West v. Louisville Gas & Elec. Co., 19-2442

• Decision Date: 02 March 2020
• Docket Number: No. 19-2442,19-2442
• Citation: 951 F.3d 827
• Parties: Stephen R. WEST, Plaintiff-Appellant, v. LOUISVILLE GAS & ELECTRIC COMPANY, Defendant, and Charter Communications, Inc., and Spectrum Mid-America, LLC, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

951 F.3d 827

Stephen R. WEST, Plaintiff-Appellant,

v. LOUISVILLE GAS & ELECTRIC COMPANY, Defendant,andCharter Communications, Inc., and Spectrum Mid-America, LLC, Defendants-Appellees.

No. 19-2442

United States Court of Appeals, Seventh Circuit.

Argued January 15, 2020

Decided March 2, 2020

Rehearing and Rehearing En Banc Denied March 31, 2020

John D. Cox, Scott D. Spiegel, Attorneys, LYNCH, COX, GILMAN & GOODMAN, PSC, Louisville, KY, for Plaintiff-Appellant.

Kevin M. Cloutier, Attorney, SHEPPARD, MULLIN, RICHTER & HAMPTON LLP, Chicago, IL, Abraham Shanedling, Paul Anthony Werner, III, Attorneys, SHEPPARD, MULLIN, RICHTER & HAMPTON, LLP, Washington, DC, Defendants-Appellees.

Matthew A. Brill, Attorney, LATHAM & WATKINS LLP, Washington, DC, for Amicus Curiae NATIONAL CABLE & TELECOMMUNICATIONS ASSOCIATION.

Before Bauer, Easterbrook, and Hamilton, Circuit Judges.

Easterbrook, Circuit Judge.

This appeal presents a question about how 47 U.S.C. § 541(a)(2), part of the Cable Communications Policy Act of 1984, affects use of a utility easement in Indiana.

In 1938 a predecessor of Stephen West granted a perpetual easement to a predecessor of Louisville Gas & Electric Company, permitting it to build and maintain a 248-foot-tall tower carrying high-voltage electric lines. (Ownership of both the underlying land and the easement has changed hands since 1938. For simplicity we refer to the current owners.) In 2000 Louisville Gas permitted Charter Communications to install on the towers a fiber-optic cable that carries communications (telephone service, cable TV service, and internet data). Louisville Gas asked in 1990 for explicit permission to do this, and West refused. In 2000 it concluded that the existing easement allows the installation of wires that carry photons (that is, fiber-optic cables) along with the wires that carry electrons. West disagreed and filed this suit under the diversity jurisdiction, seeking compensation from Louisville Gas, under Indiana’s substantive law, for the addition of the new cable.

Some time later West added Charter Communications, Insight Kentucky Partners II, L.P., and "Time Warner Cable" as additional defendants. As far as we can tell Time Warner Cable is a trade name rather than a juridical entity. There used to be a Time Warner Cable Inc., but it merged into Charter in 2016. We have omitted Time Warner Cable from the caption and do not mention it again, as trade names are not suable. See Schiavone v. Fortune , 477 U.S. 21, 106 S.Ct. 2379, 91 L.Ed.2d 18 (1986). Insight Kentucky Partners II also has disappeared by merger; its successor appears to be Spectrum Mid-America, LLC, which we have substituted in the caption, though Insight Kentucky Partners II remains relevant to jurisdiction.

The district court granted Charter’s motion to dismiss on the pleadings, ruling that § 541(a)(2) gives it a right to use existing easements dedicated to service as utility corridors. 2018 U.S. Dist. LEXIS 2832 (S.D. Ind. Jan. 8, 2018). But the judge denied Louisville Gas’s motion to dismiss, writing that some issues of Indiana law could not be resolved on the pleadings. 2018 U.S. Dist. LEXIS 2830 (S.D. Ind. Jan. 8, 2018).

West wanted to appeal immediately. But instead of asking the district judge to issue a partial final judgment under Fed. R. Civ. P. 54(b), he dismissed his claim against Louisville Gas without prejudice, reserving a right to reinstate it after an appellate decision about his rights vis-à-vis Charter. We dismissed the ensuing appeal, observing that it has long been settled that parties cannot use a dismiss-and-reinstate plan to circumvent the final-decision rule of 28 U.S.C. § 1291. See West v. Louisville Gas & Electric Co ., 920 F.3d 499 (7th Cir. 2019). West then settled his dispute with Louisville Gas and filed a second appeal.

Unfortunately, the experience of having one appeal dismissed did not induce counsel to pay attention to appellate jurisdiction the second time around. Circuit Rule 30(a) requires the appellant to submit, bound with the brief, an appendix containing "the judgment or order under review". Despite certifying compliance with this rule, West’s appellate lawyers (he has five) omitted the judgment. We tracked it down and found, to our surprise, that it does not mention Insight Kentucky Partners II or its successor. Appeal is possible only after final decision has been entered with respect to all litigants; that was the central point of our opinion dismissing West’s first appeal. Yet no one asked the district court to enter a judgment wrapping up the case, and no one brought the problem to our attention either. When we pointed out the problem at oral argument, counsel seemed surprised. We suggested that they ask the district judge to enter a judgment covering all litigants, as they should have done before appealing. That has now been accomplished—though the district court named Insight Kentucky Partners II despite the fact that the merger preceded the judgment by five weeks.

Having assured ourselves that we have appellate jurisdiction, we must turn to subject-matter jurisdiction. It’s easy enough to determine the twin citizenships of Charter Communications (Delaware and Connecticut). West is a citizen of Indiana, and Louisville Gas a citizen of Kentucky. So far, so good. But Insight Kentucky Partners II was not a corporation, so its citizenship depended on the citizenships of each partner—and if any partner is itself a partnership or limited liability company, then the identity of each member of each of these entities must be traced until we reach a corporation or natural person. See, e.g., Carden v. Arkoma Associates , 494 U.S. 185, 110 S.Ct. 1015, 108 L.Ed.2d 157 (1990) (citizenship of a partnership is that of every partner, limited as well as general); Indiana Gas Co. v. Home Insurance Co ., 141 F.3d 314, rehearing denied, 141 F.3d 320 (7th Cir. 1998). (It is the citizenship of Insight Kentucky Partners II rather than Spectrum Mid-America that matters, because subject-matter jurisdiction depends on the state of affairs when a case begins.)

West’s complaint treats Insight Kentucky Partners II as if it were a corporation. In this court he says that he recognized that it isn’t one, but because he did not know the details of its ownership structure, that was the best he could do. It’s not good enough. The district judge should have insisted that all details of citizenship be established on the record but did not do so; as far as we can see the judge never broached the issue.

Charter’s brief in this court tells us:

Insight Kentucky Partners II, L.P., and all but one of its members, and its members’ members, are Delaware limited liability companies with principal places of business in Stamford, Connecticut. The sole exception is member Advance/Newhouse Partnership, which is a New York partnership with a principal place of business in New York. None of Advance/Newhouse Partnership’s members, or its members’ members, are citizens of Indiana.

We’ve held repeatedly that there’s no such thing as a [state name here] partnership or LLC, that only the partners’ or members’ citizenships matter, and that their identities and citizenships must be revealed . See, e.g., Guaranty National Title Co. v. J.E.G. Associates , 101 F.3d 57, 59 (7th Cir. 1996). We do not blithely accept assurances along the lines of "no one on our side is a citizen of the opposing litigant’s state." We’re especially unlikely to do so when the litigant describes a partnership as a limited liability company. Do Charter’s lawyers really not know the difference? It should have been enough for them to read Circuit Rule 28(a)(1), which provides among other things: "If any party is an unincorporated association or partnership the statement shall identify the citizenship of all members." Charter’s brief does not comply with Rule 28(a)(1).

The court reviews jurisdictional matters before argument and directs parties to furnish missing details. We informed Charter that its statement did not comply with the requirements. In response—it said the same thing again! Counsel still had not complied with Circuit Rule 28(a)(1), which requires the statement to "identify the citizenship of all members." Nor was counsel familiar, at oral argument, with the Supreme Court’s insistence that only corporations receive the treatment specified by 28 U.S.C. § 1332(c)(1), under which each corporation has two state citizenships (incorporation and principal place of business). Every other entity is transparent, and the court needs to know the citizenships of every partner or member, tracing through however many layers there may be. Compare Carden and Navarro Savings Association v. Lee, 446 U.S. 458, 100 S.Ct. 1779, 64 L.Ed.2d 425 (1980) (the citizenship of a trust is that of its trustees), with Hertz Corp. v. Friend , 559 U.S. 77, 130 S.Ct. 1181, 175 L.Ed.2d 1029 (2010) (discussing the special rule for corporations). At argument we directed counsel to comply, at long last, with Circuit Rule 28(a)(1) and furnish the details that the Supreme Court has held are essential.

The jurisdictional statement that Charter filed in response to this order discloses that Insight Kentucky Partners II had an ownership structure 14 [!] levels deep. It took Charter four single-spaced pages to identify the owners. Most of the names occur over and over. Having worked this through ourselves, and having concluded that there were 17 rather than 14 layers (that there should be difficulty counting them is one of many problems with the structure), we are left with the conclusion that every branch of the chain led to a corporation that is neither incorporated in Indiana nor has a principal place of business there. Complete diversity of citizenship exists, though the parties have wasted a good deal of judicial time on the road to this conclusion.

The 1938 easement grants Louisville Gas

a right-of-way and perpetual easement to maintain, operate, renew, repair and remove a line or lines

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