Kalaj v. Main Street WP Hotel Associates, LLC

Background

Defendants Main Street WP Hotel Associates, LLC, Metropolitan Plaza WP, LLC, and MJ Hotels of White Plains, LLC removed Julijana Kalaj’s action from Supreme Court, Westchester County. They asserted that the federal court had diversity jurisdiction under 28 U.S.C. § 1332(a)(1), which generally requires complete diversity of citizenship between all plaintiffs and all defendants and an amount in controversy exceeding $75,000.

Citizenship allegations

The court explained that an individual’s citizenship for diversity purposes is based on domicile—the person’s true, fixed home and principal establishment—not residence alone. The notice of removal described Kalaj as a “resident” of Michigan, which did not establish her domicile.

The notice also stated that the defendant LLCs were organized under the laws of Delaware, New York, and Florida and that each had its principal place of business in Florida. The court explained that those facts would be relevant for corporations, but the defendants are limited liability companies. An LLC has the citizenship of each of its individual or entity members, and the notice did not separately identify the members of each LLC or their citizenship.

The court further noted that the notice alleged one defendant was a citizen of New York. Under the federal removal statute, a diversity case generally cannot be removed if a properly joined and served defendant is a citizen of the state where the action was brought. The court therefore stated that this allegation could independently prevent removal.

Order

The court ordered the defendants to submit a letter by December 1, 2020, clarifying the citizenship of every party so the court could determine whether complete diversity existed and whether removal was proper. The order did not remand the case at that time. Instead, it stated that the court would remand the case to state court for lack of subject matter jurisdiction if the defendants failed to provide the clarification.