JBR, Inc v. Cafe Don Paco, Inc et al

Filing 58

ORDER GRANTING LEAVE TO AMEND. Signed by Judge Nathanael M. Cousins on July 10, 2014. (nclc1, COURT STAFF) (Filed on 7/10/2014)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN FRANCISCO DIVISION

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JBR, INC., a California corporation, doing

12 business as ROGERS FAMILY COMPANY,
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Plaintiff,

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ORDER GRANTING LEAVE TO
AMEND

v.

15 CAFÉ DON PACO, INC.; ALVARO
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Case No. 12-cv-02377 NC

Re: Dkt. Nos. 1, 56

MONTEALGRE, aka ALVARO E.
MONTEALEGRE RIVAS; ROBERTO
BENDAÑA, aka ROBERTO BENDAÑA
McEWAN,
Defendants.

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The Court previously ordered plaintiff to show cause why this breach of contract

21 action should not be dismissed for lack of subject matter jurisdiction, because plaintiff
22 failed to allege that defendant Montealegre was a citizen of another state and thus diverse
23 from plaintiff. See Dkt. No. 1 at ¶ 4 (alleging defendant Montealegre “is a resident of
24 Texas.”); Kanter v. Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001) (“The natural
25 person‟s state citizenship is then determined by her state of domicile, not her state of
26 residence. A person‟s domicile is her permanent home, where she resides with the intention
27 to remain or to which she intends to return.”).
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Plaintiff has responded to the order to show cause by requesting leave to amend the
Case No. 12-cv-02377 NC
ORDER GRANTING LEAVE TO
AMEND

1 complaint to cure this pleading defect. Dkt. No. 57. Plaintiff states that defendant
2 Montealegre “is a citizen of Nicaragua, and, as of the date of filing the complaint, was not
3 domiciled in any state in the United States. In fact, defendant and his family moved back to
4 Nicaragua in 2004.” Id. at 1-2. The Court grants leave to amend the complaint to make the
5 proposed amendment, as long as counsel has a Rule 11 good faith basis to believe two
6 things are true: First, defendant Montealegre must have been an alien or citizen of a diverse
7 state at the time of initiating the lawsuit, not at an earlier or later time. See Grupo Dataflux
8 v. Atlas Global Grp., L.P., 541 U.S. 567, 571 (2004) (diversity of citizenship is measured
9 “against the state of facts that existed at the time of filing.”). Second, defendant must not be
10 a U.S. citizen domiciled in Nicaragua, as U.S. citizens domiciled abroad are “neither a
11 „citizen of a state‟ nor an alien under 28 U.S.C. § 1332(a)(3)” and thus may not be sued in
12 federal court based on diversity jurisdiction. Brady v. Brown, 51 F.3d 810, 815 (9th Cir.
13 1995).
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The Court finds that plaintiff may amend his complaint to cure the subject matter

15 jurisdiction defect without serving the amended complaint on the defaulting defendants (and
16 starting over the process for acquiring a default judgment) because the amendment adds
17 new factual allegations but will not add a new claim. See Fed. R. Civ. P. 5(a)(2) (“No
18 service is required on a party who is in default for failing to appear. But a pleading that
19 asserts a new claim for relief against such a party must be served on that party under Rule
20 4.”); Bd. of Trs. of Laborers Health & Welfare Trust Fund for N. Cal. v. Perez, No. 10-cv21 02002 JSW JCS, 2011 WL 6151506, at *5 (N.D. Cal. Nov. 7, 2011) (finding default
22 judgment could be granted despite plaintiff not serving defaulting defendant with amended
23 complaint, where amended complaint contained “new factual allegations” but not new
24 claims).
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Plaintiff may amend his complaint as proposed within seven days of this order. The

26 Court will then address plaintiff‟s motion for default judgment based on the amended
27 complaint.
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Case No. 12-cv-02377 NC
ORDER GRANTING LEAVE TO
AMEND

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IT IS SO ORDERED.

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Date: July 10, 2014

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_________________________
Nathanael M. Cousins
United States Magistrate Judge

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Case No. 12-cv-02377 NC
ORDER GRANTING LEAVE TO
AMEND

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