UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

FORT WORTH DIVISION

ROCK CREEK CAPITAL, LLC,

Plaintiff,

v. No. 4:22-CV-0907-P

WILMINGTON TRUST NATIONAL 

ASSOCIATION, ET AL.,

Defendants.

ORDER

This contract dispute arises out of the purchase of vehicle lease 

accounts. Cases like this one are decided every day in our Texas state 

courts. But the dockets of Texas federal courts have become increasingly 

clogged and stalled by the removal of this type of case over the past 

several years. The Court is of the opinion that Texas state courts are 

much better qualified to timely resolve these types of cases.1 Further, 

the Court concludes that it lacks subject matter jurisdiction to resolve 

this case because the parties are not completely diverse.

BACKGROUND

Plaintiff Rock Creek Capital, LLC alleges that Defendants 

committed fraud, breach of contract, and other tortious acts before, 

during, and after Plaintiff purchased vehicle lease accounts from one of 

the defendants. ECF Nos. 1 at 1–2; 1-3 at 3. Plaintiff filed suit on August 

26, 2022, in the District Court of Tarrant County, Texas. ECF Nos. 1 at 

1; 1-3 at 1. Defendant defi AUTO, LLC (“Defendant”) was served on 

September 7, 2022, and removed the case to this Court on October 8, 

2022. ECF No. 1.

1Having been a trial judge on a district court in Tarrant County and a 

justice on the Second Texas Court of Appeals, the undersigned can attest that 

the judges, justices, and juries in Texas are well-equipped to resolve this 

dispute in a timely and fair manner. 

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In its notice of removal, Defendant asserted that this Court had 

subject matter jurisdiction under 28 U.S.C. § 1332. ECF No. 1 at 3. But 

Defendant did not plead facts establishing complete diversity among the 

parties. Id. Strangely, Defendant acknowledged that Plaintiff is a 

limited liability company (“LLC”) and accepted Plaintiff’s assertion that 

it was a citizen of Wyoming and Texas (id.), given that Plaintiff stated 

in its complaint that it was formed in Wyoming and its principal place 

of business is in Texas (ECF No. 1-3 at 1). But two sentences later, 

Defendant correctly noted that the citizenship of an LLC is based on the 

citizenship of its members—information that appears nowhere in the 

filings before this Court. ECF No. 1 at 3. Even worse, Defendant—also 

an LLC—provided no information about the citizenship of its members

either. Because of these missteps, the Court ordered briefing as to 

whether there was complete diversity among the parties. ECF No. 3.

The briefs were telling. Defendant conceded that there was not

complete diversity among the parties because two of its members, BCV 

DS AIV, L.P. and BCV DS AIV, L.P. (the “Limited Partnerships”),2 have 

“potentially thousands of confidential limited partners.” ECF No. 16 at 

4. By Defendant’s own stipulation, at least one of the Limited 

Partnerships’ partners “is a citizen of the State of Texas for diversity 

purposes,” and thus—according to Defendant—there is not complete

diversity among the parties. Id. Defendant then advanced its alternative 

argument from its notice of removal: Plaintiff improperly joined

Defendant to the lawsuit to destroy diversity and prevent removal to 

federal court. Id. at 6. 

The Court now considers sua sponte whether it has jurisdiction over 

this case and concludes that it does not.

2For simplicity, the Court refers to BCV DS AIV, L.P. and BCV DS AIV, 

L.P. as Defendant’s members, even though there is one degree of separation 

between them. The true nature of Defendant’s organization is as follows: 

Defendant has one member, defi SOLUTIONS Group, LLC. ECF No. 16 at 4. 

defi SOLUTIONS Group, LLC has five members, two of which are the Limited 

Partnerships—BCV DS AIV, L.P. and BCV DS AIV, L.P. Id.

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LEGAL STANDARD

In our Republic, where authority flows from the states to the federal 

government, the “the ordinary administration of criminal and civil 

justice” is left to the state courts, not the federal courts. FEDERALIST NO. 

17 (Alexander Hamilton) (writing as “Publius”); cf. Letter from Thomas 

Jefferson to James Madison (Mar. 15, 1789), in THE LIFE AND SELECTED 

WRITINGS OF THOMAS JEFFERSON 426 (Adrienne Koch & William Peden, 

eds., 2004 Modern Library Paperback ed.) (1944) (the federal 

“judiciary . . . is a body, which, if rendered independent and kept strictly 

to their own department, merits great confidence for their learning and 

integrity.”). Accordingly, “[f]ederal courts are not courts of general 

jurisdiction” and can adjudicate only those matters “authorized by 

Article III of the Constitution and the statutes enacted by Congress 

pursuant thereto.” Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 

541 (1986); see Pidgeon v. Parker, 46 F. Supp. 3d 692, 697 (S.D. Tex. 

2014) (“These limits, based on respect both for other branches of 

government and for the state courts, must be respected.”).

For diversity jurisdiction to exist, all parties must be completely 

diverse. 28 U.S.C. § 1332(a); McLaughlin v. Miss. Power Co., 376 F.3d 

344, 353 (5th Cir. 2004). This means that “all persons on one side of the 

controversy be citizens of different states than all persons on the other 

side.” McLaughlin, 376 F.3d at 353 (citation omitted). Importantly, 

federal courts “must presume that a suit lies outside [its] limited 

jurisdiction.” Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 

2001). Due to this presumption against federal jurisdiction, the removal 

statute is to be “strictly construed, and any doubt about the propriety of 

removal must be resolved in favor of remand.” Gasch v. Hartford Acc. & 

Indem. Co., 491 F.3d 278, 281–82 (5th Cir. 2007) (cleaned up). 

Additionally, the Court must “resolve any contested issues of material 

fact, and any ambiguity or uncertainty in the controlling state law” in 

Plaintiff’s favor. Griggs v. State Farm Lloyds, 181 F.3d 694, 699 (5th Cir. 

1999). “The burden of proving that complete diversity exists rests upon 

the party who seeks to invoke the court’s diversity jurisdiction.” Getty 

Oil Corp., a Div. of Texaco, Inc. v. Ins. Co. of N. Am., 841 F.2d 1254, 1259 

(5th Cir. 1988).

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“[T]he citizenship of a[n] LLC [and a limited partnership] [are] 

determined by the citizenship of all of its members [or partners].” 

Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077, 1080 (5th Cir. 2008). In 

contrast, a corporation is a citizen of both the state in which it is 

incorporated and the state in which its principal place of business is 

located. 28 U.S.C. § 1332(c)(1); Hertz Corp. v. Friend, 559 U.S. 77, 80 

(2010).

ANALYSIS

As an initial matter, the Court notes that a defendant must file its 

notice of removal within 30 days after receiving either a copy of the 

complaint or the service of summons, whichever is shorter. 28 U.S.C. 

§ 1446(b)(1). Here, Defendant states that it was served on September 7, 

2022. ECF No. 1 at 1. Defendant did not file its notice of removal until 

October 8, 2022—31 days later. Id. The Court may well have remanded 

this case based on Defendant’s untimely notice of removal if Plaintiff 

had moved to remand within 30 days of removal. 28 U.S.C. § 1447(c). 

Rather than wait for Plaintiff’s motion, however, the Court must 

remand this case because Defendant has not met its burden of 

establishing subject matter jurisdiction.

Despite ordering briefing on subject matter jurisdiction, two 

problems with Defendant’s assertion of diversity jurisdiction remain: 

First, there are no facts establishing Plaintiff’s citizenship. Second, 

Defendant was not improperly joined.

As noted above, Plaintiff is an LLC and asserted in its state court 

complaint that it was organized in Wyoming and its principal place of 

business is in Fort Worth, Texas. ECF No. 1-3 at 1. But, as Defendant

acknowledged, the citizenship of an LLC is based on the citizenship of 

its members. Harvey, 542 F.3d at 1080; ECF No. 1 at 3. Defendant

provided no information about the citizenship of Plaintiff’s members in 

its notice of removal or in its court-ordered briefing on the issue. See 

generally ECF Nos. 1 & 16. Because the Court gave Defendant an 

opportunity to replead and it still failed to meet its burden of 

establishing the Court’s subject matter jurisdiction, Getty Oil Corp., 841 

F.2d at 1259, the Court is “doubt[ful] about the propriety of removal,” 

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which “must be resolved in favor of remand.” Gasch, 491 F.3d at 281–

82.

Even if Defendant could successfully assert facts establishing 

Plaintiff’s citizenship, remand is still warranted because its improper 

joinder argument fails on the law, too. There are two ways to establish 

improper joinder: “(1) actual fraud in the pleading of jurisdictional facts, 

or (2) inability of the plaintiff to establish a cause of action against the 

non-diverse party in state court.” Smallwood v. Ill. Cent. R. Co., 385 F.3d 

568, 573 (5th Cir. 2004). Only the second way of establishing improper 

joinder is at issue. See ECF No. 16 at 6–8. “[T]he test for fraudulent 

joinder is whether the defendant has demonstrated that there is no 

possibility of recovery by the plaintiff against an in-state defendant 

. . . .” Smallwood, 385 F.3d at 573.

There are two ways to analyze this test: “The [C]ourt may conduct a 

Rule 12(b)(6)-type analysis, looking initially at the allegations of the 

complaint to determine whether the complaint states a claim under 

state law against the in-state defendant.” Id. Or the Court, in its 

discretion, may “pierce the pleadings and conduct a summary inquiry” 

in the rare case that “a plaintiff has stated a claim, but has misstated or 

omitted discrete facts that would determine the propriety of joinder.” Id.

Defendant contends that it was not the “servicer of record for all of 

the [l]eases” purchased by Plaintiff, thus Plaintiff has no possibility of 

recovery against it. ECF No. 16 at 6–7. Defendant’s contention that it 

was not involved in Plaintiff’s purchase of the leases is a question of fact, 

given that Plaintiff asserts Defendant provided Plaintiff with false and 

incomplete data relating to the leases. ECF Nos. 1-3 at 8–11; 15 at 5–6.

The Court cannot say at this time that Defendant’s bare assertion shows

that “there is no possibility of recovery by” Plaintiff. The Court needs

evidence to substantiate Defendant’s involvement—or lack thereof—in 

Plaintiff’s purchase of the leases before concluding that Plaintiff has “no 

possibility of recovery.” On this point alone, remand is warranted.

Finally, the Court finds it notable that Defendant changed the entire 

basis for removing this case in its court-ordered jurisdictional briefing. 

Compare ECF No. 1 with ECF No. 16. Its argument is confusing. 

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Defendant first contended that there was complete diversity among the 

parties. ECF No. 1 at 3–7. It then stated in its court-ordered brief that 

it “became aware of at least one” of the Limited Partnerships’ partners

is a Texas citizen, thus allegedly destroying diversity.

Attempting to salvage its attempt at removal, Defendant pivoted to 

its alternative argument that it was improperly joined to destroy 

diversity. ECF No. 16 at 6. Not only does the Court still not know 

whether the Texas limited partners would destroy diversity, given the 

lack of information about Plaintiff’s citizenship, it is nonsensical to 

assert that Defendant was improperly joined to prevent removal when 

Defendant itself did not know the citizenship of its members at the time 

of removal. In other words, if Defendant did not know its members’ 

citizenship, how could Plaintiff? Not to mention, the Limited 

Partnerships kept the identity of its partners confidential. Because 

there was no apparent way for Plaintiff to know Defendant’s citizenship 

when it sued (ECF No. 16 at 4), it therefore could not have joined 

Defendant to destroy diversity.

CONCLUSION

As Chief Justice John Marshall recognized over two-hundred years 

ago, the duty of federal courts “to exercise jurisdiction where it is 

conferred, and not to usurp it where it is not conferred, are of equal 

obligation.” Bank of U.S. v. Deveaux, 9 U.S. 61, 87, 5 Cranch 6 38 (1809), 

overruled in part by Louisville, C. & C.R. Co. v. Letson, 43 U.S. 497, 2 

How. 497, 11 L. Ed. 353 (1844).3

3Thomas Jefferson also warned of the dangers of federal judges usurping 

authority in matters reserved for the states. Late in his life, he wrote:

It has long however been my opinion, and I have never shrunk from 

its expression, . . . that the germ of dissolution of our federal 

government is in the constitution of the federal judiciary; . . . 

working like gravity by night and by day, gaining a little to-day and 

a little tomorrow, and advancing it’s noiseless step like a thief, over 

the field of jurisdiction, until all shall be usurped from the states, 

and the government of all be consolidated into one. To this I am 

opposed; because whenever all government, domestic and foreign, 

in little as in great things, shall be drawn to Washington as the 

center of all power, it will render powerless the checks provided of 

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For these reasons, the Court herby ORDERS that this case is 

REMANDED to the District Court of Tarrant County, Texas. The Clerk 

of this Court is INSTRUCTED to mail a certified copy of this Order to 

the District Court of Tarrant County, Texas. 

SO ORDERED on this 7th day of November 2022.

one government on another, and will become as venal and 

oppressive as the government from which we separated.

Letter from Thomas Jefferson to Charles Hammond (August 18, 1821), in 15 

THE WRITINGS OF THOMAS JEFFERSON 330–33 (Albert Ellery Bergh Ed.) 

(1905). 

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