United States District Court, W.D. Louisiana, Shreveport Division
CHESAPEAKE ENERGY LOUISIANA CORP.
L. Hornsby U.S. Magistrate Judge
Inc. filed suit in state court against Chesapeake Energy
Louisiana Corporation (“CELC”) for damages and
attorney's fees in connection with a right-of-way
dispute. CELC removed the case based on an assertion of
diversity jurisdiction. It alleged in its notice of removal
that Rodidaco is a Louisiana corporation with its principal
place of business in Louisiana. CELC alleged that it is an
Oklahoma corporation with its principal place of business in
has filed a Motion for Leave to File Amended Complaint (Doc.
21) that proposes to add four new defendants. Each new
defendant is either a limited partnership or limited
liability company. The proposed amended complaint alleges the
state of organization for each entity and the state in which
the principal place of business is located for two of the
entities. The description of two of the new defendants states
that they have no known partners or members in Louisiana. The
citizenship allegations in the proposed amended complaint are
not adequate for this court to ensure that it would have
subject-matter jurisdiction if the proposed amendment were
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). “A
party seeking to establish diversity jurisdiction must
specifically allege the citizenship of every member of every
LLC or partnership involved in a litigation.”
Settlement Funding, L.L.C. v. Rapid Settlements,
Ltd., 851 F.3d 530, 536 (5th Cir. 2017). If the members
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. Mullins v. TestAmerica Inc.,
564 F.3d 386, 397-98 (5th Cir. 2009); Feaster v. Grey
Wolf Drilling Co., 2007 WL 3146363 (W.D. La. 2007).
partnership is a party, the court must consider the
citizenship of each partner, whether limited or general.
Carden v. Arkoma Associates, 110 S.Ct. 1015 (1990).
The Carden rule applies to common law limited
partnerships and a Louisiana partnership in commendam.
Whalen v. Carter, 954 F.2d 1087, 1094 (5th Cir.
1994); Newport Limited v. Sears, Roebuck and Co.,
941 F.2d 302 (5th Cir. 1991). If partners are themselves
partnerships, LLC's or other form of association, the
citizenship must be traced through however many layers of
members or partners there may be, and failure to do so can
result in dismissal for want of jurisdiction. Mullins v.
Testamerica, Inc., 300 Fed.Appx. 259 (5th Cir. 2008)
(court refused to consider the merits of an appeal until the
record distinctly and affirmatively alleged the citizenship
of a limited partnership).
general allegation that no members or partners share
citizenship with an opposing party is inadequate. Members and
partners must be identified and have their citizenship
alleged with specificity even when that task is burdensome.
Moran v. Gulf South Pipeline Co., LP, 2007 WL 276196
(W.D. La. 2007) (collecting cases that required specificity
of limited partners despite there being thousands of them or
their interests being miniscule); Masion v. Liberty Mut.
Ins. Co., 2006 WL 1675378 (W.D. La. 2006) (requiring
specificity even though partnership shares were publicly
traded and identities of owners changed often based on
trades). See also Mullins, 300 Fed.Appx. at 260
(party's stated belief that none of the entities had
members and partners in Texas “falls manifestly short
of distinctly and affirmatively alleging [a
Motion for Leave to File Amended Complaint (Doc.
21) is denied without prejudice to
filing a new motion, by August 14, 2018,
that is accompanied by a proposed amended complaint that
contains all necessary citizenship information. Counsel for
CELC, to the extent they have a relationship to the proposed
new defendants, are directed to assist in promptly gathering
the necessary information and sharing it with counsel for
Rodidaco. If Rodidaco is not able to gather all citizenship
information for the proposed new defendants, the motion
should set forth what information is known and what could not
court will then assess whether the proposed amendment should
be allowed, given the risk that an unidentified Louisiana
member or partner could be discovered later, which would
destroy diversity and require remand to state court. If
Rodidaco determines that the proposed amendment would destroy
diversity, the motion for leave to amend must be accompanied
by a brief that addresses the factors set forth ...