United States District Court, S.D. New York
August 10, 2005.
AZIMUT-BENETTI S.p.A., Plaintiff,
MAGNUM MARINE CORPORATION and KATRIN THEODOLI, Defendants.
The opinion of the court was delivered by: SIDNEY STEIN, District Judge
MEMORANDUM OPINION & ORDER
This litigation concerns a contract dispute in which the sole
basis for federal jurisdiction is the diversity of the parties.
Plaintiff Azimut is an Italian corporation. Defendant Magnum
Marine Corporation is a Florida corporation owned by defendant
Theodoli. Theodoli is an Italian citizen and a permanent resident
alien domiciled in Florida.
Upon reviewing the pleadings, the Court discovered that federal
subject matter jurisdiction might be lacking because this
litigation is between two aliens, irrespective of Theodoli's
status as a permanent resident. See Complaint ¶ 11; June 30,
2005 Conference. The Court discussed the issue of subject matter
jurisdiction with the parties at a status conference on June 30,
2005, following which the Court directed plaintiff to "show cause
in writing why this action should not be dismissed for lack of
subject matter jurisdiction. See Universal Licensing Corp. v.
Paola del Lungo S.p.A., 293 F.3d 579, 580-81 (2d Cir. 2002)
(federal diversity jurisdiction lacking over suits between
aliens); Saadeh v. Farouki, 107 F.3d 52 (D.C. Cir. 1997) (alien
permanent resident generally considered alien for purposes of diversity jurisdiction); Lloyds
Bank PLC v. Norkin, 817 F.Supp. 414 (S.D.N.Y. 1993) (same)."
(Order dated June 30, 2005).
Subsequently, plaintiff moved pursuant to Fed.R.Civ.P. 21 to
"drop" Theodoli on the ground that she was a dispensable party.
Defendants responded that to drop Theodoli without prejudice
would be unfair to her because plaintiff would be free to sue
her, in state court, for a second time in connection with the
same contract dispute. In addition, defendants maintained that
parallel state court litigation based upon the same disputed
transaction as is at issue here would be a wasteful expenditure
of judicial resources.
In an Order dated July 26, 2005, this Court provided that
plaintiff could choose to either 1) pursue this action in federal
court, in which event Theodoli would be dropped with prejudice,
see Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 838,
109 S.Ct. 2218, 104 L.Ed.2d 893 (1989), or 2) pursue its claims
in state court, in which event this action would be dismissed for
lack of subject matter jurisdiction on the ground of a lack of
complete diversity, see Marcus v. Five J Jeweler Precious
Metals Industry Ltd., 111 F.Supp.2d 445 (S.D.N.Y. 2000). By
letter dated August 8, plaintiff took the position that this
Court does not lack subject matter jurisdiction, and declined to
elect either option set forth in the July 26 Order.
The Court has concluded that it lacks diversity jurisdiction
because this litigation is between two aliens, notwithstanding
that Theodoli is a permanent resident alien domiciled in Florida.
This Court has set forth its reasoning on this issue in full in
Marcus, 111 F.Supp.2d 445. See 28 U.S.C. § 1332(a);
Universal Licensing Corp. v. Paola del Lungo S.p.A.,
293 F.3d 579, 580-81 (2d Cir. 2002) (federal diversity jurisdiction lacking over suits between aliens); Saadeh v.
Farouki, 107 F.3d 52 (D.C. Cir. 1997) (alien permanent resident
generally considered alien for purposes of diversity
jurisdiction); Lloyds Bank PLC v. Norkin, 817 F.Supp. 414
(S.D.N.Y. 1993) (same). Accordingly, this action is dismissed
without prejudice for lack of subject matter jurisdiction.
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