NY Stone Manhattan, LLC v. Cowan Logistics, LLC

Background

The court had previously ordered NY Stone Manhattan, LLC to file a completed disclosure statement under Federal Rule of Civil Procedure 7.1 and provide information needed to establish subject-matter jurisdiction based on diversity of citizenship. NY Stone Manhattan later filed a document labeled a Rule 7.1 Disclosure Statement, but the court found that it differed from the required Southern District of New York form and did not provide all necessary information.

Jurisdiction

The complaint alleged that NY Stone Manhattan is a limited liability company with two members, including NL Cohen Acquisition, described in the complaint as a Delaware corporation. NY Stone Manhattan’s disclosure statement instead alleged that NL Cohen Acquisition is a citizen of New York State, without stating its place of incorporation or principal place of business. The court explained that those facts were necessary to establish the corporation’s citizenship for diversity-jurisdiction purposes.

The complaint alleged that Cowan Logistics is a foreign limited liability company incorporated in Maryland with its principal place of business in Maryland. But NY Stone Manhattan had not identified Cowan Logistics’s members or stated their citizenship. Because the citizenship of a limited liability company depends on the citizenship of all its members, the court found that NY Stone Manhattan had not established complete diversity of citizenship.

Venue

The complaint asserted that venue was proper because a member of NY Stone Manhattan resides in New York State. The court held that a plaintiff’s residence is not a proper basis for venue under 28 U.S.C. § 1391(b), and it found no alternative venue basis apparent from the complaint.

Order and effect

The court ordered NY Stone Manhattan to file, by March 2, 2023, a letter supported by one or more sworn affidavits providing the identity and citizenship of Cowan Logistics’s members and the place of incorporation and principal place of business of NL Cohen Acquisition. It also ordered NY Stone Manhattan to show why venue was proper and to submit a completed Rule 7.1 Disclosure Statement by that date. The court stated that the action would be dismissed, without further notice to the parties, if NY Stone Manhattan could not allege a good-faith basis for complete diversity and venue. The court did not decide the underlying merits of the dispute.