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State ex rel. Tureau v. Bepco, LP

United States District Court, W.D. Louisiana, Alexandria Division

June 21, 2017

STATE OF LOUISIANA ex rel. JUSTIN DALE TUREAU
v.
BEPCO, L.P., et al.

          DRELL CHIEF JUDGE

          SUA SPONTE JURISDICTIONAL FINDINGS

          Joseph H.L. Perez-Montes United States Magistrate Judge.

         Before the Court is a Complaint removed from a Louisiana state court by Defendant Chisholm Trail Ventures, L.P. (Doc. 1). Defendant premises federal jurisdiction on diversity of citizenship.

         I. The law of citizenship.

         The diversity statute - 28 U.S.C. § 1332 - is satisfied upon a showing of: (1) diversity of citizenship between the parties; and (2) an amount in controversy in excess of $75, 000, exclusive of interest and costs. “Complete diversity requires that all persons on one side of the controversy be citizens of different states than all persons on the other side.” See Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077, 1079 (5th Cir. 2008) (internal citation and quotation omitted). Further, “when jurisdiction depends on citizenship, citizenship must be distinctly and affirmatively alleged.” See Getty Oil Corp., a Div. of Texaco, Inc. v. Ins. Co. of N. Am., 841 F.2d 1254, 1259 (5th Cir. 1988). The Court has “an independent obligation to determine whether subject-matter jurisdiction exists, even in the absence of a challenge from any party.” See Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006). This duty persists throughout all phases of the litigation, “even after trial and the entry of final judgment.” See id. at 506-07.

         The citizenship of an individual is his or her domicile, meaning the place where an individual resides and intends to remain. See Acridge v. Evangelical Lutheran Good Samaritan Soc., 334 F.3d 444, 448 (5th Cir. 2003). A corporation shall be deemed to be a citizen of every State and foreign state by which it has been incorporated and of the State or foreign state where it has its principal place of business. See Tewari De-Ox Systems, Inc. v. Mountain States/Rosen, L.L.C., 757 F.3d 481, 483 (5th Cir. 2014). The citizenship of a general partnership depends on that of all partners. See Int'l Paper Co. v. Denkmann Associates, 116 F.3d 134, 135, 137 (5th Cir. 1997). The citizenship of a limited liability company (“L.L.C.”), a limited partnership, or other unincorporated association or entity is determined by the citizenship of all its members. See Harvey, 542 F.3d at 1079-80.

         There are also trusts involved in this case. Traditionally, a trust is not considered a distinct legal entity, but a “fiduciary relationship” between multiple people. See Americold Realty Trust v. Conagra Foods, Inc., 136 S.Ct. 1012, 1016 (2016). Trusts do not have “members.” Rather, a trust exists where a settlor transfers title of property to a trustee to hold in trust for the benefit of beneficiaries. See Hometown 2006-11925 Valley View, L.L.C. v. Prime Income Asset Mgmt., L.L.C., 847 F.3d 302, 307 (5th Cir.2017) (citing Americold, 136 S.Ct. at 1016). A trustee is a real party to the controversy for purposes of diversity jurisdiction when he possesses certain customary powers to hold, manage, and dispose of assets for the benefit of others. See Navarro Sav. Ass'n, 446 U.S. at 464 (citing Bullard v. Cisco, 290 U.S. 179, 189 (1933).

         However, many States have applied the “trust” label to a variety of unincorporated entities that have little in common with the traditional trust template. Since such an entity is unincorporated, it possesses the citizenship of all its members. See Americold Realty Trust, 136 S.Ct. at 1016 (citing C.T. Carden v. Arkoma Associates, 494 U.S. 185, 195 (1990)).

         In this case, many of the partners and owners of the parties are trusts. Since Defendants claim the citizenship of both the trustees and the beneficiaries of the trusts in their notice of removal, Defendants are apparently admitting that all of the trusts are business trusts, rather than traditional trusts.

         II. Analysis

         A. Plaintiff State of Louisiana ex rel. Justin Dale Tureau is a Louisiana resident.

         Defendants show that Plaintiff Justin Dale Tureau is a citizen of Louisiana.[1]

         B. Defendant Chisolm Trail Ventures, L.P. is a citizen of California, New York, Texas, and Virginia.

         Defendants show that Chisolm Trail Ventures, L.P. is a limited partnership that is a citizen of California, New York, Texas and Virginia, and is composed of 13 general partners and 13 limited partners. The limited partners are:

         1. Sid R. Bass Management Trust (a citizen of Texas), of which Sid R. Bass (a resident of Texas) is both the trustee and beneficiary, is a citizen of Texas;

         2. Hyatt Ann Bass Management Trust (a citizen of Texas and New York), of which Panther City Investment Company (a Texas corporation with its principal place of business in Texas) is the trustee and Hyatt Ann Bass (a citizen of New York) is the beneficiary;

         3. Samantha Sims Bass Management Trust (a citizen of Texas and New York), of which Panther City Investment Company (a citizen of Texas) is the trustee and Samantha Sims Bass (a citizen of New York) is the beneficiary;

         4. Lee M. Bass 1986 Children's Trust FBO Sophie Seeligson Bass (a citizen of Texas), of which Tom White (a citizen of Texas) is the trustee and Sophie Seeligson Bass (a citizen of Texas) is its beneficiary;

         5. Lee M. Bass 1986 Children's Trust FBO Perry R. Bass II (a citizen of), of which Tom White (a citizen of Texas) is the trustee and Perry R. Bass (a citizen of Texas) is the beneficiary;

         6. Lee M. Bass 1986 Children's Trust FBO Ramona Frates Bass (a citizen of Texas), of which Tom White is the trustee and Ramona Frates Bass White (a citizen of Texas) is the beneficiary;

         7. Anne Chandler Bass Trust (a citizen of Texas and California), of which Jay Hebert (a citizen of Texas) is trustee and Anne Chandler Bass (a citizen of California) is the beneficiary;

         8. Margaret Lee Bass Trust (a citizen of Texas and California), of which Jay Hebert (a citizen of Texas) is trustee and Margaret Bass Sickel (a citizen of California) is beneficiary;

         9. Christopher Maddox Bass Trust (a citizen of Texas and California), of which Jay Hebert (a citizen of Texas) is trustee and Christopher Maddox Bass (a citizen of California) is beneficiary;

         10. Timothy Richardson Bass Trust (a citizen of Virginia), of which Timothy Richardson Bass (a citizen of Virginia) is both trustee and beneficiary; 11. FW-SSB Management, L.P. (a citizen of Texas), of which:

a. FW-SSB Management Genpar, L.L.C. is the general partner, of which the sole member of FW-SSB Management Trust (a ...

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