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Higbee Salva, L.P. v. 212-3 Eastern Shore Holdings, LLC

United States District Court, S.D. Alabama, Southern Division

April 19, 2017

HIGBEE SALVA, L.P., Plaintiff,
v.
212-3 EASTERN SHORE HOLDINGS, LLC, Defendant.

          ORDER

          KATHERINE P. NELSON UNITED STATES MAGISTRATE JUDGE

         This action is before the Court sua sponte on review of its subject matter jurisdiction.[1] The Plaintiff initiated this action by filing a complaint (Doc. 1) with the Court, alleging diversity of citizenship under 28 U.S.C. § 1332(a) as the sole basis for jurisdiction. See Fed. R. Civ. P. 8(a)(1) (“A pleading that states a claim for relief must contain a short and plain statement of the grounds for the court's jurisdiction…”).

When a plaintiff files suit in federal court, [the plaintiff] must allege facts that, if true, show federal subject matter jurisdiction over [the] case exists. Taylor v. Appleton, 30 F.3d 1365, 1367 (11th Cir. 1994). Those allegations, when federal jurisdiction is invoked based upon diversity, must include the citizenship of each party, so that the court is satisfied that no plaintiff is a citizen of the same state as any defendant. Triggs v. John Crump Toyota, Inc., 154 F.3d 1284, 1287 (11th Cir. 1998) (“Diversity jurisdiction requires complete diversity; every plaintiff must be diverse from every defendant.”). Without such allegations, district courts are constitutionally obligated to dismiss the action altogether if the plaintiff does not cure the deficiency. Stanley v. C.I.A., 639 F.2d 1146, 1159 (5th Cir. Unit B Mar. 1981); see also DiMaio v. Democratic Nat'l Comm., 520 F.3d 1299, 1303 (11th Cir. 2008) (“Where dismissal can be based on lack of subject matter jurisdiction and failure to state a claim, the court should dismiss on only the jurisdictional grounds.” (internal quotation marks omitted)). That is, if a complaint's factual allegations do not assure the court it has subject matter jurisdiction, then the court is without power to do anything in the case. See Goodman ex rel. Goodman v. Sipos, 259 F.3d 1327, 1331, n.6 (11th Cir. 2001) (“ ‘[A district] court must dismiss a case without ever reaching the merits if it concludes that it has no jurisdiction.' ” (quoting Capitol Leasing Co. v. FDIC, 999 F.2d 188, 191 (7th Cir. 1993))); see also Belleri v. United States, 712 F.3d 543, 547 (11th Cir. 2013) (“We may not consider the merits of [a] complaint unless and until we are assured of our subject matter jurisdiction.”).

Travaglio v. Am. Exp. Co., 735 F.3d 1266, 1268 (11th Cir. 2013) (emphasis added) (footnote omitted). See also, e.g., Ray v. Bird & Son & Asset Realization Co., Inc., 519 F.2d 1081, 1082 (5th Cir. 1975) (“The burden of pleading diversity of citizenship is upon the party invoking federal jurisdiction . . .” (citing Mas v. Perry, 489 F.2d 1396 (5th Cir. 1974)).[2] Upon review of the complaint (Doc. 1), the undersigned finds that the Plaintiff has failed to allege sufficient facts showing the citizenship of either party for purposes of diversity jurisdiction.[3]

         The Plaintiff alleges the citizenships of each of the artificial entity parties as though they were corporations. See 28 U.S.C. § 1332(c)(1). However, per the Plaintiff's allegations, the Plaintiff is a limited partnership (LP), while the Defendant is a limited liability company (LLC). The rule for diversity jurisdiction is “that the citizenship of an artificial, unincorporated entity generally depends on the citizenship of all the members composing the organization.” Rolling Greens, MHP, L.P. v. Comcast SCH Holdings, L.L.C., 374 F.3d 1020, 1021 (11th Cir. 2004) (per curiam) (citing Carden v. Arkoma Assocs., 494 U.S. 185, 195-96 (1990)). See also Americold Realty Trust v. Conagra Foods, Inc., 136 S.Ct. 1012, 1016 (2016) (“So long as … an entity is unincorporated, we apply our ‘oft-repeated rule' that it possesses the citizenship of all its members.” (reaffirming Carden)). As such, “[t]o sufficiently allege the citizenships of these unincorporated business entities, [the Plaintiff] must list the citizenships of all the members of the limited liability company and all the partners of the limited partnership.” Rolling Greens, 374 F.3d at 1022. Accord Mallory & Evans Contractors & Eng'rs, LLC v. Tuskegee Univ., 663 F.3d 1304, 1305 (11th Cir. 2011) (per curiam).[4] The Plaintiff has not done so.[5]

         “Defective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts.” 28 U.S.C. § 1653. “[L]eave to amend should be freely granted when necessary to cure a failure to allege jurisdiction properly.” Majd-Pour v. Georgiana Cmty. Hosp., Inc., 724 F.2d 901, 903 n.1 (11th Cir. 1984). Upon consideration, the Plaintiff is ORDERED to file, no later than Wednesday, May 3, 2017, an amended complaint that sufficiently alleges the citizenship of both artificial entity parties for purpose of diversity jurisdiction under § 1332(a), or that alleges some alternative basis for subject matter jurisdiction. In filing the amended complaint, the Plaintiff must abide by the following directives:

• The amended complaint shall reproduce the entire original complaint as amended, see S.D. Ala. CivLR 15(a) (“Any amendment to a pleading … must reproduce the entire pleading as amended and may not incorporate any prior pleading by reference.”), and will become the operative complaint in this action.[6]
• The Plaintiff must file the amended complaint as a freestanding pleading and not as an exhibit attached to a notice, motion, etc.

         Any filing made in contravention of these directives will be deemed nonresponsive to this Order and will be summarily ordered stricken. Moreover, the failure to file an amended complaint as ordered could result in dismissal of this action for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(h)(3) (“If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.”).

         The Plaintiff is further ORDERED to file a disclosure statement in accordance with S.D. Ala. CivLR 7.1 no later than Wednesday, May 3, 2017.[7]

         DONE & ORDERED.

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Notes:

[1] “It is . . . axiomatic that the inferior federal courts are courts of limited jurisdiction. They are ‘empowered to hear only those cases within the judicial power of the United States as defined by Article III of the Constitution, ' and which have been entrusted to them by a jurisdictional grant authorized by Congress.” Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 409 (11th Cir. 1999) (quoting Taylor v. Appleton, 30 F.3d 1365, 1367 (11th Cir. 1994)). Accordingly, “it is well settled that a federal court is obligated to inquire into subject matter jurisdiction sua sponte whenever it may be lacking.” Id. at 410. “[A] court should inquire into whether it has subject matter jurisdiction at the earliest possible stage in the proceedings.” Id. See also See Arbaugh v. Y&H Corp., 546 U.S. 500, ...


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