Scottsdale Insurance Company v. Earth Structures Inc.
- Analisa Torres
- 1:23-cv-01229
- U.S. District Court · Southern District of New York
- 2
In Scottsdale Insurance v. Earth Structures, Judge Torres ordered Scottsdale to provide missing citizenship details or face dismissal for lack of jurisdiction.
Scottsdale Insurance Company must provide additional citizenship allegations by February 22, 2023. The defendants and the case are affected because the court warned that the complaint will be dismissed for lack of subject-matter jurisdiction if Scottsdale does not comply.
What happened
Scottsdale Insurance Company sued Earth Structures Inc. and several other defendants, claiming the federal court had jurisdiction because the parties were citizens of different states.
The court found that the complaint did not provide enough information about the members of five defendant limited liability companies to establish their citizenship. It ordered Scottsdale to amend its pleading by February 22, 2023, and warned that the complaint would be dismissed if Scottsdale did not truthfully allege complete diversity.
Judge Analisa Torres issued the order on February 15, 2023. The court did not decide the underlying dispute or whether Scottsdale’s claims were valid.
The detailed version
- Scottsdale Insurance Company v. Earth Structures Inc. · No. 1:23-cv-01229
- Analisa Torres
- Feb. 15, 2023
Background
Scottsdale Insurance Company brought the action against Earth Structures Inc., ESI Noble, LLC, Site 5 DSA Owner LLC, BFC Partners Development LLC, Taconic Investment Partners LLC, L&M Development Partners Inc., Essex Crossing Builders LLC, and Shawn Mendez. Scottsdale invoked federal jurisdiction based on diversity of citizenship, which generally requires complete diversity between the parties and satisfaction of the amount-in-controversy requirement. The order addresses only whether the complaint adequately alleged the parties’ citizenship for that jurisdictional purpose.
The complaint alleged Scottsdale’s organization under Ohio law and principal place of business in Arizona. It also alleged citizenship or organizational information for the defendants, including that Earth Structures Inc. was organized under Delaware law with its principal place of business in New York; ESI Noble, Site 5 DSA Owner, BFC Partners Development, Taconic Investment Partners, and Essex Crossing Builders were limited liability companies; L&M Development Partners was organized and existing in New York; and Shawn Mendez was a New York resident.
Jurisdictional Defect
The court held that the allegations were not sufficient to establish subject-matter jurisdiction. For each limited liability company, the complaint needed to identify the citizenship of every individual member and, for any corporate member, the entity’s place of incorporation and principal place of business. The court cited the rule that a limited liability company has the citizenship of each of its members.
Order
The court ordered Scottsdale to amend its pleading by February 22, 2023, to allege the citizenship of each constituent person or entity of the limited liability companies. The court stated that if Scottsdale failed to amend by that date to truthfully allege complete diversity, the complaint would be dismissed for lack of subject-matter jurisdiction. The order did not dismiss the complaint at that time and did not reach the merits of the parties’ underlying dispute.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.