New York Metropolitan Regional Center, L.P. II v. Mammoet USA Holding, Inc.

Background

New York Metropolitan Regional Center, L.P. II brought a single breach-of-contract claim against Mammoet USA Holding, Inc., arising from the failed project to construct the New York Wheel. The case was filed in federal court based on diversity jurisdiction under 28 U.S.C. § 1332, which generally allows federal courts to hear certain disputes involving citizens of different states or foreign citizens.

Mammoet moved to dismiss for lack of subject-matter jurisdiction, meaning the court lacked legal authority to hear the case. The complaint described New York Metropolitan Regional Center as a limited partnership with a Delaware limited-liability-company general partner whose sole member was a New York citizen, along with individual foreign limited partners. The complaint also alleged that certain limited partners were permanent residents domiciled in Texas and that Mammoet was a Texas corporation with its principal offices in Texas.

Mammoet also alternatively moved to stay or dismiss under the rule associated with Colorado River Water Conservation District v. United States. The court did not reach that alternative request because it concluded that subject-matter jurisdiction was lacking.

The Court’s Analysis

The court first rejected the partnership’s primary argument under Section 1332(a)(3). That provision covers cases involving citizens of different states in which foreign citizens are additional parties. Relying on the Supreme Court’s decisions in Carden v. Arkoma Associates and Grupo Dataflux v. Atlas Global Group, L.P., the court held that a partnership is a single artificial entity for diversity purposes. Its partners’ citizenship determines the partnership’s citizenship, but the partners are not treated as separate parties in the lawsuit.

Because New York Metropolitan Regional Center was the sole plaintiff, its foreign limited partners could not be treated as additional parties. The court therefore held that Section 1332(a)(3) did not provide jurisdiction.

The court also rejected the partnership’s alternative theory, which combined Sections 1332(a)(1) and 1332(a)(2). The court did not decide whether those provisions could ever be combined in that way. Instead, it held that Section 1332(a)(2) could not support jurisdiction because the partnership had foreign partners who were permanent residents domiciled in Texas, the same state of which Mammoet was a citizen. The court concluded that the 2011 amendment to Section 1332(a)(2) preserved this limitation rather than creating an exception for partnerships with such partners.

Disposition

The court held that there was no valid basis for diversity jurisdiction under Section 1332. It granted Mammoet’s motion to dismiss for lack of subject-matter jurisdiction and dismissed the case without prejudice. The Clerk was directed to enter judgment consistent with the opinion and close the case.