Matsuda v. Wada

Decision Date03 October 2000
Docket NumberNo. CIV. 98-756 ACK.,CIV. 98-756 ACK.
Citation128 F.Supp.2d 659
PartiesHideo MATSUDA, Plaintiff, v. Michiko WADA, Defendant.
CourtHawaii Supreme Court

Nenad Krek, Carlsmith Ball LLP, Honolulu, HI, for Hideo Matsuda, plaintiffs.

Carl H. Osaki, Honolulu, HI, for Michiko Wada, defendants.

ORDER DENYING DEFENDANT'S MOTION TO DISMISS

KAY, District Judge.

BACKGROUND

Hideo Matsuda ("Plaintiff") is the owner of the racing yacht Big Apple III ("the yacht"). Both Plaintiff and Michiko Wada ("Defendant") are citizens of Japan. Defendant is also a permanent resident alien residing in Hawaii. All parties agree that Plaintiff hired Defendant to help him in some capacity with his campaign to win the 1998 Kenwood Cup; the dispute is over how much compensation Defendant was promised for her services and what damages Plaintiff is owed from Defendant's tortious attempts to collect by willfully withholding the bill of lading for the yacht. Defendant alleges that she performed various services which contributed to the success of the yacht pursuant to a contract with Plaintiff. According to Plaintiff, Defendant's services included acting as a translator and interpreter. See Compl., at 2. According to Defendant, her services included overseeing the design, construction, launching, optimization, and participation in three regattas, acting as a personal assistant, and acting as a liaison between Plaintiff and various English-speaking companies and individuals. See Counterclaim, at 2-3. All agree that Plaintiff paid Defendant $12,000 for her services. Defendant, however, believes she was owed additional compensation for her services and presented Plaintiff with an invoice for her services of $83,954.1 Plaintiff refused to pay.

At the conclusion of the race, Plaintiff arranged for the transportation of the yacht from Hawaii to Japan. The shipping company issued a Bill of Lading for the yacht. It is undisputed that Defendant obtained possession of the original Bill of Lading after the dispute regarding her alleged compensation arose. She then refused to release the Bill of Lading unless Plaintiff paid in full her claim for the compensation allegedly due to her for the services performed. Because of Defendant's refusal to surrender the Bill of Lading, Plaintiff had to post a bond in the amount of the value of the yacht in order to receive delivery of the yacht from the ocean carrier. Plaintiff then sought to recover the Bill of Lading through this action.

Plaintiff filed his Complaint on September 15, 1998.2 The Complaint set forth claims for Petitory and/or Possessory Relief of the Bill of Lading (Count I), Conversion (Count II), Replevin (Count III), Declaratory Relief (Count IV), Injunctive Relief (Count V), Fraud (Count VI), and Punitive Damages (Count VII). Plaintiff asserted jurisdiction under admiralty, 28 U.S.C. § 1333(1), diversity between a citizen of a State and a citizen of a foreign state, 28 U.S.C. § 1332(a)(2), and the Declaratory Judgment Act, 28 U.S.C. § 2201.

Defendant filed a First Amended Counterclaim ("Counterclaim") on March 18, 1999. The Counterclaim set forth claims for Breach of Contract (Count I), Punitive Damages (Count II), and Unjust Enrichment (Count III).

In an Order filed August 4, 1999 ("Partial SJ Order"), this Court granted in part and denied in part Plaintiff's motion for partial summary judgment. As part of its analysis, the Court examined whether the claims at issue in the motion (Counts II, VI, and VII) sat in admiralty or diversity jurisdiction. The Court concluded that it "has jurisdiction over the claims at issue in the instant motion not under its admiralty jurisdiction, but instead under its diversity jurisdiction." Partial SJ Order, at 7-8 (emphasis added). In reaching this conclusion, the Court only analyzed the test for admiralty jurisdiction; once it concluded that admiralty jurisdiction for those claims was lacking, it presumed diversity jurisdiction existed because Defendant did not challenge Plaintiff's diversity jurisdiction. Summary judgment was then granted to Plaintiff on his claim for conversion of the Bill of Lading, but denied to Plaintiff on his claim for fraud and punitive damages. The Court also held that Defendant's claim for punitive damages was moot.

Trial was set for September 7, 2000. In a motion filed on August 23, 2000, Defendant moved to dismiss the case for lack of subject matter jurisdiction. Plaintiff filed an opposition on August 28, 2000. In addition to opposing the motion, Plaintiff requested that the Court award him attorneys' fees and costs for the time spent on the opposition, the timing of which he labeled "outrageous." Opp., at 22. Defendant filed a reply on August 30, 2000. A hearing was held on the matter on September 1, 2000.

STANDARD OF REVIEW

"A party invoking the federal court's jurisdiction has the burden of proving the actual existence of subject matter jurisdiction." See Thompson v. McCombe, 99 F.3d 352, 353 (9th Cir.1996). On a Rule 12(b)(1) motion, the court is not "restricted to the face of the pleadings, but may review any evidence, such as affidavits and testimony, to resolve factual disputes concerning the existence of jurisdiction." McCarthy v. United States, 850 F.2d 558, 560 (9th Cir.1988). "The requirement that the nonmoving party present evidence outside his pleadings in opposition to a motion to dismiss for lack of subject matter jurisdiction is the same as that required under Rule 56(e) that the nonmoving party to a motion for summary judgment must set forth specific facts, beyond his pleadings, to show that a genuine issue of material fact exists." Trentacosta v. Frontier Pac. Aircraft Indus., Inc., 813 F.2d 1553, 1559 (9th Cir.1987); see also Biotics Research Corp. v. Heckler, 710 F.2d 1375, 1379 (9th Cir.1983) (noting that the district court may receive evidence to resolve underlying factual disputes in a 12(b)(1) motion to dismiss for lack of subject matter jurisdiction).

DISCUSSION

This Court is a court of limited subject matter jurisdiction and must ensure that the matter at hand is properly before it. "A federal court is presumed to lack jurisdiction in a particular case unless the contrary affirmatively appears." See Stock West, Inc. v. Confederated Tribes, 873 F.2d 1221, 1225 (9th Cir.1989). The burden is on Plaintiff to show that jurisdiction exists. Subject matter jurisdiction is determined and must exist at the time the complaint is filed. See Morongo Band of Mission Indians v. California State Bd. of Equalization, 858 F.2d 1376, 1380 (9th Cir. 1988) (looking to original complaint, and not amended complaint, for subject matter jurisdiction); see also Carney v. Resolution Trust Corp., 19 F.3d 950, 954 (5th Cir.1994).3 Defendant filed the instant motion two weeks before trial was set to begin and almost two years after the Complaint was filed in this case. Although it was indeed the eleventh hour before trial when Defendant filed the instant motion, the Court must examine the issue. "A party may question the existence of subject matter jurisdiction at any time during the proceedings." Yang v. Shalala, 22 F.3d 213, 216 n. 4 (9th Cir.1994); see also Fed.R.Civ.P. 12(h)(3) ("Whenever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter, the court shall dismiss the action."). Plaintiff asserts that jurisdiction is proper under various bases: diversity, admiralty, and supplementary. The Court will discuss each in turn.4

I. Diversity Jurisdiction

Plaintiff claims that he has jurisdiction through diversity. The requirements for diversity jurisdiction are set forth in 28 U.S.C. § 1332:

(a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between

(1) citizens of different States;

(2) citizens of a State and citizens or subjects of a foreign state;

(3) citizens of different States and in which citizens or subjects of a foreign state are additional parties; and

(4) a foreign state, defined in section 1603(a) of this title, as plaintiff and citizens of a State or of different States.

For the purposes of this section, section 1335, and section 1441, an alien admitted to the United States for permanent residence shall be deemed a citizen of the State in which such alien is domiciled.

28 U.S.C. 1332(a) (emphasis added). The Court will examine separately the "amount in controversy" and "diversity of citizenship" requirements.

A. Amount in Controversy

To have diversity jurisdiction, the amount in controversy must exceed $75,000.00. See 28 U.S.C. § 1332(a). The Court finds that Plaintiff easily satisfies this requirement.

"[W]here a plaintiff seeks injunctive or declaratory relief, it is well established that the amount in controversy is measured by the value of the object of the litigation." International Gateway Communications, Inc. v. Communication Telesystems Int'l, Inc., 922 F.Supp. 122, 124-25 (N.D.Ill.1996); see also 14B Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 3708 ("it is well-settled that the amount in controversy is said to be measured for subject matter jurisdiction purposes by the value of the right that the plaintiff seeks to enforce or to protect against the defendant or the value of the object that is the subject matter of the action"). In International Gateway, the object of the suit was to escape from liability under a contract. The court held that the "value of the relief, therefore, is measured by the liability that will follow if the contract is valid and enforceable." Id. at 125. The plaintiff's potential liability under the contract was $179,133. The court stated, "The Court finds dubious plaintiff's argument that the amount in controversy here is zero. Clearly, if the contract ... is enforceable, plaintiff may be liable to CTS...

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