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Amethyst Worldwide Limited, et al. v. Scottish Mutual International

April 3, 2012

AMETHYST WORLDWIDE LIMITED, ET AL.
v.
SCOTTISH MUTUAL INTERNATIONAL, PLC, ET AL.



The opinion of the court was delivered by: Present: The Honorable Margaret M. Morrow Anel Huerta N/a

CIVIL MINUTES - GENERAL

Deputy Clerk Court Reporter

Attorneys Present for Plaintiffs: Attorneys Present for Defendants:

None None

Proceedings: Order to Show Cause Why Action Should Not be Dismissed for Lack of Subject Matter Jurisdiction.

I. BACKGROUND

On February 22, 2011, plaintiffs Amethyst Worldwide Limited ("Amethyst") and Berenice Kaplan ("Kaplan") filed this action against defendants Scottish Mutual International, PLC ("Scottish Mutual"), Anglo Irish Bank Corporation PLC ("Anglo Irish Bank"), Andrew Peat ("Peat"), Andrew Peat Group Holdings, B.V. ("Peat Holdings"), and Clerical Medical Investment Group Limited ("Clerical Group"), invoking the court's diversity jurisdiction.*fn1 The complaint alleges claims under state law for securities fraud, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, conspiracy to defraud, violation of Business & Professions Code §§ 17200 and 17500, and fraud.*fn2 Defendants have filed motions to dismiss under Rule 12(b)(2) for lack of personal jurisdiction, which are currently set for hearing on Monday, April 9, 2012.

II. DISCUSSION

A. Legal Standard Governing Diversity Jurisdiction Where Parties are Not Citizens of the United States

Diversity jurisdiction exists "where the matter in controversy exceeds the sum or value of $75,000 . . . and is between -- (1) citizens of different States; (2) citizens of a State and citizens or subjects of a foreign state; [or] (3) citizens of different States . . . in which citizens or subjects of a foreign state are additional parties. . . ." 28 U.S.C. § 1332. For the court to have diversity jurisdiction, there must be complete diversity, i.e, all plaintiffs must have citizenship different from all defendants. See Strawbridge v. Curtis, 7 U.S. (3 Cranch) 267 (1806); see Caterpillar Inc. v. , 519 U.S. 61, 68, n. 3 (1996). Absent unusual circumstances, a party seeking to invoke diversity jurisdiction must affirmatively allege the parties' citizenship. Kanter v. Warner-Lambert, 265 F.3d 853, 857 (9th Cir. 2001).

A person is a citizen of his or her state of domicile at the time the lawsuit is filed. Lew v. , 797 F.2d 747, 749 (9th Cir. 1986). "[A] person is domiciled in a location where he or she has established a fixed habitation or abode in a particular place, and [intends] to remain there permanently or indefinitely." Id. at 749-50 (citations and internal quotations omitted; insertion original). A corporation is a citizen of the state in which it is incorporated and of the state where it has its principal place of business. See Danjaq, S.A. v. Pathe Communications Corp., 979 F.2d 772, 773-74 (9th Cir.

Under § 1332(a)(3), the presence of aliens on both sides of an action does not defeat complete diversity if citizens of the United States who satisfy the diversity requirement are plaintiffs and defendants. See Transure, Inc. v. Marsh & McLennan, Inc., 766 F.2d 1297, 1298-99 (9th Cir. 1985); 28 U.S.C. § 1332(a)(3) (diversity jurisdiction extends to actions between "citizens of different States . . . in which citizens or subjects of a foreign state are additional parties"). Diversity jurisdiction does not exist, however, where an alien plaintiff sues alien defendants. This is true even if a citizen is joined as a plaintiff. See Nike, Inc. v. Comercial Iberica de Exclusivas Deportivas,, 20 F.3d 987, 991 (9th Cir. 1994) ("[D]iversity jurisdiction does not encompass a foreign plaintiff suing foreign defendants, such as an action between NIL and these alien defendants. Nike's presence as a plaintiff does not salvage jurisdiction because diversity must be complete"); see also Faysound Ltd. v. United Coconut Chem., Inc., 878 F.2d 290, 294 (9th Cir. 1989) (the presence of a citizen defendant does not save jurisdiction as to an alien defendant in an action brought by an alien plaintiff). A federal court, therefore, does not have diversity jurisdiction where there are aliens on both sides of the action unless there are U.S. citizens on both sides as well.

B. Whether Plaintiff Has Established That the Court Has Diversity Jurisdiction Here

The complaint alleges that the amount in controversy exceeds $75,000, and asserts that the matter falls within the court's diversity jurisdiction under 28 U.S.C. § 1332.*fn3 The complaint fails adequately to allege the citizenship of any party, however. It pleads that plaintiff Amethyst is a private limited company organized "under the laws of a foreign jurisdiction,"*fn4 and that plaintiff Kaplan is a California "resident," and the sole shareholder and director of Amethyst.*fn5 The complaint alleges that defendants Scottish Mutual, Anglo Irish Bank, and Clerical Group are each a "corporation organized under the laws of a foreign jurisdiction."*fn6 It asserts that defendant Andrew Peat "is an individual residing in a foreign jurisdiction,"*fn7 and that defendant Peat Holdings "was a business ...

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