Opinion
No. 01 C 1396.
March 12, 2001.
MEMORANDUM ORDER
Beverage Realty, Inc. ("Beverage") has filed a Complaint against Chatham Club, LLC ("Chatham"), seeking to invoke federal jurisdiction under the diversity of citizenship provisions of 28 U.S.C. § 1332. Because the Complaint is materially deficient in setting out an essential predicate for such jurisdiction (the citizenship of both parties), this sua sponte memorandum order is issued to identify those flaws and to require that they be cured within a short time frame, failing which this Court would be constrained to dismiss this action for lack of subject matter jurisdiction.
All further references to Title 28's provisions will simply take the form "Section — ."
First, even though Section 1332(c)(1) expressly identifies the dual facets of corporate citizenship for diversity purposes, Complaint ¶¶ 1 says nothing more as to Beverage other than that it "is a Delaware corporation." Accordingly an amendment is required to conform to the Section 1332(c)(1) requirements.
As for Chatham, Complaint ¶¶ 2 says only that it "is an Illinois limited liability company engaged in the business of developing residential real estate projects." But counsel is expected to know that our Court of Appeals teaches limited liability companies are treated for diversity purposes just like partnerships or other unincorporated associations, with the state of citizenship of each member entering into the diversity equation (Cosgrove v. Bartolotta, 150 F.3d 729, 731 (7th Cir. 1998)). It is thus irrelevant that Complaint ¶¶ 2 would have been insufficient in Section 1332 Cc) (1) terms even if Chatham had been equated to corporate form, for here there is an even greater (indeed, a total) deficiency in meeting the operative standard.
It appears that a Boston law firm is Beverage's principal counsel, so that the absence of knowledge on the part of its members as to Seventh Circuit law might not be surprising (though all counsel are obligated to inform themselves of the state of the relevant law in such circumstances). But the co-counsel for Beverage (one of whom signed the Complaint) are members of a large and long-established multiple-office firm who are located in its principal office here in Chicago.
Such complete disregard of the plain requirements for establishing diversity jurisdiction could well justify a current dismissal of the Complaint and this action for lack of subject matter jurisdiction. But this Court has no desire to force Beverage to invest another $150 filing fee if the defects referred to here are readily curable. Accordingly its counsel is granted until March 19, 2001 to file an appropriate amendment to Complaint ¶¶ 1 and ¶¶ 2 in this Court's chambers. In the absence of such a timely amendment, this Court would be constrained to enter an order of dismissal.
No charge is to be made to Beverage by its counsel for the added work and expense incurred in correcting counsel's errors. Eeverage's counsel are ordered to apprise their client to that effect by letter, with a copy to be transmitted to this Court's chambers as an informational matter (not for filing).