The opinion of the court was delivered by: Motley, District Judge.
Plaintiffs, Creaciones Con Idea, S.A. de C.V. ("Creaciones")
and Imagen Textil Y Confecciones, S.A. de C.V. ("Imagen"), filed
this action against defendants, Mashreqbank PSC ("Mashreqbank")
and Mashreqbank New York ("MNY") on December 31, 1997. Plaintiffs
are beneficiaries of two irrevocable letters of credit ("ILC")
issued by Mashreqbank. Mashreqbank refused payment on these ILC's
due to alleged documentation deficiencies in the payment demands.
Plaintiffs brought suit against Mashreqbank, alleging that the
refusals constituted breach of contract, fraud and conspiracy to
commit fraud. On May 12, 1999, this court granted defendant's
pre-answer motion to dismiss as against the fraud and conspiracy
claims, finding that these claims were duplicative of the breach
of contract claims. Currently before the court is the question of
the legitimacy of diversity jurisdiction in this case. The court
now finds that the requirements for diversity jurisdiction have
not been satisfied, and dismisses the action for lack of subject
Plaintiffs allege that Creaciones and Imagen are foreign
corporations organized under the laws of the principality of
Mexico, with offices in Mexico. See Plaintiffs' Compl. ¶ 5,7.
According to plaintiffs' complaint, defendant Mashreqbank is a
registered commercial bank established under the laws of the
United Arab Emirates, with its principal office in Dubai, a city
in the United Arab Emirates. See Plaintiffs' Compl. ¶ 9.
Plaintiffs further allege that Defendant MNY is the wholly owned
branch office of Mashreqbank, organized under the laws of the
United States, with its principal office in New York City. See
Plaintiffs' Compl. ¶ 10.
Defendants have raised the question of the appropriateness of
subject matter jurisdiction in this case due to a lack of
diversity of citizenship. Plaintiffs alleged in their complaint
that jurisdiction is authorized by Title 28 U.S.C. § 1332
(a)(2) ("Section 1332"), the provision governing diversity
jurisdiction in cases involving foreign litigants. Upon
examination of the facts and the allegations in plaintiffs'
complaint, this court finds that the requirements of Section
1332(a)(2) have not been met, and dismisses the action for lack
of subject matter jurisdiction.
A. Dismissal for Lack of Subject Matter Jurisdiction
Dismissal for lack of subject matter jurisdiction is proper at
any stage of trial, regardless of whether a motion has been made
by either of the parties. See Alliance of American Insurers v.
M. Cuomo, 854 F.2d 591, 605 (2d Cir. 1988) ("The fact that
neither party contested the District Court's authority . . . does
not act to confer jurisdiction on the Court since a challenge to
subject matter jurisdiction cannot be waived and may be raised
sua sponte by the district court, or by a federal appellate
court."); United Food & Commercial Workers Union, Local 919 v.
CenterMark Properties, 30 F.3d 298, 300 (2d Cir. 1994) ("Indeed,
our cases make it clear that `[i]t is common ground that in our
federal system of limited jurisdiction any party or the court sua
sponte, at any stage of the proceedings, may raise the question
of whether the court has subject matter jurisdiction.'" quoting
Manway Constr. Co. v. Housing Auth. of Hartford, 711 F.2d 501,
503 (2d Cir. 1983)); Fed.R.Civ.P. 12(h)(3) ("Whenever it appears
by suggestion of the parties or otherwise that the
court lacks jurisdiction of the subject matter, the court shall
dismiss the action.") In examining the issue of subject matter
jurisdiction, a court may consider the allegations made in the
complaint as well as extrinsic evidence outside of the pleadings.
See Transatlantic Marine Claims Agency, Inc., v. Ace Shipping
Corp., 109 F.3d 105, 107 (2d Cir. 1997) ("[t]he case law does
not limit our right to refer to any material in the record.") If
the court ultimately concludes that jurisdiction is lacking,
dismissal of the action is mandatory. See United Food &
Commercial Workers Union, Local 919, 30 F.3d 298, 300.
B. Diversity Jurisdiction
1. Scope of Diversity Jurisdiction
Pursuant to Title 28 U.S.C. § 1332, federal courts have
original jurisdiction in cases involving parties with diverse
citizenship. Subsection (a) of Section 1332 outlines the
requirements for diversity of citizenship, and reads, in
`(a) The district courts shall have original
jurisdiction of all civil actions where the matter in
controversy exceeds the sum or value of $75,000,
exclusive of interests and costs, and is between —
`(1) citizens of different States;
`(2) citizens of a State and citizens or subjects
of a ...