PUBLISH 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

_________________________________ 

CELESTE C. GRYNBERG, individually 

and as Trustee on behalf of the Rachel 

Susan Trust, the Stephen Mark Trust, and 

the Miriam Zela Trust; JACK J. 

GRYNBERG, 

Petitioners - Appellants, 

v. 

KINDER MORGAN ENERGY 

PARTNERS, L.P., a Delaware Master 

Limited Partnership; KINDER MORGAN 

CO2 COMPANY, L.P., a Texas Limited 

Partnership, 

Respondents - Appellees. 

No. 14-1465 

_________________________________ 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLORADO 

(D.C. No. 1:14-CV-01832-WJM)

_________________________________ 

Daniel L. Abrams, Law Office of Daniel L. Abrams, PLLC, New York, New York 

(Richard P. Barkley, The Barkley Law Firm, Englewood, Colorado, with him on the 

briefs), appearing for Appellants. 

Stacy M. Neal (Guy S. Lipe, Mark C. Rodriguez, and James L. Leader, Jr., with her on 

the brief),Vinson & Elkins, Houston, Texas, appearing for Appellee. 

_________________________________ 

Before BRISCOE, MATHESON, and BACHARACH, Circuit Judges. 

_________________________________ 

MATHESON, Circuit Judge. 

FILED 

United States Court of Appeals 

Tenth Circuit 

November 2, 2015

Elisabeth A. Shumaker 

Clerk of Court

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_________________________________ 

Celeste C. Grynberg—individually and as trustee on behalf of the Rachel Susan 

Trust, Stephen Mark Trust, and Miriam Zela Trust—and Jack J. Grynberg petitioned the 

federal district court to vacate an arbitration award that had been entered against them 

and in favor of Kinder Morgan Energy Partners, L.P. (“KMEP”) and Kinder Morgan 

CO2 Company, L.P. (“KMCO2,” and together with KMEP, “Kinder Morgan entities”). 

The Grynbergs invoked the court’s diversity jurisdiction. When they filed the 

action, the Grynbergs were citizens of Colorado, KMEP was a Delaware master limited 

partnership (“MLP”), and KMCO2 was a Texas limited partnership with one partner, 

KMEP.1

 The district court dismissed the action for lack of jurisdiction. It concluded that 

under Carden v. Arkoma Associates, 494 U.S. 185, 195 (1990), KMEP’s citizenship was 

the citizenship of all its unitholders, and because KMEP had at least one Colorado 

unitholder, its citizenship was not completely diverse from the Grynbergs’. 

The Grynbergs appeal, arguing the district court improperly applied Carden. 

Exercising jurisdiction under 28 U.S.C. § 1291, we affirm. 

I. BACKGROUND 

A. Overview of MLPs 

This case addresses diversity jurisdiction for MLPs. MLPs are limited 

partnerships or limited liability companies whose ownership interests, called “common 

 

1

 Because KMEP was the sole partner of KMCO2, KMCO2’s citizenship included 

KMEP’s citizenship. 

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units,” are publicly traded. John Goodgame, New Developments in Master Limited 

Partnership Governance, 68 Bus. L. 81, 82 (2012); Wood v. Walton, No. WDQ-09-3398, 

2010 WL 458574, at *1 n.3 (D. Md. Feb. 2, 2010) (unpublished).2

 MLPs are similar to 

limited partnerships in that they have general partners who manage the partnership’s 

affairs and limited partners (called “unitholders”) who provide capital. Trafigura AG v. 

Enter. Prods. Operating LLC, 995 F. Supp. 2d 641, 643 n.1 (S.D. Tex. 2014). MLPs are 

classified as partnerships for federal taxation purposes, which allows them to benefit 

from “pass-through” taxation. Id. They are similar to corporations, however, in that 

MLPs are publicly traded. See id. Although MLPs are organized under state law, federal 

law permits federal pass-through taxation for MLPs engaged predominately in the 

“exploration, development, mining, or production, processing, refining, [or] 

transportation . . . of any mineral or natural resource.” 26 U.S.C. § 7704(d)(1)(E). 

B. Procedural Background 

On July 1, 2014, the Grynbergs petitioned the United States District Court for the 

District of Colorado to vacate an arbitration award that had been entered against them and 

in favor of the Kinder Morgan entities. The petition alleged the district court had 

diversity jurisdiction because the amount in controversy exceeded $75,000 and the parties 

were completely diverse. See 28 U.S.C. § 1332. The petition alleged that the Grynbergs 

 

2

 Although unpublished, out-of-circuit, district court opinions lack precedential 

value, we find the reasoning of such decisions cited here to be instructive under the 

circumstances of this case. See 10th Cir. R. 32.1 (“Unpublished decisions are not 

precedential, but may be cited for their persuasive value.”); see also Fed. R. App. P. 32.1. 

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were citizens of Colorado, that KMEP was a Delaware limited partnership3

 with its 

principal place of business in Texas, and that KMCO2 was a Texas limited partnership 

with its principal place of business in Texas. 

On July 2, 2014, the district court issued an Order to Show Cause, which said the 

Grynbergs’ petition did not adequately allege diversity jurisdiction because it did not 

properly identify the citizenship of the two limited partnerships, KMEP and KMCO2, as 

of the filing date. The court explained that under Carden, 494 U.S. at 195, the citizenship 

of limited partnerships was the citizenship of all its unitholders. The court ordered the 

Grynbergs to identify all of KMEP’s unitholders and KMCO2’s members. 

The Grynbergs responded, explaining that KMEP was a publicly traded Delaware 

MLP and that KMCO2 was a Texas limited partnership wholly owned by KMEP. The 

Kinder Morgan entities responded and explained that KMEP had unitholders who were 

citizens of Colorado. The Grynbergs argued that, because KMEP was an MLP and not a 

limited partnership, Carden was inapplicable. Instead, the Grynbergs argued, KMEP’s 

citizenship was its principal place of business and state of formation. 

The district court concluded Carden controlled and the Grynbergs had failed to 

establish complete diversity. It therefore dismissed the action without prejudice for lack 

of jurisdiction. 

 

3

 The petition did not allege that KMEP was an MLP. As explained below, the 

Grynbergs first identified KMEP as an MLP in their response to the district court’s order 

to show cause why it had jurisdiction. 

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II. DISCUSSION 

The Grynbergs appeal the district court’s decision concluding it lacked diversity 

jurisdiction. Deciding an issue of first impression, we hold the citizenship of an MLP 

consists of its unitholders’ citizenship and therefore affirm.

A. Standard of Review 

“We review the district court’s order dismissing the case for lack of subject matter 

jurisdiction de novo.” Lindstrom v. United States, 510 F.3d 1191, 1193 (10th Cir. 2007). 

B. Diversity Jurisdiction 

The Constitution states, “The judicial Power shall extend to . . . Controversies . . . 

between Citizens of different States.” U.S. Const. art. III, § 2, cl. 1. Because “[t]he 

judicial Power of the United States, shall be vested in . . . such inferior Courts as the 

Congress may from time to time ordain and establish,” id. art. III, § 1, Congress 

determines the jurisdiction of the federal district courts. Sheldon v. Sill, 49 U.S. (8 How.) 

441 (1850). “Congress first authorized the federal courts to exercise diversity jurisdiction 

in the Judiciary Act of 1789 . . . .” Carden, 494 U.S. at 187. Under the current diversity 

statute, 28 U.S.C. § 1332, district courts have diversity jurisdiction over “all civil actions 

where the matter in controversy exceeds the sum or value of $75,000 . . . and is between 

. . . citizens of different States.” 

Diversity jurisdiction requires complete diversity—no plaintiff may be a citizen of 

the same state as any defendant. See, e.g., Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267 

(1806); Ravenswood Inv. Co., L.P. v. Avalon Corr. Servs., 651 F.3d 1219, 1223 (10th Cir. 

2011). “[F]or purposes of determining the existence of diversity jurisdiction, the 

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citizenship of the parties is to be determined with reference to the facts as they existed at 

the time of filing.” Grupo Dataflux v. Atlas Glob. Grp., L.P., 541 U.S. 567, 569-70 

(2004). 

C. Analysis 

Three reasons support our conclusion that an MLP’s citizenship consists of its 

unitholders’ citizenship. First, the long-standing rule guiding the jurisdictional 

citizenship of unincorporated entities, most recently stated in Carden, applies to MLPs. 

Second, the narrow exception to this rule does not apply. Third, the Grynbergs’ policy 

arguments are appropriately addressed to Congress, not the courts. 

1. Unincorporated Associations, the Chapman Rule, and Diversity Jurisdiction 

In general, for jurisdictional citizenship, there are two types of business 

organizations: corporations and unincorporated associations. For diversity, a corporation 

is a citizen of its state of incorporation and the state where its principal place of business 

is located. 28 U.S.C. § 1332(c)(1); see also Hertz Corp. v. Friend, 559 U.S. 77, 85, 88 

(2010) (citing Louisville, Cincinnati, & Charleston R.R. Co. v. Letson, 43 U.S. (2 How.) 

497, 558 (1844)). The Supreme Court has “firmly resisted extending that treatment to 

other entities.” Carden, 494 U.S. at 189. 

Instead, beginning with Chapman v. Barney, 129 U.S. 677 (1889), the Supreme 

Court has held an unincorporated entity’s citizenship is typically determined by its 

members’ citizenship (the “Chapman rule”). Carden, 494 U.S. at 189, 195-96. The 

Court has characterized the Chapman rule as a “doctrinal wall,” United Steelworkers of 

Am., AFL-CIO v. R.H. Bouligny, Inc., 382 U.S. 145, 151 (1965), and has applied it to 

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joint stock companies, Chapman, 129 U.S. at 681-82, limited partnership associations, 

Great S. Fire Proof Hotel Co. v. Jones, 177 U.S. 449, 450, 454 (1900), labor unions, 

Bouligny, 382 U.S. at 147, and limited partnerships, Carden, 494 U.S. at 195-96. The 

Tenth Circuit has further applied the rule to trusts, ConAgra Foods, Inc. v. Americold 

Logistics, LLC, 776 F.3d 1175, 1182 (10th Cir. 2015), cert. granted, 83 U.S.L.W. 3880 

(U.S. Oct. 1, 2015) (No. 14-1382), and limited liability companies, Siloam Springs Hotel, 

L.L.C. v. Century Sur. Co., 781 F.3d 1233, 1234 (10th Cir. 2015). The district court in 

this case, relying on Carden, applied the Chapman rule to MLPs to recognize that MLPs 

are unincorporated and hold that their citizenship for diversity purposes is determined by 

the citizenship of their unitholders. 

The Grynbergs argue the district court misapplied the Chapman rule because 

Carden only applied the rule to limited partnerships, and any reference in that decision to 

other non-corporate business entities was merely dicta. We disagree. Carden was the 

result of case authority spanning a century of Supreme Court decisions uniformly 

applying the Chapman rule and holding that various forms of unincorporated associations 

are citizens of their members’ states of citizenship. See, e.g., Chapman, 129 U.S. at 681-

82; Great S. Fire Proof Hotel, 177 U.S. at 450, 454; Bouligny, 382 U.S. at 147; Carden, 

494 U.S. at 195-96. The rule applies to MLPs because they are unincorporated 

associations (1) formed under state law as limited partnerships or limited liability 

companies and (2) classified as partnerships for federal income tax purposes. See 26 

U.S.C. § 7704(a); Hite Hedge LP v. El Paso Corp., No. 7117VCG, 2012 WL 4788658, at 

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*1 (Del. Ch. Oct. 9, 2012) (unpublished).4

 MLPs are not corporations. We next address 

the Grynbergs’ argument that MLPs are akin to corporations and should be treated as an 

exception to Chapman for diversity jurisdiction. 

2. MLPs Do Not Qualify for an Exception Similar to Russell

The Supreme Court recognized one exception to the Chapman rule in Puerto Rico 

v. Russell & Co., 288 U.S. 476, 481-82 (1933). The Court determined a sociedad en 

comandita—an entity created under Puerto Rico law—was a citizen of Puerto Rico for 

diversity analysis. The Court explained, “[T]he sociedad is a juridical person . . . [whose] 

personality is so complete in contemplation of the law of Puerto Rico that we see no 

adequate reason for holding that the sociedad has a different status for purposes of federal 

jurisdiction than a corporation organized under that law.” Russell, 288 U.S. at 481. For 

example, the sociedad en comandita is created by filing articles of association as public 

records, the articles may allow the entity to continue to exist despite the death or 

 

4

 At least eight district courts have addressed this issue. All have held that the 

citizenship of MLPs is the citizenship of all their general and limited partners. These 

courts have concluded either that an MLP is not distinct from a limited partnership, see, 

e.g., LL & E Royalty Tr. ex rel. Parsons v. Quantum Res. Mgmt., LLC, No. 14-CV-13833, 

2015 WL 4274987, at *5 (E.D. Mich. July 14, 2015) (unpublished); Great Lakes Gas 

Transmission, LP v. Essar Steel Minn., LLC, No. 09-cv-3037, --- F. Supp. 3d ---, 2015 

WL 2070558, at *5 (D. Minn. May 4, 2015); Stevens Eng’rs & Constructors, Inc. v. 

MarkWest Liberty Midstream & Res. LLC, No. 14-cv-00054-RBJ, 2014 WL 2922631, at 

*2 (D. Colo. June 27, 2014) (unpublished); Gonyer v. Enbridge Energy, Ltd. P’ship, No. 

1:13-CV-796, 2014 WL 1255915, at *1-2 (W.D. Mich. Mar. 26, 2014) (unpublished); 

Ada Cty. Highway Dist. v. Nw. Pipeline GP, No. 1:12-cv-00184-BLW, 2012 WL 

4737869, at *1 (D. Idaho Oct. 3, 2012) (unpublished); Vosburg v. Williams Field Servs. 

Co., No 3:11- cv-1624, 2011 WL 3881277, at *2 (M.D. Pa. Sept. 2, 2011) (unpublished); 

Wood, 2010 WL 458574, at *1-2, or that the Chapman rule applies to all unincorporated 

entities, Trafigura AG, 995 F. Supp. 2d. at 646. 

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withdrawal of members, management and legally binding decision making power may be 

vested solely in designated managers, and the members are not typically liable for the 

sociedad’s acts and debts. Id. at 481. The Grynbergs argue a similar exception is 

warranted here because MLPs share many corporate characteristics. We disagree for two 

reasons. 

First, in cases since Russell, the Supreme Court has declined to extend the 

exception to any other form of entity and has said it likely applies only to the sociedad en 

comandita. Carden, 494 U.S. at 190; Bouligny, 382 U.S. at 151. In Bouligny, the Court 

explained that Russell presented a distinctive problem of “fitting an exotic creation of the 

civil law . . . into a federal scheme that knew it not.” 382 U.S. at 151. In Carden, the 

Court said that after the Bouligny Court declined to extend the exception to labor unions, 

“[t]here could be no doubt . . . that at least common-law entities (and likely all entities 

beyond the Puerto Rican sociedad en comandita) would be treated for purposes of the 

diversity statute” as partnerships, whose citizenship is determined according to each 

member’s citizenship. 494 U.S. at 190. And in Russell itself, the Court said, “The 

tradition of the common law is to treat as legal persons only incorporated groups and to 

assimilate all others to partnerships.” 288 U.S. at 480. 

Moreover, the Carden Court noted that although Russell might be read to “reflect 

the Supreme Court’s willingness to look beyond the incorporated/unincorporated 

dichotomy and to study the [entity’s] internal organization, state law requirements, 

management structure, and capacity or lack thereof to act and/or sue, to determine 

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diversity of citizenship,” the Court had specifically rejected that approach in decisions 

since Russell. 494 U.S. at 190 (alteration omitted) (citing Bouligny, 382 U.S. at 151). 

Second, even if we consider the MLP’s characteristics, they do not support 

treating an MLP like a corporation for diversity jurisdiction. MLPs and corporations are 

publicly traded, centrally managed, and have freely transferable interests. But the 

similarities end there. MLPs are formed as unincorporated entities under state law, and 

Carden reaffirmed the dichotomy between corporations and unincorporated entities. 

The Grynbergs do not attempt to compare the management structures of an MLP 

to those of a sociedad en comandita or a corporation, perhaps because MLP governance 

differs from corporate governance. See John Goodgame, Master Limited Partnership 

Governance, 60 Bus. L. 471, 485 (2005). For example, because MLPs are creatures of 

state limited partnership law, the partnership agreement can modify the fiduciary duties 

owed by the MLP’s partners. Id. at 485-87. But corporate law disallows modifying or 

restricting the fiduciary duties owed by the corporate board of directors. Id. at 486. 

3. The Grynbergs’ Policy Arguments Should Be Addressed to Congress, Not the 

Courts 

The Grynbergs urge us not to apply Carden to MLPs because doing so would 

preclude diversity jurisdiction over MLPs.5

 The Carden Court acknowledged the law in 

 

5

 The Grynbergs argue applying the Chapman rule to MLPs “protect[s] 130 very 

large natural resources companies from ever having to answer in federal court for any 

wrongdoing, [which] raises grave concerns, which arguably rise to the level of 

constitutional concerns, about the denial of access to the courts, equal protection, and due 

process.” Aplt. Reply Br. at 18-19. To the extent the Grynbergs raise any constitutional 

Continued . . . 

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this area “can validly be characterized as technical, precedent-bound, and unresponsive to 

policy considerations raised by the changing realities of business organization.” 494 U.S. 

at 196. Nevertheless, despite practical similarities between corporations and certain types 

of unincorporated entities, the Court said it was up to Congress, not the courts, to make 

“further adjustments.” Id. Whether MLPs should be “assimilated to the status of 

corporations for diversity purposes, how such citizenship is to be determined, and what if 

any related rules ought to apply, are decisions which we believe suited to the legislative 

and not the judicial branch.” Bouligny, 382 U.S. at 153. 

III. CONCLUSION 

The Grynbergs of Colorado concede diversity jurisdiction is lacking in this case if 

we determine the Chapman rule applies. It does. They acknowledge that when they filed 

this action, at least one KMEP unitholder was a Colorado citizen. Accordingly, the 

district court properly dismissed this case for lack of jurisdiction. We affirm.6

 

arguments for the first time in their reply brief, we will not consider them. Stump v. 

Gates, 211 F.3d 527, 533 (10th Cir. 2000). 

6

 The Kinder Morgan entities move to seal portions of the record containing the 

Grynbergs’ petition to vacate the arbitration award and certain exhibits to the petition, 

including the arbitration award, the settlement agreement at issue in the arbitration 

proceeding, and the full transcript of the arbitration proceeding. The Clerk of the Court 

ordered the Kinder Morgan entities to show cause to justify their sealing request. 

We have reviewed the Kinder Morgan entities’ response and these materials. We 

find the Kinder Morgan entities have established good cause for protecting those pages 

identified in their response as containing confidential and proprietary information and 

grant their motion as to those documents. 

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