Dallas v. Yalamanchili et al

Filing 7

ORDER: IT IS ORDERED that by June 18, 2018, Plaintiff shall show cause why this case should not be dismissed as discussed above [see attached Order for details]. Signed by Senior Judge James A Teilborg on 6/4/18. (MAW)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Sharon Dallas,

No. CV-18-01672-PHX-JAT

Plaintiff,

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ORDER

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v.

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Sunitha Yalamanchili, et al.,

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Defendants.

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Pending before this Court is Plaintiff’s application for leave to proceed in forma

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pauperis.

(Doc. 2).

In this application, Plaintiff reveals that she is currently in

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bankruptcy. (Doc. 2 at 4). If Plaintiff is in bankruptcy, the Court is skeptical that it has

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subject matter jurisdiction over this case.

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Generally, when a plaintiff files a bankruptcy petition, the plaintiff creates a

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bankruptcy estate that typically would include the property that is the subject of this

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litigation. 11 U.S.C. ' 541(a)(1), (7) (“The commencement of a case under section 301,

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302, or 303 of this title creates an estate. Such estate is comprised of all the following

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property, wherever located and by whomever held: ... all legal or equitable interests of the

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debtor in property as of the commencement of the case.... [and][a]ny interest in property

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that the estate acquires after the commencement of the case.”). Section 541 is broad in

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scope and includes causes of action. United States v. Whiting Pools, Inc., 462 U.S. 198,

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205 (1983). The bankruptcy trustee — and not a debtor-plaintiff — alone has the capacity

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to sue on behalf of the bankruptcy estate. In Re Estate of Spirtos, 443 F.3d 1172, 1176

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(9th Cir.2006) (“[T]he bankruptcy code endows the bankruptcy trustee with the exclusive

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right to sue on behalf of the estate.”). See also 11 U.S.C. ' 323(b) (“The trustee in a case

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under this title has capacity to sue and be sued.”); In re Eisen, 31 F.3d 1447, 1451 n. 2

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(9th Cir.1994) (“Once appointed a trustee, the debtor’s assets and claims pass to the

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trustee, making the trustee ‘the proper party in interest, and the only party with standing

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to appeal the bankruptcy court's order.’” (quoting Hancock Bank v. Jefferson, 73 B.R.

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183, 185 (Bankr.S.D.Miss.1986)); Sierra Switchboard Co. v. Westinghouse Elec. Corp.,

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789 F.2d 705, 707-09 (9th Cir.1986) (holding that debtor’s claim of emotional distress

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properly belonged to the estate).

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Based on the foregoing, the Court will require Plaintiff to show cause why this

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case should not be dismissed for lack of subject matter jurisdiction because it was not

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brought by the Trustee of the bankruptcy estate. Accordingly,

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IT IS ORDERED that by June 18, 2018, Plaintiff shall show cause why this case
should not be dismissed as discussed above.
Dated this 4th day of June, 2018.

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