Michael Friedman Group Inc. v. Digital Media Solutions, LLC
- Jesse Furman
- 1:21-cv-03036
- U.S. District Court · Southern District of New York
- 2
In Michael Friedman Group v. Digital Media Solutions, Judge Furman ordered jurisdictional amendments and warned the complaint could be dismissed.
Michael Friedman Group Inc. was required to amend its complaint; Digital Media Solutions, LLC was affected because the case could be dismissed if the jurisdictional deficiencies were not cured.
What happened
Michael Friedman Group Inc. sued Digital Media Solutions, LLC, claiming the federal court had jurisdiction because the parties were citizens of different states. The complaint identified Michael Friedman Group as a New York corporation but did not identify the citizenship of Digital Media Solutions’ members.
The court also found that the complaint did not provide enough facts to show that more than $75,000 was at stake. Although Michael Friedman Group alleged that Digital Media Solutions had more than $300 million in 2020 revenue, it did not say what portion came from clients that Michael Friedman Group had introduced.
Judge Furman ordered Michael Friedman Group to amend its complaint by April 16, 2021, to provide the missing citizenship information and facts supporting the amount in controversy. The court did not dismiss the complaint at that time, but warned that it would be dismissed for lack of subject-matter jurisdiction if the required allegations could not truthfully be made.
The detailed version
- Michael Friedman Group Inc. v. Digital Media Solutions, LLC · No. 1:21-cv-03036
- Jesse Furman
- Apr. 9, 2021
Background
Michael Friedman Group Inc. brought a single breach-of-contract claim against Digital Media Solutions, LLC. The complaint invoked diversity jurisdiction under 28 U.S.C. § 1332. It alleged that Michael Friedman Group was a New York corporation with its principal place of business in New York. It described Digital Media Solutions as a Delaware limited liability company headquartered in Florida, but it did not allege the citizenship of the LLC’s members.
The complaint alleged that Digital Media Solutions had stopped paying Michael Friedman Group 2.0% of revenue received from clients that Michael Friedman Group had introduced. It also alleged that Digital Media Solutions had revenue of more than $300 million in 2020. The complaint stated, without additional supporting facts, that the amount in controversy exceeded $75,000.
Jurisdictional deficiencies
The court explained that an LLC has the citizenship of each of its members. A complaint relying on diversity jurisdiction therefore must identify the citizenship of each natural-person member and the relevant incorporation and principal-place-of-business information for corporate members, including the members of any member LLCs.
The court also explained that the party invoking federal jurisdiction must show a reasonable probability that the amount in controversy exceeds the statutory minimum. It found that the complaint’s conclusory statement about the amount in controversy was insufficient. The allegation of more than $300 million in total revenue did not show what share of that revenue came from the clients introduced by Michael Friedman Group.
Order
The court ordered Michael Friedman Group to amend its complaint on or before April 16, 2021. The amended complaint had to allege the citizenship of each person or entity comprising Digital Media Solutions and plead sufficient facts to demonstrate a reasonable probability that the amount in controversy exceeded $75,000.
The court warned that, if Michael Friedman Group could not truthfully allege both complete diversity of citizenship and an amount in controversy sufficient to meet the statutory limit, the complaint would be dismissed for lack of subject-matter jurisdiction without further notice. The order itself did not dismiss the complaint.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.