Colony Insurance Company v. Erzuli, LLC
- Rochon
- 1:23-cv-03874
- U.S. District Court · Southern District of New York
- 2
Colony Insurance v. Erzuli: Judge Rochon ordered jurisdictional disclosures and a Rule 7.1 statement before the case could proceed.
The plaintiffs, who were required to establish complete diversity of citizenship and file a Rule 7.1 disclosure statement by May 19, 2023; the case could be dismissed if they could not do so.
What happened
In Colony Insurance Company v. Erzuli, LLC, the plaintiffs claimed that the federal court had jurisdiction because the parties were citizens of different states. The complaint identified Erzuli and Grid as New York limited liability companies but did not identify their members or citizenships.
Judge Rochon explained that a limited liability company is a citizen of every state where its members are citizens. The plaintiffs also had not filed the required disclosure statement about the entities’ ownership.
Judge Rochon ordered the plaintiffs to file, by May 19, 2023, a letter supported by sworn affidavits identifying the relevant entities and providing the information needed to establish complete diversity. The plaintiffs also had to file a completed disclosure statement by that date. The court stated that the action would be dismissed without further notice if the plaintiffs could not allege a good-faith basis for complete diversity.
The detailed version
- Colony Insurance Company v. Erzuli, LLC · No. 1:23-cv-03874
- Rochon
- May 11, 2023
Background
The plaintiffs filed their complaint on May 8, 2023. The complaint alleged that the court had subject-matter jurisdiction based on diversity of citizenship. It described Erzuli and Grid as limited liability companies authorized to do business in New York and having their principal places of business there. The plaintiffs did not file the required disclosure statement under Federal Rule of Civil Procedure 7.1.
Jurisdictional Information Required
The court explained that an LLC is considered a citizen of every state in which its members are citizens. If an LLC’s members include other non-corporate entities, the party invoking diversity jurisdiction must identify the ownership chain until it identifies every individual and corporation with a direct or indirect interest in the LLC. An individual’s citizenship for diversity purposes is based on domicile—the person’s true, fixed home and principal establishment.
The court ordered the plaintiffs to file, no later than May 19, 2023, a letter supported by one or more sworn affidavits. The filing had to provide the information necessary for the court to exercise subject-matter jurisdiction, including the identity of each limited liability company. The court stated that the action would be dismissed, without further notice to the parties, if the plaintiffs could not allege a good-faith basis for complete diversity of citizenship.
Rule 7.1 Disclosure Statement
The court separately ordered the plaintiffs to file a completed Rule 7.1 disclosure statement by May 19, 2023. The opinion states that Rule 7.1 requires a party to file that statement with its first appearance or pleading.
Disposition
The order required the plaintiffs to provide additional jurisdictional information and to file the Rule 7.1 disclosure statement. It did not decide the underlying insurance dispute or dismiss the action in this order.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.