Opinion
Civil Action 22-cv-02410-PAB
10-12-2022
CRESTCOM INTERNATIONAL, LLC, a Delaware limited liability company, Petitioner, v. HISHAM A. “SEAN” DABBAGH, and AL-ADL INTERNATIONAL TRAINING COMPANY, LLC, Respondents.
SECOND ORDER TO SHOW CAUSE
PHILIP A. BRIMMER, CHIEF UNITED STATES DISTRICT JUDGE
The Court takes up this matter on petitioner's Response to Order to Show Cause [Docket No. 5].
Petitioner asserts that there is diversity between the parties. Docket No. 1 at 2, ¶ 7. On September 27, 2022, the Court ordered petitioner to show cause why this case should not be dismissed for lack of subject matter jurisdiction. Docket No. 4. The Court indicated that the petition to confirm arbitration award failed to identify the members of petitioner Crestcom International, LLC and respondent Al-ADL International Training Company, LLC and, thus, to adequately allege the citizenship of petitioner and respondent. Id. at 3-4. The response to the order to show cause does not cure this deficiency with regard to petitioner's citizenship.
“An unincorporated entity's citizenship is typically determined by its members' citizenship.” Grynberg v. Kinder Morgan Energy Partners, L.P., 805 F.3d 901, 905 (10th Cir. 2015). Thus, a limited liability company is a citizen of every state of which its members are citizens. See Siloam Springs Hotel, LLC v. Century Sur. Co., 781 F.3d 1233, 1237-38 (10th Cir. 2015).
Petitioner alleges that it has thirteen members, including Farragut SBIC Fund II Blocker Corp. (“Farragut”), which petitioner alleges is a Delaware corporation. Docket No. 5 at 2, ¶ 13. A corporation is a citizen of both the state of its place of incorporation and principal place of business. See 28 U.S.C. § 1332(c)(1). Although petitioner states that Farragut is a Delaware corporation, petitioner says nothing about Farragut's principal place of business. Therefore, the Court is not able to determine Farragut's citizenship.
Petitioner alleges one of petitioner's members is BDK Investments, Ltd. Docket No. 5 at 2, ¶ 4. Petitioner alleges that the “sole member of BDK Investments, Ltd., is Michael Bailey . . . a citizen of Texas.” Id. Petitioner's allegations are insufficient for the Court to determine whether BDK Investments Ltd. is a limilted liability corporation, in which case its citizenship is determined by the citizenship of its members, or a corporation, in which case its citizenship is determined by its principal place of business and state of incorporation. Accordingly, the Court is unable to determine BDK Investment's citizenship.
Petitioner also alleges one of its members is Faragut SBIC Fund II, LP (“SBIC”). Id. at 3, ¶ 14. Petitioner alleges that the “managing partners” of SBIC are Javier Aguirre, Phillip McNeill, and Robert Hagerty of Washington D.C. Id. A limited partnership's citizenship is determined by the citizenship of all its members. See Grupo Dataflux v. Atlas Global Grp., L.P., 541 U.S. 567, 569 (2004) (recognizing the “accepted rule” that a partnership “is a citizen of each State or foreign country of which any of its partners is a citizen”); Mierzwa v. Safe & Secure Self Storage, LLC, 493 Fed.Appx. 273, 277 n.5 (3d Cir. 2012) (unpublished) (citing Zambelli Fireworks Mfg. Co., Inc. v. Wood, 592 F.3d 412, 420 (3d Cir. 2010)) (“For the limited liability company and limited liability partnership defendants, diversity jurisdiction is determined by the citizenship of each of their members.”); Windy City Metal Fabricators & Supply, Inc. v. CIT Tech. Fin. Servs., Inc., 536 F.3d 663, 666 n.1 (7th Cir. 2008) (assessing citizenship of LLP based on citizenship of each partner); Rolling Greens MHP, L.P. v. Comcast SCH Holdings L.L.C., 374 F.3d 1020, 1021 (11th Cir. 2004) (“a limited partnership is a citizen of each state in which any of its partners, limited or general, are citizens”). Petitioner's identification of “managing partners” fails to note whether SBIC has general or limited partners and fails to identify the citizenship of each individual partner. Docket No. 5 at 3, ¶ 14.
Finally, petitioner alleges one of its members is Crestcom PEP Investors, LLC (“PEP”). Docket No. 5 at 3, ¶ 15. Petitioner states that its “best information is that PEP's members include a combination of individuals and companies disclosed” in the other portions of its response to the order to show cause. Id. Petitioner states it “has no information that would indicate that any of PEP's members are citizens of the Kingdom of Saudi Arabia” of which respondents are citizens. Id. As the Court previously stated, a negative allegation of citizenship is not sufficient. See Docket No. 4 at 4 (citing D.B. Zwirn Special Opportunities Fund, L.P. v. Mehrotra, 661 F.3d 124, 125-26 (1st Cir. 2011) (holding that allegations of LLC's citizenship in the negative are insufficient to establish diversity jurisdiction); 13E Charles A. Wright et al., Fed. Prac. & Proc. § 3611 (3d ed. 2009) (updated Oct. 2020) (“Neither is a negative statement that a party is not a citizen of a particular state usually sufficient.”); Cf. Fifth Third Bank v. Flatrock 3, LLC, 2010 WL 2998305, at *3 (D.N.J. July 21, 2010) (concluding that an allegation that “upon information and belief, the members of [an LLC] are citizens of New York” was insufficient because plaintiff “failed to identify or trace the citizenship of each individual member” of the LLC (internal quotation marks omitted))). Petitioner does not identify the members of PEP with sufficient specificity for the Court to determine its citizenship.
The Court is unable to determine the citizenship of SBIC, BDK Investments, Ltd., Farragut, and PEP, and thus petitioner's citizenship. Because the allegations are presently insufficient to allow the Court to determine the citizenship of petitioner and whether the Court has jurisdiction, see United States ex rel. General Rock & Sand Corp. v. Chuska Dev. Corp., 55 F.3d 1491, 1495 (10th Cir. 1995) (“The party seeking the exercise of jurisdiction in his favor must allege in his pleading the facts essential to show jurisdiction.” (quotations omitted)), petitioner will be given one more opportunity to demonstrate the Court's jurisdiction. It is therefore ORDERED that, on or before October 20, 2022, petitioner shall show cause why this case should not be dismissed due to the Court's lack of subject matter jurisdiction.