Opinion
05 CV 10114 (CSH).
December 19, 2005
MEMORANDUM AND ORDER
Having read the complaint in the captioned action, the Court sua sponte raises the question of its subject matter jurisdiction.
Four individual plaintiffs and a plaintiff law firm allege claims for defamation and injunctive relief against two German banking corporations, an American subsidiary of one of them, and 10 "John/Jane Doe" individual defendants alleged to be officers, employees, or otherwise associated with one or another of the three corporate defendants. The complaint demands a jury trial on its damages claims against all defendants.
With respect to the subject matter jurisdiction of this Court, plaintiffs allege that as to the first named defendant, Deutsche Bundesbank, a/k/a "German National Bank," jurisdiction is based upon 28 U.S.C. § 1330. § 1330(a) provides that the federal district courts "shall have original jurisdiction without regard to amount in controversy of any nonjury civil action against a foreign state" as defined in subsequent sections of the Foreign Sovereign Immunities Act (FSIA) (emphasis added). Presumably plaintiffs regard the Deutsche Bundesbank as an "agency or instrumentality of a foreign state" as that phrase is used in the FSIA. See 28 U.S.C. § 1603. As to their claims against the other defendants, plaintiffs base subject matter jurisdiction upon diversity of citizenship under 28 U.S.C. § 1332.
Plaintiffs' allegations of diversity of citizenship are insufficient. The four individual plaintiffs and the plaintiff law firm allege only that they are "residents" of the state of Florida (although the lead plaintiff, Edward D. Fagan, also alleges that he has "a business office in the state of New York," located, the signature to the complaint indicates, at 80 Broad Street, New York, N.Y.) But it is settled law that with respect to individual parties, citizenship for diversity purposes "depends upon their places of domicile. Even though a party may have several places of residence, he or she may have only one domicile at a given time." Chapelle v. Beacon Communications Corp., 863 F.Supp. 179, 181 (S.D.N.Y. 1994 (citing cases). "[A]llegations of residence are insufficient to establish diversity jurisdiction. It is well-established that when the parties allege residence but not citizenship, the court must dismiss the suit." Held v. Held, 137 F.3d 998. 1000 (7th Cir. 1996) (citation and internal quotation marks omitted). In the case of an entity such a law firm or LLC, its citizenship is determined by that of each of its partners or equity owners.
The allegations of the complaint are inadequate under these authorities; and a particular question arises with respect to plaintiff Fagan, who is clearly practicing law at a New York City address. Presumably at the end of the working day Mr. Fagan goes home to some sort of metropolitan area residence. And the question resonates because the complaint alleges that the third corporate defendant, Commerzbank Capital Markets Corp. (CCMC), is "a US company which is located at 1251 Avenue of the Americas, New York, N.Y. 10020." Complaint, ¶ 7. For diversity purposes, a corporation is a citizen of both its state of incorporation and the state where it has its principal place of business. 28 U.S.C. § 1332(c)(1).
If CCMC is a New York corporation or its principal place of business is in New York, and any plaintiff's domicile is in New York, diversity of citizenship is not complete and the diversity statute does not confer subject matter jurisdiction upon the Court. These considerations would not appear to apply to plaintiffs' claims against the Deutsche Bundesbank, where jurisdiction is founded upon the FSIA, but quaere whether plaintiffs' claim for a jury trial in respect of that defendant is valid, given the quoted language of 28 U.S.C. § 1330(a). That question may be deferred for the present.
In these circumstances, the four individual plaintiffs with respect to themselves, and plaintiff Florida Law Group LLC with respect to each of its partners or equity owners, are directed to file not later than January 20, 2006 affidavits stating whether or not, at the time the complaint was filed, they maintained a residence in any state or states other than Florida. If any individual answers in the affirmative, and if that other state of residence coincides with the apparent citizenship of a corporate defendant, there will be a further inquiry with respect to the state of that individual's domicile.
Counsel for plaintiffs is directed to serve a copy of this Memorandum and Order forthwith upon attorneys who enter a notice of appearance on behalf of any defendant.
It is SO ORDERED.