United States District Court, D. Maryland
George W. Yu Found, for Nutrition and Health, Inc.
Twinlab Consolidation Corp., et al.
MEMORANDUM TO COUNSEL
LIPTON HOLLANDER UNITED STATES DISTRICT JUDGE
know, on August 30, 2018, plaintiff George W. Yu Foundation
for Nutrition and Health, Inc. ("Yu Foundation")
filed suit in the Circuit Court for Anne Arundel County
against a host of defendants: Twinlab Consolidation Corp.
("Twinlab"); Naomi Whittel; Jeff Hays Films, LLC
("Hays, LLC"); Jeff Hays; Brookwell McNamara
Entertainment, Inc. ("Brookwell McNamara");'
David Brookwell, c/o Brookwell McNamara Entertainment, Inc.;
W Products Limited ("W"); The Real Skinny on Fat,
LLC ("TRSOF"), c/o Delaware Corporations, LLC
("Delaware Corporations"); and Bodhi Williams. ECF
1-2 (the "Complaint").
Foundation alleges that defendants made "unauthorized
video and audio recordings" during a retreat it hosted
in Linthicum, Maryland. Id. ¶¶ 1 -2. The
Complaint asserts eight causes of action under Maryland law
against all defendants: "Civil Conspiracy" (Count
1); "Breach of Contract" (Count 2);
"Fraud" (Count 3); "Declaratory Judgment"
(Count 4); "Unjust Enrichrnent" (Count 5);
"Invasion of Privacy - Appropriation of Name or
Likeness" (Count 6); "Violation of Maryland
Wiretapping Electronic Surveillance Act," Md. Code (2013
Repl. Vol., 2017 Supp.), § 10-401 et seq. of
the Courts and Judicial Proceedings Article (Count 7); and
"Unfair Competition" (Count 8). Id.
¶¶ 99-185. Plaintiff seeks damages in excess of
$75, 000, as well as attorneys' fees and costs.
Id. at 55.
November 27, 2018, with the consent of all defendants,
Whittel; Hays, LLC; Hays; Brookwell Namara; Brookwell; W; and
TRSOF removed the case to federal court, pursuant to 28
U.S.C. § 1441. ECF 1 ("Notice of Removal").
They asserted that this "Court has diversity
jurisdiction over this action pursuant to 28 U.S.C. §
1332, because the amount in controversy exceeds $75, 000,
exclusive of interest and costs, and the appropriately named
parties are diverse." Id. at 3.
28 U.S.C. § 1332(a)(1), federal district courts have
subject matter jurisdiction over "civil actions where
the matter in controversy exceeds the sum or value of $75,
000, exclusive of interest and costs, and is between .. .
citizens of a State and citizens or subjects of a foreign
state, except that the district courts shall not have
original jurisdiction under this subsection of an action
between citizens of a State and citizens or subjects of a
foreign state who are lawfully admitted for permanent
residence in the United States and are domiciled in the same
State." With exceptions not applicable here, diversity
jurisdiction under § 1332 "requires complete
diversity among parties, meaning that the citizenship of
every plaintiff must be different from the citizenship of
every defendant." Cent. W.Va. Energy Co. v. Mountain
State Carbon, LLC, 636 F.3d 101, 103 (4th Cir. 2011).
"burden of establishing subject matter jurisdiction is
on ... the party asserting jurisdiction." Robb Evans
& Assocs., LLC v. Holibaugh, 609 F.3d 359, 362 (4th
Cir. 2010); accord Hertz Corp. v. Friend, 559 U.S.
77, 96 (2010). However, it is not apparent from the
submissions that the requirements of diversity jurisdiction
are satisfied. Indeed, on the face of the Complaint, it does
not appear that complete diversity exists, because both Yu
Foundation and defendant Williams appear to be domiciled in
Maryland. See ECF 1-2, ¶¶ 4, 13.
Complaint alleges, in relevant part, that Yu Foundation
"is a non-profit entity incorporated in the State of
Maryland. Its current principal office address is c/o Hyatt
& Weber, PA, 200 Westgate Circle, Ste. 500, Annapolis,
Maryland, 21401." Id. ¶ 4. It further
asserts that Twinlab "is an entity incorporated in the
State of Florida" with its "principal office"
located in Boca Raton, Florida. Id. ¶ 5.
Whittel, who was Chief Executive Officer of Twinlab and a
member of Twinlab's Board, is "a resident of the
state of Florida." Id. ¶ 6. And, Brookwell
McNamara "is an entity incorporated under the laws of
the State of California" with "[i]ts principal
office" located in Manhattan Beach, California.
Id. ¶ 8. In addition, the Complaint states that
Brookwell is a principal in Brookwell McNamara, and his
"last known address" was in Manhattan Beach,
California. Id. ¶ 9. Hays, LLC "is an
entity organized under the laws of the State of Utah"
with "[i]ts principal office address" located in
Draper, Utah. Id. ¶ 10. The Complaint further
provides that Hays, who is a principal in Hays, LLC,
"appears" to be "a resident of Utah."
Id.¶ 11. And, TRSOF "is an entity
organized and appearing to have its principal office in the
State of Delaware." Id. ¶ 12. In addition,
the Complaint alleges that W "appears to be a fictitious
name for one or more individuals and/or companies, who . ..
appear to include but not be limited to" Whittel,
Twinlab, Brookwell McNamara, Hays, LLC, and others.
Id. ¶ 7. According to the Complaint, Williams
is an "individual who resides in the State of
Maryland." Id. ¶ 13.
28 U.S.C. § 1332(c)(1), a corporation is "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." A
corporation's "principal place of business" is
"the place where [its] officers direct, control, and
coordinate the corporation's activities."
Hertz, 559 U.S. at 92-93. And, since 1844, a
"state of incorporation" has been the state by
whose laws the corporation was created. Id. at 85
(citation omitted). Thus, Yu Foundation is a citizen of
regard to natural persons, a party's citizenship for
diversity purposes depends not on residence but rather on
domicile. See Axel Johnson, Inc. v. Carroll Carolina Oil
Co., 145 F.3d 660, 663 (4th Cir. 1998). Assuming that
the domicile of Williams is the same as his residence, he is
domiciled in Maryland.
noted, diversity jurisdiction under 28 U.S.C. § 1332
"requires complete diversity among parties, meaning that
the citizenship of every plaintiff must be different
from the citizenship of every defendant."
Cent. W.Va. Energy Co., 636 F.3d at 103 (emphasis
added). Thus, the Complaint plainly does not allege
complete diversity of citizenship, because both Yu
Foundation and Williams are citizens of Maryland.
defendants-Hays, LLC and TRSOF-are limited liability
companies ("LLC"). "For purposes of diversity
jurisdiction, the citizenship of a limited liability company
... is determined by the citizenship of all of its
members." Mountain State, 636 F.3d at 103. With
respect to an LLC, citizenship "must be traced through
however many layers of partners or members there may
be." Hart v. Terminex Int'l, 336 F.3d 541,
543 (7th Cir. 2003). In other words, the citizenship of each
member must be considered. The Notice of Removal does not
reflect any consideration of the place of domicile for
members of the LLCs.
Court, like all federal courts, has "an independent
obligation to determine whether subject-matter jurisdiction
exists, even when no party challenges it."
Hertz, 559 U.S. at 94. Because I cannot determine
whether diversity jurisdiction has been established, I ask
defense counsel to clarify the basis for jurisdiction on this
ground, due by December 11, 2018.
the informal nature of this Memorandum, it is an Order of the
Court, and the ...