Of A Feather, LLC v. Allegro Credit Services, LLC
- Denise Cote
- 1:19-cv-09351
- U.S. District Court · Southern District of New York
- 6
In Of a Feather v. Allegro, Judge Cote denied remand, holding that diversity jurisdiction existed and removal was timely.
Of a Feather, LLC and Allegro Credit Services, LLC; the denial of remand left the action in federal court.
What happened
Of A Feather, LLC sued Allegro Credit Services, LLC in New York state court, alleging deceptive trade practices, interference with a business relationship, and breach of contract. Allegro moved the case to federal court, and Of a Feather asked the federal court to send it back.
Of a Feather argued that the federal court lacked authority over the case and that Allegro waited too long to remove it. The court rejected both arguments. It concluded that the parties were citizens of different states and that the initial state-court papers did not provide enough information for Allegro to know that the case could be removed.
Judge Denise Cote denied Of a Feather’s motion to remand. The case therefore remained in federal court, and the opinion did not decide the underlying claims.
The detailed version
- Of A Feather, LLC v. Allegro Credit Services, LLC · No. 1:19-cv-09351
- Denise Cote
- Jan. 7, 2020
Background
Of a Feather, LLC filed a state-court action against Allegro Credit Services, LLC. It alleged deceptive trade practices, tortious interference, and breach of contract. Allegro removed the action to the U.S. District Court for the Southern District of New York. Of a Feather then moved to remand, meaning it asked the federal court to return the case to state court.
Subject-Matter Jurisdiction
Of a Feather argued that the federal court lacked subject-matter jurisdiction, or legal authority to hear the case. The court explained that removal based on diversity jurisdiction requires the parties to be citizens of different states and that no defendant may be a citizen of the state where the action was filed.
The court applied the rules for determining the citizenship of business entities. A limited liability company is a citizen of every state where its members are citizens. The court found that Of a Feather had one member, Jared Stamell, who was a citizen of either New York or Massachusetts; the opinion states that Of a Feather did not contest this assertion. Allegro’s ownership structure included members or partners who were citizens of Rhode Island, California, and Delaware. The court therefore concluded that Allegro was not a citizen of New York or any state of which Of a Feather was a citizen, and that diversity jurisdiction existed.
The court also noted that it had an independent duty to examine its subject-matter jurisdiction, even though Of a Feather arguably did not continue pressing that argument in its reply brief.
Timeliness of Removal
Of a Feather also argued that Allegro’s notice of removal was filed too late. Under 28 U.S.C. § 1446, the usual 30-day removal period begins when the defendant receives an initial pleading that allows it to determine from the face of that pleading that the case is removable.
Of a Feather served Allegro with a summons with notice on June 7, 2019, and later filed a complaint. Neither document stated Of a Feather’s citizenship. The court held that the name of a limited liability company does not reveal its citizenship. Allegro was not required to investigate other documents from the parties’ transaction to determine whether removal was possible. Because removability was not apparent from the initial state-court papers, the 30-day period had not begun on June 7. Allegro’s October 9 removal was therefore timely.
Disposition
Judge Denise Cote denied Of a Feather’s October 24, 2019 motion to remand. The opinion addressed jurisdiction and the timing of removal; it did not decide the merits of Of a Feather’s deceptive-practices, interference, or contract claims.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.