Tutor Perini Building Corp. v. SLAYTON VENTURES, LLC

Background

Tutor Perini Building Corp. (TPBC) brought claims concerning alleged nonpayment and diversion of funds related to the renovation of the George Washington Bridge Bus Station. TPBC said it had been retained by George Washington Bridge Development Venture LLC, referred to as the Developer, to perform construction work. TPBC alleged that the Developer, which was in bankruptcy, failed to pay TPBC and its subcontractors because funds received from the Port Authority of New York and New Jersey and various lenders had been unlawfully diverted.

The complaint included claims against several entities and individuals, including multiple limited liability companies (LLCs). The opinion states that TPBC adequately pleaded the citizenship of the corporate and individual defendants, but did not identify all members and the citizenship of those members for more than half of the LLC defendants.

Jurisdictional dispute

The only possible basis for federal jurisdiction was diversity of citizenship. For diversity jurisdiction, all opposing parties must be citizens of different states. A corporation is a citizen of its state of incorporation and its principal place of business, while an LLC is a citizen of every state where its members are citizens.

TPBC alleged that none of the defendants was a citizen of Arizona or Nevada, the states relevant to TPBC's citizenship allegations. The Court held that this blanket assertion did not cure TPBC's failure to identify the complete citizenship of the LLC defendants. The Court declined to apply an out-of-circuit decision that allowed more relaxed pleading in some circumstances when an LLC's membership information could not be determined.

The defendants argued that the complaint should be dismissed for lack of subject-matter jurisdiction, and they contended that the proper result was dismissal of the complaint in its entirety with prejudice. TPBC sought limited jurisdictional discovery if the Court found its allegations inadequate. The defendants argued that such discovery was unavailable because they had made a facial challenge to the sufficiency of the complaint's jurisdictional allegations.

Ruling

The Court held that TPBC had not adequately pleaded complete diversity, so it could not deny the defendants' motions to dismiss on the existing record. But the Court also declined to grant those motions at that point because the defendants had not shown that any defendant was actually a citizen of Arizona or Nevada. Instead, the Court found that TPBC had made a sufficient initial showing supporting a possible basis for diversity jurisdiction and had made apparently diligent efforts to obtain information that was not publicly available.

Judge Paul A. Engelmayer granted TPBC's motion for limited jurisdictional discovery. The discovery was limited to written requests and interrogatories concerning the citizenship of all members of each defendant LLC. The Court deferred ruling on and stayed the pending motions to dismiss. The parties were ordered to complete the discovery by January 29, 2021, file a discovery schedule by January 5, 2021, and submit supplemental memoranda concerning the jurisdictional issue on February 8 and February 18, 2021, respectively. The opinion did not decide the merits of TPBC's underlying claims.