Order | Filed: July 18, 2025
| Entered: July 18, 2025
Margar Associates Limited Partnership v. Levitt et al
Contract: Other | New York Eastern
Order of Remand to State Court
REMAND ORDER: The Court has reviewed the parties' 6 9 10 11 13 14 letters regarding the Court's June 13, 2025 Order to Show Cause as to whether the Court has subject-matter jurisdiction over this case.
Defendants contend that this Court has jurisdiction pursuant to 28 U.S.C. Sec. 1332(a). Defendants are citizens of, inter alia, New Jersey, South Carolina, Maryland, and Pennsylvania. (See Defs. Ltr. at 3, 6 .) Plaintiff Margar Associates Limited Partnership ("Margar") is a Connecticut limited partnership whose limited partner, Emgee Associates Limited Partnership ("Emgee"), is also a citizen of Connecticut. (Pls. Ltr at 2, 10 .) Plaintiff has offered documentary evidence that one of Emgee's limited partners is the Estate of Yale Gellman, which is a Pennsylvania citizen, thus making Margar also a citizen of Pennsylvania. (Pls. Ltrs. 11 13 .)
Defendants contend that Plaintiff has failed "to come forward with competent documentary evidence to establish its non-diverse citizenship... [because] [t]he only satisfactory documentary evidence" to establish Plaintiff's citizenship "are the partnership agreements... and relevant tax documents...." (Defs. Ltr, 14 .) Defendants cite no legal support for their argument that only these documents can establish Plaintiff's citizenship. Moreover, Defendants themselves proffer no evidence to establish the full extent of Margar's citizenship. (But see Exs. to Pl. Ltr., [11-1 to 5].) Because it is Defendants' burden to demonstrate complete diversity between the parties in order to establish subject-matter jurisdiction, and they have failed to do so, this Court lacks jurisdiction under 28 U.S.C. Sec. 1332(a).
Defendants also contend that this Court has jurisdiction pursuant to 28 U.S.C. Sec. 1331 because federal housing laws are "implicated in this action," i.e., whether "the Individual Defendants took fees in violation of Federal Law, Federal Regulations and Regulatory Agreements." (Defs. Ltr. at 11-13, 6 .) Where, as here, "a plaintiff pleads only state-law causes of action, federal jurisdiction may still exist in a 'special and small category' of cases, Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677, 699 (2006), namely, those that 'implicate significant federal issues,' Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 312 (2005)." AMTAX Holdings 227, LLC v. CohnReznick LLP, 136 F.4th 32, 38 (2d Cir. 2025).
Defendants argue that Plaintiff's claims are "affirmatively premised on a violation of federal law." (Defs. Ltr. at 12, 6 ). While the Complaint states that the fees retained by Defendants were not "HUD-approved management fee[s]" (Compl. para. 32, [1-3]), Plaintiffs' claims arise not from federal law but rather are based on state laws regarding contracts and fiduciary duty and focus on the issue of whether the fees sought "were properly directed under the... partnership agreement." (Pls. Ltr. at 4,