Acadya Capital Group LLC v. Texas A&M University
- Nathanael Cousins
- 5:20-cv-07837
- U.S. District Court · Northern District of California
- 2
In Acadya Capital Group LLC v. Texas A&M University, Judge Cousins ordered Acadya to explain why the case should not be dismissed over possible diversity-jurisdiction problems.
Acadya Capital Group LLC, Texas A&M University, and Pao-Tai Lin; the case's continued existence depended on Acadya explaining the basis for diversity jurisdiction.
What happened
Acadya Capital Group LLC sued Texas A&M University and Pao-Tai Lin. Acadya said the federal court could hear the case because the parties were citizens of different states.
The court said Acadya treated itself like a corporation when identifying its citizenship, even though it is a limited liability company. For diversity jurisdiction, an LLC must identify the citizenship of all its members.
Judge Nathanael M. Cousins ordered Acadya to explain in writing by March 17, 2021, why the case should not be dismissed. The opinion does not itself dismiss the case.
The detailed version
- Acadya Capital Group LLC v. Texas A&M University · No. 5:20-cv-07837
- Nathanael Cousins
- Mar. 10, 2021
Background
Acadya Capital Group LLC filed a complaint against Texas A&M University and Pao-Tai Lin on November 5, 2020. Acadya alleged that the court had diversity jurisdiction under 28 U.S.C. § 1332, which allows a federal court to hear certain disputes involving citizens of different states.
Jurisdiction issue
The court stated that Acadya incorrectly applied the citizenship test for a corporation to itself. Because Acadya is a limited liability company, it is treated like a partnership for diversity-jurisdiction purposes. Acadya therefore needed to identify the citizenship of all of its members and then determine whether diversity existed.
Ruling and next steps
The court ordered Acadya to show cause—that is, to explain in writing—why the case should not be dismissed. Acadya's written response was due March 17, 2021, and the defendants' reply was due March 19, 2021. Judge Nathanael M. Cousins did not dismiss the case in this order and did not decide the underlying dispute.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.