United States District Court, S.D. Alabama
KATHERINE P. NELSON UNITED STATES MAGISTRATE JUDGE
action is before the Court sua sponte on review of
its subject matter jurisdiction. Plaintiff Capitol Indemnity
Corporation (“the Plaintiff”) has filed its first
amended complaint (“FAC”) (Doc. 16) as a matter
of course under Federal Rule of Civil Procedure 15(a)(1)(B).
Like the initial complaint, the FAC alleges diversity of
citizenship under 28 U.S.C. § 1332(a) as the sole basis
for subject matter 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.
review of the FAC, the undersigned finds that the Plaintiff
must correct the following deficiencies in its allegations
supporting the citizenships of the newly joined defendants,
Thomas Heil and the William Walter Bolt & Family Trust
• Heil, a natural person, is alleged to be “a
resident of Baldwin County…” (Doc. 16, ¶
First, the Plaintiff does not allege in what state the
“Baldwin County” Heil resides in is located.
Second, the Eleventh Circuit has repeatedly stressed that
“[c]itizenship, not residence, is the
key fact that must be alleged . . . to
establish diversity for a natural person.” Taylor
v. Appleton, 30 F.3d 1365, 1367 (11th Cir. 1994)
(emphasis added). Accordingly, the Plaintiff must amend its
complaint to allege Heil's state of citizenship (as
opposed to his county of residence).
• The FAC is unclear as to the nature of BAFT.
“Traditionally, a trust was not considered a distinct
legal entity, but a fiduciary relationship between multiple
people. Such a relationship was not a thing that could be
haled into court; legal proceedings involving a trust were
brought by or against the trustees in their own name. And
when a trustee files a lawsuit or is sued in her own name,
her citizenship is all that matters for diversity purposes.
For a traditional trust, therefore, there is no need to
determine its membership, as would be true if the trust, as
an entity, were sued.” Americold Realty Tr. v.
Conagra Foods, Inc., 136 S.Ct. 1012, 1016 (2016)
(citations omitted). “Many States, however, have
applied the ‘trust' label to a variety of
unincorporated entities that have little in common with this
traditional template…So long as such an entity is
unincorporated, …it possesses the citizenship of all
its members…But neither this rule nor
Navarro limits an entity's membership to its
trustees just because the entity happens to call itself a
trust.” Id. Accordingly, the Plaintiff must
either amend its complaint to allege all members of BAFT and
their citizenships,  or sufficiently explain why BAFT should be
considered a “traditional trust” under Alabama
law (the law under which it was allegedly organized) whose
membership may be disregarded for purposes of diversity
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 and serve, no later than Wednesday, February
27, 2019, an amended complaint that corrects
the above-noted deficiencies in its allegations supporting
diversity jurisdiction under § 1332(a), that alleges
some alternative basis for subject matter jurisdiction, or
that drops the parties whose citizenships have not been
sufficiently alleged. In filing the amended complaint, the
Plaintiff must abide by the following directives:
• The amended complaint, which will become the operative
complaint in this action,  “must reproduce the entire
pleading as amended and may not incorporate any prior
pleading by reference[, ]” see S.D. Ala. CivLR
• the Plaintiff must file the amended complaint as a
freestanding pleading and not as an exhibit attached
to a notice, motion, etc.
filing made in contravention of these directives will be
deemed nonresponsive to this Order and will be summarily
ordered stricken. The failure to file an amended complaint as
ordered may result in further appropriate action, which may
include entry of an order dropping Heil and BAFT as parties
to this action under Federal Rule of Civil Procedure 21 in
order to preserve subject matter jurisdiction, or possible
dismissal of this action for lack of subject matter
jurisdiction if it is determined that a party would be
prejudiced by dropping either Heil or BAFT. See
Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 832
(1989) (“[I]t is well settled that Rule 21 invests
district courts with authority to allow a dispensable
nondiverse party to be dropped at any time, even after
judgment has been rendered.”); Iraola & CIA,
S.A. v. Kimberly-Clark Corp., 232 F.3d 854, 860-61 (11th
Cir. 2000) (A “court can dismiss a dispensable party in
order to retain jurisdiction. See Newman-Green, Inc. v.
Alfonzo-Larrain, 490 U.S. 826, 833, 109 S.Ct. 2218,
2223, 104 L.Ed.2d 893 (1989); Ingram v. CSX
Transportation, Inc., 146 F.3d 858, 863 (11th Cir.
1998). Such power is to be used sparingly, and the court
should carefully consider whether one of the parties will be
prejudiced by the dismissal. See 490 U.S. at 837-38,
109 S.Ct. at 2225.”).
 “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 Arbaugh v. Y&H
Corp., 546 U.S. 500, ...