Penn-Star Insurance Company v. Loring Place Realty LLC
- James Oetken
- 1:22-cv-01154
- U.S. District Court · Southern District of New York
- 1
In Penn-Star v. Loring Place Realty, Judge Oetken required jurisdictional allegations or a response before possible dismissal.
Penn-Star Insurance Company must either explain why the complaint should not be dismissed for lack of subject-matter jurisdiction or seek to amend the complaint by February 25, 2022. The action may be dismissed if it fails to do so.
What happened
Penn-Star Insurance Company sued Loring Place Realty LLC and others in federal court, relying on diversity jurisdiction. The complaint did not identify the citizenship of every member of the LLC defendant.
The court explained that an LLC has the citizenship of each member, not merely the place where it is registered or does business. It ordered Penn-Star, by February 25, 2022, either to explain why the complaint should not be dismissed for lack of jurisdiction or to seek permission to file an amended complaint with the missing information. The court said the action may be dismissed if Penn-Star does neither.
Judge J. Paul Oetken issued the order on February 11, 2022. The order did not decide the underlying insurance dispute.
The detailed version
- Penn-Star Insurance Company v. Loring Place Realty LLC · No. 1:22-cv-01154
- James Oetken
- Feb. 11, 2022
Background
Penn-Star Insurance Company invoked the court’s diversity jurisdiction under 28 U.S.C. § 1332. The complaint named Loring Place Realty LLC as a defendant but did not allege the citizenship of each member of that LLC.
Court’s Analysis
The court explained that limited liability companies are treated differently from corporations for diversity-jurisdiction purposes. An LLC has the citizenship of each of its members. The LLC’s place of registration and principal place of business do not establish its citizenship for this purpose. The complaint therefore did not adequately show that the court had subject-matter jurisdiction—the authority to hear the case.
Order
The court ordered Penn-Star, by February 25, 2022, to take one of two steps: (1) show why the complaint should not be dismissed for lack of subject-matter jurisdiction, or (2) move to file an amended complaint that properly alleges jurisdiction. The court stated that the action may be dismissed if Penn-Star fails to do so. The order did not resolve the underlying insurance dispute.
Read the full 1-page opinion on CourtListener, the free public archive maintained by the Free Law Project.