Tuesday, March 3, 2020
It's Not Cool to Skip Completely the LLC Law. Not Cool.
Plain Bay alleges that it is a citizen of Florida for diversity purposes as it is a Florida limited liability company incorporated in Florida with its principal place of business in Florida and that Yates is a citizen of California for diversity purposes as he “is a citizen of the United States and a resident of the State of California[.]” . . . In order for this Court to properly exercise jurisdiction over a case, “the action must be between ‘citizens of different States.’ ” 28 U.S.C. § 1332(a)(1).
Plain Bay Sales, LLC v. Gallaher, 9:18-CV-80581-WM, 2020 WL 961847, at *2 (S.D. Fla. Feb. 28, 2020) (emphasis added).
Yates, though, was a UK citizen, who lived in Florida, and thus, "the Court concludes that, for diversity purposes, Yates should be considered a citizen of Florida." Id. The court eventually determines that Yates would destroy diversity, but Plain Bay removed him as a defendant, and as a dispensable party, diversity was restored.
Okay, but there is a problem here. Two really. First, Plain Bay was not "incorporated" anywhere. It was formed. It is an LLC, not a corporation. But more important, Plain Bay's citizenship has not been determined. The state of formation and principal place of business is irrelevant to LLC citizenship. “[A] limited liability company is a citizen of any state of which a member of the company is a citizen.” Rolling Greens MHP, L.P. v. Comcast SCH Holdings, L.L.C., 374 F.3d 1020, 1022 (11th Cir. 2004). Here, the court determined that the plaintiff LLC is an citizen of Florida without ever looking at the citizenship of any members. They may all be Florida residents, but WE DON'T KNOW.
Anyway, not even stating the law for determining citizenship of an LLC is not cool. Not cool at all.