## Facts

- Belleville Catering Co. and five individual guarantors sued Champaign Market Place, L.L.C. in federal court, invoking diversity jurisdiction under 28 U.S.C. § 1332.
- The pleadings alleged Belleville was a Missouri corporation with its principal place of business in Missouri, the individual plaintiffs were Missouri citizens, and the defendant was a Delaware LLC with its principal place of business in Illinois.
- The defendant accepted these allegations and asserted a counterclaim.
- By party consent, a magistrate judge presided, and a jury returned a $220,000 verdict for the defendant on its counterclaim.
- On appeal, both sides repeated the same jurisdictional assertions.
- The court of appeals raised subject-matter jurisdiction on its own initiative and discovered indications that Belleville may have been incorporated in Illinois, contrary to the complaint.
- The record did not identify the members of the defendant LLC or their citizenship, and supplemental filings did not establish complete diversity.

## Issues

1. For diversity jurisdiction, whether an LLC’s citizenship is determined like a corporation’s (state of organization and principal place of business) or by the citizenship of each of its members.
2. Whether, given incomplete and incorrect jurisdictional allegations and uncertainty about party citizenship, the federal courts had subject-matter jurisdiction sufficient to support the judgment.

## Decision

- The court held that an LLC is not treated as a corporation for diversity purposes and instead is a citizen of every state in which any member is a citizen.
- Because the LLC members’ citizenship was not alleged or proved, complete diversity was not established.
- The court also noted evidence suggesting Belleville Catering was incorporated in Illinois, further calling diversity into question.
- The court vacated the judgment and remanded with instructions to dismiss for lack of subject-matter jurisdiction.

## Legal Principles

- Federal courts must assure themselves of subject-matter jurisdiction in every case and may examine jurisdiction sua sponte.
- Subject-matter jurisdiction cannot be created by consent, waiver, or litigation conduct; it must exist from the outset.
- For diversity jurisdiction, unincorporated entities (including LLCs) take the citizenship of each of their members, not the citizenship rules applicable to corporations.
- The party invoking federal jurisdiction bears the burden to plead and, when challenged, prove facts establishing complete diversity; failure requires dismissal and vacatur of any merits judgment entered without jurisdiction.

## Conclusion

The Seventh Circuit set aside the jury verdict because diversity jurisdiction was never properly established: the defendant LLC’s citizenship depended on the citizenship of all its members, which was not identified, and the plaintiffs’ own citizenship allegations were unreliable, requiring dismissal for want of subject-matter jurisdiction.


Belleville Catering Co. v. Champaign Market Place, L.L.C., 350 F.3d 691 (7th Cir. 2003)