Opinion ID: 3151314
Heading Depth: 2
Heading Rank: 1

Heading: Overview of MLPs

Text: 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. -2- 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  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 Feb. 2, 2010) (unpublished).2 MLPs are similar to limited partnerships in that they have general partners who manage the partnership’s affairs and limited partners (called “unitholders”)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).