SPORT-BLX, Inc. v. Salerno
- Lorna Schofield
- 1:22-cv-08111
- U.S. District Court · Southern District of New York
- 4
In Sport-BLX v. Salerno, Judge Schofield granted in part and denied in part an application for information about Cypress’s citizenship to assess diversity jurisdiction.
The order affected Defendants, who were required to submit affidavits tracing Cypress Holdings III, L.P.’s partners and upstream ownership for purposes of establishing complete diversity jurisdiction. It also limited the identifying information that had to be disclosed.
What happened
In SPORT-BLX, Inc. v. Salerno, Sport-BLX asked the court to require Defendants to provide information tracing the ownership and citizenship of Cypress Holdings III, L.P., a limited partnership, because the case had been removed to federal court based on diversity jurisdiction. Sport-BLX argued that Defendants had not adequately identified Cypress’s members or their citizenship.
The court granted in part and denied in part the application. It ordered Defendants to file, by October 28, 2022, one or more affidavits from people with personal knowledge establishing the citizenship of Cypress’s partners and, when necessary, the ownership of those partners and entities farther upstream. The affidavits did not have to identify the names or locations of those people or entities.
Judge Schofield issued the October 17, 2022 order to address whether complete diversity jurisdiction had been established; the order did not decide the underlying claims.
The detailed version
- SPORT-BLX, Inc. v. Salerno · No. 1:22-cv-08111
- Lorna Schofield
- Oct. 17, 2022
Background
The case had recently been removed from state court. Sport-BLX asked the court to require Defendants to provide information about the members of Cypress Holdings III, L.P. ("Cypress") and the citizenship of those members and any entities that owned them. Sport-BLX argued that this information was needed to determine whether the federal court had diversity jurisdiction.
The court’s jurisdiction was based on diversity of citizenship, which generally requires complete diversity between the opposing sides. For a limited partnership or limited liability company, citizenship depends on the citizenship of its members or partners, including members or partners farther upstream in the ownership structure. Sport-BLX argued that Defendants’ amended removal notice stated only, in general terms, that Cypress’s partners were citizens of New Jersey and were not citizens of Delaware or New York. According to Sport-BLX, the notice did not identify the partners or provide sufficiently specific citizenship facts.
Sport-BLX also argued that Defendants had declined to provide the requested identities, had not asserted privilege or burden, and had offered only information counsel reported receiving from their clients. Defendants opposed the request, although the opinion does not set out a separate detailed statement of their legal arguments beyond their position that they had no obligation to provide more information.
Court’s ruling
The application was granted in part and denied in part. By October 28, 2022, Defendants were ordered to file a letter attaching one or more affidavits from a person or persons with personal knowledge attesting to the facts needed to establish the citizenship of each of Cypress’s general and limited partners.
The order further required the affidavits to address the citizenship of the partners, members, or comparable owners of any Cypress partner that was itself a partnership, limited liability company, or similar entity. This tracing requirement continued until complete diversity had been established under 28 U.S.C. §§ 1332 and 1441.
The court expressly stated that the affidavits did not need to identify the names or locations of the people or entities involved. Thus, the order required sworn information sufficient to establish citizenship but did not require the broader disclosure of names and locations sought in Sport-BLX’s application.
Significance and scope
The order addressed a jurisdictional question and did not reach the merits of the parties’ underlying dispute. It required additional proof concerning Cypress’s ownership and citizenship before the case could proceed on the assumption that diversity jurisdiction existed. Judge Schofield dated the order October 17, 2022, in New York, New York.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.