Nguyen v. Sound Solutions Group, Inc. et al

Filing 9


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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 SAN JOSE DIVISION United States District Court Northern District of California 11 12 KHOA DANG NGUYEN, Plaintiff, 13 14 15 16 17 Case No. 18-cv-02225-BLF v. SOUND SOLUTIONS GROUP, INC., et al., Defendants. ORDER ADOPTING REPORT AND RECOMMENDATION OF MAGISTRATE JUDGE; DENYING APPLICATION TO PROCEED IN FORMA PAUPERIS AND DISMISSING ACTION WITHOUT PREJUDICE [Re: ECF 2, 6] 18 19 20 21 On April 13, 2018, pro se Plaintiff Khoa Dang Nguyen (“Mr. Nguyen”) filed a letter 22 complaint and an application to proceed in forma pauperis (“IFP”). ECF 1, 2. On May 2, 2018, 23 Magistrate Judge Nathanael M. Cousins, to whom the case initially was assigned, issued a 24 screening order under 28 U.S.C. § 1915, and requested that Mr. Nguyen file a declaration in 25 support of his motion to proceed IFP. See ECF 5. Judge Cousins found that the complaint fails to 26 state a claim and fails to satisfy the procedural rules of pleading. Id. Specifically, Judge Cousins 27 found that Mr. Nguyen failed to plead federal subject matter jurisdiction and failed to plead fraud 28 with particularity. Id. at 3-4. Mr. Nguyen was granted leave to amend by June 1, 2018. Id. Judge 1 Cousins also noted that Mr. Nguyen’s IFP application was incomplete and requested that Mr. 2 Nguyen file a declaration under penalty of perjury by June 1, 2018 clarifying his monthly income 3 and where it goes each month (e.g., in a bank, or spent on something other than on necessary 4 expenses). Id. at 2. Judge Cousins advised Mr. Nguyen that the Court will recommend dismissing 5 his complaint if he does not amend his complaint by June 1, 2018. Id. at 5. 6 Mr. Nguyen did not file any documents in response to the Court’s order. Accordingly, on 7 July 10, 2018, Judge Cousins directed that the case be reassigned to a district judge, and issued a 8 Report and Recommendation (“R&R”) that the case be dismissed without prejudice for the 9 reasons stated in his May 2, 2018 Order. R&R, ECF 6. 10 Mr. Nguyen has not filed an objection to the R&R and the time to object has expired. See United States District Court Northern District of California 11 Fed. R.Civ. P. 6(d), 72(b)(2). The Court finds Judge Cousins’ R&R and Order to be well- 12 reasoned and correct in every respect, and ADOPTS the R&R in its entirety. In particular, the 13 Court agrees with Judge Cousins’ conclusion that the complaint fails to establish that this Court 14 has subject matter jurisdiction. The two main sources of subject matter jurisdiction are federal 15 question jurisdiction (also known as “arising under” jurisdiction) and diversity jurisdiction. First, 16 with respect to federal question jurisdiction, federal courts have original jurisdiction over civil 17 claims “arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. A 18 claim “arises under” federal law if, based on the “well-pleaded complaint rule,” the plaintiff 19 alleges a federal claim for relief. Vaden v. Discovery Bank, 129 S. Ct. 1262, 1272 (2009). 20 21 Here, the complaint fails to establish federal question jurisdiction. Mr. Nguyen’s claim sounds in fraud, which does not give rise to federal court jurisdiction under 28 U.S.C. § 1331. 22 Turning to the whether there is diversity jurisdiction, the complaint must allege that the 23 matter in controversy is between citizens of different states and the amount in controversy must 24 exceed $75,000 to invoke diversity jurisdiction in an action involving U.S. citizens. 28 U.S.C. 25 §1332(a)(1). Diversity jurisdiction requires “complete diversity,” that “plaintiffs and each 26 defendant be citizens of different states.” Allen v. Boeing Co., 821 F.3d 1111, 1115 (9th Cir. 27 2016). Here, the complaint does not allege the citizenship of any party, although the defendants 28 appear to be in Utah. The amount in controversy requirement also appears to be satisfied as Mr. 2 1 Nguyen asks that the Court grant him $137,011.00. However, without allegations of citizenship, 2 the Court cannot determine whether complete diversity of citizenship exists. 3 Mr. Nguyen’s complaint also insufficiently alleges a claim for fraud. The elements of a 4 fraud claim are “‘(a) misrepresentation (false representation, concealment, or nondisclosure ); (b) 5 knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable 6 reliance; and (e) resulting damage.’” Kearns v. Ford Motor Co., 567 F.3d 1120, 1126 (9th Cir. 7 2009) (quoting Engalla v. Permanente Med. Group, Inc., 15 Cal. 4th 951, 974 (1997)). In federal 8 court, fraud claims are further subject to Federal Rule of Civil Procedure 9(b) which requires that 9 allegations of fraud be stated with particularity. Specifically, the Ninth Circuit has held that averments of fraud “be accompanied by ‘the who, what, when, where, and how’ of the misconduct 11 United States District Court Northern District of California 10 charged.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (quoting Cooper v. 12 Pickett, 137 F.3d 616, 627 (9th Cir. 1997)). When an “entire claim within a complaint[ ] is 13 grounded in fraud and its allegations fail to satisfy the heightened pleading requirements of Rule 14 9(b), a district court may dismiss the ... claim.” Id. at 1107. 15 The Court agrees with Judge Cousins that at most, Mr. Nguyen has alleged that defendants 16 stole his money by making misrepresentations and then absconding with his money. But Mr. 17 Nguyen does not address the other elements of fraud and therefore he has not stated a fraud claim 18 or complied with Rule 9(b). 19 Judge Cousins identified the above deficiencies in his screening order dismissing the 20 complaint, and he granted Mr. Nguyen an opportunity to amend the complaint by June 1, 2018. 21 See ECF 5. Mr. Nguyen also had an opportunity to address the deficiencies by filing objections to 22 Judge Cousins’ R&R. However, Mr. Nguyen has not filed an amended complaint, filed the 23 requisite declaration supporting his IFP status, and has not objected to the R&R within the 24 allowable time. Because Mr. Nguyen has failed to timely file an amended complaint, the Court 25 finds that it is appropriate to dismiss the case. However, the Court also agrees with Judge Cousins 26 that dismissal be without prejudice because even though the allegations are insufficient, Mr. 27 Nguyen may be able to amend it in a future federal or state court proceeding based on the same 28 facts. ECF 6 at 2. 3 1 Accordingly, this action is DISMISSED WITHOUT PREJUDICE. See Fed. R. Civ. P. 2 41(b); Edwards v. Marin Park, Inc., 356 F.3d 1058, 1065 (9th Cir. 2004) (“The failure of the 3 plaintiff eventually to respond to the court’s ultimatum . . . is properly met with the sanction of a 4 Rule 41(b) dismissal.”). In addition, Mr. Nguyen’s application to proceed IFP is DENIED 5 WITHOUT PREJUDICE. 6 The Clerk shall close the file. 7 IT IS SO ORDERED. 8 9 10 United States District Court Northern District of California 11 Dated: July 30, 2018 ______________________________________ BETH LABSON FREEMAN United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4

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