Commercial Litigation and Arbitration

LLC’s Citizenship Determined by the Citizenship of Its Members, Not by State of Organization — Issue of First Impression for Fifth Circuit

From Harvey v. Grey Wolf Drilling Co., 2008 U.S. App. LEXIS 19564 (5th Cir. Sept. 15, 2008):

This appeal presents an issue of first impression in this circuit: whether, for purposes of federal diversity jurisdiction, a limited liability company ("LLC") is a citizen of the state where it is organized or is a citizen of the states of which its members are citizens. The district court held that 28 U.S.C. § 1332(c), which governs citizenship for corporations, should be interpreted to include LLCs such that LLCs would share the characteristics of a corporation for purposes of diversity analysis. Based on this approach, the district court held that complete diversity was lacking. *** We reverse. ***

Neither the Supreme Court nor this circuit have previously addressed the question of how to determine the citizenship of a LLC for purposes of diversity jurisdiction. *** All federal appellate courts that have addressed the issue have reached the same conclusion: like limited partnerships and other unincorporated associations or entities, the citizenship of a LLC is determined by the citizenship of all of its members. See Pramco, LLC ex rel. CFSC Consortium, LLC v. San Juan Bay Marina, Inc., 435 F.3d 51 (1st Cir. 2006); Handelsman v. Bedford Village Assocs. Ltd. P'ship, 213 F.3d 48 (2nd Cir. 2000); Gen. Tech. Applications, Inc. v. Exro Ltda, 388 F.3d 114 (4th Cir. 2004); Homfeld II, L.L.C. v. Comair Holdings, Inc., 53 Fed.Appx. 731 (6th Cir. 2002); Wise v. Wachovia Securities, LLC, 450 F.3d 265 (7th Cir. 2006); GMAC Commercial Credit LLC v. Dillard Dept. Stores, Inc., 357 F.3d 827 (8th Cir. 2004); Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894 (9th Cir. 2006); Rolling Greens MHP, L.P. v. Comcast SCH Holdings L.L.C., 374 F.3d 1020 (11th Cir. 2004). We now join the other circuits in this holding.

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