United States District Court, D. New Mexico
CHRIS LUCERO, as Personal Representative Of the Estate of Marco Antonio Sanchez, Plaintiff,
CARLSBAD MEDICAL CENTER, LLC, COMMUNITY HEALTH SYSTEMS, INC., and JOHN DOES 1-10, Defendants.
MEMORANDUM OPINION AND ORDER DENYING PLAINTIFF'S
MOTION TO REMAND
MATTER comes before the Court upon Plaintiff's Motion to
Remand to the Second Judicial District Court of New Mexico,
filed April 16, 2018 (Doc. 19). Having
reviewed the parties' pleadings and the applicable law,
the Court finds that Plaintiff's motion is not well-taken
and, therefore, is DENIED.
a Complaint for Wrongful Death based on medical negligence,
initially filed in the Second Judicial District, County of
Bernalillo on December 28, 2017, and removed to federal court
on February 14, 2018 on the basis of diversity jurisdiction.
The Notice of Removal states that Defendant Carlsbad Medical
Center, LLC (“CMC”) is a Delaware limited
liability company, and that the sole member of CLC is Triad
Holdings V, LLC, a Delaware limited liability company. The
sole member of Triad Holdings V, LLC is Tennyson Holdings,
I-LC, a Delaware limited liability company. The sole member
of Tennyson Holdings, LLC is Triad Healthcare, LLC, a
Delaware limited liability company. The sole member of Triad
Healthcare, LLC is HMA-TRI Holdings, LLC, a Delaware limited
liability company. The sole member of HMA-TRI Holdings, LLC
is CHS/Community Health Systems, Inc.
(“CHS/CHSI”), a Delaware corporation with its
principal place of business in Tennessee. The Notice also
states that Defendant Community Health Systems, Inc.
("CHSI") is a Delaware corporation with its
principal place of business in Tennessee.
contends that this Court lacks subject matter jurisdiction
over the case because there is no diversity of citizenship as
required under 28 U.S.C. §1332(c)(1)(C).
courts are courts of limited jurisdiction; thus, there is a
presumption against removal jurisdiction, which the defendant
seeking removal must overcome. See Fajen v. Found.
Reserve Ins. Co., 683 F.2d 331, 333 (10th Cir.1982);
Martin v. Franklin Capital Corp., 251 F.3d 1283,
1290 (10th Cir. 2001). Removal statutes are strictly
construed, and ambiguities should be resolved in favor of
remand. Removal is proper where there is complete diversity
of citizenship between the parties and the amount in
controversy exceeds the jurisdictional amount of $75, 000. 28
U.S.C. §1332. In seeking removal the removing party has
the burden of proving both of these elements. Huffman v.
Saul Holdings, Ltd. P'ship, 194 F.3d 1072 (10th Cir.
1999). Under 28 U.S.C. § 1332(a), the citizenship of all
defendants must be different from the citizenship of all
plaintiffs. See McPhail v. Deere & Co., 529 F.3d
947, 951 (10th Cir. 2008). A motion for remand based on the
lack of subject matter jurisdiction arguing lack of diversity
jurisdiction is timely made at any time prior to judgment. 28
U.S.C. § 1447(c).
contends that the case should be remanded because Defendant
CMC is a citizen of New Mexico, not Tennessee, because the
physical location of the hospital is Carlsbad, New Mexico is
where CMC's principal place of business is located. It is
true that for purposes of § 1332, a corporation is
deemed to be a citizen of every State by which it has been
incorporated and the State where it has its principal place
of business. See 28 U.S.C. § 1332(c)(1); Tinner v.
Farmers Ins. Co. Inc., 504 Fed. App'x. 710, 713
(10th Cir. 2012). Here, however, CMC is a limited liability
company (“LLC”), which requires a different
analysis, at least initially in this case.
the citizenship of a limited liability company is different
than determining the citizenship of a corporation under
§ 1332, based on a clear distinction between
corporations and other artificial entities that are not
corporations. A limited partnership is not in its own right a
“citizen” of the State that created it within the
meaning of the federal diversity statute. See Carden v.
Arkoma Assocs., 494 U.S. 185, 185 (1990) (noting that
the Supreme Court has “firmly resisted extending the
well-established rule treating corporations as
‘citizens' to other artificial entities”);
Mgmt. Nominees, Inc. v. Alderney Investments, LLC,
813 F.3d 1321, 1324 (10th Cir. 2016) (only those entities
that are corporations, in the traditional understanding of
that word, will be treated as a person for purposes of
diversity jurisdiction); Conagra Foods, Inc. v. Americold
Logistics, LLC, 776 F.3d 1175, 1179 (10th Cir. 2015),
as amended (Jan. 27, 2015), aff'd sub nom.
Americold Realty Tr. v. Conagra Foods, Inc., 136 S.Ct.
1012 (2016) (citing Carden v. Arkoma Assocs., 494
Tenth Circuit precedent, the citizenship of limited liability
companies is determined by the citizenship of their members
and not their principal place of business. Siloam Springs
Hotel, LLC v. Century Sur. Co., 781 F.3d 1233, 1237-38
(10th Cir. 2015) (rejecting defendant's request to
determine citizenship of Oklahoma limited liability company
“by reference to its state of organization and the
state of its primary business operations” and
“join[ing] all other circuits that have considered the
matter in concluding Siloam Springs takes the citizenship of
all its members”). Limited liability companies are
treated as partnerships for citizenship purposes and are
therefore citizens of every state in which any of its members
are citizens. Carden v. Arkoma Assocs., 494 U.S.
185, 195-96, (1990) (the citizenship of business entities is
determined by the citizenship of its members). Further, in
determining the citizenship of a limited liability company,
any and all of its members must be considered. See Mgmt.
Nominees, Inc., 813 F.3d at 1237-38 (for purposes of
diversity, federal courts must include all the entities'
members) (citing Carden v. Arkoma Assocs., 494 U.S.
at 195-96 (holding that the citizenship of a limited
partnership is determined by the citizenship of each of its
partners, both general and limited); Siloam Springs
Hotel, 781 F.3d at 1238 (“in determining the
citizenship of an unincorporated association for purposes of
diversity, federal courts must include all the entities'
members”) (citing Carden v. Arkoma Assocs.,
494 U.S. 185, 195-96) (holding that the citizenship of a
limited partnership is determined by the citizenship of each
of its partners, both general and limited).
does not contest the law on this issue but instead argues
that it does not apply here because the end of the
citizenship chain for CMC leads to a corporation, and not
individual members. This situation does indeed make the
analysis a bit trickier, but it is resolvable nonetheless.
partnerships, where an LLC has as one of its members another
LLC, “the citizenship of unincorporated associations
must be traced through however many layers of partners or
members there may be” to determine the citizenship of
the LLC. Hart v. Terminex Int'l, 336 F.3d 541,
543 (7th Cir.2003) (quotation omitted). For example, in
Zambelli Fireworks Mfg. Co. v. Wood, Plaintiff
brought suit seeking to enforce a restrictive covenant
against Defendants Pyrotecnico, a competitor, and Matthew
Wood who worked in the fireworks industry as a pyrotechnician
and choreographer. 592 F.3d 412, 420 (3d Cir. 2010). The
court in that case found that complete diversity did not
exist because of Pyrotecnico's presence. Plaintiff
Zambelli was a citizen of Pennsylvania, being incorporated
under Pennsylvania laws and having its principal place of
business in New Castle, Pennsylvania. Defendant Wood was
domiciled in, and therefore was a citizen of, Florida. The
citizenship of Pyrotecnico was not as straightforward: it was
a Nevada limited liability company with a single member,
Pyrotecnico of Louisiana, LLC, which was a Louisiana limited
liability company. Tracing the company's citizenship,
Pyrotecnico took on the citizenship of the members of
Pyrotecnico of Louisiana, including managing member Stephen
Vitale who was a resident of New Castle, Pennsylvania and
therefore a citizen of Pennsylvania for diversity purposes.
Because both Plaintiff and a Pyrotecnico were citizens of
Pennsylvania, diversity jurisdiction was destroyed.
Zambelli Fireworks, 592 F.3d at 420.
case, determining the citizenship of CMC requires
consideration of four sublayers. The first four entities
(Triad Holdings V, LLC, Tennyson Holdings, I-LC, Triad
Healthcare, LLC and HMA-TRI Holdings, LLC) are all Delaware
limited liability companies. The last company is the sole
member of HMA-TRI Holdings, LLC, which is CHS/CHSI-a
corporation, not a limited liability company. If CHS/CHSI
were an LLC, the final step would be to look to the
citizenship of all the members in the entity. However, that
information is not only lacking here but also unnecessary
because CHS/CHSI is a corporation. Doc. 1 at 2; Doc. 20 at 3.
purposes of § 1332, a corporation is deemed to be a
citizen of every State by which it has been incorporated and
the state where it has its principal place of business. See
28 U.S.C. § 1332(c)(1). According to the affidavit of
Beth McCormick, the Chief Quality Officer and Risk Manager at
CMC, CMC is a Delaware corporation with its principal place
of business in Tennessee, making CMC a citizen of Delaware
and Tennessee. Doc. 20-1. Plaintiff agrees (correctly) that
CHS/CHSI is a corporation and thus Defendant CMC must
ultimately be considered a corporation. However, Plaintiff
insists that CMC's principal place of business, as well
as its business operations, are located in Carlsbad, New
Mexico and that CMC is therefore a non-diverse defendant.
This contention is simply not supported by the pleadings, and
Plaintiff offers no evidence to counter Ms. McCormick's
affidavit statements. Plaintiff presents exhibits showing
that CMC's CEO's and administrators reside in New
Mexico, but the residence of a corporation's
administrators is not the standard used to determine the
citizenship of corporations, and so Plaintiff's arguments
the Court finds that the Defendant CMS is a diverse
defendant. The last layer of partners or members in the CMC
chain is CHS/CHSI, which is a Delaware corporation with its
principal place of business in Tennessee. Plaintiff does not
dispute the citizenship of the other Defendant in this case,
Defendant CHSI, which is also represented to be a Delaware
corporation with its principal place of business in