The Texas Supreme Court recently reversed a decision by the Houston Fourteenth District Court of Appeals, which held harmless the trial court’s admission of evidence related to the defendant’s wealth. Reliance Steel & Aluminum Co. v. Sevcik, No. 06-0422, 2008 Tex. LEXIS 861 (Tex. Sept. 26, 2008). Continue Reading Evidence of Defendant’s Wealth Held Harmful
Opinions & Judgments
Determining Diversity of Jurisdiction for Limited Liabililty Corporations
For the purpose of determining diversity jurisdiction, is a limited liability company a citizen of the state where it is organized or is it a citizen of the states of which its members are citizens?
In an issue of first impression, the Fifth Circuit, in Harvey v. Grey Wolf Drilling Co., held that a limited liability company, for diversity jurisdiction purposes, depends on the citizenship of its members.
In Grey Wolf, the plaintiffs, Louisiana residents, sued Grey Wolf in the Eastern District of Louisiana on diversity jurisdiction grounds. Grey Wolf was a Texas LP with members that included an LLC with members in Texas and Nevada, but was organized in Louisiana. The district court applied 28 U.S.C. § 1332(c), a statute governing citizenship of corporations, to the LLC, and held that (1) an LLC’s citizenship is determined by where it is organized; and (2) that the parties lacked diversity jurisdiction.
The Fifth Circuit reversed the district court’s opinion because:
· Every Circuit Court that had dealt with the issue held that citizenship would be determined by the LLC’s members;
· The district court’s holding was inconsistent with Supreme Court jurisprudence;
· The district court’s opinion conflicted with § 1332(c)(1)’s language;
· Louisiana law clearly distinguished LLCs from Corporations.
*For more insight on the district court’s reasoning, see Debra R. Cohen’s article "Limited Liability Company Citizenship: Reconsidering an Illogical and Inconsistent Choice", 90 Marq. L. Rev. 269 (2006).Continue Reading Determining Diversity of Jurisdiction for Limited Liabililty Corporations
En Banc San Antonio Court of Appeals Affirms Chapter 10 Sanction
A divided en banc Fourth Court of Appeals held that a court may award sanctions for both expenses and attorney’s fees as well as for inconvenience and harassment and order them paid to the moving party. Applying the Texas Supreme Court’s recent opinion in Low v. Henry, the majority held the trial court had broad…
Mandamus waiver
The Houston Fourteenth District Court of Appeals has held that a Relator must challenge all possible grounds supporting a trial court’s ruling by its Petition for Writ of Mandamus or the Relator waives its complaint. In In re TCW Global Project Fund II, Ltd., No. 14-08-00116-CV (Sept. 24, 2008), the Relator filed a Petition…
