Kang v. BKCoin Management LLC

Background

Kevin Kang sued BKCoin Management LLC, BKCoin Capital LP, and Michael Goldberg. The complaint invoked federal jurisdiction based on diversity of citizenship, which generally requires complete diversity between the parties and satisfies the applicable amount-in-controversy requirement. The opinion addresses only whether the complaint adequately alleged citizenship for this jurisdictional purpose.

Kang alleged that he is a citizen of New York. He alleged that BKCoin Capital LP is a Delaware limited partnership and that its general partner is BKCoin Management LLC. He also alleged that BKCoin Management LLC is a Delaware limited liability company and that its only managing member at the time was Carlos Betancourt, whom Kang alleged is a citizen of Florida.

Court’s analysis

The court explained that an LLC and a limited partnership are citizens of every state in which their members or partners are citizens. Therefore, a complaint relying on diversity jurisdiction must allege the citizenship of all natural-person members or partners and the relevant citizenship information for entity members, including members that are themselves LLCs or limited partnerships.

The court found that the complaint did not provide the required information. It alleged only the general partner of BKCoin Capital LP, rather than all of its partners, and only the managing member of BKCoin Management LLC, rather than all of its members.

Order and effect

The court ordered Kang to amend the complaint by May 25, 2023, to allege the citizenship of each person or entity comprising BKCoin Management LLC and BKCoin Capital LP. The order stated that, if Kang could not truthfully allege complete diversity, the complaint would be dismissed for lack of subject matter jurisdiction without further notice. The opinion did not decide the underlying claims.

Judge Jesse M. Furman signed the order as a United States District Judge.