The Court noted that the complaint only “baldly asserted” jurisdiction with no factual underpinning, which is insufficient to adequately allege diversity jurisdiction involving LLCs. Indeed, the Court recognized that the plaintiff ignored this argument in its opposition in favor of an unsuccessful attack on the second manager’s ability to bring the motion. In the second manager’s motion to dismiss, he argued that plaintiff had omitted the state citizenships of the members of the LLCs – a fundamental omission by the Plaintiff’s counsel. In the case of limited liability companies, not only is the residence of the company considered, but also the residence of all of its members. In diversity cases, the plaintiffs must reside in different states than the defendants. Plaintiff, in its insufficiently pled complaint, and in the opposition where it ignored defendants’ arguments and also failed to make factual averments, lost on every front.Ī federal court that does not have subject matter jurisdiction must dismiss the case. The defendants argued, either together or individually, that the plaintiff failed to establish subject matter jurisdiction, personal jurisdiction or the requirements of the claims themselves.
Remaining at the time of the Court’s decision were the corporate defendant and its CEO/manager, a second alleged manager of the corporate defendant, and one alleged additional owner. Various defendants brought immediate motions seeking dismissal of the complaint, and several were voluntarily dismissed. Plaintiff brought an action alleging claims for breach of contract against the corporate defendant and its CEO/manager, fraud against the corporate defendant and its CEO/manager, and conversion, unjust enrichment and civil conspiracy against all Defendants in their individual capacities.
Plaintiff alleged that, despite repeated demands, the corporate defendant did not return the money. Plaintiff alleges that the corporate defendant did not make the payments and used the money for the benefit of the other named defendants, who were alleged to be either owners or officers/managers of the corporate defendant. In this action, plaintiff alleged that it hired the corporate defendant to process plaintiff’s payroll, move funds from plaintiff to its own accounts in order to pay plaintiff’s employees direct deposits, taxes and benefits. The second and important misstep to avoid, is that in pleading diversity jurisdiction, the citizenship of all parties must be stated, and in the case of limited liability companies, the citizenship of the members as well. This case should serve as a warning for all practitioners to not lead with a threadbare complaint and assume that formulaic recitations of legal conclusions are sufficient. The Court added a warning that while it was not granting sanctions, it could under such circumstances where plaintiff’s opposition defendants’ summary judgment motion advocated and reaffirmed frivolous claims from the complaint and misrepresented material facts. A complaint missing key factual pleadings and setting forth bare legal conclusions masquerading as facts was recently dismissed in a scathing opinion by the Maryland Federal Court in Temescal Wellness of Maryland, LLC T/A Evermore Cannabis Company, v.