Solax Energia Altiplano S.A. DE. C.V. and Solax Energy LLC v. Ithuba Credit…

Background

Solax Energia Altiplano S.A. DE. C.V. and Solax Energy LLC brought a diversity action against Ithuba Credit Corporation, Ithuba Savings and Credit, Ithuba Investment Bank and Statutory Trust, Ithuba Business Advisory Services Inc., Ithuba Holdings Inc., ISCC Group of Companies, Jean Bilala, and Paul Maleka Sefudi. The opinion refers to the Ithuba entities collectively as the Ithuba Defendants and to the Ithuba Defendants and Jean Bilala collectively as the Defaulting Defendants.

After the defendants failed to plead or otherwise move following the denial of their motion to dismiss, the clerk entered a certificate of default against the Defaulting Defendants on November 4, 2022. The case was later referred to Magistrate Judge Valerie Figueredo for an inquiry into damages. On August 25, 2025, Magistrate Judge Figueredo recommended vacating the default judgment, dismissing the complaint without prejudice for failure to adequately plead subject-matter jurisdiction, and allowing the plaintiffs to file an amended complaint.

Review of the Recommendation

The plaintiffs did not object to the report and recommendation by the September 8, 2025 deadline. They filed a letter motion one day later asking for an extension until September 25, 2025, but they still did not file objections. Because there were no objections, the court reviewed the magistrate judge’s recommendations for clear error. That standard asks whether review of the record leaves the court firmly convinced that a mistake was made.

The court found no clear error. In a case based on diversity jurisdiction, the complaint must allege the citizenship of the natural persons who are members of a limited liability company. The court concluded that the complaint did not adequately allege the citizenship of Solax Energy LLC. As a result, the court had no basis to determine that diversity jurisdiction existed.

Ruling

Judge Daniels adopted Magistrate Judge Figueredo’s report and recommendation in full. The court vacated the default judgment, dismissed the complaint without prejudice, and granted the plaintiffs leave to file an amended complaint. The clerk was directed to close the case.