Question:
Gloria Duchin, a Rhode Island resident, was the sole shareholder and chief executive officer of Gloria Duchin, Inc. (Duchin, Inc.), which manufactured metallic Christmas ornaments and other novelty items. The firm was incorporated in Rhode Island. Duchin Realty, Inc., also incorporated in Rhode Island, leased real estate to Duchin, Inc. The Duchin entities hired Gottesman Co. to sell Duchin, Inc., and to sign with the buyer a consulting agreement for Gloria Duchin and a lease for Duchin Realty’s property. Gottesman negotiated a sale, a consulting agreement, and a lease with Somerset Capital Corp. James Mitchell, a resident of Massachusetts, was the chairman and president of Somerset, and Mary Mitchell, also a resident of Massachusetts, was the senior vice president. The parties agreed that to buy Duchin, Inc., Somerset would create a new limited liability company, JMTR Enterprises, L.L.C., in Rhode Island, with the Mitchells as its members. When the deal fell apart, JMTR filed a suit in a Massachusetts state court against the Duchin entities, alleging, among other things, breach of contract. When the defendants tried to remove the case to a federal district court, JMTR argued that the court did not have jurisdiction because there was no diversity of citizenship between the parties: all of the plaintiffs and defendants were citizens of Rhode Island. Is JMTR correct? Why or why not?