Resource Strategies, III, LLC, et al. v. Moncla Workover & Drilling Operations, LLC, et al.

• Court: District Court, S.D. Alabama
• Decided: January 30, 2026
• Docket: 1:26-cv-00012
• Status: Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION

RESOURCE STRATEGIES, III, LLC, ) et al., ) ) Plaintiffs, ) ) v. ) CIVIL ACTION NO. 1:26-00012-KD-N ) MONCLA WORKOVER & ) DRILLING OPERATIONS, ) LLC, et al., ) ) Defendants. ) ORDER This civil action is before the undersigned Magistrate Judge on review sua sponte of the Court’s subject-matter jurisdiction.1 Upon due consideration, the removing Defendant, Moncla Workover & Drilling Operations, LLC, will be ordered to file an amended notice of removal to correct defects in its jurisdictional

1 “It is . . . axiomatic that the inferior federal courts are courts of limited jurisdiction. They are ‘empowered to hear only those cases within the judicial power of the United States as defined by Article III of the Constitution,’ and which have been entrusted to them by a jurisdictional grant authorized by Congress.” Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 409 (11th Cir. 1999) (quoting Taylor v. Appleton, 30 F.3d 1365, 1367 (11th Cir. 1994)). Accordingly, “it is well settled that a federal court is obligated to inquire into subject matter jurisdiction sua sponte whenever it may be lacking.” Id. at 410. “[A] court should inquire into whether it has subject matter jurisdiction at the earliest possible stage in the proceedings.” Id. See also Arbaugh v. Y&H Corp., 546 U.S. 500, 514, 126 S. Ct. 1235, 163 L. Ed. 2d 1097 (2006) (“[C]ourts, including this Court, have an independent obligation to determine whether subject-matter jurisdiction exists, even in the absence of a challenge from any party.”). “[R]emoval jurisdiction is no exception to a federal court’s obligation to inquire into its own jurisdiction.” Univ. of S. Ala., 168 F.3d at 410. “[T]here is a presumption against the exercise of federal jurisdiction, such that all uncertainties as to removal jurisdiction are to be resolved in favor of remand.” Russell Corp. v. Am. Home Assur. Co., 264 F.3d 1040, 1050 (11th Cir. 2001). allegations. Moncla removed this case from the Circuit Court of Escambia County, Alabama, under 28 U.S.C. § 1441(a), with the Notice of Removal (Doc# 1) alleging diversity of citizenship under 28 U.S.C. § 1332(a) as the sole basis for original subject-matter jurisdiction over this case. See 28 U.S.C. § 1446(a) (“A defendant or defendants desiring to remove any civil action from a State court shall file in the district court of the United States for the district and division within which such action is pending a notice of removal…containing a short and plain statement of the grounds for removal…”); Baltin v. Alaron Trading Corp., 128 F.3d 1466, 1469 (11th Cir. 1997) (generally, “[i]n a given case, a federal district court must have at least one of three types of subject matter jurisdiction: (1) jurisdiction under a specific statutory grant; (2) federal question jurisdiction pursuant to 28 U.S.C. § 1331; or (3) diversity jurisdiction pursuant to 28 U.S.C. § 1332(a).”). Where, as here, a case is removed from state court, “[t]he burden of establishing subject matter jurisdiction falls on the party invoking removal.” Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 411–12 (11th Cir. 1999). Accord, e.g., City of Vestavia Hills v. Gen. Fid. Ins. Co., 676 F.3d 1310, 1313 (11th Cir. 2012) (“The removing party bears the burden of proof regarding the existence of federal subject matter jurisdiction.”). “A defendant may remove an action to a district court that would have original jurisdiction if complete diversity between the parties exists and the amount in controversy exceeds $75,000.” City of Vestavia Hills, 676 F.3d at 1313 (citing 28 U.S.C. § 1332). “Diversity jurisdiction requires complete diversity; every plaintiff must be diverse from every defendant.” Triggs v. John Crump Toyota, Inc., 154 F.3d 1284, 1287 (11th Cir. 1998). “A party removing a case to federal court based on diversity of citizenship bears the burden of establishing the citizenship of the parties.” Rolling Greens MHP, L.P. v. Comcast SCH Holdings L.L.C., 374 F.3d 1020, 1022 (11th Cir. 2004) (per curiam). See also, e.g., McGovern v. Am. Airlines, Inc., 511 F.2d 653, 654 (5th Cir. 1975) (per curiam) (“When jurisdiction depends on citizenship, citizenship should be distinctly and affirmatively alleged.” (quotation omitted)); Ray v. Bird & Son & Asset Realization Co., Inc., 519 F.2d 1081, 1082 (5th Cir. 1975) (“The burden of pleading diversity of citizenship is upon the party invoking federal jurisdiction . . .” (citing Mas v. Perry, 489 F.2d 1396 (5th Cir. 1974)).2 Cf. Travaglio v. Am. Exp. Co., 735 F.3d 1266, 1268 (11th Cir. 2013) (“When a plaintiff files suit in federal court, [the plaintiff] must allege facts that, if true, show federal subject matter jurisdiction over [the] case exists. Those allegations, when federal jurisdiction is invoked based upon diversity, must include the citizenship of each party, so that the court is satisfied that no plaintiff is a citizen of the same state as any defendant. Without such allegations, district courts are constitutionally obligated to dismiss the action altogether if the plaintiff does not cure the deficiency. That is, if a complaint’s factual allegations do not assure the court it has subject matter jurisdiction, then the court is without power to do anything in the case.” (citations omitted)).

Both Moncla and Plaintiff Resource Strategies, III, LLC (“RS III”) are alleged

2 On “October 1, 1981 pursuant to the Fifth Circuit Court of Appeals Reorganization Act of 1980, P.L. 96-452, 94 Stat. 1995, … the United States Court of Appeals for the Fifth Circuit was divided into two circuits, the Eleventh and the ‘new Fifth.’ ” Bonner v. City of Prichard, Ala., 661 F.2d 1206, 1207 (11th Cir. 1981) (en banc). “The Eleventh Circuit, in the en banc decision Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981), adopted as precedent decisions of the former Fifth Circuit rendered prior to October 1, 1981.” Smith v. Shook, 237 F.3d 1322, 1325 n.1 (11th Cir. 2001) (per curiam). to be limited liability companies. For purposes of diversity jurisdiction, it is well established that an unincorporated artificial entity such as an LLC “possesses the citizenship of all its members.” Americold Realty Trust v. Conagra Foods, Inc., 577

U.S. 378, 383, 136 S. Ct. 1012, 194 L. Ed. 2d 71 (2016); see also Rolling Greens MHP, L.P. v. Comcast SCH Holdings L.L.C., 374 F.3d 1020, 1022 (11th Cir. 2004) (per curiam) (“like a limited partnership, a limited liability company is a citizen of any state of which a member of the company is a citizen”). Therefore, to properly allege an LLC’s citizenship, the party invoking jurisdiction must “list the citizenships of all the members of the limited liability company…” Rolling Greens, 374 F.3d at 1022. Accord Mallory & Evans Contractors & Engineers, LLC v. Tuskegee Univ., 663 F.3d

1304, 1305 (11th Cir. 2011) (per curiam). See also S.D. Ala. CivLR 8 (“A pleading or notice of removal asserting jurisdiction based on diversity of citizenship must identify the citizenship of each party to the litigation…If any party is an unincorporated association, limited liability company, or partnership, the pleading or notice must identify the citizenship of all members.”). Recognizing this rule, Moncla alleges that its “members are citizens of

Louisiana[,]” and RS III’s “members are citizens of Colorado.” (Doc# 1 § II(A), PageID.3). However, Moncla’s notice of removal does not identify any of the members of either entity. This is insufficient to assure the Court of diversity of citizenship. The Court cannot simply accept Moncla’s bare assurances that all members of each LLC are citizens of a particular state. Rather, Moncla must also affirmatively identify all members of each LLC, so that the Court can assure itself that Moncla has properly assessed the citizenship of each member entity. For instance, if an LLC member is itself an LLC or some other unincorporated entity, then that member’s members and their citizenships must also be alleged. Thus,

assessing an LLC’s citizenship “can require tracing through several layers.” BouMatic, LLC v. Idento Operations, BV, 759 F.3d 790, 791 (7th Cir. 2014) (citing Cosgrove v. Bartolotta, 150 F.3d 729 (7th Cir. 1998) (citizenship of an LLC depends on citizenship of its members, traced through as many levels as necessary to reach corporations or natural persons)).3 Accordingly, Moncla must affirmatively identify each of its members and those of RS III, and properly allege each member’s citizenship in its notice of removal.4

Defective allegations of jurisdiction may be amended, upon terms, in the trial

3 See also Purchasing Power, LLC v. Bluestem Brands, Inc., 851 F.3d 1218, 1220 (11th Cir. 2017) (“When determining citizenship of the parties for diversity jurisdiction purposes, a limited liability company (LLC) is a citizen of every state that any member is a citizen of. And it is common for an LLC to be a member of another LLC. Consequently, citizenship of LLCs often ends up looking like a factor tree that exponentially expands every time a member turns out to be another LLC, thereby restarting the process of identifying the members of that LLC.”); Azzo v. Jetro Rest. Depot, LLC, No. 3:11-CV-324-J-34JRK, 2011 WL 1357557, at *2 n.2 (M.D. Fla. Apr. 11, 2011) (in pleading the citizenships of the members, “each member's citizenship must [also ]be properly alleged, be it an individual, corporation, LLC, or other entity”).

4 About a week after filing its notice of removal, Moncla filed a disclosure statement that, in accordance with Federal Rule of Civil Procedure 7.1(a)(2) and S.D. Ala. Civil Local Rule 7.1, identified Moncla’s five members, all natural persons, and alleged they are all citizens of Louisiana. (Doc# 8). However, given that a notice of removal generally must “contain[] a short and plain statement of the grounds for removal,” 28 U.S.C. § 1446(a), and as Moncla must amend its notice of removal to identify the members of RS III and their citizenships anyway, Moncla’s amended notice of removal should also identify its members and their citizenships consistent with the information provided in its disclosure statement. or appellate courts.” 28 U.S.C. § 1653. “[T]he failure to establish a party’s citizenship at the time of filing the removal notice is a procedural, rather than jurisdictional, defect.” Corporate Mgmt. Advisors, Inc. v. Artjen Complexus, Inc., 561 F.3d 1294,

1296 (11th Cir. 2009) (quotation omitted). “If a party fails to specifically allege citizenship in their notice of removal, the district court should allow that party ‘to cure the omission,’ as authorized by § 1653.” Id. at 1297. Upon due consideration, Moncla is ORDERED to file and serve, no later than FEBRUARY 6, 2026, an amended Notice of Removal that corrects the above-described deficiencies in its allegations supporting subject-matter jurisdiction under § 1332(a). The failure to comply with this order may result in entry of a recommendation that this action be

remanded sua sponte for lack of subject-matter jurisdiction under 28 U.S.C. § 1447(c) (“If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.”). DONE and ORDERED this the 30th day of January 2026. /s/ Katherine P. Nelson KATHERINE P. NELSON UNITED STATES MAGISTRATE JUDGE