UDG Management, LLC v. Ironshore Indemnity Corp.

Background

Ironshore Indemnity Corp. removed the case from New York Supreme Court to the U.S. District Court for the Southern District of New York. Ironshore asserted that the federal court had subject-matter jurisdiction based on diversity of citizenship, which generally requires the opposing parties to be citizens of different states.

For diversity purposes, a limited liability company has the citizenship of each of its members. The court therefore required the removal notice to identify the members and citizenship of the plaintiff limited liability companies, UDG Management, LLC and UDG Holdings, LLC. For corporate members, the notice also had to provide the corporation’s state of incorporation and principal place of business.

Jurisdictional Deficiencies

The removal notice stated that UDG Management was organized under New York law and had its principal place of business in New York. It stated that UDG Holdings was organized under Delaware law and was a subsidiary of UDG Management. But it did not identify the members or citizenship of either limited liability company, and it did not state UDG Holdings’ principal place of business.

After the court ordered Ironshore to submit evidence establishing subject-matter jurisdiction, Ironshore filed a declaration and affidavit stating, on information and belief, that Jeong Hoon Kim was the sole member of both limited liability companies. The filings stated that Kim was a resident of New York. The court found that the supporting public-record document showed that Kim was a member of UDG Management but did not establish that he was its only member. The tax returns showed that Kim was an officer of UDG Holdings but did not show that he was a member, much less its sole member. The filings also did not provide UDG Holdings’ principal place of business.

Ruling

Judge Valerie Caproni concluded that Ironshore’s filings did not cure the removal notice’s defects because they did not provide enough facts for the court to determine the plaintiffs’ citizenship or whether diversity jurisdiction existed.

The court ordered that the case will be remanded to New York Supreme Court on May 1, 2024, unless, before that date, Ironshore either seeks permission to conduct jurisdictional discovery or submits new affidavits that adequately demonstrate the basis for federal jurisdiction. The opinion does not state that an immediate remand had already occurred on April 23.