Megalomedia v. Philadelphia Indemnity

Case: 23-20570        Document: 92-2       Page: 1     Date Filed: 09/20/2024




         United States Court of Appeals
              for the Fifth Circuit                                 United States Court of Appeals
                                                                             Fifth Circuit

                              ____________                                 FILED
                                                                   September 20, 2024
                               No. 23-20570                           Lyle W. Cayce
                              ____________                                 Clerk

Megalomedia Incorporated; Megalomedia Studios,
L.L.C.; Mansfield Films, L.L.C.; DBA Holdings, L.L.C.,

                                                         Plaintiffs—Appellants,

                                     versus

Philadelphia Indemnity Insurance Company,

                                          Defendant—Appellee.
                ______________________________

                Appeal from the United States District Court
                    for the Southern District of Texas
                         USDC No. 4:20-CV-1644
                ______________________________

                            PUBLISHED ORDER
Before Ho, Duncan, and Oldham, Circuit Judges.
Andrew S. Oldham, Circuit Judge:
       This is yet another case presenting an evergreen problem in our cir-
cuit: The parties failed to establish the citizenship of limited liability compa-
nies in a diversity case under 

. We therefore remand for
jurisdictional discovery.
Case: 23-20570        Document: 92-2       Page: 2    Date Filed: 09/20/2024




                                       *
       Philadelphia Indemnity Insurance Company (“Philadelphia Indem-
nity”) brought this action against Megalomedia Inc., Megalomedia Studios,
LLC, Mansfield Films, LLC, and DBA Holdings, LLC (the “Megalomedia
entities”) in federal court. Philadelphia Indemnity sought a declaratory judg-
ment that it had no duty to defend or indemnify the Megalomedia entities.
The Megalomedia entities counterclaimed for breach of contract and various
torts. The contractual claims were resolved on summary judgment, and the
tort claims were resolved after a bench trial.
       The claimed basis of subject matter jurisdiction over the case was
diversity of citizenship under 

. Diversity jurisdiction is
proper only if there is complete diversity of citizenship among the parties. See
Strawbridge v. Curtiss, 

 (1806). This means “[e]ach
plaintiff must be diverse from each defendant.” In re Levy, 

(5th Cir. 2022) (per curiam).
       We have repeatedly held that the citizenship of an LLC is determined
by the citizenship of its members. See, e.g., Harvey v. Grey Wolf Drilling Co.,

, 1079–80 (5th Cir. 2008); Settlement Funding, LLC v. Rapid
Settlements, Ltd., 

 (5th Cir. 2017); MidCap Media Fin., LLC
v. Pathway Data, Inc., 

 (5th Cir. 2019); Acadian Diagnostic
Lab’ys, LLC v. Quality Toxicology, LLC, 

, 408 n.1 (5th Cir.
2020). At the pleading stage, the party invoking the federal court’s jurisdic-
tion must allege the citizenship of each LLC’s members. See Lujan v. Defs. of
Wildlife, 

 (1992) (explaining that standing “must be sup-
ported . . . with the manner and degree of evidence required at the successive
stages of the litigation”). At the summary judgment stage, that party must
provide evidence sufficient to support a jury finding of the citizenship of each
LLC’s members. See 

 And at trial, that party must prove the citizenship
 Case: 23-20570            Document: 92-2   Page: 3    Date Filed: 09/20/2024




of each LLC’s members. See 

 The parties cannot stipulate to diversity
jurisdiction, just as they cannot stipulate to any other form of subject matter
jurisdiction. E.g., J.A. Masters Invs. v. Beltramini, --- F.4th ---, No. 23-20292,

, at *1 (5th Cir. Sept. 9, 2024) (per curiam) (diversity stip-
ulations insufficient); see also Ins. Corp. of Ir. v. Compagnie des Bauxites de
Guinee, 

 (1982) (“[N]o action of the parties can confer sub-
ject-matter jurisdiction upon a federal court. Thus, the consent of the parties
is irrelevant . . . .”).
        Here, the complaints alleged only where the LLC parties were “doing
business” and had their “principal place of business.” The latter allegation
is relevant to the citizenship of a corporation, see 

(c)(1), but
neither allegation is relevant to an LLC’s citizenship. We can amend defec-
tive jurisdictional allegations on appeal under 

, but only if
there is record evidence establishing the necessary jurisdictional facts. See
MidCap, 

. This case had already proceeded to trial, so we re-
quested the parties to file a letter brief identifying record evidence proving
the citizenship of the LLCs’ members. The parties’ joint letter admitted
there is no such evidence. We thus cannot proceed to the merits. See Beltra-
mini, 

, at *1.
                                        *
        The case is REMANDED for jurisdictional discovery. This panel
will retain jurisdiction pending any further appeal.