The Sixth Circuit today booted a case because it couldn't tell if it belonged in federal court or not.
The lawsuit pitted a Keystone State corporation (with a Pennsylvania principal place of business, which as Blawgletter knows from yesterday coincides with the firm's "nerve center") against a limited partnership. The complaint alleged diversity of citizenship as the basis for jurisdiction (under 28 U.S.C. 1332). It also averred that the limited partnership belonged to two limited liability companies and an "S.A.R.L." from France.
As the Sixth Circuit pointed out, the citizenship of LLCs depends on the citizenship of their "members" (owners). Plus, if an LLC member itself takes the LLC form, its citizenship likewise equals the citizenship of its members. And so on and so on (and scoobie doobie doobie) until the end.
Kind of like those Russian nesting dolls.
The court couldn't figure out if diversity existed because the record didn't show the insides of all the LLC nesting dolls. The French S.A.R.L. also vexed the panel, as no one seemed to know whether it counted as a corporation or a non-corporation and thus whether the nesting doll thing applied to it as well.
"As it stands," the court said, "the current jurisdictional allegations are fatally incomplete, leaving us uncertain that diversity jurisdiction exists." V&M Star, LP v. Centimark Corp., No. 09-3249, slip op. at (6th Cir. Feb. 24, 2010).
Well, it happened again. This time in the First Circuit. With the same result. D.B. Zwirn Special Opportunities Fund, L.P. v. Mehrotra, No. 11-1172, slip op. at 8 (1st Cir. Nov. 18, 2011) (per curiam) (ordering plaintiff "not only [to] identify its members and their respective citizenship" but "also [to] trace the citizenship of any member that is an unincorporated association through however many layers of members or partners there may be").
Oddly, the panel didn't mention V&M Star.