Introduction

In a per curiam, unpublished opinion dated October 10, 2025, the Eleventh Circuit resolved two consolidated appeals arising from a failed $11 million commercial real estate transaction in Miami between Sound Around, Inc. (a New York corporation), Hialeah Last Mile Fund VII LLC (“Fund VII”), Hialeah Last Mile LLC (“HLM”), and Douglas O’Donnell (signatory for Fund VII). The litigation spanned two district court actions—one seeking specific performance against the seller entities (Sound Around I), and a follow-on fraud and warranty suit against O’Donnell (Sound Around II)—and three Eleventh Circuit appeals.

The central issues were: (1) whether the district court in Sound Around I had diversity jurisdiction, given that the defendants were LLCs whose member citizenships were not pleaded and later showed non-diversity; and (2) whether the district court properly dismissed Sound Around II as an impermissible claim-splitting action while Sound Around I was pending. The appellate court affirmed the jurisdictional dismissal of Sound Around I and vacated the claim-splitting dismissal of Sound Around II, remanding for further proceedings on the remaining issues.

Case information:

• Court: United States Court of Appeals for the Eleventh Circuit
• Date: 2025-10-10
• Panel: Circuit Judges Jill Pryor, Newsom, and Anderson
• Appeal Nos.: 25-10754 (Sound Around I, jurisdiction); 23-12479 (Sound Around II, claim-splitting)

Summary of the Opinion

The Eleventh Circuit issued two core holdings:

• Sound Around I (No. 25-10754): Affirmed for lack of subject-matter jurisdiction. The district court properly found no complete diversity because HLM, an LLC defendant, had at least one member (Jose Rojas) domiciled in New York—the same state as Sound Around. On the court’s limited remand to determine jurisdiction, the district court permissibly relied on a declaration and corroborating documents (including a W‑9 and subscription agreement) to find Rojas’s New York citizenship. Once a single non‑diverse LLC member was established, the court was not required to resolve the entire ownership “tree.” The district court did not violate the mandate and did not abuse its discretion in limiting further jurisdictional discovery.
• Sound Around II (No. 23-12479): Vacated and remanded. Because Sound Around I was ultimately dismissed for lack of jurisdiction, the doctrine against claim-splitting could not bar Sound Around II as a matter of law. The Eleventh Circuit remanded for the district court to consider O’Donnell’s alternative grounds for dismissal (failure to state a claim and Florida’s litigation privilege), which the district court had not reached.

The Court reiterated a practical admonition: litigants and courts must verify diversity jurisdiction—particularly in cases involving LLCs and partnerships—early in the case to avoid wasted effort and nullified judgments.

Analysis

Precedents Cited and Their Influence

• Diversity and burden of proof
  • 28 U.S.C. § 1332(a): Diversity jurisdiction requires complete diversity and an amount in controversy exceeding $75,000.
  • McCormick v. Aderholt, 293 F.3d 1254 (11th Cir. 2002): Party invoking federal jurisdiction bears the burden to prove it by a preponderance.
  • Palmer v. Hosp. Auth. of Randolph Cnty., 22 F.3d 1559 (11th Cir. 1994): Complete diversity means every plaintiff is diverse from every defendant.
  • Mallory & Evans Contractors & Eng’rs, LLC v. Tuskegee Univ., 663 F.3d 1304 (11th Cir. 2011): An LLC is a citizen of every state of which any member is a citizen.
  • Purchasing Power, LLC v. Bluestem Brands, Inc., 851 F.3d 1218 (11th Cir. 2017): LLC citizenship often expands recursively through nested entities; courts and litigants must verify diversity early. The opinion quotes its notable admonition.
  • Travaglio v. American Express Co., 735 F.3d 1266 (11th Cir. 2013): Standards of review; the Eleventh Circuit reviews jurisdictional dismissals de novo and jurisdictional fact-findings for clear error.
• Mandate rule and limited remand
  • Weidner v. Comm’r of Soc. Sec., 81 F.4th 1341 (11th Cir. 2023): Compliance with mandates reviewed de novo.
  • United States v. Jordan, 429 F.3d 1032 (11th Cir. 2005); Litman v. Mass. Mut. Life Ins., 825 F.2d 1506 (11th Cir. 1987) (en banc); Piambino v. Bailey, 757 F.2d 1112 (11th Cir. 1985): Law-of-the-case and mandate doctrines; a district court must implement the letter and spirit of a mandate and not exceed it.
• Jurisdictional discovery
  • ACLU of Fla., Inc. v. City of Sarasota, 859 F.3d 1337 (11th Cir. 2017): Parties have a qualified right to jurisdictional discovery; a complete denial can be an abuse of discretion.
• Claim-splitting
  • Vanover v. NCO Fin. Servs., Inc., 857 F.3d 833 (11th Cir. 2017): Claim-splitting generally requires plaintiffs to bring all claims arising from a common nucleus of operative fact in one suit.
  • Kennedy v. Floridian Hotel, Inc., 998 F.3d 1221 (11th Cir. 2021): District courts may dismiss second-filed suits before the first reaches final judgment to prevent duplicative litigation.
  • Borrero v. United Healthcare of N.Y., Inc., 610 F.3d 1296 (11th Cir. 2010): The claim-splitting rule does not apply when the first court lacks jurisdiction over the claims.
• Appellate practice
  • Stephens v. Tolbert, 471 F.3d 1173 (11th Cir. 2006): Appellate review is generally limited to the district court record.
  • Rothenberg v. Sec. Mgmt. Co., 667 F.2d 958 (11th Cir. 1982): Appellate courts may take judicial notice of subsequent, relevant public-record developments.
  • United States ex rel. Sedona Partners LLC v. Able Moving & Storage Inc., 146 F.4th 1032 (11th Cir. 2025): Remand is appropriate where the district court has not addressed alternative grounds.

Legal Reasoning

1) Diversity jurisdiction: one non-diverse LLC member is dispositive

Sound Around pleaded diversity jurisdiction by alleging the states of incorporation and principal places of business for the defendants, but the defendants were LLCs. The complaint never alleged the citizenship of the LLCs’ members, a critical defect under established Eleventh Circuit law. On the Eleventh Circuit’s limited remand to determine “the citizenship of the parties and whether diversity jurisdiction existed,” the district court conducted jurisdictional discovery and received submissions showing that HLM member Jose Rojas was domiciled in New York when Sound Around I was filed. Evidence included:

• Rojas’s declaration describing domicile indicia (residence, intent to remain, property ownership, taxes, driver’s license, and vehicle registration in New York).
• Rojas’s W‑9 listing a New York address.
• Rojas’s 2019 subscription agreement representing New York residency and a New York address (created well before the litigation).

Finding no contrary evidence and noting Sound Around did not move to compel Rojas’s deposition, the district court held that HLM was a New York citizen and thus complete diversity failed because Sound Around is also a New York citizen. The Eleventh Circuit affirmed: the district court’s jurisdictional fact-finding was not clearly erroneous. Given that a single non‑diverse member defeats complete diversity, the court was not obliged to complete the full “factor tree” of LLC/partnership membership once non‑diversity was established.

2) Scope of the limited remand and mandate rule

Sound Around argued the district court violated the mandate by resolving jurisdiction based on Rojas’s declaration, suggesting the appellate motions panel had implicitly rejected it. The Eleventh Circuit disagreed. The prior order denied motions (including a motion to supplement with the Rojas materials) “without prejudice” and expressly permitted the parties to seek relief on remand. Nothing in the mandate barred reliance on the Rojas declaration or the additional corroborating documents that were presented for the first time to the district court. The panel also explained the limited remand asked one question—whether diversity existed—and the district court fully answered it once it found a single non‑diverse member, without needing to identify every other member’s citizenship. The court assumed without deciding that the mandate rule applied to the motions panel’s limited remand and held the district court complied with “both the letter and the spirit” of the remand.

3) Jurisdictional discovery

The Eleventh Circuit reiterated that parties have a qualified right to jurisdictional discovery, but the district court has discretion to calibrate its scope. Sound Around received some discovery (operating and partnership agreements, partner registers, tax and business records for certain members, including Rojas). In light of unrebutted documentation establishing Rojas’s New York domicile, the district court did not abuse its discretion by concluding that more discovery was unnecessary. The court further found no bad faith in the defendants’ belated jurisdictional challenge—the appellate court itself had raised the defect.

4) Claim-splitting is inapplicable when the first suit lacked jurisdiction

The district court had dismissed Sound Around II for improper claim splitting, finding it involved the same parties or privies and arose from the same nucleus of operative facts as Sound Around I. After Sound Around I was dismissed for lack of subject-matter jurisdiction, however, the Eleventh Circuit held that the claim-splitting doctrine could not bar Sound Around II as a matter of law. Citing Borrero, the court emphasized the longstanding rule that claim-splitting does not apply where the first court lacks jurisdiction over the claims. The panel vacated the dismissal in Sound Around II and remanded so the district court could reach O’Donnell’s alternative defenses (failure to state a claim; Florida litigation privilege) in the first instance, consistent with Sedona Partners.

Impact

On diversity jurisdiction practice, especially with LLCs and partnerships

• Pleading precision is essential. Alleging the state of formation and principal place of business for an LLC is insufficient. Plead the citizenship of every member (and where members are entities, continue tracing through each layer).
• Early verification saves cases. As Purchasing Power warns and this case demonstrates, failure to verify citizenship early can unravel months or years of litigation, including hard-won merits rulings, when jurisdiction fails post hoc.
• Limited remand efficiency. When a limited remand is ordered to determine diversity, district courts may resolve the question once any single non‑diverse member is established; exhaustive mapping of the entire ownership chain is unnecessary at that point.
• Evidence mix suffices. A sworn declaration corroborated by contemporaneous, pre-litigation documents (e.g., subscription agreements, W‑9s, licenses, tax records) can support domicile findings.
• Jurisdictional discovery is qualified, not absolute. Courts may reasonably limit discovery when reliable, unrebutted evidence resolves jurisdiction.
• Stipulations cannot create jurisdiction. Parties’ agreement in pleadings or pretrial stipulations does not waive jurisdictional defects; federal courts must independently confirm subject-matter jurisdiction.

On claim-splitting doctrine and litigation strategy

• No claim-splitting bar without jurisdiction in the first suit. If the first-filed action lacked subject-matter jurisdiction, a second suit is not barred as an impermissible split, even if both actions arise from the same facts and involve the same parties or privies.
• Sequencing matters. Defendants advancing claim-splitting should account for jurisdictional vulnerability in the first action; plaintiffs should consider preserving independent claims in separate actions if jurisdiction is uncertain in the first forum.
• Alternative defenses preserved on remand. Where a dismissal turns on claim-splitting, alternative Rule 12 defenses (e.g., failure to state a claim, privileges) remain for the district court to address on remand if claim-splitting falls away.

For transactional and litigation counsel

• Ensure proper parties and signatures. Here, one seller entity (HLM) had not signed the purchase agreement, sparking disputes about intent and authority. In real estate transactions, confirm that all intended obligors are parties of record.
• Consider Rule 21 early if non‑diverse but dispensable parties exist. Although not decided here (the argument was raised only on reconsideration), Federal Rule of Civil Procedure 21 sometimes allows dismissal of dispensable, non‑diverse parties to preserve jurisdiction. Counsel should evaluate and raise this promptly, not post‑judgment.

Complex Concepts Simplified

• Complete diversity: Every plaintiff must be a citizen of a different state than every defendant. If even one plaintiff shares citizenship with one defendant, diversity fails.
• LLC citizenship: An LLC is a citizen of every state where its members are citizens. If an LLC’s member is another entity (LLC/LP), you must trace through until you reach people or corporations, then determine their citizenships.
• Domicile vs. residence: Domicile (not mere residence) controls an individual’s citizenship. Domicile is the place a person intends to remain and calls home, shown by factors like property ownership, driver’s license, tax filings, and statements of intent.
• Limited remand: An appellate court can send a case back to the district court with narrow instructions (here, to determine the parties’ citizenship and whether diversity existed). The district court must follow the mandate and resolve only what’s needed.
• Claim-splitting: A doctrine that bars plaintiffs from prosecuting multiple suits based on the same facts at the same time. But if the first court lacks jurisdiction, the doctrine does not apply.
• Judicial notice of subsequent developments: On appeal, courts may consider later public-record developments (e.g., a jurisdictional dismissal in a parallel case) that bear on issues like claim-splitting.
• Standards of review: Jurisdictional rulings are reviewed de novo; factual determinations about citizenship are reviewed for clear error; rulings on claim-splitting are reviewed for abuse of discretion.

Conclusion

The Eleventh Circuit’s consolidated decision delivers two pragmatic and reinforcing messages. First, in diversity cases involving unincorporated entities, jurisdiction must be built on the bedrock of member-by-member citizenship allegations and evidence. On a limited remand, a district court may end the inquiry upon establishing that any one LLC member destroys complete diversity, and it may rely on sworn declarations corroborated by reliable documents to find domicile without permitting boundless jurisdictional discovery. Second, the claim-splitting doctrine cannot be used to dismiss a second-filed action if the first-filed action lacked subject-matter jurisdiction; in such circumstances, courts should reach the alternative dispositive defenses in due course.

Outcomes:

• Sound Around I (No. 25-10754): Affirmed—dismissed for lack of subject-matter jurisdiction due to non‑diverse LLC member.
• Sound Around II (No. 23-12479): Vacated and remanded—claim-splitting inapplicable because the first action lacked jurisdiction; district court to address remaining defenses.

Although unpublished and thus not binding precedent, the opinion underscores a recurring jurisdictional trap in LLC cases and clarifies efficient judicial management on limited remands and claim‑splitting. The practical takeaway is clear: verify diversity early, plead it correctly, and do not rely on stipulations to cure jurisdictional defects. Doing so can avert costly detours and preserve the merits for adjudication.