IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF INDIANA

SOUTH BEND DIVISION

Halfwassen ILPK, LLC, )

)

Plaintiff, )

)

v. ) No. 3:14-CV-1852

)

INLAND LOGISTICS PORT-KINGSBURY, )

LLC AND GREEN EXPRESS COMPANY, )

)

Defendants. )

OPINION AND ORDER

This matter is before the Court on the Motion to Remand, filed

by Plaintiff, Halfwassen ILPK, LLC, on October 2, 2014 (DE #5). 

For the reasons set forth below, the motion (DE #5) is GRANTED. 

The case is REMANDED back to the LaPorte Circuit Court, Indiana, on

the basis that this Court lacks subject matter jurisdiction over

this controversy. Additionally, Halfwassen is AWARDED its just

costs and actual expenses, including attorneys’ fees, as a result

of the removal. 

BACKGROUND

Halfwassen ILPK filed its amended complaint in the LaPorte

Circuit Court on July 15, 2014, seeking a declaratory judgment over

the construction and validity of the Operating Agreement of ILPK,

LLC and seeking damages from breaches alleged against the
Defendants. (DE #2.) Defendants filed a notice of removal with

this Court on September 2, 2014. (DE #1.) 

The parties do not dispute that Defendant Green Express

Company (“Green Express”) is a Florida corporation and thus a

citizen of Florida. (DE #1, ¶ 3.) The only dispute is the

citizenship of Plaintiff, Halfwassen ILPK, which is a limited

liability company. Plaintiff has provided sworn declarations

establishing that Halfwassen has four members, all trusts. The

member-trusts are: the Caryl Anne Halfwassen Revocable Trust dated

October 28, 1997, as amended and restated; the Colin H. Halfwassen

Revocable Trust dated October 28, 1997, as amended and restated;

the Colin Brent Halfwassen and Kathleen Elizabeth Halfwassen

Revocable Trust dated January 11, 2007, as amended and restated;

and the Joel E. Halfwassen Irrevocable Trust dated June 3, 2011. 

(Pl.’s Ex. 1, Decl. of Colin J. Halfwassen; Pl.’s Ex. 2, Decl. of

Caryl Anne Halfwassen.) Trustees Colin H. Halfwassen and Caryl

Anne Halfwassen, the respective trustees of the Caryl Anne

Halfwassen Revocable Trust dated October 28, 1997, as amended and

restated, and the Colin H. Halfwassen Revocable Trust dated October

28, 1997, as amended and restated, are both citizens of the state

of Florida. Id.

DISCUSSION

Defendants have the burden of showing that this case was

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removable. Wellness Cmty-Nat’l v. Wellness House, 70 F.3d 46, 49

(7th Cir. 1995); Fate v. Buckeye State Mut. Ins. Co., 174 F.Supp.2d

876, 878 (N.D. Ind. 2001) (“when a federal court’s exercise of

jurisdiction is challenged following removal, the burden of

establishing federal jurisdiction rests on the party seeking to

preserve removal.”); Roberson v. Orkin Exterminating Co., Inc., 770

F. Supp. 1324, 1328 (N.D. Ind. 1991). A defect in the removal

procedure results in a case being remanded back to the state court. 

Shaw v. Dow Brands, Inc., 994 F.2d 364, 366 (7th Cir. 1993). 

The federal courts have limited jurisdiction. Wellness, 70

F.3d at 50. A federal court has diversity jurisdiction where the

amount in controversy exceeds $75,000 and the parties to the suit

are citizens of different states. 28 U.S.C. § 1332(a). A

defendant may remove a case that is properly filed in state court

if that case could have originally been brought in federal court. 

28 U.S.C. § 1441(a); Shaw, 994 F.2d at 366. Importantly, section

1332 requires complete diversity of citizenship. Exxon Mobil Corp.

v. Allapattah Servs., Inc., 545 U.S. 546, 553 (2005) (citations

omitted) (“In a case with multiple plaintiffs and multiple

defendants, the presence in the action of a single plaintiff from

the same State as a single defendant deprives the district court of

original diversity jurisdiction over the entire action.”). 

As noted above, the dispute in this case is whether the

parties are diverse. Plaintiff argues that the notice of removal

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baldly asserts that Halfwassen ILPK is “a citizen of the State of

Wisconsin,” because it wrongly concludes “Halfwassen is a Wisconsin

limited liability company with its principal place of business in

Milwaukee, Wisconsin.” (DE #1, ¶ 3.) This is not the proper

analysis for a limited liability corporation (LLC). 

 Plaintiff sets forth the law of determining the citizenship of

an LLC properly, and indeed, Defendants concede as much. (DE #8,

p. 1.) The citizenship of an LLC is determined by examining the

citizenship of each of its members - not the location of the LLC’s

principal place of business or its state of organization. See,

e.g., Fellowes, Inc. v. Changzhou Xinrui Fellowes Office Equip. Co.

Ltd., 759 F.3d 787, 787-88 (7th Cir. 2014) (“[i]f it is a limited

liability company . . . then it has the citizenship of each

member”); Copeland v. Penske Logistics LLC, 675 F.3d 1040, 1043

(7th Cir. 2012) (“a limited liability company’s citizenship

includes every state of which any unit holder is a citizen”);

Cosgrove v. Bartolotta, 150 F.3d 729, 731 (7th Cir. 1998) (“we

conclude that the citizenship of an LLC for purposes of the

diversity jurisdiction is the citizenship of its members.”). Thus,

“even if one of the members is a citizen of the same state as one

of the [Defendants], the suit cannot be maintained as a diversity

action.” Boyd Mach. & Repair Co. v. Freedman, No. 1:03-CV-57, 2003

WL 21919214, at *1 (N.D. Ind. Mar. 7, 2003) (citing Cosgrove, 150

F.3d at 731). 

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There is no dispute that Defendant, Green Express, is a

Florida citizen. Plaintiff has set forth that two members of

Halfwassen ILPK, LLC (Colin J. Halfwassen, as Trustree of the Colin

J. Halfwassen Revocable Trust dated October 28, 1997, as amended

and restated, and Caryl Anne Halfwassen, as Trustee of the Caryl

Anne Halfwassen Revocable Trust dated October 28, 1997, as amended

and restated), are Florida citizens. (Pl.’s Exs. 1, 2.) For the

purpose of diversity analysis, this means that Halfwassen ILPK is

a Florida citizen, because “the citizenship of a trust is the

citizenship of the trustee.” Hemenway v. Peabody Coal Co., 159

F.3d 255, 257 (7th Cir. 1998); see also Navarro Sav. Ass’n v. Lee,

446 U.S. 458, 464 (1980) (a trust’s trustees are the “real parties

to the controversy” for jurisdictional analysis).

In response, Defendants merely state that in its amended

complaint, Plaintiff provided that it was “a limited liability

company organized and existing under the laws of the state of

Wisconsin.” (DE #2 ¶ 1.) This was a state court complaint,

though, and it is not surprising that Plaintiff did not allege

federal jurisdictional facts in it. The defendant seeking removal

bears the burden of demonstrating federal jurisdiction. Wellness,

70 F.3d at 49. To jump from the allegation in the complaint to the

conclusion in the notice of removal that Halfwassen ILPK LLC “is a

citizen of Wisconsin” and that “diversity of citizenship . . .

exists under 28 U.S.C. ¶ 1332(A)(1)” (DE #1, ¶¶ 3,7) was simply

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incorrect on the part of Defendants. Indeed, the Seventh Circuit

has condemned this type of assumption. See Belleville Catering Co.

v. Champaign Market Place, LLC, 350 F.3d 691, 693 (7th Cir. 2003)

(“Both sides also must share the blame for assuming that a limited

liability company is treated like a corporation.”). 

The only other argument Defendants pose is that “the only

proof of the members of the plaintiff entity is the declarations

attached to the Memorandum in Support.” (DE #8, p. 1.) Moreover,

they complain that they requested copies of the operating

agreements and trust documents, but they have not been provided. 

Plaintiff’s declarations were made under the penalties of perjury

allowed by 28 U.S.C. § 1746, and Defendants have put forth no

argument showing how the confidential trust agreements and

operating agreements might verify the citizenship of the membertrustees. The Court believes the declarations are entitled to the

assumption of truth - and anyway, it is not the Plaintiff’s burden

to prove non-diversity, it is the Defendants’ burden to establish

diversity of citizenship. 

The only other issue is whether Halfwassen ILPK should be

awarded its attorneys’ fees. As the Supreme Court has stated,

“[t]he process of removing a case to federal court and then having

it remanded back to state court delays resolution of the case,

imposes additional costs on both parties, and wastes judicial

resources.” Martin v. Franklin Capital Corp., 546 U.S. 132, 140

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(2005). Under Seventh Circuit law, “if, at the time the defendant

filed his notice in federal court, clearly established law

demonstrated that he had no basis for removal, then a district

court should award a plaintiff his attorneys’ fees.” Lott v.

Pfizer, Inc., 492 F.3d 789, 793 (7th Cir. 2007).

In this case, Defendants failed to follow the law in analyzing

federal jurisdiction. It is well settled that a limited liability

company has the citizenship of each of its members. See, e.g.,

Cosgrove, 150 F.3d at 731 (citizenship of Wisconsin limited

liability company for purposes of diversity jurisdiction is the

citizenship of its members). Moreover, as the court in Parks v.

Guidant Corp., 402 F.Supp.2d 964, 971 (N.D. Ind. 2005), stated:

The district court has a broad discretion in

deciding whether to award fees under § 1447(c). In

this circuit, plaintiffs who prevail on a remand

motion are presumptively entitled to attorneys’

fees. The presumption, of course, is rebuttable.

Defendants argue it was reasonable to rely on Plaintiff’s

statements in its amended complaint that Halfwassen is a limited

liability company organized and existing under the laws of

Wisconsin. As already established, that statement does not

establish citizenship of an LLC, and Defendants were objectively

unreasonable for relying upon it in a bubble for the purpose of

removing this case. As such, Halfwassen is awarded its just costs

and actual expenses, including attorneys’ fees, as a result of the

removal. 

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CONCLUSION

For the reasons set forth above, the motion to remand (DE #5)

is GRANTED. The case is REMANDED back to the LaPorte Circuit

Court, Indiana, on the basis that this Court lacks subject matter

jurisdiction over this controversy. Additionally, Halfwassen is

AWARDED its just costs and actual expenses, including attorneys’

fees, as a result of the removal. 

DATED: February 18, 2015 /s/ RUDY LOZANO, Judge

United States District Court

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