United States District Court, S.D. Texas, Houston Division
Honorable Alfred H. Bennett United States District Judge.
the Court is Defendant's ("SunTx") Motion to
Dismiss Plaintiffs Complaint (Doc. #10) and Supplement (Doc.
#27), Plaintiffs ("WAV") Response (Doc. #14) and
Supplement (Doc. #25), and Plaintiffs Reply in Opposition
(Doc. #35). After reviewing counsels' arguments and the
applicable legal authority, the Court denies Defendant's
Motion to Dismiss Plaintiffs Complaint.
African Ventures Limited ("WAV") and Sea Trucks
Group FZE brought suit seeking to enforce payment guarantees
against Ranger Offshore, Inc. and SunTx relating to oil and
gas production offshore Nigeria, Africa. Doc. #14 at 1. WAV
alleges it is a corporation organized under the laws of
Nigeria, with its principal place of business in Lagos,
Nigeria. Doc. #1. SunTx is a Texas limited partnership with
its principal place of business in Dallas, Texas.
Id. Defendant Ranger Offshore, Inc. is a Delaware
corporation with its principal place of business in Texas.
Id. at 2. SunTx argues that WAV insufficiently
alleged its corporate form and citizenship and now moves to
dismiss the case for lack of subject matter jurisdiction.
SunTx argues that WAV provided contradictory statements
concerning its corporate form and thus did not satisfy its
burden of establishing diversity sufficient to invoke the
Court's jurisdiction. Doc. #10 at 1-2.
concedes that if WAV proves it is a corporation, it has met
its burden of establishing jurisdiction. However, if WAV is a
limited liability company, SunTx contends that WAV must plead
the citizenship of its individual members. Doc. #10 at 3.
Compare 28 U.S.C. § 1332(c)(1) ("a
corporation shall be deemed to be a citizen of every State
and foreign state by which is has been incorporated and of
the State or foreign state where it has its principal place
of business . . ."), with Garden v. Arkoma
Assocs., 494 U.S. 185, 195-96 (1990) (holding "that
the citizenship of an unincorporated entity or association,
such as a partnership, is based upon the citizenship of each
of its members.").
the question before the Court is whether WAV is more like a
corporation for the purpose of establishing citizenship (and
jurisdiction has been sufficiently pled) or it is more like a
partnership or limited liability company and would therefore
be required to plead the citizenship of its individual
burden to allege complete diversity lies with the party
invoking the Court's jurisdiction. Howery v. Allstate
Ins. Co., 243 F.3d 912, 919 (5th Cir. 2001). However,
problems with jurisdictional allegations arise when parties
assume foreign countries have business entities that enjoy
corporate status as the United States understands it.
White Pearl Inversiones, S.A. v. Cemusa, Inc., 647
F.3d 684, 686 (7th Cir. 2011). Foreign business entities
present some difficulty for courts in the area of determining
citizenship for the purpose of subject matter jurisdiction
due to having business forms not identical to those of the
United States. See Id. (stating "[n]ot even the
United Kingdom has a business form that is exactly equal to
that of a corporation."). In order for a foreign
business entity to be considered a corporation as opposed to
an unincorporated entity for the purpose of establishing its
citizenship, the Court must determine whether a foreign
business has attributes sufficiently similar to those of a
corporation organized in the United States. Lear Corp. v.
Johnson Electric Holdings, Ltd., 353 F.3d 580, 582 (7th
Cir. 2003). Attributes of a United States corporation (which
distinguish the business from a limited liability company)
that courts have considered when evaluating foreign business
entities are: "indefinite existence, personhood (the
right to contract and litigate in its own name), limited
liability for equity investors, and alienable shares, among
other features." Banks v. Janssen Research &
Dev. L.L.C., 2014 WL 6608340, at *4 (S.D. Ala. Nov. 20,
2014) (citing Fellowes, Inc. v. ChangzhouXinrui Fellowes
Office Equip. Co., 759 F.3d 787, 788 (7th Cir. 2014).
Analysis of WAV's Corporate Form
a limited company incorporated under the laws of Nigeria,
established under the Nigerian Companies and Allied Matters
Act 2004 (formerly the Nigerian Companies and Allied Matters
Act 1990) ("NCAMA"). Doc. #25, Ex. 1 at ¶ 6.
Companies incorporated under NCAMA are entities with legal
personhood (able to contract and litigate as a natural
person). WAV is managed by directors and officers
and owned by shareholders (also referred to as members). Doc.
#25, Ex.1 at ¶ 6. WAV also appears to have perpetual
existence. Doc. #25, Ex. B.
Certificate of Incorporation indicates that it is a
"private company" and "the liability of the
members is limited by shares." Doc. #25, Ex. A, Ex. B at
10 ¶¶ 4-5. NCAMA states, "the shares or other
interests of a member in a company shall be properly
transferable in the manner provided in articles of
association of the company." Under its articles of
association, WAV's shares are alienable with certain
restrictions as a private company. Id. at Ex.
reviewing WAV's incorporation documents, NCAMA, and the
affidavit of WAV's legal counsel in Nigeria, the Court
finds that WAV (a Nigerian limited company) has demonstrated
it is a corporation for the purpose of determining its
citizenship. As discussed above, WAV is an entity with legal
personhood, perpetual existence, governed by a Board of
Directors, with transferable shares, and thus it has
attributes similar to a United States corporation.
the Court finds WAV has attributes sufficiently similar to
that of a corporation, WAV properly pled its citizenship and
demonstrated that complete diversity exists between the
parties. For the ...