United States District Court, D. Kansas
MEMORANDUM AND ORDER
D. Crabtree United States District Judge
matter comes before the court on defendant's Motion to
Dismiss Plaintiff's Amended Complaint (Doc. 35) and
plaintiff's Motion for Leave to File Sur-reply in
Opposition to Defendant's Motion to Dismiss (Doc. 46).
Both parties have responded and replied to the motions. For
reasons explained below, the court grants plaintiff's
Motion for Leave to File Sur-Reply and grants defendant's
Motion to Dismiss.
Plaintiff's Motion for Leave to File Sur-reply
court begins with plaintiff's Motion for Leave to File
Sur-reply before turning to the parties' extensive
briefing on the Motion to Dismiss.
has moved for leave to file a sur-reply to defendant's
Motion to Dismiss. The District of Kansas Local Rules
authorize a response and a reply memoranda to a motion. D.
Kan. Rule 7.1. The court may authorize a sur-reply. Mike
v. Dymon, Inc., No. 95-2405-EEO, 1996 WL 427761, at *2
(D. Kan. July 25, 1996). But, “the court generally
grants leave to file a sur-reply only in ‘extraordinary
circumstances after a showing of good cause.'”
Id. (citation omitted). Good cause exists, for
example, when a reply brief improperly makes new arguments.
court grants plaintiff leave to file a sur-reply for good
cause shown. Defendant raises new arguments in its Reply
supporting its Motion to Dismiss plaintiff's Amended
Complaint and its Supplement to Reply. Unless the court
permitted a sur-reply, plaintiff would have no opportunity to
respond to those new arguments. For these reasons, the court
grants plaintiff's Motion for Leave to File Sur-reply and
considers plaintiff's Sur-reply (Doc. 46-1) when deciding
defendant's Motion to Dismiss.
Defendant's Motion to Dismiss
papers filed on this motion narrow to one simple question:
Does the court have diversity subject matter jurisdiction
over this case? Typically, the court determines the answer to
this question with little inquiry. Is it a civil case
involving an amount in controversy that exceeds $75, 000? Are
the parties citizens of different states? When the answer to
both questions is yes, the federal courts have subject matter
jurisdiction to decide the case. See 28 U.S.C.
§ 1332. But when the answer to either question is no,
the court must dismiss the case for lack of jurisdiction.
See Basso v. Utah Power & Light Co., 495 F.2d
906, 909 (10th Cir. 1974) (“A court lacking
jurisdiction cannot render judgment but must dismiss the
cause at any stage of the proceedings in which it becomes
apparent that jurisdiction is lacking.”). Here, there
is no dispute that the matter in controversy exceeds $75,
000. So, to determine whether diversity subject matter
jurisdiction exists, the court needs only to decide whether
the parties are citizens of the same state.
the dispute is between business organizations, the
court's inquiry becomes a little more complicated. For
corporations, the citizenship determination, at least most of
the time, is straightforward. A corporation is a citizen of
its state of incorporation and the place where its principal
place of business is located. Grynberg v. Kinder Morgan
Energy Partners, L.P., 805 F.3d 901, 905 (10th Cir.
2015); see also 28 U.S.C. § 1332(c)(1).
Unincorporated associations, such as limited liability
companies (“LLC”) and partnerships, present
bigger challenges. Those entities are citizens of their
members/partners' states of citizenship.
Grynberg, 805 F.3d at 906. Here, the defendant is an
LLC, so the court must determine its citizenship under these
parties do not dispute plaintiff's citizenship. Plaintiff
is an insurance corporation, so its citizenship is determined
by its state of incorporation and principal place of
business. Plaintiff was incorporated in Wisconsin and its
principal place of business is in New York. For subject
matter jurisdiction purposes, then, plaintiff is a citizen of
Wisconsin and New York.
that half of the caption decided, solving the jurisdiction
equation only requires the court to determine whether
defendant, an LLC, is a citizen of Wisconsin or New York.
Defendant's LLC is comprised of just two members: Fort
Leavenworth-Michaels Private, LLC” (“FLMP,
LLC”) and Marlton Developers Holdings Co., LLC
(“MDHC, LLC”). So, the court must determine the
citizenship of FLMP, LLC and MDHC, LLC to decide whether
subject matter jurisdiction exists. And, because both members
are LLCs themselves, the court also must determine their
members' states of citizenship. See Siloam Springs
Hotel LLC v. Century Sur. Co., 781 F.3d 1233, 1237-38
(10th Cir. 2015) (“[I]n determining the citizenship of
an unincorporated association for purposes of diversity,
federal courts must include all the entities'
members”); see also Birdsong v. Westglen Endoscopy
Ctr., LLC, 176 F.Supp.2d 1245, 1249 (D. Kan. 2001)
(finding that an LLC is a citizen, for diversity purposes, of
each state where its members are citizens).
questions do not always beget simple answers, and this is
where the endeavor gets more difficult. Originally,
defendant asserted that FLMP, LLC has only one member,
Michael J. Levitt. Mr. Levitt is a citizen of New Jersey.
Nothing about Mr. Levitt's citizenship negates diversity
subject matter jurisdiction because Mr. Levitt is not a
citizen of Wisconsin or New York. So far, so good. But, in a
Supplemental Reply, defendant contends that Mr. Levitt
transferred some of his interests in this LLC to another
entity-the Michaels DJA Partnership
(“MDJAP”)-before this action was
filed. Defendant thus contends MDJAP was a member
of FLMP, LLC at the operative time-when plaintiff filed its
Complaint-so the court must consider MDJAP's citizenship
when deciding whether diversity jurisdiction exists.
Defendant also asserts that MDJAP's involvement matters,
for one of MDJAP's partners, Andrew Bocchino, is, like
plaintiff, a citizen of New York.
where the parties disagree. Defendant contends that Andrew
Bocchino is a partner of MDJAP, and this fact puts a New York
citizen on defendant's half of the caption. If a New York
citizen is chargeable to the defendant's side of the
caption, it nullifies diversity subject matter jurisdiction
because the corporate plaintiff is a New York citizen.
Plaintiff, on the other hand, contends MDJAP never became a
member of FLMP, LLC, because FLMP, LLC never fulfilled the