United States District Court, W.D. Louisiana, Shreveport Division
L. HORNSBY U.S. MAGISTRATE JUDGE.
Doyle Construction, LLC and Woodrow Wilson filed this civil
action in a Texas federal court against four defendants based
on allegations of fraud in connection with a business
investment. The complaint does not invoke federal law. Its
sole basis for jurisdiction is an assertion of diversity
jurisdiction pursuant to 28 U.S.C. § 1332, which places
the burden on the parties who brought the suit to plead
particular facts that establish the requisite amount in
controversy and complete diversity of citizenship between the
plaintiffs and the defendants.
Texas federal court recently transferred venue to this court,
which has reviewed the pleadings for an assessment of whether
jurisdiction is established. The complaint appears to be
lacking in some respects. The need for specific factual
allegations with respect to jurisdiction, and a determination
of jurisdiction at an early stage of the case, was recently
emphasized in Settlement Funding, LLC v. Rapid
Settlements, Limited, 851 F.3d 530 (5th Cir. 2017).
Accordingly, an amended complaint and addition information
about the amount in controversy are required.
the parties (Wilson, Cooper and Harris) are individuals. The
complaint alleges that each of them is a
“resident” of a particular state. It is domicile
rather than mere residency that decides citizenship for
diversity purposes, and “[i]t is well established that
an allegation of residency does not satisfy the requirement
of an allegation of citizenship.” Great Plains
Trust Co. v. Morgan Stanley, 313 F.3d 305, 310 n. 2 (5th
Cir. 2002), quoting Strain v. Harrelson Rubber Co.,
742 F.2d 888 (5th Cir. 1984). A person may reside in multiple
states, but he has only one domicile at a time. The amended
complaint needs to set forth the state in which each
individual party was domiciled at the time the complaint was
Doyle Construction, LLC describes itself as a limited
liability company organized under Louisiana law. The
complaint describes defendant TriHM Foundation, LLC as an LLC
organized under Texas law. The pleadings do not appear to
provide any additional information about membership in those
entities. That information is necessary because the
citizenship of an LLC is determined by the citizenship of all
of its members, with its state of organization or principal
place of business being irrelevant. Harvey v. Grey Wolf
Drilling Co., 542 F.3d 1077 (5th Cir. 2008). If the
members of an LLC are themselves partnerships, LLCs,
corporations or other form of entity, their citizenship must
be alleged in accordance with the rules applicable to that
entity, and the citizenship must be traced through however
many layers of members or partners there may be. Adams v.
Wal-Mart Stores, Inc., 2014 WL 2949404 (W.D. La. 2014).
Standard Asurety, LLLP is described as a limited liability
limited partnership organized under Georgia law. The
citizenship of limited partnerships and similar
unincorporated associations are determined by looking to the
citizenship of each partner, both limited and general.
Carden v. Arkoma Associates, 110 S.Ct. 1015 (1990);
Whalen v. Carter, 954 F.2d 1087, 1094 (5th Cir.
1994). As with the LLCs, if partners are themselves
partnerships, LLCs or other forms of association, the
citizenship must be traced through the various layers.
such detailed allegations of citizenship is sometimes a
difficult or even impossible task. But it is one that must be
accomplished if the case is to remain in federal court.
Settlement Funding, 851 F.3d at 536 (“A party
seeking to establish diversity jurisdiction must specifically
allege the citizenship of every member of every LLC or
partnership involved in a litigation.”). And it is the
membership/citizenship at the time the complaint was filed
that is relevant. Later changes do not impact jurisdiction.
Grupo Dataflux v. Atlas Glob. Grp., L.P., 124 S.Ct.
appears that Plaintiffs' counsel is not admitted to this
court, so a separate order will issue that allows time to (1)
be admitted pro hac vice (and enroll local counsel)
or (2) secure substitute counsel who is admitted to practice
in this court. Accordingly, the court will not now set a
deadline for compliance with this order. But Plaintiffs will
eventually be required to file a motion for leave to amend
their complaint and set forth specific allegations that
establish the citizenship of all parties. They should begin
gathering the necessary information.
will also be required to explain in a memorandum how the
amount in controversy element has been met. The original
complaint alleges total damages of $88, 000, but it states
that the loss is divided between Mark Doyle Construction, LLC
($66, 000) and Woodrow Wilson ($22, 000). Parties ordinarily
may not aggregate their individual claims in an effort to
exceed the $75, 000 threshold for federal jurisdiction.
Eagle Star Ins. Co. v. Maltes, 313 F.2d 778, 780 n.3
(5th Cir. 1963); Zarate v. Guillory, 2016 WL 2996899
*4 (E.D. La. 2016).
complaint does seeks recovery of punitive damages and
attorneys fees that could elevate the amounts of the claims
to satisfy the amount in controversy if such awards
are available under state law. St. Paul Reinsurance Co.
v. Greenberg, 134 F.3d 1250, 1253 (5th Cir. 1998);
Wright Family Investments v. Jordan Carriers, 2012
WL 2457664 (W.D. La. 2012). The complaint does not cite any
particular statutes or jurisprudence that allows for the
recovery of attorneys fees or punitive damages on claims of
this nature. The Plaintiffs' memorandum in support of
jurisdiction should point to particular authority on these
issues or concede that such forms of relief are not available
under applicable law. If the amended complaint and memorandum