Judge Joseph Bianco
Altaire Pharmaceuticals sued Rose Stone Enterprises LLC, Al-Rose Enterprises LLC (Al-Rose LLC) and Hub Pharmaceuticals LLC for failure to pay $7 million in unpaid bills for goods sold and delivered between 2002 and 2012. Altaire asserted causes of action for: goods sold and delivered; contract breach; unjust enrichment; and, breach of the covenant of good faith and fair dealing. The court dismissed only the good faith covenant breach claim. In finding that diversity of citizenship existed, the court held that California law does not contemplate “de facto” membership in a limited liability company. Because defendants conceded that no operating agreement for Al-Rose LLC exists, Altaire was not a member of Al-Rose for purposes of assessing diversity jurisdiction. The court also deemed defendants’ statute of limitations argument—that Altaire’s goods sold and delivered and contract breach claims were premised on invoices due by Feb. 9, 2009, four years before Altaire filed suit—premature. Although bearing on the applicability of the statute of limitations, the purported existence—and content—of an agreement between Altaire and Rose Stone as to payment of invoices can be resolved only on a more complete record.
