United States District Court, District of Columbia
C.F. FOLKS, LTD., Plaintiff,
MCP II JEFFERSON, LLC, Defendant.
J. NICHOLS UNITED STATES DISTRICT JUDGE
C.F. Folks, Ltd. filed this civil action against MCP II
Jefferson, LLC in the Superior Court of the District of
Columbia, alleging various non-federal causes of action.
See generally Compl., ECF No. 1-2 at 4-17. MCP
removed the case to this Court. See Not. of Removal,
ECF No. 1. Pending are MCP's Motion to Dismiss, ECF No.
8, and C.F. Folks's Motion to Remand, ECF No. 13. For the
reasons that follow, the Court will grant C.F. Folks's
Motion and remand the case to Superior Court. Because the
Court disposes of the case on jurisdictional grounds, it
declines to reach the merits of MCP's Motion to Dismiss.
case arises out of a landlord-tenant dispute. The tenant,
C.F. Folks, operated a Washington, D.C. restaurant for
several decades. Compl. ¶¶ 4, 8. It briefly
experimented with offering both breakfast and lunch service,
but it quickly abandoned breakfast and served only lunch for
more than thirty years. Id. ¶¶ 1, 8. To
make up for sagging profit margins over the last few years,
it made some plans to expand its business, including
restoring its breakfast service, obtaining a liquor license,
and trying its hand at dinner and late-night operations.
Id. ¶ 42.
ran into at least one problem: the only internal restroom
available for patrons was located on the restaurant's
basement level and could only be accessed by going down a
narrow stairway. Id. ¶ 13. Because the restroom
was inaccessible to persons with disabilities, C.F. Folks
directed most patrons to a common restroom located outside
the restaurant elsewhere in the building. Id. ¶
14. That arrangement sufficed for some time but was a
frequent source of tension between the restaurant and the
previous landlord. Id. ¶ 15. The Parties failed
to reach an agreement on the matter over the course of
several amendments to the lease and eventually went to court
in 2007. Id. ¶ 27-30. They settled that
litigation and memorialized C.F. Folks's right to access
the common restroom in the settlement agreement. Id.
agreement said nothing about the time of day during which the
restaurant's patrons could use the common restroom.
Id. ¶ 31. C.F. Folks proposed several times
expanding to a dinner service (which included the prospect of
serving alcohol to diners late in the evening on weekends),
and each time the landlord refused to permit customers access
to the building and its common restroom after hours unless
the restaurant took affirmative measures to ensure the
building's security, including escorting patrons to the
restroom and hiring a part-time security guard. Id.
¶¶ 39-50. Those solutions proved cost-prohibitive,
so the Parties again turned to litigation, which was filed in
May 2017 in Superior Court and removed shortly thereafter.
Id. ¶ 51. Judge Chutkan eventually dismissed
that suit for lack of Article III standing because C.F. Folks
had not yet taken concrete steps to expand its service and
there was not yet any harm that the Court could redress.
See generally C.F. Folks, Ltd. v. DC Jefferson Bldg.,
LLC, 308 F.Supp.3d 145 (D.D.C. 2018).
its efforts to compel the landlord to cooperate with its
expansion plans failed, C.F. Folks closed. Compl. ¶ 63.
C.F. Folks then filed this suit in the Superior Court of the
District of Columbia, arguing that it had now experienced
concrete injury and had standing to sue. See generally
Id. Defendant MCP (successor in interest to the previous
landlord) promptly removed and moved to dismiss. MCP argues
(1) that the statute of limitations has run on the
restaurant's claims and (2) that the Complaint fails to
state a claim for relief. Def.'s Mem. in Support of Mot.
to Dismiss at 9-19, ECF No. 8-1. MCP argues in part that C.F.
Folks has failed to allege cognizable damages or that MCP
caused such damages. Id. at 18-19.
Folks responded by moving to remand, based on a novel
argument. The restaurant characterizes MCP's arguments on
damages as an assertion that C.F. Folks lacks standing to
sue. See Pl.'s Mot. to Remand at 5-8. C.F. Folks
contends that if the Court finds that the Complaint does not
adequately plead damages, then C.F. Folks would lack Article
III standing to bring its claims. Id. Such a
holding, C.F. Folks argues, would deprive the Court of
subject-matter jurisdiction and require a remand to Superior
Court. See Id. (citing Collier v. SP Plus
Corp., 889 F.3d 894, 896 (7th Cir. 2018)).
considering the restaurant's motion to remand, the Court
made the Parties aware of an apparent, separate
jurisdictional defect. MCP removed the case on the basis of
diversity jurisdiction under 28 U.S.C. § 1332.
See Not. of Removal at 1. MCP asserted that (1) C.F.
Folks “is a District of Columbia limited liability
company, ” id. ¶ 4; (2) “Defendant,
while registered to do business in the District of Columbia,
is a Delaware limited liability company registered with its
principal place of business in Boston, Massachusetts, ”
id. ¶ 5; and (3) “[t]he amount in
controversy exceeds the sum of $75, 000, exclusive of costs
and interest, ” id. ¶ 6.
allegations were insufficient to establish the Court's
subject-matter jurisdiction, including (though not only)
because limited liability companies (LLCs) are citizens of
all states of which their members are citizens.
CostCommand, LLC v. WH Adm'rs, Inc., 820 F.3d
19, 21 (D.C. Cir. 2016). As a result, the Court directed MCP
to file supplemental briefing alleging particularized
jurisdictional facts about the citizenship of the Parties.
ECF No. 18. (citing Doe ex rel. Fein v. District
of Columbia, 93 F.3d 861, 871 (D.C. Cir. 1996)).
MCP's response, ECF No. 19, “raised more questions
than it answered, ” Laroach v. BridgePoint
Healthcare, LLC, No. 1:18-cv-1096, 2018 WL 6434768, at
*2 (D.D.C. Dec. 7, 2018), so the Court ordered a second round
of briefing. ECF No. 20. MCP timely filed another
supplemental brief, ECF No. 22, and C.F. Folks responded, ECF
No. 23. This time, MCP included over 200 pages of affidavits,
shareholder lists, and LLC formation documents attempting to
demonstrate that none of its parent companies or their
trustees, shareholders, or members were D.C. citizens so as
to destroy complete diversity.
after sifting through those papers, the Court still cannot
determine whether it has subject-matter jurisdiction, and MCP
has certainly not established that the Court has
originally alleged that C.F. Folks is a D.C. LLC. Not. of
Removal ¶ 4. But upon further investigation, it now
believes that C.F. Folks is a D.C. corporation with its
principal place of business in D.C. ECF No. 22, Ex. A. The
Court will therefore assume that C.F. Folks is a citizen of
the District of Columbia under 28 U.S.C. § 1441(c).
however, is an LLC. Not. of Removal ¶ 5. As noted above,
LLCs are citizens of all states of which their members are
citizens. CostCommand, 820 F.3d at 21. MCP's
sole member happens to be another LLC, the sole member of
which is a Maryland real estate investment trust
(“REIT”). A Maryland REIT is a citizen of all
states of which its trustees and its shareholders
are citizens. Americold Realty Tr. v. Conagra Foods,
Inc., 136 S.Ct. 1012, 1016 (2016). This particular REIT
has (A) trustees who are all Massachusetts citizens and (B)
shareholders who own two classes of stock, one type of which
is wholly owned by a limited partnership. The general partner
of that partnership is an LLC, and that LLC's two members
are a Massachusetts corporation and yet another LLC.
turn, that LLC-which is five ownership steps removed from
MCP-has several dozen members, including individual
investors, pension funds, major universities, and other
institutional investors. But among that group, the Court
counts at least sixteen trusts and ten LLCs. On top of that,
the other class of the Maryland REIT's shareholders is
comprised of 125 individuals, among whom number at least nine
Court therefore faces a situation in which, to determine
whether diversity exists between a tenant and its landlord at
odds over the use of a restroom, it must investigate the
membership of more than a half dozen layers of unincorporated
associations and their members, partners, trustees, and
shareholders. But that inquiry has simply yielded more
unincorporated associations. While each has a mailing address
somewhere other than the District of Columbia, it is nearly
impossible to determine where the inquiry ends. So far, it
appears that for diversity purposes MCP is a citizen of at
least Massachusetts, Delaware, Maryland, Ohio, Tennessee,
Pennsylvania, New York, Connecticut, New Hampshire, North
Carolina, Florida, Illinois, Colorado, Rhode ...