Pachella v. Arivo Acceptance, LLC
- Philip Halpern
- 7:23-cv-01090
- U.S. District Court · Southern District of New York
- 2
In Pachella v. Arrivo Acceptance, Judge Halpern ordered more information about the LLC’s members before deciding whether diversity jurisdiction exists.
Stephen Pachella must provide additional information about Arrivo Acceptance, LLC’s members and their citizenships; the court’s jurisdiction over the case remains unresolved.
What happened
In Pachella v. Arrivo Acceptance, LLC, Stephen Pachella sued Arrivo Acceptance, LLC, Garff Enterprises Inc., and Robert Avery, claiming that federal jurisdiction existed because the parties were citizens of different states and more than $75,000 was at stake.
The court explained that a limited liability company’s citizenship depends on the citizenship of all its members, not simply where the company was organized or has its main business location. Pachella did not identify Arrivo Acceptance’s members or their citizenships, so the court could not determine whether the parties were sufficiently diverse.
Judge Philip M. Halpern ordered Pachella to file a letter by 5:00 p.m. on February 17, 2023, explaining the basis for diversity jurisdiction and supporting factual statements about Arrivo Acceptance’s membership with an affidavit from someone with personal knowledge. The order did not reach the underlying claims.
The detailed version
- Pachella v. Arivo Acceptance, LLC · No. 7:23-cv-01090
- Philip Halpern
- Feb. 10, 2023
Background
Stephen Pachella began the action on February 8, 2023, against Arrivo Acceptance, LLC, Garff Enterprises Inc., and Robert Avery. The complaint asserted federal subject-matter jurisdiction based on diversity of citizenship under 28 U.S.C. § 1332(a)(1). It alleged that Pachella was a citizen of New York, that Arrivo Acceptance, LLC and Garff Enterprises Inc. were citizens of Utah, and that the amount in controversy exceeded $75,000, excluding interest and costs.
Jurisdictional Issue
The court explained that, except for corporations, a business entity’s citizenship is based on the citizenship of all its members. Because Arrivo Acceptance is a limited liability company, identifying only its state of organization and principal place of business did not establish its citizenship for diversity purposes. The complaint did not plead the citizenship of any of Arrivo Acceptance’s members. As a result, the court could not determine whether every member of Arrivo Acceptance was diverse from Pachella as of the filing date.
Order
The court ordered Pachella to file a letter through the court’s electronic filing system by 5:00 p.m. on February 17, 2023. The letter must explain the basis for asserting diversity jurisdiction and must support factual statements about Arrivo Acceptance’s membership with an affidavit from a person with personal knowledge. The court did not decide whether diversity jurisdiction ultimately exists and did not address the merits of the underlying claims.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.