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Joe, a resident of New Jersey, wants to open a restaurant.
Joe, a resident of New Jersey, wants to open a restaurant. He asks Kay, his friend, an experienced attorney and a New Yorker, for her business and legal advice in exchange for a 20 percent ownership interest in the restaurant. Kay helps Joe negotiate a lease for the restaurant premises and advises Joe to organize the business as a limited liability company. Joe forms Café Ole, LLC and with Kay's help obtains financing. Then, the night before the restaurant opens, Joe tells Kay that he is "cutting her out of the deal." The restaurant is a success. Kay wants to file a suit in a federal district court against Joe and the LLC.
Can a federal court exercise jurisdiction over the parties based on diversity of citizenship? Explain
