge moved to remand back to state court, asserting improper removal due to insufficient evidence of diversity, and also moved to strike an affidavit submitted by Petro Guardian.
- The magistrate judge initially recommended denying remand, but later withdrew that recommendation, called for more briefing, and ultimately recommended remand while denying the motion to strike.
- Petro Guardian objected, particularly to findings that it had not sufficiently established the citizenship of all its members at both filing and removal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Petro Guardian establish complete diversity? | Removal defective: did not show both members were citizens | Supplemented with affidavits & public records | Petro Guardian failed to prove complete diversity; remand granted |
| Was Petro Guardian's pleading of diversity proper? | Removal notice cited wrong standard for LLCs | A response properly identified members | Pleading was deficient; removal notice was not sufficient |
| Was affidavit evidence for member citizenship adequate? | Affidavit lacked specific dates needed for jurisdiction | Affidavit and supplemental records suffice | Evidence did not adequately prove domicile on requisite dates |
| Motion to strike affidavit | Affidavit should be excluded | No objection to denial of this motion | Motion to strike denied |
Key Cases Cited
- Coury v. Prot, 85 F.3d 244 (5th Cir. 1996) (citizenship for diversity must be determined at filing and removal; domicile defined)
- New Orleans & Gulf Coast Ry. Co. v. Barrois, 533 F.3d 321 (5th Cir. 2008) (removing party bears burden to show federal subject matter jurisdiction)
- MidCap Media Fin., LLC v. Pathway Data, Inc., 929 F.3d 310 (5th Cir. 2019) (LLC's citizenship based on all members)