GateGuard, Inc. v. Goldmont Realty Corp.

Background

The parties relied on diversity jurisdiction, which allows a federal court to hear certain disputes between citizens of different states. The court explained that complete diversity must have existed both when the state-court complaint was filed and when the case was removed to federal court. As the parties who removed the case, the defendants had the burden of establishing subject-matter jurisdiction.

Jurisdiction concerns

GateGuard’s amended complaint described it as a Delaware corporation with a place of business in New York City, but it did not state the location of GateGuard’s principal place of business. The court noted that one defendant, Leon Goldenberg, was alleged to be a New York citizen. If GateGuard’s principal place of business was also in New York, complete diversity would be lacking. The court also noted that GateGuard’s counsel had expressed uncertainty about GateGuard’s principal place of business when the action was filed and removed.

The court identified a separate potential problem under 28 U.S.C. § 1441(b)(2). That provision generally bars removal when a properly joined and served defendant is a citizen of the state where the action was brought. Because at least one defendant was alleged to be a New York citizen, the court said removal might be improper for that additional reason.

Order

Judge Alison J. Nathan ordered the defendants to provide “competent proof” no later than August 7, 2020, showing that removal was proper and that the court has subject-matter jurisdiction. The order did not state that the case was dismissed, remanded, or that jurisdiction was definitively absent.