BAM Franchising v. Reckless Ben: The Federal Court Enters Preliminary Injunction but the Judge flagged a Jurisdictional Problem That Could Send the Case Back to State Court

As we already had a bunch of people discuss... on June 26, defense attorneys at Spencer Fane removed the case to federal court under 28 U.S.C. sections 1441(a) and 1446, arguing there is complete diversity of citizenship between the parties. The plaintiffs are all Utah-based (BAM is a Delaware corporation, the individual plaintiffs are Utah residents, and Baker Bricks LLC is a Utah entity). The defendants are from California (Schneider, Reckless Ben LLC, and Nguyen) and Oregon (Mansell). The amount in controversy exceeds $300,000. Co-defendant Bryan Mansell consented to removal.

The Preliminary Injunction (entered July 7):

The parties filed their joint motion for PI in federal court on June 30, and Judge Barlow granted it on July 7 (signed July 6). The terms are the same as what the parties agreed to in state court: seven categories of prohibited conduct (threats of violence, doxxing, entering within 100 yards of franchise locations or homes, impersonation, property interference, blocking business operations, and soliciting leaks or staged confrontations), along with the critical Paragraph 2 safe harbor that expressly preserves defendants' rights to discuss, comment on, criticize, satirize, and engage in investigative journalism about the plaintiffs through any lawful means. No bond was required. The injunction remains in effect until further court order.

The jurisdiction problem:

Here is where it gets interesting to me. On the same day he entered the PI, Judge Barlow issued a separate Memorandum Decision and Order addressing a deficiency in the Notice of Removal.

The issue is straightforward but from what I understand it is potentially case-altering. For federal diversity jurisdiction, the court needs to know the citizenship of every party. For individuals, that is their state of domicile. For corporations, it is their state of incorporation and principal place of business. But for LLCs, it is different: an LLC's citizenship is determined by the citizenship of each of its individual members, traced through however many layers of ownership there may be. I've been told in the past that a single member LLC is a pass through entity and when multiple owners/members are involved it is considered a partnership. That's probably where this complexity lies.

The Notice of Removal states that Reckless Ben LLC is "a California limited liability company," but it does not identify who the members of the LLC are or where they are domiciled. Without that information, the court cannot confirm complete diversity exists.

Judge Barlow gave the defendants a deadline: show the citizenship of each member of Reckless Ben LLC on or before July 21, 2026. If they fail to do so, the case will be remanded to state court for lack of jurisdiction.

What this means practically:

If Schneider is the sole member of Reckless Ben LLC (which seems likely given the nature of the business), then establishing California citizenship with the pass through aspect of ownership should be straightforward. But the deadline is firm, and if it is missed for any reason, the case goes back to the Utah state court where it started.

This seems to be a routine jurisdictional housekeeping issue that federal courts raise regularly with LLC parties. It does not signal any skepticism from the judge about the merits or the removal itself. But it is a reminder that federal removal is not automatic, and defense counsel needs to dot every procedural "i" to keep the case in the forum they chose.