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Amoroso v. Schmitt

United States District Court, Third Circuit

November 13, 2013

JAYSON AMOROSO (individually and in his capacity as 50 percent owner of NEW WAY RECRUITING LLC), Plaintiff,
v.
TERESA SCHMITT (individually and in her capacity as 50 percent owner of NEW WAY RECRUITING LLC), et al., Defendants.

MEMORANDUM OPINION

MARY L. COOPER, District Judge.

THE PLAINTIFF, Jayson Amoroso, brings this action in his individual capacity and in his capacity as 50 percent owner of New Way Recruiting LLC ("NWRLLC"), against the defendants, (1) Teresa Schmitt, in her individual capacity and in her capacity as 50 percent owner of NWRLLC, (2) Kylmar Solutions LLC ("KSLLC"), and (3) "John and Jane Does 1-10". (See dkt. entry no. 1, Compl.; dkt. entry no. 3, Am. Compl.) Amoroso seeks to recover damages for (1) breach of fiduciary duty, (2) misappropriation, (3) fraudulent misrepresentation, (4) breach of management duties, (5) tortious interference with prospective economic advantage, (6) unfair competition, and (7) conspiracy to commit a tort. (See Am. Compl. at 7-10.)

AMOROSO brought the action on September 4, 2013. (See generally dkt. entry no. 1 (noting filing date).) He asserts subject-matter jurisdiction under 28 U.S.C. ยง 1332(a)(1) ("Section 1332(a)(1)"). (See Am. Compl. at 2.)

THE COURT intends to dismiss the Amended Complaint without prejudice, as the plaintiff's allegations are deficient on several grounds. See Fed.R.Civ.P. 12(h)(3) (instructing district court to dismiss complaint if jurisdiction is lacking).

AMOROSO fails to allege his own citizenship or Schmitt's citizenship. Amoroso merely alleges that he "resides" in New Jersey and that Schmitt "resides" in Pennsylvania. (See Am. Compl. at 2.) See McNair v. Synapse Grp. , 672 F.3d 213, 219 n.4 (3d Cir. 2012) (stating allegation as to mere residency is "jurisdictionally inadequate" in action brought under Section 1332(a)(1)); see also O'Brien v. Nowicki, 490 Fed.Appx. 506, 508 n.2 (3d Cir.) (stating "[o]f course, citizenship and residency are not synonymous"), cert. denied, 133 S.Ct. 2376 (2013).

AMOROSO fails to properly allege KSLLC's citizenship. Amoroso alleges, without more, that (1) KSLLC "is a Limited Liability Company formed under the laws of... Pennsylvania" with "a principal place of business [in] Pennsylvania", and (2) Schmitt has an ownership interest in KSLLC. (Am. Compl. at 2.) But limited liability companies are unincorporated associations. Thus, they are deemed to be citizens of the states in which all of their members are citizens, not the states in which (1) they were formed, (2) they have their principal places of business, and (3) only one of the members is a citizen. Zambelli Fireworks Mfg. Co. v. Wood , 592 F.3d 412, 418-20 (3d Cir. 2010). The citizenship of each membership layer must be traced and analyzed to determine a limited liability company's citizenship. Id. at 420. The name and citizenship of each member must be specifically alleged. See S. Freedman & Co. v. Raab , 180 Fed.Appx. 316, 320 (3d Cir. 2006) (stating citizenship is to be alleged "affirmatively and distinctly"); Vail v. Doe , 39 F.Supp.2d 477, 477 (D.N.J. 1999) (stating citizenship allegation that is based upon information and belief "does not convince the Court that there is diversity among the parties").

AMOROSO fails to allege the citizenship of "John and Jane Does 1-10", even though he asserts substantive allegations against them. (See Am. Compl. at 1, 9-11.) Here, Amoroso must allege the citizenship of each fictitious defendant in order to demonstrate that the Court has subject-matter jurisdiction under Section 1332(a)(1). See Howell v. Tribune Entm't Co. , 106 F.3d 215, 218 (7th Cir. 1997) (stating that "because the existence of diversity jurisdiction cannot be determined without knowledge of every defendant's place of citizenship, John Doe' defendants are not permitted in federal diversity suits"); Abels v. State Farm Fire & Cas. Co. , 770 F.2d 26, 31-32 (3d Cir. 1985) (concluding "that the Doe allegations here are sufficient on their face to defeat diversity jurisdiction" because they were asserted "[w]ith [a] degree of specificity", and thus "we cannot say that the Doe defendants are mere phantoms' who live not and are accused of nothing'").

IT ALSO APPEARS that Amoroso brings this action on behalf of NWRLLC against Schmitt in her capacity as a member of NWRLLC.[1] This is not jurisdictionally permissible. See Techstar Inv. P'ship v. Lawson, No. 94-6279 , 1995 WL 739701, at *3 (E.D. Pa. Dec. 8, 1995) (stating there is common citizenship on both sides of action when unincorporated entity and member of that entity are adversaries); DPCC, Inc. v. Cedar Fair, L.P. , 21 F.Supp.2d 488, 490 (E.D. Pa. 1998) (granting motion to remand where unincorporated entity and member of that entity are adversaries); Nomura Asset Capital v. Overland Co., No. 02-1604, 2003 WL 138093, at *1-3 (D. Del. Jan. 8, 2003) (same). When the first member on behalf of an unincorporated entity brings an action against the second member in the second member's capacity as a member of the same unincorporated entity, "the doors of the federal courts" are "effectively close[d]" to that action. Bankston v. Burch , 27 F.3d 164, 168-69 (5th Cir. 1994). Furthermore, it appears that NWRLLC's presence is required in this action. See Fed.R.Civ.P. 19(a)(1).

AMOROSO has failed to show that complete diversity of citizenship exists here. See Lincoln Prop. Co. v. Roche , 546 U.S. 81, 89 (2005) (requiring complete diversity between each plaintiff and each defendant). Thus, the Court will dismiss the Amended Complaint, but will do so without prejudice to Amoroso to exercise one of two options within thirty days. Amoroso may recommence the action in state court, as the limitations period for the cause of action is tolled by the filing of a federal complaint. See Jaworowski v. Ciasulli , 490 F.3d 331, 333-36 (3d Cir. 2007); Galligan v. Westfield Ctr. Serv. , 82 N.J. 188, 191-95 (1980). Or Amoroso may move in accordance with both the Federal Rules of Civil Procedure and the Local Civil Rules to reopen the action in federal court, with supporting documentation:

(1) demonstrating which state he was a citizen of specifically on September 4, 2013;

(2) demonstrating which state Schmitt was a citizen of specifically on September 4, 2013;

(3) listing each member - including each non-managing and non-individual member - within KSLLC on September 4, 2013, and analyzing the citizenship of each member within KSLLC as it existed specifically on September 4, 2013;

(4) demonstrating which states "John and Jane Does 1-10" were citizens of specifically ...


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