recognizing plaintiff should “at least be given the opportunity to amend his complaint to make a more complete statement of the court’s jurisdiction over his claim”
How later courts described this case
- recognizing plaintiff should “at least be given the opportunity to amend his complaint to make a more complete statement of the court’s jurisdiction over his claim”
- finding that an LLC’s citizenship for diversity purposes is that of its members
- “The intent of Congress drastically to restrict federal jurisdiction in controversies between citizens of different states has always been rigorously enforced by the courts.”
Written by the judges who cited it.
The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
PATRIOT DISASTER SPECIALIST, CIVIL ACTION
LLC
VERSUS NO. 23-7157
DON MATHERNE, ET AL. SECTION “R” (3)
ORDER AND REASONS
Before the Court is defendant GeoVera Specialty Insurance Company’s
(“GeoVera”) unopposed motion for summary judgment. Because GeoVera,
as the removing defendant, has failed to meet its burden to demonstrate
complete diversity for the purpose of establishing this Court’s subject matter
jurisdiction, the Court remands the case to state court.
I. BACKGROUND
This action was filed by plaintiff Patriot Disaster Specialist, LLC
(“Patriot Disaster”) in Louisiana state court to recover amounts allegedly
owed for work it performed for water mitigation services.1 In the state court
petition, Patriot Disaster states that it is “a foreign limited liability company
formed in the State of Florida, registered to do business in the State of
1 R. Doc. 3-2.
Louisiana, and at all times relevant conducted business in LaFourche Parish,
Louisiana.”2 Patriot Disaster alleges that it entered into a water mitigation
contract with defendants Don and Kelly Matherne, under which Patriot
Disaster would perform certain water mitigation work at the Mathernes’
property in Raceland, Louisiana, following Hurricane Ida.3 Defendant
GeoVera is the Mathernes’ homeowner liability insurance carrier. Patriot
Disaster alleges that the Matherne assigned it the right to pursue GeoVera
directly under the insurance policy for the price of its covered services.4
Patriot Disaster brought several claims against the Mathernes to
recover the balance due under the contract,5 as well as claims against
GeoVera for breach of its contractual obligation to timely pay the amounts
owed under the policy and any accompanying statutory penalties.6 GeoVera
removed the action on December 4, 2023, asserting diversity jurisdiction,
and stating that plaintiff is a “foreign limited liability company formed in the
2 Id. at ¶ 1.
3 Id. at ¶¶ 7-8.
4 Id. at ¶ 9. The water mitigation contract allegedly provided that the
Mathernes agreed “that all cost[s], expenses and attorney’s fees
incurred by [Patriot Disaster] to collect money owed, will be added to
the amount becoming due and payable.” Id. at ¶ 11. The water service
contract was allegedly attached as Exhibit 1 to Patriot Disaster’s state
court petition, but it was not included in the state court pleadings
attached to GeoVera’s notice of removal.
5 Id. at ¶¶ 19, 21.
6 Id. at ¶ 44.
State of Florida.”7 Following removal, the Court dismissed defendant Don
Matherne for Patriot Disaster’s failure to effect service.8
GeoVera has moved for summary judgment on Patriot Disaster’s
claims against it.9 Patriot Disaster did not oppose the motion. On May 23,
2024, this Court determined that neither Patriot Disaster nor GeoVera
adequately alleged Patriot Disaster’s citizenship, and it ordered GeoVera, as
the removing party asserting federal jurisdiction, to submit evidence of
plaintiff’s citizenship by May 30, 2024.10 GeoVera did not respond to the
Court’s Order.
II. LEGAL STANDARD
A defendant may generally remove a civil action filed in state court if
the federal court has original jurisdiction over the action. See 28 U.S.C.
§ 1441(a). Subject matter jurisdiction must exist at the time of removal to
federal court, based on the facts and allegations contained in the complaint.
See Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001). Federal
courts must consider subject matter jurisdiction sua sponte if not raised by
7 R. Doc. 3.
8 R. Doc. 11.
9 R. Doc. 14.
10 R. Doc. 19.
the parties, id. at 919 (5th Cir. 2001), and, if it appears that it lacks subject
matter jurisdiction at any time before final judgment, “[r]emand is required,”
Vantage Drilling Co. v. Hsin-Chi Su, 741 F.3d 535, 537 (5th Cir. 2014).
In assessing whether removal was appropriate, the Court is guided by
the principle, grounded in notions of comity and the recognition that federal
courts are courts of limited jurisdiction, that removal statutes should be
strictly construed. See, e.g., Manguno v. Prudential Prop. & Cas. Ins., 276
F.3d 720, 723 (5th Cir. 2002); see also St. Paul Mercury Indem. Co. v. Red
Cab Co., 303 U.S. 283, 288 (1938) (“The intent of Congress drastically to
restrict federal jurisdiction in controversies between citizens of different
states has always been rigorously enforced by the courts.”). Thus, “[a]ny
‘doubts regarding whether removal jurisdiction is proper should be resolved
against federal jurisdiction.’” Vantage Drilling Co., 741 F.3d at 537 (citing
Acuna v. Brown Root Inc., 200 F.3d 335, 339 (5th Cir. 2000)).
The removing party bears the burden of showing that federal
jurisdiction exists. See Allen v. R & H Oil Gas Co., 63 F. 3d 1326, 1335 (5th
Cir. 1995). When original jurisdiction is based on diversity of citizenship, the
cause of action must be between “citizens of different states,” and the amount
in controversy must exceed the “sum or value of $75,000, exclusive of
interest and costs.” 28 U.S.C. § 1332(a). Having a plaintiff and a defendant
who are citizens of the same state ordinarily destroys complete diversity. See
McLaughlin v. Miss. Power Co., 376 F.3d 344, 353 (5th Cir. 2004).
“Citizenship for an individual is synonymous with the person’s domicile; for
a corporation, it is that of the state in which it is incorporated and the state
where it has its principal place of business; for [a limited liability company
(LLC)], it is that of any state where its members reside.” English v. Aramark
Corp., 858 F. App’x 115, 116 (5th Cir. 2021) (citing Mullins v. TestAmerica,
Inc., 564 F.3d 386, 397 n.6 (5th Cir. 2009)).
III. DISCUSSION
Because the “district court must be certain that the parties are in fact
diverse before proceeding to the merits of the case,” the party invoking
diversity jurisdiction must properly allege the citizenship of all parties and
show that there is complete diversity. See Getty Oil Corp., a Div. of Texaco,
Inc. v. Ins. Co. of N. Am., 841 F.2d 1254, 1258-59 (“[The Fifth Circuit has]
stated repeatedly that when jurisdiction depends on citizenship, citizenship
must be ‘distinctly and affirmatively alleged.’” (quoting McGovern v. Am.
Airlines, Inc., 511 F.2d 653, 654 (5th Cir.1975)) (emphasis in original)). If
the removing party fails to properly allege diversity, and diversity is not
evident elsewhere on the record, then the removing party should be given the
opportunity to amend the removal petition to cure any defective allegations
of jurisdiction. In re Allstate Ins. Co., 8 F.3d 219, 219 n.4 (5th Cir. 1993); 28
U.S.C. § 1653; see also Leigh v. Nat’l Aeronautics and Space Admin., 860 F.
2d 652, 653 (5th Cir. 1988) (recognizing plaintiff should “at least be given the
opportunity to amend his complaint to make a more complete statement of
the court’s jurisdiction over his claim”).
Here, GeoVera, as the removing party asserting federal jurisdiction,
fails to carry its burden to demonstrate complete diversity. See Howery, 243
F.3d at 919; Garcia v. Kock Oil Co. of Tex. Inc., 351 F.3d 636, 638 (5th Cir.
2003). Patriot Disaster is a limited liability company (“LLC”), the citizenship
of which “is determined by the citizenship of all its members.” Harvey v.
Grey Wolf Drilling Co., 542 F.3d 1077, 1080 (5th Cir. 2008) (citations
omitted); see also Mackason v. Diamond Fin. LLC, 347 F. Supp. 2d 53, 55
(S.D.N.Y. 2004) (finding that an LLC’s citizenship for diversity purposes is
that of its members). This Court previously determined that neither Patriot
Disaster in its petition, nor GeoVera in its notice of removal, adequately
alleged Patriot Disaster’s citizenship.11 The citizenship of Patriot Disaster’s
11 R. Doc. 19. Plaintiff Patriot Disaster Specialists, LLC alleges in its
petition that it is “a foreign limited liability company formed in the
State of Florida, registered to do business in the State of Louisiana, and
at all times relevant conducted business in LaFourche Parish,
Louisiana.” R. Doc. 3-2 at ¶ 1. GeoVera’s notice of removal states only
members is not apparent elsewhere in the record. See In re Allstate Ins. Co.,
8 F.3d at 219 n. 4 (recognizing the possibility of other facts in the record
identifying a party’s citizenship). The Court gave GeoVera the opportunity
to cure its defective jurisdictional allegations, and it failed to do so. See 28
U.S.C. § 1653. This Court “cannot presume the existence of federal
jurisdiction.” Howery, 243 F.3d at 919. Because GeoVera has “fail[ed] to
meet [its] burden” of “establishing diversity,” id., the Court finds that
diversity jurisdiction does not exist to warrant removal.
IV. CONCLUSION
For the foregoing reasons, the Court REMANDS this case to the 17th
Judicial District Court, LaFourche Parish, Louisiana.
New Orleans, Louisiana, this__18th_ day of June, 2024.
Lora Vavee
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE
that plaintiff is “a foreign limited liability company formed in the State
of Florida.” R. Doc. 3 at 2.