Multicultural Radio Broad., Inc. v. Korean Radio Broad., Inc.

• Decision Date: 31 January 2017
• Docket Number: Civil Action No. 15-1961 (SRC)
• Parties: MULTICULTURAL RADIO BROADCASTING, INC., a New Jersey Corporation, Plaintiff, v. KOREAN RADIO BROADCASTING, INC., a New York Corporation; YOUNG DAE KWON, an Individual, Defendants. KOREAN RADIO BROADCASTING, INC., a New York Corporation; YOUNG DAE KWON, an Individual, Counter-Complainants, v. MULTICULTURAL RADIO BROADCASTING, INC., a New Jersey Corporation, Counter-Defendant.
• Court: U.S. District Court — District of New Jersey

MULTICULTURAL RADIO BROADCASTING, INC.,a New Jersey Corporation, Plaintiff, v. KOREAN RADIO BROADCASTING, INC.,a New York Corporation; YOUNG DAE KWON, an Individual, Defendants.

KOREAN RADIO BROADCASTING, INC.,a New York Corporation; YOUNG DAE KWON, an Individual, Counter-Complainants, v. MULTICULTURAL RADIO BROADCASTING, INC.,

a New Jersey Corporation, Counter-Defendant.

Civil Action No. 15-1961 (SRC)

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

January 31, 2017

NOT FOR PUBLICATION

OPINION

CHESLER, District Judge

Plaintiff Multicultural Radio Broadcasting, Inc. ("MBRI" or "Plaintiff") brings this diversity action against Defendants Korean Radio Broadcasting, Inc., (KBR) and Young Dae Kwon ("Young") (collectively, "Defendants") for breach of contract and other state law causes of action. Now before the Court are three motions: (1) Plaintiff's motion for leave to amend its complaint, pursuant to Federal Rule of Civil Procedure 15(a)(2) (Doc. No. 61); (2) Defendants' cross-motion to dismiss the complaint for lack of subject matter jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(1) (Doc. No. 66); and (3) Defendants' motion for judgment on the pleadings as to count two of the complaint, pursuant to Federal Rule of Civil Procedure 12(c) (Doc. No. 67). The Court has reviewed the parties' submissions and proceeds to rule without oral argument. See Fed. R. Civ. P. 78(b). For the reasons stated herein, Plaintiff's motion for leave to amend its complaint will be denied, and Defendants' cross-motion to dismiss for lack of subject matter jurisdiction will be granted. Because the court will dismiss this matter for want of subject matter jurisdiction, it declines to consider Defendants' motion for judgment on the pleadings and will deny that motion as moot.

I. BACKGROUND

Plaintiff is the licensee and operator of WWRU-AM 1660 ("AM 1660"), an AM radio station located in Jersey City, New Jersey. KBR is a producer and broadcaster of Korean-language radio programing in the New York City metropolitan area. Young allegedly owns and manages KBR. In November 2013, Plaintiff and KBR entered into a time brokerage agreement (the "Agreement"), through which KBR agreed to purchase all of the program time on AM 1660's radio broadcast from January 2014 to December 2015. Under the Agreement, KBR was required to make monthly payments for the program time that it used.

Plaintiff commenced this action against Defendants in March 2015, asserting claims for breach of contract, unjust enrichment, and trade libel. In its complaint, Plaintiff alleges that Defendants failed to make payments due and owing under the Agreement, ceased transmission of KBR's signal to AM 1660 in violation of the Agreement, and, thereafter, published false advertisements in Korean language media outlets suggesting that AM 1660's broadcast signal was of inferior quality. (Compl. ¶¶ 21-22, 30-32, 37-38.) Plaintiff asserts diversity jurisdiction pursuant to 28 U.S.C. § 1332(a), based on allegations that Plaintiff is a "New Jersey Corporation" and a "citizen of New Jersey" and that Defendants "are each . . . citizen[s] of the State of New York." (Compl. ¶¶ 1, 9.)

In May 2016, during a conference between the parties and the Court, Defendants raised, for the first time, an objection to the court's subject matter jurisdiction. Defendants contended that Plaintiff's principal place of business is located in New York, not New Jersey, and that complete diversity between the parties is therefore lacking. Thereafter, the Court issued an order limiting discovery to jurisdictional and other threshold issues until August 31, 2016, and it directed the parties to file all 12(b)(1) motions to dismiss, and any other motion regarding threshold issues, by that date.

Plaintiff now moves for leave to amend its complaint in order to add a claim under Section 43(a) of the Lanham Act, 15 U.S.C. §1125(a), and to assert federal question jurisdiction pursuant to 28 U.S.C. § 1331. (Doc. No. 61-2, Memorandum of Law in Support of Plaintiff/Counterclaim-Defendant's Motion for Leave to File a First Amended Complaint ("Pl. Mov. Br."), at 8; Doc. No. 61-3, Exhibit A, Amended Complaint, ¶¶ 9, 47-58.) Defendants cross-move to dismiss the complaint for lack of subject matter jurisdiction, on grounds that complete diversity between the parties is lacking. (Doc. No. 66-1, Brief in Support of Motion to Dismiss Plaintiff's Complaint for Lack of Subject Matter Jurisdiction Pursuant to F.R.C.P. 12(b)(1) ("Def. Mov. Br."), at 22-23). Plaintiff disputes Defendants' contention, arguing that its principal place of business is located in New Jersey. (Doc. No. 69, Plaintiff/Counterclaim-Defendant's Opposition to Defendant/Cross-Complainant's Cross-Motion to Dismiss Plaintiff's Complaint for Lack of Subject Matter Jurisdiction Pursuant to F.R.C.P. 12(b)(1) ("Pl. Opp'n"), at 3-5.) In addition, Plaintiff argues that the Court in any event "should direct its [jurisdictional] inquiry not toward diversity, but toward the federal question jurisdiction specified" in Plaintiff's proposed amended complaint. (Pl. Opp'n, at 7). Plaintiff argues that its motion for leave to amend thus "[r]enders [d]efendants' [m]otion [m]oot" because the amended complaint, if permitted to be filed, would supply an alternative jurisdictional basis for the action. (Pl. Opp'n, 7.) The Court will first address whether diversity jurisdiction existed at the time of the commencement of this suit. It will then consider whether Plaintiff may cure the jurisdictional defects in the original complaint in the manner that Plaintiff proposes.

II. DISCUSSION

A. Defendants' Motion to Dismiss for Lack of Subject Matter Jurisdiction

1. Legal Standard

"The district courts of the United States . . . are 'courts of limited jurisdiction.'" Exxon Mobil Corp. v. Allapattah Servs., 545 U.S. 546, 552, 125 S. Ct. 2611, 162 L.Ed.2d 502 (2005) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S. Ct. 1673, 128 L.Ed.2d 391 (1994). "They possess only that power authorized by Constitution and statute, which is not to be expanded by judicial decree." United States v. Merlino, 785 F.3d 79, 82 (3d Cir. 2015) (quoting Kokkonen, 511 U.S. at 377)). Consequently, when a federal court finds that it lacks jurisdiction over an action, "the only function remaining . . . is that of announcing the fact and dismissing the cause." Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94, 118 S. Ct. 1003, 140 L.Ed.2d 210 (1998) (quoting Ex parte McCardle, 74 U.S. (7 Wall.) 506, 514, 19 L.Ed. 264 (1869)); see Elliott v. Archdiocese of N.Y., 682 F.3d 213, 219 (3d Cir. 2012); Fed. R. Civ. P. 12(h)(3).

A motion to dismiss for lack of subject matter jurisdiction may be raised by a defendant at any time. Iwanowa v. Ford Motor Co., 67 F. Supp. 2d 424, 437-38 (D.N.J. 1999); see 2 Moore's Federal Practice § 12.30[1] (Matthew Bender 3d ed. 2015). Because federal courts have "an independent obligation to satisfy themselves of jurisdiction if it is in doubt," they may also "raise sua sponte subject-matter jurisdiction concerns." Nesbit v. Gears Unlimited, Inc., 347 F.3d 72, 76 (3d Cir. 2003) (citing Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 278, 97 S. Ct. 568, 50 L.Ed.2d 471 (1977)). "The burden of establishing federal jurisdiction rests with the party asserting its existence." Lincoln Benefit Life Co. v. AEI Life, LLC, 800 F.3d 99, 105 (3d Cir. 2015) (citing DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n.3, 126 S. Ct. 1854, 164 L.Ed.2d 589 (2006)).

Challenges to subject matter jurisdiction pursuant to Rule 12(b)(1) may be regarded as either facial or factual. See Mortensen v. First Fed. Sav. & Loan, 549 F.2d 884, 891 (3d Cir. 1977); 2 Moore's Federal Practice § 12.30[4] (Matthew Bender 3d ed.). Facial challenges "contest the sufficiency of the pleadings" as a basis for the court's subject matter jurisdiction. S.D. v. Haddon Heights Bd. of Educ., 833 F.3d 389 n.5 (3d Cir. 2016) (quoting Taliaferro v. Darby Twp. Zoning Bd., 458 F.3d 181, 188 (3d Cir. 2006)). A court reviewing such a challenge may "only consider the allegations of the complaint[,]" which it takes to be true, "and documents referenced therein and attached thereto, in the light most favorable to the plaintiff." In re Schering Plough Corp., 678 F.3d at 243 (quoting Gould Elecs. Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000)) (internal quotation marks omitted); see Petruska v. Gannon Univ., 462 F.3d 294, 302 n.3 (3d Cir. 2006). In contrast, a factual challenge contests the truth of the allegations underlying a plaintiff's assertion of subject-matter jurisdiction. Constitution Party of Pa. v. Aichele, 757 F.3d 347, 358 (3d Cir. 2014); Mortensen, 549 F.2d at 891. When a defendant raises a factual challenge, "no presumptive truthfulness attaches to [the] plaintiff's allegations[,]" Mortensen, 549 F.2d at 891, and "a court may weigh and 'consider evidence outside the pleadings[,]'" Constitution Party of Pa., 757 F.3d at 358 (quoting (Gould Elecs. Inc., 220 F.3d at 176)). The plaintiff bears the burden of proving that jurisdiction in fact exists, Mortensen, 549 F.2d at 891, and he or she must meet this burden by supplying "competent proof" thereof, Hertz Corp. v. Friend, 559 U.S. 77, 96, 130 S. Ct. 1181, 175 L.Ed.2d 1029 (2010) (citing McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S. Ct. 780, 80 L.Ed. 1135 (1936)).

2. Diversity Jurisdiction

28 U.S.C. 1332(a)(1) grants federal district courts "original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $ 75,000 . . . and is between Citizens of different States." 28 U.S.C. § 1332(a)(1). Section 1332(a) "require[s] complete diversity between all plaintiffs and all defendants[,]" Lincoln Prop. Co. v. Roche, 546 U.S. 81, 89, 126 S. Ct. 606, 163 L.Ed.2d 415 (2005); Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 267, 2 L.Ed.435 (1806), with the effect that "in cases with ....