California Casualty Indemnity Exchange v. Danylova et al

Filing 21

ORDER GRANTING-IN-PART DEFENDANTS' MOTION by Judge Paul S. Grewal granting-in-part 4 (psglc2, COURT STAFF) (Filed on 3/17/2014)

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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 United States District Court For the Northern District of California 8 SAN JOSE DIVISION 11 12 CALIFORNIA CASUALTY INDEMNITY EXCHANGE, Plaintiff, 13 v. 14 15 RAYISA DANYLOVA, et al., Defendants. 16 17 18 19 ) ) ) ) ) ) ) ) ) ) ) Case No. 5:13-cv-05838-PSG ORDER GRANTING-IN-PART DEFENDANTS’ MOTION (Re: Docket No. 4) Before the court is Defendants Rayisa Danylova, Mykhaylo Danylova, and the Law Office of Boris E. Efron’s motion to dismiss this interpleader action for want of diversity pursuant to Fed. R. Civ. P. 12(b)(1). 1 Defendants want the case dismissed with prejudice and also seek 20 21 sanctions. Plaintiff California Casualty Indemnity Exchange opposes. The court elected to take 22 this matter under submission on the papers pursuant to Civil L.R. 7-1(b). 2 Having considered the 23 arguments, the court GRANTS Defendants’ motion, but only IN PART. 24 25 26 1 27 2 28 See Docket No. 4. See Civil L.R. 7-1(b) (“In the Judge’s discretion, or upon request by counsel and with the Judge’s approval, a motion may be determined without oral argument or by telephone conference call.”). 1 Case No. 5:13-cv-05838-PSG ORDER GRANTING-IN-PART DEFENDANTS’ MOTION I. LEGAL STANDARDS 1 2 A. Motion to Dismiss Pursuant to Fed. R. Civ. P. 12(b)(1) and 35 U.S.C. § 1335 The subject-matter jurisdiction of the federal courts is limited. 3 This court has jurisdiction 3 4 over interpleader actions where: (1) the amount in controversy exceeds $500 and (2) two or more 5 adverse claimants are diverse. 4 6 7 8 9 United States District Court For the Northern District of California 10 11 For the purposes of Defendants’ Rule 12 motion, the court accepts all material allegations in the complaint as true and construes them in the light most favorable to California Casualty. 5 The court’s review is “limited to the complaint, materials incorporated into the complaint by reference, and matters of which the court may take judicial notice.” 6 The court need not accept as true allegations that are conclusory, unwarranted deductions of fact, or unreasonable inferences. 7 Dismissal with prejudice and without leave to amend is not appropriate unless it is clear 12 13 “that the complaint could not be saved by amendment.” 8 14 B. 15 16 Fed. R. Civ. P. 11 Rule 11 provides the court with authority to assess sanctions. The court’s authority extends to pleadings filed for an improper purpose, the making of frivolous arguments, or allegations 17 18 19 3 See Fed. R. Civ. P. 12(b)(1) (providing a Rule 12 defense for “lack of subject-matter jurisdiction”). 4 20 21 22 See Methven & AssociatesProfessional Corp. v. Paradies-Stroud, Case No. 3:13-cv-01079-JSW, 2014 WL 231654, at *1 (N.D. Cal. Jan. 21, 2014) (holding that in “order bring a statutory interpleader action, the plaintiff must establish that there are two or more adverse claimants, of diverse citizenship who “are claiming or may claim to be entitled” to such money or property) (citing 28 U.S.C. § 1335(a)(1)). 5 23 24 See Metzler Inv. GMBH v. Corinthian Colls., Inc., 540 F.3d 1049, 1061 (9th Cir. 2008) (“The court ‘accept[s] the plaintiffs’ allegations as true and construe[s] them in the light most favorable to plaintiffs.’” (quoting Gompper v. VISX, Inc., 298 F.3d 893, 895 (9th Cir. 2002))). 6 25 Id. 7 26 27 28 See Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001) (noting that the court is not required “to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable” inferences); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 561(2007) (holding “a wholly conclusory statement” of a claim will not survive a motion to dismiss). 8 Eminence Capital, LLC v. Asopeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). 2 Case No. 5:13-cv-05838-PSG ORDER GRANTING-IN-PART DEFENDANTS’ MOTION 1 tendered without record support. 9 Sanctions “shall be assessed if the paper filed in the district 2 court and signed by an attorney or unrepresented party is frivolous, legally unreasonable, or 3 without factual foundation, even though the paper was not filed in subjective bad faith.” 10 4 5 II. DISCUSSION A. 6 7 8 9 United States District Court For the Northern District of California 10 11 Because No Defendants Are Diverse, This Court Lacks Jurisdiction Statutory interpleader requires at least two adverse claimants be diverse. Here, the complaint alleges that the defendants are diverse because Kathleen Sebelius, Secretary of the United States Department of Health and Human Services, is located in Washington, D.C. and all other defendants are residents of California. 11 A claim alleged against a United States officer acting in her official capacity, however, is correctly treated as a claim against the United States 12 itself. 12 “The United States, for the purposes of interpleader statute, is not a citizen of any state.” 13 13 This court thus does not have jurisdiction to hear the case. 14 15 16 17 18 19 20 21 22 9 See United States v. W.R. Grace, 526 F.3d 499, 523 (9th Cir. 2008) (“Under Federal Rule of Civil Procedure 11, attorneys must sign the filings they submit to the district court, and, upon filing, the attorneys certify that the papers are not being filed for an improper purpose, such as to harass or cause delay; that legal contentions are supported by existing law or by nonfrivolous arguments to alter existing law; that factual contentions have or are likely to have evidentiary support; and that denials of factual contentions are warranted on the evidence, belief, or lack of information.” (citing Fed. R. Civ. P. 11(a), (b))); Fed. R. Civ. P. 11 (c) (“If, after notice and a reasonable opportunity to respond, the court determines that Rule 11(b) has been violated, the court may impose an appropriate sanction on any attorney, law firm, or party that violated the rule or is responsible for the violation.”). 10 23 Zuniga v. United Can Co., 812 F.2d 443, 452 (9th Cir. 1987) (quoting Golden Eagle Distrib. Corp. v. Burroughs Corp., 801 F.2d 1531, 1537 (9th Cir. 1986)). 24 11 25 12 26 27 See Morongo Band of Mission Indians v. California State Bd. of Equalization, 858 F.2d 1376, 1382 (9th Cir. 1988) (citing Monell v. Department of Social Services, 436 U.S. 658, 690 n.55, (An “official-capacity suit is, in all respects other than name, to be treated as a suit against the entity.”)). 13 28 See Docket No. 1 at 2. Kent v. N. California Reg’l Office of Am. Friends Serv. Comm., 497 F.2d 1325, 1327 (9th Cir. 1974) (citations omitted). 3 Case No. 5:13-cv-05838-PSG ORDER GRANTING-IN-PART DEFENDANTS’ MOTION

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