In a twist on an often-overlooked issue in pleading diversity jurisdiction that we see in U.S. district court for the district of Minnesota, here is a case where an LLC plaintiff failed to plead its own citizenship properly. Usually, the plaintiff fails to get at the roots of its adversary’s lineage.
This kind of threshold stumble is normally of no consequence over the long haul of civil litigation but its a tedious extra step that brings the “stitch in time…” adage to mind. (Here is an excerpt from a recent pleading showing how it should be done. Noe that the example is from a Notice of Removal — that is, the party pleading the partnership lineage is pleading its own diversity, which makes things easier.)
Complaints are starting to read like those biblical lineage recitations:
Adam, a citizen of Eden, begat Seth, a citizen of Minnesota; and Seth, Enos, a citizen of Iowa, Kenan, Mahalaleel, Jered, Henoch, Methuselah, Lamech, all citizens of California, Noe, Shem, Ham, and Japheth, citizens of New York. The sons of Japheth were Gomer, a citizen of North Carolina, Magog, Madai, and Javan, Tubal, Meshech, and Tiras, all citizens of Vermont…”)
(And what do these silly genealogies really have to do with the actual interests at issue in diversity jurisdiction?)
Sorry, no fresh meat on Minnesota Litigator until Monday, 12/2/2013.
TIME TO GOBBLE (for meat-eating Americans (not so much for turkeys)).
47 million turkeys are raised by Minnesota family farmers every year.
Happy Thanksgiving and Happy Holidays to All!
Photograph by Maura Teague
It’s been a little slow around here these days in terms of true “news and commentary on Minnesota civil litigation” and so this Minnesota litigator wanders off where he does not belong, to ponder issues brought to mind by a recent order in Wells Fargo v. United States pending before U.S. District Court Judge Patrick J. Schiltz, (D. Minn). The lawsuit involves an alleged “sham transaction” that Wells Fargo allegedly devised to lower its taxes…
X falsely claims personal expenses as business expenses to lower his taxes (and keep more money for himself).
Y retains a high-powered accounting firm to lower her tax burden by use of a complex off-shore financial transactions. Her only purpose is to lower her taxes (and keep more money for herself). Y’s tax avoidance efforts exploit loopholes, which have been reviewed and approved by legal experts as legal.
Z retains a high-powered accounting firm to lower his tax burden by use of a complex off-shore financial transactions whose only purpose is to lower his taxes. Z’s tax avoidance efforts were not “blessed” by legal experts and, in fact, the maneuvers are later found to be “sham transactions” designed solely to deprive the government of taxes that Z owed. Z was aware of this risk but he did not have actual knowledge of illegality.
Where do X, Y, and Z sit on a moral continuum? Does it make a difference if X is lowering his tax burden by a pittance and Z is lowering his tax burden by billions of dollars? Does it make a difference if Z is a human or a corporation? Is it insane to apply morals to a corporation?
This is a trainwreck. Mr. Butler’s (professional) meltdown within the far more immense (residential mortgage lending) meltdown has been covered previously here.
Where will it end? It is not much of a stretch to suggest that it will end badly. But, with the recently raised question of whether Mr. Butler filed tax returns at all for a few years, comes the first hint that this could end up for Mr. Butler at a federal correctional facility. It is ironic that many Americans have eagerly and impatiently called for criminal charges against those at the epicenter of the global meltdown. And maybe it will only be the self-anointed freedom fighter for the foreclosed who will feel the full force of justice.
Update (11/22/2013): There are so many interesting angles in a recent order by the U.S. District Court (D. Minn.) (Nelson, J.) in the Ewald v. Royal Norwegian embassy, that the circuitry of my central processing unit (CPU) (f.k.a., my brain) is blown.
Mind you, I am not saying there are any “explosive” developments in this memorandum opinion and order. There aren’t. There are, however, several interesting elements and I cannot figure out how to organize my thoughts about them. (Plus, I guess the nuclear option is on my mind these days for some reason.)