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Gwendolyn Walker Smith, et al., Al v. Breakthrough International


April 29, 2013


The opinion of the court was delivered by: Jon S. Tigar United States District Judge



Defendant Breakthrough International, Inc. ("Breakthrough") has moved to dismiss Plaintiffs Gwendolyn Walker Smith and Zeus Harrison Smith's ("Plaintiffs") First Amended 16 Complaint ("FAC") for lack of subject matter jurisdiction, among other reasons. Notice of Motion 17 and Motion to Dismiss Plaintiffs' First Amended Complaint ("Mot."), ECF No. 31. The Court 18 finds that this matter is suitable for disposition without oral argument, pursuant to Federal Rule of 19 Civil Procedure 78(b) and Civil Local Rule 7-1(b). Since the Court is not satisfied that it has 20 subject matter jurisdiction over this matter, it hereby DISMISSES the FAC WITHOUT 21 PREJUDICE, subject to Plaintiffs filing a sworn affidavit attesting to their state citizenship on 22 April 12, 2012. Without such an affidavit, the Court is likely to dismiss the case with prejudice. 23


A. Procedural and Factual Background

On April 12, 2012, Plaintiffs Gwendolyn Smith and Zeus Harrison Smith ("Plaintiffs") 26 filed a complaint ("the Complaint") against Defendants Howard Elan, Reverend Oracle, and 27 Breakthrough, alleging violations of the U.S. and California constitutions, alleging violation of the 28 federal Electronic Communications and Privacy Act ("ECPA"), 18 U.S.C. § 2511, and raising several state tort causes of action. ECF No. 1. The Court granted Plaintiff Gwendolyn Smith's 2 application to proceed in forma pauperis, but also dismissed the Complaint without prejudice 3 under the screening procedures in 28 U.S.C. § 1915(e)(2)(B). ECF No. 12.*fn1 The Court held that 4 the Complaint failed to state any claim against Breakthrough, that Plaintiffs' ECPA claim was 5 time-barred, that the Complaint failed to invoke the Court's subject matter jurisdiction in the 6 absence of the ECPA claim, and further finding that that the Complaint failed to allege sufficient 7 facts to state any claim except defamation, false light, and intentional infliction of emotional 8 distress. Id. The Court granted Plaintiffs leave to file an amended complaint, but noted that 9

Plaintiffs asserted Oregon citizenship while at the same time listing a Sebastapol, California 10 address on the Court's electronic case filing system. Id. The Court ordered Plaintiffs "to submit 11 an affidavit, under oath, attesting to their true residency," in any amended complaint. Id. 12

In October 2012, Plaintiffs filed the FAC. ECF No. 16. In the FAC, Plaintiffs allege that they are both residents of Portland, Oregon, and are citizens of the State of Oregon. FAC, at ¶ 1. 14

The FAC asserts that "[p]ursuant to, at a minimum, Cal. Civ. Pro § 410.10 [sic], the Court has 15 jurisdiction under the provisions of 28 U.S.C. § 1332." Id. at ¶ 5. The FAC's caption lists the 16

Defendants as "Breakthrough International, d/b/a, d/b/a Howard Elan and 17

Reverend Oracle, Defendants." Id. The FAC lists four causes of action: "Invasion of Privacy - 18

Physical Intrusion on Solitude And/Or Private Affairs, in Violation of Federal and State 19

Constitutions and 18 U.S.C. § 1702," "Defamation and Defamation Per Se," "False Light," and 2 "Conspiracy to Defame." Plaintiffs did not file the affidavit that the Court ordered them to file, 3 but in November 2012, they filed a notice of change of address, stating that "as of October 10, 4 2012," they were no longer receiving mail at their Sebastapol address, and submitting a new 5 Portland, Oregon address. ECF No. 22. 6

In granting Plaintiff Zeus Harrison Smith's separate application to proceed in forma 7 pauperis, the Court dismissed the FAC's first and fourth causes of action with prejudice, finding 8 that the first was time-barred and that the fourth did not state a legal claim. ECF No. 25. 9 Defendant Breakthrough moves to dismiss on the grounds that Plaintiffs have failed to 10 meet their burden of establishing that the Court has subject matter jurisdiction over the case, that 11 the FAC does not allege cognizable claims against Breakthrough, and that the remaining claims 12 are time-barred. Mot.

B. Legal Standards

A party may move to dismiss a complaint for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). "[I]f the court determines at any time that it lacks 16 subject-matter jurisdiction, it must dismiss the action." Fed. R. Civ. Pro. 12(h)(3). "The burden 17 of establishing . . . [a federal court's jurisdiction] rests upon the party asserting jurisdiction." 18

Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). 19 Federal district courts have original jurisdiction over "all civil actions where the matter in 20 controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between 21 . . . citizens of different States." 28 U.S.C. § 1332(a). This statute requires "complete diversity of 22 citizenship," such that "the citizenship of each plaintiff is diverse from the citizenship of each 23 defendant." Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996). A "natural person's state 24 citizenship is . . . determined by her state of domicile, not her state of residence." Kanter v. 25

Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001). "A person's domicile is her permanent 26 home, where she resides with the intention to remain or to which she intends to return." Id. "[A]ll 27 challenges to subject-matter jurisdiction premised upon diversity of citizenship [are measured] 28 against the state of facts that existed at the time of filing," and a party's subsequent change of citizenship cannot cure a lack of diversity which existed at the time of filing. Grupo Dataflux v. 2 Atlas Global Grp., L.P., 541 U.S. 567, 571 (2004). 3

"In ruling on a challenge to subject matter jurisdiction, the district court is ordinarily free 4 to hear evidence regarding jurisdiction and to rule on that issue prior to trial, resolving factual 5 disputes where necessary." Carijano v. Occidental Petroleum Corp., 686 F.3d 1027, 1032 (9th 6

circumstances, '[n]o presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of 8 jurisdictional claims.'" Augustine, 704 F.2d at 1077 (quoting Thornhill Publishing Co. v. General 9

Telephone Corp., 594 F.2d 730, 737 (9th Cir. 1979). Without satisfying itself that it has subject 10 matter jurisdiction, a court may not proceed to the merits of the case. See Steel Co. v. Citizens for 11 a Better Env't, 523 U.S. 83, 94-95 (1998) ("[t]he requirement that jurisdiction be established as a Cir. 2012) (quoting Augustine v. United States, 704 F.2d 1074, 1077 (9th Cir.1983)). "In such threshold matter 'spring[s] from the nature and limits of the judicial power of the United States' 13 and is 'inflexible and without exception.'") (quoting Mansfield, C. & L.M.R. Co. v. Swan, 111 14 U.S. 379, 382 (1884)). 15

"Although we construe pleadings liberally in their favor, pro se litigants are bound by the 16 rules of procedure." Ghazali v. Moran, 46 F.3d 52, 54 (9th Cir. 1995). 17


The only jurisdiction Plaintiffs assert over their remaining claims is diversity jurisdiction.

FAC, at ¶ 5.*fn2 On the basis of the available evidence, this jurisdiction is very much in question. 20

Although the FAC does not explicitly identify the citizenship of Breakthrough, the Court 21 construes it as asserting that Breakthrough is a California citizen, a fact which Breakthrough does 22 not dispute. See FAC at ¶ 2; Mot. at 8:12-15. Therefore, to invoke diversity jurisdiction, both 23

Plaintiffs must assert that they were both permanently domiciled in a state other than California on 24

April 12, 2012. 25

There is compelling evidence tending to indicate that both Plaintiffs, and at least

Ms. Smith, are domiciled in California, or at least were in April 2012. In March 2010, both 2 ECF. No. 1, ¶1.*fn3 In that litigation, Plaintiffs filed a change of address with the Court in December 4 2011 claiming a Sebastapol, California mailing address. Id. at ECF No. 52. As late as August 6, 5 2012, Plaintiffs sent submissions to this Court in envelopes which bore the Sebastapol address as 6 the return address. ECF No. 11-1. Plaintiffs kept that Sebastapol address on file with this Court 7 until November 2012, and they changed it after receiving this Court's order pointing to the 8 discrepancy between the filed address and their asserted Oregon citizenship. ECF No. 22. 9

Plaintiffs asserted California residency in litigation before this district. Case No. 4:10-cv-0996, 3 Finally, Breakthrough has filed a declaration with the Court indicating that the address both 10 Plaintiffs now have on file with the Court appears to be an administrative building at Reed 11 College, and that the "MS" designation in the address indicates that it is a mailbox belonging to a 12 student. Declaration of Stacy Y. North in Support of Motion to Dismiss Plaintiffs' First Amended United States District Court Northern District of California Complaint, ECF No. 31-1. Ms. Smith has not alleged that she is a student at Reed College. 14

This evidence is even more damaging to Plaintiffs' invocation of diversity jurisdiction than Breakthrough suggests in its motion. Under the rule of Grupo Dataflux, complete diversity must 16 exist at the time of filing, and cannot be cured by any post-filing change in a party's citizenship. 17

Even if both Plaintiffs did permanently relocate to Oregon sometime after April 12, 2012, the case 18 must still be dismissed if they were California residents at the time the complaint was filed. In 19 their change of address notice, Plaintiffs state that "as of October 1, 2012, mail is no longer 20 received for them" at their Sebastapol address. ECF No. 22. This indicates that any move to 21

Oregon came many months after filing. 22

In their opposition to the motion to dismiss, Plaintiffs notably do not take the opportunity 23 to assure the Court that they both make their permanent domicile in the State of Oregon, and they 24 make no attempt to refute the evidence presented by Breakthrough. Memorandum of Law in 25 Opposition to Motion to Dismiss ("Opp."), ECF No. 36. Instead, they argue that because "this 2 Court already conducted an evidentiary hearing on the issue of jurisdiction, raised sua sponte and 3 resolved in Plaintiff's favor," Breakthrough is estopped from raising the issue again. Id. at 2:18-4

Plaintiffs' favor. In any case, "subject-matter jurisdiction, because it involves a court's power to hear a case, can never be forfeited or waived." Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006) 6 (quoting United States v. Cotton, 535 U.S. 625, 630 (2002)). 7 Plaintiffs argue that this Court must "accept as true the factual allegations in the 21. The Court held no such hearing and issued no order resolving the issue of jurisdiction in 8 complaint" if it does not hold an evidentiary hearing. McLachlan v. Bell, 261 F.3d 908, 909 (9th 9 Cir. 2001). Breakthrough does not address this point in its reply brief. However, at least one 10 court in this district has declined to read MacLachlan as requiring district courts always to hold an 11 evidentiary hearing before concluding that one party has successfully refuted another's invocation of jurisdiction. Robertson v. Qadri, 2008 WL 818529, at *4, n.4 (N.D. Cal. Mar. 25, 2008) aff'd, 13 399 F. App'x 219 (9th Cir. 2010) (unpublished). 14

In this situation, the Court similarly concludes that no evidentiary hearing is required. The Court does not view Plaintiffs' ipse dixit assertion that they "are citizens of the State of Oregon" 16 as the sort of "factual allegation" whose truth must be assumed in the absence of an evidentiary 17 hearing. Rather, this assertion is closer akin to a "legal conclusion couched as a factual 18 allegation," which a court is "not bound to accept as true" on a motion to dismiss. Bell Atl. Corp. 19 v. Twombly, 550 U.S. 544, 555 (2007) (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)). If 20 merely asserting state citizenship counted as a "factual allegation" under MacLachlan, courts 21 would be required to hold an evidentiary hearing before ever considering whether one party had 22 properly disputed the other's invocation of diversity jurisdiction. It is doubtful that this was 23

MacLachlan's intended effect. Such a reading would substantially upend the well-established 24 principle that the party invoking jurisdiction bears the burden of proving it, as well as the rule that 25 "no presumptive truthfulness applies to plaintiff's allegations" when a court inquiries into subject-26 matter jurisdiction. Augustine, 704 F.2d at 1077. Therefore, the Court assumes the truth of all 27 legitimately factual allegations in the FAC but does not consider itself bound to assume the truth of Plaintiff's unadorned assertion of Oregon citizenship in the face of substantial evidence to the contrary. 2

On this basis, the Court concludes that Plaintiffs have failed to meet their burden of

3 establishing subject-matter jurisdiction. Without jurisdiction to hear the case, the Court cannot 4 proceed to consider Breakthrough's other arguments in support of dismissal. 5


Since Plaintiffs have failed to meet their burden of asserting subject-matter jurisdiction, the Complaint is hereby DISMISSED pursuant to Federal Rule of Civil Procedure 12(h)(3). Since the 8 Complaint has not heretofore been dismissed on this ground, and since the standard for dismissing 9 pro se complaints is very liberal, dismissal is WITHOUT PREJUDICE. Rather than giving 10

Plaintiffs leave to file a further amended complaint, this Court will instead give Plaintiffs a final 11 opportunity to satisfy their burden of demonstrating that this Court has jurisdiction to hear their 12 claims.

Plaintiffs are ordered a second time to file with the Court an affidavit, taken under oath, in 14 which Plaintiffs attest to both of their permanent domiciles at the time they filed this action: April 15 12, 2012. The affidavit also must satisfactorily address and refute the evidence discussed above 16 which indicates that they were domiciled in California at that time. Plaintiffs should also take the 17 opportunity to submit any admissible evidence within their possession which demonstrates that 18 their permanent domicile in April was in a state other than California, and refutes the evidence 19 cited above which tends to indicate that both Plaintiffs very likely do not both make their 20 permanent domicile at the address they have filed with the Court. If the Court does not receive 21 such a submission within fourteen days, or if the Court deems this evidence insufficient to 22 establish Plaintiffs' non-California citizenship, it will dismiss this case with prejudice. The Court 23 trusts that it need not remind Plaintiffs that it is a serious crime to testify falsely under oath or to 24 perpetrate a fraud upon a federal court. 25


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