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Enterprise Propane Terminals and Storage, LLC v. Sterling Transport Co., Inc.

United States District Court, M.D. Georgia, Macon Division

June 11, 2019

ENTERPRISE PROPANE TERMINALS AND STORAGE, LLC, Plaintiff,
v.
STERLING TRANSPORT CO., INC.; JEFFREY ARNOLD CHRISTIE, Defendants.

          ORDER GRANTING PLAINTIFF'S MOTION TO REMAND

          TILMAN E. SELF, III, JUDGE

         Defendants removed this Georgia Nonresident Motorist Act[1] negligence action on the basis of diversity jurisdiction under 28 U.S.C. § 1332. See generally [Doc. 1]. In their Notice of Removal, Defendants claim that Plaintiff Enterprise Propane Terminals and Storage, LLC (“Enterprise”) is “organized and existing under the laws of Delaware, ” while Defendant Sterling Transport Co., Inc. (“Sterling”) and Defendant Jeffery Arnold Christie (“Christie”) are citizens of North Carolina and Florida, respectively. [Id. at p. 2]. Plaintiff now moves to remand the case to the Superior Court of Lamar County, Georgia, because it claims that it is owned by a master limited partnership consisting of members who are citizens of every state in the United States. See [Doc. 13]. Having reviewed the parties' briefs and the record, the Court GRANTS Plaintiff's motion to remand.

         FACTUAL BACKGROUND

         In its Complaint, Enterprise claims that Christie negligently drove a truck in the scope of his employment with Sterling, causing the truck's “sleeper cab air dam” to collide with Enterprise's terminal loading dock canopy. [Doc. 1-1, ¶ 11]. The collision caused significant damage to the terminal, and Enterprise seeks to hold Christie liable under the Georgia Nonresident Motorist Act and to hold Sterling liable on a theory of vicarious liability. [Id. at ¶¶ 6-8, 12].

         After Defendants removed the case to this Court, Enterprise and Sterling filed jurisdictional statements as required under Local Rule 87.1.[2] In its statement, Enterprise explained that it is part of a four-tier subsidiary structure with Enterprise at the bottom of the pyramid and Enterprise Products Partners L.P. (“EPP”), “a publicly held entity formed in Delaware, ” at the top of the pyramid. [Doc. 12, pp. 1-2].[3] According to the statement and Plaintiff's subsequent motion to remand, EPP is a master limited partnership, and approximately 65% of EPP's members are public “unitholders” residing in every state in the United States, including North Carolina and Florida. [Id. at p. 2]; [Doc. 13, p. 3]. Enterprise now argues that this case should be remanded to state court because there is not complete diversity between the parties. [Doc. 12 at p. 3].

         DISCUSSION

         A. Standard of Review

          Diversity jurisdiction exists where the parties are citizens of different states and the amount in controversy exceeds $75, 000, exclusive of interest and costs. 28 U.S.C. § 1332(a)(1). For a case to satisfy the “citizens of different states” component of diversity jurisdiction, no plaintiff can be from the same state as any defendant. Triggs v. John Crump Toyota, Inc., 154 F.3d 1284, 1287 (11th Cir. 1998). Natural persons are considered citizens of wherever they are domiciled-that is, the state where they reside and intend to remain indefinitely. Molinos Valle Del Cibao, C. por A. v. Lama, 633 F.3d 1330, 1341 (11th Cir. 2011) (quoting Mississippi Band of Choctaw Indians v. Holyfield, 490 U.S. 30, 48 (1989)). A corporation is deemed to be a citizen of the state(s) where it is incorporated and where it maintains its principal place of business. 28 U.S.C. § 1332(c)(1). On the other hand, an unincorporated association like a general or limited partnership is a citizen of every state in which its members are citizens. Carden v. Arkoma Assocs., 494 U.S. 185, 195-96 (1990); Underwriters at Lloyd's, London v. Osting-Schwinn, 13 F.3d 1079');">613 F.3d 1079, 1089 (11th Cir. 2010) (quoting Indiana Gas Co. v. Home Ins., 141 F.3d 314, 317 (7th Cir. 1998)).

         If challenged, the removing party “bears the burden of proving that federal jurisdiction exists.” Williams v. Best Buy Co., 1316');">269 F.3d 1316, 1319 (11th Cir. 2001). Removal is usually unfavored; therefore, any “ambiguities are generally construed against removal.” Whitt v. Sherman Int'l Corp., 1325');">147 F.3d 1325, 1329 (11th Cir. 1998).

         B. EPP's Citizenship

         EPP is a master limited partnership (“MLP”), an entity defined by its similarities to both unincorporated entities (e.g., limited liability partnerships and LLCs) and corporations.

MLPs are limited partnerships or limited liability companies whose ownership interests, called “common units, ” are publicly traded. John Goodgame, New Developments in Master Limited Partnership Governance, 68 Bus. L. 81, 82 (2012); Wood v. Walton, No. WDQ-09-3398, 2010 WL 458574, at *1 n.3 (D. Md. Feb. 2, 2010) (unpublished). MLPs are similar to limited partnerships in that they have general partners who manage the partnership's affairs and limited partners (called “unitholders”) who provide capital. Trafigura AG v. Enter. Prods. Operating LLC, 995 F.Supp.2d 641, 643 n.1 (S.D. Tex. 2014). MLPs are classified as partnerships for federal taxation purposes, which allows them to benefit from “pass-through” taxation. Id. They are similar to corporations, however, in that MLPs are publicly traded. See Id. Although MLPs are organized under state law, federal law permits federal pass-through taxation for MLPs engaged predominately in the “exploration, development, mining, or production, processing, refining, [or] transportation . . . of any mineral or natural resource.” 26 U.S.C. § 7704(d)(1)(E).

Grynberg v. Kinder Morgan Energy Partners, L.P., 805 F.3d 901, 903-04 (10th Cir. 2015).

         Although no court in this circuit has ever considered the citizenship of MLPs, courts outside this jurisdiction agree that MLPs are treated like unincorporated associations for the purpose of diversity jurisdiction.[4] As such, the citizenship of an MLP is determined by the citizenship of each of its unitholders. The overwhelming rationale for this conclusion rests on the Supreme Court's opinion in Carden v. Arkoma Associates, 494 U.S. 185 (1990), which has been summarized to establish “a general rule: every association of a common-law jurisdiction other than a corporation is to be treated like ...


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