Summary
This memorandum opinion and order from the U.S. District Court for the Northern District of Illinois addresses a defendant's Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction and a related motion to seal a corporate disclosure statement. The court denied the motion to seal, finding insufficient good cause to overcome the presumption of public access to dispositive documents. Applying Seventh Circuit precedent on LLC citizenship, the court granted the motion to dismiss, concluding that complete diversity of citizenship under 28 U.S.C. § 1332 was lacking because the plaintiff held dual foreign citizenship while the defendant LLC had both domestic and foreign members. Consequently, the court lacked federal subject matter jurisdiction over the case.
Topics
Practice areas
Questions Presented
- Whether the corporate disclosure should be sealed under the presumption of public access.
- Whether the district court has subject‑matter jurisdiction over the case under 28 U.S.C. §1332.
Holdings
- The court denied the motion to seal because the plaintiff failed to show good cause; the presumption of public access outweighs the defendant's privacy interests.
- The court lacks diversity jurisdiction because there is a U.S. citizen on only one side of the suit and foreign parties on both sides; the motion to dismiss is granted.
Key quotations
““[s]ecrecy in judicial proceedings is disfavored,” GEA Grp. AG v. Flex‑Gate Corp., 740 F.3d 411, 419 (7th Cir. 2014).” (740 F.3d at 419)
““Documents that affect the disposition of federal litigation are presumptively open to public view, even if the litigants strongly prefer secrecy, unless a statute, rule, or privilege justifies confidentiality.”” (297 F.3d at 545)
Factual background
FractureLabs Oü, a foreign corporation, sued Jump Trading, LLC alleging fraud, conspiracy, breach of contract and fiduciary duty related to a cryptocurrency offering. Jump Trading submitted a corporate disclosure stating it is a citizen of several U.S. states and foreign nations. The parties dispute whether complete diversity exists under §1332.
Procedural history
Plaintiff filed complaint alleging fraud and related state law claims. Defendant moved to dismiss for lack of subject‑matter jurisdiction under 28 U.S.C. §1332 and moved to seal its corporate disclosure. The court denied the seal motion, granted the dismissal, and denied the plaintiff's jurisdictional‑discovery motion as moot.