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EnVen Energy Ventures LLC v. Gemini Insurance Co.

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

June 8, 2018

ENVEN ENERGY VENTURES, LLC
v.
GEMINI INSURANCE COMPANY

          DOUGHTY MAGISTRATE JUDGE.

          REPORT AND RECOMMENDATION

          PATRICK J. HANNA UNITED STATES MAGISTRATE JUDGE.

         Currently pending is defendant Gemini Insurance Company's motion to transfer venue. (Rec. Doc. 10). Before ruling on that motion, this Court raised the issue of subject-matter jurisdiction sua sponte and required the parties to address that issue because, absent subject-matter jurisdiction, a federal district court can take no action whatsoever.[1] Having found that the court lacks subject-matter jurisdiction, this Court will recommend that the motion to transfer venue be denied as moot and this action be dismissed.

         Background

         In this lawsuit, EnVen Ventures, LLC, sued Gemini Insurance Company for breach of contract and declaratory judgment, alleging that Gemini issued commercial general liability and commercial umbrella liability insurance policies to EnVen that afford coverage for claims asserted in another lawsuit, styled Wilson J. Batiste v. Pharma-Safe Industrial Services, Inc., et al., Civil Action No. 6:16-cv-00813, which is also pending in this court. EnVen alleged that the court has subject-matter jurisdiction in the instant lawsuit under 28 U.S.C. § 1332 because EnVen and Gemini are diverse in citizenship and the amount in controversy exceeds $75, 000; EnVen alternatively alleged that the court has subject-matter jurisdiction under the Outer Continental Shelf Lands Act (“OCSLA”), 43 U.S.C. § 1331, et seq.

         Law and Analysis

         Federal district courts are courts of limited jurisdiction, possessing only the power authorized by the Constitution and by statute.[2] A suit is presumed to lie outside a federal court's jurisdiction until the party invoking federal-court jurisdiction establishes otherwise.[3] Therefore, a federal court has an independent duty, at any level of the proceedings, to determine whether it properly has subject- matter jurisdiction over a case.[4] In fact, federal courts have a continuing obligation to examine the basis for their jurisdiction, and the issue may be raised by the court sua sponte at any time.[5]

         The party invoking a federal court's jurisdiction has the burden of establishing the court's subject-matter jurisdiction.[6] Because EnVen filed its suit against Gemini and alleged in its complaint that the court has subject-matter jurisdiction under either the diversity statute or under the OCSLA, EnVen must bear the burden of establishing subject-matter jurisdiction.

         A. Diversity Jurisdiction

         There are two criteria for diversity jurisdiction: the first is an amount in controversy exceeding $75, 000, and the second is complete diversity of citizenship among the parties.

         In its compliant, EnVen expressly alleged that the amount in controversy exceeds $75, 000. (Rec. Doc. 1 at 2). A simple allegation by Plaintiff that the amount exceeds $75, 000 is sufficient to establish the amount in controversy if made in good faith.[7] Nothing in the record suggests that EnVen's allegation concerning the amount in controversy was not made in good faith. Accordingly, this Court finds that the amount-in-controversy requirement is satisfied.

         But EnVen did not establish, in its complaint or in its subsequent briefing, that the parties are diverse in citizenship. EnVen is a limited liability company, while Gemini is a corporation. A corporation's citizenship is determined by its state of incorporation and the state of its principal place of business, [8] while a limited liability company is a citizen of every state in which any member of the company is a citizen.[9]Because the citizenship of a limited liability company is determined by the citizenship of all of its members, [10] the diversity analysis for a limited liability company requires a determination of the citizenship of every member of the company.[11] “A party seeking to establish diversity jurisdiction must specifically allege the citizenship of every member of every LLC or partnership involved in a litigation.”[12] If any one of the members is not diverse, the limited liability company is not diverse.

         The briefing submitted by the parties established that Gemini is a corporation organized under Delaware law with its principal place of business in either Connecticut or Arizona. (Rec. Doc. 1 at 2; Rec. Doc. 10-4 at 1). Accordingly, the plaintiff established that Gemini is a citizen of Delaware and either Connecticut or Arizona.

         EnVen represented in its response to this Court's briefing order that “[b]ased on a thorough investigation of EnVen's members and their residences, EnVen has determined that it is not diverse in citizenship with Gemini.” (Rec. Doc. 23 at 11, n. 5). In its supplemental briefing, EnVen stated that its sole member is a Delaware citizen. (Rec. Doc. 30 at 2). How EnVen arrived at that conclusion is unclear. While EnVen stated that it is owned 100% by EnVen Energy Ventures Holdings, LLC (“Holdings”), and alleged that Holdings is a Delaware Limited liability company, EnVen did not identify the members of that company or state the members' citizenship. Absent that ...


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