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Apace Communications, Ltd. v. Burke

June 19, 2009

APACE COMMUNICATIONS, LTD., RAKESH AGGARWAL, PLAINTIFFS,
v.
JEFFREY BURKE, DAVID KLEIN, MICHAEL BENEDICT, STEVEN LEVINE, LORI LEVINE, CEPHAS CAPITAL PARTNERS, LP JEFFREY HOLMES, CLINT CAMPBELL, CEPHIRE TECHNOLOGIES, TIMOTHY BEERS, DEFENDANTS.



The opinion of the court was delivered by: David G. Larimer United States District Judge

DECISION AND ORDER

Plaintiff, Apace Communications, Ltd. ("Apace"), filed the complaint in this action on March 16, 2007, alleging fraud and other claims against a number of defendants, including David Klein. Jurisdiction is premised on diversity of citizenship under 28 U.S.C. § 1332.

By Decision and Order filed November 16, 2007, see 522 F.Supp.2d 509, this Court granted defendants' motion to dismiss the amended complaint, but allowed plaintiff to file a motion for leave to file a second amended complaint. Plaintiff did so, that motion was eventually granted, and plaintiff filed the second amended complaint on November 14, 2008 (Dkt. #103).

Defendant David Klein now moves to dismiss the claims against him for lack of subject matter jurisdiction, pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure. Klein asserts that he changed his domicile from New York to the United Kingdom ("UK") prior to the commencement of this action. Klein contends that this renders him a "stateless" United States citizen, and that diversity of citizenship for jurisdictional purposes is therefore lacking.

The relevant facts are essentially undisputed; what the parties disagree about is the inferences to be drawn from those facts. Until early 2007, Klein was a domiciliary of New York State. At some point prior to the March 16, 2007 commencement of this action, however, Klein accepted and began long-term employment in the UK, as the chief financial officer for Constellation Europe, Ltd. ("Constellation"), a wholly-owned subsidiary of Constellation Brands, Inc.

It is undisputed that after plaintiff accepted that position, he secured housing in the UK, opened a bank account there, and obtained UK work and residency permits of indefinite duration for himself and his wife. Klein further contends, and plaintiff does not dispute, that he also sold his house in New York, and that he either sold, or sent to the UK, all of his personal property. Klein also resigned from his position as treasurer of a Rochester, New York nonprofit organization.

Klein did, however, retain some ties to New York State. Specifically, he maintained his New York voting registration, his New York State driver's license, and his New York-based bank account. Apace also contends, and Klein does not appear to dispute, that as of the date of filing of the complaint in this action, Klein had not joined any social, charitable, or religious organizations in the UK.

Based on the undisputed facts before me, I conclude as a matter of law that Klein had changed his domicile to the UK prior to the commencement of this action on March 16, 2007. Klein's motion to dismiss is therefore granted.

DISCUSSION

I. General Principles

A court deciding a Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction applies a standard similar to that applicable to a Rule 12(b)(6) motion to dismiss for failure to state a claim. Arrigoni Enterprises, LLC v. Town of Durham, 606 F.Supp.2d 295, 297 (D.Conn. 2009). See also Friedlander v. Port Jewish Center, 588 F.Supp.2d 428, 430 (E.D.N.Y. 2008) (standard for reviewing a 12(b)(1) motion to dismiss is "essentially identical to the 12(b)(6) standard," except that plaintiff has burden of proving by a preponderance of the evidence that subject matter jurisdiction exists, and court may consider materials beyond the pleadings).

When presented with a Rule 12(b)(1) motion challenging the court's subject matter jurisdiction, a district court "may resolve the disputed jurisdictional fact issues by referring to evidence outside of the pleadings, such as affidavits, and if necessary, hold an evidentiary hearing." Zappia Middle E. Constr. Co. v. Emirate of Abu Dhabi, 215 F.3d 247, 253 (2d Cir. 2000); see also Katz, 737 F.2d at 242 n. 2 ("the question of jurisdiction need not be submitted to a jury"). "[T]he district court need not hold a hearing on a Rule 12(b)(1) motion in the absence of complex legal or factual questions," however. Rich v. United States, 119 F.3d 447, 449 n.1 (6th Cir. 1997), cert. denied, 523 U.S. 1047 (1998); see also Judkins v. HT Window Fashions Corp., 514 F.Supp.2d 753, 759 (W.D.Pa. 2007) ("Where none of the material facts are in dispute, a hearing is not required" on a Rule 12(b)(1) motion).

As stated, the relevant facts here are essentially undisputed. The question before me is simply whether those facts indicate that Klein had changed his domicile prior to the commencement of this lawsuit. Accordingly, I conclude that no hearing is required to resolve Klein's motion. See McCann v. Newman Irrevocable Trust, 458 F.3d 281, 290-91 (3d Cir. 2006) (district court did not err in deciding Rule 12(b)(1) motion without a hearing, since "the accuracy of the facts submitted by the parties was not in dispute. What was in dispute was the estate's allegation that these facts demonstrated a change of domicile").

Diversity jurisdiction under 28 U.S.C. § 1332 requires that all adverse parties to an action be "completely diverse in their citizenships." Herrick Co. v. SCS Communications, Inc., 251 F.3d 315, 322 (2d Cir. 2001). In determining whether diversity of citizenship exists, it is the date on which the complaint was filed that controls. See Bank One, Texas, N.A. v. Montle, 964 F.2d 48, 49 (1st Cir. 1992) ("Domicile is determined as of the time the suit is filed, and once diversity jurisdiction is established, it is not lost by a later change in domicile"); Bogan v. Northwestern Mut. Life Ins. Co., 103 F.Supp.2d 698, 700 (S.D.N.Y. 2000) ("For diversity purposes, the relevant date in determining a party's domicile is the date on ...


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