Federal Court Dismisses Dual-Citizenship LLC Case Over Jurisdiction

The U.S. Court of Appeals for the Fourth Circuit dismissed a lawsuit on June 25, 2026, ruling that a limited liability company (LLC) with both domestic and foreign members cannot meet diversity jurisdiction requirements. This decision impacts LLCs seeking to sue parties with foreign citizenship in federal courts.

The court's ruling in FS Med. Supplies, LLC v. Tanner Pharma UK Ltd. involved FS Medical Supplies, an LLC with members from California, Texas, and China, which sued defendants from the United Kingdom and North Carolina for breach of contract. The case was initially filed in the U.S. District Court for the Western District of North Carolina.

The appellate court clarified that under 28 U.S.C. § 1332(a)(3), a plaintiff LLC with mixed domestic and foreign citizenship cannot establish the necessary diversity jurisdiction, leading to the dismissal of the claim.