Best Brands Consumer Products, Inc. v. CA Citizen Protection Group, LLC
- Lewis Kaplan
- 1:22-cv-07260
- U.S. District Court · Southern District of New York
- 1
Best Brands v. CA Citizen Protection Group was dismissed for lack of subject-matter jurisdiction, Judge Kaplan ruled, because diversity allegations were insufficient.
The plaintiffs and CA Citizen Protection Group, LLC; the action was dismissed because the amended complaint did not establish complete diversity of citizenship.
What happened
In Best Brands Consumer Products, Inc. v. CA Citizen Protection Group, LLC, the plaintiffs relied on diversity of citizenship as the only stated basis for federal jurisdiction. They alleged that CA Citizen Protection Group was a California corporation with its principal place of business there.
The court noted that the defendant’s “LLC” designation indicated it was a limited liability company, not a corporation. For diversity jurisdiction, an LLC is treated as a citizen of every state where any of its members is a citizen. Because the amended complaint did not identify the members or allege their citizenship, it did not establish that the parties were completely diverse.
The court dismissed the action for lack of subject-matter jurisdiction. Judge Lewis A. Kaplan also noted that the plaintiffs had previously been given an opportunity to correct the problem but repeated the assertion that the defendant was a corporation.
The detailed version
- Best Brands Consumer Products, Inc. v. CA Citizen Protection Group, LLC · No. 1:22-cv-07260
- Lewis Kaplan
- Sept. 8, 2022
Background
The amended complaint identified diversity of citizenship as the sole basis for subject-matter jurisdiction, meaning the federal court’s authority to hear the case. The plaintiffs alleged that CA Citizen Protection Group was a California corporation with its principal place of business in California.
Jurisdictional problem
Judge Kaplan noted that the defendant’s name included “LLC,” which ordinarily signifies a limited liability company rather than a corporation. The court also referred to an internet check of the relevant California Secretary of State website indicating that the defendant was a limited liability company.
For diversity jurisdiction, a limited liability company is a citizen of every state in which any of its members is a citizen. The amended complaint did not allege the identities or citizenship of the defendant’s members. As a result, it did not allege facts sufficient to establish complete diversity between the plaintiffs and the defendant.
Ruling
The court stated that the plaintiffs had previously had an opportunity to correct the jurisdictional allegation but instead repeated the incorrect assertion that the defendant was a corporation. The court dismissed the action for lack of subject-matter jurisdiction. The opinion does not state whether the dismissal was with or without prejudice.
Read the full 1-page opinion on CourtListener, the free public archive maintained by the Free Law Project.