United States District Court, D. New Mexico
INFORMATION DOCK ANALYTICS LLC, a Delaware Series Limited Liability Company; INFORMATION DOCK ANALYTICS LLC PROTECTED SERIES SHORT; INFORMATION DOCK ANALYTICS LLC PROTECTED SERIES MID; INFORMATION DOCK ANALYTICS LLC PROTECTED SERIES LONG; INFORMATION DOCK ANALYTICS LLC PROTECTED SERIES ISLAND; and INFORMATION DOCK ANALYTICS LLC PROTECTED SERIES MUTLI, Plaintiffs,
MICHAEL COUGHLIN and M. KAY COUGHLIN, Defendants.
MEMORANDUM OPINION AND ORDER
matter comes before the Court on Defendants Michael and M.
Kay Coughlin's (the Coughlins) Motion to Dismiss
Plaintiffs' Complaint, filed May 29, 2018. (Doc. 17). The
Coughlins move to dismiss this case for lack of subject
matter jurisdiction pursuant to the abstention doctrine
announced in Younger v. Harris, 401 U.S. 37 (1971).
(Id.) Plaintiffs Information Dock Analytics LLC
(IDA), Information Dock Analytics LLC Protected Series Short
(Series Short), Information Dock Analytics LLC Protected
Series Mid (Series Mid), Information Dock Analytics LLC
Protected Series Long (Series Long), Information Dock
Analytics LLC Protected Series Island (Series Island), and
Information Dock Analytics LLC Protected Series Multi (Series
Multi) (collectively, Plaintiff-LLCs) filed their Response on
June 12, 2018. (Doc. 20). The Coughlins filed their Reply on
June 26, 2018. (Doc. 22). Having considered the briefing, the
record, and the applicable law, the Court grants in part the
Coughlins' Motion to Dismiss Plaintiffs' Complaint
Standard of Review
to dismiss for lack of subject matter jurisdiction, pursuant
to Federal Rule of Civil Procedure 12(b)(1), generally take
two forms: facial attacks on the complaint's allegations
as to subject matter jurisdiction, which question the
sufficiency of the complaint; and factual attacks on subject
matter jurisdiction, which challenge the facts upon which
subject matter jurisdiction depends. Holt v. United
States, 46 F.3d 1000, 1002-03 (10th Cir. 1995)
(explaining two types of challenges to subject matter
jurisdiction). Younger abstention is jurisdictional
in nature. Steel Co. v. Citizens for a Better
Env't, 523 U.S. 83, 100 n.3 (1998). Motions to
dismiss predicated on abstention doctrines constitute factual
attacks on subject matter jurisdiction. Hill v.
Whetsel, 2007 WL 963216, at *1 n.2 (W.D. Okla. Mar. 28,
2007); Cole v. Olympus Health Care Ctr., Inc., 2004
WL 838043, at *4 (D. Conn. Mar. 8, 2004). “When
reviewing a factual attack on subject matter jurisdiction, a
district court may not presume the truthfulness of the
complaint's factual allegations[, and] has wide
discretion to allow . . . other documents . . . to resolve
disputed jurisdictional facts . . . .” Holt,
46 F.3d at 1003 (internal citations omitted).
Background and Procedural History 
Al Luckett (Luckett Sr.) and Christina McCarthy (McCarthy),
husband and wife, collect art and artifacts. They have
purportedly amassed over 3, 000 items, now allegedly owned by
the Plaintiff-LLCs. This federal lawsuit turns on ownership
of the art and artifacts. McCarthy owns a 10% membership
interest in each of the Plaintiff-LLCs, while the
couple's son, Jonathon Luckett (Luckett Jr.), owns the
remaining 90% membership interest in the Plaintiff-LLCs.
Luckett Sr., allegedly, does not own any membership interest
in the Plaintiff-LLCs.
Plaintiff-LLCs are neither the first nor the only business
entities owned, operated, or controlled by Luckett Sr. and
McCarthy. In 1997, Luckett Sr. and McCarthy formed Cultural
Assets II, LLC (CA2) to hold the art and artifacts they had
acquired. Luckett Sr. and McCarthy each owned a 50%
membership interest in CA2. In 2001, Luckett Sr. transferred
his interest in CA2 to McCarthy, giving her sole membership
in the company. McCarthy transferred a 1% membership interest
to Luckett Jr. in June 2004. Luckett Sr. continued to serve
as an operations manager for CA2.
Luckett Jr., and longtime family accountant Brian Rowe (Rowe)
formed Deadend Investments Limited Partnership (Deadend), a
Nevada limited partnership, in December 2004. McCarthy served
as the majority partner, holding an 89.1% share, while
Luckett Jr. held a 9.9% interest, and Rowe held the remaining
1% interest. At the same time, McCarthy and Luckett Jr.
transferred all of CA2's assets to Deadend.
got more complicated in November 2007. McCarthy, Luckett Jr.,
and Rowe formed Part 1 ST LLC, Part 1 MT LLC, HART LT LLC,
and Multi Ethnic LT LLC (all together, Collection LLCS) as
Nevada limited liability companies. McCarthy held a 71.1%
membership interest in all of the entities, while Rowe and
Luckett Jr. held 21% and 7.9% interests, respectively. The
members also formed other entities to “facilitate new
market research, [perform] intellectual property services
associated with the collection, and selling agent
services.” (Doc. 1) at ¶ 19.
of the Collection LLCs shuffled in December 2012, resulting
in Luckett Jr. holding an 80% interest, Rowe holding a 10%
interest, and McCarthy holding a 10% interest. By April 2014,
the Collection LLCs moved from Nevada to New Mexico, and Rowe
surrendered his interest, resulting in Luckett Jr. holding an
89% interest in the Collection LLCs while McCarthy held the
remaining 11% interest in the Collection LLCs.
Jr. formed the Plaintiff-LLCs in Delaware on October 13,
2017. The Collection LLCs merged into the Plaintiff-LLCs as
follows: Part 1 ST LLC merged into Series Short; Part 1 MT
LLC merged into Series Mid; Part 1 LT LLC merged into Series
Long; HART LT LLC merged into Series Island; and Multi Ethnic
LT LLC merged into Series Multi.
federal lawsuit arises collaterally to a state court
proceeding, Coughlin v. Cultural Assets I, LLC,
D-101-CV-2012-02707, filed in the First Judicial District
Court for the State of New Mexico (State Court Lawsuit). The
State Court Lawsuit stems from the following series of
events: Luckett Sr. and McCarthy rented a residence from the
Coughlins on September 1, 2010, and insisted that the
two-year lease be in the name of Cultural Assets 1, LLC
(CA1), a business owned and operated at least in part by
Luckett Sr. and McCarthy. McCarthy and Luckett Sr. refused to
move out of the residence after the lease expired and the
Coughlins notified them, on September 20, 2012, that the
Coughlins were selling the home. After taking additional
steps and executing an offer to buy their house, with the
buyer requiring possession of the property by October 31,
2012, the Coughlins filed a Petition by Owner for Restitution
in state court-the State Court Lawsuit-on October 1, 2012.
The day before the eviction hearing, CA1 filed for
bankruptcy, resulting in an automatic stay of proceedings.
The sale of the house fell through because the buyers could
not take possession by October 31, 2012.
automatic stay lifted on December 14, 2012. On December 20,
2012, the State Court entered its order of Partial Default
Judgment for Restitution Against Defendants Al Luckett and
Christine McCarthy, finding that the automatic stay did not
apply to Luckett Sr. and McCarthy, who failed to appear at
the eviction hearing. Therefore, the State Court concluded
that McCarthy and Luckett Sr. had “no further right to
occupancy” to the leased residential property. State
Court Lawsuit, Partial Default Judgment for Restitution
Against Defendants Al Luckett and Christine McCarthy,
filed Dec. 20, 2012. After additional motions practice, the
State Court ...