United States Court of Appeals

for the Fifth Circuit ____________

No. 22-50933

____________

SXSW, L.L.C., 

Plaintiff—Appellant,

versus

Federal Insurance Company, 

Defendant—Appellee.

______________________________

Appeal from the United States District Court 

for the Western District of Texas

USDC No. 1:21-CV-900

______________________________

Before Willett, Engelhardt, and Oldham, Circuit Judges.

Andrew S. Oldham, Circuit Judge:

This appeal involves an insurance coverage dispute between SXSW, 

L.L.C. and Federal Insurance Company. But we cannot reach the merits 

because the parties have failed to establish diversity of citizenship. We 

remand to allow the district court to consider additional evidence regarding 

jurisdiction.

I. 

SXSW planned to hold its annual “South by Southwest” festival in 

Austin in March 2020. But the City of Austin cancelled the 2020 festival on 

United States Court of Appeals

Fifth Circuit

FILED

October 5, 2023

Lyle W. Cayce

Clerk

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No. 22-50933

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account of the COVID-19 pandemic. When SXSW refused to refund ticket 

purchases, a group of would-be festival goers sued in a class action. The class 

settled, with a total litigation cost to SXSW of over $1 million.

SXSW sued its insurer, Federal, for failing to defend SXSW in the 

class action. Adopting the magistrate’s report and recommendation, the 

district court denied SXSW’s partial motion for summary judgment and 

granted Federal’s motion for summary judgment. SXSW appealed. 

II.

In their opening appellate briefs, the parties agreed that the district 

court had jurisdiction under 28 U.S.C. § 1332(a)(1). SXSW contended that 

we have jurisdiction under 28 U.S.C. § 1291. 

Notwithstanding the parties’ agreement, we have an independent 

obligation to assess subject matter jurisdiction before exercising the judicial 

power of the United States. See Steel Co. v. Citizens for a Better Env't, 523 U.S. 

83, 93–99 (1998). We could not find proper allegations or evidence of 

SXSW’s citizenship. So we gave notice before oral argument that the parties 

should discuss this issue. When questioned, the parties pointed to one page

in the record. Oral Arg. Trans. 16:30–17:00; ROA.519. But that record cite is 

insufficient to support jurisdiction.

A. 

Because federal courts have limited jurisdiction, parties must make 

“clear, distinct, and precise affirmative jurisdictional allegations” in their 

pleadings. Getty Oil Corp. v. Ins. Co. of N. Am., 841 F.2d 1254, 1259 (5th Cir. 

1988). To properly allege diversity jurisdiction under § 1332, the parties need 

to allege “complete diversity.” McLaughlin v. Miss. Power Co., 376 F.3d 344, 

353 (5th Cir. 2004) (per curiam). That means “all persons on one side of the 

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

side.” Ibid. (quotation and citation omitted).

This case presents two evergreen issues related to diversity 

jurisdiction: residency versus citizenship for individuals and citizenship for 

LLCs. See, e.g., MidCap Media Fin., LLC v. Pathway Data, Inc., 929 F.3d 310 

(5th Cir. 2019).

“The difference between citizenship and residency is a frequent source 

of confusion.” Id. at 313. For natural persons, § 1332 citizenship is 

determined by domicile, which requires residency plus an intent to make the 

place of residency one’s permanent home. See Gilbert v. David, 235 U.S. 561, 

568–69 (1915); cf. Joseph Story, Commentaries on the 

Conflict of Laws §§ 41, 44 (1st ed. 1834); Restatement (First)

of Conflict of Laws § 15 (1934). An allegation of residency alone 

“does not satisfy the requirement of an allegation of citizenship.” Strain v. 

Harrelson Rubber Co., 742 F.2d 888, 889 (5th Cir. 1984) (per curiam).

For limited liability companies, § 1332 citizenship is determined by 

the citizenship of “all of its members.” Harvey v. Grey Wolf Drilling Co., 542 

F.3d 1077, 1080 (5th Cir. 2008). To establish diversity jurisdiction in a suit 

by or against an LLC, a party “must specifically allege the citizenship of every 

member of every LLC.” Settlement Funding, LLC v. Rapid Settlements, Ltd., 

851 F.3d 530, 536 (5th Cir. 2017).

B.

In its complaint dated October 6, 2021, SXSW noted that it was a 

limited liability company. ROA.8. Instead of alleging the citizenship of all of 

its members, SXSW only alleged its principal place of business, confusing 

LLC citizenship with corporate citizenship. ROA.8; cf. 28 U.S.C. 

§ 1332(c)(1). 

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In an exhibit dated December 14, 2021 and attached to its motion for 

summary judgement, Federal detailed SXSW’s organizational structure. 

ROA.519. The exhibit stated that SXSW, LLC has two members: SXSW 

Holdings, Inc. and Starr Hill Presents – SX, LLC. ROA.519. SXSW 

Holdings, Inc.’s corporate citizenship (Texas and Texas) is alleged 

elsewhere in the record. ROA.225. But Federal’s chart nowhere alleged the 

citizenship of Star Hill Presents – SX, LLC. ROA.519. And the parties have 

not pointed us to another place in the record. The only allegation regarding 

the citizenship of Star Hill Presents – SX, LLC comes 14 months later in 

SXSW’s opening brief in our court, dated February 22, 2023. Blue Br. 1. The 

brief’s jurisdictional statement specified “Starr Hill Presents – SX LLC is 

wholly owned by Starr Hill Presents LLC, which is wholly owned by Robert 

C. Capshaw, a Virginia resident.” Ibid.

This procedural history reveals at least three potential jurisdictional 

defects in SXSW’s citizenship.

First, there is a potentially important difference between LLC 

membership and LLC ownership. State law governs LLC formation and 

organization. Several states permit LLC membership without ownership. 

See, e.g., Del. Code Ann. tit. 6, § 18-301(d); Tex. Bus. Orgs.

§ 101.102. But SXSW’s jurisdictional statement refers only to the ownership

of Starr Hill Presents – SX LLC and Starr Hill Presents LLC. Blue Br. 1. And 

SXSW has not shown the relevant LLCs were formed in States that equate 

membership and ownership.

1 If those LLCs have non-owner members, the 

citizenship of those members will trickle up to SXSW, potentially defeating 

complete diversity. In any event, the lack of clarity does not satisfy our 

_____________________

1 Insofar as one might infer that both Starr Hill Presents – SX LLC and Starr Hill 

Presents LLC are Virginia LLCs because of their ultimate owner’s residency, Virginia law 

also appears to allow non-owner members. See Va. Code Ann. § 13.1-1038.1(C).

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requirement of “clear, distinct, and precise affirmative jurisdictional 

allegations.” Getty Oil, 841 F.2d at 1259.

Second, SXSW stated that Capshaw was a Virginia resident. But 

residency is not citizenship for purposes of § 1332. See MidCap, 929 F.3d at 

314; Strain, 742 F.2d at 889; Stine, 213 F.2d at 448.

Finally, there is a timing issue. For diversity jurisdiction, we look to 

citizenship at the time the complaint was filed. See Newman-Green, Inc. v. 

Alfonzo-Larrain, 490 U.S. 826, 830 (1989). SXSW filed its complaint on 

October 6, 2021. ROA.8. The complaint makes no allegations about the 

citizenship of SXSW’s members. Federal’s December 14, 2021 exhibit 

contains some additional information, ROA.519, as does SXSW’s February 

22, 2023 appellant brief. Blue Br. 1. But we have no way of knowing whether 

those later documents reflect SXSW’s membership structure as of October 

6, 2021. And we know from oral argument that SXSW’s organizational 

structure has undergone significant changes in the last few years. Oral Arg. 

Trans. 1:30–5:00. This too prohibits us from exercising jurisdiction at this 

stage.

2

* * *

_____________________

2 At oral argument, SXSW’s counsel said that he used the words “owner” and 

“member” interchangeably to mean the same thing. Oral Arg. Trans. 2:00–2:30. He asked 

for the court’s leave to amend SXSW’s allegations or supplement the complaint to make 

affirmative assertions. Oral Arg. Trans. 2:30–3:30; see 28 U.S.C. § 1653 (“Defective 

allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts.”).

But Section 1653 is only helpful where there is evidence of jurisdiction in the record. See

Howery v. Allstate Ins. Co., 243 F.3d 912, 919–20 (5th Cir. 2001); see also MidCap, 929 F.3d 

at 315 (“Since at least 1878, the Supreme Court has prohibited us from receiving 

jurisdictional evidence on appeal.”). Where “the party asserting federal jurisdiction has 

failed to specifically plead that the parties are diverse” and where “there is no evidence of 

diversity on the record, we cannot find diversity jurisdiction....” Howery, 243 F.3d at 919–

20.

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“On every writ of error or appeal, the first and fundamental question 

is that of jurisdiction, first, of this court, and then of the court from which the 

record comes. This question the court is bound to ask and answer for itself, 

even when not otherwise suggested, and without respect to the relation of the 

parties to it.” Great S. Fire Proof Hotel Co. v. Jones, 177 U.S. 449, 453 (1900). 

The parties have not presented sufficient evidence of subject matter 

jurisdiction. We therefore REMAND to the district court for the limited 

purpose of determining whether jurisdiction exists. See MidCap, 929 F.3d at 

316; Mullins v. Testamerica Inc., 300 F. App’x 259, 261 (5th Cir. 2008) (per 

curiam); see also 16 Charles Alan Wright & Arthur R. Miller, 

Federal Practice and Procedure § 3937.1 (3d ed. Apr. 2023). The 

parties do not need to file a new notice of appeal to obtain appellate review of 

the district court’s decision. See Royal Bank of Canada v. Trentham Corp., 665 

F.2d 515, 519 (5th Cir. 1981). The clerk of the district court need only 

supplement the appellate record with “copies of the new filings below and 

the district court’s opinion on jurisdiction.” Mullins, 300 F. App’x at 261; 

Royal Bank of Canada, 665 F.2d at 519. The panel retains jurisdiction over 

this limited remand. See United States v. Perez, 27 F.4th 1101, 1105 (5th Cir. 

2022); Petition of Geisser, 627 F.2d 745, 749 (5th Cir. 1980).

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