AP MA FUNDING LLC v. CAPS PLANTATION LLC, et al.
- Garnett
- 1:25-cv-06934
- U.S. District Court · Southern District of New York
- 2
In AP MA FUNDING LLC v. CAPS PLANTATION LLC, Judge Garnett gave Plaintiff 14 days to correct its diversity allegations or face dismissal for lack of jurisdiction.
AP MA FUNDING LLC must either amend its complaint within 14 days to properly allege Forbright Bank’s citizenship or face dismissal for lack of subject-matter jurisdiction. CAPS PLANTATION LLC and the other defendants are affected because the case may be dismissed if the jurisdictional defect is not corrected.
What happened
In AP MA FUNDING LLC v. CAPS PLANTATION LLC, the court found that the complaint did not properly allege the citizenship of Forbright Bank, the sole member of Plaintiff AP MA FUNDING LLC. That information was needed to determine whether the court has diversity jurisdiction.
The court allowed Plaintiff to file an amended complaint within 14 days. If Plaintiff does not truthfully allege complete diversity by then, the action will be dismissed for lack of subject matter jurisdiction without further notice. The court did not dismiss the action in this order.
Judge Margaret M. Garnett explained that a state-chartered bank is a citizen of both its state of incorporation and its principal place of business, and ordered Plaintiff to allege those facts under the correct legal standard.
The detailed version
- AP MA FUNDING LLC v. CAPS PLANTATION LLC, et al. · No. 1:25-cv-06934
- Garnett
- Sept. 8, 2025
Background
AP MA FUNDING LLC sued CAPS PLANTATION LLC and others in federal court based on diversity of citizenship. The complaint alleged that AP MA FUNDING LLC is a limited liability company whose sole member is Forbright Bank. It described Forbright Bank as a state-chartered bank with its main office in Chevy Chase, Maryland, but did not state Forbright Bank’s place of incorporation or principal place of business.
Court’s Analysis
The court addressed subject-matter jurisdiction, meaning the court’s legal power to hear the case. For a diversity-jurisdiction case involving a limited liability company, the complaint must identify the citizenship of the LLC’s members. If a member is a corporation, the complaint must allege the corporation’s place of incorporation and principal place of business.
The court said Plaintiff appeared to have used the rule for nationally chartered banks rather than the rule for state-chartered banks. Under the standard stated by the court, a state-chartered corporation, including a state-chartered bank, is a citizen of both the state where it is incorporated and the state where it has its principal place of business.
Order
Within 14 days, Plaintiff may file an amended complaint that expressly alleges Forbright Bank’s citizenship under the correct standard for state-chartered banks. If Plaintiff fails to amend by that deadline and truthfully allege complete diversity of citizenship, the action will be dismissed for lack of subject-matter jurisdiction without further notice to any party. The order does not itself dismiss the action.
Judge
The order was issued by United States District Judge Margaret M. Garnett.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.