Written by attorneys · grounded in primary & secondary sources — see below
A direct lawsuit by a member or partner against another member, manager, partner, or the entity to enforce the plaintiff's own rights under the operating or partnership agreement or arising independently of the membership or partnership relationship. The plaintiff must plead and prove an actual or threatened injury that is not solely the result of an injury to the entity itself.
Sources & Authorities
How it applies
Common Examples
6
Insurer Citizenship in Direct Suit
Maria, a Texas citizen, sues Shield Insurance alone after slipping at a Texas store insured by Shield. Shield is incorporated in New York with its principal place of business in California, while the store is incorporated in Texas with its principal place of business in Illinois. Because Maria proceeds directly against the insurer without joining the insured, Shield is treated as a citizen of Texas and Illinois in addition to New York and California, destroying complete diversity.
Member Direct Claim in LLC
Uriah, a non-managing member of Bright Lodging LLC, sues Cole after Cole diverts hotel bookings to his own agency and revokes only Uriah's promised employee discounts through side agreements favoring other members. Uriah alleges a personal loss of benefits distinct from any reduction in LLC revenue, allowing him to proceed directly against Cole and the LLC to protect his individual interests under the operating agreement.
Select any source to read its text and confirm it supports the definition.
Statutes
Uniform Acts
Restatements
Dictionaries
Partner Direct Claim in LP
A limited partner sues another partner and the limited partnership after the managing partner diverts partnership opportunities that personally reduced the suing partner's distributions. The partner pleads an injury to individual rights arising independently of the partnership relationship and seeks an accounting along with direct relief.
Pleading Injury Requirement
A member of an LLC files a direct action alleging that a manager's self-dealing reduced company profits and thereby lowered the member's distributions. Because the complaint shows only harm flowing through the LLC and fails to allege any separate injury to the member, the court dismisses the direct action for lack of the required individualized injury.
Direct Constitutional Challenge
Voters sue state officials directly to enjoin enforcement of a state constitutional amendment that adds term limits for congressional candidates. The plaintiffs assert their own rights to vote for qualified candidates without waiting for the state legislature or another entity to act.
United States Term Limits v. Thornton514 U.S. 779, 838 (1995)
Direct Civil Rights Claim
A plaintiff brings a direct action against a store under federal civil rights statutes alleging that store employees conspired with police to deny service on the basis of race. The complaint asserts the plaintiff's personal injury without requiring any intermediate party to sue first.
Adickes v. S.H. Kress & Co.398 U.S. 144, 152 (1970)
Common questions
Frequently Asked
3
When may a member of an LLC bring a direct action instead of a derivative action?+
A member may maintain a direct action only by pleading and proving an actual or threatened injury that is not solely the result of an injury to the LLC itself. The claim must enforce rights personal to the member under the operating agreement or arising independently of the membership relationship.
Supporting sources
How does the direct-action rule affect diversity jurisdiction when a plaintiff sues only an insurer?+
In a direct action against a liability insurer where the insured is not joined as a defendant, the insurer is deemed a citizen of every state of which the insured is a citizen in addition to its own states of incorporation and principal place of business. This expanded citizenship often defeats complete diversity.
Supporting sources
What must a partner plead to maintain a direct action in a limited partnership?+
The partner must plead and prove an actual or threatened injury that is not solely the result of an injury suffered or threatened to be suffered by the limited partnership. The action may seek to enforce rights under the partnership agreement or arising independently of the partnership relationship.
Supporting sources
444 U.S. 286 (1980)Civil Procedure
…beyond what he would face if the suit were in his home State. The real impact on the named defendant is the same as it is in a direct action against the insurer, which would be constitutionally permissible. Watson v. Employers Liability Assurance Corp. , 348 U. S. 66 (1954); Minichiello v. Rosenberg , 410 F. 2d 106, 109-110…