Delshah 60 Ninth, LLC v. Free People of PA LLC

Background

Free People of PA LLC removed the action from the Supreme Court of New York, New York County, asserting that federal jurisdiction existed because the parties were citizens of different states or jurisdictions. Delshah 60 Ninth, LLC identified itself as a New York limited liability company. It stated that its sole member was Delshah Capital Limited, a British Virgin Islands limited liability company with its principal place of business in New York, New York, but it did not identify the members of Delshah Capital Limited.

Jurisdiction issue

For diversity jurisdiction, a limited liability company is treated as a citizen of every state or jurisdiction where its members are citizens. The court therefore required the removal notice to identify the citizenship of the individuals and entities that ultimately make up the membership of Delshah 60 Ninth, LLC. The court found that Free People’s notice of removal did not provide that information.

Order

The court ordered Free People to amend its notice of removal by May 20, 2022, to allege the citizenship of each person or entity comprising Delshah Capital Limited. For any corporate entity member, the amended notice must state its place of incorporation and principal place of business. If Free People could not truthfully allege complete diversity, the court stated that the action would be remanded to the Supreme Court of New York, New York County, without further notice. The order also required Free People to serve the order on Delshah within two business days and required Delshah’s counsel to file a notice of appearance within two business days after service.