1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 EVANSTON INSURANCE COMPANY, Case No. 24-cv-05067-WHO

8 Plaintiff, ORDER ON THE MOTION TO 9 v. DISMISS

10 JESSICA RICHMAN, et al., Re: Dkt. No. 44 Defendants. 11

12 Evanston Insurance Company (“Evanston”) brings this declaratory relief lawsuit against 13 defendants Jessica Richman (“Richman”) and Zachary Apte (“Apte”) (together, “defendants”), 14 seeking a judicial determination that it owes defendants no duty to defend or indemnify in a 15 number of underlying matters concerning defendants’ alleged conduct related to their now- 16 bankrupt company “uBiome.” Defendants move to dismiss the case for lack of subject matter 17 jurisdiction.1 On the facts before me now, defendants appear to have been domiciled in Germany 18 since before the start of this litigation and are therefore “stateless,” precluding the diversity 19 jurisdiction upon which Evanston relies to bring its case. I therefore GRANT the motion to 20 dismiss. I will allow leave to amend: Evanston went to a great deal of trouble to serve defendants 21 in Germany and deserves the opportunity to allege adequate additional jurisdictional facts, 22 although it is unclear that it will be able to do so. Evanston shall file any amended complaint 23 within 30 days of this Order. 24 BACKGROUND 25 Evanston is an Illinois-based, domestic surplus lines insurance company. Complaint 26

27 1 Defendants also moved to dismiss in the alternative for lack of personal jurisdiction, improper 1 (“Compl.”) ¶ 2. Apte and Richman are co-founders, officers, and directors of the now-defunct 2 company known as uBiome that purported to be a successful health testing startup. Compl. ¶¶ 3– 3 4, 26, 30. Defendants were also Co-Chief Executive Officers of uBiome. Id. uBiome applied for 4 an insurance policy with Evanston on July 5, 2018. Compl. ¶ 9. As a part of the application 5 process, representatives at uBiome certified that no individual was aware that “any wrongful act, 6 event, matter, fact, circumstance, situation or transaction might reasonably be expected to result in 7 or be the basis for a future claim.” Id. Evanston issued the Excess Management Liability 8 Insurance Policy to uBiome effective January 31, 2019–August 21, 2019. Compl. ¶ 12. 9 The policy covers a wide range of claims, including written demands for relief, civil, 10 administrative, regulatory, arbitration, or mediation proceedings, official requests for extradition, 11 and criminal proceedings following an indictment. Compl. ¶ 18. But it includes the Common 12 Exclusions provision that “the Insurer shall not be liable under this Policy to pay any Loss arising 13 from any Claim made against any Insured [b]ased upon . . . (1) any public offering of securities by 14 the Company, or the solicitation, sale, purchase distribution, or issuance of any such securities . . . 15 (2) any Wrongful Act, relating in any way to any public offering of securities by the Company . . . 16 .” Compl. ¶22. 17 Between 2019 and 2022, defendants and uBiome received notice of approximately 11 18 matters proceeding against them in various courts. Compl. ¶¶ 23–47. These included the issuance 19 of a search and seizure warrant, a subpoena to appear and present documents in connection with 20 an ongoing Securities and Exchange Commission (“SEC”) investigation, an enforcement action 21 against defendants commenced by the SEC, a criminal proceeding brought by the DOJ, a 22 forfeiture proceeding concerning defendants’ properties allegedly bought with fraudulently- 23 acquired income (“Two Condominiums”), an adversary proceeding brought by a former trustee of 24 uBiome, a demand for arbitration brought by that same trustee, and an extradition proceeding 25 against Dr. Richman. Id. The crux of these proceedings are rooted in the allegations that uBiome 26 defrauded its investors to the tune of approximately $60 million when it lied about the successful 27 nature of its use of health insurance reimbursements to turn a profit for the company and likewise 1 ¶¶ 26, 34. 2 Defendants, through uBiome, provided Evanston with notice of those proceedings pursuant 3 to the requirements of the insurance policy. Compl. ¶ 48. Evanston denied coverage in each 4 matter based on its understanding that by the time uBiome applied for insurance coverage, it was 5 allegedly already committing fraudulent acts that would eventually lead to the matters included 6 above. Compl. ¶¶ 75–79. Among other things, Evanston also concluded that the actions leading 7 to the matters occurred prior to the inception date of the policy. Compl. ¶ 76. 8 Evanston filed the instant lawsuit on August 12, 2024, seeking declaratory relief that it 9 owed no duty to defend or duty to indemnify defendants in the underlying lawsuits. See Dkt. No. 10 1. Since that time, issues of proper service have been raised in this case and the underlying cases. 11 See Dkt. No. 18 (Docket Order by Magistrate Judge Tse explaining: “The plaintiff notes that the 12 defendants appear to be residing in Germany and thus must be served in that country. 13 Accordingly, the Court hereby vacates the case management conference scheduled for December 14 13, 2024. If defendants have not yet appeared by January 31, 2025, the plaintiff is ordered to file 15 an update on service with the Court by February 14, 2025. If defendants have not appeared and 16 there is no filing from plaintiffs by February 14, 2025, then the Court will dismiss the case without 17 prejudice.”); see also Order Granting Motion for Alternative Service, SEC v. Richman, No. 18 3:21-cv-01911-CRB (N.D. Cal. July 19, 2021), Dkt. No. 23 at 1 (“Since around July 2020, 19 Defendants have resided in Germany.”) and 5 (German Central Authority declined SEC’s Hague 20 request). 21 On November 10, 2025, defendants moved to dismiss the case for lack of diversity subject 22 matter jurisdiction. See Motion to Dismiss (“Mot.”) [Dkt. No. 44]. Evanston opposed the motion. 23 Opposition to the Motion to Dismiss (“Oppo.”) [Dkt. No. 46]. Defendants replied. Reply ISO 24 Motion to Dismiss (“Reply”) [Dkt. No. 47]. I held a hearing on the motion on December 10, 25 2025. 26 LEGAL STANDARD 27 A motion to dismiss filed pursuant to Rule 12(b)(1) is a challenge to the court’s subject 1 jurisdiction,” and it is “presumed that a cause lies outside this limited jurisdiction.” Kokkonen v. 2 Guardian Life Ins. of Am.,

(1994). The party invoking the jurisdiction of the 3 federal court bears the burden of establishing that the court has the requisite subject matter 4 jurisdiction to grant the relief requested.

5 Diversity jurisdiction exists under

(a), where no plaintiff is a citizen of 6 the same state as any defendant and the amount in controversy exceeds $75,000. A “natural 7 person’s state citizenship is then determined by her state of domicile, not her state of residence. A 8 person’s domicile is her permanent home, where she resides with the intention to remain or to 9 which she intends to return.” Kanter v. Warner-Lambert Co.,

(9th Cir. 2001). 10 Complete diversity must exist at the time a complaint is filed, and so domicile is therefore 11 determined at the initiation of a lawsuit. Lew v. Moss,

(9th Cir. 1986). A 12 “person is domiciled in a location where he or she has established a fixed habitation or abode in a 13 particular place, and intends to remain there permanently or indefinitely.”

at 749–750 (citation 14 modified). For cases such as this one involving citizens of the United States, “[t]o demonstrate 15 citizenship for diversity purposes, a party must (a) be a citizen of the United States, and (b) be 16 domiciled in a state of the United States.”

. 17 DISCUSSION 18 There is no doubt that defendants currently reside in and currently indicate that they are 19 domiciled in Germany. There is also no dispute that defendants have resided in Germany since 20 2020. The question is this: At what point did Dr. Richman and Dr. Apte make Germany their 21 domicile as opposed to simply their residence? As the record currently stands, Evanston has been 22 unable to meet its burden to demonstrate that California has been defendants’ domicile since 23 before the instigation of this litigation. 24 Evanston’s argument is based on publicly-filed documents related to the underlying 25 actions. In Two Condominiums, defendants moved to dismiss the government’s complaint and 26 simultaneously moved to strike claims pursuant to the Fugitive Disentitlement Doctrine. Oppo. 27 Exhibit A [Dkt. No. 46-2]. On November 15, 2021, defendants argued in that case that they were 1 explained, they went to Germany in the summer of 2020 for their honeymoon. Id.at 8. While 2 there, Dr. Richman’s health suffered and Dr. Apte became her primary caretaker.

Dr. 3 Richman’s health continued to deteriorate such that any return to the United States was not yet 4 foreseeable.

Defendants specifically argued that “Dr. Apte and Dr. Richman are residing in 5 Germany and have not returned due to Dr. Richman’s ill health.” Id. at 19. Further, they attested 6 that “the lack of timeline for recovery is not evidence that Dr. Richman or Dr. Apte remain in 7 Germany for any reason other than her illness.” Id. at 20. Evanston takes these statements to be 8 proof that although defendants may have been residing in Germany at that time, they were still 9 domiciled somewhere within the United States. Oppo. 4–6. 10 Evanston has no evidence of the defendants’ domiciliary intent between 2021 and 2024, 11 when it filed this lawsuit.2 But what is fatal to Evanston’s argument is that it has presented no 12 evidence, documentation, or argument to demonstrate proof of defendants’ domicile in California. 13 Dr. Richman and Dr. Apte have been living in Germany for the last five years. Four years have 14 passed since defendants made the above-mentioned representations to the court in Two 15 Condominiums. Evanston has not made any allegations (in its complaint or in its opposition to the 16 motion) of ongoing ties, or of evidence to suggest that defendants intend to return to California— 17 or anywhere within the United States, for that matter. See Kanter,

. Without 18 evidence, or even allegations, of domicile, Evanston’s case cannot proceed here.3 19 As the Supreme Court has held: “The problem in this case is that [defendants], although [] 20 United States citizen[s], ha[ve] no domicile in any State. [They are] therefore ‘stateless’ for 21 purposes of § 1332(a)(3). Subsection 1332(a)(2), which confers jurisdiction in the District Court 22 when a citizen of a State sues aliens only, also could not be satisfied because [defendants are] 23 2 I do not take notice of the exhibits filed by defendants with the Duffy declaration (Dkt. 44-1), as 24 they were not properly authenticated or translated. I note, however, that they purport to be defendants’ German address registration, German drivers’ licenses, German health insurance 25 cards, and expired U.S. passports. Should Evanston file an amended complaint, defendants may properly proffer those documents. Any inconsistencies (such as travel after the purported 26 expiration of one passport in 2019) should be explained as a part of any authenticating declaration(s). 27 1 United States citizen[s].”” Newman-Green, Inc. v. Alfonzo-Larrain,

(1989). I 2 || do not have jurisdiction over defendants in this matter. 3 CONCLUSION 4 For the foregoing reasons, the Motion to Dismiss is GRANTED with leave to amend. 5 Evanston shall file any amended complaint within 30 days of this Order. 6 IT IS SO ORDERED. 7 Dated: December 11, 2025 \ 9 ® Wriliam H. Orrick 10 United States District Judge 11 12

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