Squarex Pharmaceutical Corporation v. Spartan Capital Securities LLC
Squarex Pharmaceutical Corporation, formerly known as Squarex LLC v. Spartan Capital Securities LLC, a division of Spartan Capital Holdings, LLC
- Vyskocil
- 1:24-cv-06880
- U.S. District Court · Southern District of New York
- 4
In Squarex Pharmaceutical v. Spartan Capital, Judge Vyskocil granted Squarex’s motion to compel information about Spartan’s members’ citizenship.
The ruling affects Squarex Pharmaceutical Corporation’s effort to establish federal subject-matter jurisdiction and requires it to serve the order and pursue information from Spartan Capital Securities LLC about the citizenship of Spartan’s members.
What happened
Squarex Pharmaceutical Corporation, formerly known as Squarex LLC v. Spartan Capital Securities LLC, a division of Spartan Capital Holdings, LLC, concerns whether the federal court can confirm its authority to hear the case. Squarex claimed that the parties were citizens of different states and that more than $75,000 was at stake, but it did not identify the citizenship of Spartan Capital Securities LLC’s members.
The court had allowed Squarex to seek information about Spartan’s members, ownership interests, and residences. Squarex served a subpoena and said Spartan did not respond. Squarex then asked the court to compel a response. The court found that the requested information was relevant and could determine whether the case could proceed in federal court.
Judge Mary Kay Vyscokil granted Squarex’s motion. She ordered Squarex to serve the order on Spartan instead of a separately approved subpoena and directed Squarex to report whether it had enough information to establish jurisdiction by January 1, 2025. The order warned that the case would be dismissed if Squarex failed to establish jurisdiction by that date.
The detailed version
- Squarex Pharmaceutical Corporation v. Spartan Capital Securities LLC · No. 1:24-cv-06880
- Vyskocil
- Oct. 8, 2025
Background
Squarex Pharmaceutical Corporation filed the case after identifying itself as incorporated in Delaware and having a “corporate home” in Minnesota. It alleged that federal jurisdiction existed because the parties were citizens of different states and the amount in controversy exceeded $75,000. The complaint did not state the citizenship of the members of Spartan Capital Securities LLC, which is a limited liability company.
After the court ordered Squarex to explain why the case should not be dismissed for lack of subject-matter jurisdiction, Squarex submitted information from public records. Squarex stated that Spartan Capital Securities LLC was “75% or more” owned by Spartan Capital Holdings LLC, which was wholly and solely owned and operated by John D. Lowry, a New York citizen. The court found that Squarex had made a sufficient start toward establishing jurisdiction and allowed it to seek discovery from Spartan about the citizenship of Spartan’s members.
Motion to Compel
Squarex filed a subpoena seeking documents or a sworn statement about the members of Spartan Capital Securities LLC and Spartan Capital Holdings LLC, their membership interests, when they obtained those interests, and their principal places of residence. Squarex told the court that Spartan had not responded by the applicable deadline or otherwise communicated about the subpoena. Squarex moved to compel a response and requested a court-ordered subpoena.
Under Federal Rule of Civil Procedure 37, a party may ask the court to compel discovery when another party fails to produce requested documents or respond to a discovery request. Rule 26 permits discovery of nonprivileged information relevant to a claim or defense. The court explained that the citizenship of Spartan’s members was relevant because complete diversity of citizenship is required for this type of federal jurisdiction and because the information could determine whether the case could proceed.
Ruling
Judge Mary Kay Vyskocil granted Squarex’s motion. The court ordered Squarex to serve the order on Spartan in place of a separately approved subpoena. It also ordered Squarex, on or before January 1, 2025, to complete the subpoena process and tell the court whether it had gathered enough information to adequately plead complete diversity and establish subject-matter jurisdiction.
The order stated that the case would be dismissed if Squarex failed to demonstrate subject-matter jurisdiction by January 1, 2025. It also warned that failure to comply with the order, the Federal Rules of Civil Procedure, the Southern District of New York’s local rules, or the court’s individual rules could result in sanctions, including monetary penalties, dismissal, or limits on claims, defenses, arguments, or evidence. The court directed the clerk to close the motion at docket entry 42.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.