Last month, we wrote about Chief Judge Connolly's new standing order for diversity cases, requiring plaintiffs to disclose the citizenship of LLCs on both sides so that the Court can determine whether it has diversity jurisdiction.
Today, Judge Connolly denied a motion to alter or amend a judgment in a diversity action where he had issued a similar order and dismissed the case based on the Plaintiff's own "on information and belief" representation.
In Harbor Associates Limited Partnership v. Micron Devices, LLC, C.A. No. 20-1706-CFC (D. Del.), the Court sua sponte issued an order asking for plaintiffs to identify their members and those of one of the defendants, to ensure that the Court had diversity jurisdiction:
To ensure that the Court has subject matter jurisdiction over this matter, Plaintiffs . . . shall within one week identify the name and citizenship of every member of [a plaintiff LLC], and [defendant] Micron Devices, LLC. If any of [the two LLCs'] members are noncorporate entities, Plaintiffs shall also identity the name and citizenship of every member of those entities, proceeding up the chain of ownership until Plaintiffs have identified the name and citizenship of every individual and corporation with a direct or indirect interest in [the LLCs].
D.I. 24. In response, the plaintiffs identified themselves as Florida entities, D.I. 25, and stated on information and believe that one member of one defendant LLC was also a Florida citizen:
Upon information and belief, Laura Perryman is a member of [defendant] Micron Devices, LLC. . . . Upon information and belief, Ms. Perryman is a citizen of Florida.
D.I. 26. In response, the Court dismissed the case, holding that it lacked jurisdiction:
Consistent with their complaint, Plaintiffs identified Florida as the citizenship of the members of the plaintiff entities. D.I. 25. They also identified Laura Perryman as a member of Defendant Micron Devices, LLC and they say that she too is a citizen of Florida. D.I. 26. This Court therefore lacks diversity jurisdiction over this action.
D.I. 26, 27.
Can We Just . . . Click Undo on That?
Apparently not realizing what was about to happen when they made those statements to the Court, plaintiffs quickly moved for relief from the judgement, essentially arguing that the Court can't trust what they just said:
[T]his Honorable Court sua sponte declined jurisdiction based upon Micron Devices, LLC member Laura Perryman’s past representations that she is a citizen of Florida. Plaintiffs respectfully submit that reliance upon Ms. Perryman’s testimony is unwarranted given her documented history of deceit. This Court previously stated at oral argument that Ms. Perryman was a perjurer and found Ms. Perryman’s testimony to be “patently false.” . . . While Plaintiffs understand the Court must examine subject matter jurisdiction, Plaintiffs respectfully request discovery regarding jurisdiction given Ms. Perryman’s past practice of lying.
D.I. 29. The Court was—unsurprisingly—uninterested in giving plaintiffs a chance to hit undo on their filing:
Plaintiffs identified Florida as the citizenship of the members of the plaintiff entities . . . Plaintiffs . . . represented upon information and belief that Laura Perryman is a member of Micron Devices and that she is a citizen of Florida. . . . Based on Plaintiffs' representations and exhibits, I concluded that I lacked diversity jurisdiction over this action, D.I. 27, and dismissed the case, D.I. 28.
Plaintiffs have now filed a motion to alter judgment . . . arguing that I "declined jurisdiction based upon ... Laura Perryman' s past representations that she is a citizen of Florida" but that "reliance upon Ms. Perryman' s testimony is unwarranted given her documented history of deceit." . . . Plaintiffs are incorrect: I did not conclude that the Court lacked jurisdiction based on Ms. Perryman' s representations; rather I based that conclusion on Plaintiffs' representations. Indeed, I had directed Plaintiffs, as the parties bearing the burden to establish diversity jurisdiction, to inform the Court of the name and citizenship of each member of the limited partnership and LLC parties, and I made my determination about jurisdiction based on Plaintiffs' response. If Plaintiffs believed that reliance on Ms. Perryman's prior representations was unwarranted, they should not have based their representations—the representations upon which I made my decision—on Ms. Perryman's prior representations.
The Court denied the motion. It included a very relevant Third Circuit cite about why attorneys must be careful, which I hadn't seen before:
See EF Operating Corp. v. Am. Bldgs., 993 F.2d 1046, 1050 (3d Cir. 1993) ("The smooth, efficient working of the judicial process depends heavily upon the assumption that [representations made in briefs] will be made after careful, deliberate evaluation by skilled attorneys who must ultimately accept responsibility for the consequences of their decisions. It goes without saying that one cannot casually cast aside representations, oral or written, in the course of litigation simply because it is convenient to do so[.]").
That's probably a good reminder for everyone.
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