United States District Court, D. Connecticut
ORDER REGARDING SUBJECT MATTER JURISDICTION
CHARLES S. HAIGHT, JR. Senior United States District Judge
North Sails Group, LLC ("North Sails") brings this
action against Boards and More GmbH ("B&M") and
Emeram Capital Partners GmbH ("Emeram"), the
private equity company that owns B&M, asserting that
these defendants have breached a Trademark License Agreement
("License Agreement") entered between North Sails
and B&M on October 1, 2000. Under this License Agreement,
North Sails provided B&M a worldwide exclusive license to
use North Sails trademarks and a North Sails trade name
("North Marks") on certain B&M windsurfing,
kitesurfing, and associated products ("Surf Sport
Products"). Doc. 1, at 1. In return, B&M promised to
use its "best good faith efforts to maximize the
production, marketing, and sale of the Licensed
Products" and to pay North Sails royalties on the these
products. Id., at 2, 5.
to North Sails, contrary to the License Agreement, B&M is
presently launching it own trademark for use with the Surf
Sport Products. This B&M trademark which will replace the
North Marks on all of B&M's 2019 models of Surf Sport
Products, which will be released in Fall 2018. Id.,
at 2, ¶ 3. North Sails alleges that the replacement of
its trademark will result in "irreparable and other
substantial harm to North Sails." Id.
Accordingly, North Sails has filed a motion for preliminary
injunction, requesting that this Court enjoin B&M and its
owner, Emeram, from "further breach of the Trademark
License Agreemnt." Doc. 6, at 1.
Complaint, North Sails alleges that this Court has
"diversity of citizenship" subject matter
jurisdiction over this action under 28 U.S.C. §
1332(a)(2). Doc. 1, at 4, ¶ 13. That statutory provision
states that "[t]he district courts shall have original
jurisdiction of all civil actions where the matter in
controversy exceeds the sum or value of $75, 000, exclusive
of interest and costs, and is between - . . .citizens of a
State and citizens or subjects of a foreign state, except
that the district courts shall not have original jurisdiction
under this subsection of an action between citizens of a
State and citizens or subjects of a foreign state who are
lawfully admitted for permanent residence in the United
States and are domiciled in the same State.
Reviewing the Complaint, however, the Court finds that the
Plaintiff has failed to allege sufficient facts from which
this Court may determine the citizenship of the parties for
purposes of diversity of citizenship jurisdiction. Therefore,
as set forth infra, the Court must ascertain whether
subject matter jurisdiction exists or this case should be
dismissed for lack thereof. It thus follows that Plaintiff
must make additional submissions so the Court may consider
the existence vel non of its subject matter
Subject Matter Jurisdiction
district courts are courts of limited jurisdiction under
Article III, Section 2, of the United States Constitution.
See, e.g., Chicot Cnty. Drainage Dist. Baxter State
Bank, 308 U.S. 371, 376 (1940), reh'g
denied, 309 U.S. 695 (1940). The question of subject
matter jurisdiction is fundamental so that a court must raise
the issue sua sponte, of its own accord, when the
issue is not addressed by the parties. Mansfield, C.
& L.M. Ry. Co. v. Swan, 111 U.S. 379, 382 (1884).
See also Joseph v. Leavitt, 465 F.3d 87, 89 (2d Cir.
2006) ("Although neither party has suggested that we
lack appellate jurisdiction, we have an independent
obligation to consider the presence or absence of subject
matter jurisdiction sua sponte."), cert.
denied, 549 U.S. 1282 (2007); Univ. of S. Alabama v.
Am. Tobacco Co., 168 F.3d 405, 410 (11th Cir. 1999)
("[I]t is well settled that a federal court is obligated
to inquire into subject matter jurisdiction sua
sponte whenever it may be lacking").
general, a federal district court may exercise subject matter
jurisdiction over an action only if there is either: (1)
"federal question" jurisdiction, applicable to
"all civil actions arising under the Constitution, laws,
or treaties of the United States, " 28 U.S.C. §
1331; or (2) there exists "diversity of citizenship,
" complete diversity of citizenship between the
plaintiff and all defendants and the amount in controversy
exceeds "the sum or value of $75, 000, exclusive of
interest and costs, " 28 U.S.C. § 1332(a). See
also Strawbridge v. Curtiss, 7 U.S. 267, 267-68 (1806);
Da Silva v. Kinsho Int'l Corp., 229
F.3d 358, 363 (2d Cir. 2000) (delineating two categories of
subject matter jurisdiction).
personal jurisdiction, "failure of subject matter
jurisdiction is not waivable." Lyndonville Sav. Bank
& Trust Co. v. Lussier, 211 F.3d 697, 700 (2d Cir.
2000). If subject matter jurisdiction is lacking, the action
must be dismissed. See Fed. R. Civ. P. 12(h)(3). 211
F.3d at 700-01. See also, e.g., Cortlandt St. Recovery
Corp. v. Hellas Telecomms., S.À.R.L., 790 F.3d
411, 416-17 (2d Cir. 2015) ("A district court properly
dismisses an action . . . for lack of subject matter
jurisdiction if the court lacks the statutory or
constitutional power to adjudicate it . . . .") (quoting
Makarova v. United States, 201 F.3d 110, 113 (2d
Cir. 2000)); Manway Constr. Co. v. Housing Auth. of
Hartford, 711 F.2d 501, 503 (2d Cir. 1983) ("It is
common ground that in our federal system of limited
jurisdiction any party or the court sua sponte, at
any stage of the proceedings, may raise the question of
whether the court has subject matter jurisdiction; and, if it
does not, dismissal is mandatory.").
order for diversity of citizenship to exist, the
plaintiff's citizenship must be diverse from that of all
defendants. See, e.g., St. Paul Fire and Marine
Ins. Co. v. Universal Builders Supply, 409 F.3d 73, 80
(2d Cir. 2005) ("Diversity is not complete if any
plaintiff is a citizen of the same state as any
defendant.") (citing Owen Equip. & Erection Co.
v. Kroger, 437 U.S. 365, 373-74 (1978)). Moreover, such
diversity must exist at the time the action is
commenced." Universal Licensing Corp. v. Lungo,
293 F.3d 579, 581 (2d Cir. 2002). See also Wolde-Meskel
v. Vocational Instruction Project Comm. Servs., Inc.,
166 F.3d 59, 62 (2d Cir.1999) ("Satisfaction of the
§ 1332(a) diversity requirements (amount in controversy
and citizenship) is determined as of the date that suit is
filed - the 'time-of-filing' rule.")
case at bar, there appears to be no basis for the Court to
exercise "federal question" jurisdiction -
i.e., no claim arising under the Constitution or
federal law. See 28 U.S.C. § 1331. Plaintiff
has brought two state law breach of contract claims, one
against B&M and one against Emeram as B&M's alter
ego, and a request for declaratory judgment against both
defendants regarding breach of contract. Doc. 1, at 13-14.
Consequently, Plaintiff's sole asserted jurisdictional
basis is "diversity of citizenship." Id.,
¶ 5. North Sails has explicitly stated that "[t]he
Court has subject matter jurisdiction under 28 U.S.C.
[§]1332(a)(2) because Plaintiff seeks damages in excess
of $75, 000 exclusive of interest and costs, Plaintiff is a
Delaware corporation with its principal place of business in
Connecticut, and Defendants are Austrian and German Companies
and residents." Doc. 1, at 4, ¶ II.13.
order for diversity of citizenship to exist, North
Sails's citizenship must be diverse from that of both
defendants. See, e.g., St. Paul Fire &
Marine Ins. Co., 409 F.3d at 80. Moreover, the
"time-of-filing" rule dictates that "diversity
must exist at the time the action is commenced, " in