UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT ____________

No. 21-2923 ____________

PEACE CHURCH RISK RETENTION GROUP, (A RECIPROCAL), AS SUBROGEE OF BARCLAY FRIENDS; CARING COMMUNITIES, (A RECIPROCAL), AS SUBROGEE OF BARCLAY FRIENDS

v.

JOHNSON CONTROLS FIRE PROTECTION LP, FKA SimplexGrinnell LP, Appellant

____________

On Appeal from the United States District Court for the Eastern District of Pennsylvania District Court No. 5-19-cv-05377 U.S. District Judge: Honorable R. Barclay Surrick ____________

Submitted Under Third Circuit LAR 34.1(a) July 8, 2022 Before: SHWARTZ, KRAUSE, and ROTH, Circuit Judges (Opinion Filed: September 20, 2022)

Catherine G. Bryan Jeffrey L. O’Hara Connell Foley 1085 Raymond Boulevard One Newark Center, 19th Floor Newark, NJ 07102 Timothy K. Lewis Schnader Harrison Segal & Lewis 120 Fifth Avenue Suite 2700 Pittsburgh, PA 15222 Bruce P. Merenstein Schnader Harrison Segal & Lewis 1600 Market Street Suite 3600 Philadelphia, PA 19103 Attorneys for Johnson Controls Fire Protection LP Morgan S. Birch Thomas B. Fiddler Justin E. Proper White & Williams 1650 Market Street One Liberty Place, Suite 1800 Attorneys for Peach Church Risk Retention Group and Caring Communities

2 ____________

OPINION OF THE COURT ____________ KRAUSE, Circuit Judge.

The parties’ initial briefs asked us to decide the availability of particular tort claims under Pennsylvania law. But before any federal court can decide the merits of such a question, it must have the jurisdiction to do so, and supplemental briefing on a jurisdictional issue submitted to this Court convinces us that it may be lacking here. That is because the federal courts’ authority to entertain this case is premised on diversity jurisdiction, but we conclude that the citizenship of reciprocal insurance exchanges, such as Plaintiffs- Appellees, turns on the citizenship of their subscribers, who may not be completely diverse from Defendant-Appellant. As additional factfinding is needed on this issue, we will vacate the District Court’s denial of the motion to dismiss under Rule 12(b)(6) and remand for that Court to determine the existence of diversity jurisdiction in the first instance.

I. FACTUAL AND PROCEDURAL BACKGROUND

This action arises out of a tragic fire at the Barclays Friends assisted living facility in 2017 that caused four residents’ deaths. The estates of those residents sued Barclay Friends and Defendant-Appellant Johnson Controls Fire Protection LP (“Johnson Controls”) (formerly known as SimplexGrinnell), which maintained and monitored Barclay Friends’s fire-suppression system at the time of this terrible incident.

3 After Barclay Friends—and by extension its liability insurers, the Plaintiffs-Appellees Peach Church Risk Retention Group (“Peace Church”) and Caring Communities (collectively, the “Liability Insurers”)—settled with the estates, the Liability Insurers filed the instant suit against Johnson Controls in federal court, asserting diversity jurisdiction. They alleged that because Johnson Controls’s tortious conduct caused the fire—and the fire caused the residents’ deaths, eventually leading to Barclay Friends’s voluntary settlement of the estates’ claims—the Liability Insurers, standing in the shoes of Barclay Friends as its subrogees, are entitled to damages in the amount of the settlement payments they made on Barclay Friends’s behalf. The Liability Insurers’ complaint asserted claims against Johnson Controls for a variety of torts, including negligence, gross negligence, wanton and willful misconduct, neglig