United States District Court, N.D. Alabama, Southern Division
MEMORANDUM OPINION AND ORDER
VIRGINIA EMERSON HOPKINS United States District Judge.
Introduction and Procedural History.
a civil action filed by Plaintiff AFC Franchising, LLC
(“AFCF”) against Defendants Earl S. Reed
(“Mr. Reed”) and Urgent Care of Mount Vernon, LLC
UCMV was served on November 14, 2016. (Doc. 7). On December
12, 2016, AFCF moved for entry of default against UCMV, and
the Clerk entered default against UCMV that same day. (Docs.
11, 12). This case was reassigned to the undersigned on
December 13, 2016. (Doc. 14). On February 8, 2017, AFCF filed
a Motion for Default Judgment as to UCMV. (Doc. 21). On March
17, 2017, AFCF filed a Motion to set a hearing to determine
the damages owed by UCMV (“Motion To Determine
Damages”). (Doc. 26).
Reed was served on February 10, 2017. (Doc. 23). On March 17,
2017, AFCF moved for entry of default against Mr. Reed, and
the Clerk entered default against Mr. Reed on March 20, 2017.
(Docs. 25, 27). AFCF has not filed a Motion for Default
Judgment as to Mr. Reed.
Subject Matter Jurisdiction.
federal courts sitting in diversity, as is the case here,
subject matter jurisdiction exists if the suit is between
“citizens of different States” and “the
matter in controversy exceeds the sum or value of $ 75, 000,
exclusive of interest and costs . . . .” 28 U.S.C.
initial Complaint (doc. 1) failed to satisfy the Court's
jurisdiction according to the standard enunciated by the
Eleventh Circuit in Rolling Greens MHP, L.P. v. Comcast
SCH Holdings LLC, 374 F.3d 1020 (11th Cir. 2004).
Specifically, that case held that, in order to establish
diversity, if a limited liability company is a party, the
names and states of citizenship of each member of the limited
liability company must be listed. Id. at 1022;
see also Flintlock Const. Servs., LLC v. Well-Come
Holdings, LLC, 710 F.3d 1221, 1224 (11th Cir. 2013).
on May 10, 2017, the Court ordered AFCF to replead its
complaint to establish the Court's subject matter
jurisdiction over the action. (Doc. 29). On May 24, 2017,
AFCF filed an Amended Complaint. (Doc. 31). However, the
Court determined that AFCF's Amended Complaint also
failed to satisfactorily establish that this suit is between
“[c]itizens of different States” as of the time
the lawsuit was filed. Specifically, AFCF had not met its
burden of listing the names and states of every
member of Defendant UCMV. Accordingly, the Court again
ordered AFCF to show cause why this action should not be
dismissed without prejudice for lack of subject matter
jurisdiction. (Doc. 32).
18, 2017, AFCF responded to the Court's Order and moved
to dismiss UCMV as a party defendant, stating that is has
been unable to “discover any such additional evidence
necessary to establish diversity jurisdiction.” (Doc.
33 at 1). AFCF requests that this Court dismiss UCMV as a
nominal party in order to retain jurisdiction over the case.
must “disregard nominal or formal parties and rest
jurisdiction only upon the citizenship of real parties to the
controversy.” Thermoset Corp. v. Bldg Materials
Corp. of Am., 849 F.3d 1313, 1317 (11th Cir. 2017)
(citing Navarro Sav. Ass'n v. Lee, 446 U.S. 458,
461, 100 S.Ct. 1779, 1782, 64 L.Ed.2d 435 (1980)). As the
Eleventh Circuit has recently explained,
[t]his Court has acknowledged “there is no bright-line
rule” for distinguishing between real and nominal
parties. Payroll Mgmt., Inc. v. Lexington Ins. Co.,
566 Fed.Appx. 796, 799 (11th Cir. 2014) (per curiam)
(unpublished). In Tri-Cities Newspapers, Inc. v.
Tri-Cities Printing Pressmen and Assistants' Local
349, 427 F.2d 325 (5th Cir. 1970),  we defined
“nominal or formal parties” as those that are
“neither necessary nor indispensable” to
the action. Id. at 327. We also said “[t]he
ultimate test” for whether a defendant is nominal is
“whether in the absence of the defendant, the Court can
enter a final judgment consistent with equity and good
conscience which would not be in any way unfair or
inequitable to plaintiff.” Id. (quotation
omitted and alteration adopted).
Id. (emphases added).
points out, Mr. Reed is individually responsible for
obligations and debts under the Franchise Agreement. See,
e.g., (Doc. 31-2 at 6) (demonstrating Mr. Reed is a
party to the Franchise Agreement). AFCF therefore argues that
(1) UCMV is not a necessary or indispensable party, and (2)
AFCF would be prejudiced by the additional time and costs