Pola v. Rao

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA

SAI POLA, No. 2:19-cv-01154-MCE-KJN

Plaintiff, v. ORDER MAHENDER RAO and SRINIVAS RAO,

Defendants.

Through this action, Plaintiff Sai Pola (“Plaintiff”) seeks damages from Defendants Mahender Rao and Srinivas Rao (collectively, “Defendants”) for wrongful expulsion from partnership, breach of fiduciary duty, and partnership accounting. Presently before the Court is Defendants’ Motion to Dismiss for Lack of Personal and Subject Matter Jurisdiction (“Motion”). ECF No. 25. For the reasons set forth below, Defendants’ Motion is DENIED.1

Plaintiff filed his complaint on June 21, 2019, and the Court subsequently issued the Initial Pretrial Scheduling Order (“PTSO”) on June 24, 2019. ECF Nos. 1, 4. According to the PTSO, all non-expert discovery was to be completed no later than 365 days from the date the case was opened, and all dispositive motions were to be filed no

Generally, the Court is required to enter a pretrial scheduling order within 120 days of the filing of the complaint. Fed. R. Civ. P. 16(b). The scheduling order “controls the subsequent course of the action” unless modified by the Court. Fed. R. Civ. P. 16(e). “A scheduling order is not a frivolous piece of paper, idly entered, which can be cavalierly disregarded by counsel without peril.” Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 610 (9th Cir. 1992) (citation and internal quotation marks omitted). Orders entered before the final pretrial conference may be modified upon a showing of “good cause,” Fed. R. Civ. P. 16(b), but orders “following a final pretrial conference shall be modified only to prevent manifest injustice.” Fed. R. Civ. P. 16(e); see also Johnson, 975 F.2d at 608.

According to the PTSO, non-expert discovery should have been completed by June 21, 2020, and dispositive motions should have been filed by December 21, 2020; however, the present Motion was not filed until May 4, 2021.3 To date, no modification

Although Defendants’ Motion is filed far beyond the time frame set forth in the PTSO, because subject matter jurisdiction involves a court’s power to hear a case, it can never be forfeited or waived. United States v. Cotton, 535 U.S. 625, 630 (2002). “The objection that a federal court lacks subject-matter jurisdiction, see Fed. Rule Civ. Proc. 12(b)(1), may be raised by a party, or by a court on its own initiative, at any stage in the litigation, even after trial and the entry of judgment.” Arbaugh v. Y & H Corp., 546 U.S. 13 500, 506 (2006). Indeed, “courts, including this Court, have an independent obligation to determine whether subject-matter jurisdiction exists, even in the absence of a challenge from any party.” Id. at 514 (citing Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583 (1999)); see Fed. R. Civ. P. 12(h)(3) (“If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.”).

Here, Plaintiff’s Complaint asserts diversity of citizenship as the basis for federal jurisdiction. ECF No. 1 ¶ 5. Diversity jurisdiction is proper when the amount in controversy exceeds $75,000, and where the matter is between the citizens of different states. 28 U.S.C. § 1332(a). Diversity jurisdiction requires complete diversity of citizenship, with each plaintiff being a citizen of a different state from each defendant. Id.; Caterpillar, Inc. v. Lewis, 519 U.S. 61, 68 (1996). Plaintiff is a California resident, Defendant Mahender Rao is a Michigan resident, and Defendant Srinivas Rao is a Virginia resident. ECF No. 1 ¶¶ 2–4. Because “the purpose of diversity jurisdiction is to neutralize any bias that a local court may have in favor of a local resident, an argument which does not extend with any force where there are citizens of the same foreign country on both sides,” the fact that Plaintiff and Defendant Srinivas Rao are both citizens of India does not destroy diversity jurisdiction. Resource Recovery Corp. v. Inductance Energy Corp., No. CV-20-00764-PHX-SPL, 2020 WL 6149844, at *3 (D. Ariz. Oct. 20, 2020) (“Accordingly, this Court concludes that the presence of Canadian plaintiffs and defendants in this case would not destroy diversity jurisdiction.”). As for the amount in controversy, Plaintiff seeks to recover approximately $2,898,000 in addition to attorney’s fees, which more than exceeds $75,000. ECF No. 1 at 6-7. Therefore, the Court finds that subject matter jurisdiction exists on the basis of diversity jurisdiction.

Based on the foregoing, Defendants’ Motion to Dismiss for Lack of Personal and Subject Matter Jurisdiction, ECF No. 25, is DENIED.

IT |S SO ORDERED.

Dated: October 13, 2021

Matar LEK: Whip AX XC -

‘3 SENIOR UNITED STATES URTRICT JUDGE