United States District Court, W.D. Louisiana, Monroe Division
A. DOUGHTY MAG. JUDGE
REPORT AND RECOMMENDATION
L. HAYES UNITED STATES MAGISTRATE JUDGE.
April 27, 2018, defendant, Louisiana Southern Railroad,
L.L.C., (“LSR”) removed this matter to federal
court on the basis of diversity jurisdiction, 28 U.S.C.
§ 1332. (Notice of Removal). On August 30, 2018, in
response to court order, LSR filed an amended notice of
removal in an attempt to redress deficient jurisdictional
allegations regarding its citizenship. See doc. #s
18, 20-22. In so doing, however, LSR conceded that it had
been unable to allege the members/partners of all the limited
liability companies (“LLCs”) and limited
partnerships that comprised its organizational chain of
membership, and therefore, requested additional time to
conduct jurisdictional discovery, and for leave to file a
further amended and supplemental notice of removal. [doc. #
26]. The court granted the motion. [doc. # 27].
October 15, 2018, LSR filed its second amended and
supplemental notice of removal, which again endeavored to set
forth the members/partners of the LLCs and limited
partnerships that comprised the sub-LLCs that in turn were
members of a series of LLCs that constituted LSR.
See 2nd Amend. & Suppl. Notice of
Removal [doc. # 33]. In conjunction with its supplemental
notice of removal, LSR sought and obtained leave of court to
file under seal the ownership structure of certain
partnerships: SkyKnight Rail Holdings, L.P. and SkyKnight
Rail Holdings II, L.P., Series 1-8. [doc. #s 34-36].
law authorizes a defendant to remove to federal court
“any civil action brought in a State court of which the
district courts of the United States have original
jurisdiction . . .” 28 U.S.C. § 1441(a).
“The removing party bears the burden of showing that
federal jurisdiction exists.” De Aguilar v. Boeing
Co., 47 F.3d 1404, 1408 (5th Cir. 1995) (citing
Gaitor v. Peninsular & Occidental S.S. Co., 287
F.2d 252, 253-54 (5th Cir. 1961)). Because federal courts are
courts of limited jurisdiction, a suit is presumed to lie
outside this limited jurisdiction unless and until the party
invoking federal jurisdiction establishes to the contrary.
Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th
Cir. 2001) (citation omitted).
defendant invoked this court's original jurisdiction, via
diversity, which requires complete diversity of citizenship
between the adverse parties and an amount in controversy
greater than $75, 000. 28 U.S.C. § 1332(a). Removing
defendant has not satisfied the former requirement.
detailed earlier herein, LSR obtained court permission to
file under seal the membership of SkyKnight Rail Holdings,
L.P. and SkyKnight Rail Holdings II, L.P., Series 1-8, which,
via a lengthy organizational chain, ultimately own a small
ownership interest in LSR. The five-page long document lists
over 100 entities and individuals, but fails to identify all
of the members/partners for some of the sub-LLCs/limited
partnerships. For example, midway down the first page “
___ Family Partners, LP” is listed, but its members are
not identified. Four lines beneath that, the members of an
LLC are not identified. Three lines from the bottom of page
two, the owner/member of “ ___ Partners, LLC” is
not identified. There are several other examples of
undisclosed members/partners on pages three and four of the
party invoking the court's jurisdiction must disclose the
identities of members/partners of LLCs and limited
partnerships so the other parties in the case (or the court)
may traverse citizenship, if appropriate. See Nunez v.
ACE Am. Ins. Co., CV, No. 17-1593, 2017 WL 6997341, at
*4 (M.D. La. Dec. 28, 2017) (collecting cases), R&R
adopted, 2018 WL 493398 (M.D. La. Jan. 16, 2018). Absent this
requirement, the court and opposing party(ies) would be
constrained to blindly accept the naked representations of
partner/member citizenship proffered by the party invoking
jurisdiction. Here, LSR has not provided the requisite
membership information to the court, nor is it clear that
they provided the sealed information to other parties in this
the sealed document includes at least 26 trusts. For each
trust identified as a member or partner of a sub-entity, LSR
sometimes alleges the name of an individual associated with
the trust, but does not specify whether the individual is the
trustee or a beneficiary. When a trust is a party to a suit,
its citizenship for purposes of diversity jurisdiction
depends on the nature of the trust. Algiers Dev. Dist. v.
Vista Louisiana, LLC, No. CV 16-16402, 2017 WL 121127,
at *3 (E.D. La. Jan. 12, 2017) (citing Americold Realty
Tr. v. Conagra Foods, Inc., 136 S.Ct. 1012, 1016
(2016)). In a traditional trust or when a trustee files a
suit in his own name, the citizenship of the trustee
controls. Id.; Claret v. Port Richey Auto.
Mgmt., LLC, No. CV 18-5844, 2018 WL 2980068, at *2 (E.D.
La. June 14, 2018). However, when a business trust files suit
in its organizational name, its citizenship is determined by
the citizenship of all of its members. Claret, 2018
WL 2980068 at *2 (citing Americold Realty Tr., 136
S.Ct. at 1017). The members of a trust are its beneficiaries.
not alleged that any unspecified trustee of the listed trusts
are filing suits in their own names; rather it lists the
trusts themselves as members of various sub-entities of
SkyKnight Rail Holdings, L.P. and SkyKnight Rail Holdings II,
L.P., Series 1-8. Further, LSR does not indicate whether the
trusts are traditional or business trusts. Therefore, the
trusts should be treated as business entities with
citizenship based on their beneficiaries, see
Claret, 2018 WL 2980068 at *2, which LSR has failed to
case, the court has afforded LSR ample opportunity to
affirmatively allege and establish citizenship for purposes
of diversity. As the record now stands, however, the
undersigned is constrained to find that removing defendant
has not established federal diversity
jurisdiction. Under these circumstances, where a party
has been permitted an opportunity to amend its pleadings to
allege the basis for diversity jurisdiction and still fails
to do so, dismissal is warranted. Patterson v.
Patterson, 808 F.2d 357, 358 (5th Cir. 1986).
foregoing reasons, the undersigned finds that removing
defendant has not satisfied its burden of establishing
federal subject matter jurisdiction. Howery, supra;
28 U.S.C. § 1332. Remand is required. 28 U.S.C. §
1447(c). Accordingly, IT IS RECOMMENDED that the
instant case be remanded to the 2nd Judicial