Pinnavaia v. Moody-Stuart et al, No. 4:2009cv03803 - Document 46 (N.D. Cal. 2009)
Court Description: ORDER Granting Defendant's Motion to Dismiss and Vacating Case Management Conference by Judge Claudia Wilken 5 Motion to Dismiss (cwlc1, COURT STAFF) (Filed on 12/11/2009)
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Pinnavaia v. Moody-Stuart et al Doc. 46 1 2 IN THE UNITED STATES DISTRICT COURT 3 4 FOR THE NORTHERN DISTRICT OF CALIFORNIA 5 No. C 09-03803 CW 6 MATTHEW D. PINNAVAIA, 7 8 9 ORDER GRANTING DEFENDANT’S MOTION TO DISMISS AND VACATING CASE MANAGEMENT CONFERENCE Plaintiff, v. MARK MOODY-STUART, CYNTHIA CARROLL, NICHOLAS F. OPPENHEIMER, United States District Court For the Northern District of California 10 Defendants 11 and 12 ANGLO AMERICAN plc, 13 Nominal Defendant. 14 / 15 This action purports to be a derivative shareholder suit based 16 on the premise that Nominal Defendant Anglo American plc has been 17 damaged by individual Defendants because of a 2006 settlement of a 18 number of antitrust class actions in which De Beers, a subsidiary 19 of Anglo American, was a named defendant. Specially appearing 20 Nominal Defendant Anglo American moves to dismiss the complaint 21 pursuant to Rules 12(b)(1), 12(b)(2), 12(b)(6) and 23.1 of the 22 Federal Rules of Civil Procedure.1 Plaintiff opposes the motion. 23 The matter was taken under submission and decided on the papers. 24 Having considered all of the papers filed by the parties, the Court 25 grants the motion to dismiss. Dismissal is without prejudice. 26 27 1 28 Individual Defendants have not been served and do not join in this motion. Dockets.Justia.com 1 BACKGROUND United States District Court For the Northern District of California 2 On July 8, 2009, Plaintiff filed this action in state court; 3 on August 19, 2009, Anglo American removed it to federal court 4 based on diversity jurisdiction. 5 following. 6 company headquartered in London and organized under the laws of the 7 United Kingdom. 8 American’s revenue is its diamond subsidiaries, De Beers 9 Consolidated Mines Ltd. and De Beers Jewelers U.S., Inc., which Plaintiff’s complaint alleges the Anglo American is a mining and natural resources Comp. at ¶¶ 6, 11. A major source of Anglo 10 owns De Beers jewelry stores located throughout California 11 (together, De Beers). 12 were filed against De Beers alleging that it unlawfully monopolized 13 the supply of diamonds, conspired to fix, raise, and control 14 diamond prices and issued false and misleading advertising. 15 at ¶ 7. 16 suffer a financial loss of approximately $295 million in the 17 settlement of those lawsuits, entitled “Diamond Class Action 18 Settlement.” 19 financial damages in the future due to De Beers’ assistance to 20 Adolph Hitler and the Third Reich during World War II. 21 8. 22 Comp. at ¶ 6. Beginning in 2001, lawsuits Comp. The named individual Defendants caused Anglo American to Comp. at ¶ 7. Anglo American also will suffer Comp. at ¶ During the time at issue in this lawsuit, Plaintiff was an 23 owner of Anglo American common stock. 24 Mark Moody-Stuart, during the relevant time period, was non- 25 executive Chairman of the Board of Anglo American. 26 position, Mr. Moody-Stuart was aware of De Beers’ unlawful activity 27 during World War II and thereafter. 28 Cynthia Carroll became Chief Executive and Executive Director of 2 Comp. at ¶ 10. Comp. at ¶ 13. Defendant Because of his Defendant United States District Court For the Northern District of California 1 Anglo American in 2007. 2 activities. 3 been Deputy Chairman of Anglo American since 1983, a non-executive 4 director since 1974 and is the grandson of Sir Ernest Oppenheimer, 5 the founding chairman of Anglo American. 6 Oppenheimer was aware of the illegal acts of De Beers. 7 ¶ 15. 8 in the aforementioned illegal activities, to Anglo American’s 9 financial detriment. She was and is aware of De Beers’ illegal Comp. at ¶ 14. Defendant Nicholas F. Oppenheimer has Comp. at ¶ 15. Mr. Comp. at Individual Defendants conspired to allow De Beers to engage Comp. at ¶ 23. Individual Defendants 10 concealed the fact that De Beers was engaged in violations of 11 federal and state laws and deceived the investing public about 12 Anglo American’s financial health and future business projects. 13 Comp. at ¶ 26. 14 Board of Directors to institute this action because such a demand 15 would be futile as a result of its relationship with individual 16 Defendants. 17 Plaintiff has not made a demand on Anglo American’s Comp. at ¶ 36. Based on these allegations, Plaintiff asserts the following 18 causes of action: (1) violation of California Corporations Code 19 §§ 202, 27101(a), 27101(c), 2207(i)(ii); breach of fiduciary duty; 20 abuse of control; gross mismanagement; waste of corporate assets; 21 and unjust enrichment. 22 in favor of Anglo American; an injunction requiring Anglo American 23 to divest itself of De Beers; an injunction requiring Anglo 24 American to enter into diplomatic negotiations with the Israeli 25 government and the United States government to create a special 26 financial fund to compensate the Israeli government for the death 27 and destruction of the European Jewish community during World War 28 II and the death of the American soldiers who died fighting Nazi- Plaintiff requests damages of $295 million 3 1 Germany during World War II; an injunction removing individual 2 Defendants from their corporate positions with Anglo American; and 3 an injunction making Plaintiff and one other honest individual 4 directors of Anglo American. 5 Anglo American argues that this action must be dismissed on 6 the grounds that: Plaintiff cannot assert derivative claims pro se; 7 Plaintiff lacks standing to pursue claims derivatively; the Court 8 lacks personal jurisdiction over Anglo American; and the forum is 9 not convenient. United States District Court For the Northern District of California 10 11 DISCUSSION As an initial matter, the Court addresses federal jurisdiction 12 because Plaintiff’s response to all of Anglo American’s arguments 13 is that this case was removed improperly from California state 14 court and that this Court lacks subject matter jurisdiction. 15 I. Federal Jurisdiction 16 A defendant may remove a civil action filed in state court to 17 federal district court so long as the district court could have 18 exercised original jurisdiction over the matter. 19 § 1441(a). 20 before judgment it appears that the district court lacks subject 21 matter jurisdiction over a case previously removed from State 22 court, the case must be remanded. 23 of the removal statute must be strictly construed. 24 Inc., 980 F.2d 564, 566 (9th Cir. 1992). 25 against removal jurisdiction means that the defendant always has 26 the burden of establishing that removal is proper." 27 28 28 U.S.C. Title 28 U.S.C. § 1447 provides that if at any time 28 U.S.C. § 1447(c). The scope Gaus v. Miles, "The 'strong presumption' Id. District courts have original jurisdiction over all civil actions "where the matter in controversy exceeds the sum or value 4 1 of $75,000, exclusive of interest and costs, and is between . . . 2 citizens of different States." 3 subject matter jurisdiction is predicated on diversity of 4 citizenship, complete diversity must exist between the opposing 5 parties. 6 74 (1978). 7 be deemed to be a citizen of any State by which it has been 8 incorporated and of the State where it has its principal place of 9 business . . . ." United States District Court For the Northern District of California 10 28 U.S.C. § 1332(a). When federal Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373According to 28 U.S.C. § 1332(c), a corporation "shall 28 U.S.C. § 1332(c). Plaintiff is a citizen of California. See Docket, page 1. 11 Because it is undisputed that Anglo American is not incorporated in 12 California nor does it have its principal place of business in 13 California, it is not a citizen of California for purposes of 14 diversity jurisdiction. 15 Nevertheless, Plaintiff argues that there is not complete 16 diversity of citizenship because Anglo American owns forty-five 17 percent, and Defendant Oppenheimer and the Oppenheimer family own 18 forty percent, of De Beers, a California corporation. 19 reasons that, because Anglo American and the Oppenheimer family 20 together own eighty-five percent of De Beers, Anglo American is a 21 California citizen. 22 Plaintiff In Danjaq, S.A. v. Pathe Communications Corp., 979 F.2d 772, 23 775 (9th Cir. 1992), the court held that the citizenship of a 24 parent is distinct from its subsidiary and a subsidiary’s activity 25 has no bearing on the citizenship of its parent company for 26 27 28 5 purposes of diversity jurisdiction. 2 ownership of De Beers does not bestow California citizenship upon 3 Anglo American. 4 Thus, Anglo American’s Plaintiff does not argue that any individual Defendant is a 5 California citizen or that the amount in controversy is less than 6 $75,000. 7 Therefore, this Court has diversity jurisdiction over this case and 8 the removal was proper. 9 II. 10 United States District Court For the Northern District of California Id.2 1 All requirements for diversity jurisdiction are met. Pro Se Derivative Suit Anglo American argues that Plaintiff may not bring a 11 derivative action pro se. 12 constitutional due process right to pursue his claims in court. 13 Plaintiff argues that he has a The rule establishing an individual’s right to represent 14 himself or herself is provided in 28 U.S.C. § 1654. 15 Hartford Life, Inc., 546 F.3d 661, 664 (9th Cir. 2008). 16 the privilege to represent oneself is personal to the litigant and 17 does not extend to other parties or entities. 18 plaintiffs are generally prohibited from pursuing claims on behalf 19 of others in a representative capacity. 20 this proposition). 21 shareholder’s derivative suit is that of the corporation. 22 v. Tobin, 548 F.2d 408, 411 (9th Cir. 1976). 23 may not appear in court except through an attorney, likewise a 24 representative shareholder may not appear without an attorney. 25 Id. Simon v. However, Thus, pro se Id. (citing many cases for Furthermore, the substantive right to bring a Phillips Because a corporation Id. Thus, Plaintiff may not bring this derivative action in a pro 26 2 27 28 Anglo American indicates that neither of the De Beers entities to which Plaintiff refers in his complaint is incorporated in California or has its principal place of business in California. 6 1 se capacity. 2 because this suit is purportedly brought on behalf of Anglo 3 American. 4 without merit and the case must be dismissed. 5 dismissal is without prejudice to re-filing if Plaintiff obtains 6 the services of an attorney. 7 dismissed on this ground, the Court does not address Anglo 8 American’s other grounds for dismissal. 9 CONCLUSION United States District Court For the Northern District of California 10 Plaintiff’s constitutional rights are not at issue Therefore, Plaintiff’s constitutional argument is However, the Because the complaint must be Based on the foregoing, this case is dismissed. Dismissal is 11 without prejudice to refiling if Plaintiff obtains representation 12 by an attorney. 13 December 17, 2009 is vacated. The case management conference scheduled for 14 15 16 IT IS SO ORDERED. 17 18 Dated: December 11, 2009 CLAUDIA WILKEN United States District Judge 19 20 21 22 23 24 25 26 27 28 7
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