Chi v. Parajon

Background

Yun Chi and Na Chi filed this case against Evelio Parajon and JGM Trucking LLC. They relied solely on diversity jurisdiction, which allows a federal court to hear certain disputes between citizens of different states when the jurisdictional requirements are properly alleged.

The court previously told plaintiffs that their complaint did not adequately plead diversity because it did not identify the citizenship of JGM Trucking LLC’s members. For diversity purposes, the court stated that a limited liability company has the citizenship of each of its members. The court also noted that the complaint appeared to describe events occurring in the District of New Jersey and instructed plaintiffs to clarify why venue—the appropriate federal district for the case—was proper in the Southern District of New York.

The court gave plaintiffs until November 9, 2020, to file an amended complaint alleging the citizenship of all LLC members and clarifying venue. It also told them they could file an application to dismiss the case so they could refile elsewhere or to transfer the case.

Plaintiffs’ Filing

Plaintiffs did not file an amended complaint. Instead, they moved to transfer the case to the District of New Jersey. Their motion described JGM Trucking LLC as a corporation residing in Hudson County, New Jersey, but did not identify the LLC’s members or their citizenship. It also did not provide the principal place of business and state of incorporation that would be relevant if JGM Trucking LLC were a corporation.

Court’s Ruling

The court held that it could not consider transferring the case without subject-matter jurisdiction, meaning legal authority to hear the dispute. Because plaintiffs had not pleaded facts sufficient to establish diversity jurisdiction, the court denied the motion to transfer and dismissed the case without prejudice.

The court emphasized that the dismissal did not find that the parties were not diverse. It found only that plaintiffs had not provided adequate allegations allowing the court to determine whether diversity jurisdiction existed. The court also stated that the dismissal did not prevent plaintiffs from filing the case again with good-faith allegations about the citizenship of each JGM Trucking LLC member in a court where venue is proper. The clerk was directed to close the case.

Classification

This is a procedural order because the court dismissed the case for failure to establish subject-matter jurisdiction without deciding the underlying dispute.