Tuesday, February 25, 2020
LLCs Are Not Corporations: A New Hero Emerges
The Honorable Aida M. Delgado-Colón made me smile today. As BLPB readers know, An LLC By Any Other Name, Is Still Not a Corporation. Finally, I received a notice of a court acknowledging this fact and requiring a party to refer to their legal entity correctly. Judge Delgado-Colón writes:
Pursuant to this Court’s sua sponte obligation to inquire into its own subject matter jurisdiction and noticing the unprecedented increase in foreclosure litigation in this District, the Court ordered plaintiff to clarify whether it is a corporation or a limited liability company (“LLC”).
Here, the Court cannot ascertain that diversity exists among the parties. Rule 11(b) of the Federal Rules of Civil Procedure holds attorneys responsible for “assur[ing] that all pleadings, motions and papers filed with the court are factually well-grounded, legally tenable and not interposed for any improper purpose.” Mariani v. Doctors Associates, Inc., 983 F.2d 5, 7 (1st Cir. 1993) (citing Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 393 (1990). Despite Rule 11’s mandate, the Court finds significant inconsistencies among plaintiff’s representations, which to this date remain unclear. As noted at ECF No. 53, plaintiff has repeatedly failed to explain why its alleged principal place of business is in New Jersey instead of Michigan. To make matters worse, plaintiff now claims to be a “limited liability corporation”1 under Delaware law.
Query: This decision (which seems substantively right to me) is in 2020 for a 2016 case number. Shouldn't this have been a 12(b)(1) question and thus live three years ago (or more)? Or are there party substitutions and/or significant amendments to the complaint that raise the question?
Posted by: C.E. Petit | Feb 28, 2020 12:50:38 PM
Now you just need a judge to cite one of your blog posts!
Posted by: Haskell Murray | Feb 25, 2020 7:06:36 PM