Loancare LLC v. Dimont & Associates, LLC
- Jesse Furman
- 1:22-cv-09286
- U.S. District Court · Southern District of New York
- 2
In LoanCare v. Dimont, Judge Furman ordered citizenship details amended or the complaint dismissed for lack of jurisdiction.
LoanCare, LLC, Dimont & Associates, LLC, and Investor Claim Solutions, LLC; the order required LoanCare to amend the complaint and warned that the complaint would be dismissed if complete diversity could not be truthfully alleged.
What happened
LoanCare, LLC sued Dimont & Associates, LLC and Investor Claim Solutions, LLC, relying on the federal court’s authority over disputes between citizens of different states. The complaint identified the companies’ states and business locations but did not identify every member’s citizenship.
The court explained that a limited liability company is treated as a citizen of every state where its members are citizens. It ordered LoanCare to amend the complaint by November 14, 2022, to identify the citizenship of every person or entity making up each party.
Judge Jesse M. Furman stated that if LoanCare could not truthfully allege complete diversity by that deadline, the complaint would be dismissed for lack of subject matter jurisdiction without further notice.
The detailed version
- Loancare LLC v. Dimont & Associates, LLC · No. 1:22-cv-09286
- Jesse Furman
- Nov. 1, 2022
Background
LoanCare, LLC brought the case against Dimont & Associates, LLC and Investor Claim Solutions, LLC. The complaint invoked diversity jurisdiction under 28 U.S.C. § 1332, which allows a federal court to hear certain disputes between citizens of different states. LoanCare alleged that it was a Delaware limited liability company with its principal place of business in Virginia. It alleged that Dimont was a Delaware limited liability company with its principal place of business in Texas and that Investor Claim Solutions was a Texas limited liability company with its principal place of business in Texas.
Reasoning
The court explained that an LLC has the citizenship of each of its members. Therefore, a complaint relying on diversity jurisdiction must identify the citizenship of the natural-person members of an LLC and the relevant incorporation and principal-business locations of corporate members. If an LLC member is itself another LLC, the complaint must also identify the citizenship of that LLC’s members. The court emphasized that these citizenship facts must be affirmatively pleaded, rather than stated only in a general or conclusory way.
The court found that the complaint did not affirmatively plead the citizenship of every member of LoanCare, Dimont, and Investor Claim Solutions. The opinion did not decide the underlying claims between the parties.
Order
The court ordered LoanCare to amend the complaint by November 14, 2022, to affirmatively allege the citizenship of each person or entity comprising itself and the defendants. Judge Jesse M. Furman further ordered that, if LoanCare could not truthfully allege complete diversity by that date, the complaint would be dismissed for lack of subject matter jurisdiction without further notice to any party.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.