Ulysses Capital Partners Limited Partnership v. Callidus USA Inc.
- Gregory Woods
- 1:22-cv-09817
- U.S. District Court · Southern District of New York
- 3
In Ulysses Capital Partners v. Callidus USA, Judge Woods ordered a response explaining why the removed case should not be dismissed for uncertain diversity jurisdiction.
Ulysses Capital Partners Limited Partnership and the defendants—Callidus USA Inc., Callidus Capital Corporation, and SteelCoast Company, LLC—are affected because the court questioned whether complete diversity supports federal jurisdiction and required the plaintiff to respond before a possible dismissal.
What happened
Ulysses Capital Partners Limited Partnership v. Callidus USA Inc. was removed to federal court by Callidus USA Inc. and Callidus Capital Corporation, which relied on diversity jurisdiction. That jurisdiction requires every plaintiff and defendant to be citizens of different states and an amount in dispute above $75,000.
The court found that the defendants had not provided enough information about the parties’ citizenship. They identified only the limited partnership’s general partners, not its limited partners. They also did not clearly establish the citizenship of every member of SteelCoast Company, LLC through the companies in its ownership chain.
Judge Gregory H. Woods ordered the plaintiff to explain by November 28, 2022, why the case should not be dismissed for lack of subject-matter jurisdiction. The order did not itself dismiss the case.
The detailed version
- Ulysses Capital Partners Limited Partnership v. Callidus USA Inc. · No. 1:22-cv-09817
- Gregory Woods
- Nov. 21, 2022
Background
Callidus USA Inc. and Callidus Capital Corporation removed the action to the U.S. District Court for the Southern District of New York on November 21, 2022. They asserted that the court had diversity jurisdiction under 28 U.S.C. § 1332, alleging that the parties were citizens of different states and that the amount in controversy exceeded $75,000. Diversity jurisdiction requires complete diversity, meaning that every plaintiff must be a citizen of a different state from every defendant. The parties invoking that jurisdiction must provide the facts needed to establish it.
Citizenship allegations
Ulysses Capital Partners is a limited partnership. For diversity purposes, the citizenship of every partner in a limited partnership must be considered, including both general and limited partners. The Callidus Defendants alleged that Ulysses’s general partners were citizens of Florida and Pennsylvania, but the court held that this was insufficient because the allegations did not address the limited partners.
The court also considered Defendant SteelCoast Company, LLC. A limited liability company has the citizenship of each of its members. The Callidus Defendants stated that Adams Steel was a member of SA Recycling LLC, which was SteelCoast’s sole member. They also represented that the ultimate principals of Adams Steel LLC were natural persons who were all California citizens. The court was unsure whether this representation established that all of Adams Steel LLC’s members were California citizens and therefore could not determine the citizenship of all SteelCoast members.
Order
Because these deficiencies prevented the court from determining whether complete diversity existed, the court stated that it could not determine whether it had subject-matter jurisdiction. The court noted that it must dismiss an action if subject-matter jurisdiction is lacking. It therefore ordered the plaintiff to show cause by November 28, 2022, why the action should not be dismissed for lack of subject-matter jurisdiction. The opinion is an order to show cause; it does not itself dismiss the action.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.