THOMAS D. SCHROEDER, District Judge.
Plaintiff Meyn America, LLC ("Meyn") moves to remand this state-law contract dispute, which Defendant Omtron USA, LLC ("Omtron") removed to this court on the basis of diversity jurisdiction, to the General Court of Justice, Superior Court Division, in Chatham County, North Carolina. (Doc. 30.) Because Omtron's notice of removal presently contains fundamental flaws that, while technical in nature, fail to establish this court's subject matter jurisdiction, the motion to remand will be granted unless Omtron amends its notice
Meyn is a Georgia-based manufacturer and supplier of poultry processing equipment. It filed this action on August 10, 2011, in the General Court of Justice, Superior Court Division, in Chatham County, North Carolina, alleging that it supplied equipment and parts to Omtron pursuant to purchase orders, but that Omtron failed to pay. (Doc. 3 ¶¶ 9-12.) Meyn seeks recovery for breach of contract, quantum meruit, lien foreclosure, and litigation-expenses under North Carolina and Georgia law and claims over $1.8 million in damages.
Meyn is a limited liability company organized under Georgia law with its principal place of business in Ball Ground, Georgia. (Doc. 1 ¶ 3.) Omtron is a limited liability company organized under the laws of the state of Delaware, and its sole member is a foreign corporation with a principal place of business in Cyprus.
At some point following removal — apparently in January 2012 — Meyn and Omtron signed a Settlement Agreement and Mutual Release ("Settlement Agreement") in which Omtron agreed to make a series of installment payments to Meyn and, in exchange, Meyn agreed to dismiss (with prejudice) this case (its state and federal versions) against Omtron. (Doc. 31-1 at 3-4.) The Settlement Agreement also provided that "any litigation that may be necessary to enforce any provision/obligation under this Settlement Agreement shall be brought exclusively in the General Court of Justice of North Carolina, Superior Court Division in Chatham County, North Carolina." (Id. at 8 ¶ 10.)
Thereafter, the parties must have had a falling out, because on February 9, 2012, Meyn filed a "Motion to Remand to State Court." (Doc. 30.) Meyn opposes removal on two grounds. First, it contends that the parties are not diverse because, as limited liability companies, their citizenship is determined not by their principal places of business but by the citizenship of their individual members. In Meyn's view, the fact that Omtron's sole member is a Cyprus-based corporation defeats diversity jurisdiction because Omtron is, in effect, a "stateless" citizen for the purposes of diversity jurisdiction.
Omtron does not respond to Meyn's Settlement Agreement argument, but it contends
Federal courts exercise limited jurisdiction. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). Indeed, "[w]ithin constitutional bounds, Congress decides what cases the federal courts have jurisdiction to consider." Bowles v. Russell, 551 U.S. 205, 212, 127 S.Ct. 2360, 168 L.Ed.2d 96 (2007). Relevant to this dispute, Congress permits federal courts to adjudicate civil lawsuits involving more than $75,000
Congress also permits cases filed in state courts to be removed to federal courts when the parties are diverse. 28 U.S.C. 1441(a). In order for removal based on diversity to be proper, however, complete diversity must have existed at the time of the filing of the state-court complaint and at the time of removal. Rowland v. Patterson, 882 F.2d 97, 99 (4th Cir.1989) (en banc). Because actions that are removed from state courts to federal courts "raise[] significant federalism concerns," removal jurisdiction is "strictly construed." Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir.1994). Ultimately, the burden of demonstrating subject matter jurisdiction is on the party seeking to litigate in federal court. Robb Evans & Assocs., LLC v. Holibaugh, 609 F.3d 359, 362 (4th Cir. 2010), cert. denied, ___ U.S. ___, 131 S.Ct. 924, 178 L.Ed.2d 751 (2011). If the basis for federal jurisdiction "is doubtful, a
Generally, a party seeking a remand to state court must bring procedural objections within 30 days of removal. 28 U.S.C. § 1447(c). However, challenges to a federal court's subject matter jurisdiction may be raised at any time, and the court has an independent duty to assess whether it may adjudicate a dispute. Ins. Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982); Plyler v. Moore, 129 F.3d 728, 731 n. 6 (4th Cir.1997). The key question for subject matter jurisdiction in diversity cases is the citizenship of the litigants. See Axel Johnson, Inc. v. Carroll Carolina Oil Co., 145 F.3d 660, 663 (4th Cir.1998) (distinguishing "citizenship" and "domicile" from an individual's "residence" when assessing diversity jurisdiction). Although corporations are citizens of the state (or country) in which they are incorporated and have their principal place of business, see 28 U.S.C. § 1332(c)(1), the citizenship of an unincorporated association is determined by the citizenship of its individual members, Carden v. Arkoma Assocs., 494 U.S. 185, 195-96, 110 S.Ct. 1015, 108 L.Ed.2d 157 (1990). The end result is that "every association of a common-law jurisdiction other than a corporation is to be treated like a partnership." Indiana Gas Co. v. Home Ins. Co., 141 F.3d 314, 317 (7th Cir.1998). Thus, a limited liability company's "citizenship is that of its members." Gen. Tech. Applications, Inc. v. Exro Ltda, 388 F.3d 114, 121 (4th Cir.2004); see also GMAC Commercial Credit LLC v. Dillard Dep't Stores, Inc., 357 F.3d 827, 829 (8th Cir.2004) (holding that "an LLC's citizenship is that of its members for diversity jurisdiction purposes").
With these principles in mind, it is readily apparent that Meyn's argument for remand — that Omtron is a "stateless" citizen — misses the mark. A party is "stateless" for jurisdictional purposes when he or she is an American citizen domiciled abroad.
It is clear, nevertheless, that Omtron's notice of removal suffers from important defects that render it inadequate for establishing this court's subject matter
Omtron does explain that its sole member "is a foreign corporation with a principal place of business in Cyprus; it is not a resident of North Carolina." (Doc. 1 ¶ 5.) Assuming for the moment that Cyprus is the principal place of business for Omtron's sole member (rather than a principal place of business), this information establishes for diversity purposes that Omtron's sole member, and thus Omtron itself, is a citizen of Cyprus. 28 U.S.C. § 1332(c)(1). Left unclear in the notice of removal, however, is where Omtron's member is incorporated (beyond the fact that it is foreign). See Cent. W. Va. Energy Co. v. Mountain State Carbon, LLC, 636 F.3d 101, 102 (4th Cir.2011) ("For federal diversity jurisdiction purposes, a corporation is a citizen of the states in which it has been incorporated and in which it has its principal place of business." (emphasis added)). More specifically, Omtron has not indicated whether the member is "foreign" because it is incorporated in a state other than North Carolina or because it is incorporated in a foreign nation.
More importantly, the notice of removal fails to allege the citizenship of any of Meyn's members. All that Omtron explains for diversity purposes is that Meyn "is a Georgia limited liability company with its principal office in Ball Ground, Georgia." (Doc. 1 ¶ 3.) Of course, since Meyn, as a limited liability company, is a citizen of the states or countries where its various members are citizens, Gen. Tech., 388 F.3d at 121, the absence of this information renders this allegation insufficient for determining whether there is complete diversity between the Plaintiff and Defendant. Accordingly, the notice of removal, as it now stands, fails to demonstrate that this court has subject matter jurisdiction over the parties' dispute.
Generally, where federal jurisdiction is doubtful, the case should be remanded to the state court. Mulcahey, 29 F.3d at 151. Congress, however, permits "[d]efective allegations of jurisdiction [to] be amended, upon terms, in the trial or appellate courts." 28 U.S.C. § 1653. "Courts have interpreted 28 U.S.C. § 1653 as permitting parties to amend defective pleading allegations at any time, so long as the original removal was timely and the proposed amendment corrects a merely technical defect." Scholl v. Sagon RV Supercenter, LLC, 249 F.R.D. 230, 235 (W.D.N.C.2008) (citing Gray v. Remley, No. 1:03CV421, 2004 WL 951485, at *5 (M.D.N.C. Apr. 30, 2004)). Merely technical defects include "a removal notice that was timely filed and which asserted diversity jurisdiction, but which inadvertently left out the citizenship of one of the parties." Gray, 2004 WL 951485, at *5 (citing Wright v. Combined Ins. Co. of Am., 959 F.Supp. 356, 359 (N.D.Miss.1997)). Similarly, alleging the wrong information about a limited liability company (i.e., that it was organized under Virginia law and headquartered in Norfolk) "constitutes a `defective allegation' that may be properly amended." SunTrust Bank v. Village at Fair Oaks Owner,
Here, Omtron filed a timely notice of removal. See 28 U.S.C. § 1446(b). The notice alleged that the "action is removable... because the Court has original jurisdiction by reason of the diversity of citizenship of the parties."
If Omtron chooses to file an amended notice of removal, a word of caution is appropriate. Since the proper method of determining a limited liability company's citizenship is to evaluate the citizenship of its members, Omtron must identify Meyn's specific members and their citizenship. If one or more of Meyn's members is, itself, a limited liability company or a partnership, Omtron must identify the members of those entities as well. See, e.g., Thomas v. Guardsmark, LLC, 487 F.3d 531, 534 (7th Cir.2007) ("[A]n LLC's jurisdictional statement [under a Seventh Circuit rule] must
Because the court is permitting Omtron to amend its notice of removal and in order to avoid having to revisit any arguments already made should jurisdiction be shown, the court will address Meyn's second argument in favor of remand. Quite apart from its subject matter jurisdiction argument, Meyn contends that this action should be remanded because the parties' Settlement Agreement provides that "`any litigation that may be necessary to enforce any provision/obligation under this Settlement Agreement shall be brought exclusively'" in North Carolina state court. (Doc. 31 at 3 (quoting Doc. 31-1 at 8 ¶ 10).) If Omtron establishes a basis for diversity, this secondary argument fails.
Parties can agree to adjudicate disputes in particular fora. See, e.g., Consulting Eng'rs Corp. v. Geometric Ltd., 561 F.3d 273, 281 n. 11 (4th Cir.2009). When parties bring a dispute outside of the agreed-upon forum, the proper resolution is for the federal court to dismiss the action or remand the case. See Find-Where Holdings, Inc. v. Sys. Env't Optimization, LLC, 626 F.3d 752, 756 (4th Cir. 2010) (affirming the district court's remand of an action based on a forum selection clause that required any dispute involving a contract to be litigated in the state courts of Virginia).
The Settlement Agreement provides that North Carolina law applies to its interpretation and enforcement, and Omtron has not disputed this. (Doc. 31-1 at 8 ¶ 10.) General principles of contract law apply to settlement agreements. Chappell v. Roth, 353 N.C. 690, 692, 548 S.E.2d 499, 500 (2001). Unambiguous contracts are to be interpreted as written, Parks v. Venters Oil Co., 255 N.C. 498, 501, 121 S.E.2d 850, 853 (1961), and each provision is to be given effect where possible, Bolton Corp. v. T.A. Loving Co., 317 N.C. 623, 628, 347 S.E.2d 369, 372 (1986).
Here, even a broad reading of the Settlement Agreement does not entitle Meyn to remand. No provision of the Settlement Agreement requires that any pending litigation between Omtron and Meyn be litigated in state court. (See Doc. 31-1.) The action currently before this court is Meyn's damages claim related to Omtron's alleged lack of payment for certain poultry processing equipment that Meyn provided pursuant to purchase orders. (Doc. 3.) The Settlement Agreement's express language, in contrast, requires only that a separate lawsuit to enforce the Settlement Agreement be filed in state court. (Doc. 31-1 at 8 ¶ 10.)
Here, in contrast, Meyn's breach of contract claim is still pending before this court, and no party has brought a separate claim seeking to enforce the Settlement Agreement. In addition, the Settlement Agreement has no provision requiring that this action be remanded to state court. As such, the Settlement Agreement does not require remand, and Meyn's secondary argument in favor of remand based on its settlement with Omtron fails.
For the reasons stated above, therefore,
IT IS ORDERED that Meyn America, LLC's motion to remand this action to state court (Doc. 30) will be GRANTED unless, consistent with and within twenty (20) days of this Memorandum Opinion and Order, Omtron files an amended notice of removal demonstrating this court's subject matter jurisdiction.
28 U.S.C. § 1332(a).