Zambelli Fireworks Mfg. Co., Inc. v. Wood

Brief Fact Summary.

Zambelli Fireworks Mfg. Co., Inc. (Zambelli) sued Wood and Pyrotecnico F/X LLC (Pyrotecnico) for enforcement of a restrictive covenant under diversity jurisdiction, claiming that Zambelli was a citizen of Pennsylvania, Wood was a citizen of Florida, and Pyrotecnico as a citizen of Nevada.

Synopsis of Rule of Law.

The citizenship of a limited liability company is determined by the citizenship of each of their members for the purposes of diversity of citizenship.

Facts.

Zambelli Fireworks Mfg. Co., Inc. (Zambelli) is a Pennsylvania Company with its principal place of business in Pennsylvania. Wood, a Florida resident, signed an employment agreement with Zambelli that included a two-year covenant not to compete. Nevertheless, Wood went to work for Pyrotecnico F/X LLC (Pyrotecnico), a limited liability company with its principal place of business in Nevada, shortly after leaving Zambelli. Pyrotecnico’s only member was in Louisiana. Zambelli sued Wood and Pyrotecnico for enforcement of a restrictive covenant under diversity jurisdiction, claiming that Zambelli was a citizen of Pennsylvania, Wood was a citizen of Florida, and Pyrotecnico as a citizen of Nevada. The managing member of Pyrtecnico Louisiana, however, testified that he resided and worked in Pyrotecnico’s Pennsylvania headquarters.

Issue.

Whether the citizenship of a limited liability company is determined by the citizenship of each of their members for the purposes of diversity of citizenship?

Held.

Yes. Pyrotecnico is dismissed as a party within the suit. Pyrotecnico is a Pennsylvania citizen and no diversity exists with Zambelli. Citizenship of Pyrotecnico is traced through Pyrotecnico’s managing member.

Discussion.

The citizenship of a limited liability company is determined by the citizenship of each of their members for the purposes of diversity of citizenship.