WRJ Holdings, LLC v. Mercedes-Benz USA, LLC

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
WRJ HOLDINGS, LLC, 	)
Plaintiff, 	)
)
v. 	) 	CIVIL ACTION NO. 1:24-00332-KD-N
)
MERCEDES-BENZ USA, LLC, 	)
Defendant. 	)
REPORT AND RECOMMENDATION
This civil action is before the Court on the “Motion to Remand” filed October
25, 2024, by the Plaintiff, WRJ Holdings LLC (“WRJ”). (Doc# 7). The assigned
District Judge has referred that motion to the undersigned Magistrate Judge for
appropriate action under 28 U.S.C. § 636(a)-(b), Federal Rule of Civil Procedure 72,
and S.D. Ala. GenLR 72(a). See S.D. Ala. GenLR 72(b); (10/25/2024 electronic
reference notation). Upon due consideration, the undersigned finds that the motion
to remand is due to be DENIED.
I. 	Procedural Background
WRJ commenced this case on September 1, 2024, by filing a civil complaint
with the Circuit Court of Mobile County, Alabama. (See Doc# 1-1, PageID.16-24).
The Defendant, Mercedes-Benz USA, LLC (“Mercedes”), removed the case to this
Court 	under 	28 	U.S.C. 	§ 	1441(a) 	on 	September 	13, 	2024, 	alleging 	original
subject-matter jurisdiction based on diversity of citizenship under 28 U.S.C. §
1332(a), and also on the grant of jurisdiction in the Magnuson-Moss Warranty Act
(“MMWA”), 15 U.S.C. § 2310(d). (Doc# 1).1 On October 3, 2024, the undersigned
1 See 28 U.S.C. § 1446(a) (“A defendant or defendants desiring to remove any civil
action from a State court shall file in the district court of the United States for the
district 	and 	division 	within 	which 	such 	action 	is 	pending 	a 	notice 	of
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ordered Mercedes to amend its notice of removal by October 17, 2024, to address
noted deficiencies in its allegations supporting subject-matter jurisdiction under
both asserted bases, warning that “[t]he failure to comply with this order may result
in remand of this action sua sponte for lack of subject matter jurisdiction under 28
U.S.C. § 1447(c)…” (Doc# 6).
That deadline passed without any response from Mercedes. On October 25,
2024, WRJ filed the present motion to remand noting that failure to respond and
requesting that the Court “remand this matter back to the Circuit Court of Mobile
County, Alabama, in accordance with its October 3, 2024, order.” (Doc# 7). Two days
later, Mercedes filed an “Initial Response to Order on Subject Matter Jurisdiction
and Plaintiff’s Motion to Remand,” claiming that counsel, through “mistake and
inadvertence[,] became aware of the Order only after the filing of the Plaintiff’s
Motion To Remand (Doc. 7) on October 25, 2024, which references the Order.”2
(Doc# 8, PageID.59). Mercedes’s “Initial Response” also “request[ed] any additional
time that the Court may be inclined to grant for further response to the Court’s
Order and the Plaintiff’s Motion To Remand…” (Id.).
On October 28, 2024, the Court granted Mercedes’s request for additional time
by extending the deadline to file an amended notice of removal to November 1,
2024. (Doc# 9). The Court also stayed briefing on the motion to remand until
removal…containing a short and plain statement of the grounds for removal…”);
Baltin v. Alaron Trading Corp., 128 F.3d 1466, 1469 (11th Cir. 1997) (generally, “[i]n
a given case, a federal district court must have at least one of three types of subject
matter jurisdiction: (1) jurisdiction under a specific statutory grant; (2) federal
question jurisdiction pursuant to 28 U.S.C. § 1331; or (3) diversity jurisdiction
pursuant to 28 U.S.C. § 1332(a).”).
2 The Court’s electronic filing system reflects that a “Notice of Electronic Filing” for
the order was sent to the emails of both counsel of record the same day it was filed.
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otherwise 	ordered. 	(Id.). 	On 	October 	30, 	2024, 	Mercedes 	filed 	an 	additional
“Supplemental Evidentiary Submission in Support of Notice of Removal.” (Doc #
10).
II. 	Analysis
Where, 	as 	here, 	a 	case 	is 	removed 	from 	state 	court, 	“[t]he 	burden 	of
establishing subject matter jurisdiction falls on the party invoking removal.” Univ. of
S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 411–12 (11th Cir. 1999). Accord, e.g., City
of Vestavia Hills v. Gen. Fid. Ins. Co., 676 F.3d 1310, 1313 (11th Cir. 2012) (“The
removing party bears the burden of proof regarding the existence of federal subject
matter jurisdiction.”). “Because removal jurisdiction raises significant federalism
concerns, federal courts are directed to construe removal statutes strictly. Indeed, all
doubts about jurisdiction should be resolved in favor of remand to state court.” Univ.
of S. Ala., 168 F.3d at 411 (citation omitted). Accord, e.g., Scimone v. Carnival Corp.,
720 F.3d 876, 882 (11th Cir. 2013) (“[W]hen we evaluate whether the particular
factual circumstances of a case give rise to removal jurisdiction, we strictly construe
the right to remove and apply a general presumption against the exercise of federal
jurisdiction, such that all uncertainties as to removal jurisdiction are to be resolved
in favor of remand.” (quotations omitted)).
“A defendant may remove an action to a district court that would have
original jurisdiction if complete diversity between the parties exists and the amount
in controversy exceeds $75,000.” City of Vestavia Hills, 676 F.3d at 1313 (citing 28
U.S.C. § 1332). “Diversity jurisdiction requires complete diversity; every plaintiff
must be diverse from every defendant.” Triggs v. John Crump Toyota, Inc., 154 F.3d
1284, 1287 (11th Cir. 1998). “A party removing a case to federal court based on
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diversity of citizenship bears the burden of establishing the citizenship of the
parties.” Rolling Greens MHP, L.P. v. Comcast SCH Holdings L.L.C., 374 F.3d 1020,
1022 (11th Cir. 2004) (per curiam). Accord Hertz Corp. v. Friend, 559 U.S. 77, 96, 130
S. Ct. 1181, 175 L. Ed. 2d 1029 (2010) (“The burden of persuasion for establishing
diversity jurisdiction, of course, remains on the party asserting it.”). Additionally,
“[d]efective allegations of jurisdiction may be amended, upon terms, in the trial or
appellate courts.” 28 U.S.C. § 1653. “[T]he failure to establish a party’s citizenship at
the time of filing the removal notice is a procedural, rather than jurisdictional,
defect.” Corporate Mgmt. Advisors, Inc. v. Artjen Complexus, Inc., 561 F.3d 1294,
1296 (11th Cir. 2009) (quotation omitted). “If a party fails to specifically allege
citizenship in their notice of removal, the district court should allow that party ‘to
cure the omission,’ as authorized by § 1653.” Id. at 1297.
For 	purposes 	of 	diversity 	jurisdiction, 	it 	is 	well 	established 	that 	an
unincorporated artificial entity such as limited liability company (LLC) “possesses
the citizenship of all its members.” Americold Realty Trust v. Conagra Foods, Inc.,
577 U.S. 378, 383, 136 S. Ct. 1012, 194 L. Ed. 2d 71 (2016); see also Rolling Greens
MHP, 374 F.3d at 1022 (“like a limited partnership, a limited liability company is a
citizen of any state of which a member of the company is a citizen”). Therefore, to
properly allege an LLC’s citizenship, the party invoking jurisdiction must “list the
citizenships of all the members of the limited liability company…” Rolling Greens,
374 F.3d at 1022. Accord Mallory & Evans Contractors & Engineers, LLC v.
Tuskegee Univ., 663 F.3d 1304, 1305 (11th Cir. 2011) (per curiam). See also S.D. Ala.
CivLR 8 (“A pleading or notice of removal asserting jurisdiction based on diversity of
citizenship must identify the citizenship of each party to the litigation…If any party
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is an unincorporated association, limited liability company, or partnership, the
pleading or notice must identify the citizenship of all members.”).3 Both parties to
this action are LLCs, but, as the Court’s October 3 order noted, Mercedes had failed
in its initial notice of removal to allege the identity, much less the citizenship, of any
member of WRJ. That order also noted that Mercedes had failed to sufficiently allege
part of the citizenship of its sole member, Mercedes-Benz North America, Inc., by
failing to clearly allege its sole principal place of business. See 28 U.S.C. § 1332(c)(1)
(subject 	to 	inapplicable 	exceptions, 	for 	purposes 	of 	diversity 	jurisdiction 	“a
corporation shall be deemed to be a citizen of every State and foreign state by which
it has been incorporated and of the State or foreign state where it has its principal
place of business…”); Hertz Corp. v. Friend, 559 U.S. 77, 130 S. Ct. 1181, 175 L. Ed.
2d 1029 (2010) (holding that for purposes of diversity jurisdiction, a corporation can
only have one principal place of business, which is its “nerve center”).
In its second responsive filing, Mercedes now clearly alleges, with supporting
evidence, that its sole member is “a corporation organized and existing under
Delaware law,” and that its principal place of business (i.e., where its “high-level
3 This “can require tracing through several layers.” BouMatic, LLC v. Idento
Operations, BV, 759 F.3d 790, 791 (7th Cir. 2014) (citing Cosgrove v. Bartolotta, 150
F.3d 729 (7th Cir. 1998) (citizenship of an LLC depends on citizenship of its
members, traced through as many levels as necessary to reach corporations or
natural persons)). See also Purchasing Power, LLC v. Bluestem Brands, Inc., 851
F.3d 1218, 1220 (11th Cir. 2017) (“When determining citizenship of the parties for
diversity jurisdiction purposes, a limited liability company (LLC) is a citizen of every
state that any member is a citizen of. And it is common for an LLC to be a member of
another LLC. Consequently, citizenship of LLCs often ends up looking like a factor
tree that exponentially expands every time a member turns out to be another LLC,
thereby restarting the process of identifying the members of that LLC.”); Azzo v.
Jetro Rest. Depot, LLC, No. 3:11-CV-324-J-34JRK, 2011 WL 1357557, at *2 n.2 (M.D.
Fla. Apr. 11, 2011) (in pleading the citizenships of the members, “each member's
citizenship must [also ]be properly alleged, be it an individual, corporation, LLC, or
other entity”).
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officers direct, control, and coordinate the corporation’s activities”) is “in Michigan.”
(Doc# 10-1, PageID.75). Thus, Mercedes has now sufficiently alleged that it is a
citizen of both Delaware and Michigan. In its first responsive filing, Mercedes
alleges, with supporting evidence, that the sole member of WRJ is William Jewett,
and that he is not a citizen of either Delaware or Michigan.4 Thus, Mercedes has
now sufficiently alleged that the parties are of diverse citizenship.5
4 Mercedes alleges that Jewett, and therefore WRJ, “is a citizen of the states of
Alabama and Montana[,]” based on two different addresses provided by Jewett on
the purchase documents for the vehicle at issue. (See Doc# 8, PageID.60). However, a
natural person cannot be a citizen of two states for purposes of diversity jurisdiction.
Rather, for natural persons, “[c]itizenship is equivalent to ‘domicile’ for purposes of
diversity 	jurisdiction. 	A 	person’s 	domicile 	is 	the 	place 	of 	his 	true, 	fixed, 	and
permanent home and principal establishment, and to which he has the intention of
returning whenever he is absent therefrom.” McCormick v. Aderholt, 293 F.3d 1254,
1257-58 (11th Cir. 2002) (citations, quotations, and footnote omitted)). Nevertheless,
while “[r]esidence alone is not the equivalent of citizenship, … the place of residence
is prima facie the domicile[,]” Stine v. Moore, 213 F.2d 446, 448 (5th Cir. 1954);
accord Slate v. Shell Oil Co., 444 F. Supp. 2d 1210, 1215 n.9 (S.D. Ala. 2006) (Steele,
J.) (“[W]hile the two concepts are analytically distinct, a party's place of residence is
prima 	facie 	evidence 	of 	his 	domicile.”), 	and 	Mercedes 	has 	presented 	evidence
indicating that Jewett resides in either Alabama or Montana, neither of which
Mercedes is a citizen.
5 	As 	was 	already 	explained 	in 	the 	October 	3 	order, 	§ 	1332(a)’s 	requisite
minimum amount in controversy appears satisfied on the face of the complaint, since
it demands, as one form of relief, “return of the [subject automobile]’s purchase
price” 	of 	$198, 	400, 	“or 	a 	replacement 	[automobile] 	and 	all 	incidental 	and
consequential damages incurred by Plaintiff.” (Doc# 1-1, PageID.22).
Because Mercedes has now sufficiently alleged that this Court has diversity
jurisdiction over this case, the Court need not currently decide whether there is also
jurisdiction under MMWA. See Allen v. Toyota Motor Sales, U.S.A., Inc., 155 F.
App'x 480, 482 n.2 (11th Cir. 2005) (per curiam) (unpublished) (“Although not cited
in the district court, the parties’s [sic] briefs address an alternative basis for federal
jurisdiction: the Magnuson–Moss Warranty Act, 15 U.S.C. § 2301 et seq….Because
we conclude that the district court had diversity jurisdiction, we do not consider
whether this alternative source of federal jurisdiction was available.”).
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In light of this, the undersigned finds that the present motion to remand is
due to be denied. The only ground for remand raised in that motion is Mercedes’s
failure to comply with the Court’s initial deadline to amend its notice of removal.
However, 	as 	noted 	above, 	failure 	to 	properly 	allege 	parties’ 	citizenships 	is 	a
procedural defect that the Court may allow to be cured, and Mercedes has done so.6
While Mercedes did not do so by the undersigned’s initial deadline, the undersigned
was permitted to, and did, extend that deadline under Federal Rule of Civil
Procedure 6(b) on Mercedes’s motion, and WRJ did not move to reconsider that order
or object to it with the assigned District Judge. See 28 U.S.C. § 636(b)(1)(A); Fed. R.
Civ. P. 72(a).7
III. 	Conclusion
In accordance with the foregoing analysis, the undersigned RECOMMENDS
that WRJ’s “Motion to Remand” filed October 25, 2024 (Doc# 7), be DENIED.
6 The undersigned notes that WRJ’s motion to remand was filed beyond the 30-day
deadline to move to remand based on a procedural defect. See 28 U.S.C. § 1447(c) (“A
motion to remand the case on the basis of any defect other than lack of subject
matter jurisdiction must be made within 30 days after the filing of the notice of
removal under section 1446(a).”); Shipley v. Helping Hands Therapy, 996 F.3d 1157,
1160-61 	(11th 	Cir. 	2021) 	(holding 	that 	the 	plaintiff 	“forfeited 	any 	procedural
objection to removal” by not filing “a motion to remand based on a procedural defect
within the 30-day time limit required by the statute[,]” and that the district court
“exceeded its authority under § 1447(c)” when it remanded based on a procedural
defect not so raised).
7 The Court’s October 3 order only directed Mercedes to amend its allegations
supporting subject-matter jurisdiction, and did not require it to present evidence
supporting those allegations. Nothing in this recommendation should be construed
as foreclosing an appropriate evidentiary challenge by WRJ to those allegations or
otherwise challenging the existence of subject-matter jurisdiction. See 28 U.S.C. §
1447(c); Kontrick v. Ryan, 540 U.S. 443, 455, 124 S. Ct. 906, 157 L. Ed. 2d 867 (2004)
(“A litigant generally may raise a court’s lack of subject-matter jurisdiction at any
time in the same civil action, even initially at the highest appellate instance.”).
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NOTICE OF RIGHT TO FILE OBJECTIONS
A copy of this report and recommendation shall be served on all parties in the
manner provided by law. Any party who objects to this recommendation or anything
in it must, within 14 days of the date of service of this document, file specific written
objections with the Clerk of this Court. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P.
72(b); S.D. Ala. GenLR 72(c). The parties should note that under Eleventh Circuit
Rule 	3-1, 	“[a] 	party 	failing 	to 	object 	to 	a 	magistrate 	judge's 	findings 	or
recommendations contained in a report and recommendation in accordance with the
provisions of 28 U.S.C. § 636(b)(1) waives the right to challenge on appeal the district
court's order based on unobjected-to factual and legal conclusions if the party was
informed of the time period for objecting and the consequences on appeal for failing to
object. In the absence of a proper objection, however, the court may review on appeal
for plain error if necessary in the interests of justice.” 11th Cir. R. 3-1. In order to be
specific, an objection must identify the specific finding or recommendation to which
objection is made, state the basis for the objection, and specify the place in the
Magistrate Judge’s report and recommendation where the disputed determination is
found. An objection that merely incorporates by reference or refers to the briefing
before the Magistrate Judge is not specific.
DONE this the 17th day of January 2025.
/s/ Katherine P. Nelson
KATHERINE P. NELSON
UNITED STATES MAGISTRATE JUDGE
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