Fed. R. Civ. P. 27 Pre-Filing Deposition Is Not a Vehicle for Jurisdictional Discovery, Holds Seventh Circuit

In Qin v. Deslongchamps, No. 21-1873 (7th Cir. Apr. 14, 2022), the Seventh Circuit affirms the denial of a petition to take a Fed. R. Civ. P. 27 deposition of a member of a limited liability corporation (LLC) to ascertain their citizenship before filing a diversity suit in federal court.

For federal diversity purposes, LLCs are held to have the citizenship of all of its members under 28 U.S.C. § 1332(c)(1). “And in states where the members of the LLC need not be publicly identified, it can be difficult if not impossible for a prospective plaintiff to ascertain the membership and in turn determine whether he can sue the LLC in diversity.”

This dilemma faced prospective plaintiff Qin, a permanent resident alien who wished to file a federal diversity action against an LLC named CRC-I. Because Qin did “not know the identities and citizenships of all of the members of CRC-I and therefore [could not] plead with reasonable certainty the existence of diversity of citizenship,” he petitioned a federal district court in Wisconsin to allow him to depose one of CRC-I’s members, named Deslongchamps, in order to learn the necessary jurisdictional facts.

The district court denied the petition, holding both that (1) Qin had not shown that his proposed lawsuit was within federal subject-matter jurisdiction and, even if it were; (2) Rule 27 may only be invoked to “perpetuate testimony” at “risk of such testimony being lost (due to an individual’s impending death, for example),” not to obtain jurisdictional discovery.

The Seventh Circuit affirms. “Rule 27 allows for a particular and narrow form of inquiry to take place before a suit is filed . . . . [W]hen there is a need to perpetuate the testimony of an individual relevant to a matter that is cognizable in federal court, the party seeking that testimony may file a verified petition in the judicial district where the individual resides asking the court to authorize his or her deposition. Rule 27(a)(1)–(2). The petitioner must show that he expects to be a party to an action in a United States court but cannot presently bring the action or cause it to be brought. Rule 27(a)(1)(A). If the court is satisfied that perpetuating the sought-after testimony may prevent the failure or delay of justice, the court must issue an order allowing the deposition.”

Qin argued that Rule 27 afforded him “opportunity to depose Deslongchamps” to “plead himself into federal court.” But this rationale, the panel holds, “attributes a breadth and purpose to the rule that it does not possess.” The rule “provides only for the perpetuation of testimony that is at risk of becoming unavailable,” such as “testimony of a witness who is aged or seriously ill, might flee, or who may become unavailable by reason of relocation or other geographic constraints before a suit can be filed.”

“Qin’s petition is not one [under Rule 27] to perpetuate testimony material to a prospective suit that he and the court have reason to believe is cognizable in federal court but rather one to identify whether a particular action is cognizable in federal court.” The panel holds that this purpose is not “recognized by Rule 27, and we do not have the authority to expand the rule beyond its stated scope.”

In closing, the panel takes note of Qin’s dilemma. “Qin faces an obvious obstacle to pursuing relief in federal court, and the dilemma posed by the non-corporate association whose members (and their citizenship) the plaintiff cannot ascertain despite reasonable investigatory efforts has been noted and discussed elsewhere . . . . But in asking us to explore how he might surmount that obstacle, Qin is asking for us to issue an advisory opinion. That is beyond our power.”

In a footnote, the panel questions whether Qin could establish diversity because of his status as an alien.  “When in 2011 Congress removed section 1332(a)’s ‘deeming clause,’ which treated a lawful permanent resident of the U.S. as a citizen of his state of domicile, see Pub. L. No. 100-702, § 203(a), 102 Stat. 4642, 4646 (1988) (‘an alien admitted to the United States for permanent residence shall be deemed a citizen of the State in which such alien is domiciled’), it replaced that clause with language that two of our sister circuits have construed to treat a lawful permanent resident as an alien for diversity purposes, see Pub. L. No. 112-63, § 101, 125 Stat. 758, 758 (2011)” (citing authority from the Second and Eleventh Circuits).

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