UNITED STATES DISTRICT COURT FOR THE 

DISTRICT OF NEW HAMPSHIRE

Preferred Merchant Hood, LLC

v. Civil No. 06-cv-067-JD

Family Dollar, Inc.

O R D E R

Preferred Merchant Hood, LLC, a landlord, commenced a

possessory action against its tenant, Family Dollar, Inc., in the

Derry District Court pursuant to New Hampshire Revised Statutes

Annotated (“RSA”) 540:13. After the state court scheduled a

hearing on the merits, to take place February 23, 2006, Family

Dollar removed the case to this court, invoking its diversity

jurisdiction. Preferred Merchant then moved to remand for lack

of subject matter jurisdiction, arguing, inter alia, that the

case fails to satisfy the amount in controversy requirement. 

Family Dollar objected to the remand motion.

This court then issued a procedural order directing Family

Dollar to “file an amended notice of removal setting forth the

citizenship of each of the parties for purposes of diversity

jurisdiction . . . .” Proc. Order at 2. The court ordered

Family Dollar to make this filing because its original notice of

removal stated that simply that “[t]his Court has original

jurisdiction over this case because the matter in controversy

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exceeds the sum or value of $75,000, exclusive of interest or

costs, and is between citizens of different states,” without

alleging the citizenship of either party. Not. Removal ¶ 4. In

its order, the court also noted that “for purposes of diversity

jurisdiction, a limited liability company (like Preferred

Merchant) has the citizenship of each of its members.” Proc.

Order at 1-2 (citing Pramco, LLC ex rel. CFSC Consortium, LLC v.

San Juan Bay Marina, Inc., 435 F.3d 51, 54-55 (1st Cir. 2006)).

Family Dollar has since filed an amended notice of removal

stating that “Preferred Merchant is a Massachusetts limited

liability company with two members: Merchant Hood LLC (a

Massachusetts limited liability company) and First Merchants

Group LP (a Massachusetts limited partnership). Preferred

Merchant is thus a citizen of Massachusetts.” Am. Not. Removal 

¶ 2. But the phrase “Massachusetts limited liability company” is

meaningless to the jurisdictional inquiry, because, again, “the

citizenship of a limited liability company is determined by the

citizenship of all of its members.” Pramco, 435 F.3d at 54. 

Likewise, as the First Circuit also noted in Pramco, “[t]he

citizenship of [a] . . . partnership . . . is determined by the

citizenship of all of its members.” Id. (citing Carden v. Arkoma

Assocs., 494 U.S. 185, 195-96 (1990)).

Thus, in Pramco, the circuit ruled that the jurisdictional

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allegation that the plaintiff was “a limited liability company,

organized under the laws of Delaware, with its principal place of

business in New York” was “insufficient to establish the

existence of complete diversity.” Id. Despite this court’s

effort to expedite the jurisdictional determination by bringing

Pramco to the parties’ attention in the procedural order, Family

Dollar has responded to that order with a jurisdictional

allegation identical to the one found insufficient by the First

Circuit in that case. As the Seventh Circuit has put it, “there

is no such thing as ‘a [state name] limited partnership’ for

purposes of . . . diversity jurisdiction,” Guaranty Nat’l Title

Co. v. J.E.G. Assocs., 101 F.3d 57, 59 (7th Cir. 1996), or, by

like token, “a [state name] limited liability company.” Such

allegations, then, do nothing to inform the jurisdictional

inquiry. Instead, “the citizenship of unincorporated

associations must be traced through however many layers of

partners or members there may be.” Meyerson v. Harrah’s E.

Chicago Casino, 299 F.3d 616, 617 (7th Cir. 2002).

Family Dollar and its lawyers have now had two chances to

perform this task, the second accompanied by the court’s explicit

instructions on how to determine the citizenship of

unincorporated associations. Their continued failure to do

warrants the determination that subject matter jurisdiction does

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not exist. Guaranty Nat’l Title Co., 101 F.3d at 59. “Litigants

who call on the resources of a federal court must establish that

the tribunal has jurisdiction, and when after multiple

opportunities they do not demonstrate that jurisdiction is

present, the appropriate response is clear.” Id. Indeed, the

court warned Family Dollar in the procedural order that remand

would follow if it failed “to file an amended notice of removal

setting forth the citizenship of each of the parties for purposes

of diversity jurisdiction.” Proc. Order at 2. The case is

therefore remanded to the Derry District Court for lack of

subject matter jurisdiction pursuant to 28 U.S.C. § 1447(c).

Finally, in its motion for remand, Preferred Merchant asks

for an order requiring Family Dollar to pay its attorneys’ fees

and costs incurred in connection with the motion on the ground

that “removal was improper.” Mot. ¶ 4. Preferred Merchant

argues that Family Dollar’s “true purpose” in removing the case

in the absence of subject matter jurisdiction was to delay the

hearing on the merits scheduled in the Derry District Court, so

“remanding this matter . . . without awarding Preferred Motion

its costs and fees would only reward Family Dollar for its stall

tactic.” Mem. Law Supp. Mot. Remand ¶ 29. Though Family Dollar

objected to remand in both its original opposition to the motion

and its subsequent sur-reply, neither filing addressed Preferred

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Merchant’s request for fees and costs.

“An order remanding [a] case may require payment of just

costs and any actual expenses, including attorney fees, incurred

as a result of the removal.” 28 U.S.C. § 1447(c). The Supreme

Court held last term that “[a]bsent unusual circumstances, courts

may award attorney’s fees under § 1447(c) only where the removing

party lacked an objectively reasonable basis for seeking

removal.” Martin v. Franklin Capital Corp., 126 S. Ct. 704, 711

(2005). The Court also noted, in a passage with particular

relevance to this case, that a party’s “failure to disclose facts

necessary to determine jurisdiction may affect the decision to

award attorney’s fees.” Id.

Here, the court determines that Family Dollar lacked an

objectively reasonable basis for removing this case. Indeed, as

just discussed, Family Dollar either still does not know or is

unwilling to say whether the parties are in fact diverse. 

Furthermore, as the Supreme Court explained in Martin, “awarding

fees under § 1447(c) should recognize the desire to deter

removals sought for the purposes of prolonging litigation, while

not undermining Congress’s basic decision to afford defendants a

right to remove as a general matter, when the statutory criteria

are satisfied.” 126 S. Ct. at 711. Again, Family Dollar has

made no effort to satisfy the test for diversity jurisdiction

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here; this failure, combined with the fact that removal occurred

just over a week before a scheduled hearing in the state court,

amply support the inference that the purpose of that tactic was

to delay the resolution of this matter.

Preferred Merchant is therefore entitled to collect its

costs and attorneys’ fees incurred as a result of the removal

from Family Dollar. To that end, if Preferred Merchant wishes to

pursue those expenses, it shall file a request for costs and fees

within twenty days of the date of this order in accordance with

Local Rule 54.1. Family Dollar will then have an opportunity to

respond to any request pursuant to section (c) of the rule.

Conclusion

For the foregoing reasons, this case is REMANDED to the

Derry District Court for lack of subject matter jurisdiction

pursuant to 28 U.S.C. § 1447(c). The court also determines that

Preferred Merchant is entitled to its attorneys’ fees and costs

incurred as a result of the removal. Preferred Merchant’s motion

for remand (document no. 7) is therefore allowed to the extent it

seeks fees and costs; the motion is otherwise TERMINATED. Family

Dollar’s motion for leave to file a sur-reply (document no. 23)

is also TERMINATED. This court’s order of April 6, 2006, 

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granting Family Dollar’s motion for an extension of time to

respond to the complaint (document no. 21), is VACATED.

SO ORDERED.

____________________________

Joseph A. DiClerico, Jr.

United States District Judge

April 24, 2006

cc: James P. Harris, Esquire

Vincent J. Pisegna, Esquire

Douglas M. Watson, Esquire

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