Lincoln v. Roche
The Roches sued Lincoln Property, their landlord, for damages after they found toxic mold in their apartment in Virginia and their property was damaged and stolen while Lincoln had the apartment cleaned. Lincoln, which is a Texas corporation, removed the case to federal court based on diversity of citizenship. The Roches moved to return the case to state court, claiming that there was no diversity of citizenship because Lincoln owned a subsidiary partnership with one partner residing in Virginia. The federal district court denied the Roches’s motion, stating that Lincoln was a citizen of Texas because Texas was its state of incorporation and principal place of business.
The Fourth Circuit Court of Appeals reversed, stating that Lincoln had failed to prove complete diversity of citizenship. The court held that the “real party in interest” in this case was a subsidiary partnership of Lincoln, but because Lincoln had not disclosed the citizenship of all of its member partners, the court could not determine the citizenship of the partners.
Questions Presented:
1. Whether an entity not named or joined as a defendant in the lawsuit can nonetheless be deemed a "real party in interest" to destroy complete diversity
of citizenship in a case removed from state court under 28 U.S.C. ยง 1441(b).
2. Whether a limited partnership's citizenship for diversity subject-matter jurisdiction purposes is determined not by the citizenship of its partners but by whether its business activities
establish a "very close nexus" with the state.
