Botto v. Ayala
4:18-cv-00679
| S.D. Tex. | Mar 12, 2018Background
- Plaintiff Jason Botto sued Samuel Ayala, Jimmy Diaz, Angel Basulto, and LASTBITME LLC in federal court alleging breach of contract and breach of a promissory note.
- The complaint states Texas law governs the joint venture agreement and the promissory note.
- All parties are alleged to be citizens of Texas.
- Plaintiff seeks relief under state-law contract claims; no federal statute is invoked as the source of the claims.
- Defendants moved (or the court raised) lack of subject-matter jurisdiction under federal-question and diversity principles.
- The court concluded it lacked subject-matter jurisdiction and dismissed the case without prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal-question jurisdiction exists | Botto asserts state-law contract claims (implicitly that federal court can hear them) | Defendants argue claims arise under Texas law, not federal law | No federal-question jurisdiction — claims are state-law contract causes of action |
| Whether diversity jurisdiction exists | Botto alleges amount in controversy but does not plead diverse citizenship | Defendants note all parties are Texas citizens | No diversity jurisdiction — all parties are Texas citizens |
| Whether the court must dismiss for lack of subject-matter jurisdiction | Botto sought adjudication of contract disputes in federal court | Defendants (and court) assert federal courts are courts of limited jurisdiction and must dismiss if jurisdiction lacking | Case dismissed without prejudice for lack of subject-matter jurisdiction |
| Whether resolution requires substantial federal question | Botto’s claims could implicate factual issues but rely on Texas law | Defendants argue resolution depends on Texas contract law, not federal law | No substantial federal question present; federal law not necessary to resolve dispute |
Key Cases Cited
- Stockman v. Federal Election Comm’n, 138 F.3d 144 (5th Cir.) (federal courts must dismiss actions lacking subject-matter jurisdiction)
- Howery v. Allstate Ins. Co., 243 F.3d 912 (5th Cir.) (federal courts are courts of limited jurisdiction; standards for federal-question jurisdiction)
- Goffney v. Bank of America, N.A., 897 F. Supp. 2d 520 (S.D. Tex.) (resolution of a contract/deed claim under state law does not create a federal question)