International Flight Resources, LLC v. Aufiero

Background

International Flight Resources, LLC sued Joseph Aufiero, Wells Fargo Merchant Services, LLC, and Wells Fargo & Co. The complaint asserted claims for fraud, breach of contract, unfair competition, and unjust enrichment. It alleged federal subject-matter jurisdiction under the diversity statute, which generally requires more than $75,000 in controversy and complete diversity of citizenship between all plaintiffs and defendants. The complaint also alleged supplemental jurisdiction.

The defendants filed two motions to dismiss, arguing that the complaint failed to state a claim. Before addressing those motions, the court examined whether it had subject-matter jurisdiction, which is the court’s legal authority to hear the case.

Jurisdictional Deficiencies

The court held that the complaint did not establish complete diversity. Because International Flight Resources is a limited liability company, its citizenship depends on the citizenship of its members, but the complaint did not identify those members’ citizenship. The complaint alleged that Aufiero was a resident of the Southern District of New York, but residence does not establish citizenship. It identified Wells Fargo & Co.’s state of incorporation but not its principal place of business. It also provided no information about the citizenship of the members of Wells Fargo Merchant Services, LLC.

The court concluded that International Flight Resources had not met its burden of showing that complete diversity existed. Without subject-matter jurisdiction, the court could not reach the merits of the defendants’ motions under Rule 12(b)(6), which addresses whether a complaint states a legally sufficient claim.

Ruling

The court ordered that the complaint be dismissed and directed the Clerk of Court to close the two pending motions to dismiss at docket numbers 24 and 29. The order did not state that the dismissal was with or without prejudice. It allowed International Flight Resources to file an amended complaint within 28 days that sufficiently alleges subject-matter jurisdiction, along with a letter of no more than three pages explaining the jurisdictional allegations. The defendants may file a letter motion to renew their earlier motions within 14 days after the amended complaint is filed. The scheduled telephone conference was cancelled.