Ge Oil & Gas, LLC v. Waguespack
| Citation | 523 F.Supp.3d 926 |
| Decision Date | 01 March 2021 |
| Docket Number | CASE NO. 6:19-CV-00054 |
| Parties | GE OIL & GAS, LLC v. Dalis Moreno WAGUESPACK, et al. |
| Court | U.S. District Court — Western District of Louisiana |
John M. Duck, Lisa Merz Hedrick, Mark R. Beebe, Adams & Reese, Graham H. Williams, Sternberg Naccari & White, New Orleans, LA, Paul J. Hebert, William H.L. Kaufman, Ottinger Hebert, Lafayette, LA, for GE Oil & Gas LLC.
Thomas M. Flanagan, Camille E. Gauthier, Flanagan Partners, New Orleans, LA, Brett P. Furr, John M. Parker, Jr., Taylor Porter et al., Baton Rouge, LA, Samuel T. Acker, Pro Hac Vice, Bradley Arant et al., Birmingham, AL, William S. Snyder, Pro Hac Vice, Bradley Arant et al., Dallas, TX, for Dalis Moreno Waguespack, William W. Rucks, IV, Jesus Moreno.
Thomas M. Flanagan, Camille E. Gauthier, Flanagan Partners, Andy Joseph DuPre, Carter Dupre, New Orleans, LA, Brett P. Furr, John M. Parker, Jr., Taylor Porter et al., Baton Rouge, LA, Samuel T. Acker, Pro Hac Vice, Bradley Arant et al., Birmingham, AL, William S. Snyder, Pro Hac Vice, Bradley Arant et al., Dallas, TX, for MBM 2011 DOHGRAT, TCM 2011 DOHGRAT, MBM 2011 MGHGRAT, TCM 2011 MGHGRAT, Moreno Childrens Trust, MBM 2008 Childrens Trust No. 1, TCM 2008 Childrens Trust No. 1, MBM Family Trust No. 1.
RULING
On March 5, 2020, the Court sua sponte raised the issue of whether subject matter jurisdiction exists in the present case and ordered briefing addressing the Court's jurisdiction. [ECF No. 26]. On June 2, 2020, the Court held a telephone conference to discuss the briefs filed. [ECF No. 40]. For the reasons discussed at the conference, the Court found further briefing was necessary and supplemental briefs have now been filed. Id. ; see also ECF Nos. 44, 45. After consideration of all briefing filed, the Court finds this suit must be dismissed for lack of subject matter jurisdiction.
The present matter arises out of a longstanding attempt by Plaintiff GE Oil & Gas, LLC ("GEOG") to collect on a $25,000,000 loan it made to Turbine Generation Services, LLC ("TGS"), which was guaranteed by Michel B. Moreno ("Moreno").1 According to the Complaint before the Court, GEOG has obtained a Judgment from the State of New York against Moreno and TGS in the amount of $39,846,575.34, and that Judgment has now been domesticated in Louisiana and Texas. [ECF No. 1 at ¶¶ 1-2]. However, according to GEOG, "TGS and Moreno have continuously evaded GEOG's enforcement of the Judgment and obstructed its attempts to obtain documents and information identifying the judgment debtor's assets." Id. at ¶ 2. Accordingly, GEOG has filed this suit, which is solely for declaratory relief, in furtherance of its efforts to collect on its Judgment.
GEOG names the following persons and entities as Defendants to this suit:
Defendants numbered 4 through 11, supra , are collectively referred to herein as the "Trust Defendants." GEOG asks the Court to declare that GEOG's New York Judgment is "enforceable against the Trust Defendants and alternatively declare that the loans taken by Moreno from the Trusts [sic] Defendants were, in fact, simulations and that the proceeds of those loans are therefore subject to seizure." Id. at 25. GEOG pleads the following theories in support of the relief it seeks:
GEOG asserts jurisdiction over this matter exists pursuant to 28 U.S.C. § 1332 (diversity of citizenship). [ECF No. 1 at 5]. According to the filings, GEOG is a citizen of Delaware, Texas, Ohio, Connecticut, New York and Massachusetts. [ECF No. 34-11]. GEOG asserts all Trustee Defendants are citizens of Louisiana. [ECF No. 1 at 3-5]. In its briefing, GEOG contends that the Trust Defendants are nominal parties, the Trustee Defendants are the real parties in interest, and therefore "the citizenship of the individually named trustees controls" the diversity jurisdiction inquiry. [ECF No. 44 at 20; see also Id. at 13-14].
"Proper jurisdiction for a federal court is fundamental and necessary before touching the substantive claims of a lawsuit." Arena v. Graybar Elec. Co., Inc. , 669 F.3d 214, 223 (5th Cir. 2012). District courts have an independent obligation to ensure they do not exceed the scope of their limited jurisdiction. See e.g. Arbaugh v. Y&H Corp. , 546 U.S. 500, 506, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006) (citing Fed. R. Civ. P. 12(h)(3) ). Thus, district courts "must raise and decide jurisdictional questions that the parties either overlook or elect not to press." Henderson ex rel. Henderson v. Shinseki , 562 U.S. 428, 434, 131 S.Ct. 1197, 179 L.Ed.2d 159 (2011). "The burden of establishing federal jurisdiction rests on the party seeking the federal forum." Arena at 219 (quoting Howery v. Allstate Ins. Co. , 243 F.3d 912, 919 (5th Cir. 2001) ).
District courts have original jurisdiction over all civil actions "where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs," and the parties are "citizens of different States." 28 U.S.C. § 1332(a)(1). The diversity statute requires "complete diversity" of citizenship, meaning a "district court cannot exercise diversity jurisdiction if one of the plaintiffs shares the same state citizenship as any one of the defendants." Corfield v. Dallas Glen Hills LP , 355 F.3d 853, 857 (5th Cir. 2003). "[T]he ‘citizens’ upon whose diversity a plaintiff grounds jurisdiction must be real and substantial parties to the controversy." Navarro Savings Association v. Lee , 446 U.S. 458, 460, 100 S.Ct. 1779, 64 L.Ed.2d 425 (1980). "Thus, a federal court must disregard nominal or formal parties and rest jurisdiction only upon the citizenship of real parties to the controversy." Id. at 461, 100 S.Ct. 1779. Further, "[t]he inquiry into the existence of complete diversity requires considering the citizenship even of absent indispensable parties." Bankston v. Burch , 27 F.3d 164, 168 (5th Cir. 1994) ; see also Corfield at 865 n.10 (Courts must consider the citizenship of non-parties "when a party already before the court is found to be a non-stake holder/agent suing only on behalf of another").
In this matter, GEOG has sued both the Trustees and the Trusts which the Trustees manage. The Supreme Court has established three rules for determining jurisdictional citizenship when a trust or a trustee is involved in a lawsuit. In Navarro , the Supreme Court explained that when a trustee files a lawsuit in his or her name, the trustee's State of domicile determines his or her jurisdictional citizenship. Navarro , 446 U.S. 458, 465-66, 100 S.Ct. 1779, 64 L.Ed.2d 425 (1980) ; see also Americold Realty Trust v. Conagra Foods, Inc. , 577 U.S. 378, 136 S.Ct. 1012, 1016, 194 L.Ed.2d 71 (2016). In Carden , the Supreme Court held that when an "artificial entity" other than a corporation sues or is sued, the entity's jurisdictional citizenship is determined by looking to the citizenship of each of its members. Carden v. Arkoma Associates , 494 U.S. 185, 195, 110 S.Ct. 1015, 108 L.Ed.2d 157 (1990). In Americold , the Supreme Court reaffirmed that when an "artificial entity" sues or is sued, its jurisdictional citizenship is determined by the domicile of each of its members. Id. at 1016. Americold involved a suit brought against a real estate investment trust ("REIT") created under Maryland law. In finding the citizenship of the REIT included the domicile of each of its members, the Court explained:
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