## Facts

- Barry C. Cosgrove negotiated with Joseph Bartolotta and Mary-Bart, LLC (a restaurant business) about Cosgrove’s participation in a restaurant venture.
- Cosgrove claimed Bartolotta made assurances about Cosgrove’s role and compensation, and that Cosgrove took actions in reliance on those assurances.
- Cosgrove sued in federal court under diversity jurisdiction, asserting Wisconsin-law claims including promissory estoppel, misrepresentation, and unjust enrichment.
- A jury awarded Cosgrove $135,000 total: $117,000 (promissory estoppel), $1,000 (misrepresentation), and $17,000 (unjust enrichment).
- On a post-trial motion, the district court set aside the promissory-estoppel award for lack of reliance, but left the misrepresentation and unjust-enrichment awards intact.
- The district court denied Cosgrove’s motion for costs, reasoning he did not recover the minimum jurisdictional amount under 28 U.S.C. § 1332(b).
- Cosgrove appealed the elimination of the promissory-estoppel award and the denial of costs; defendants cross-appealed and challenged subject-matter jurisdiction based on the LLC’s citizenship.

## Issues

1. How is a limited liability company’s citizenship determined for diversity jurisdiction under 28 U.S.C. § 1332?
2. Whether the evidence permitted a reasonable jury to find detrimental reliance sufficient to support promissory estoppel under Wisconsin law.
3. Whether the misrepresentation and unjust-enrichment verdicts were supported under Wisconsin law.
4. Whether 28 U.S.C. § 1332(b) permits denial of costs solely because the plaintiff recovered less than the jurisdictional amount.

## Decision

- The court held that an LLC’s citizenship for diversity purposes is the citizenship of all of its members, as with partnerships, and complete diversity existed on the record.
- The court reinstated the jury’s promissory-estoppel award, concluding the evidence was sufficient for a reasonable jury to find reliance under Wisconsin law.
- The court affirmed the misrepresentation and unjust-enrichment awards.
- The court vacated the denial of costs and remanded, holding § 1332(b) does not authorize denying costs merely because the recovery falls below the jurisdictional threshold.

## Legal Principles

- For diversity jurisdiction, unincorporated entities, including LLCs, take the citizenship of each member; they are not treated as corporations for citizenship purposes.
- Promissory estoppel under Wisconsin law requires a promise reasonably expected to induce action or forbearance, actual inducement of action or forbearance of a definite and substantial character, and a need for enforcement to avoid injustice.
- Post-trial review of a jury verdict requires deference where a reasonable jury could find the elements satisfied based on the evidence.
- Under 28 U.S.C. § 1332(b), a court may deny costs when the plaintiff recovers less than the amount claimed, but the statute does not make the jurisdictional minimum a standalone basis to deny costs; the focus is on whether the amount claimed was unreasonably inflated.

## Conclusion

The Seventh Circuit confirmed that an LLC’s citizenship is determined by the citizenship of all its members, reinstated the jury’s promissory-estoppel award while affirming misrepresentation and unjust enrichment, and required reconsideration of costs because § 1332(b) does not permit denying costs solely for recovering below the jurisdictional amount.


Cosgrove v. Bartolotta, 150 F.3d 729 (7th Cir. 1998)