The Board of Managers of the 17 Battery Place Condominium v. Twin City Fire…

Background

The action includes three plaintiffs: The Board of Managers of the 17 Battery Place Condominium, Battery Commercial Associates LLC, and Columbus Property Management LLC. Twin City Fire Insurance Company removed the action to federal court, asserting diversity jurisdiction under 28 U.S.C. § 1332. Diversity jurisdiction generally requires the amount in controversy to exceed $75,000 and requires complete diversity, meaning that no plaintiff shares state citizenship with any defendant.

The court stated that a natural person’s citizenship is based on domicile, not merely residence. A corporation is a citizen of its state of incorporation and the state where it has its principal place of business. An LLC has the citizenship of each of its members. If an LLC member is another LLC or a partnership, the citizenship inquiry continues through that entity’s ownership structure. The court also explained that an unincorporated condominium is treated as a citizen of the states where its individual unit owners are citizens.

Jurisdictional Information

The court found the plaintiffs’ March 6 response inadequate and the defendant’s March 10 response inadequate as well. According to the court, the plaintiffs’ response identified the domicile and headquarters of LLCs owning units in the condominium but did not identify the citizenship of the natural-person members of those LLCs or any corporations that were members. The court said the inquiry had to continue through successive layers until reaching only natural persons and corporations.

The court stated that Twin City Fire had invoked diversity jurisdiction and bore the burden of demonstrating that jurisdiction. It also stated that the plaintiffs had a duty to fully respond to discovery requests concerning subject-matter jurisdiction.

Order

The court allowed Twin City Fire 45 days to conduct discovery needed to identify and plausibly demonstrate the citizenship of all three plaintiffs. Twin City Fire was ordered to amend its notice of removal within 60 days in a manner sufficient to demonstrate complete diversity of citizenship between the parties.

The court did not remand the action in this order. Instead, it stated that failure to amend the notice of removal, or failure to demonstrate complete diversity, would result in remand to the court from which the action had been removed. The order began anew because the court believed there had been a misunderstanding of the facts and an inadequate understanding of the law.