Law Commons^™

Limited Liability Company Citizenship: Reconsidering An Illogical And Inconsistent Choice, Debra R. Cohen

Journal Articles

The trend in diversity actions in Federal Court is to rigidly apply the formalistic rules for determining citizenship (aggregate or entity) to deem limited liability companies (LLCs) to have aggregate or "partnership" citizenship. While the approach is designed to reduce the federal docket; there is no evidence that it works. More importantly, this result-oriented approach is not based on well-reasoned analysis. This approach creates several illogical and inconsistent results. It bears no reflection on modern business realities, it undermines well established principles of law, and it undercuts the purpose for which diversity jurisdiction was established, This article suggests that, just …

Citizenship Of Limited Liability Companies For Diversity Jurisdiction, Debra R, Cohen

Journal Articles

The limited liability company is an increasingly popular form of business organization. Due to its hybrid nature, however, the citizenship of a LLC for purposes of diversity jurisdiction is difficult to determine. Should the citizenship of a LLC be determined as if it were a corporation, in which case it has "entity" citizenship, or as if it were a partnership, in which case its citizenship is determined by the citizenship of "persons composing" the LLC?

This Article examines the history of the evolution of hybrid organizations like the LLC, and the rules for determining the citizenship of business organizations in …