Opinion
1:23-cv-02223-JMS-KMB
12-15-2023
GARAGE DOOR SYSTEMS, LLC d/b/a Overhead Door Company of Indianapolis, Plaintiff, v. BLUE GIANT EQUIPMENT CORPORATION, Defendant.
ORDER
HON. JANE MAGNUS-STINSON, JUDGE UNITED STATES DISTRICT COURT
Plaintiff has filed a Complaint in which it alleges that this Court has diversity jurisdiction over this matter. The Court notes the following issues with Plaintiff's jurisdictional allegations:
• Plaintiff has not adequately alleged the citizenship of an unincorporated association. The citizenship of an unincorporated association is "the citizenship of all the limited partners, as well as of the general partner." Hart v. Terminex Int'l, 336 F.3d 541, 542 (7th Cir. 2003). "[T]he citizenship of unincorporated associations must be traced through however many layers of partners or members there may be." Id. at 543. Asserting that all members are citizens of a certain state, or that no members are citizens of a certain state, is insufficient. See Guaranty Nat'l Title Co., Inc. v. J.E.G. Assocs., 101 F.3d 57, 59 (7th Cir. 1996) (alleging that all partners of limited partnership were citizens of Massachusetts was insufficient to establish diversity jurisdiction); Thomas v. Guardsmark, LLC, 487 F.3d 531, 534 (7th Cir. 2007) ("blanket declaration" that partners of limited liability company were citizens of state different than state of opposing party's citizenship was insufficient to establish diversity jurisdiction). Rather, Plaintiff must provide the name and citizenship of each member, traced down to the lowest layer, in order for the Court to determine whether diversity jurisdiction exists. See Guaranty Nat'l Title Co., Inc. 101 F.3d at 59 (in order to determine citizenship of a limited partnership, court "need[ed] to know the name and citizenship(s) of its general and limited partners").
• Plaintiff does not properly allege the citizenship of a foreign business entity. In order to properly provide the citizenship a foreign business entity, Plaintiff must confirm which American business form it most closely resembles. See Global Dairy Solutions Pty Ltd. v. BouMatic LLC, 2013 WL 1767964 (7th Cir. 2013) (analyzing the citizenship of the foreign corporation based on which American
business form the foreign company most closely resembles) (citing White Pearl Invesiones S.A. (Uruguay) v. Cemusa, Inc., 647 F.3d 684 (7th Cir. 2011)).
o If the entity most closely resembles a corporation, Plaintiff must provide its place of incorporation and its principal place of business. 28 U.S.C. § 1332(c)(1); see also Smoot v. Mazda Motors of Am., Inc., 469 F.3d 675, 676 (7th Cir. 2006) (a corporation has two places of citizenship: where it is incorporated and where it has its principal place of business).
o If the entity most closely resembles an unincorporated association, Plaintiff must provide "the citizenship of all the limited partners, as well as of the general partner." Hart v. Terminex Int'l, 336 F.3d 541, 542 (7th Cir. 2003). "[T]he citizenship of unincorporated associations must be traced through however many layers of partners or members there may be." Id. at 543. Asserting that all partners are citizens of "X" or that no partners are citizens of "X" is insufficient. See Peters v. Astrazeneca LP, 224 Fed. App'x 503, 505 (7th Cir. 2007) (noting the insufficiency of a limited partnership asserting that none of its partners were citizens destroying diversity "rather than furnishing the citizenship of all of its partners so that [the court] could determine its citizenship").
• Plaintiff has pled some of its jurisdictional allegations on information and belief. Jurisdictional allegations must be made on personal knowledge, not on information and belief, to invoke the subject matter jurisdiction of a federal court. See America's Best Inns, Inc. v. Best Inns of Abilene, L.P., 980 F.2d 1072, 1074 (7th Cir. 1992) (only a statement about jurisdiction "made on personal knowledge has any value" and a statement made "'to the best of my knowledge and belief' is insufficient" to engage diversity jurisdiction "because it says nothing about citizenship"). "Conclusional allegations are insufficient. A court needs to know details, such as the state of incorporation and principal place of business of each corporate party." State St. Bank & Trust Co. v. Morderosian, 234 F.3d 1274 (7th Cir. 2000).
The Court is not being hyper-technical: Counsel has a professional obligation to analyze subject-matter jurisdiction, Heinen v. Northrop Grumman Corp., 671 F.3d 669, 670 (7th Cir. 2012), and a federal court always has a responsibility to ensure that it has jurisdiction, Hukic v. Aurora Loan Servs., 588 F.3d 420, 427 (7th Cir. 2009). The Court must know the details of the underlying jurisdictional allegations because parties cannot confer jurisdiction on the Court simply by stipulating that it exists. See Evergreen Square of Cudahy v. Wisconsin Housing and Economic Development Authority, 776 F.3d 463, 465 (7th Cir. 2015) ("the parties' united front is irrelevant since the parties cannot confer subject-matter jurisdiction by agreement.. .and federal courts are obligated to inquire into the existence of jurisdiction sua sponte").
For these reasons, the Court ORDERS Plaintiff to file an Amended Complaint by January 10, 2024, which addresses the issues outlined in this Order and properly alleges a basis for this Court's diversity jurisdiction. Defendant need not answer or otherwise respond to the Complaint at which this Order is directed. Defendant is cautioned, however, that when it does respond to the Amended Complaint, and to the extent that it denies any of Plaintiff's jurisdictional allegations or states that it does not have sufficient information to respond to those allegations, the Court will require the parties to conduct whatever investigation is necessary and file a joint jurisdictional statement confirming that all parties are in agreement with the underlying jurisdictional allegations before the litigation moves forward.
Additionally, Fed.R.Civ.P. 7.1(a)(2) provides:
In an action in which jurisdiction is based on diversity under 28 U.S.C. §1332(a), a party or intervenor must, unless the court orders otherwise, file a disclosure statement. The statement must name - and identify the citizenship of - every individual or entity whose citizenship is attributed to that party or intervenor:
(A) when the action is filed in or removed to federal court, and
(B) when any later event occurs that could affect the court's jurisdiction under §1332(a).
Plaintiff has filed a Rule 7.1 Disclosure Statement, but it does not properly provide Plaintiff's citizenship. As noted above, the citizenship of an unincorporated association is "the citizenship of all the limited partners, as well as of the general partner." Hart, 336 F.3d at 542. Plaintiff must provide its citizenship accordingly and the Court ORDERS Plaintiff to file an Amended Rule 7.1 Disclosure Statement by January 10, 2024.