Prime Property & Casualty Insurance Inc. v. Cardenas
- Jesse Furman
- 1:23-cv-00935
- U.S. District Court · Southern District of New York
- 3
In Prime Property v. Cardenas, Judge Furman ordered corrected citizenship allegations to establish diversity jurisdiction or face dismissal without prejudice.
Prime Property & Casualty Insurance, Inc., Pedro Cardenas, Fancy Food, and Fancy Food Logistics, LLC. Prime Property was required to correct the citizenship allegations in its complaint; the defendants were affected because the case’s continuation depended on establishing federal diversity jurisdiction.
What happened
Prime Property & Casualty Insurance, Inc. sued Pedro Cardenas, Fancy Food, and Fancy Food Logistics, LLC, relying on diversity jurisdiction. Its complaint identified some residences and business activity but did not properly allege each defendant’s citizenship.
The court explained that corporations must be identified by their state of incorporation and principal place of business, while a limited liability company’s citizenship depends on the citizenship of all its members. The complaint also listed Cardenas’s residence rather than his citizenship.
Judge Jesse M. Furman ordered Prime Property to file an amended complaint establishing each defendant’s citizenship by February 14, 2023. The court stated that it would dismiss the case without prejudice if Prime Property failed to do so, but it did not dismiss the case in this order.
The detailed version
- Prime Property & Casualty Insurance Inc. v. Cardenas · No. 1:23-cv-00935
- Jesse Furman
- Feb. 7, 2023
Background
Prime Property & Casualty Insurance, Inc. brought the action against Pedro Cardenas, Fancy Food, and Fancy Food Logistics, LLC. The complaint invoked federal subject-matter jurisdiction based on diversity of citizenship under 28 U.S.C. § 1332.
The complaint alleged that Prime Property was a citizen of Utah, that Cardenas was a resident of Florida, and that Fancy Food and Fancy Food Logistics were foreign corporations doing business in New Jersey. The court noted that the complaint described Fancy Food Logistics as a corporation even though its name suggested that it might be a limited liability company, and directed Prime Property to clarify that point in any amended complaint.
Jurisdictional Defects
The court explained that a corporation’s citizenship depends on its state or country of incorporation and its principal place of business. An LLC is a citizen of every state in which its members are citizens. Therefore, a complaint relying on diversity jurisdiction must identify the citizenship of natural-person members and the relevant incorporation and principal-place-of-business information for corporate members, including members of any member LLCs.
The court found that the complaint did not provide the required information for the business defendants. It also held that alleging Cardenas’s residence was insufficient because residence does not establish citizenship for diversity-jurisdiction purposes.
Order
The court ordered Prime Property to file an amended complaint properly alleging the citizenship of each defendant no later than February 14, 2023. The court stated that, if Prime Property did not file an amended complaint establishing subject-matter jurisdiction by that date, it would dismiss the case without prejudice and without further notice. The order itself did not dismiss the case.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.