Opinion
Civil Action No. 3:02-CV-1781-D.
January 24, 2003.
ORDER
Defendant's motion to dismiss for lack of subject matter jurisdiction presents the question whether plaintiff's citizenship is based on that of the lead underwriter of a Lloyd's, London syndicate or on the citizenship of each underwriter. The court follows the majority of courts that hold that diversity jurisdiction is based on the citizenship of each Lloyd's underwriter. Because plaintiff concedes that at least one underwriter is a Texas citizen, and at least one limited partner of the defendant is a Texas citizen, the court holds that it lacks subject matter jurisdiction and dismisses this case without prejudice.
I
Plaintiff Thomas Rokeby Conyhghan Corfield ("Corfield") initiated this declaratory judgment action by filing a complaint against defendant Dallas Glen Hills, L.P. ("DGH"). He invoked this court's subject matter jurisdiction based on diversity of citizenship. The court issued an order requiring Corfield to replead because he had not properly pleaded diversity jurisdiction. It held that his complaint was defective at least because he had failed to plead properly the citizenship of defendant DGH. Because DGH was alleged to be a Texas limited partnership, Corfield was required to allege the citizenship of each of its limited partners. The court also noted that it was possible that Corfield had failed to plead properly plaintiff's citizenship. This was so because Corfield brought this action on his own behalf as the lead Underwriter of Lloyd's Syndicate 190 and as the representative of Certain Underwriters at Lloyd's, London. The court noted that some circuits, and several district courts, had similarly held that the citizenship of underwriting syndicates at Lloyd's, London must be treated like limited partnerships for purposes of determining their citizenship, although one circuit had concluded that a Lloyd's syndicate is only a citizen of the state in which its managing/lead underwriter is a citizen. The court directed Corfield either to plead citizenship in accordance with the majority rule or, at the time he cured the defect in pleading DGH's citizenship, submit a letter brief that explained why this court should conclude that his British citizenship alone controls.
Plaintiff thereafter filed an amended complaint and a letter brief. The pleading changed the name of the plaintiff from Corfield to Liberty Corporate Capital, Ltd. ("Liberty"). Liberty asserted that it was prosecuting the suit on its own behalf and as lead underwriter of those Underwriters at Lloyd's, London subscribing to Policy No. CRCTX 99-1128. It stated in the letter that there appeared to be at least one individual subscribing to the risk who was a Texas citizen. In response, the court issued an order stating that, due to the split of authority concerning how the citizenship of Underwriters at Lloyd's, London was to be determined, it was willing to defer consideration of plaintiff's proper citizenship, at least in the absence of a motion to dismiss filed by DGH. The court rejected, however, plaintiff's assertion that a Texas limited partnership should be treated as a corporation. Accordingly, it directed plaintiff to replead to allege properly the citizenship of all limited partners and that he could not do so inferentially (i.e., by stating that no partner is a citizen of the United Kingdom).
Liberty filed another amended complaint in which it based diversity on the British citizenship of Liberty and attempted to plead properly the citizenship of DGH's limited partners.
DGH moves to dismiss this action for lack of subject matter jurisdiction, contending that one member of the Lloyd's, London syndicate is a Texas citizen, thus destroying complete diversity because at least one of defendant's limited partners is a Texas citizen.
Liberty filed an ex parte motion for leave to conduct discovery on jurisdiction, by which it seeks to discover jurisdictional facts about DGH's limited partners. DGH moves to strike plaintiff's amended complaints on the ground that, without leave of court, plaintiff exceeded the scope of what the court directed be done by way of amendment. Liberty has filed a motion for leave to file an amended complaint, in the event the court decides to grant the motion to strike. In view of its disposition of DGH's motion to dismiss, the court need not decide the remaining motions, and they are denied without prejudice as moot.
II
To have diversity jurisdiction, there must be complete diversity of citizenship between all plaintiffs and all defendants. Owen Equip. Erection Co. v. Kroger, 437 U.S. 365, 373-74 (1978); Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267 (1806); Freeman v. Northwest Acceptance Corp., 754 F.2d 553, 555 (5th Cir. 1985). The majority of circuit and district courts hold that the citizenship of a Lloyd's, London syndicate is based on that of each underwriter. See, e.g., Ind. Gas Co. v. Home Ins. Co., 141 F.3d 314, 317 (7th Cir. 1998); Advani Enters., Inc. v. Underwriters at Lloyds, 140 F.3d 157, 160-61 (2d Cir. 1998). Liberty concedes in its letter to the court that at least one underwriter appears to be a Texas citizen. DGH asserts in its motion to dismiss that at least one underwriter is a Texas citizen, and plaintiff in its response does not deny this allegation. Accordingly, the court lacks diversity jurisdiction and dismisses this case without prejudice.* * *
DGH's motion to dismiss is granted, and this action is dismissed by judgment filed today.