Duniya Group, Inc. v. Hanmi Bank ( 2023 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 DUNIYA GROUP, INC., Case No. 1:23-cv-00927-ADA-CDB 12 Plaintiff, ORDER REQURING PLAINTIFF TO SHOW CAUSE WHY SANCTIONS 13 v. SHOULD NOT BE IMPOSED FOR FAILURE TO PROSECUTE 14 HANMI BANK, SHOW CAUSE BY: SEPTEMBER 18, 2023 15 Defendant. ORDER REQURING PLAINTIFF TO 16 SHOW CAUSE WHY THIS ACTION SHOULD NOT BE DISMISSED FOR 17 LACK OF SUBJECT MATTER JURISDICTION 18 SHOW CAUSE BY: SEPTEMBER 22, 2023 19 20 21 Plaintiff Duniya Group, Inc., a Delaware corporation, with its principal place of business 22 in California, filed a Complaint against Defendant Hanmi Bank a/k/a/ Hanmi Financial 23 Corporation, on June 21, 2023. (Doc. 1). On the same day, the Court issued an Order Setting 24 Mandatory Scheduling Conference (the “Order”). (Doc. 4). 25 Failure to Prosecute 26 The Order directed Plaintiff to “diligently pursue service of summons and complaint” and 27 “promptly file proofs of service.” The Order further advised Plaintiff that failure to diligently prosecute this action “may result in the imposition of sanctions, including the dismissal of 1 unserved defendants.” The Order separately directed the parties to appear for a scheduling 2 conference on September 18, 2023, and to file a joint scheduling report one full week prior to the 3 scheduling conference. Id. at 2. 4 To date, Plaintiff has not filed proofs of service for the summons and complaint and 5 Defendant has not appeared in the action, requiring the Court to vacate the mandatory scheduling 6 conference.1 In addition, Plaintiff has not filed either a joint report as required by the Order, or a 7 stand-alone report, or a request for continuance. 8 Local Rule 110 provides that “[f]ailure of counsel or of a party to comply with these Rules 9 or with any order of the Court may be grounds for imposition by the Court of any and all 10 sanctions . . . within the inherent power of the Court.” The Court has the inherent power to 11 control its docket and may, in the exercise of that power, impose sanctions where appropriate, 12 including dismissal of the action. Bautista v. Los Angeles County, 216 F.3d 837, 841 (9th Cir. 13 2000). 14 Based on the foregoing, IT IS HEREBY ORDERED that no later than September 18, 15 2023, Plaintiff SHALL show cause in writing why sanctions should not be imposed for its failure 16 to prosecute this action and to serve the summons and complaint and file a proof of service in a 17 timely manner. Alternatively, within the same period, Plaintiff may file proof of service 18 demonstrating the summons and complaint were served. 19 The scheduling conference set for September 18, 2023, is VACATED to be reset at a date 20 following Defendant’s appearance in the action. 21 Subject Matter Jurisdiction 22 The Court has a duty to consider its own subject matter jurisdiction, regardless of whether 23 the issue is raised by the parties, and is required to dismiss an action over which it lacks 24 jurisdiction. See Morongo Bank of Mission Indians v. Cal. State Bd. of Equalization, 858 F.2d 25 26 1 Plaintiff’s complaint contains an unattached Proof of Service indicating that counsel for Hanmi Bank was served with the complaint (but not the summons) on June 21, 2023 (Doc. 1 p. 23). However, 27 there is a separate Proof of Service indicating that Young Ohr, who is not listed in the caption as a defendant, was served with the Complaint on April 18, 2023 (which is prior to the date the complaint was filed and a summons issued in this action). Therefore, it is unclear to the Court whether Plaintiff has 1 1376, 1380 (9th Cir. 1988); Fed. R. Civ. P. 12(h)(3). 2 Plaintiff’s complaint raises the following state law causes of action: (1) breach of contract; 3 (2) intentional misrepresentation; (3) contractual breach of implied covenant of good faith and 4 fair dealing; (4) breach of fiduciary duty; and (5) negligence. (Doc. 1 p. 1). The complaint further 5 alleges that the Superior California, County of Kern has jurisdiction over this action. Defendant 6 Hanmi Bank is a California corporation with its principal place of business in Los Angeles, 7 California.2 Plaintiff does not expressly plead the basis for which this Court properly has 8 jurisdiction. 9 Federal courts have limited jurisdiction and can adjudicate only those cases which the 10 United States Constitution and Congress authorize them to adjudicate. Kokkonen v. Guardian 11 Life Ins. Co., 551 U.S. 375 (1994). “To proceed in federal court, a plaintiff’s pleading must 12 establish the existence of subject matter jurisdiction. Generally, there are two potential bases for 13 the federal subject matter jurisdiction: (1) federal question jurisdiction, or (2) diversity 14 jurisdiction.” Martinez v. Hoff, No. 1:19-cv-00923-LJO-SKO, 2019 WL 3564178, at *1 (E.D. 15 Cal. Aug. 6, 2019). 16 A. Diversity Jurisdiction 17 28 U.S.C. § 1332(a) vests district courts with original jurisdiction over all civil actions 18 where the amount in controversy exceeds $75,000 and is between citizens of different states. 19 Section 1332 requires complete diversity, i.e., that “the citizenship of each plaintiff is diverse 20 from the citizenship of each defendant.” Caterpillar Inc. v. Lewis, 519 U.S. 61, 67-68 (1996). A 21 corporation is deemed to be a citizen of any State by which it has been incorporated and of the 22 State where it has its principal place of business. Lincoln Prop. Co. v. Roche, 546 U.S. 81, 94 23 (2005) (citing 28 U.S.C. § 1332(c)(1)). 24 Here, Plaintiff pleads it is a Delaware corporation, duly registered in California, and has a 25 principal place of business in Bakersfield, California. Accordingly, for diversity jurisdiction 26 purposes, Plaintiff is deemed to be a citizen of both Delaware and California. As noted above, 27 2 The Court takes judicial notice of Hanmi Bank’s business entity profile, retrieved from the California Secretary of State Website. See Applied Underwriters, Inc. v. Lara, 530 F.Supp.3d 914, 924 1 Defendant Hanmi Bank is a California corporation, with its principal place of business in Los 2 Angeles, California. Thus, Defendant also is deemed to be a California citizen. 3 Accordingly, because Plaintiff and Defendant both are California citizens, the parties to 4 this action lack complete diversity and this Court lacks jurisdiction under 28 U.S.C. § 1332(a) 5 B. Federal Question Jurisdiction 6 A case “arises” under federal law either where federal law itself creates the cause of action 7 or where the vindication of a state law right would “necessarily [turn] on some construction of 8 federal law.” Republican Party of Guam v. Gutierrez, 277 F.3d 1086, 1088-89 (9th Cir. 2002) 9 (quoting Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 8-9 (1983)). 10 Courts determine whether they have federal question jurisdiction by applying the “well-pleaded 11 complaint rule.” Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). “[F]ederal jurisdiction 12 exists only when a federal question is presented on the face of the plaintiff’s properly pleaded 13 complaint.” Id. Federal question jurisdiction does not arise from the “mere presence of a federal 14 issue in a state cause of action.” Merrell Dow Pharms., Inc. v. Thompson, 478 U.S. 804, 813 15 (1986); see Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308, 314 (2005) 16 (holding that passing references to federal issues are not a “password opening federal courts to 17 any state action embracing a point of federal law”). 18 Here, Plaintiff asserts state law causes of action only. None of those causes of action turn 19 on construction of federal law. While Plaintiff’s complaint references in passing the Bank 20 Secrecy Act (Doc. 1 ⁋ 108), mere references to federal statutes are not enough to establish federal 21 jurisdiction. See, e.g., Alan v. Equifax, No. CV 19-6588-DMG (ASX), 2019 WL 5801891, at *2 22 (C.D. Cal. Nov. 6, 2019). Accordingly, this Court lacks jurisdiction for lack of federal question 23 presented in the face of the complaint. 24 / / / 25 / / / 26 27 1 Based on the foregoing, IT IS FURTHER ORDERED that no later than September 22, 2 | 2023, Plaintiff SHALL show cause in writing why this action should not be dismissed for lack of 3 | subject matter jurisdiction. 4 Failure to timely comply with this Order will result in the Court imposing sanctions and 5 || recommending that the action be dismissed. 6 | IT IS SO ORDERED. 7 Dated: _ September 12, 2023 | Ww Vv R~ 8 UNITED STATES MAGISTRATE JUDGE 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28