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In re Arbitration between Wells Fargo Bank, N.A. and WMR e-PIN, LLC, e-Banc, LLC, and Synoran, Inc.: US District Court : CIVIL PROCEDURE - where is LLC citizen for diversity jurisdiction purposes1UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA Marquette Business Credit, Inc., Plaintiff, v. Civil No. 08-1383 (JNE/FLN) ORDER International Wood, Inc., Sonak Management LLC, Edward G. Gleason, and Irwin A. Engelman, Defendants. This case is before the Court on the request of Marquette Business Credit, Inc. (Marquette), to reschedule a motion hearing from January 30, 2009, to December 17, 2008, and for an order requiring Defendants to file reply briefs instead of new memoranda. For the reasons set forth below, the Court denies the request. Asserting diversity jurisdiction, Marquette brought this action against International Wood, LLC (International Wood),1 Sonak Management LLC (Sonak), Edward G. Gleason, and Irwin A. Engelman. On July 14, 2008, Defendants filed Motions to Dismiss for lack of personal jurisdiction and improper venue. On August 19, Defendants amended their Motions to Dismiss to add lack of subject matter jurisdiction as a basis for dismissal. The motion hearing was scheduled for November 21. Defendants filed memoranda in support of their motions on October 7, and Marquette responded on October 31. On November 4, defendants International Wood, Sonak, and Gleason asked the Court to postpone the November 21 motion hearing to 1 Although the caption identifies International Wood as “International Wood, Inc.,” the Complaint indicates that International Wood is a Delaware limited liability company. International Wood stated in its Amended Motion to Dismiss that it is misnamed in the caption and that its proper name is International Wood, LLC. 2 allow for expedited jurisdictional discovery. Engelman joined in the request on November 5, and Marquette objected to postponement on the same day. On November 6, the Court noted that the parties had assumed the rules applicable to citizenship of corporations also applied to limited liability companies, that the rules governing citizenship of limited liability companies actually differ from those applicable to corporations, and that Marquette’s jurisdictional allegations were deficient. The Court therefore ordered Marquette to establish the citizenship of Defendants by November 10. Marquette filed an Amended Complaint on November 6, and Defendants withdrew their Motions to Dismiss on November 10. Defendants filed new motions to dismiss for lack of personal jurisdiction and improper venue on November 20, which are scheduled for hearing on January 30, 2009. Marquette now asks the Court to reschedule the January 30 motion hearing to December 17, 2008. Marquette observes that the opening and response briefs filed in connection with Defendants’ August 19 motions address personal jurisdiction and venue and asks the Court to order Defendants to file their reply briefs relating to the August 19 motions rather than rebriefing the personal jurisdiction and venue arguments. Defendants International Wood, Sonak, and Gleason reply that they would prefer to present a “streamlined” brief focused on personal jurisdiction and venue rather than asking the Court to determine which facts and legal arguments in the briefs filed in connection with the August 19 motions are germane to the November 20 motions. Federal Rule of Civil Procedure 15(a)(3) provides that a party must respond to an amended pleading within the time remaining to respond to the original pleading or within ten days after service of the amended pleading, whichever is later. Defendants timely responded to Marquette’s Amended Complaint by filing their Motions to Dismiss on November 20. See Fed. 3 R. Civ. P. 6(a)(1)-(2). The Court appreciates Marquette’s concerns regarding delay, but much of the delay to date was occasioned by the parties’ wasted effort stemming from their misapprehension of the applicable law. Nevertheless, the Court concludes that retaining the January 30 hearing date and allowing new briefing focused on personal jurisdiction and venue will facilitate the just determination of this action. Based on the files, records, and proceedings herein, and for the reasons stated above, IT IS ORDERED THAT: 1. Marquette’s request to reschedule the January 30, 2009, hearing and for an order requiring Defendants to file reply briefs instead of new memoranda [Docket No. 73] is DENIED. Dated: November 26, 2008 s/ Joan N. Ericksen JOAN N. ERICKSEN United States District Judge ------------------------------------- 1 UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA In re Arbitration Between Wells Fargo Bank, N.A., Claimant, and Civil No. 08-5472 (JNE/FLN) ORDER WMR e-PIN, LLC, e-Banc, LLC, and Synoran, Inc., Respondents. Wells Fargo Bank, N.A., petitions the Court to correct an arbitration award and to confirm the award as corrected. Respondents seek to vacate or modify the arbitration award. Pursuant to 28 U.S.C. § 636(b)(1)(A)-(C) (2006), the Court refers Wells Fargo Bank’s petition to correct the award and to confirm the award as corrected [Docket No. 1] and Respondents’ motions to vacate or modify [Docket Nos. 5, 7 & 15] to the Honorable Franklin L. Noel, United States Magistrate Judge. Counsel are directed to contact Cathy Orlando, Magistrate Judge Noel’s Judicial Assistant, to obtain a hearing date. The hearing before the undersigned on January 13, 2009, at 2:00 p.m. is stricken. The Court’s review of Wells Fargo Bank’s petition reveals that Wells Fargo Bank’s jurisdictional allegations are insufficient.1 Wells Fargo Bank asserts that jurisdiction exists based on the Federal Arbitration Act and diversity of citizenship. The Federal Arbitration Act, however, does not confer subject matter jurisdiction on federal courts. Advance Am. Servicing of Ark., Inc. v. McGinnis, 526 F.3d 1170, 1173 (8th Cir. 2008) (“The Federal Arbitration Act does not create independent federal question jurisdiction.”); Carter v. Health Net of Cal., Inc., 374 1 Respondents’ motions do not include any jurisdictional allegations. 2 F.3d 830, 833 (9th Cir. 2004) (“It is well-established that even when a petition is brought under the Federal Arbitration Act . . . a petitioner seeking to confirm or vacate an arbitration award in federal court must establish an independent basis for federal jurisdiction.”); Specialty Healthcare Mgmt., Inc. v. St. Mary Parish Hosp., 220 F.3d 650, 653 n.5 (5th Cir. 2000) (“Since the [Federal Arbitration Act] does not create federal jurisdiction, confirmation under § 9 requires an independent basis for federal jurisdiction . . . .”). The Court turns to Wells Fargo Bank’s assertion of diversity jurisdiction. Under 28 U.S.C. § 1332 (2006), a federal district court has original jurisdiction of a civil action where the matter in controversy exceeds ,000, exclusive of interest and costs, and is between citizens of different states. 28 U.S.C. § 1332(a)(1). Wells Fargo Bank asserts that it is a national banking association headquartered in California; that WMR e-PIN, LLC, is an Ohio limited liability company with its principal place of business in Ohio; that e-Banc, LLC, is an Ohio limited liability company with its principal place of business in Ohio; that Synoran, Inc., is a Delaware corporation with its principal place of business in Ohio; and that the amount in controversy exceeds ,000. Wells Fargo Bank properly alleges its citizenship, see Wachovia Bank v. Schmidt, 546 U.S. 303, 307 (2006), and that of Synoran, Inc., see 28 U.S.C. § 1332(c)(1), but does not properly allege the citizenship of the limited liability companies. For purposes of diversity jurisdiction, “an LLC’s citizenship is that of its members.” GMAC Commercial Credit LLC v. Dillard Dep’t Stores, Inc., 357 F.3d 827, 829 (8th Cir. 2004). Having failed to allege the citizenship of the members of WMR e-PIN, LLC, and e-Banc, LLC, Wells Fargo Bank has not satisfied its burden to establish subject matter jurisdiction. See Sheehan v. Gustafson, 967 F.2d 1214, 1215 (8th Cir. 1992). Unless Wells Fargo Bank establishes the citizenship of WMR e-PIN, LLC, and e-Banc, LLC, by 5:00 p.m. on Wednesday, December 3, 3 2008, the Court will dismiss this action for lack of subject matter jurisdiction. Wells Fargo Bank’s submission regarding jurisdiction shall be made directly to the undersigned; it is the petition and motions to correct, confirm, vacate, or modify the arbitration award which are referred to Magistrate Judge Noel.2 Based on the files, records, and proceedings herein, and for the reasons stated above, IT IS ORDERED THAT: 1. Wells Fargo Bank’s petition to correct the award and to confirm the award as corrected [Docket No. 1] and Respondents’ motions to vacate or modify [Docket Nos. 5, 7 & 15] are referred to Magistrate Judge Noel. Counsel shall contact Cathy Orlando to schedule a hearing before Magistrate Judge Noel. 2. Wells Fargo Bank shall establish the citizenship of WMR e-PIN, LLC, and e-Banc, LLC, by 5:00 p.m. on Wednesday, December 3, 2008. Dated: November 26, 2008 s/ Joan N. Ericksen JOAN N. ERICKSEN United States District Judge 2 Synoran’s corporate status is apparently in dispute. In its Petition, Wells Fargo Bank asserts that Synoran is a corporation. [Docket No. 1] In its motion to vacate or modify, Synoran identifies itself as “Synoran, Inc.” [Docket No. 5] In a subsequent letter to the Court, Synoran identifies itself as “Synoran, LLC.” [Docket No. 15] Upon receipt of Wells Fargo Bank’s submission regarding jurisdiction, the Court will decide what proceedings to conduct to resolve the dispute regarding Synoran’s corporate status and its effect on Synoran’s citizenship. See Barclay Square Props. v. Midwest Fed. Sav. & Loan Ass’n of Minneapolis, 893 F.2d 968, 969-70 (8th Cir. 1990). |
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