Diversity of citizenship jurisdiction over corporate parties is not problematic.  Under 28 U.S.C. § 1332(c), the citizenship of a corporation is deemed to be both the state of its incorporation and that of its principal place of business. The first is a matter of public record. The second sometimes involves questions of fact, but it is usually fairly easy to determine.

That is not true of the other increasingly popular forms of business organization that provide limited liability for investors: the limited partnership, and the limited liability company. Under the Supreme Court’s decision in Carden v. Arkoma Associates, both are treated as if they were a common law partnership or other unincorporated association.  That is to say, their citizenship is deemed to be the citizenship of each individual or corporate partner or member. That is frequently difficult to determine because those facts are not matters of public record. On the contrary, investors in those forms of business frequently desire to keep their individual identities secret. In addition, the business structure often includes layers of LLC or LPs, which requires that the party alleging jurisdiction drill down to the lowest layer of individual or corporate membership.

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