America Core Aviation LLC v. Morrison Cohen L.L.P.

Background

America Core Aviation LLC and Shalva Pavlovich Chigirinskiy filed the complaint against Morrison Cohen L.L.P., David Scharf, Jonathan Margolis, and other defendants. The plaintiffs asserted that the court had diversity jurisdiction, which generally requires complete diversity of citizenship between the plaintiffs and defendants.

The complaint alleged that America Core Aviation LLC was a Delaware limited liability company with its principal place of business in New York. It alleged that the company’s sole member was a Connecticut limited liability company whose beneficial owner was Chigirinskiy, described as a Florida resident. The complaint described Morrison Cohen as a limited liability partnership but left its alleged principal place of business incomplete. It alleged that Scharf and Margolis were partners of Morrison Cohen with principal places of business in New York, and alleged on information and belief that Morrison Cohen’s partners were New York residents with principal places of business in New York.

Court’s analysis

The court explained that a limited liability company has the citizenship of each of its members. If a member is another noncorporate entity, the party invoking diversity jurisdiction must identify and allege the citizenship of that entity’s members, continuing through the ownership chain until every individual and corporation with a direct or indirect interest is identified. A limited liability partnership has the citizenship of all its partners. The court also explained that an individual’s citizenship is based on domicile—the person’s true, fixed home—not merely residence.

The court concluded that the plaintiffs had not properly alleged the citizenship of the parties. In particular, the complaint did not provide the required ownership and citizenship information for the limited liability companies and limited liability partnership, and it did not adequately establish complete diversity.

Order and effect

Judge Jennifer L. Rochon ordered the plaintiffs to file, no later than July 12, 2023, a letter supported by one or more sworn affidavits. The submission must identify the citizenship of each party, including the identity and citizenship of each limited liability company member and limited liability partnership partner, and continue down the ownership chain as required. It must also show that complete diversity exists.

The court did not dismiss the action in this order. It stated that the action may be dismissed for lack of subject-matter jurisdiction without further notice if the plaintiffs cannot allege complete diversity by the deadline. The opinion did not address the merits of the plaintiffs’ underlying claims.