Coleman v. Chase Home Finance, LLC, 08-2215NLHJS, 2009 WL 1323598 (D.N.J., May 11, 2009). 

Pay attention to those citizenship allegations, litigators, or you risk being forced off the federal court turnpike at the next exit! Remember that federal courts sometimes analyze whether they have subject matter jurisdiction, even if the parties themselves do not raise the issue. 

In Coleman, the federal district court for the District of New Jersey did just that, denying without prejudice the defendant’s Rule 12(b)(6) motion because of uncertainty about whether subject matter jurisdiction existed. The root of this uncertainty? The plaintiff did not adequately allege the citizenship of the defendant, Chase Home Finance, LLC.

Although the plaintiff alleged that the defendant is organized under the laws of Delaware, she did not allege where the defendant has its principal place of business, as is required under CAFA for determining the citizenship of unincorporated associations. Beyond this deficiency, the court discussed the possibility that CAFA’s “home state” controversy exception to jurisdiction could apply if the defendant is found to be a citizen of New Jersey. 

The court recognized that this was a distinct possibility, because other cases involving the same defendant had indicated the defendant was organized under the laws of the state of New Jersey and maintained its principal place of business in New Jersey. As a result, the court gave the parties twenty days to engage in jurisdictional discovery, and directed the plaintiff to file an amended complaint properly alleging jurisdiction shortly thereafter, cautioning both parties of the impermissibility of consenting to jurisdiction.   The court advised that if defendant was from Jersey, the case would be dismissed for lack of subject matter jurisdiction. 

SGJ