Challenger Holdings LLC v. Jetcraft Global Limited

Background

Challenger Holdings LLC brought the action against Jetcraft Global (UK) Limited and invoked diversity-of-citizenship jurisdiction. The complaint alleged that Challenger was organized under Delaware law, had its principal place of business in Plano, Texas, and had George Tsingos as its sole member. It alleged that Tsingos resided in Texas and described Challenger as a Texas citizen. It also alleged that Jetcraft was organized under the laws of England and Wales and had its principal place of business in London.

Jurisdictional issue

The court explained that an action based on diversity jurisdiction must allege the citizenship of every member of a limited liability company. For an individual member, citizenship is determined by domicile—the person’s true, fixed home and principal establishment—not merely by residence. Because the complaint alleged where Tsingos resided but did not allege his citizenship, the court found that the jurisdictional allegations were insufficient.

Order

The court ordered Challenger to amend its complaint within 14 days to allege George Tsingos’s citizenship. Judge P. Castel stated that if Challenger failed to amend by that deadline or could not truthfully allege diversity of citizenship, the action would be dismissed for lack of subject-matter jurisdiction without further notice to any party.