Opinion
No. 04 Civ. 741 (CSH).
July 26, 2005
MEMORANDUM AND ORDER
Presently pending before the Court in this putative diversity action is defendant's fully ripe Motion to Dismiss. Prior to adjudication of defendant's motion, however, I must be satisfied that this Court has subject matter jurisdiction over the case. As observed by Justice Harlan more than a century ago, in "cases where such jurisdiction does not affirmatively appear in the record on which, in the exercise of that power, it is called to act . . . the first and fundamental question is that of jurisdiction." Great Southern Fire Proof Hotel Co. v. Jones, 177 U.S. 449, 453 (1900). Because the pleadings insufficiently set forth the citizenship of defendant Pareto Partners, this first and fundamental question remains unanswered.
The first grounds for defendant's Motion to Dismiss is that this Court lacks subject matter jurisdiction because indispensable parties — including Lynne S. Minard, Inc., Palomar Management LLC, and Palomar Management LP — cannot be joined without destroying diversity jurisdiction. I do not address this facet of defendant's motion herein. Rather, as described in detail below, this Memorandum and Order raises, sua sponte, the antecedent question of whether this Court has jurisdiction based on the citizenship of the general partnership defendant Pareto Partners.
Rule 8(a), Fed.R.Civ.P., provides that "[a] pleading which sets forth a claim for relief . . . shall contain (1) a short and plain statement of the grounds upon which the courts jurisdiction depends." The Amended Complaint avers that "[t]his Court has subject matter jurisdiction over the claims in this action under 28 U.S.C. § 1332 . . . the action is between citizens of different states and the matter in controversy exceeds the sum of $75,000." Amended Complaint, ¶ 2. The complaint further avers that the plaintiff is a citizen of the State of New Jersey, and that defendant Pareto Partners "is a general partnership organized and existing under the laws of the State of New York with its principal place of business in New York, New York. Defendant currently has three partners, Melon Global Investing Corp., Palomar Management LP, and Cumberland New York, Inc.". Id. at ¶ 4. The averments in the Amended Complaint are prima facie sufficient to establish the citizenship — that is to say, domicile — of the individual plaintiff, but are lacking with respect to the general partnership defendant.
In her complaint, the plaintiff alleges that she is a "citizen of the State of New Jersey." With respect to individuals, citizenship for diversity purposes is determined by the state of domicile, rather than the state of residence. This issue may need to be further pursued with respect to the plaintiff.
In establishing the citizenship of an unincorporated partnership "the long-standing rule [is] that, for purposes of diversity jurisdiction, the court looks to the citizenship of the partners." Woodward v. D.H. Overmyer Co., 428 F.2d 880, 883 (2d Cir. 1970) (citing Great Southern Fireproof Hotel Co., 177 U.S. at 456 ("When the question relates to the jurisdiction of a . . . court of the United States as resting on the diverse citizenship of the parties we must look in the case of a suit by or against a partnership association to the citizenship of the several persons composing such association."); see also Herrick Co., Inc. v. SCS Communications, Inc., 251 F.3d 315, 322 (2d Cir. 2001) ("[F]or purposes of establishing diversity, a partnership has the citizenship of each of its partners.") Therefore, in this case, the citizenship of each entity that comprises defendant Pareto Partners determines the citizenship of the defendant itself.
In the Amended Complaint, plaintiff asserts that three entities comprise Pareto Partners: Melon Global Investing Corp., Palomar Management LP, and Cumberland New York, Inc., Amended Complaint at ¶ 4. The first and third entities appear to be corporations and the second, a limited partnership. If plaintiff's assertion is correct, defendant's citizenship will consist of: (i) the state of incorporation of the two corporate partners, (ii) the principal place of business of the two corporate partners, (iii) the state under which the limited partnership is organized, and (iv) the state or states of citizenship for each partner of the limited partnership.
"[A] limited partnership has the citizenship of each of its general and limited partners." LaSalle Bank National Ass'n v. Nomura Asset Capital Corp., 180 F.Supp.2d 465, 469 (S.D.N.Y. 2001) (citing Carden v. Arkoma Associates, 494 U.S. 185, 195-96 (1990) ("[W]e reject the contention that to determine, for diversity purposes, the citizenship of an artificial entity, the court may consult the citizenship of less than all of the entity's members. 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'. . . .")) (emphasis added).
And, of course, if any of the general partners are themselves partnerships or corporations, the state of citizenship of those entities must be established as well.
In these circumstances, the Court makes the following Order:
On or before August 29, 2005, defendant is directed to file and serve an affidavit, giving the details necessary under relevant case law to demonstrate the state or states of its citizenship at the time plaintiff commenced this action.
If this submission does not resolve the issue of this Court's subject matter jurisdiction, the Court will conduct an evidentiary hearing limited to that issue. While I do not suggest that it would attempt to do so, defendant cannot avoid the proper jurisdiction of this Court by failing to comply with this Order. Such non-compliance would result in a hearing before the Court at which its attendance would be compelled by subpoena.
It is SO ORDERED.