Orion Portfolio Services II v. Lexington Finance Designated Activity Company

Background

Orion Portfolio Services II, L.L.C. sued Lexington Finance Designated Activity Company. The complaint relied on diversity jurisdiction, which allows a federal court to hear certain disputes involving parties who are citizens of different states or countries.

The complaint alleged that Orion’s sole member was Anurag Sett, described only as a resident of Georgia. It alleged that Lexington was a foreign company with an address in Dublin, Ireland.

Court’s Analysis

The court stated that the parties’ citizenship must be clearly and specifically alleged. A party’s residence does not establish citizenship. For a limited liability company, the complaint must identify the citizenship of its individual members and, if any members are business entities, provide the place of incorporation and principal place of business for those entities.

The court also stated that diversity jurisdiction does not exist when each side includes a citizen or subject of a foreign country. The complaint’s description of Sett as a Georgia resident therefore did not adequately establish his citizenship. The opinion did not decide the underlying merits of the dispute.

Ruling

Judge P. Castel ordered Orion to file an amended complaint within 14 days of the order. The amended complaint must expressly allege Anurag Sett’s citizenship rather than his state of residence. If Sett is a Georgia citizen, it must specify whether Georgia refers to the U.S. state or the country.