Your client was just sued for several million dollars in state supreme court for breach of contract. However, your client is a Delaware LLC, your co-defendant is a New York corporation, and the plaintiff is an individual residing in New Jersey. It may make sense to consider removing the case to federal court based upon diversity jurisdiction. However, there are several additional considerations that must be taken into account – and it can frequently become quite a maze of issues.
The Removal Statute
Generally, a civil action brought in New York State Court “may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending” 28 U.S.C. § 1441(a). One such ground is removal based on diversity of citizenship. 28 U.S.C. § 1441(b). The other ground for removal is where the litigation presents a question under federal law. 28 U.S.C. § 1441(c).
Diversity of Citizenship and its Own Procedural Hurdles
In order to establish diversity of citizenship, the action must be between citizens of different states, and the amount in controversy must exceed the sum or value of $75,000. 28 U.S.C. § 1332. When considering removal based on diversity jurisdiction, complete diversity must be established “both at the time of removal and at the time the state court complaint was filed.” Cotto v. Fed. Nat’l Mortgage Assoc., No. 1:20-CV-6487-MKV, 2021 WL 4340668, at *2 (S.D.N.Y. Sept. 22, 2021). “[D]iversity is lacking where any party to the action is a citizen of the same state as an opposing party.” ICON MW, LLC v. Hofmeister, 950 F. Supp. 2d 544, 545 (S.D.N.Y. 2013).
For purposes of determining the citizenship of each party, the plaintiff in our hypothetical scenario is a citizen of the state in which she is domiciled, which is “the place where a person has his true fixed home and principal establishment, and to which, whenever he is absent, he has the intention of returning.” Finnegan v. Long Island Power Auth., 409 F. Supp. 3d 91, 96 (E.D.N.Y. 2019) (citations and internal quotation marks omitted).
This is generally a straight-forward determination as it will presumably be directly pled in the state court complaint. Cf. Finnegan, 409 F. Supp. 3d at 96 (discussing the complexities that may arise in determining an individual party’s domicile as “[d]omicile is not synonymous with residence; a party can reside in one place and be domiciled in another.” (citations and internal quotation marks omitted)). However, for your hypothetical Delaware LLC client and your co-defendant, the analysis often becomes very fact-laden and adds another layer of complexity.
With regard to a limited liability company (or a partnership), its citizenship is derived from the citizenship of its members. Avant Cap. Partners, LLC v. W108 Dev. LLC, 387 F. Supp. 3d 320, 322 (S.D.N.Y. 2016) (limited liability company); see also Carden v. Arkoma Assocs., 494 U.S. 185, 195–96 (1990) (general partnership); Shlomchik v. Richmond 103 Equities Co., 763 F. Supp. 732, 736–37 (S.D.N.Y. 1991) (limited partnership).
Thus, you will need to know the citizenship of each of its members – even if those members constitute less than one percent of the membership of the limited liability company. See ICON MW, 950 F.Supp.2d at 546; see also New Millennium Cap. Partners, III, LLC v. Juniper Grp. Inc., No. 10 CIV. 46(PKC), 2010 WL 1257325, at *1 (S.D.N.Y. Mar. 26, 2010). If its members include other limited liability companies, this exercise continues until you reach an individual or a corporation. See id.; see also Avant Cap. Partners, 387 F. Supp. 3d at 322.[1]
To determine the citizenship of a corporation, one must review both the “state in which it is incorporated and the state of its principal place of business.” Bayerische Lndesbank, New York Branch v. Aladdin Capital Mgmt. LLC, 692 F.3d 42, 48 (2d Cir. 2012); see also 28 U.S.C. § 1332(c)(1). A corporation may only have one principal place of business. See, e.g., Wilson-Abrams v. Magezi, 2021 WL 4962100, at *2 (W.D.N.Y. Oct. 26, 2021); Am. Nat. Fire Ins. Co. v. Mirasco, Inc., 2000 WL 1368009, at *4 (S.D.N.Y. Sept. 20, 2000).
For corporations with dispersed operations, courts consider “the nerve center from which [the corporation] radiates out to its constituent parts and from which [the corporation’s] officers direct, control, and coordinate all activities.” Kubin v. Miller, 801 F. Supp. 1101, 1112 (S.D.N.Y. 1992) (citation omitted).
The Notice of Removal
Assuming that diversity of citizenship does, in fact, exist, removal may be available. But see infra. In order to effectuate the removal, the defendant may file a Notice of Removal, along with “a copy of all process, pleadings, and orders served upon such defendant or defendants in such action.” 28 U.S.C. § 1446(a). The notice of removal must be filed within 30 days after service of the state-court summons and complaint. See id.
In that notice, the defendant must “adequately demonstrate the Court’s subject matter jurisdiction”, including setting forth the citizenship of each of the parties to establish complete diversity. Mata v. CF E 86, LLC, No. 25-CV-10277 (JPO), 2026 WL 18898, at *1 (S.D.N.Y. Jan. 2, 2026). This means it is defendant’s burden to demonstrate that the requirements for diversity jurisdiction are met. See Battaglia v. Shore Parkway Owner LLC, 249 F. Supp. 3d 668, 670 (E.D.N.Y. 2017).
For the Southern District of New York and Eastern District of New York, the notice of removal must also set forth:
(a) in the case of each individual named as a party, that party’s residence and domicile and any state or other jurisdiction of which that party is a citizen for purposes of 28 U.S.C. § 1332;
(b) in the case of each party that is a partnership, limited liability partnership, limited liability company, or other unincorporated association, like information for all of its partners or members, as well as the state or other jurisdiction of its formation;
(c) in the case of each party that is a corporation, its state or other jurisdiction of incorporation, principal place of business, and any state or other jurisdiction of which that party is a citizen for purposes of 28 U.S.C. § 1332;
(d) in the case of an assigned claim, corresponding information for each original owner of the claim and for each assignee; and
(e) the date on which each party that has been served was served.
See Local Civil Rule 81.1.
Additional Complicating Factors to Removal
Let’s assume for one moment that you now represent the plaintiff and are looking into potential bases for remand to New York State Court.
The first to consider is whether any of the defendants are citizens of New York, which is sometimes referred to as the “forum defendant rule.” In our hypothetical scenario, that would include the New York corporate defendant. If that defendant was served before the notice of removal was filed, then the case will be remanded. See 28 U.S.C. § 1441(b)(2).
If, however, the notice of removal is filed before the New York corporate defendant is served with process, then the removal will be deemed proper. See Gibbons v. Bristol-Myers Squibb Co., 919 F.3d 699 (2d Cir. 2019). Thus, as long as the action is removed to federal court before any forum defendant is served, then removal to federal court is proper (even if removal is sought by the forum defendant).
Another ground to seek remand, is the failure by the removing party to obtain written consent from all defendants who have been served within the 30-day period provided for removal. See 28 U.S.C. § 1446(b)(2)(a); Russell v. S. Shore Indus. Ltd., No. 19-CV-8494 (VSB), 2019 WL 6888614, at *3 (S.D.N.Y. Dec. 18, 2019). This is known as the rule of unanimity: “each defendant must submit written consent unambiguously agreeing to removal.” Cole v. City of New York, No. 19-CV-8376 (JGK), 2020 WL 3618422, at *2 (S.D.N.Y. July 2, 2020) (internal citations omitted).
While the exact form of the consent is not set forth in the statute, courts state that “something more is required for a defendant to express unambiguous consent to removal than merely advising the removing defendant that it consents to removal or filing documents that do not address consent on the federal docket.” L.Y.E. Diamonds Ltd. v. Gemological Inst. of Am. Inc., No. 16-CV-3766 (VSB), 2017 WL 1207839, at *5 (S.D.N.Y. Mar. 31, 2017)(representation that consent was obtained during a telephone call was insufficient to satisfy the unanimity requirement); see also Edelman v. Page, 535 F. Supp. 2d 290, 292 (D. Conn. 2008) (written emails exchanged between defendants’ counsel deemed similarly insufficient).
“Where a defendant fails to comply with the rule of unanimity, ‘[c]ourts have very little discretion – if any – to forgive [it].’” Hailemariam v. Nat’l Passenger R.R. Corp., No. 22-CV-1503 (CS), 2022 WL 1591902, at *2 (S.D.N.Y. May 19, 2022) (citing L.Y.E. Diamonds Ltd. v. Gemological Inst. of Am. Inc., No. 16-CV-3766 (VSB), 2017 WL 1207839, at *4 (S.D.N.Y. Mar. 31, 2017)).
Thus, before considering removal, it is vital that you consider the various procedural hurdles that must be strictly complied with in order to avoid remand to the state court. Relatedly, it is incumbent on the Plaintiff to timely move to remand the matter back to state court if there are grounds for same (or risk waiver). See Bedminster Fin. Grp., Ltd. v. Umami Sustainable Seafood, Inc., No. 12 CIV. 5557 JPO, 2013 WL 1234958, at *2 (S.D.N.Y. Mar. 26, 2013)(“A plaintiff may waive its right to move for remand under these circumstances through ‘affirmative action in the federal court prior to making a motion to remand … even if the 30–day period has not expired.’”).
Ultimately, while removal may sound like an easy enough proposition based upon diversity jurisdiction, there are many considerations that must be accounted for before filing the Notice of Removal. It is thus important to review these hurdles (or, better yet, confer with someone that has knowledge of them) to avoid the associated pitfalls.
Lisa M. Casa is a partner at Forchelli Deegan Terrana LLP. She is a member of the firm’s Employment & Labor, Litigation, Cannabis, and Emerging Companies & Venture Capital practice groups.
Danielle B. Gatto is a partner at Forchelli Deegan Terrana LLP. She is a member of the firm’s Litigation and Employment & Labor practice groups.
Reprinted with permission from the March 6, 2026, edition of the New York Law Journal © 2026 ALM Global Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or asset-and-logo-licensing@alm.com