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Signicast, LLC v. Fireman's Fund Insurance
Citations: 920 F. Supp. 2d 967; 2013 U.S. Dist. LEXIS 13907; 2013 WL 388431Docket: No. 12-C-1029
Court: District Court, E.D. Wisconsin; January 31, 2013; Federal District Court
Signicast, LLC initiated a lawsuit against Fireman’s Fund Insurance Company in Wisconsin state court without a federal claim. Fireman’s removed the case to federal court, claiming diversity of citizenship and an amount in controversy exceeding $75,000. However, the notice of removal mischaracterized Signicast’s citizenship by stating it is a Delaware LLC with its principal place of business in Wisconsin, neglecting that the citizenship of an LLC is determined by the citizenship of its members. The court ordered Fireman’s to clarify the citizenship of Signicast’s members. Signicast then moved to remand the case, asserting that one of its members is a California citizen, thus establishing that both Signicast and Fireman’s are citizens of California. The declaration accompanying Signicast's motion revealed that Signicast Holdings LLC, its sole member, is also a limited liability company, necessitating an examination of its members’ citizenship. One member, T.P. Group 2007-B, L.P., is a limited partnership, which is a citizen of every state where any partner is a citizen. One general partner of T.P. Group is The Pritzker Group-LA, LLC, whose sole member is an individual allegedly residing in California. However, referring to this individual as a "resident" instead of a "citizen" indicates a misunderstanding of jurisdictional principles, as citizenship is determined by domicile, not residence. The burden of proving the facts for federal jurisdiction lies with Fireman’s, which has not provided evidence to counter the claim of California citizenship for the individual member of The Pritzker Group. Fireman’s argued that the citizenship of a non-equity partner is irrelevant to the limited partnership's citizenship, but the court reiterated that a limited partnership is a citizen of every state where any partner, general or limited, is a citizen. No exceptions exist regarding the citizenship of a limited partnership; it is determined by the citizenship of its partners. Although some partnerships may misidentify individuals as partners who are actually employees under state law (as illustrated in Morson v. Kreindler), this does not apply in the current case, as Fireman’s does not contest The Pritzker Group's status as a partner according to Delaware law. Thus, The Pritzker Group's citizenship, linked to a California resident, is pertinent to the limited partnership's citizenship and that of Signicast. Fireman’s is currently conducting discovery to ascertain whether the California resident is a California citizen, and has until March 15, 2013, to submit evidence to support its claims. If Fireman’s fails to provide sufficient proof that the California resident is not a California citizen, the case will be remanded to state court. Additionally, Signicast’s motion to seal documents related to its ownership structure is denied, as the desire for privacy does not justify withholding information critical to judicial processes in civil litigation. All case documents will remain publicly accessible.