United States District Court, M.D. Florida, Orlando Division
DALTON JR. JUDGE
instant action, forty Plaintiffs have filed suit against two
Defendants for state law tort claims and injunctive relief.
(Doc. 1 (“Complaint”).) In doing
so, Plaintiffs purport to invoke the Court's diversity
jurisdiction. (Id. ¶ 41.) Given the number of
Plaintiffs-many of which are unincorporated entities-the
Court has expended considerable judicial resources to conduct
a jurisdictional review of the Complaint. But, as is all too
often the case, Plaintiffs have failed to sufficiently allege
the parties' citizenship. Thus, Plaintiffs' Complaint
is due to be dismissed. Nonetheless, the Court will grant
Plaintiffs leave to amend their Complaint to cure the
jurisdictional deficiencies and, if necessary, submit
additional briefing to support their citizenship allegations.
law permits federal courts to resolve certain nonfederal
controversies between ‘citizens' of different
States.” Americold Realty Tr. v. Conagra Foods,
Inc., 136 S.Ct. 1012, 1014 (2016). “This rule is
easy enough to apply to humans, but can become metaphysical
when applied to legal entities.” Id. For
example, “[f]or a long time . . . Congress failed to
explain how to determine the citizenship of a non-breathing
entity like a business association.” Id. at
1015. The U.S. Supreme Court “later carved a limited
exception for corporations, holding that a corporation itself
could be considered a citizen of its State of
incorporation.” Id. Thereafter,
“Congress etched this exception into the U.S. Code,
adding that a corporation should also be considered a citizen
of the State where it has its principal place of
business.” Id. (citing 28 U.S.C. §
1332(c)). “But Congress never expanded this grant of
citizenship to include artificial entities other than
corporations. . . .” Id. For such
unincorporated entities, federal courts must adhere to the
“oft-repeated rule that diversity jurisdiction in a
suit by or against the entity depends on the citizenship of
all its members.” Id.
Supreme Court has “equated an association's members
with its owners or the several persons composing such
association”-for example, it has identified “the
members of a joint-stock company as its shareholders, the
members of a partnership as its partners, and the members of
a union as the workers affiliated with it.”
currently stands, the Court cannot determine whether it has
diversity jurisdiction over this action due to the following
shortcomings in Plaintiffs' citizenship allegations.
the Court requires more information regarding the citizenship
of the trusts (“Trusts”)
identified as members or sub-members of certain Plaintiffs.
In repleading such allegations, Plaintiffs should heed the
differences between traditional trusts and unincorporated
entities labeled as “trusts” under state law.
Americold, 136 S.Ct. at 1016.
recently articulated by the Supreme Court,
[t]raditionally, a trust was not considered a distinct legal
entity, but a “fiduciary relationship” between
multiple people. Such a relationship was not a thing that
could be haled into court; legal proceedings involving a
trust were brought by or against the trustees in their own
name. And when a trustee files a lawsuit or is sued in her
own name, her citizenship is all that matters for diversity
purposes. For a traditional trust, therefore, there is no
need to determine its membership, as would be true if the
trust, as an entity, were sued.
Many States, however, have applied the “trust”
label to a variety of unincorporated entities that have
little in common with this traditional template. So long as
such an entity is unincorporated, . . . it possesses the
citizenship of all its members.
constitute a traditional trust, the trustee must
“possesses certain customary powers to hold, manage,
and dispose of assets for the benefit of others.”
See LMP Ninth St.
Estate, LLC. v. U.S. Bank Nat'l Ass'n, Case No.
8:16-cv-2463-T-33AEP, 2016 WL 6068302, at *2-3 (M.D. Fla.
Oct. 17, 2016) (quoting Navarro Sav. Ass'n v.
Lee, 446 U.S. 458, 462-66 (1980)). If the trustee
possess such powers, the citizenship of the trustee is
controlling for purposes of diversity jurisdiction.
Id. Hence Plaintiffs must identify whether the
Trusts referenced in the Complaint are traditional trusts
and, if so, Plaintiffs must identify the trustees and allege
their citizenship ...