Global Carbon Opportunity Fund Ltd. v. CME Group Inc.

Background

Global Carbon Opportunity (Cayman) Fund Ltd., 1798 Center Master Fund Ltd., and Altana Protective Alpha Strategy Fund SLP sued CME Group Inc. and New York Mercantile Exchange, Inc. The complaint alleges federal-question jurisdiction. A defendant moved under Federal Rule of Civil Procedure 12(b)(6) to dismiss the claim under the Commodity Exchange Act.

Jurisdictional issue

The court explained that federal courts must independently ensure that they have jurisdiction, including when the parties do not raise or pursue the issue. If the court dismissed the federal claim, jurisdiction would be lacking unless the action met the requirements for diversity jurisdiction. Diversity jurisdiction requires complete diversity, meaning that all opposing parties must be citizens of different states or other relevant jurisdictions.

The complaint describes Altana Protective Alpha Strategy Fund SLP as a foreign limited liability company incorporated under Luxembourg law. For diversity purposes, the citizenship of a limited liability company is based on the citizenship of each member. If a member is itself a limited-liability entity, the court must examine that entity’s members as well, continuing until it identifies a person or entity whose citizenship determines the analysis.

Order

The court ordered the plaintiffs to file by June 10, 2025, either a declaration explaining Altana Fund’s citizenship for diversity-jurisdiction purposes or a letter stating why they contend its citizenship should be determined by another method. The opinion does not rule on the motion to dismiss or decide the merits of the Commodity Exchange Act claim.