Question

38-7. Jurisdictional Requirements. Fadal Machining r Centers, LLC, and MAG Industrial Automation Centers, ir LLC, sued a New Jersey-based corporation, Mid-Atlantic CNC, Inc., in federal district court. Ten percent of MAG was owned by SP MAG Holdings, a Delaware LLC. SP MAG had n six members, including a Delaware limited partnership called ir Silver Point Capital Fund and a Delaware LLC called SPCP Group III. In turn, Silver Point and SPCP Group had a com- mon member, Robert O'Shea, who was a New Jersey citizen. P Assuming that the amount in controversy exceeds $75,000, does the district court have diversity jurisdiction? Why not? [Fadal Machining Centers, LLC v. Mid-Atlantic CNC Inc., 2012 WL 8669 (9th Cir. 2012)] (See The Limited Liabil- ity Company.) why or S, 1

Answer 1

Answer: 38-7: jurisdictional Requirements. Requirements of federal jurisdiction is one of the major differences between the corporations and LLC (limited Liability company) • Any corporate is deemed to be citizen of the state where it is in cor po rated but federal taw does not bound the citizenship of Llc. · It means that Llc have the citizenships of all the states of which members are citizens. when any party sues an LLC on the ground of diversified then the issue of citizenship of the may come citizenship into play. It is to be noted that if the amount of controversy is more than 875,000 then federal court has right to I Exercise diversify Jurisdiction.

In present case LLe F.M centers and Llc M.A.G centers jointly sued company m. cnc, a Nij bosed corporation : ...p who hold lof. of Lle miAG had six members including a limited partnership called spef and LLC Spep. and lle spep have one member • Both the members sper in common R have a citizenship of N. J. It has been assumed the amount in controversy is in excers of $75,000 it is required to state whether district court have diversify jurisdictim. • As per law, when any party sues an Llc on the ground of diversified citizenship then the issue of citizenship of LLC may come into play. 1. It is to be noted that if the amount of controversy is more than 875,000 then federal court has right to

Excercise diversify Jurisdiction • Hence in this case in nature. parties are diverse Hence, state citizenship comes into play and so when LLC F.M and LLC M.AG sue company M.CNC, jurisdiction ofor the federal court can Exercise assumed to be extending beyond amount on Controversy $75,000 count! that federal district Thus, it can be concluded can exercise diversified jurisdictims.