LLC pleading leads to LLC remand
December 6, 2020An error in pleading jurisdiction led to an inconclusive end in Accordant Communications v. Sayer Construction, No. 20-50169 (Dec. 4, 2020):
- Accordant won a $1.4 million arbitration award against Sayer.
- Accordant sued to confirm the award in federal court.
“As to the citizenship of the parties, Accordant alleged that it ‘is a limited liability company organized under the laws of Georgia with its principal place of business in Seminole County, Florida” and that Sayers ‘is a limited liability company organized under the laws of Texas with its principal place of business in Travis County, Texas.'” - Sayer declined to answer postjudgment discovery, and on appeal argued that the district court lacked subject-matter jurisdiction (as the above allegations are based on the standards for a corporation rather than an LLC).
Despite this ‘clearly deficient’ and ‘basic’ pleading problem, the Fifth Circuit did not dismiss the case: “Considering the evidence in the record on appeal … we find that ‘jurisdiction is not clear from the record, but there is some reason to believe that jurisdiction exists.’ Therefore, we exercise our discretion under [28 USC] § 1653 and ‘remand the case to the district court for amendment of the allegations and for the record to be supplemented,’ if necessary.” (citation omitted).
