USCA4 Appeal: 25-2199 Doc: 69 Filed: 06/25/2026 Pg: 1 of 14
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 25-2199
FS MEDICAL SUPPLIES, LLC,
Plaintiff – Appellant,
v.
TANNER PHARMA UK LIMITED; RAYMOND FAIRBANKS BOURNE, a/k/a
Banks Bourne; MARY EVERETT WHITEHURST BOURNE, a/k/a Molly Bourne,
Defendants – Appellees.
No. 25-2200
FS MEDICAL SUPPLIES, LLC,
Plaintiff – Appellant,
v.
TANNERGAP, INC.; TANNER PHARMA UK LIMITED,
Defendants – Appellees.
Appeals from the United States District Court for the Western District of North Carolina,
at Charlotte. Martin K. Reidinger, Chief District Judge. (3:23-cv-00598-MR-WCM; 3:21-cv-00501-MR-WCM)
Argued: March 25, 2026 Decided: June 25, 2026 USCA4 Appeal: 25-2199 Doc: 69 Filed: 06/25/2026 Pg: 2 of 14
Before DIAZ, Chief Judge, and WYNN and QUATTLEBAUM, Circuit Judges.
Affirmed by published opinion. Chief Judge Diaz wrote the opinion, in which Judge Wynn
and Judge Quattlebaum joined.
ARGUED: Kent Alden Yalowitz, ARNOLD & PORTER KAYE SCHOLER LLP, New
York, New York, for Appellant. Jonathan Y. Ellis, MCGUIREWOODS LLP, Raleigh,
North Carolina, for Appellees. ON BRIEF: Lex M. Erwin, Kevin Y. Zhao, MAYNARD
NEXSEN PC, Charlotte, North Carolina, for Appellant. Robert W. Fuller, Amanda P. Nitto,
Anna Claire Tucker, Charlotte, North Carolina, Erik R. Zimmerman, Emma W. Perry,
ROBINSON, BRADSHAW & HINSON, P.A., Chapel Hill, North Carolina, for Appellees
Raymond Fairbanks Bourne and Mary Everett Whitehurst Bourne. Mark E. Anderson,
Raleigh, North Carolina, Bradley R. Kutrow, Hannah K. Caison, Charlotte, North Carolina,
Anne L. Doherty, MCGUIREWOODS LLP, Richmond, Virginia, for Appellees Tanner
Pharma UK Limited and TannerGAP, Inc.
2
USCA4 Appeal: 25-2199 Doc: 69 Filed: 06/25/2026 Pg: 3 of 14
DIAZ, Chief Judge:
District courts generally have diversity jurisdiction over suits between “citizens of
different States” even when additional foreign parties are present. 28 U.S.C. § 1332(a)(3). 1
In this appeal, we consider this provision when a mix of domestic and foreign parties appear
on both sides of the caption.
Here, a limited liability company (LLC) with both domestic and foreign members
sued a domestic corporation, domestic individuals, and a foreign corporation. Applying
Section 1332(a)(3), the district court dismissed the case for lack of subject matter
jurisdiction.
As we explain, because plaintiff is a dual-citizen LLC, we must test whether
diversity jurisdiction is satisfied for each of its members. When we do so, we’re left with
a dispute between a foreign citizen plaintiff and a mix of domestic and foreign citizen
defendants. Since that isn’t a suit between “citizens of different States,” there’s no
diversity jurisdiction under Section 1332(a)(3). So the district court was right to dismiss
for lack of subject matter jurisdiction.
1
Provided also that the amount in controversy exceeds $75,000. 28 U.S.C.
§ 1332(a)(3).
3
USCA4 Appeal: 25-2199 Doc: 69 Filed: 06/25/2026 Pg: 4 of 14
I.
A.
This case stems from a contract dispute. In the early days of the COVID-19
pandemic, FS Medical Supplies, LLC, agreed to supply TannerGAP, Inc., and Tanner
Pharma UK Limited personal protective equipment and other COVID-related products for
distribution. But when FS Medical learned that the Tanner Defendants entered a direct
contract with one of its suppliers, it sued for breach.
B.
FS Medical first sued the Tanner Defendants in California state court. But the
defendants removed that action to federal court, and the district court granted their
subsequent motion to dismiss for lack of personal jurisdiction. So FS Medical tried again,
this time in the Western District of North Carolina.
FS Medical asserted subject matter jurisdiction under 28 U.S.C. § 1332, claiming
the amount in controversy exceeded $75,000 and all parties were “citizens of different
states and foreign states.” Joint Appendix (J.A.) 54. FS Medical alleged that its four
members were citizens of California and Texas, TannerGAP was a North Carolina
corporation with its principal place of business in North Carolina, and Tanner Pharma UK
was a foreign corporation with its principal place of business in the United Kingdom.
After conducting limited jurisdictional discovery, FS Medical amended its
complaint to add two defendants, Tanner Pharma UK’s owners: Raymond Bourne and
Stephen Scalia, both domiciled in North Carolina. All defendants moved to dismiss, and
4
USCA4 Appeal: 25-2199 Doc: 69 Filed: 06/25/2026 Pg: 5 of 14
the district court granted the motions in part (dismissing FS Medical’s claim under the
North Carolina Unfair Deceptive Trade Practices Act).
A few days later, FS Medical filed a second case against Raymond Bourne, Molly
Bourne (Raymond’s wife and another Tanner Pharma UK owner), and Tanner Pharma UK,
also in the Western District of North Carolina. FS Medical again asserted diversity
jurisdiction, alleging that its members were citizens of Texas and California, Tanner
Pharma UK was a United Kingdom citizen, and the Bourne Defendants were North
Carolina citizens.
The court consolidated the two cases for discovery and set a status conference and
hearing on various pending motions. The day before the hearing, FS Medical told the court
that one if its members, Zhen Zhen Tong, was actually a citizen of China. After it learned
of the mistake, FS Medical instructed Ms. Tong to “transfer[] her shares in the LLC to
[fellow member and her husband] Mr. Mao” so that the LLC would have “three members,
not four, [all of whom are] U.S. citizens living in Texas and California.” J.A. 266–67.
But the transfer didn’t solve the potential jurisdictional defect, because “diversity is
measured at the time the complaint is filed.” J.A. 267. Defendants immediately moved to
dismiss both cases for lack of subject matter jurisdiction. 2
2
FS Medical filed suit a third time, without Ms. Tong as a member, to “moot out
the jurisdictional issue.” J.A. 267, 308. Defendants moved to dismiss that action under
28 U.S.C. § 1359 and other grounds. The magistrate judge recommended granting the
motions, but the district court has yet to rule. See FS Med. Supplies, LLC v. TannerGAP,
Inc. et al, No. 3:25-cv-00102-UJ1-WCM.
5
USCA4 Appeal: 25-2199 Doc: 69 Filed: 06/25/2026 Pg: 6 of 14
C.
A magistrate judge considered whether a suit brought by an LLC with both domestic
and foreign citizen members against a domestic corporation, domestic individuals, and a
foreign corporation satisfies Section 1332(a)(3)’s diversity requirement. That is, whether
the suit is between “citizens of different States and in which citizens or subjects of a foreign
state are additional parties.” 28 U.S.C. § 1332(a)(3).
The judge noted that “no controlling case law directly address[es] the precise
[diversity jurisdiction] situation presented here.” J.A. 315. But citing our decision in
General Technology Applications, Inc. v. Exro Ltda, 388 F.3d 114 (4th Cir. 2004), and the
Supreme Court’s decision in Grupo Dataflux v. Atlas Global Group, L.P., 541 U.S. 567
(2004), the judge found no diversity jurisdiction.
The judge recognized that “where an entity has multiple citizenships, [they all] must
be considered in the jurisdictional analysis.” J.A. 316 (citing Gen. Tech., 388 F.3d at 121–
22). And because FS Medical had both domestic and foreign members when it filed the
first two complaints, neither could be ignored. Nor could the judge disaggregate FS
Medical’s citizenship, treating it “as a domestic citizen (by virtue of the Texas and
California citizenship of certain of its members) for the purpose of one portion of the (a)(3)
analysis, while, at the same time, [treating it] as an ‘additional party’ (by virtue of the
foreign citizenship of its other member).” J.A. 316 (citing Grupo Dataflux, 541 U.S. at
579).
So the judge recommended dismissing the case for lack of subject matter
jurisdiction. And without jurisdiction, FS Medical wasn’t entitled to relief under Rule
6
USCA4 Appeal: 25-2199 Doc: 69 Filed: 06/25/2026 Pg: 7 of 14
41(b) of the North Carolina Rules of Civil Procedure to permit it to file a new action within
one year of dismissal. 3
The district court overruled FS Medical’s objections, accepted the magistrate
judge’s recommendation, and dismissed the case for lack of jurisdiction.
This appeal followed.
II.
We review a district court’s dismissal for lack of subject matter jurisdiction de novo.
Evans v. United States, 105 F.4th 606, 612 (4th Cir. 2024).
A.
We first sort out the parties’ citizenships. When the two cases were filed, FS
Medical was a citizen of Texas, California, and China. See Gen. Tech., 388 F.3d at 120
(“[An LLC] has the citizenship of its members.”). The two corporate defendants, Tanner
Pharma UK and TannerGAP, were citizens of the United Kingdom and North Carolina,
respectively. See 28 U.S.C. § 1332(c)(1) (“[A] corporation shall be deemed to be a citizen
of every State and foreign state by which it has been incorporated and of the State or foreign
state where it has its principal place of business.”). And the Bourne Defendants were North
Carolina citizens. See Axel Johnson, Inc. v. Carroll Carolina Oil Co., 145 F.3d 660, 663
3
Rule 41(b), known as the North Carolina savings statute, allows a court dismissing
a case without prejudice to specify that a new action based on the same claims that would
otherwise be barred by the statute of limitations “may be commenced within one year or
less after such dismissal.” N.C. Gen. Stat. § 1A-1, Rule 41(b).
7
USCA4 Appeal: 25-2199 Doc: 69 Filed: 06/25/2026 Pg: 8 of 14
(4th Cir. 1998) (“[S]tate citizenship for purposes of diversity jurisdiction depends . . . on
national citizenship and domicile.”). So the diversity landscape looked like:
Tanner Pharma UK
FS Medical Supplies • United Kingdom
• Texas
TannerGAP
• California v.
• North Carolina
• China
Bourne Defendants
• North Carolina
B.
The diversity jurisdiction statute, 28 U.S.C. § 1332(a), sets forth four ways to
establish jurisdiction (when the amount in controversy exceeds $75,000). This case
involves subsection (a)(3), which applies in actions between “citizens of different States
and in which citizens or subjects of a foreign state are additional parties.” Id. § 1332(a)(3)
(emphasis added).
1.
We begin and end with the first clause of (a)(3): there must be citizens of different
States on both sides of the case caption. And in determining whether there are, we can’t
“disregard either [the domestic or foreign] aspect of [a dual-citizen LLC’s] citizenship.”
Gen. Tech., 388 F.3d at 122. Put another way, we must “test” diversity for each LLC
member to determine whether there is subject matter jurisdiction.
We derive this testing requirement from our decision in General Technology and
the Supreme Court’s analysis in Grupo Dataflux.
8
USCA4 Appeal: 25-2199 Doc: 69 Filed: 06/25/2026 Pg: 9 of 14
In General Technology, we considered whether a Colombian corporation (Exro)
could bring a derivative action on behalf of an LLC (EXG) with members from Colombia
and Virginia against the LLC itself and two other U.S. citizen defendants. 388 F.3d at
120. 4 When “we align[ed] EXG as a defendant, then Exro (Col[o]mbia) [was] suing EXG
(Col[o]mbia and Virginia) and the other [U.S.] defendants.” Id. We concluded that “[t]he
alien citizenship on both sides . . . destroy[ed] diversity.” Id.
True, General Technology wasn’t an (a)(3) case because there weren’t U.S. citizens
on both sides. But if we had only “tested” EXG’s domestic citizenship (as FS Medical
suggests we do here) there would have been diversity under (a)(2) for disputes between
“citizens of a State and citizens or subjects of a foreign state,” in that case Colombia v.
Virginia. See 28 U.S.C. § 1332(a)(2). Still, we found “no basis upon which to disregard
either aspect of EXG’s citizenship.” Gen. Tech., 388 F.3d at 121–22.
So too in Grupo Dataflux. There, a partnership with Mexican and U.S. citizen
partners sued a Mexican corporation. Grupo Dataflux, 541 U.S. at 569. As the Supreme
Court concluded, “complete diversity did not exist given the altogether evident Mexican
citizenship of both [defendant] and two of [plaintiff’s] limited partners.” Id. at 585–86. In
other words, when the Court tested the partnership’s Mexican citizenship, the Mexico v.
Mexico line-up destroyed diversity.
4
“In a derivative action, where there are three parties conceptually presented as ‘A’
v. ‘B’ v. ‘C,’ the parties must be aligned for diversity purposes. Generally, the represented
entity (i.e., the entity on whose behalf the suit is initiated—‘B’), here EXG, is aligned as a
defendant.” Gen. Tech., 388 F.3d at 120.
9
USCA4 Appeal: 25-2199 Doc: 69 Filed: 06/25/2026 Pg: 10 of 14
If the Court had focused solely on the partnership’s U.S. citizenship, there would
have been no diversity defect under (a)(2). Although the Court didn’t “specifically validate
this [testing] aspect of the case because it was concentrating on whether a later withdrawal
of the foreign partners could cure the jurisdictional defect, it would not have reached the
issue it did address if the case presented no underlying jurisdictional defect.” Gen. Tech,
388 F.3d at 122 n.5. 5
2.
Applying these principles here, when we test FS Medical’s Chinese citizenship,
there isn’t a U.S. citizen on the plaintiff side. So we don’t have a suit between “citizens of
different States.” 28 U.S.C. § 1332(a)(3).
FS Medical says that only its domestic citizenship “counts” for this analysis.
Opening Br. at 25. In its view, clause one of (a)(3) “is met because there is [complete
diversity] between all the State citizenships of [the LLC] (Texas and California) and all the
State citizenships of the [domestic] defendants (North Carolina).” Reply Br. at 1–2.
That analysis may be appropriate for dual-citizen individuals, for whom we can
ignore foreign citizenship. See Gen. Tech., 388 F.3d at 121. But it doesn’t work for an
LLC. See id. (finding that an LLC is “like a corporation whose citizenship can be ‘dual’”
and “therefore, its foreign citizenship cannot be ignored”).
5
We take the same approach in suits with purely domestic parties. Say an LLC with
North Carolina and Virginia members sues a Virginia citizen. Virginia’s presence on both
sides would destroy diversity. Even FS Medical agrees that we can’t simply disregard an
LLC’s member in that context. See Oral Argument at 14:30–14:42.
10
USCA4 Appeal: 25-2199 Doc: 69 Filed: 06/25/2026 Pg: 11 of 14
In short, we can’t do as FS Medical asks and disregard the LLC’s foreign member.
Neither the diversity jurisdiction statute nor our case law supports such an approach.
Rather, we apply “the long-standing requirement of complete diversity . . . to the dual
citizenship of corporations,” domestic or foreign. Slavchev v. Royal Caribbean Cruises,
Ltd., 559 F.3d 251, 254 (4th Cir. 2009) (no diversity jurisdiction in suit brought by “an
alien (Bulgarian) against a corporation with the dual citizenship of Florida and a foreign
state, Liberia”).
And when we test FS Medical’s foreign citizenship, we have a dispute between a
foreign citizen (FS Medical) against another foreign citizen (Tanner Pharma UK) and U.S.
citizens (TannerGAP and the Bourne Defendants). That isn’t a dispute between “citizens
of different States.” So FS Medical can’t satisfy the first clause of 28 U.S.C. § 1332(a)(3). 6
3.
Tango Music, LLC v. DeadQuick Music, Inc., 348 F.3d 244 (7th Cir. 2003), doesn’t
persuade us otherwise. There, the court found (a)(3) diversity jurisdiction when a dualcitizen LLC (New Jersey and United Kingdom) sued a domestic corporation (Delaware
6
FS Medical says the district court agreed with its reasoning on clause one and
found diversity jurisdiction lacking only because of clause two: the LLC’s Chinese
member couldn’t be disaggregated to satisfy the additional foreign party requirement.
Reply Br. at 2. That was error, says FS Medical, because another foreign party, Tanner
Pharma UK, could satisfy it. Id.
But that’s wrong twice over. First, the magistrate judge addressed clause one,
correctly explaining that neither the domestic nor foreign citizenship of a dual-citizen LLC
could be ignored. J.A. 316. Second, whether Tanner Pharma UK satisfies clause two’s
additional foreign party requirement is irrelevant where we don’t have citizens of different
States to begin with.
11
USCA4 Appeal: 25-2199 Doc: 69 Filed: 06/25/2026 Pg: 12 of 14
and New York) and a United Kingdom individual. Id. at 245. But the question there was
whether having citizens from the same foreign country on either side satisfied (a)(3)’s
additional foreign party requirement. Id. The court said yes. Id. at 246.
Our sister circuit didn’t directly answer the question before us—whether jurisdiction
is destroyed when the sole plaintiff is a dual-citizen LLC. And if such a holding can be
gleaned from the case, it’s inconsistent with Grupo Dataflux. See, e.g., ImagineX
Consulting, L.P. v. Reprivata, L.L.C., No. 1:20-cv-03045-DDD-KLM, 2021 WL 520107,
at *1 (D. Colo. Feb. 11, 2021) (finding that Grupo Dataflux commands that LLCs with
both domestic and foreign citizen members “must be treated as aliens for jurisdictional
purposes”).
To satisfy diversity jurisdiction under 28 U.S.C. § 1332(a)(3), there must be a U.S.
citizen on each side of the dispute. When we consider FS Medical’s foreign member, as
we must, we’re left with no U.S. citizen on the plaintiff side, destroying diversity. 7
III.
If we find jurisdiction lacking—as we do—FS Medical asks us to dismiss the
foreign defendant, Tanner Pharma UK, to preserve diversity. But the jurisdictional defect
7
Nor does any other subsection of Section 1332(a) support jurisdiction. FS Medical
can’t satisfy (a)(1) for a dispute between “citizens of different States” for the same reason
it fails (a)(3): the LLC’s foreign member. The same holds true for (a)(2), involving
disputes between “citizens of a State and citizens or subjects of a foreign state.”
12
USCA4 Appeal: 25-2199 Doc: 69 Filed: 06/25/2026 Pg: 13 of 14
stems from FS Medical’s involvement in this case, not Tanner Pharma UK’s. Dismissing
the latter wouldn’t cure the defect.
IV.
Finally, FS Medical asks us to invoke North Carolina’s savings statute and dismiss
the case without prejudice, allowing FS Medical to refile within a year. See N.C. Gen. Stat.
§ 1A-1, Rule 41(b). A federal court sitting in diversity may grant relief under the statute,
which would then allow an action otherwise barred by the statute of limitations to proceed.
See Topshelf Mgmt., Inc. v. Campbell-Ewald Co., 203 F. Supp. 3d 608, 611 (M.D.N.C.
2016). But without subject matter jurisdiction, we (along with the district court) are
powerless to act. See Shortt v. Richlands Mall Assocs., Inc., No. 90-2056, 1990 WL
207354, at *4 (4th Cir. Dec. 19, 1990) (“[A] court lack[ing] subject matter jurisdiction . . .
is generally barred from taking any action which would go to the merits of the case.”).
FS Medical argues that Rule 41(b) involves a collateral issue, over which we retain
jurisdiction. Not so.
True, “a federal court may consider collateral issues after an action is no longer
pending,” Willy v. Coastal Corp., 503 U.S. 131, 138 (1992) (citation modified). Collateral
issues are those “premised on the court’s inherent authority to engage in . . . judicial acts
attendant to the presence of a live controversy before the court.” Shortt, 1990 WL 207354,
at *4 (citation modified).
Issuing sanctions, for example, fits the bill. See e.g., Willy, 503 U.S. at 138. Doing
so is “not a judgment on the merits of an action” but “requires the determination of a
13
USCA4 Appeal: 25-2199 Doc: 69 Filed: 06/25/2026 Pg: 14 of 14
collateral issue: whether the attorney has abused the judicial process, and, if so, what
sanction would be appropriate.” Id. (citation modified). A court has an “interest in having
rules of procedure obeyed,” which “does not disappear upon a subsequent determination
that the court was without subject-matter jurisdiction.” Id. at 139.
But North Carolina’s savings statute doesn’t involve the court’s own interests or
governing procedures. Rather, the statute affects a party’s right to bring suit. Because
that’s not a collateral issue, we (and the district court) have no jurisdiction. So we can’t
grant FS Medical relief. 8
* * *
For the reasons given, we affirm the district court’s judgment.
AFFIRMED
8
Even if we had jurisdiction, the equities don’t warrant discretionary relief. See 84
Lumber Co. v. Barkley, 461 S.E.2d 780, 782 (N.C. Ct. App. 1995) (a judge “may, in his
discretion,” grant Rule 41(b) relief). FS Medical has been litigating this case since 2021.
It alone is to blame for not discovering the jurisdictional defect earlier so as to not run up
against the statute of limitations. See WG/Welch Mech. Contractors, LLC v. Int’l Ass’n of
Sheet Metal, Air, Rail & Transpo. Workers, 684 F. Supp. 3d 432, 438 (D. Md. 2023)
(“[T]he law places the burden on Plaintiff to obtain knowledge of the requisite facts to
plead diversity of citizenship adequately before it files its complaint in federal court”
(citation modified)).
14