Crown Publishing Group v. McNichol Pictures Inc.

• Court: District Court, S.D. New York
• Decided: November 5, 2025
• Docket: 1:25-cv-09022
• Status: Unknown

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

CROWN PUBLISHING GROUP, Plaintiff,

25-cv-9022 (PKC) -against- ORDER

MCNICHOL PICTURES INC., Defendant. eee ee ee eee ee eee eee X CASTEL, U.S.D.J. The limited subject matter jurisdiction of a district court is best addressed at the outset of a case. It falls upon the Court to raise issues of subject matter jurisdiction sua sponte. The Complaint asserts subject matter jurisdiction based on diversity of citizenship. (Compl’t § 5.) “It is firmly established that diversity of citizenship should be distinctly and positively averred in the pleadings, or should appear with equal distinctness in other parts of the record.” Leveraged Leasing Admin. Corp. v. PacifiCorp Cap.., Inc., 87 F.3d 44, 47 (2d Cir. 1996). “It is axiomatic that diversity jurisdiction is available only when all adverse parties to a litigation are completely diverse in their citizenships.” Washington Nat’l Ins. Co. v. OBEX Grp. LLC, 958 F.3d 126, 133 (2d Cir. 2020) (quotation marks omitted). Where a complaint premised upon diversity of citizenship names a limited liability company as a party, it must allege the citizenship of natural persons who are members of the limited liability company as well as the place of incorporation and principal place of business of any corporate entities that are members of the limited liability company. See Platinum-

Montaur Life Sciences, LLC v. Navidea Biopharmaceuticals, Inc., 943 F.3d 613, 615 (2d Cir. 2019). The Complaint alleges that plaintiff Penguin Random House LLC is a limited liability company with two members: PRH Publications LLC and PRH Holdings LLC. (Compl’t 4/3.) PRH Publications LLC, in turn, is “wholly owned by” Bertelsmann Publishing Group, Inc. and PRH Holdings LLC. (Compl’t § 3.) PRH Holdings LLC, in turn, is “wholly owned” by Bertelsmann Publishing Group, Inc. (Compl’t § 3.) PRH LLC, PRH Publications LLC, PRH Holdings LLC and the Bertelsmann Publishing Group, Inc. are alleged to be organized under Delaware law with their principal places of business in New York. (Compl’t { 3.) . The defendant is alleged to be a Florida corporation with its principal place of business in Florida. (Compl’t ¥ 4.) The allegation that a limited liability company is “wholly owned” by a parent corporation is not sufficient to allege the LLC’s membership. See, e.g., Caicedo v. Sabovics, 2024 WL 1719635, at *2 (E.D.N.Y. Apr. 22, 2024) (“Walmart LLC’s allegations that it is a ‘privately held and wholly-owned subsidiary of Walmart, Inc.’ is insufficient to establish its citizenship because the owner of a subsidiary, even the sole owner, may or may not be a member — or the sole member of its subsidiary. For LLCs, it is membership, not ownership, that is critical.”) (quotation marks, alterations and internal citations omitted) (collecting cases). Within fourteen (14) days of this Order, plaintiff shall amend its complaint to correct the jurisdictional deficiency by truthfully and accurately alleging the citizenship of the plaintiff limited liability company, including the membership of any limited liability company that, in turn, is a member of the plaintiff. The complaint must allege the citizenship of all natural persons who are members of the limited liability company at issue, and if any corporation is a

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member, the jurisdiction under whose laws it is incorporated and where it maintains its principal place of business. If, by this date, plaintiff fails to allege complete diversity of citizenship, the action will be dismissed for lack of subject matter jurisdiction without further notice to any party. SO ORDERED.

P. Kevin Castel United States District Judge Dated: New York, New York November 4, 2025

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