A Federal district court recently reaffirmed a long-standing rule with respect to the determination of diversity jurisdiction in cases involving artificial entities other than corporations. In Provini v. Paradigm Global Advisors, LLC, 2008 U.S. Dist LEXIS 40500 (N.J. May 19, 2008) a rather exasperated court declared that a petition alleging for purposes of diversity jurisdiction the fact that the defendant was a New York LLC with its principal office in New York was "meaningless." Unlike corporations, where such an allegation would be meaningful, LLCs are unincorporated associations deemed citizens of each state in which their members are citizens.
In fact, it may be necessary to go deeper than the first layer of ownership to determine diversity if the LLC has members who are LLCs (Belleville Catering Co. v. Champaign Mkt. Place, 350 F. 3d 691 (7th Cir. 2003) or limited partnerships (Hart v. Terminex Int'l, 336 F. 3d 541 (7th Cir 2003).
Provini is an excellent case for learning what will not suffice as sufficient allegations of diversity of citizenship. For a terrific review of the history of diveristy jurisdiction and artificial entities, see C.T. Carden v. Arkoma Associates, 494 U.S. 185, 110 S. Ct. 1015, 108 L. Ed. 157 (1990).
-Marc Ward
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