MANAGEMENT NOMINEES, INC., Plаintiff Counter Defendant-Appellee, v. ALDERNEY INVESTMENTS, LLC, Defendant Counterclaimant-Appellant. Edyta Skowronska, individually and on behalf of her minor children R.S. and D.S., Intervenor Defendant-Appellant.
No. 15-8011
United States Court of Appeals, Tenth Circuit
Feb. 19, 2016.
813 F.3d 1321
Before GORSUCH, BACHARACH, and McHUGH, Circuit Judges. McHUGH, Circuit Judge.
Even if we look past the inadequate briefing, the result remains the same. Before the special mastеr, Ms. Trujillo presented no evidence of her beneficial use of water for indoor purposes. And she failed to controvert the State‘s evidence regarding historic per-household indoor use. Moreover, her argument that a permit alone creates water rights contradicts New Mexico law. See, e.g.,
In sum, Ms. Trujillo has not presented an adequately developed argument challenging the special master‘s summary judgment order. And she failed to controvert the State‘s evidence at summary judgment. We therefore find no error in the special master‘s summary judgment order or the district court‘s 2015 order.
III. CONCLUSION
For the reasons stated, we affirm the district court‘s 2015 order.
Gregory B. Kanan and Hermine Kallman, Lewis Roca Rothgerber, LLP, Dеnver, CO, for Appellants Alderney Investments, LLC and Edyta Skowronska.
Gregory F. Hauser, Wuersch & Gering LLP, New York, NY; Larry B. Jones, Burg Simpson Eldredge Hersh & Jardine, P.C., Cody, WY, for Appellee Management Nominees, Inc.
I. INTRODUCTION
This case raises a dispute regarding the citizenship of a Wyoming LLC and whether, in light of our recent decision in Siloam Springs Hotel, L.L.C. v. Century Surety Co., 781 F.3d 1233 (10th Cir.2015), the district court lacked subject-matter jurisdiction over the case. We conclude that Alderney Investments, LLC (Alderney) is an unincorporated association for purposes of federal diversity jurisdiction, with its citizenship therefore determined by that of its members. Because Alderney‘s members are foreign corporations, there is not complete diversity between Alderney and Management Nominees, Inc. (MNI), a foreign corporation. As a rеsult, the district court lacked subject-matter jurisdiction over the action under
II. BACKGROUND
A. Factual History
This case involves competing claims to the ownership of Alderney Investments, LLC by relatives of Rudolf Skowronska (Rudolf), a Polish national.1 Alderney was
In the years that followed, the beneficial ownership of Alderney went through a series of transformations. Rudolf initially held beneficial ownership of Alderney through a series of intermediary entities, including both of Aldеrney‘s initial members, Management Nominees Inc. and Nominees Associated Inc., as well as UEB Services, LTD and Morgan & Morgan Corporation Services S.A. In August 1999, Rudolf, although not individually a member of Alderney, purported to transfer ownership of Aldernеy to his half-sister, Dagmara Skowronska. Alderney‘s managers subsequently voted to give Dagmara “power of attorney” over Alderney‘s affairs.
The parties’ versions of events after this point diverge. The Appellee, MNI, is a Belizean corрoration also named Management Nominees Inc., which contends that in 2003 Dagmara transferred her interest in Alderney to Rico Sieber, her husband and MNI‘s sole shareholder. The Appellants, Alderney and Edyta Skowronska, Rudolf‘s wife, contend that Dagmara transferred 90% of her interest to Edyta and her two children after Rudolf‘s disappearance in 2005. Further complicating matters, in 2012, Alderney‘s members, Management Nominees Inc. and Nominees Associated Inc., transferred their membership interest in Alderney to MNI, making MNI the sole member of Alderney.
The dispute over ownership of Alderney came to a head in 2013, when Edyta sought to dissolve Alderney. Edyta, on behalf of Alderney, filed articles of dissolution with the Wyoming Secretary of State. The Secretary issued a certificate of dissolution for Alderney in March 2013, and this lawsuit followed.
B. Procedural History
MNI filed suit in federal district court against Alderney in July 2013, principally seeking either damages or declaratory and injunctive relief recognizing MNI as the sole mеmber of Alderney and ordering Alderney to be reinstated with the Wyoming Secretary of State. MNI moved for summary judgment, arguing the undisputed facts showed it was the sole member of Alderney and that Edyta therefore lacked the authority to file for Alderney‘s dissоlution. The district court agreed, granted summary judgment to MNI, and entered a final judgment in its favor.
Edyta then moved to intervene for purposes of appeal, which the district court granted. She and Alderney timely appealed the district court‘s summаry judgment order and final judgment. On appeal, Edyta and Alderney raise for the first time a challenge to the district court‘s subject-matter jurisdiction.
III. ANALYSIS
Despite the complicated factual history, the parties agree on the critical pоint: MNI is a foreign corporation, and all of Alderney‘s members (past and present) are also foreign entities. Nevertheless, MNI asserts federal jurisdiction, claiming we may look to Alderney‘s state of organization—Wyoming—for its citizenship. In assessing federal jurisdiction, then, this court must consider whether Alderney should be treated as an unincorporated association for purposes of diversity jurisdiction under
Relying on guidance from the Supreme Court, we recently clarified that “in determining the citizenship of an unincorporated association for purposes of diversity, federal courts must include all the entities’ members.” Id. at 1237-38 (citing Carden v. Arkoma Assocs., 494 U.S. 185, 195-96, 110 S.Ct. 1015, 108 L.Ed.2d 157 (1990) (holding that the citizenship of a limited partnership is determined by the citizenship of each of its partners, both general and limited); Conagra Foods, Inc. v. Americold Logistics, LLC, 776 F.3d 1175, 1180-81 (10th Cir.2015), cert. granted, ___ U.S. ___, 136 S.Ct. 27, 192 L.Ed.2d 997 (2015)). This court also explained that an entity‘s citizenship for purposes of diversity depends not on the entity‘s unique features or whether state law makes the entity more like a corporation than an unincorporated association. Id. Rather, only those entities that are “corporations, in the traditional understanding of that word, will be treated as a person for purposes of diversity jurisdiction.” Id. at 1237 (emphasis added) (citing Carden, 494 U.S. at 197, 110 S.Ct. 1015).
In arguing that jurisdiction in this case was proper under
In Siloam Springs, the party asserting federal jurisdiction made the same argument Appellee makes here—that under the unique features of state law an LLC was “equivalent to a corporation.” Id. at 1237. In rejecting this approach, we relied on the Supreme Court‘s Carden decision:
The 50 States have created, and will continue to create, a wide assortment of artificial entities possessing different powers and characteristics, and composеd of various classes of members with varying degrees of interest and control. Which of them is entitled to be considered a “citizen” for diversity purposes, and which of their members’ citizenship is to be consulted, are questions more readily resolved by legislative prescription than by legal reasoning, and questions whose complexity is particularly unwelcome at the threshold stage of determining whether a court has jurisdiction.
Id. (quoting Carden, 494 U.S. at 197, 110 S.Ct. 1015).
As in Siloam Springs, we decline here to evaluate whether the unique features of
Because Alderney is an unincorporated association, its citizenship must be determined by “includ[ing] all the entities’ members.” Id. Here, the parties do not dispute “that the member(s) of Alderney Investments, LLC have always been foreign entities or individuals.” And although Appellee argues we should measure the citizenship of an entity by the jurisdiction in which it is organized, in addition to that of its members, that argument is both legally unsupported and contrary to the Supreme Court‘s decision in Carden, 494 U.S. at 195-96, 110 S.Ct. 1015 (“We adhere to our oft-repeated rule that diversity jurisdiction in a suit by or against the entity depends on the citizenship of ‘all the members,’ ‘the several persons composing such association,’ ‘each оf its members.’ “) (citations omitted).
Because there are only foreign entities on both sides of this dispute, the district court lacked subject-matter jurisdiction under
IV. CONCLUSION
Having concluded complete diversity between the parties is lacking here, we vacate the judgment and remand the case to the district court with instructions to dismiss the action for lack of subject-matter jurisdiction.