SPT Chatsworth Holdings, L.L.C. v. HFZ 344 West 72nd Street LLC
- P. Castel
- 1:20-cv-08502
- U.S. District Court · Southern District of New York
- 3
In SPT Chatsworth Holdings v. Chatsworth Realty, Judge Castel ordered citizenship details before the case could proceed or face dismissal for lack of jurisdiction.
SPT Chatsworth Holdings, L.L.C., the defendant LLCs, Ziel and Helene Feldman, and the plaintiff’s ability to proceed in federal court based on diversity jurisdiction.
What happened
SPT Chatsworth Holdings, L.L.C. sued Chatsworth Realty Corporation and other defendants in federal court, relying on the parties’ citizenship to establish diversity jurisdiction.
The court found that the complaint did not adequately identify the citizenship of the members of several defendant limited liability companies, or the citizenship of Ziel and Helene Feldman. Allegations made only on information and belief were insufficient without facts supporting that belief.
Judge Castel gave the plaintiff permission to serve limited questions about the defendants’ citizenship, required defendants to respond within seven days, and ordered the plaintiff to amend the complaint within thirty days. The order stated that the action would be dismissed for lack of subject-matter jurisdiction if the complaint was not amended.
The detailed version
- SPT Chatsworth Holdings, L.L.C. v. HFZ 344 West 72nd Street LLC · No. 1:20-cv-08502
- P. Castel
- Oct. 19, 2020
Background
SPT Chatsworth Holdings, L.L.C. brought the action against Chatsworth Realty Corporation, five limited liability companies, one corporation, and two individuals. The complaint relied on diversity of citizenship as the basis for federal subject-matter jurisdiction.
The complaint alleged that SPT was a citizen of Maryland and Connecticut because of the citizenship of its members. But it alleged the citizenship of all defendants only on information and belief. It did not adequately allege the citizenship of the members of several defendant LLCs. In particular, it did not identify the members of non-party HFZ West 72nd Street Investments LLC, which was alleged to be part of the ownership chain for three defendant LLCs. It also did not allege the membership of HFZ 344 West 72nd Street Two LLC. The complaint alleged, on information and belief, that H F Z Capital Group LLC included a New York trust and Ziel and Helene Feldman, but did not adequately establish the required citizenship information.
Jurisdictional standard
For diversity jurisdiction, an LLC has the citizenship of each of its members. The citizenship of individual members must be stated, and if a corporation is a member, the complaint must identify the corporation’s state of incorporation and principal place of business. The court also explained that allegations based on information and belief must include facts supporting that belief.
Order
Within seven days of the order, plaintiffs were permitted to serve the LLC defendants with an interrogatory limited to the citizenship of their members. The interrogatory could ask for the states of citizenship of individual members and, for any corporate member, its state of incorporation and principal place of business. Plaintiffs could separately serve interrogatories on Ziel and Helene Feldman regarding their states of citizenship. Defendants were given seven days to respond.
Within thirty days, the plaintiff was ordered to amend the complaint to allege the citizenship of each defendant. The order stated that the action would be dismissed for lack of subject-matter jurisdiction if the complaint was not amended. Judge P. Castel did not dismiss the action in this order.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.