CMT Developers LLC v. US Capital Global Partners LLC
- Jesse Furman
- 1:20-cv-01853
- U.S. District Court · Southern District of New York
- 2
In CMT Developers v. US Capital Global Partners, Judge Furman ordered defendants to amend removal allegations or face remand for unproven diversity jurisdiction.
The order directly affected defendants US Capital Global Partners LLC and Ish Spencer, who had to provide additional citizenship information or face remand of the action to New York state court. It also required action by plaintiff's counsel regarding service and a notice of appearance.
What happened
CMT Developers LLC v. US Capital Global Partners LLC began in New York state court and was removed to federal court by US Capital Global Partners LLC and Ish Spencer, who claimed the parties were citizens of different states.
The court found that the removal papers did not identify every member of CMT Developers LLC, so they did not establish the complete diversity required for federal jurisdiction. The court ordered defendants to provide that information and also ordered service and a notice of appearance.
Judge Jesse M. Furman ordered defendants to amend the removal notice by March 11, 2020. If they could not truthfully establish complete diversity, the court said the action would be remanded to New York state court without further notice.
The detailed version
- CMT Developers LLC v. US Capital Global Partners LLC · No. 1:20-cv-01853
- Jesse Furman
- Mar. 4, 2020
Background
Defendants US Capital Global Partners LLC and Ish Spencer removed the 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 federal jurisdiction based on diversity of citizenship, which generally requires the opposing parties to be citizens of different states and requires the amount-in-controversy requirement to be satisfied. The order discusses only the citizenship requirement.
The removal notice alleged that US Capital Global Partners LLC and its 100-percent owner, US Capital Holding Corporation, were incorporated in Delaware and had their principal places of business in California. It also alleged that Ish Spencer resided in and was a citizen of California. The notice alleged that CMT Developers LLC was incorporated in New Jersey and had its principal place of business in New York.
Jurisdictional issue
The court explained that a limited liability company is a citizen of every state of which its members are citizens. Therefore, a removal notice based on diversity jurisdiction must identify the citizenship of each individual member of an LLC and the incorporation state and principal place of business of any corporate member.
The court held that the removal notice failed to identify each member of CMT Developers LLC. As a result, the notice did not establish complete diversity of citizenship.
Order and effect
The court ordered defendants to amend the removal notice by March 11, 2020, to truthfully allege the citizenship of every person or entity comprising CMT Developers LLC. The order specifically required residency information for individual members and the state of incorporation and principal place of business for corporate members.
If defendants were unable to 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 did not decide the underlying claims. Defendants also had to serve plaintiff with the order within two business days and file proof of service, and plaintiff's counsel had to file a notice of appearance within two business days after service.
Judge Jesse M. Furman entered the order on March 4, 2020.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.