Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-15-08011/USCOURTS-ca10-15-08011-0/pdf.json

Parties Involved:
Alderney Investments, LLC
Appellant
Management Nominees, Inc.
Appellee
Edyta Skowronska
Appellant

Document Text:

PUBLISH 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

_________________________________ 

MANAGEMENT NOMINEES, INC., 

Plaintiff Counter Defendant - 

Appellee, 

v. 

ALDERNEY INVESTMENTS, LLC, 

Defendant Counterclaimant - 

Appellant. 

 --------------- 

EDYTA SKOWRONSKA, individually 

and on behalf of her minor children R.S. 

and D.S., 

Intervenor Defendant - Appellant. 

No. 15-8011 

_________________________________ 

Appeal from the United States District Court 

for the District of Wyoming 

(D.C. No. 2:13-CV-00140-ABJ)

_________________________________ 

Submitted on the briefs:*

Gregory B. Kanan and Hermine Kallman, Lewis Roca Rothgerber, LLP, Denver, 

Colorado, for Appellants Alderney Investments, LLC and Edyta Skowronska. 

 *

 After examining the briefs and appellate record, this panel has determined 

unanimously that oral argument would not materially assist in the determination of 

this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore 

ordered submitted without oral argument. 

FILED 

United States Court of Appeals 

Tenth Circuit 

February 19, 2016

Elisabeth A. Shumaker 

Clerk of Court

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Gregory F. Hauser, Wuersch & Gering LLP, New York, New York; Larry B. Jones, Burg 

Simpson Eldredge Hersh & Jardine, P.C., Cody, Wyoming, for Appellee Management 

Nominees, Inc. 

_________________________________ 

Before GORSUCH, BACHARACH, and McHUGH, Circuit Judges. 

_________________________________ 

McHUGH, Circuit Judge. 

_________________________________ 

I. INTRODUCTION 

This case raises a dispute regarding the citizenship of a Wyoming LLC and 

whether, in light of our recent decision in Siloam Springs Hotel, L.L.C. v. Century Surety 

Co., 781 F.3d 1233 (10th Cir. 2015), the district court lacked subject-matter jurisdiction 

over the case. We conclude that Alderney Investments, LLC (Alderney) is an 

unincorporated association for purposes of federal diversity jurisdiction, with its 

citizenship therefore determined by that of its members. Because Alderney’s members 

are foreign corporations, there is not complete diversity between Alderney and 

Management Nominees, Inc. (MNI), a foreign corporation. As a result, the district court 

lacked subject-matter jurisdiction over the action under 28 U.S.C. § 1332(a). 

Accordingly, we must vacate the district court’s grant of summary judgment and remand 

with instructions to dismiss the action. 

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II. BACKGROUND 

A. Factual History 

This case involves competing claims to the ownership of Alderney Investments, 

LLC by relatives of Rudolf Skowronska (Rudolf), a Polish national.1

 Alderney was 

formed in 1999 by filing Articles of Organization with the Wyoming Secretary of State. 

That initial filing identified two Panamanian corporations as Alderney’s only two 

members: Nominees Associated Inc. and Management Nominees Inc.2

In the years that followed, the beneficial ownership of Alderney went through a 

series of transformations. Rudolf initially held beneficial ownership of Alderney through 

a series of intermediary entities, including both of Alderney’s initial members, 

Management Nominees Inc. and Nominees Associated Inc., as well as UEB Services, 

LTD and Morgan & Morgan Corporation Services S.A. In August 1999, Rudolf, although 

not individually a member of Alderney, purported to transfer ownership of Alderney to 

his half-sister, Dagmara Skowronska. Alderney’s managers subsequently voted to give 

Dagmara “power of attorney” over Alderney’s affairs. 

The parties’ versions of events after this point diverge. The Appellee, MNI, is a 

Belizean corporation also named Management Nominees Inc., which contends that in 

2003 Dagmara transferred her interest in Alderney to Rico Sieber, her husband and 

MNI’s sole shareholder. The Appellants, Alderney and Edyta Skowronska, Rudolf’s 

 1

 We use first names throughout this opinion because several of the family 

members involved in the case share the same last name. 

2

 The Panamanian corporation named Management Nominees Inc. is a distinct 

entity from MNI, the plaintiff and appellee in this case. 

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wife, contend that Dagmara transferred 90% of her interest to Edyta and her two children 

after Rudolf’s disappearance in 2005. Further complicating matters, in 2012, Alderney’s 

members, Management Nominees Inc. and Nominees Associated Inc., transferred their 

membership interest in Alderney to MNI, making MNI the sole member of Alderney. 

The dispute over ownership of Alderney came to a head in 2013, when Edyta 

sought to dissolve Alderney. Edyta, on behalf of Alderney, filed articles of dissolution 

with the Wyoming Secretary of State. The Secretary issued a certificate of dissolution for 

Alderney in March 2013, and this lawsuit followed. 

B. Procedural History 

MNI filed suit in federal district court against Alderney in July 2013, principally 

seeking either damages or declaratory and injunctive relief recognizing MNI as the sole 

member of Alderney and ordering Alderney to be reinstated with the Wyoming Secretary 

of State. MNI moved for summary judgment, arguing the undisputed facts showed it was 

the sole member of Alderney and that Edyta therefore lacked the authority to file for 

Alderney’s dissolution. The district court agreed, granted summary judgment to MNI, 

and entered a final judgment in its favor. 

Edyta then moved to intervene for purposes of appeal, which the district court 

granted. She and Alderney timely appealed the district court’s summary judgment order 

and final judgment. On appeal, Edyta and Alderney raise for the first time a challenge to 

the district court’s subject-matter jurisdiction. 

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III. ANALYSIS 

Despite the complicated factual history, the parties agree on the critical point: 

MNI is a foreign corporation, and all of Alderney’s members (past and present) are also 

foreign entities. Nevertheless, MNI asserts federal jurisdiction, claiming we may look to 

Alderney’s state of organization—Wyoming—for its citizenship. In assessing federal 

jurisdiction, then, this court must consider whether Alderney should be treated as an 

unincorporated association for purposes of diversity jurisdiction under 28 U.S.C. 

§ 1332(a), such that it takes on the citizenship of its members, or like a corporation with 

citizenship determined by its place of incorporation and principal place of business.3

 We 

conclude that our decision in Siloam Springs Hotel, L.L.C. v. Century Surety Co. is 

dispositive and that complete diversity is absent here because all members of Alderney 

are foreign entities. 781 F.3d 1233 (10th Cir. 2015). As a result, the district court lacked 

jurisdiction to grant summary judgment, and that decision must be vacated and the action 

dismissed. 

Relying on guidance from the Supreme Court, we recently clarified that “in 

determining the citizenship of an unincorporated association for purposes of diversity, 

federal courts must include all the entities’ members.” Id. at 1237–38 (citing Carden v. 

Arkoma Assocs., 494 U.S. 185, 195–96 (1990) (holding that the citizenship of a limited 

 3

 MNI argues that Alderney’s principal place of business is Wyoming. This is 

doubtful. In support, MNI cites only to the Articles of Organization, which show 

Alderney’s state of organization but say nothing of where Alderney conducts 

business. From the record it appears MNI was managed and directed primarily out of 

Panama, rather than Wyoming. But because we conclude the citizenship of Alderney 

is determined by the citizenship of its members, we need not resolve this issue. 

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partnership is determined by the citizenship of each of its partners, both general and 

limited); Conagra Foods, Inc. v. Americold Logistics, LLC, 776 F.3d 1175, 1180–81 

(10th Cir. 2015), cert. granted, 136 S. Ct. 27 (2015)). This court also explained that an 

entity’s citizenship for purposes of diversity depends not on the entity’s unique features 

or whether state law makes the entity more like a corporation than an unincorporated 

association. Id. Rather, only those entities that are “corporations, in the traditional 

understanding of that word, will be treated as a person for purposes of diversity 

jurisdiction.” Id. at 1237 (emphasis added) (citing Carden, 494 U.S. at 197). 

In arguing that jurisdiction in this case was proper under § 1332(a), Appellee 

attempts to distinguish the Wyoming LLC at issue here—Alderney—from the Oklahoma 

LLC we concluded was an unincorporated association in Siloam Springs. In particular, 

Appellee claims Alderney has the “powers and nature of a corporation” by virtue of 

Wyoming state law, which it argues grants some corporate-like features to LLCs 

organized in the state. Appellee misreads Siloam Springs and misinterprets Wyoming 

Law. 

In Siloam Springs, the party asserting federal jurisdiction made the same argument 

Appellee makes here—that under the unique features of state law an LLC was 

“equivalent to a corporation.” Id. at 1237. In rejecting this approach, we relied on the 

Supreme Court’s Carden decision: 

The 50 States have created, and will continue to create, a wide assortment 

of artificial entities possessing different powers and characteristics, and 

composed of various classes of members with varying degrees of interest 

and control. Which of them is entitled to be considered a “citizen” for 

diversity purposes, and which of their members’ citizenship is to be 

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consulted, are questions more readily resolved by legislative prescription 

than by legal reasoning, and questions whose complexity is particularly 

unwelcome at the threshold stage of determining whether a court has 

jurisdiction. 

Id. (quoting Carden, 494 U.S. at 197). 

As in Siloam Springs, we decline here to evaluate whether the unique features of 

Wyoming LLCs render them sufficiently corporate-like to be treated as “persons” for 

purposes of diversity.4

 Instead, we continue to follow the approach announced by the 

Supreme Court in Carden, and we determine citizenship based on that of the entity’s 

members unless the entity has been formed as a traditional corporation under the relevant 

state law. Alderney is an LLC, formed under the Wyoming Limited Liability Company 

Act, and is therefore an “unincorporated association” for purposes of diversity 

jurisdiction. Siloam Springs, 781 F.3d at 1237–38. 

Because Alderney is an unincorporated association, its citizenship must be 

determined by “includ[ing] all the entities’ members.” Id. Here, the parties do not dispute 

 4

 Even if we were willing to undertake the state-by-state analysis MNI 

suggests, we would not conclude that Wyoming LLCs are equivalent to corporations 

under Wyoming law. Limited liability companies and corporations are created by 

different sections of the Wyoming Code and have distinct statutory features with 

respect to formation, liability, and dissolution. Compare WYO. STAT. ANN.

§§ 17-29-101 to 1105 (Wyoming Limited Liability Company Act), with WYO. STAT.

ANN. §§ 17-16-101 to 1810 (Wyoming Business Corporation Act). Nor are we 

convinced that Wyoming LLCs are more akin to corporations than LLCs from other 

states. Although Wyoming law defines a “foreign limited liability company” as an 

“unincorporated entity,” WYO. STAT. ANN. § 17-29-102(a)(vi), nowhere does it 

suggest that Wyoming (or domestic) LLCs are, in contrast, incorporated entities. To 

the contrary, the same definitional section of the Wyoming Code expressly 

acknowledges the similarities of foreign and domestic LLCs, defining foreign LLCs 

to include entities that “possess characteristics sufficiently similar to those of a 

limited liability company organized under this chapter.” Id. (emphasis added). 

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“that the member(s) of Alderney Investments, LLC have always been foreign entities or 

individuals.” And although Appellee argues we should measure the citizenship of an 

entity by the jurisdiction in which it is organized, in addition to that of its members, that 

argument is both legally unsupported and contrary to the Supreme Court’s decision in 

Carden. 494 U.S. at 195–96 (“We adhere to our oft-repeated rule that diversity 

jurisdiction in a suit by or against the entity depends on the citizenship of ‘all the 

members,’ ‘the several persons composing such association,’ ‘each of its members.’”) 

(citations omitted). 

Because there are only foreign entities on both sides of this dispute, the district 

court lacked subject-matter jurisdiction under § 1332(a) to entertain the action, and it 

must be dismissed. Grupo Dataflux v. Atlas Global Grp., L.P., 541 U.S. 567, 569 (2004) 

(“[A]liens were on both sides of the case, and the requisite diversity was therefore 

absent.”); Gschwind v. Cessna Aircraft Co., 232 F.3d 1342, 1345 (10th Cir. 2000) 

(“[T]he circuits that have considered the issue read § 1332(a)(2) to require United States 

citizens on both sides of an action between foreign citizens.”). 

IV. CONCLUSION 

Having concluded complete diversity between the parties is lacking here, we 

vacate the judgment and remand the case to the district court with instructions to dismiss 

the action for lack of subject-matter jurisdiction. 

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