Coral Capital Solutions LLC v. Disrupt Social, LLC
- Subramanian
- 1:24-cv-03940
- U.S. District Court · Southern District of New York
- 2
In Coral Capital Solutions v. Disrupt Social, Judge Subramanian ordered amended diversity allegations by June 3 or dismissal for lack of jurisdiction.
Coral Capital Solutions LLC must amend its complaint to provide the required citizenship allegations. Disrupt Social, LLC and Evan Hart Bloomberg are affected because the case may be dismissed for lack of subject matter jurisdiction if complete diversity cannot be truthfully alleged.
What happened
Coral Capital Solutions LLC sued Disrupt Social, LLC and Evan Hart Bloomberg, claiming the federal court could hear the case because the parties are citizens of different states. The court found problems with the allegations supporting that basis for jurisdiction.
The court explained that an LLC’s citizenship depends on the citizenship of every person or entity that belongs to it. It also said that stating Bloomberg’s state of residence was not enough; the complaint had to allege his citizenship.
Judge Arun Subramanian ordered Coral Capital Solutions to amend its complaint by June 3, 2024, to provide the required citizenship information. The court said the complaint will be dismissed for lack of subject matter jurisdiction if Coral cannot truthfully allege complete diversity, but the opinion did not dismiss the complaint in this order.
The detailed version
- Coral Capital Solutions LLC v. Disrupt Social, LLC · No. 1:24-cv-03940
- Subramanian
- May 28, 2024
Background
Coral Capital Solutions LLC brought the action against Disrupt Social, LLC and Evan Hart Bloomberg. The complaint relied on diversity-of-citizenship jurisdiction under 28 U.S.C. § 1332, which generally requires complete diversity between the opposing parties and satisfaction of the amount-in-controversy requirement. The opinion addresses only problems with the citizenship allegations.
Jurisdictional Problems
The court explained that an LLC is a citizen of every state of which its members are citizens. Therefore, a complaint relying on diversity jurisdiction must identify the citizenship of each person who is an LLC member and the place of incorporation and principal place of business of each corporate member. It must also identify the citizenship of members that are themselves LLCs.
The court separately found that the complaint alleged only Bloomberg’s state of residence, rather than his state of citizenship. The court explained that residence alone does not establish citizenship for diversity-jurisdiction purposes; citizenship depends on domicile.
Order
The court ordered Coral Capital Solutions to amend its complaint on or before June 3, 2024. The amended complaint must allege the citizenship of each constituent person or entity comprising the LLCs involved in the action and must properly allege Bloomberg’s citizenship. The court stated that, if Coral Capital Solutions could not truthfully amend the complaint to allege complete diversity, the complaint would be dismissed for lack of subject matter jurisdiction without further notice. The opinion did not itself dismiss the complaint.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.