Series 2020A of Nahla Capital LLC v. Brody

Background

Alyssa Soto Brody removed the case to the U.S. District Court for the Southern District of New York, asserting diversity jurisdiction. Series 2020A of Nahla Capital LLC argued that complete diversity was absent, while Brody argued that complete diversity existed. The parties submitted documents and additional briefing addressing the issue.

Jurisdictional analysis

Diversity jurisdiction requires that no plaintiff and no defendant be citizens of the same state. For jurisdictional purposes, a limited liability company takes the citizenship of each of its members. The party seeking federal jurisdiction—Brody—had the burden of showing that diversity existed. The court also explained that the party alleging a change in domicile must show both an intent to give up the old domicile and actual residence in the new one. Here, that party was Series 2020A.

The decisive question was whether Marc Weidner, one of two natural-person members of an LLC that is a member of Series 2020A, was domiciled in Florida when Brody removed the case on August 21, 2022. The court found that he was. Series 2020A submitted Weidner’s affidavit stating that he moved from New York to Florida in February 2021 and had lived there as a Florida resident since then. It also submitted his Florida driver’s license, issued in May 2021, and Brody acknowledged that Weidner maintained a rental apartment in Florida.

Brody relied on Weidner’s New York voter registration, his divorce proceedings in New York, his once-a-week teaching position at a New York-based university, and a statement that he had previously lived and been domiciled in Manhattan. The court gave those facts little weight because the voter registration predated Weidner’s move to Florida and was listed as inactive, and because the other facts did not outweigh the evidence of Florida domicile.

Disposition

The court concluded that Weidner was domiciled in Florida as of August 21, 2022. Because a member of the plaintiff and Brody were both domiciled in Florida, complete diversity was absent and the court lacked subject-matter jurisdiction. The court therefore dismissed the action without prejudice and remanded it to the New York Supreme Court. It also granted the motion at docket number 37 to seal part of Weidner’s affidavit containing sensitive and irrelevant business information. The Clerk was directed to terminate all pending motions and close the case. Judge Paul A. Engelmayer signed the order.