Dorilton Capital Management LLC v. Stilus LLC

• Court: District Court, S.D. New York
• Decided: May 8, 2023
• Docket: 1:23-cv-03789
• Status: Unknown

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

DORILTON CAPITAL MANAGEMENT LLC and WILLIAMS IP HOLDINGS LLC, Plaintiffs, 1:23-cv-03789 (JLR) -against- ORDER STILUS LLC and CLAUDIA SCHWARZ, Defendants.

JENNIFER L. ROCHON, United States District Judge: Plaintiffs filed their Complaint on May 4, 2023. ECF No. 1. The Complaint alleges subject matter based on diversity of citizenship. Id. ¶ 12. It alleges that Plaintiff Dorilton Capital Management LLC “is a limited liability company organized under the laws of Delaware and headquartered in New York, New York,” id. ¶ 8, and Plaintiff Williams IP Holdings LLC “is a limited liability company organized in the Republic of the Marshall Islands with a business address in Hamilton, Bermuda,” id. ¶ 9. The Complaint further alleges that Defendant Stilus LLC “is a limited liability company organized under the laws of Delaware with a business address in Aventura, Florida,” id. ¶ 10, and Defendant Claudia Schwarz “is a German citizen who founded and controls several companies including Stilus, and maintains residences in Florida, Bermuda, and Germany,” id. ¶ 11. Plaintiffs have not filed a disclosure statement pursuant to Federal Rules of Civil Procedure (“Rule”) 7.1. For diversity purposes, a limited liability company is deemed to be a citizen of each state of which its members are citizens. See, e.g., Handelsman v. Bedford Vill. Assocs. L.P., 213 F.3d 48, 51-52 (2d Cir. 2000). That means that, “if any of an LLC’s members are themselves non- corporate entities, then a plaintiff must allege the identity and citizenship of their members, proceeding up the chain of ownership until it has alleged the identity and citizenship of every individual and corporation with a direct or indirect interest in the LLC.” U.S. Liab. Ins. Co. v. M Remodeling Corp., 444 F. Supp. 3d 408, 410 (E.D.N.Y. 2020). “An individual’s citizenship, within the meaning of the diversity statute, is determined by his domicile. . . [in other words] the place where a person has his true fixed home and principal establishment, and to which, whenever he is absent, he has the intention of returning.” Van Buskirk vy. United Grp. of Cos., 935 F.3d 49, 53 (2d Cir. 2019). Rule 7.1 requires that a party file a disclosure statement “with its first” appearance or pleading. Plaintiffs have not satisfied these requirements here. Accordingly, Plaintiffs shall, by May 15, 2023, file a completed Rule 7.1 Disclosure Statement, available here: https://www.nysd.uscourts.gov/forms/rule-7 1-statement. It is further ORDERED that Plaintiffs shall, no later than May 15, 2023, file a letter, supported by one or more sworn affidavits, that provides the necessary prerequisites for the Court to exercise subject-matter jurisdiction in this case, including by alleging the identity and citizenship of members of each limited liability company. If Plaintiffs are unable to allege a good-faith basis for complete diversity of citizenship, the action will be dismissed, without further notice to the parties. Dated: May 8, 2023 New York, New York SO ORDERED.

United States District Judge