Chi v. Parajon

Background

Yun Chi and Na Chi filed a complaint against Evelio Parajon and JGM Trucking LLC. The complaint identified diversity of citizenship as the only basis for federal subject-matter jurisdiction. It described JGM Trucking LLC as a corporation residing in Hudson County, New Jersey, but did not allege the citizenship of the LLC’s members.

For diversity jurisdiction, an LLC has the citizenship of each of its members. The court therefore needed allegations identifying the citizenship of any individual members and, for any corporate members, the place of incorporation and principal place of business.

Venue issue

The complaint alleged that the tort occurred on the George Washington Bridge in New Jersey. It also alleged that each defendant resided in New Jersey, while stating that venue was proper in the Eastern District of New York. The court explained that the allegations appeared to place the events and defendants in the District of New Jersey, not the Southern or Eastern Districts of New York. The court noted that improper venue does not eliminate subject-matter jurisdiction, but advised the plaintiffs to consider whether the case should instead be filed in the District of New Jersey.

Ruling

Judge Engelmayer granted the plaintiffs leave to amend under Federal Rule of Civil Procedure 15(a)(2). The amended complaint had to identify the citizenships of all JGM Trucking LLC members and clarify the basis for venue in the Southern District of New York by November 9, 2020.

The court stated that, if the plaintiffs could not truthfully allege complete diversity based on the citizenship of every LLC member, the complaint would be dismissed, without prejudice, for lack of subject-matter jurisdiction. The court also asked that any request for dismissal without prejudice to refile in another district, or for transfer to another district, be filed by the same deadline. The opinion did not decide the underlying tort claims.