Alice Glinda Harvey, Etc. v. Grey Wolf Drilling Company

Full title: ALICE GLINDA HARVEY, ETC., ET AL v. GREY WOLF DRILLING COMPANY

Court: United States District Court, E.D. Louisiana

Date published: Nov 7, 2007

CIVIL ACTION NO. 05-3068, SECTION "C" (2) (E.D. La. Nov. 7, 2007)

Opinion

CIVIL ACTION NO. 05-3068, SECTION "C" (2).

November 7, 2007

ORDER AND REASONS

HELEN BERRIGAN, Chief Judge

This matter comes before the Court on the issue of subject matter jurisdiction. Having considered the record, the memoranda of counsel and the law, the Court has determined that it lacks subject matter jurisdiction for the following reasons.

According to the Complaint, the plaintiffs are Louisiana citizens who invoke the Court's diversity jurisdiction. (Rec. Doc. 1). The plaintiffs originally named as a defendant Grey Wolf Drilling Company, which is properly named and answered as Grey Wolf Drilling Company, L.P.¹ Grey Wolf Drilling Company, L.P. stated in its answer that it was a "foreign corporation." (Rec. Doc. 4). In response to the Court's order, it was determined that Grey Wolf Drilling Co., L.P. is a Texas limited partnership with Grey Wolf, L.L.C. as a member. The parties agree that Grey Wolf, L.L.C. is a limited liability corporation organized in Louisiana with no members which are Louisiana citizens.

1 There is no issue that subsequently named defendants are diverse from the plaintiffs.

The parties also agree that the Fifth Circuit has not spoken to this issue. Unity Communications, Inc. v. Unity Communications of Colorado L.L.C., 2004 WL 1576550 (5^th Cir. 2004). They all argue in favor of a finding of diversity and a rule that determines a L.L.C.'s citizenship by the citizenship of its members only, disregarding the L.L.C.'s state of organization and principal place of business. See Doussan Properties, L.L.C. v. Union Industrial Gas Supply, Inc., 2007 WL 2177691 (E.D.La.) (J. Porteous).

The Court is persuaded by the comprehensive discussion of this issue presented by Debra R. Cohen in "Limited Liability Company Citizenship: Reconsidering An Illogical and Inconsistent Choice," 90 Marq. L.Rev. 269 (2006), which begins with the generalized characterization of the L.L.C. as "a state-created organization that combines the partnership characteristic of flow-through tax treatment with the corporate characteristic of owner limited liability."² That author concludes, after thoughtful analysis, that 28 U.S.C. § 1332(c) should be read "dynamically" and "interpreted to include the LLC, an organization created after the statute was adopted and sharing the entity characteristics that are relevant to a diversity analysis." Id., 90 Marq. L.Rev. at 306-307. This Court agrees with and adopts that conclusion and analysis as the basis for determining in this matter that subject matter jurisdiction is lacking.

2 Under La.Rev.Stat. 12:1301(10):

"Limited liability company" or "domestic limited liability company" means an entity that is an unincorporated association having one or more members that is organized and existing under this Chapter. No limited liability company organized under this Chapter shall be deemed, described as, or referred to as an incorporated entity, corporation, body corporate, body politic, joint stock company, or joint stock association.

The Court is mindful that it is a Court of limited jurisdiction. "We thus make especially certain that we take jurisdiction only over such cases as Congress has provided by statute. The strict construction rule recognizes Congress's ultimate authority to shape the jurisdiction of the lower federal courts." Beiser v. Weyler, 284 F.3d 665, 674 (5^th Cir. 2002).

We cannot avoid this result, for the rules of federal jurisdiction, while sometimes technical and counterintuitive, are strict and mandatory. Cf. In re Carter, 618 F.2d 1093, 1100 (5th Cir. 1980), cert. denied, 450 U.S. 949,101 S.Ct. 1410, 67 L.Ed.2d 378 (1981). Furthermore the presumption is that every federal court is without jurisdiction unless the contrary appears affirmatively from the record." King Bridge Co. v. Otoe County, 120 U.S. 225, 226, 7 S.Ct. 552, 30 L.Ed. 623 (1887). Federal courts are courts of limited jurisdiction by origin and design, implementing a basic principle of our system of limited government. In sum, we do not visit a mere technicality upon the parties. Rather, we uphold a basic tenet of the American system of diffused political and judicial power.

Oliver v. Trunkline Gas Co., 789 F.2d 341, 343 (5^th Cir. 1986).

Accordingly,

IT IS ORDERED that this matter is hereby DISMISSED for lack of subject matter jurisdiction.³

3 In dismissing this matter for lack of diversity jurisdiction, the Court does not pass on the merits of the pending motions.