Medlink Legal Systems LLC v. BuKo LLC

Background

Medlink Legal Systems LLC brought an action for damages arising from a medical-gown procurement deal. The defendants were BuKo LLC, Rashmi Budhram and Lisa Kornman Avila individually, and unidentified defendants. Medlink also moved to freeze the defendants’ assets pending trial.

The complaint relied on diversity jurisdiction, which allows a federal court to hear certain disputes between parties who are citizens of different states. For an LLC, citizenship is based on the citizenship of each member. The court therefore ordered Medlink to provide information about its membership.

Jurisdictional Dispute

Medlink initially submitted information stating that Samuel Benjamin was a member of Medlink and resided in New York, and that Avigail Diverioli resided in Florida. The opinion states that the defendants were citizens of New York or Florida, so those allegations would defeat complete diversity, meaning that every plaintiff must be diverse from every defendant.

After the court ordered Medlink to explain why the case should not be dismissed, Medlink changed its position. It claimed that Benjamin was not a member but instead a non-member manager whose compensation was governed by a profit-sharing agreement. Medlink also claimed that Diverioli had moved from Florida to California in 2019 and was Medlink’s sole member.

The court found that Medlink had not supported those revised assertions with sufficient evidence. It noted that Medlink provided no membership certificate or comparable documentation. The court also found that Diverioli’s evidence—bank statements and medical correspondence showing two Los Angeles mailing addresses—did not establish that she intended to abandon her Florida residence or remain in California indefinitely. Medlink provided no evidence such as a change-of-address request, moving expenses, tax records, voter registration, or driver’s license showing a permanent change of domicile.

The court further found Medlink’s explanation that Benjamin had merely misunderstood his membership status not credible. Because Medlink had made inconsistent representations and did not provide supporting documentation, the court concluded that Medlink had not shown by the required evidence that Benjamin was not a New York member.

Ruling

The court held that Medlink failed to establish complete diversity. It dismissed the case without prejudice for lack of subject-matter jurisdiction, directed the Clerk of Court to terminate all pending motions and deadlines, and ordered the case closed.

Because it found that it lacked jurisdiction, the court did not decide whether Medlink could obtain equitable relief freezing the defendants’ assets in a contract action seeking money damages. The court also stated that Medlink’s existing complaint lacked meaningful membership information and that its failure to provide plausible evidence of complete diversity showed that amendment would be futile and unnecessary.