United States District Court, S.D. New York
March 17, 2015
MERHDAD PORGHAVAMI, Plaintiff,
AEROLÍNEA PRINCIPAL CHILE S.A. (PAL Airlines); GRUPO MUSIET; PROMATI INC.; and ROLANDO MUSIET SENIOR; ROLANDO MUSIET JR; ROLANDO MUSIET TALGUIA; FERNANDO MUSIET TALGUIA; PIERRE MUSIET; CARLOS MUSIET (DOE 3); and DOES 4 Through 100, inclusive, Defendants.
REPORT AND RECOMMENDATION
ANDREW J. PECK, Magistrate Judge.
Pro se plaintiff Merhdad Porghavami brings this action, alleging diversity jursidiction, against corporate defendants Aerolínea Principal Chile S.A. (PAL Airlines), Grupo Musiet and Promati Inc., and individual defendants Rolando Musiet Sr., Rolando Musiet Jr., Rolando Musiet Talguia, Fernando Musiet Talguia, Mauricio Musiet Talguia, Pierre Musiet and Carlos Musiet. (Dkt. No. 23: Am. Compl.) Presently before the Court is defendants' motion to dismiss for failure to state a claim and improper venue. (Dkt. No. 25.) The Court sua sponte raised the issue of lack of diversity jurisdiction. (Dkt. No. 31: 2/23/15 Order.) Porghavami is a Canadian citizen suing two Chilean corporations, six Chilean citizens, one dual citizen of the United States and Chile, and a Florida corporation. For the reasons set forth below, this Court lacks subject matter jurisdiction and Porghavami's claims should be DISMISSED without prejudice to filing his claims in state court.
Porghavami's amended complaint asserts jurisdiction "[p]ursuant to 28 U.S.C. Sections 1391(b), 1332, 2201 and 2202." (Dkt. No. 23: Am. Compl. ¶¶ 39-43.) Section 1332 provides for diversity jurisdiction. The other sections are not relevant to jurisdiction. Section 1391(b) deals with venue. 28 U.S.C. § 2201 and § 2202 deal with declaratory relief, but only "[i]n a case of actual controversy within [the court's] jurisdiction." 28 U.S.C. § 2201. Thus, for the Court to have jurisdiction, there must be diversity of citizenship.
The amended complaint pleads the defendants' citizenship, which defendants have supplemented and verified. (Am. Compl. ¶¶ 2-4, 45-49; Dkt. No. 33: Defs. Letter of Citizenship.) Defendants PAL Airlines and Grupo Musiet are Chilean corporations with their principal place of business in Chile. (Am. Compl. ¶¶ 2-3, 45-46; Defs. Letter of Citizenship.) Defendant Promati is a Florida corporation with its principal place of business in Florida. (Defs. Letter of Citizenship; Am. Compl. ¶¶ 4, 47.) The individual defendants are all citizens of Chile, except for Pierre Musiet, who is a citizen of both Chile and the United States, with his primary residence in Florida. (Defs. Letter of Citizenship.)
As to plaintiff Porghavami, the amended complaint merely states that he "maintain[s] residences in Sacramento, California, USA, and Montreal, QC, Canada." (Am. Compl. ¶ 1.) In response to the Court's Order requiring the parties "to identify the citizenship of plaintiff and each defendant, as used in 28 U.S.C. § 1332" (Dkt. No. 31: 2/23/15 Order), Porghavami responded:
Porghavami currently residing in Montreal, Canada and holds a valid Canadian passport. However, for [a] period  approximately starting early 1990's through the end of 2008, Porghavami held local residency in Sacramento, California....
(Dkt. No. 32: Porghavami Notice of Citizenship, emphasis added.) To hold a Canadian passport, one must be a Canadian citizen. Canadian Passport Order, SI/81-86, § 4(2) (Can.) ("No passport shall be issued to a person who is not a Canadian citizen under the Act.").
I. LEGAL STANDARDS GOVERNING DISMISSALS FOR LACK OF SUBJECT MATTER JURISDICTION
28 U.S.C. § 1332 confers diversity jurisdiction upon the federal courts. In relevant part, § 1332 states:
(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 interest and costs, and is between-
(1) citizens of different States;
(2) citizens of a State and citizens or subjects of a foreign state, except that the district courts shall not have original jurisdiction under this subsection of an action between citizens of a State and citizens or subjects of a foreign state who are lawfully admitted for permanent residence in the United States and are domiciled in the same State;
(3) citizens of different States and in which citizens or subjects of a foreign state are additional parties;...
28 U.S.C. § 1332(a) (emphasis added).
Subject matter jurisdiction is a nonwaivable requirement. E.g., Arbaugh v. Y&H Corp., 546 U.S. 500, 514, 126 S.Ct. 1235, 1244 (2006); Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583-84, 119 S.Ct. 1563, 1569-70 (1999); Ahmed v. Holder, 624 F.3d 150, 154 (2d Cir. 2010) ("[W]e may not exercise jurisdiction that we otherwise lack simply because the parties will allow it."); In re Methyl Tertiary Butyl Ether ("MTBE") Prods. Liab. Litig., 488 F.3d 112, 121 (2d Cir. 2007); Burns v. King, 160 F.Appx. 108, 111 (2d Cir. 2005); Oscar Gruss & Son, Inc. v. Hollander, 337 F.3d 186, 193 (2d Cir. 2003); Lyndonville Sav. Bank & Trust Co. v. Lussier, 211 F.3d 697, 700 (2d Cir. 2000) ("[F]ailure of subject matter jurisdiction is not waivable and may be raised at any time by a party or by the court sua sponte."). Cases lacking subject matter jurisdiction must be dismissed whether raised by the parties or on the Court's own initiative. Fed.R.Civ.P. 12(h)(3) ("If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action."); see, e.g., Henderson v. Shinseki, 562 U.S. 428, 131 S.Ct. 1197, 1202 (2011); Arbaugh v. Y&H Corp., 546 U.S. at 514, 126 S.Ct. at 1244; Ruhrgas AG v. Marathon Oil Co., 526 U.S. at 583, 119 S.Ct. at 1570 ("[S]ubject-matter delineations must be policed by the courts on their own initiative even at the highest level."); City of N.Y. v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 125-26 (2d Cir. 2011).
The standard for dismissal under Federal Rule of Civil Procedure 12(h)(3) is the same as for a motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1). Omoniyi v. Dep't of Homeland Sec., 10 Civ. 1344, 2012 WL 892197 at *4-5 (S.D.N.Y. Mar. 13, 2012). On a motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), the Court "may refer to evidence outside the pleadings." Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000) (citing Kamen v. American Tel. & Tel. Co., 791 F.2d 1006, 1011 (2d Cir. 1986)). Additionally, the "standards for dismissal under [Rule] 12(b)(6) and 12(b)(1) are substantively identical." Lerner v. Fleet Bank, N.A., 318 F.3d 113, 128 (2d Cir.) (Sotomayor, C. J.), cert. denied, 540 U.S. 1012, 124 S.Ct. 532 (2003). The only substantive difference is "that the party invoking the jurisdiction of the court has the burden of proof in a 12(b)(1) motion, in contrast to a 12(b)(6) motion, in which the defendant has the burden of proof." Lerner v. Fleet Bank, N.A., 318 F.3d at 128 (citing Thompson v. Cnty. of Franklin, 15 F.3d 245, 249 (2d Cir. 1994)); see also, e.g., CP Investors Grp., LLC v. Deutch, 2014 WL 1327975 at *3; Langella v. Bush, 306 F.Supp.2d 459, 463 (S.D.N.Y. 2004) ("On a motion to dismiss pursuant to Rule 12(b)(1), plaintiff carries the burden of establishing that subject matter jurisdiction exists over his complaint."); Bishop v. Porter, 2003 WL 21032011 at *3.
The Court must construe a pro se complaint liberally and must use less stringent standards when reviewing a pro se complaint than if the complaint had been drafted by counsel. See, e.g., Walker v. Schult, 717 F.3d 119, 124 (2d Cir. 2013); Cancel v. Home Depot, 488 F.Appx. 520, 521 (2d Cir. 2012); Spataro v. Glenwood Supply, 479 F.Appx. 403, 404 (2d Cir. 2012); Ercole v. LaHood, 472 F.Appx. 47, 48 (2d Cir. 2012), cert. denied, 133 S.Ct. 1479 (2013); Harris v. Mills, 572 F.3d 66, 72 (2d Cir. 2009); LaBounty v. Adler, 933 F.2d 121, 123 (2d Cir. 1991). "Even a pro se plaintiff, however, will bear the burden of proving that subject-matter jurisdiction exists." Omoniyi v. Dep't of Homeland Sec., 2012 WL 892197 at *5 (citing Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000)); see also, e.g., Pucci v. Brown, 423 F.Appx. 77, 77, 78 (2d Cir. 2011).
The principles regarding diversity jurisdiction and aliens are clear:
The pertinent legal principles with respect to diversity jurisdiction are clearly established. To the extent relevant here, diversity is present when the action is between "citizens of a State and citizens or subjects of a foreign state, " 28 U.S.C. § 1332(a)(2), or between "citizens of different States and in which citizens or subjects of a foreign state are additional parties, " id. § 1332(a)(3). However, diversity is lacking within the meaning of these sections where the only parties are foreign entities, or where on one side there are citizens and aliens and on the opposite side there are only aliens.
Universal Licensing Corp. v. Paola del Lungo S.p.A., 293 F.3d 579, 580-81 (2d Cir. 2002) (emphasis added; citing Dassigienis v. Cosmos Carriers & Trading Corp., 442 F.2d 1016, 1017 (2d Cir. 1971)); see, e.g., Bayerische Landesbank v. Aladdin Capital Mgmt. LLC, 692 F.3d 42, 49 (2d Cir. 2012); Mont Blanc Trading Ltd. v. Khan, 13 Civ. 700, 2014 WL 1116733 at *2 (S.D.N.Y. Mar. 20, 2014); LCE Lux HoldCo S.a.r.l. v. Entretenimiento GM de Mexico S.A. de C.V., 287 F.R.D. 230, 234-35 (S.D.N.Y. 2012); IGY Ocean Bay Props. Ltd. v. Ocean Bay Props. I Ltd., 534 F.Supp.2d 446, 448 (S.D.N.Y. 2008); Hubei Jingzhou Yizhou Indus. Co. v. JNJ Rest. Supplies, Inc., 10 Civ. 2642, 2010 WL 5174337 at *2 (S.D.N.Y. Dec. 9, 2010).
"It is firmly established that diversity of citizenship "should be distinctly and positively averred in the pleadings, or should appear with equal distinctness in other parts of the record."'" Leveraged Leasing Admin. Corp. v. PacifiCorp Capital, Inc., 87 F.3d 44, 47 (2d Cir. 1996) (quoting Wolfe v. Hartford Life & Annuity Ins. Co., 148 U.S. 389, 389, 13 S.Ct. 602, 603 (1893)); accord, e.g., Sodhi v. Gentium S.p.A., 14 Civ 287, 2015 WL 273724 at *8 (S.D.N.Y. Jan. 22, 2015); Vargas v. Person, 13 Civ. 4699, 2014 WL 1054021 at *2 (S.D.N.Y. Mar. 17, 2014). "It is also clear that a statement of the parties' residence is insufficient to establish their citizenship." Leveraged Leasing Admin. Corp. v. PacifiCorp Capital, Inc., 87 F.3d at 47 (citing Wolfe v. Hartford Life & Annuity Ins. Co., 148 U.S. at 389, 13 S.Ct. at 603; & John Birch Soc'y v. Nat'l Broad. Co., 377 F.2d 194, 199 (2d Cir. 1967)); accord, e.g., Young-Gibson v. Patel, 476 F.Appx. 482, 483 (2d Cir. 2012); Vargas v. Person, 2014 WL 1054021 at *3.
II. PORGHAVAMI'S COMPLAINT SHOULD BE DISMISSED WITHOUT PREJUDICE BECAUSE THE COURT LACKS DIVERSITY SUBJECT MATTER JURISDICTION
It is Porghavami's burden to establish subject matter jurisdiction, i.e., diversity jurisdiction. (See cases cited at pages 5-6 above.) Porghavami is a Canadian citizen. (See page 3 above.) Porghavami has given no indication that he is a United States citizen. (Dkt. No. 32:Porghavami Notice of Citizenship; Dkt. No. 23: Am. Compl. ¶ 1.) Porghavami therefore is a "citizen or subject of a foreign state" for purposes of diversity jurisdiction. 28 U.S.C. § 1332(a)(2)-(3). Of the defendants, only Pierre and Promati are citizens of the United States. (See page 2 above.) All of the other defendants are "citizens or subjects of a foreign state" (Chile) for purposes of diversity jurisdiction. See 28 U.S.C. § 1332(a)(2)-(3). As such, this is a suit between a citizen of a foreign state (Porghavami) and citizens of a foreign state (along with two United States citizens). This is not a suit between citizens of different states. See 28 U.S.C. § 1332(a)(1). Nor is this a suit between citizens of a state and citizens of a foreign state, because citizens of foreign states are on both sides. See 28 U.S.C. § 1332(a)(2); Bayerische Landesbank v. Aladdin Capital Mgmt. LLC, 692 F.3d 42, 49 (2d Cir. 2012) ("[S]pecifically, diversity is lacking... where the only parties are foreign entities, or where on one side there are citizens and aliens and on the opposite side there are only aliens.'") (quoting Universal Licensing Corp. v. Paola del Lungo S.p.A., 293 F.3d 579, 581 (2d Cir. 2002)); Mont Blanc Trading Ltd. v. Khan, 13 Civ. 700, 2014 WL 1116733 at *2 (S.D.N.Y. Mar. 20, 2014) ("Diversity jurisdiction does not extend to cases in which only aliens are parties."). Finally, this is not a suit between citizens of different states with foreign citizens as additional parties. See 28 U.S.C. § 1332(a)(3). This Court thus lacks subject matter jurisdiction because of the presence of foreign citizens on both sides. Accordingly, the case should be dismissed without prejudice to Porghavami bringing his case in state court.
For the reasons set forth above, Porghavami's claims should be DISMISSED without prejudice for lack of subject matter jurisdiction.
FILING OF OBJECTIONS TO THIS REPORT AND RECOMMENDATION
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days from service of this Report to file written objections. See also Fed.R.Civ.P. 6. Such objections (and any responses to objections) shall be filed with the Clerk of the Court, with courtesy copies delivered to the chambers of the Honorable George B. Daniels, 500 Pearl Street, Room 1310, and to my chambers, 500 Pearl Street, Room 1370. Any requests for an extension of time for filing objections must be directed to Judge Daniels (with a courtesy copy to my chambers). Failure to file objections will result in a waiver of those objections for purposes of appeal. Thomas v. Arn, 474 U.S. 140, 106 S.Ct. 466 (1985); Ingram v. Herrick, 475 F.Appx. 793, 793 (2d Cir. 2012); IUE AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1054 (2d Cir. 1993), cert. denied, 513 U.S. 822, 115 S.Ct. 86 (1994); Frank v. Johnson, 968 F.2d 298, 300 (2d Cir.), cert. denied, 506 U.S. 1038, 113 S.Ct. 825 (1992); Small v. Sec'y of Health & Human Servs., 892 F.2d 15, 16 (2d Cir. 1989); Wesolek v. Canadair Ltd., 838 F.2d 55, 57-59 (2d Cir. 1988); McCarthy v. Manson, 714 F.2d 234, 237-38 (2d Cir. 1983).