When you think you might want to invoke federal diversity jurisdiction, you have to determine the citizenship of each party. And different entity types have different rules. For instance, a corporation’s citizenship is determined by its state of incorporation and its principal place of business. 28 U.S.C. § 1332(c)(1). This is usually not overly difficult to determine, although it can be.
But things get more complicated with other types of entities, like limited liability companies (LLCs). Within the Fifth Circuit, the citizenship of an LLC is determined by the citizenship of each of its members. See Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077, 1079-80 (5th Cir. 2008). Limited liabilities companies can have myriad members, and the identity of all of those members is not often publicly available. Those members themselves can also be LLCs, which then requires you to dig into the individual members’ citizenship to determine the citizenship of the primary entity. It can turn into a real rabbit hole quite quickly.
To avoid this, a lot of attorneys try to skirt the issue by treating LLCs as corporations and acting as though an LLC’s state of organization and principal place of business determines its citizenship. This is not only wrong, but something that courts are beginning to press on even in the absence of a party raising the issue.
In Storey Mountain, L.L.C. v. JPMorgan Chase Bank, N.A., No. 24-20535, 2025 U.S. App. LEXIS 29502 (5th Cir. Nov. 10, 2025), the Fifth Circuit remanded an appeal because the record did not adequately disclose the citizenship of an LLC. The parties did exactly what’s described above, incorrectly treating the LLC as a corporation. As the court explained, “[d]espite the long line of cases requiring parties to establish the citizenship of an LLC’s members, this remains an evergreen problem in our circuit.”
The Storey court made clear that a party invoking federal jurisdiction must allege the citizenship of each LLC’s members at the pleading stage. The parties cannot side-step this requirement, even if everyone stipulates that jurisdiction exists. The trial court and the appellate court will independently require evidence regarding the citizenship of LLCs and other parties. So if you are drafting a notice of removal or a complaint invoking federal jurisdiction, be mindful of this requirement, or risk a hasty and costly dismissal.
Of course, having to allege all information at the front end can create a real problem, as often times it is impossible for an opposing party to know all the members of an LLC, much less the citizenship of those members. In those circumstances, I’ve seen practitioners allege that “Upon information and belief, all members of [the LLC] are not citizens of [the same state as the opposing parties].” I’m not certain that is sufficient and I have yet to see a court address that head on. My two cents are that LLCs should be treated as corporations for citizenship purposes. While I understand the logic of relying on the members’ citizenship, I think the rule unintentionally places an unreasonable burden on parties seeking to invoke diversity jurisdiction and potentially limits access to federal courts beyond what was ever intended. But for now, the rule is the rule. Invoke diversity jurisdiction as clearly and completely as you can, or risk being kicked out of federal court.