Peleus Insurance Company v. Rubin Development and Construction, Inc.
- John Cronan
- 1:24-cv-01083
- U.S. District Court · Southern District of New York
- 2
In Peleus Insurance v. Rubin Development, Judge Cronan ordered Peleus to clarify diversity jurisdiction or risk dismissal.
Peleus Insurance Company must amend its complaint to establish diversity jurisdiction. The order affects the pending action against Rubin Development and Construction, Inc., Paul Ashram, 856 Bushwick Avenue Realty LLC, and the other named defendants because the court may dismiss the action if jurisdiction is not properly established.
What happened
In Peleus Insurance Company v. Rubin Development and Construction, Inc., the court found that the complaint did not adequately show that the parties were citizens of different states, as required for diversity jurisdiction. The complaint described Paul Ashram as a New York resident and 856 Bushwick Avenue Realty LLC as established and operating in New York, but those allegations were insufficient.
The court explained that residence does not establish a person's legal citizenship for jurisdictional purposes. It also explained that a limited liability company's citizenship depends on the citizenship of each member, including the required details for any corporate members.
Judge Cronan ordered Peleus Insurance Company to amend the complaint by February 22, 2024, to provide the required citizenship information. The court did not dismiss the case, but warned that it may dismiss the action for lack of subject-matter jurisdiction if Peleus does not properly establish jurisdiction.
The detailed version
- Peleus Insurance Company v. Rubin Development and Construction, Inc. · No. 1:24-cv-01083
- John Cronan
- Feb. 15, 2024
Background
Peleus Insurance Company filed the complaint on February 14, 2024, seeking declaratory relief and invoking diversity jurisdiction under 28 U.S.C. § 1332. The court noted that the Declaratory Judgment Act does not independently give federal courts subject-matter jurisdiction; an independent jurisdictional basis is required.
The complaint alleged that Defendant Paul Ashram was a resident of the Bronx, New York, and that Defendant 856 Bushwick Avenue Realty LLC was established in New York with its principal place of business in Brooklyn, New York.
Court’s Analysis
The court held that these allegations did not adequately establish diversity jurisdiction. A person's residence is not enough to establish citizenship or domicile for jurisdictional purposes. For a limited liability company, citizenship is based on the citizenship of each member. A complaint relying on diversity jurisdiction must therefore identify the citizenship of the LLC's natural-person members and, for corporate members, their places of incorporation and principal places of business.
Order
The court ordered Peleus to amend its complaint by February 22, 2024, to allege Ashram's citizenship and the citizenship of each member of 856 Bushwick Avenue Realty LLC. The order states that if Peleus fails to amend or otherwise properly establish jurisdiction under 28 U.S.C. § 1332, the court may dismiss the action for lack of subject-matter jurisdiction without further notice. The court did not dismiss the action in this order.
Disposition
The court ordered an amendment to the complaint and warned of possible dismissal; it did not grant or deny a motion to dismiss.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.