Richard's Clearview v. Starr Surplus Lines ( 2023 )

Case: 23-30130 Document: 00516933457 Page: 1 Date Filed: 10/17/2023
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
____________ FILED
October 17, 2023
No. 23-30130
Lyle W. Cayce
____________ Clerk
Richard’s Clearview LLC,
Plaintiff—Appellee,
versus
Starr Surplus Lines Insurance Company,
Defendant—Appellant.
______________________________
Appeal from the United States District Court
for the Eastern District of Louisiana
USDC No. 2:22-CV-2326
______________________________
Before Graves, Higginson, and Ho, Circuit Judges.
Per Curiam: *
Richard’s Clearview LLC sued Starr Surplus Lines Insurance
Company in Louisiana state court over an insurance dispute. Starr removed
the case to federal court, alleging diversity of citizenship. After the district
court dismissed the case on other grounds, Clearview presented evidence of
the lack of diversity of citizenship between the parties and accordingly filed a
motion for vacatur under Federal Rule of Civil Procedure 60(b)(4). The
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*
This opinion is not designated for publication. See 5th Cir. R. 47.5.
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No. 23-30130
district court granted the motion, denied Starr’s request for jurisdictional
discovery, and remanded the case to state court. Starr appealed the
judgment. We now affirm for the reasons given by the district court in its
opinion.
A judgment issued in a diversity case is a “paradigmatic” void
judgment under Rule 60(b)(4) if it is later discovered that the parties are in
fact not diverse. See Mitchell Law Firm, L.P. v. Bessie Jeanne Revocable Trust,
8 F.4th 417, 420 (5th Cir. 2021). And that is exactly the case here.
Starr is a corporation incorporated in Texas with its principal place of
business in New York. 1 This makes it a citizen of Texas and New York for
diversity purposes. 28 U.S.C. § 1332(c)(1). Clearview is a limited liability
company, and two of its members turn out to be Texas citizens. A limited
liability company takes the citizenship of all its members, see MidCap Media
Fin., L.L.C. v. Pathway Data, Inc., 929 F.3d 310, 314 (5th Cir. 2019), so
Clearview is a citizen of Texas for diversity purposes. Accordingly, there is
no diversity jurisdiction in this case under 28 U.S.C. § 1332(a). Once that
became clear, the district court correctly held that it had a “total want of
jurisdiction,” Richard’s Clearview LLC v. Starr Surplus Lines Ins. Co., No. 22-
CV-2326, 2023 WL 1778943 at *2 (E.D. La. Feb. 6, 2023) (quoting Callon
Petrol. Co. v. Frontier Ins. Co., 351 F.3d 204, 208 (5th Cir. 2003)), and vacated
its prior order accordingly.
The district court did not abuse its discretion by denying Starr
jurisdictional discovery. We will disturb a discovery decision “only if it is
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1
On appeal, Starr states multiple times that it is incorporated in New York and has
its principal place of business in Texas. This is at odds with what it alleges in the initial
notice of removal and what the district court states in its opinion. The discrepancy is
ultimately immaterial, because the corporation is a citizen of both for diversity purposes.
See 28 U.S.C. § 1332(c)(1).
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No. 23-30130
arbitrary or clearly unreasonable.” Fielding v. Hubert Burda Media, Inc., 415
F.3d 419, 428 (5th Cir. 2005) (citing Mayo v. Tri-Bell Inus., Inc., 787 F.2d
1007, 1012 (5th Cir. 1986)). The district court’s refusal to let Starr conduct
discovery on Clearview’s members’ citizenship was neither. Having
considered evidence of the Texas members’ residence and activities, the
district court concluded both were Texas citizens. Given this evidence, it
was reasonable to determine, as the district court did, that further discovery
was unnecessary.
Federal courts are courts of limited jurisdiction. Without jurisdiction,
a court “cannot proceed at all in any cause.” Steel Co. v. Citizens for a Better
Env’t, 523 U.S. 83, 94 (1998). When a want of jurisdiction becomes apparent,
the court must dismiss the cause. See id. And when it becomes apparent
following a judgment that the rendering court lacked jurisdiction to issue it,
that judgment is void. See Mitchell, 8 F.4th at 420. The district court issued
a void judgment. It was appropriate to vacate that judgment. Accordingly,
we affirm.
3