Arneault v. Diamondhead Casino Corp.

277 F. Supp. 3d 671
CourtDistrict Court, D. Delaware
DecidedSeptember 26, 2017
DocketC. A. No. 16-989-LPS
StatusPublished
Cited by4 cases

This text of 277 F. Supp. 3d 671 (Arneault v. Diamondhead Casino Corp.) is published on Counsel Stack Legal Research, covering District Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Arneault v. Diamondhead Casino Corp., 277 F. Supp. 3d 671 (D. Del. 2017).

Opinion

MEMORANDUM OPINION

STARK, U.S. District Judge:

Pending before the Court are Defendant’s motion to dismiss for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1) (D.I, 6), and Plaintiffs’ motion for leave to amend the complaint (D.I. 16).

I. BACKGROUND

On October 25, 2016, Plaintiffs Edson R. Arneault, Kathleen and James Devlin, J. Steven Emerson, Steven Rothstein, and Barry Stark and Irene Stark (the “Individual Plaintiffs”), together with Emerson Partners and J. Steven Emerson Roth IRA (collectively, “Plaintiffs”), filed suit against Diamondhead Casino Corporation (“Defendant”) to recover monies allegedly-owed to Plaintiffs under certain Collater-ized Convertible Senior Debentures. (D.I. 1) (the “Complaint”) Plaintiffs’ alleged this Court had subject matter jurisdiction pursuant to diversity of citizenship under 28 U.S.C. § 1332(a). (Id. at ¶ 1)

On November 21, 2016, Defendant filed a Motion to Dismiss for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1) based on Plaintiffs’ alleged failure to plead the citizenship of each plaintiff in a manner sufficient for this Court to determine if complete diversity exists. (D.I. 6) It is undisputed that Defendant is incorporated in Delaware and has its principal place of business in Virginia. (D.I. 7 at 2)

On February 17, 2017,- Plaintiffs filed an Answering Brief in Opposition to Defendant’s Motion to Dismiss. (D.I. 10) With that brief, Plaintiffs also filed five declarations of citizenship, one from each of: Ed-son R. Arneault (D.I. 12), James Devlin (D.I. 14),1 J. Steven Emerson (D.I. 13), Steven Rothstein (D.I. 16), and Barry Stark (D.I. II).2 The declaration of J. Steven Emerson addresses his citizenship as an individual, as well as the citizenship of Emerson Partners and the J. Steven Emerson Roth IRÁ. (D.I. 13) (the “Emerson Declaration”)

On February 21, 2017, Plaintiffs filed a Motion for Leave to Amend the Complaint. (D.I. 16) Plaintiffs submitted a Proposed Amended Complaint, revising the pleadings related to the parties’ citizenship. (D.I. 17 Ex. A) (the “Amended Complaint”) Defendant agreed to consent to the filing of Plaintiffs’ Proposed Amended Complaint but declined to withdraw its Motion to Dismiss. (D.I. 17) Defendant has not filed a Reply Brief in support of its Motion to Dismiss.

II. LEGAL STANDARDS

A. Motion for Leave to Amend

Pursuant to Fed. R. Civ. P. 16(a), “[a] party may amend its pleading once as a matter of course within ... 21 days of service of a motion under Rule 12(b).” “In all other cases, a party may amend its pleading only with the opposing party’s written consent or the court’s leave. The court should freely give leave when justice so requires.” Fed. R. Civ. P. 15(a). The decision to grant or deny leave to amend lies within the discretion of the court. See Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962); In re Burlington Coat Factory Secs. Litig., 114 F.3d 1410, 1434 (3d Cir. 1997). The Third Circuit has adopted a liberal approach to the amendment of pleadings to “ensure[ ] that a particular claim will be decided oh the merits rather than on technicalities.” Dole v. Arco Chem. Co., 921 F.2d 484, 487 (3d Cir.1990). Generally, then, leave to amend should be'granted absent a showing of “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of the allowance of the amendment, futility of amendment, etc.” Foman, 371 U.S. at 182, 83 S.Ct. 227; see also Oran v. Stafford, 226 F.3d 275, 291 (3d Cir. 2000).

B. Motion to Dismiss

1. Challenges to Subject Matter Jurisdiction

Federal Rule of Civil Procedure 12(b)(1) authorizes dismissal of a complaint for lack of jurisdiction over the subject matter, or if the plaintiff lacks standing to bring his claim.” Samsung Elec. Co., Ltd. v. ON Semiconductor Corp., 541 F.Supp.2d 645, 648 (D. Del. 2008). A motion to dismiss for lack of subject matter jurisdiction may present either a facial attack or a factual attack. See CNA v. United States, 535 F.3d 132, 139 (3d Cir. 2008); Fed. R. Civ. P. 12(b)(1). A facial attack “concerns an alleged pleading deficiency,” while “a factual attack concerns the actual failure of a plaintiffs claim to comport factually with the jurisdictional prerequisites.” CNA, 535 F.3d at 139 (internal quotation marks and brackets omitted).

Where, as here, the motion presents a facial challenge to the Court’s jurisdiction, or one based purely on the sufficiency of the allegations in the complaint, the Court must accept well-pled factual allegations as true and may consider only the complaint and any documents referenced therein or attached thereto. See Lincoln Ben. Life Co. v. AEI Life, LLC, 800 F.3d 99, 105 (3d Cir. 2015). “Affidavits and briefs in opposition do not fall in this category.” Id. at 110.

2. Pleading Diversity Jurisdiction

Federal Rule of Civil Procedure 8(a)(1) requires plaintiffs to provide “a short and plain statement of the grounds for the court’s jurisdiction. The burden of establishing -diversity jurisdiction rests with the party asserting its existence.” McCann v. Newman Irrevocable Tr., 458 F.3d 281, 286 (3d Cir. 2006). A party generally meets this burden by proving' diversity of citizenship "by a preponderance of the evidence. See McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936). For complete diversity to exist, no plaintiff may be a citizen of the same state as any defendant. See Zambelli Fireworks Mfg. Co. v. Wood, 592 F.3d 412

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277 F. Supp. 3d 671, Counsel Stack Legal Research, https://law.counselstack.com/opinion/arneault-v-diamondhead-casino-corp-ded-2017.