Opinion
1:23-cv-08999 (JLR)
10-16-2023
DEL MAR TIC I, LLC and DEL MAR TIC II, LLC, Plaintiffs, v. THE BANCORP BANK, Defendant.
ORDER
JENNIFER L. ROCHON, UNITED STATES DISTRICT JUDGE
Plaintiffs filed their Complaint in New York state court on September 8, 2023. See ECF No. 1-1. Defendant removed the case to this Court on October 12, 2023. See ECF No. 1 (“Notice of Removal”). Defendant asserts that jurisdiction is based on diversity of citizenship, pursuant to 28 U.S.C. § 1332. See id. ¶ 6. The Notice of Removal alleges that Defendant is a national banking association with its main office in South Dakota, and thus a citizen of South Dakota for purposes of diversity of citizenship. Id. ¶ 7. The Notice of Removal alleges some members of Plaintiffs Del Mark TIC I, LLC and Del Mark TIC II, LLC. Id. ¶¶ 9-10. However, Defendant states that other members of these limited liability companies are unknown to Defendant and could not be ascertained after a reasonably diligent search of public records. Id. Defendant therefore requests that Plaintiffs provide a statement disclosing this information pursuant to Rule 7.1(a)(2) of the Federal Rules of Civil Procedure (“Rules”) and Rule 81.1 of the Southern District of New York's Local Rules. See id.
Rule 7.1, as amended in 2022, provides as follows:
In an action in which jurisdiction is based on diversity under 28 U.S.C. § 1332(a), a party or intervenor must, unless the court orders otherwise, file a disclosure statement. The statement must name - and identify the citizenship of - every individual or entity whose citizenship is attributed to that party or intervenor: (A) when
the action is filed in or removed to federal court, and (B) when any later event occurs that could affect the court's jurisdiction under § 1332(a).The 2022 Committee Notes indicate that this amendment was adopted, in part, because of the burden imposed on parties seeking to commence a federal suit against limited liability companies. See Rule 7.1 advisory committee's note. “[M]any examples of attributed citizenship arise from noncorporate entities that sue or are sued as an entity. A familiar example is a limited liability company, which takes on the citizenship of each of its owners. A party suing an LLC may not have all the information it needs to plead the LLC's citizenship.” Id. To ensure that diversity jurisdiction exists, this burden is placed not only on the party initiating the federal action, but also “other parties and intervenors.” Id.; see, e.g., Kin v. Matte Projects LLC, No. 21-cv-09317 (LTS), 2023 U.S. Dist. LEXIS 76438, at *2 (S.D.N.Y. May 2, 2023) (ordering disclosures from both the plaintiff and defendant when the action commenced).
Here, Defendant filed a Rule 7.1 disclosure statement, see ECF No. 6, but Plaintiffs have not. Accordingly, IT IS HEREBY ORDERED that Plaintiffs shall, within 10 days of the date of their appearance in this action, file completed Rule 7.1 disclosure statements, which shall name, and identify the citizenship of, every individual or entity whose citizenship is attributable to that party. See also Handelsman v. Bedford Vill. Assocs. L.P., 213 F.3d 48, 51-52 (2d Cir. 2000); U.S. Liab. Ins. Co. v. M Remodeling Corp., 444 F.Supp.3d 408, 410 (E.D.N.Y. 2020) (“[I]f any of an LLC's members are themselves noncorporate entities, then a plaintiff must allege the identity and citizenship of their members, proceeding up the chain of ownership until it has alleged the identity and citizenship of every individual and corporation with a direct or indirect interest in the LLC.”).
IT IS FURTHER ORDERED that Plaintiffs shall, promptly and no later than October 23, 2023, appear in this action.
IT IS FURTHER ORDERED that Defendant shall, by October 17, 2023, file a copy of the state court docket sheet as required by Rule 4(A) of the Court's Individual Rules in Civil Cases and serve this order on Plaintiffs.
SO ORDERED.