Kaplan Group Investments, LLC v. A.S.A.P. Logistics LTD
- James Oetken
- 1:22-cv-07326
- U.S. District Court · Southern District of New York
- 2
In Kaplan Group Investments v. A.S.A.P. Logistics, Judge Oetken ordered plaintiffs to establish LLC citizenship or seek amendment to avoid possible dismissal.
The plaintiffs and the LLC defendants, because the court required clarification of the LLC members’ citizenship to determine whether federal diversity jurisdiction was adequately alleged.
What happened
In Kaplan Group Investments LLC v. A.S.A.P. Logistics LTD., the plaintiffs relied on diversity jurisdiction, which allows certain disputes involving citizens of different states to be heard in federal court. The complaint did not identify the citizenship of every member of the limited liability company parties.
The court explained that an LLC’s citizenship depends on the citizenship of each member, not its principal place of business or state of registration. The opinion did not decide whether the court ultimately had jurisdiction or whether the claims were legally valid.
Judge J. Paul Oetken ordered the plaintiffs, by September 7, 2022, either to explain why the complaint should not be dismissed for lack of subject-matter jurisdiction or to ask permission to file an amended complaint that properly alleges jurisdiction. The court warned that failing to do so may result in dismissal.
The detailed version
- Kaplan Group Investments, LLC v. A.S.A.P. Logistics LTD · No. 1:22-cv-07326
- James Oetken
- Aug. 31, 2022
Background
The plaintiffs invoked the federal court’s diversity jurisdiction under 28 U.S.C. § 1332. The complaint included limited liability company parties but did not allege the citizenship of each member of those LLCs.
Jurisdictional Rule
For diversity-jurisdiction purposes, an LLC has the citizenship of each of its members. Its principal place of business and state of registration do not establish its citizenship for this purpose. The plaintiffs therefore had to allege that every member of the LLC defendants had citizenship diverse from the plaintiffs as of the date the action was filed.
Court’s Action
The court did not dismiss the action in this order. Instead, it ordered the plaintiffs to act by September 7, 2022. They had to either show cause—meaning explain why dismissal should not occur—for lack of subject-matter jurisdiction or move to file an amended complaint that properly pleaded jurisdiction. The court stated that the action may be dismissed if the plaintiffs failed to do so.
Judge J. Paul Oetken issued the order.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.