Lack v. Caesars Enterainment Corporation
- Vincent Briccetti
- 7:20-cv-05394
- U.S. District Court · Southern District of New York
- 2
In Lack v. Caesars Entertainment Corporation, Judge Briccetti questioned diversity jurisdiction and ordered defendants to explain why the case should not be remanded.
Myrna Lack and the defendant companies were affected because the court questioned whether the federal court had subject-matter jurisdiction. Defendants’ counsel was required to explain why the case should not be remanded to state court.
What happened
In Lack v. Caesars Entertainment Corporation, the defendants removed Myrna Lack’s state-court lawsuit to federal court, claiming the parties were citizens of different states. The court examined whether it had authority to hear the case.
The court explained that diversity jurisdiction requires every plaintiff to be a citizen of a different state from every defendant. It rejected the defendants’ argument that the citizenship of Harrah’s Atlantic City, LLC, could be disregarded because that company was formed after the alleged incident, explaining that citizenship is assessed when the lawsuit is filed. The court also noted that the complaint alleged only that Lack lived in Westchester County, New York; residence alone does not establish citizenship for this purpose.
The court did not decide whether to remand the case. Instead, Judge Vincent L. Briccetti ordered defendants’ counsel to submit a detailed letter by July 22, 2020, explaining why the case should not be sent back to state court for lack of subject-matter jurisdiction.
The detailed version
- Lack v. Caesars Enterainment Corporation · No. 7:20-cv-05394
- Vincent Briccetti
- July 15, 2020
Background
The defendants removed Lack’s action from the Supreme Court of Westchester County to the U.S. District Court for the Southern District of New York. They relied on diversity jurisdiction under 28 U.S.C. § 1332(a)(1), which allows a federal court to hear certain disputes between citizens of different states.
Jurisdictional issues
The court explained that diversity jurisdiction requires complete diversity: every plaintiff must be a citizen of a different state from every defendant. An individual’s citizenship is based on domicile—the person’s fixed home and principal place of establishment—not residence alone. A corporation is generally a citizen of its state of incorporation and the state where it has its principal place of business. An LLC has the citizenship of each of its members.
The defendants argued that the court should disregard the New York citizenship of Harrah’s Atlantic City, LLC because that LLC was organized on December 11, 2019, after the alleged incident on October 27, 2019. The court rejected that timing theory, explaining that diversity is assessed when the action begins, not when the events giving rise to the action allegedly occurred. Lack filed the action on June 4, 2020, and named Harrah’s Atlantic City, LLC, as a defendant at that time.
The court also noted that the complaint alleged only that Lack was a resident of Westchester County, New York. Because residence alone does not establish citizenship for diversity purposes, the complaint did not by itself establish Lack’s citizenship. The opinion also states that the notice of removal incorrectly identified the plaintiff as Sheena Gibson and alleged that Gibson was a New York citizen.
Order
The court did not enter an order remanding the case. Instead, Judge Vincent L. Briccetti ordered defendants’ counsel to submit, by July 22, 2020, a letter explaining in detail why the court should not remand the case for lack of subject-matter jurisdiction. The opinion does not state the later result of that jurisdictional inquiry.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.