NY United A-1 Construction, Inc. v. J.P. Management, LLC

Background

NY United A-1 Construction, Inc. filed the action in New York state court against J.P. Management, LLC, JP Clinton Management, LLC, Bergen Realty Properties, LLC, J&D General Kearny Associates, LLC, 190 Main Street Associates, LLC, J&D 11 Fairmount Avenue Associates, LLC, JD Prospect West, LLC, 324 M.P. Broadway, LLC, J&D 46 Anderson Associates, LLC, and J&D 339 Broadway, LLC. The plaintiff alleged that the defendants failed to pay $354,158.05 for cleaning and renovation services and maintenance work allegedly provided in New Jersey. The defendants removed the case to federal court and moved to dismiss for lack of personal jurisdiction, or alternatively to transfer the case or partially dismiss it for failure to state a claim.

Subject-Matter Jurisdiction

The court explained that federal diversity jurisdiction requires the parties to be citizens of different states. Although the complaint identified the plaintiff as a New York company and the defendants as New Jersey limited liability companies, it did not identify the members of those companies or allege their citizenship. Because a limited liability company takes the citizenship of its members, the court held that the complaint did not adequately allege a basis for federal subject-matter jurisdiction. The court stated that this defect alone supported dismissal.

Personal Jurisdiction

The court also held that it lacked personal jurisdiction, meaning legal authority over the defendants. It found no jurisdiction under New York's law allowing jurisdiction over certain out-of-state parties. The defendants' phone calls, emails, facsimiles, and payments involving New York did not amount to sufficient purposeful business activity there. The court also found no basis under the provisions concerning tortious acts in New York or out-of-state acts causing injury in New York. The alleged transactions occurred in New Jersey, the defendants were New Jersey entities, and the plaintiff did not allege the additional facts required under those provisions.

The court further stated that exercising jurisdiction would violate the federal constitutional requirement of fair play and substantial justice, even assuming New York's long-arm statute could otherwise apply. It noted that the defendants were New Jersey entities, the transactions occurred in New Jersey, and the plaintiff could obtain full relief in New Jersey courts.

Disposition

The court dismissed the complaint for lack of subject-matter jurisdiction and personal jurisdiction, without leave to replead in that court. It stated that amendment would be futile because personal jurisdiction was also lacking, and that sending the case back to state court would only prolong a case brought in the wrong jurisdiction. The clerk was directed to terminate all open motions, tax costs, and close the case.