Free Speech

Court Notes Possible Lack of Diversity of Citizenship in Marc Rotenberg v. Politico LLC

|

I blogged a few weeks ago about a COVID-related libel lawsuit by former Electronic Privacy Information Center head Marc Rotenberg against Politico, LLC, and in particular noted the possible jurisdictional problem:

As I've suggested in my earlier posts (on the disclosure of private facts claim and the libel and false light claims), the lawsuit by Marc Rotenberg—former head of the Electronic Privacy Information Center—against Politico and Protocol is likely to be an uphill battle. This of course raises the question: Will Politico and Protocol be able to take advantage of D.C.'s anti-SLAPP statute? That statute, like others in various states,

  • allows early dismissal of lawsuits based on speech "in connection with an issue of public interest," if the court concludes that plaintiff's claim is legally unfounded;
  • generally suspends discovery until the motion is resolved;
  • requires expedited hearings and rulings in such cases;
  • provides for immediate appellate review; and
  • presumptively requires a losing plaintiff to pay the prevailing defendant's attorney fees.

Anti-SLAPP statutes are bad news for plaintiffs with iffy legal claims.

But wait: Though many federal courts have held that state anti-SLAPP statutes apply in federal lawsuits based on state tort claims, others have disagreed. And the D.C. Circuit, in an opinion by then-Judge Kavanaugh, held that the D.C. anti-SLAPP statute is a procedural rule that doesn't apply in D.C. federal district court. Rotenberg sued in that federal court, so he needn't fear the anti-SLAPP statute, right?

Not so fast! The lawsuit is in federal court on a "diversity of citizenship" theory—the claim is that plaintiff Rotenberg is domiciled in D.C. and defendants Politico LLC and Protocol Media, LLC are headquartered and "incorporated" in Virginia. But there are also two other defendants, Robert L. Allbritton and Tim Grieve, who run Politico and Protocol. And while their addresses are listed on the Complaint as being the same as the Virginia address of Politico and Protocol Media, my quick research suggests that they might be domiciled in D.C.

And if at least one of the defendants is a D.C. domiciliary, that means that there isn't complete diversity of citizenship between plaintiff and defendants, and thus no federal jurisdiction. The federal court would have to dismiss the case, and while Rotenberg could refile in D.C. Superior Court, the anti-SLAPP statute would apply there.

Nor can Rotenberg avoid this by refiling the lawsuit in federal court without the two individual defendants (who aren't really necessary defendants in any event). "For diversity jurisdiction to exist, no plaintiff may share state citizenship with any defendant," and "Unincorporated associations, including LLCs, have the citizenship of each of their members."

Contrary to what the Complaint says, Politico LLC and Protocol Media, LLC appear not to have been "incorporated," but to instead be, true to their names, LLCs; I checked on the Virginia State Corporation Commission's site, which showed each as a "Limited Liability Company." So if Allbritton, Grieve, or both are members of the LLCs, and if the member or members are D.C. residents, then the case would still be kicked out of federal court, and would have to be refiled in D.C. Superior Court.

I expect that, if my tentative research about Allbritton's and Grieve's D.C. residence is correct, the defendants will promptly move to dismiss on this jurisdictional ground; we should learn within a few weeks whether that indeed happens.

But it looks like Judge Tanya S. Chutkan beat the defendants to it:

Plaintiff brings this diversity action against two corporate entities and two individuals. However, the venue, jurisdiction and parties sections of the Complaint do not set forth the facts necessary to establish that this court has jurisdiction pursuant to 29 U.S.C. Section 1332. Plaintiff has not alleged the states where the individual defendants are citizens. Additionally, Defendant has not alleged where Politico LLC has its principal places of business, nor where Protocol Media, LLC is incorporated or has its principal place of business. Accordingly, by May 5, 2021 Plaintiff shall file an Amended Complaint that contains the facts necessary for this court to establish jurisdiction.

(Federal judges indeed often inquire into their possible lack of jurisdiction, even before the parties raise it.) I'll report on what plaintiff files.

NEXT: Connecticut Repeals Religious Exemption from Immunization Rules

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Say I’m suing an LLC with unknown members. I may have my suspicions but I don’t have the formal paperwork. Does pleading the diversity I hope to exist get my lawyer in Rule 11 trouble?

    1. Well, that kind of depends on what the basis for your claim is; Rule 11 says that your lawyer is certifying that to the best of his/her knowledge formed after a reasonable inquiry, the facts have evidentiary support. Of course, it could be pleaded on information and belief, but some judges won’t let you get discovery if you do that, in which case you can’t prove jurisdiction.

      (Of course, Rule 11 also says that factual denials in pleadings must have evidentiary support, and that one is honored only in the breach.)

  2. Politico is a hate speech propaganda outlet for Soros. The courts should allow a claim against Soros and against his assets.

  3. Often enough (though not in this case because of the SLAPP issue), defendants are perfectly happy not to contest diversity jurisdiction. Federal judges hate it when parties are blase about verifying diversity, because there’s a real risk that the the losing party will get the case dismissed on appeal. After all, subject matter jurisdiction cannot be created by waiver, consent or estoppel.

    I’ve seen a couple cases where both sides were happy to be in federal court but the judge made the defendant submit multiple rounds of evidence on citizenship so that the court could make an early finding on diversity. That can be a herculean effort when the parties are organized with layers of LLCs/LPs — especially if an investment fund needs to diligence the citizenship of all of its limited partners (i.e., the investors).

Please to post comments