Phoenix v. LMM Transport, LLC

Background

The defendants removed this action from the Supreme Court of New York, New York County, to the U.S. District Court for the Southern District of New York. They asserted that federal jurisdiction existed under the diversity-of-citizenship statute, which generally requires complete diversity between the parties and the required amount in controversy. The defendants alleged that they were citizens of New Jersey and that Rodney Phoenix was a citizen of New York.

Jurisdictional problem

The court explained that a limited liability company is considered a citizen of every state in which one of its members is a citizen. Therefore, a removal notice relying on diversity jurisdiction must identify the citizenship of each individual member of the LLC and, for any business-entity member, provide its state of incorporation and principal place of business.

The defendants’ removal notice did not provide that information for LMM Transport, LLC. The opinion did not determine whether complete diversity actually existed.

Order

The court ordered the defendants to amend their removal notice by February 12, 2020, to allege the citizenship of every person or entity comprising LMM Transport, LLC, including the required corporate information. If the defendants could not truthfully allege complete diversity by that deadline, the action would be remanded to the Supreme Court of New York, New York County, without further notice.

The court also ordered the defendants to serve Phoenix with the order within two business days and file proof of service. Phoenix’s counsel was directed to file a notice of appearance within two business days after service. Judge Jesse M. Furman did not decide the underlying dispute between the parties.