Rivera-Rivera et al
Filing
29
OPINION AND ORDER re 14 MOTION to Dismiss/Lack of Jurisdiction (subject matter) as to All PlaintiffsMOTION to Dismiss/Lack of Jurisdiction (subject matter) as to All Plaintiffs filed by Toys "R" Us, Inc. Signed by US Magistrate Judge Camille L. Velez-Rive on 5/12/11.(ljt)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
JUDITH RIVERA-RIVERA ET AL.,
Plaintiffs,
CIVIL NO. 10-1786 (CVR)
v.
TOYS “R” US, INC.,
Defendant.
OPINION AND ORDER
INTRODUCTION
On August 16, 2010, plaintiffs Judith Rivera-Rivera filed a complaint on her behalf
and of her two minor children (hereafter “plaintiffs”) for an incident amounting to a state
tort that took place at the Toys R Us store located in San Juan, Puerto Rico. Plaintiffs
invoked in the instant case diversity jurisdiction against herein defendant TOYS “R” US,
Inc.1 Title 28, United States Code, Section 1332.
On January 3, 2011, defendant TOYS “R” US filed a Motion to Dismiss for Lack of
Subject Matter Jurisdiction based on lack of diversity. Defendant TOYS “R” US, the
company included by plaintiffs as herein federal defendant, is not the owner nor did it
manage neither operate the Toys R Us store in San Juan where the incident alleged by
plaintiffs took place. In addition, the Toys R Us store in question is indeed a Puerto Rico
corporation. Since plaintiffs are also citizens of Puerto Rico, defendant avers the Court has
no subject matter jurisdiction for lack of complete diversity.
1
Plaintiffs have made a claim for damages under Article 1802-1803 of Puerto Rico Civil Code, 31 P.R. Laws Ann.
§§5141-5142.
Judith Rivera-Rivera et al., v. Toys “R” Us
Civil No. 10-1786 (CVR)
Opinion and Order
Page No. 2
On March 1, 2011, the Court referred the case to this Magistrate Judge for all further
proceedings, including the entry of judgment. (Docket Nos. 26 and 27).
Plaintiffs have failed to oppose defendant’s averments for which dismissal will be
allowed as briefly discussed below for it is now clear from the record, and without need of
an evidentiary hearing, this federal court lacks jurisdiction.
STANDARD FOR MOTION TO DISMISS
Under Rule 12(b)(1) of the Federal Rules of Civil Procedure, a party may, consider
materials outside the pleadings without converting the motion to dismiss into one for
summary judgment.2 Still, under Section 12 (b)(2) "a complaint should not be dismissed
for failure to state a claim unless it appears ... that the plaintiff can prove no set of facts in
support of his claim which would entitle him to relief." See Bell Atlantic Corp. v. Twonbly,
127 S.Ct. 1955 (2007) (citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102 (1957));
see Miranda v. Ponce Fed. Bank, 948 F.2d 41 (1st Cir. 1991); see also Rodríguez-Ortiz v.
Margo Caribe, Inc., 490 F.3d 92, 94-95 (1st Cir. 2007).3
To elucidate a motion to dismiss the Court must accept as true "all well-pleaded
factual averments and indulg[e] all reasonable inferences in the plaintiff's favor." Aulson
v. Blanchard, 83 F.3d 1, 3 (1st Cir. 1996). A complaint must set forth "factual allegations,
either direct or inferential, regarding each material element necessary to sustain recovery
under some actionable theory." Romero-Barceló v. Hernández-Agosto, 75 F.3d 23, 28 n.
2
Fed.R.Civ.P. 12(b)(1) allows a defense to be presented for lack of subject matter jurisdiction, while 12(b)(2)
allows same for lack of personal jurisdiction.
3
No heightened fact pleading of specifics is required but only enough facts to state a claim to relief that is
plausible on its face. Bell Atlantic, 127 S.Ct. at 1974.
Judith Rivera-Rivera et al., v. Toys “R” Us
Civil No. 10-1786 (CVR)
Opinion and Order
Page No. 3
2 (1st Cir. 1996) (quoting Gooley v. Mobil Oil Corp., 851 F.2d 513, 514 (1st Cir. 1988)). The
Court, need not accept a complaint's " 'bald assertions' or legal conclusions" when assessing
a motion to dismiss. Abbott, III v. United States, 144 F.3d 1, 2 (1st Cir. 1998) (citing Shaw
v. Digital Equip. Corp., 82 F.3d 1194, 1216 (1st Cir. 1996)).
Still, under Fed.R.Civ.P. 12(h)(3) upon the Court determining at any time that it
lacks subject matter jurisdiction, it must dismiss the action.
LEGAL DISCUSSION
A perusal of the complaint filed by plaintiffs clearly shows that diversity is the only
conceivable basis for federal subject matter jurisdiction. Title 28, United States Code
Sections 1331, 1332.4
The cause of action alleged by plaintiffs is predicated on a tort when the plaintiffs
visited the store of Toys R Us located in San Juan, Puerto Rico. (Docket No. 1, Complaint
¶¶1, 2). Defendant Toys “R” Us, a business dedicated to retail sale of toys and juvenile
products, is alleged in the complaint to be a corporation organized and existing under the
laws of Delaware, with headquarters located in Wayne, New Jersey. (Id. ¶6). Toys “R” Us
is claimed to be jointly responsible for the acts or omissions of its personnel, including the
Store Manager, the Security Guard and any other employee involved in the incident [at the
San Juan store on February 13, 2010]. (Id. ¶¶7, 18).
4
Section 1331 provides: “The district courts shall have original jurisdiction of all civil actions arising under the
Constitution, laws, or treaties of the United States.”
Section 1332 (a)(1) provides for diversity of citizenship and jurisdiction amount required for district court to
have original jurisdiction between citizens of different States.
Judith Rivera-Rivera et al., v. Toys “R” Us
Civil No. 10-1786 (CVR)
Opinion and Order
Page No. 4
Defendant herein TOYS “R” US, a Delaware Corporation, submitted its request for
dismissal for absence of subject matter jurisdiction upon lack of diversity. The corporation
that owns the San Juan store, where the incident in question occurred, is identified properly
as Toys R Us, a separate and distinct corporation, which is organized and operating under
the laws of the Commonwealth of Puerto Rico. (Docket No. 14, Exhibit 1, Certificate of
Incorporation). Said proper defendant Toys R Us has the same citizenship as plaintiffs for
which diversity would be lacking. (Docket No. 14, pp. 5-7).
As courts of limited jurisdiction, federal courts have the duty to construe
jurisdictional grants narrowly. When deciding whether to dismiss a complaint for lack of
subject matter jurisdiction, the Court “may consider whatever evidence has been submitted,
such as . . . depositions and exhibits.” See Aversa v. United States, 99 F.3d 1200, 1210 (1st
Cir. 1996). When federal jurisdiction is premised on the diversity statute, courts must
determine whether complete diversity exists among all plaintiffs and all defendants. Casas
Office Machines v. Mita Copystar America, Inc., 42 F.3d 668, 673 (1st Cir. 1994). An
absence of subject matter jurisdiction can be raised at any time. Am. Fiber & Fin, Inc. v.
Tyco Healthcare Group, LP, 362 F.3d 136, 138-39 (1st Cir. 2004).
For purposes of diversity jurisdiction, citizenship usually is equated with domicile.
Valentín v. Hospital Bella Vista, 254 F.3d 358, 366 (1st Cir. 2001). A person is a citizen of
the state in which he is domiciled. Lundquist v. Precision Valley Aviation, Inc., 946 F.2d 8,
10 (1st Cir. 1991). For purposes of Section 1332(c) in diversity jurisdiction, a corporation is
deemed a citizen of any State by which it has been incorporated and of the State where it
has its principal place of business.
Judith Rivera-Rivera et al., v. Toys “R” Us
Civil No. 10-1786 (CVR)
Opinion and Order
Page No. 5
Defendant in this case has challenged federal jurisdiction claiming herein defendant
TOYS “R” US has nothing to do with the operation, management or affairs of the Toys R Us
store in San Juan where the incident alleged by plaintiffs took place. Plaintiffs are aware
of said fact for they had already initiated a state action against the San Juan store in the San
Juan Superior Court, where therein defendant Toys R Us has filed its answer admitting
being the entity in charge of the store depicted in the state complaint.
Insofar as the Toys R Us store, same is a citizen of Puerto Rico, as well as plaintiffs,
for it is a corporation organized and existing under the laws of the Commonwealth of Puerto
Rico, where it operates, provides support, keeps its inventory and from where all local
activities are managed. Said corporation’s employees are residents of Puerto Rico who file
income tax returns in Puerto Rico. Toys R Us keeps its files in Puerto Rico, submits its
income and property tax returns, maintains bank accounts in Puerto Rico and submits its
annual corporate reports in Puerto Rico. Thus, a corporation such as Toys R Us store in San
Juan, which operates independently of its alleged parent company, and which keeps all its
corporate records and accounts in Puerto Rico, holds its principal place of business in
Puerto Rico, is considered, for purposes of diversity, a citizen of Puerto Rico and if included
herein as a defendant would not allow for subject matter jurisdiction to exist for lack of
diversity jurisdiction. Rodriguez v. SK & F Co., 833 F.2d 8 (1st Cir. 1987).
Furthermore, once jurisdiction is challenged, “the party invoking subject matter
jurisdiction has the burden of proving by a preponderance of the evidence the facts
supporting jurisdiction.” Padilla-Mangual v. Pavia Hosp., 516 F.3d 29, 31 (1st Cir. 2008
(quoting Bank One, Texas N. A. v. Montle, 964 F.2d 48, 50 (1st Cir. 1992)).
Judith Rivera-Rivera et al., v. Toys “R” Us
Civil No. 10-1786 (CVR)
Opinion and Order
Page No. 6
Puerto Rican law and the tort statute herein provides that “[a] person who by an act
or omission causes damage to another through fault or negligence shall be obliged to repair
the damage so done.” P.R. Laws Ann. Tit. 31, §5141. Failure to perform an act gives rise to
a cause of action only when there is a legal duty to act. Muñiz v. National Can Corp., 737
F.2d 45, 147-148 (1st Cir. 1984).
Under Puerto Rico law, to establish jurisdiction over the parent corporation based
in action of subsidiary, if we are to considered that Toys R Us store in San Juan is a
subsidiary of herein defendant TOYS “R” US, which it has not been alleged in the complaint,
a party must produce strong and robust evidence of control by the parent company over the
subsidiary, rendering the corporate entity a mere shell. See De Castro v. Sanifill, Inc., 198
F.3d 282 (1st Cir. 1999). A parent company may not be subject to jurisdiction merely
because its subsidiary resides in the forum. González v. Walgreens Co., 878 F.2d 560, 561
(1st Cir. 1989);5 Alvarado-Morales v. Digital Equipment Corp., 843 F.2d 613, 616 (1st Cir.
1988).
Plaintiffs herein have failed to address defendant TOYS “R” US contention in the
motion to dismiss as to having no control over Toys R Us store in San Juan6 or as to the
sworn statement of Mr. Adolfo A. Roselló-Rodríguez attesting to the facts above indicated
as to the independent activities of Toys R Us in San Juan which further sustains Toys R Us
5
González v. Walgreens holds that the mere use of the name “Walgreens” was not enough to assert jurisdiction
over the out-of-state franchisor in a cause of action alleging negligence of the franchisee. See Negrón-Torres v. Verizon
Communications, Inc., 478 F.3d 19, 26 (1st Cir. 2007).
6
The principal of limited liability is one of the hallmarks of corporate law. DeBreceni v. Graf Bros. Leasing, Inc.,
828 F.2d 877, 879 (1st Cir. 1987).
Judith Rivera-Rivera et al., v. Toys “R” Us
Civil No. 10-1786 (CVR)
Opinion and Order
Page No. 7
be considered a citizen corporation of Puerto Rico, which defeats diversity.7 (Docket No. 14,
Exhibit 2).
TOYS “R” US included as defendant in this federal action is not the corporation
engaged in the operation of any business in Puerto Rico, which proposition has not been
opposed or replied by plaintiffs. Because federal courts have limited jurisdiction, the party
asserting jurisdiction has the burden of demonstrating the existence of federal and in
personam jurisdiction. See Murphy v. United States, 45 F.3d 520, 522 (1st Cir. 1995).
In the absence of a reply or opposition to defendant’s motion to dismiss for lack of
subject matter jurisdiction, as to which plaintiff is bound to present evidence,8 which if
credited, would support a finding of jurisdiction, and having plaintiffs failed to do so,
further considering the pleadings and documents before the Court reasonably lead to the
conclusion there is no jurisdiction for lack of diversity. Accordingly, dismissal of the instant
case is warranted.
CONCLUSION
In view of the foregoing, the Motion to Dismiss filed by defendant TOYS “R” US, for
lack of subject matter jurisdiction, is GRANTED. (Docket No. 14).
7
Under the factual predicates of the complaint filed which lacks facts essential, it could become an issue, as to
which the standard is prima facie, whether it supports personal jurisdiction over defendant TOYS”R”US that the record
shows was served with summons in New Castle County, Delaware.
8
Plaintiff has the burden of showing that jurisdiction exists. Boit v. Gar-Tec Products, Inc., 967 F.2d 671, 675
(1 Cir. 1992); Ealing Corp.v. Harrods Ltd., 790 F.2d 978, 979 (1st Cir. 1986).
st
Judith Rivera-Rivera et al., v. Toys “R” Us
Civil No. 10-1786 (CVR)
Opinion and Order
Page No. 8
Judgment to be entered accordingly, dismissing the complaint, with prejudice.
IT IS SO ORDERED.
San Juan, Puerto Rico, this 12th day of May of 2011.
s/CAMILLE L. VELEZ-RIVE
CAMILLE L. VELEZ-RIVE
UNITED STATES MAGISTRATE JUDGE
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