SRI Energy LLC v. Clean Energy Nexus LLC
- Jesse Furman
- 1:22-cv-10431
- U.S. District Court · Southern District of New York
- 2
In SRI Energy v. Clean Energy Nexus, Judge Furman ordered Plaintiff to amend its complaint to plead LLC members’ citizenship or face dismissal.
SRI Energy LLC was ordered to amend its complaint by December 30, 2022. Clean Energy Nexus LLC was affected because the court required the complaint to allege the citizenship of each member of both LLCs, and the complaint could be dismissed if complete diversity could not be truthfully established.
What happened
SRI Energy LLC sued Clean Energy Nexus LLC, claiming federal court jurisdiction based on the parties’ citizenship. SRI Energy alleged that it is a Michigan limited liability company with one Michigan-resident member, while Clean Energy Nexus is a Delaware limited liability company with its principal place of business in Houston, Texas.
The court explained that a limited liability company is treated as a citizen of every state where its members are citizens. The complaint did not identify the citizenship of every member of either company, and statements about residence alone were not enough to establish citizenship.
The court ordered SRI Energy to amend its complaint by December 30, 2022, to truthfully allege the citizenship of every person or entity making up both companies. Judge Furman stated that if SRI Energy could not establish complete diversity, the complaint would be dismissed for lack of subject matter jurisdiction without further notice.
The detailed version
- SRI Energy LLC v. Clean Energy Nexus LLC · No. 1:22-cv-10431
- Jesse Furman
- Dec. 12, 2022
Background
SRI Energy LLC brought the action against Clean Energy Nexus LLC and invoked diversity jurisdiction under 28 U.S.C. § 1332. SRI Energy alleged that it is a Michigan limited liability company with its principal place of business in Michigan and one member who is a Michigan resident. It alleged that Clean Energy Nexus is a Delaware limited liability company with its principal place of business in Houston, Texas.
Jurisdictional pleading requirement
The court explained that an LLC has the citizenship of each of its members. A complaint relying on diversity jurisdiction must therefore identify the citizenship of the natural persons who are LLC members and, when members are entities, provide the required citizenship information for those entities and their members. Citizenship must be affirmatively pleaded; allegations of residence alone are insufficient.
Court’s action
The court found that the complaint failed to affirmatively plead the citizenship of each member of SRI Energy and Clean Energy Nexus. It ordered SRI Energy, by December 30, 2022, to amend the complaint to allege the citizenship of each person or entity comprising both companies. The order stated that if SRI Energy could not truthfully allege complete diversity of citizenship by that date, the complaint would be dismissed for lack of subject matter jurisdiction without further notice. Judge Jesse M. Furman entered the order.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.