Tungsten Heavy Powder and Parts v. Global Tungsten & Powders Corporation
4:17-cv-01948
M.D. Penn.Feb 1, 2018Background
- THPP, a California tungsten-powder manufacturer, sued Pennsylvania-based Global Tungsten & Powders (GTP) alleging a campaign of false statements (defamation, interference, unfair competition, civil conspiracy) that harmed THPP’s business.
- Allegations include GTP telling customers THPP imported material from China and violated ITAR by having materials inspected in Mexico; statements made at industry trade shows.
- Complaint named GTP and Does 1–10 (including a third-party lobbying firm) but did not allege the state(s) of incorporation or principal place of business for the corporate parties, nor the citizenship of the Doe defendants.
- GTP moved to dismiss under Fed. R. Civ. P. 12(b)(1) (lack of subject-matter jurisdiction) and alternatively 12(b)(6).
- The court found the complaint failed to plead complete diversity under 28 U.S.C. § 1332: (1) corporations’ citizenship was not properly alleged (state of incorporation and principal place of business), and (2) fictitiously named Doe defendants with unspecified citizenship defeat diversity in an original (non-removed) diversity action.
- The complaint was dismissed without prejudice under Rule 12(b)(1) and THPP was given 21 days to file an amended complaint curing the jurisdictional defects.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether court has diversity jurisdiction under 28 U.S.C. § 1332 | THPP asserted parties were citizens of different states (THPP a California citizen; GTP a Pennsylvania citizen) | GTP argued jurisdictional allegations were insufficient to establish complete diversity (missing corporate citizenship and Doe identities) | Dismissed for lack of subject-matter jurisdiction; allegations insufficient |
| Whether Doe defendants may be ignored for diversity analysis | THPP asked for expedited discovery to identify Does | GTP contended Doe defendants destroy diversity when citizenship not alleged | Court held Doe defendants’ unspecified citizenship defeats diversity in an original diversity suit |
| Whether plaintiff properly pleaded corporate citizenship | THPP alleged location/citizenship but did not plead state of incorporation or principal place of business | GTP argued conclusory corporate citizenship allegations are insufficient | Court held corporate citizenship must allege state of incorporation and principal place of business (nerve center); complaint failed to do so |
| Whether court should drop nondiverse parties under Rule 21 to preserve jurisdiction | THPP implicitly sought relief to proceed | GTP opposed dropping as improper here; Doe parties central to conspiracy claim | Court declined to drop Does because they are indispensable and dropping would not cure other pleading defects |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (legal standard for considering factual allegations at motion to dismiss)
- Mortensen v. First Federal Sav. and Loan Ass’n, 549 F.2d 884 (facial vs. factual Rule 12(b)(1) attacks)
- Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365 (complete diversity requirement)
- Hertz Corp. v. Friend, 559 U.S. 77 (principal place of business as corporation's "nerve center")
- Mortellite v. Novartis Crop Protection, Inc., 460 F.3d 483 (John Doe parties destroy diversity if citizenship cannot be alleged)
- Zambelli Fireworks Mfg. Co. v. Wood, 592 F.3d 412 (Rule 21 dropping nondiverse parties/discussing indispensability)