Nitrous Funding, LLC v. Cardinal Equity, LLC

Background

Nitrous Funding filed the complaint on March 12, 2020, asserting diversity of citizenship as the sole basis for federal jurisdiction. The court observed that both Nitrous Funding and Cardinal Equity are limited liability companies.

Jurisdictional Allegations

For diversity jurisdiction, a limited liability company has the citizenship of each of its members. The complaint alleged that Nitrous Funding was organized under Florida law and had its principal place of business in Florida, and that Cardinal Equity was organized under New York law and had its principal place of business in New York. But it did not allege the citizenship of the companies’ members.

The court directed Nitrous Funding to allege the citizenship of every natural-person member and, for any corporate member, the corporation’s place of incorporation and principal place of business. Those allegations are necessary for the court to determine whether complete diversity exists.

Order

The court granted Nitrous Funding leave to amend under Federal Rule of Civil Procedure 15(a)(2), requiring the amended complaint to allege the citizenship of all members of both LLCs by March 27, 2020. Judge Engelmayer stated that if Nitrous Funding could not truthfully allege complete diversity, the complaint would be dismissed, without prejudice, for lack of subject-matter jurisdiction. The order did not reach the merits of the parties’ underlying dispute.