FD Special Opportunities V, LLC v. Silver Arch Capital Partners, LLC
- Rochon
- 1:21-cv-00797
- U.S. District Court · Southern District of New York
- 2
In FD Special Opportunities V v. Silver Arch Capital Partners, Judge Rochon ordered plaintiffs to document each party’s citizenship or risk dismissal for lack of jurisdiction.
The plaintiffs were required to provide sworn information about the citizenship of every party. The order also affected all parties because the court stated that the action may be dismissed for lack of subject-matter jurisdiction if complete diversity cannot be established.
What happened
FD Special Opportunities V, LLC and FD GP Investment LLC sued Silver Arch Capital Partners, LLC, Jeffrey Wolfer, and Matt Cole in federal court, relying on the court’s authority over disputes between citizens of different states. The plaintiffs said the companies were based in Delaware and Massachusetts, while the defendants were connected to New Jersey.
The court explained that a limited liability company’s citizenship depends on the citizenship of all its members, not simply its state of formation or principal place of business. The court found that the plaintiffs had not properly identified every party’s citizenship.
The court ordered the plaintiffs to file a letter supported by sworn affidavits identifying each party’s citizenship by November 2, 2022. Judge Jennifer L. Rochon stated that the action may be dismissed for lack of subject-matter jurisdiction if the plaintiffs cannot provide a good-faith basis for complete diversity.
The detailed version
- FD Special Opportunities V, LLC v. Silver Arch Capital Partners, LLC · No. 1:21-cv-00797
- Rochon
- Oct. 19, 2022
Background
The plaintiffs filed the action on January 28, 2021, and filed an amended complaint on August 16, 2021. They asserted that federal jurisdiction existed because the parties were citizens of different states under 28 U.S.C. § 1332. The plaintiffs identified FD Special Opportunities V, LLC and FD GP Investment LLC as Delaware limited liability companies with principal places of business in Middlesex County, Massachusetts. They identified Silver Arch Capital Partners, LLC as a New Jersey limited liability company with its principal place of business in Bergen County, New Jersey, and identified Jeffrey Wolfer and Matt Cole as individuals residing in New Jersey.
Jurisdictional issue
The court explained that, for diversity jurisdiction, a limited liability company is a citizen of every state where its members are citizens. Its state of formation and principal place of business do not determine its citizenship for this purpose. The court concluded that the plaintiffs had not properly alleged the citizenship of all parties.
Order
The court ordered the plaintiffs to file, by November 2, 2022, a letter supported by one or more sworn affidavits alleging the citizenship of each party. The court stated that, if the plaintiffs could not allege a good-faith basis for complete diversity of citizenship by that date, the action may be dismissed for lack of subject-matter jurisdiction without further notice. Judge Jennifer L. Rochon did not dismiss the action in this order.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.