Air Marshall Motorsports LLC v. Moke America LLC

Background

Air Marshall Motorsports LLC sued Moke America LLC and Todd Rome for breach of contract and alleged violations of New York and Florida statutory law. The complaint relied on diversity jurisdiction, which is federal jurisdiction based on the parties’ citizenship. It alleged that Air Marshall was a Florida limited liability company with its principal place of business in Hollywood, Florida, and that Moke America was a New York limited liability company. But the complaint did not allege the citizenship of Moke America’s members.

The court explained that a limited liability company’s citizenship is determined by the citizenship of each member. The party invoking diversity jurisdiction must show that the parties are completely diverse. At an initial conference, the court told Air Marshall that the complaint did not properly establish federal jurisdiction and ordered it either to amend the complaint or explain why the case should not be dismissed.

Jurisdictional Discovery Request

Air Marshall responded that it was a Florida limited liability company whose only member was a Florida citizen. It also said that, when it filed the complaint, it believed Moke America was a New York citizen, but defense counsel had informed it that one of Moke America’s members was a Florida resident. Air Marshall requested discovery, including Moke America’s membership records, tax returns, and government identification for members. It sought permission to amend the complaint after receiving that discovery.

Moke America submitted a declaration from Blake Ian Goldsmith. Goldsmith stated that he was a member of Moke America and had been continuously since 2018, and that he had been a Florida resident since 2019. The opinion does not state that the court received or considered additional evidence about the citizenship of every Moke America member.

Ruling

The court denied Air Marshall’s request for discovery. It recognized that courts may allow limited discovery into a limited liability company’s citizenship when the plaintiff has a good-faith basis to believe federal jurisdiction exists but otherwise cannot learn the members’ citizenship. The court found that this was not such a case because Air Marshall offered no reason to question Goldsmith’s sworn statements or to believe the requested discovery would establish federal jurisdiction.

The court dismissed the complaint, without prejudice, for lack of jurisdiction. It directed the Clerk of Court to terminate pending motions and close the case. Judge Lewis J. Liman did not decide the breach-of-contract or state-law claims on their merits.