Also known as: LLC · limited liability company
Written by attorneys — see sources below.
A business entity formed under state law that shields its members from personal liability for the entity's debts while permitting flexible management and pass-through taxation.
Liberty Trust, an LLC whose sole member resides in Illinois, sues a Delaware corporation in federal court over a contract dispute. The defendant moves to dismiss for lack of diversity. The court treats the LLC as an unincorporated association and examines the citizenship of its member rather than any state of formation or principal place of business.
Lunar Dynamics, an LLC, winds up after paying all creditors. It holds surplus funds traceable to unreturned member contributions. The liquidator first returns those contributions in full before allocating any remaining surplus among members according to their pre-dissolution distribution rights.
Legacy Motors, an LLC operating a parking facility, requires employees to sign individual arbitration agreements covering workplace disputes. When a union challenges the agreements, the LLC asserts that the contracts bind the employees to arbitration rather than litigation.
Respondents are members of the Service Employees International Union, Local 32BJ. Under the National Labor Relations Act, the Union serves as the exclusive bargaining representative of employees within the building-services industry in New York City. Since the 1930s, the Union has engaged in industry-wide collective bargaining with the Realty Advisory Board on Labor Relations, Inc., a multiemployer association for the New York City real-estate industry. Their agreement, the Collective Bargaining Agreement for Contractors and Building Owners, contains a section 30 provision stating that there shall be no discrimination on the basis of age or other protected characteristics and that all such claims shall be subject to the grievance and arbitration procedures as the sole and exclusive remedy. Petitioner 14 Penn Plaza LLC, a member of the RAB, owns and operates the New York City office building where respondents worked as night lobby watchmen and in similar capacities. Respondents were directly employed by petitioner Temco Service Industries, Inc., a maintenance service and cleaning contractor. In August 2003, with the Union's consent, 14 Penn Plaza engaged Spartan Security, a unionized security contractor affiliated with Temco, to provide licensed security guards for the building lobby and entrances. Temco then reassigned respondents to jobs as night porters and light duty cleaners in other locations within the building, which respondents contend produced a loss in income, emotional distress, and less desirable positions. At respondents' request, the Union filed grievances alleging that the reassignments violated the CBA's ban on workplace discrimination by discriminating on the basis of age in violation of the ADEA, along with claims that petitioners violated seniority rules and failed to equitably rotate overtime. After an initial arbitration hearing, the Union withdrew the age-discrimination grievances on the ground that its consent to the new security contract precluded it from objecting to the reassignments as discriminatory. The Union continued to arbitrate the seniority and overtime claims, which were denied after several hearings. In May 2004, while arbitration was ongoing, respondents filed a complaint with the Equal Employment Opportunity Commission alleging that petitioners had violated their rights under the ADEA. The EEOC issued each respondent a Dismissal and Notice of Rights. Respondents then filed suit against petitioners in the United States District Court for the Southern District of New York alleging violations of the ADEA and state and local age-discrimination laws. Petitioners moved to compel arbitration pursuant to sections 3 and 4 of the Federal Arbitration Act. The District Court denied the motion. The Second Circuit affirmed. The Supreme Court granted certiorari.
View caseA California plaintiff sues Lone Peak Energy, a Delaware LLC with its principal place of business in Texas, in a California federal court for injuries occurring abroad. The LLC moves to dismiss, arguing that its subsidiary's California contacts cannot be attributed to it for general jurisdiction purposes.
In 2004, twenty-two residents of Argentina filed suit in the United States District Court for the Northern District of California against DaimlerChrysler Aktiengesellschaft, a German public stock company headquartered in Stuttgart that manufactures Mercedes-Benz vehicles in Germany. The complaint alleged that Daimler's Argentinian subsidiary, Mercedes-Benz Argentina, collaborated with state security forces during Argentina's 1976–1983 Dirty War to kidnap, detain, torture, and kill MB Argentina workers, including plaintiffs or persons closely related to them. The complaint asserted claims under the Alien Tort Statute, the Torture Victim Protection Act of 1991, and California and Argentina law. Jurisdiction over Daimler was predicated on the California contacts of Mercedes-Benz USA, LLC, another Daimler subsidiary incorporated in Delaware with its principal place of business in New Jersey. MBUSA serves as Daimler's exclusive importer and distributor in the United States, purchasing vehicles from Daimler in Germany and distributing them to independent dealerships throughout the nation, including California. MBUSA maintains a regional office in Costa Mesa, a Vehicle Preparation Center in Carson, and a Classic Center in Irvine. MBUSA's California sales accounted for 2.4 percent of Daimler's worldwide sales. A General Distributor Agreement between Daimler and MBUSA established MBUSA as an independent contractor that buys and sells vehicles for its own account and has no authority to make binding obligations for Daimler. Daimler moved to dismiss the action for lack of personal jurisdiction. After allowing jurisdictional discovery on the agency allegations, the District Court granted the motion in November 2005 and reaffirmed the dismissal in February 2007, concluding that Daimler's own contacts with California were too sporadic and that MBUSA's contacts could not be attributed to Daimler. The Ninth Circuit initially affirmed but, on rehearing, reversed in 2011, holding that MBUSA was Daimler's agent for jurisdictional purposes and that its California contacts supported the exercise of general jurisdiction over Daimler. Daimler petitioned for rehearing and rehearing en banc, which the Ninth Circuit denied over the dissent of eight judges. The Supreme Court granted certiorari in 2013 to decide whether Daimler is amenable to suit in California for claims arising from events occurring entirely outside the United States and unrelated to any activity in California.
View caseTransUnion LLC, a credit reporting agency, generates reports containing inaccurate information about consumers. Several individuals sue the LLC alleging statutory violations. The LLC contends that only those who actually obtained and relied on the reports have standing to sue.
In 2002 TransUnion began selling an add-on product called OFAC Name Screen Alert. It compared consumers' first and last names against the U.S. Treasury Department's Office of Foreign Assets Control list of specially designated nationals. Therefore it generated many false positives. In February 2011 Sergio Ramirez sought to buy a car from a Nissan dealership. The dealership ran a credit check revealing an OFAC alert in his TransUnion credit report indicating a potential match. The dealership refused to sell the car to Ramirez, and his wife purchased it in her name instead. Ramirez requested a copy of his credit file. TransUnion sent a first mailing that included his credit file and the required summary of rights but did not mention the OFAC alert. The next day TransUnion sent a second mailing notifying him of the OFAC alert but omitting another copy of the summary of rights. Ramirez consulted a lawyer, canceled a planned trip to Mexico, and TransUnion eventually removed the alert. In February 2012 Ramirez sued TransUnion alleging three violations of the Fair Credit Reporting Act. He sought statutory and punitive damages along with class certification. The parties stipulated that the class included 8,185 members and that only 1,853 of them had their credit reports disseminated by TransUnion to potential creditors during the class period running from January 1, 2011 to July 26, 2011. The District Court ruled that all 8,185 class members had Article III standing. A jury awarded statutory and punitive damages to every class member. The Ninth Circuit affirmed in relevant part over Judge McKeown's dissent and reduced the punitive damages.
View caseMercExchange, L.L.C. obtains a jury verdict that eBay infringed its patent. The LLC seeks a permanent injunction barring further sales of the infringing feature. The court weighs the traditional four-factor test rather than granting the injunction automatically upon a finding of infringement.
eBay Inc. operates a popular Internet Web site that allows private sellers to list goods they wish to sell, either through an auction or at a fixed price. Petitioner Half.com, now a wholly owned subsidiary of eBay, operates a similar Web site. Respondent MercExchange, L.L.C., holds several patents, including a business method patent for an electronic market designed to facilitate the sale of goods between private individuals by establishing a central authority to promote trust among participants. See U.S. Patent No. 5,845,265. MercExchange sought to license its patent to eBay and Half.com, as it had previously done with other companies, but the parties failed to reach an agreement. MercExchange subsequently filed a patent infringement suit against eBay and Half.com in the United States District Court for the Eastern District of Virginia. A jury found that MercExchange's patent was valid, that eBay and Half.com had infringed that patent, and that an award of damages was appropriate. eBay and Half.com continue to challenge the validity of MercExchange's patent in proceedings pending before the United States Patent and Trademark Office. Following the jury verdict, the District Court denied MercExchange's motion for permanent injunctive relief, 275 F. Supp. 2d 695 (2003). The Court of Appeals for the Federal Circuit reversed, applying its general rule that courts will issue permanent injunctions against patent infringement absent exceptional circumstances, 401 F.3d 1323, 1339 (2005). The Supreme Court granted certiorari to determine the appropriateness of this general rule, 546 U.S. 1029 (2005).
View caseAn LLC is treated as an unincorporated association. Its citizenship is that of each of its members rather than any state of formation or principal place of business.
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After paying creditors, surplus is first returned to holders of transferable interests for unreturned contributions and then allocated among those holders in proportion to their pre-dissolution rights to distributions.
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