Cambridge Funding Source LLC v. Emco Oilfield Services LLC
- Paul Engelmayer
- 1:22-cv-10741
- U.S. District Court · Southern District of New York
- 2
In Cambridge Funding Source LLC v. Emco Oilfield Service LLC, Judge Engelmayer ordered jurisdictional and service steps before considering CFS’s arbitration petition.
Cambridge Funding Source LLC, Emco Oilfield Service LLC, and Emco Alpha LLC; the order primarily required CFS to establish federal jurisdiction and complete service before Emco’s response deadlines began.
What happened
In Cambridge Funding Source LLC v. Emco Oilfield Service LLC, Cambridge Funding Source LLC asked the court to confirm an arbitration-related injunction under the Federal Arbitration Act. The respondents did not appear, and the clerk entered a default certificate, but the court had not yet decided the petition.
The court identified two issues that had to be addressed first. Because the parties are limited liability companies, the court required Cambridge Funding to provide a sworn declaration describing the citizenship of their members so it could determine whether federal diversity jurisdiction exists. The court also ordered further service of the order and supporting papers and gave Emco deadlines to appear and respond if it wished to oppose the petition.
Judge Paul A. Engelmayer’s order did not decide the petition’s merits. It directed Cambridge Funding to provide the jurisdictional information and proof of service before the court considers whether to grant the requested relief.
The detailed version
- Cambridge Funding Source LLC v. Emco Oilfield Services LLC · No. 1:22-cv-10741
- Paul Engelmayer
- Sept. 12, 2023
Background
Cambridge Funding Source LLC (CFS) brought the action under the Federal Arbitration Act, 9 U.S.C. § 9, seeking confirmation of an arbitral injunction. CFS filed its original action on December 20, 2022, and an amended petition on December 29, 2022. The opinion states that CFS served Emco Oilfield Service LLC and Emco Alpha LLC, together referred to as Emco, on January 5, 2023. Emco did not appear, and the clerk issued a certificate of default on March 16, 2023.
The court later directed CFS to submit any additional materials supporting its petition. CFS filed a legal memorandum and supporting declaration. The court stated that CFS’s supporting papers were in good order but identified two matters that had to be resolved before it could reach the petition’s merits.
Jurisdiction
The court explained that a federal court may hear an action under the Federal Arbitration Act only when there is an independent basis for federal jurisdiction. CFS had alleged diversity of citizenship as the sole basis for jurisdiction. Because each party is a limited liability company, however, each LLC has the citizenship of each of its members. The amended petition alleged the parties’ states of formation but did not allege the citizenship of their members.
The court therefore directed CFS to file, by September 19, 2023, a sworn declaration stating the citizenship of natural persons who are members of each party and, for any corporate members, the corporation’s place of incorporation and principal place of business. The court noted that it has an independent obligation to determine whether subject-matter jurisdiction exists.
Service and Response Deadlines
The court directed CFS to serve the order and the papers supporting its petition on Emco and Emco’s arbitration counsel and to file proof of service by September 19, 2023. If Emco wished to oppose the petition, its counsel had to file a notice of appearance by September 26, 2023, and a response by October 4, 2023.
Disposition
The order addressed jurisdiction and service before reaching the petition’s merits. It did not grant or deny CFS’s request to confirm the arbitral injunction. The order was signed by United States District Judge Paul A. Engelmayer on September 12, 2023.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.