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Adkins v. TFI Family Services, Inc.

United States District Court, D. Kansas

September 29, 2017

DON ADKINS, ELLEN ADKINS, and DON ADKINS o/b/o T.A., a minor, Plaintiffs,
v.
TFI FAMILY SERVICES, INC., et al., Defendants.

          MEMORANDUM AND ORDER

          Daniel D. Crabtree United States District Judge.

         On September 26, 2017, the court held a hearing to consider approval of the settlement agreement between plaintiffs Don Adkins, Ellen Adkins, and T.A. (T.A. is a minor child) and defendants TFI Family Services, Inc.; Kelli Ann Hegarty; Nonprofit Solutions, Inc.; Kansas Family and Children, Inc.; TFI Family Connections, LLC; Pathway Family Services, LLC; and Kyds, Inc. Plaintiff Don Adkins appeared in person and through counsel at the hearing. Ellen Adkins and T.A. appeared through counsel. Defendants appeared through counsel. The court asked the parties to address two issues during the hearing: subject matter jurisdiction and the reasonableness and properness of the agreement.

         I. Subject Matter Jurisdiction

         The court first directed the parties to address the threshold issue of subject matter jurisdiction. The court has an independent obligation to satisfy itself that subject matter jurisdiction is proper. Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428, 434 (2011). And, it “must dismiss the cause at any stage of the proceedings in which it becomes apparent that jurisdiction is lacking.” Penteco Corp. Ltd. P'ship v. Union Gas Sys., Inc., 929 F.2d 1519, 1521 (10th Cir. 1991); see also Fed. R. Civ. P. 12(h)(3) (“If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.”).

         Plaintiffs allege that the court has diversity jurisdiction under 28 U.S.C. § 1332. Doc. 97 at 4 ¶ 15. Section 1332 of Title 28 of the United States Code requires complete diversity between all plaintiffs and all defendants. 28 U.S.C. § 1332(a)(1); see also Radil v. Sanborn W. Camps, Inc., 384 F.3d 1220, 1225 (10th Cir. 2004). But, the operative Complaint fails to allege facts sufficient to allow the court to determine whether diversity of citizenship exists. For defendant corporations, other than TFI Family Services, Inc., [1] plaintiffs merely allege the corporations' state of incorporation.[2] For defendant limited liability companies, plaintiffs merely allege their state of citizenship.[3] So, at the hearing, the court required the parties to provide sufficient facts to determine it has subject matter jurisdiction over these claims.

         To establish diversity jurisdiction, the citizenship of a business entity is determined by its organizational structure. If the business is a corporation, its citizenship is both the state where it is incorporated and the state where its principal place of business is located. 28 U.S.C. § 1332(c)(1); Newsome v. Gallacher, 722 F.3d 1257, 1267 (10th Cir. 2013). If the business is a limited liability company, its citizenship is determined by the citizenship of each one of its members. See Siloam Springs Hotel, LLC v. Century Sur. Co., 781 F.3d 1233, 1234 (10th Cir. 2015) (“Like every other circuit to consider this question, this court concludes an LLC, as an unincorporated association, takes the citizenship of all its members.”); see also Birdsong v. Westglen Endoscopy Ctr., LLC, 176 F.Supp.2d 1245, 1248 (D. Kan. 2001).

         Defendant now has provided the requisite facts. In an affidavit, the chief executive officer for defendant TFI Family Services, Inc. asserts that:

3. TFI Family Services, Inc. is a Kansas not-for-profit Corporation incorporated in the State of Kansas and with a principal place of business in the State of Kansas.
4. Kansas Family and Children, Inc. is a Kansas for-profit Corporation incorporated in the State of Kansas and with a principal place of business in the State of Kansas.
5. Kyds, Inc. is a Kansas for-profit Corporation incorporated in the State of Kansas and with a principal place of business in the State of Kansas.
6. Nonprofit Solutions, Inc. is a Kansas not-for-profit Corporation incorporated in the State of Kansas and with a principal place of business in the State of Kansas.
7. Pathway Family Services, LLC is a single-member LLC, and the sole member is TFI Family Services, Inc.
8. TFI Family Connections, LLC is a single-member LLC, and the sole member is TF1 Family Services, Inc.

         Doc. 230-1 at 1-2. The court thus finds that defendants TFI Family Services, Inc.; Kansas Family and Children, Inc.; Kyds, Inc.; Nonprofit Solutions, Inc; Pathway Family Services, LLC; and TFI Family Connections, LLC are citizens of Kansas. In plaintiffs' First Amended Complaint, they assert that Don Adkins, Ellen Adkins, and T.A. were citizens of Georgia at the time the action was filed in 2013. Doc. 97 at 2 ¶ 2. At the time of filing, all defendants were citizens of Kansas and all plaintiffs were citizens of Georgia. The court thus finds that no plaintiff is “a citizen of the ...


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