CareandWear II, Inc. v. Nexcha L.L.C.
- Paul Engelmayer
- 1:20-cv-08773
- U.S. District Court · Southern District of New York
- 2
In CareandWear II v. Nexcha, Judge Nathan ordered more citizenship details before deciding whether diversity jurisdiction exists.
CareandWear II, Inc. must provide additional information about the citizenship of Nexcha L.L.C.’s members and could face dismissal for lack of subject matter jurisdiction if it cannot truthfully establish complete diversity.
What happened
CareandWear II, Inc. sued Nexcha L.L.C. in federal court, claiming that the court could hear the case because the parties were citizens of different states.
The complaint described CareandWear as a Delaware corporation with its main office in New York and Nexcha as a Connecticut limited liability company with its main office in Connecticut. But an LLC’s citizenship depends on the citizenship of every member, and the complaint did not identify those members and their citizenship.
The court ordered CareandWear to amend its complaint within 20 days to identify the citizenship of each person or entity that makes up Nexcha, including required information for any corporate member. Judge Alison J. Nathan stated that the case would be dismissed for lack of subject matter jurisdiction if CareandWear could not truthfully allege complete diversity by that deadline.
The detailed version
- CareandWear II, Inc. v. Nexcha L.L.C. · No. 1:20-cv-08773
- Paul Engelmayer
- Nov. 19, 2020
Background
CareandWear II, Inc. brought the action based on diversity jurisdiction, which allows a federal court to hear certain disputes between citizens of different states. The complaint alleged that CareandWear is a Delaware corporation with its principal place of business in New York, and that Nexcha L.L.C. is a Connecticut limited liability company with its principal place of business in Connecticut.
Jurisdictional issue
The court explained that it has an independent duty to determine whether subject matter jurisdiction exists. For diversity purposes, a limited liability company has the citizenship of each of its members. A complaint relying on diversity jurisdiction therefore must allege the citizenship of every individual or entity that is a member of the LLC. For a corporate member, citizenship includes both the state of incorporation and the state of its principal place of business.
Order
The court ordered CareandWear to amend its complaint within 20 days of the November 19, 2020 order. The amended complaint must allege the citizenship of each person or entity comprising Nexcha, including the state of incorporation and principal place of business of any corporate member. The court stated that, if CareandWear could not truthfully allege complete diversity by that deadline, the complaint would be dismissed for lack of subject matter jurisdiction without further notice. Judge Alison J. Nathan did not dismiss the complaint in this order.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.