United States District Court, S.D. New York
OPINION & ORDER
ABRAMS, United States District Judge.
JS Barkats PLLC brings this action against Defendants Blue
Sphere Corporation and Shlomo Palas, asserting claims for
quantum meruit and tortious interference with contract under
New York law. Before the Court is Plaintiffs motion to remand
the action to state court. For the reasons set forth below,
the motion is granted, and this action is remanded.
JS Barkats PLLC ("JSB") is a law firm organized as
a professional limited liability company in New York.
See Compl. ¶ 1; Barkats Decl. ¶ 1.
JSB's sole member, Sunny J. Barkats, is a dual citizen of
France and Israel. See Barkats Decl. ¶ 1.
Defendant Shlomo Palas is the Chief Executive Officer of Blue
Sphere Corporation ("Blue Sphere") and a citizen of
Israel. See Daniel Aff. ¶ 4; Am. Notice of
Removal ¶ 5. According to the complaint, Palas
"resides in and conducts [Blue Sphere's] business
from Israel." Compl. ¶ 3.
Blue Sphere is a corporation engaged in the clean energy
production and waste-to-energy markets. See Barkats
Decl. Ex. 1 at 2. JSB's complaint alleges that Blue
Sphere is "a foreign corporation organized in Nevada,
with a principal place of business in America in North
Carolina, and with a principal place of business outside
America in Israel." Compl. ¶ 2. The complaint
further alleges that Blue Sphere is
"Israeli-headquartered." Id. ¶ 4.
According to Blue Sphere's Chief Financial Officer, Ran
Daniel, Blue Sphere is "a Nevada corporation, with a
principal place of business in North Carolina." Daniel
Aff. ¶ 3.
support of its motion to remand, JSB has submitted three SEC
filings. First, JSB submitted a Form 424B3 investment
prospectus, which Blue Sphere filed on September 16, 2016.
See Barkats Decl. Ex. 1. This prospectus states that
Blue Sphere is "a Nevada corporation" whose
"principal executive offices" are located in
Charlotte, North Carolina. See Id. at 3. The
prospectus further states that "although [its] principal
executive office is in the United States, a substantial part
of [its] business and management is based in Israel."
Id. at 8. Under a section titled "Properties,
" the prospectus states that Blue Sphere's
"principal executive office is located in North
Carolina, " where the company leases office space, and
that Blue Sphere also has "office space located at 35
Asuta St. Even Yehuda, Israel 40500." Id. at
JSB submitted a Schedule 13G form, which was filed by Dr.
Borenstein, Ltd. on February 6, 2017. See PL's
Letter to Ct. Ex. 1 (Feb. 8, 2017). In this form, Dr.
Borenstein, Ltd. reported that it is the beneficial owner of
6.4 percent of Blue Sphere's common stock. See
Id. at 1-2. The form lists "35 Asuta St. Even
Yehuda, Israel 40500" as the address of Blue
Sphere's "principal executive offices." See
JSB submitted excerpts of an Amendment to a Form S-l
registration statement, which Blue Sphere filed on April 3,
2012. See PL's Letter to Ct. Ex. 1 at 60 (Feb.
12, 2017). The cover page of the registration statement lists
"35 Asuta Street, Even Yehuda, Israel 40500" as the
address of Blue Sphere's "Principal Executive
Offices." Id. at 1. The registration statement
provides the same Israeli address for Blue Sphere's
Chairman, Joshua Shoham, Chief Executive Officer and
Director, Shlomo Palas, and Chief Carbon Officer and General
Counsel, Mark Radom. See Id. at 36, 46.
October 23, 2016, JSB filed a complaint against Blue Sphere
and Palas in the Supreme Court of New York. See
Compl. The complaint alleges, inter alia, that Blue
Sphere terminated JSB without paying for its legal services.
See Id. ¶¶ 5-18. The complaint asserts one
claim against Blue Sphere for quantum meruit damages and one
claim against Palas for tortious interference with contract.
See Id. ¶¶ 19-22. The complaint seeks
$652, 000 in damages. See Id. at 6.
October 31, 2016, Defendants filed an amended notice of
removal, asserting diversity jurisdiction under 28 U.S.C.
§ 1332(a). See Am. Notice of Removal ¶ 7.
On December 6, 2016, JSB moved to remand this case to state
court. See PL's Mot. to Remand (Dkt. 13). On
December 20, 2016, Defendants filed an opposition,
see Defs.' Opp'n Mem. (Dkt. 23), to which
JSB replied on December 23, 2016, see PL's Reply
Mem. (Dkt. 28).
civil action brought in a State court of which the district
courts of the United States have original jurisdiction, may
be removed by the defendant or the defendants, to the
district court of the United States for the district and
division embracing the place where such action is
pending." 28 U.S.C. § 1441(a). Under 28 U.S.C.
§ 1332(a), district courts have original jurisdiction
over cases between "citizens of a State and citizens or
subjects of a foreign state" and between "citizens
of different States and in which citizens or subjects of a
foreign state are additional parties. Id. §
1332(a)(2), (3). "[D]iversity 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, 581 (2d Cir. 2002); accord F5 Capital v.
Pappas, 856 F.3d 61, 75 (2d Cir. 2017). "The
citizenship requirement for diversity jurisdiction has been
interpreted to mean complete diversity so that each
plaintiffs citizenship must be different from the citizenship
of each defendant." Briarpatch Ltd., L.P. v. Phoenix
Pictures, Inc., 373 F.3d 296, 302 (2d Cir. 2004) (citing
Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996)).
"The rule of complete diversity-that no plaintiff and no
defendant may be a citizen of the same state-applies to
alienage cases as well as to ordinary diversity cases."
F. & H.R. Farman-Farmaian Consulting Eng'rs Firm
v. Harza Eng'g Co., 882 F.2d 281, 284 (7th Cir.
1989); accord Ergowerxlnt'l, LLC v. Maxell Corp. of
Am., 18 F.Supp.3d 453, 455 (S.D.N.Y.2014),
aff'd, 615 F.App'x 689 (Fed. Cir. 2015).
defendant, as the party seeking removal and asserting federal
jurisdiction, bears the burden of demonstrating that the
district court has original jurisdiction." McCulloch
Orthopaedic Surgical Servs., PLLC v. Aetna Inc., 857
F.3d 141, 145 (2d Cir. 2017); accord Linardos v.
Fortuna,157 F.3d 945, 947 (2d Cir. 1998) ("It is
... horn book law that the party invoking federal
jurisdiction bears the burden of proving facts to establish
that jurisdiction."). In addition, "statutory
procedures for removal are to be strictly construed, and . .
. out of respect for the limited jurisdiction of the federal
courts and the rights of states, [federal courts] must
resolve any doubts against removability." In re MBTE
Prod. Liab. Litig.,488 F.3d 112, 124 (2d Cir. 2007)
(alterations, internal citations, and quotation marks
omitted); accord For de v. Hornblower N.Y., LLC, No.
16-CV-4028 (AJN), 2017 WL 1078585, at *2 (S.D.N.Y. Mar. 20,
2017) ("In light of federalism concerns, federal courts
construe the removal statute narrowly and resolve any doubts
against removability."). Where, as here, "subject
matter jurisdiction is contested, courts are permitted to