The Fifth Circuit and the Texas Supreme Court recently reaffirmed the high bar that must be met to find that the plain language of a statute violates the absurdity doctrine.

Under the absurdity doctrine a court will construe a statute by applying the plain meaning of the words used unless it would lead to absurd

The Fifth Circuit has affirmed a denial of all attorney fees under the Fair Debt Collection Practices Act based on the “outrageous facts” and the conduct of the plaintiff’s attorneys.

Continue Reading Fifth Circuit Denies Attorney Fees Where Attorneys Created Claim for Purpose of Generating Excessive Fee Request

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