Aspen American Insurance Company v. Allstate Sprinkler, LLC

Background

Aspen American Insurance Company, acting as the subrogee of 31st Street Zef LLC, brought the action based on diversity of citizenship. The original complaint described Allstate Sprinkler, LLC as a domestic business corporation organized under New York law and having its principal place of business in the Bronx. The court noted that this allegation appeared inconsistent because an LLC is not a corporation.

The court had previously ordered Aspen either to amend the complaint to allege the citizenship of each member of Allstate Sprinkler, LLC or to provide evidence showing that the entity was actually a corporation. Aspen filed an amended complaint on June 28, 2023. The amended complaint added Allstate Sprinkler Corp. as a defendant and alleged that Allstate Corp. had been acquired by a newly formed entity called Allstate Sprinkler, LLC. It further alleged, on information and belief, that Adam Goodrich, a New York resident, was the LLC’s member.

Jurisdictional issue

For diversity jurisdiction, an LLC’s citizenship depends on the citizenship of each of its members. The court explained that an individual’s citizenship is based on domicile—the person’s true, fixed home and principal place of establishment—not merely residence. Because the amended complaint alleged only that Goodrich was a New York resident and did not allege his citizenship, it did not adequately establish the LLC’s citizenship.

Order

The court ordered Aspen to amend its complaint within 14 days to allege Adam Goodrich’s citizenship. The court stated that if Aspen failed to amend or could not truthfully allege diversity of citizenship, the action would be dismissed for lack of subject-matter jurisdiction without further notice. The order did not itself dismiss the action.