Huobi Co., Ltd v. Marto HG Digital Asset Group Fund I GP, LLC
- Maxine Chesney
- 3:21-cv-04804
- U.S. District Court · Northern District of California
- 2
In Huobi v. Marto, Judge Chesney dismissed the action without prejudice because Huobi failed to establish diversity jurisdiction over a limited partnership’s partners.
Huobi Co., Ltd. and the defendants, particularly MHG LP; the federal action was dismissed, without prejudice to refiling in an appropriate state-court forum.
What happened
Huobi Co., Ltd. sued Marto HG Digital Asset Group Fund I GP, LLC and others over state-law claims, asserting that the federal court had diversity jurisdiction. The court had previously required Huobi to show that every defendant had citizenship different from Huobi.
Huobi filed a response and a first amended complaint. The court found that Huobi adequately alleged the citizenship of Marto HG Digital Asset Group, LLC and Marto HG Digital Asset Group Fund I, GP, LLC. But Huobi did not identify the citizenship of the limited partners of Marto HG Digital Asset Group Fund I, LP.
The court dismissed the action for lack of subject-matter jurisdiction, without prejudice to refiling in an appropriate state-court forum. Judge Maxine M. Chesney signed the September 17, 2021 order.
The detailed version
- Huobi Co., Ltd v. Marto HG Digital Asset Group Fund I GP, LLC · No. 3:21-cv-04804
- Maxine Chesney
- Sept. 17, 2021
Background
Huobi Co., Ltd. brought state-law claims against Marto HG Digital Asset Group, LLC (MHG LLC), Marto HG Digital Asset Group Fund I, GP, LLC (MHG GP), Marto HG Digital Asset Group Fund I, LP (MHG LP), and other defendants. Huobi asserted that diversity jurisdiction existed. Diversity jurisdiction is a form of federal jurisdiction based on the parties’ citizenship being different and meeting the statutory requirements.
In an August 19, 2021 order, the court directed Huobi to show why the action should not be dismissed for lack of subject-matter jurisdiction. The court had found that Huobi, which identified itself as a citizen of the Republic of Korea, had not alleged facts establishing the citizenship of MHG LLC, MHG GP, and MHG LP.
Jurisdictional allegations
Huobi filed a response and a First Amended Complaint on September 3, 2021. The court found that Huobi’s additional allegations sufficiently showed that Huobi was diverse in citizenship from MHG LLC and MHG GP.
The court explained that a limited partnership is a citizen of every state of which its general and limited partners are citizens. Huobi alleged that MHG LP had one general partner, MHG GP, and that MHG GP was diverse in citizenship from Huobi. But Huobi also alleged that MHG LP had limited partners whose specific identities it did not know. Huobi therefore provided no facts about the citizenship of those limited partners.
Ruling
The court held that, without a showing that every limited partner of MHG LP was diverse in citizenship from Huobi, Huobi could not establish diversity jurisdiction. The court dismissed the action for lack of subject-matter jurisdiction, without prejudice to refiling in an appropriate state-court forum. Judge Maxine M. Chesney issued the order.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.