A Proposed Amendment to Rule 7.1 


The Advisory Committee on Civil Rules has released a proposed amendment to Rule 7.1 regarding disclosure statements filed in district courts.  The proposed modification requires parties in diversity cases to file a disclosure statement that "names—and identifies the citizenship of—every individual or entity whose citizenship is attributed to that party at the time the action is filed."

The change is intended to address the complicated issue of determining diversity jurisdiction of an LLC or other non-corporation who takes on the citizenship of all its members.  But the citizenship can be quite convoluted if an LLC has a lot of members or if there is a series of telescoping LLCS, where one LLC is a member of another LLC.

The need for this information is clear, the Court cannot determine diversity jurisdiction without it.  And federal appeals courts are often confronted with final orders in cases where there was never any jurisdiction at the inception of the case.  But the new rule will provide a real challenge for some defendants to try and track down complex and extensive residency information for their clients before their first responsive pleading.

You can monitor any comments about the proposal here.  It will be interesting to see if any objections are raised.

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