Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_05-cv-02051/USCOURTS-cand-4_05-cv-02051-0/pdf.json

Nature of Suit Code: 160
Nature of Suit: Stockholder's Suits
Cause of Action: 28:1332 Diversity-Stockholders Suits

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

IRWIN REINHARZ,

Plaintiff,

v.

MEDIAGATE, LTD, an Israeli

corporation, MEDIAGATE, INC., a

Delaware corporation, and

MEDIAGATE, N.V., a Dutch

corporation,

Defendants.

 /

No. C 05-2051 CW

ORDER DENYING

PLAINTIFF'S

MOTION FOR A

TEMPORARY

RESTRAINING

ORDER

Plaintiff Irwin Reinharz moves for a temporary restraining

order enjoining Defendant Mediagate, N.V. from transferring or

disposing of any assets without prior approval of the Court. To

date, there is no proof of service of the complaint or of the

motion. Having considered the moving papers, the Court DENIES

Plaintiff's motion for a temporary restraining order because it

does not appear that the Court has subject matter jurisdiction

over the case.

BACKGROUND

The following facts are alleged in Plaintiff's complaint. 

Case 4:05-cv-02051-CW Document 5 Filed 05/24/05 Page 1 of 4
United States District Court

For the Northern District of California

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Plaintiff resides in San Francisco, California. Mediagate, N.V.

is a Dutch corporation that maintains, or used to maintain,

headquarters in San Jose, California. Mediagate, LTD is an

Israeli corporation, and Mediagate, Inc. is incorporated in

Delaware. These entities together form Mediagate Group, which

develops advanced unified messaging and voice mail technology.

Plaintiff is a principal partner in MG Investments, which

formed in 1997 with the sole purpose of purchasing shares in

Mediagate, N.V. On February 18, 1997, Mediagate, N.V. issued a

financing letter and initial subscription form to MG

Investments. In May, 1997, Plaintiff, through MG Investments,

bought $313,269.60 worth of stock in Mediagate, N.V. In August,

1999, Plaintiff individually invested an additional $24,403.10

in preferred shares in the company. To date, Plaintiff has not

received stock certificates for either purchase. On February 8,

2005, Mediagate, N.V. stated that it would not issue Plaintiff

his stock certificates because it was "winding down."

On May 19, 2005, Plaintiff filed his complaint alleging

causes of action for (1) breach of contract, (2) material

misrepresentation, (3) conversion, (4) fraud and (5) breach of

fiduciary duties. The complaint alleges that the Court has

subject matter jurisdiction pursuant to Title 28 U.S.C. section

1332(a). Also on May 19, Plaintiff filed this motion for a

temporary restraining order.

DISCUSSION

Federal diversity jurisdiction is available under Title 28

U.S.C. section 1332(a) when the matter in controversy is between

Case 4:05-cv-02051-CW Document 5 Filed 05/24/05 Page 2 of 4
United States District Court

For the Northern District of California

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citizens of different States. A party seeking to invoke

diversity jurisdiction bears the burden of establishing absolute

diversity of citizenship. Dweck v. Japan CBM Corp., 877 F.2d

790, 792 (9th Cir. 1989) (internal citations omitted). When

federal subject matter jurisdiction is predicated upon diversity

of citizenship, complete diversity must exist between the

opposing parties. Owen Equip. & Erection Co. v. Kroger, 437

U.S. 365, 373-74 (1978). 

A corporation is deemed a citizen of both the State in

which it is incorporated as well as the State where it has its

principal place of business. 28 U.S.C. § 1332(c)(1). Thus, a

corporation cannot be sued in federal court under diversity

jurisdiction in either State where the plaintiff is a citizen of

that State. Bank of Cal. Nat’l Ass’n v. Twin Harbors Lumber

Co., 465 F. 2d 489, 491-92 (9th Cir. 1972). Section 1332(c)

also applies to alien corporations. Danjaq, S.A. v. Pathe

Communications Corp., 979 F.2d 772, 774 (9th Cir. 1992). Thus,

an alien corporation is considered a citizen of the foreign

state in which it was incorporated, and of the State in which it

maintains its principal place of business. Id.

Plaintiff's complaint alleges that Mediagate, N.V. is a

Dutch company with headquarters in San Jose, California. Thus,

for purposes of diversity of citizenship analysis, Mediagate,

N.V. is a citizen of both The Netherlands and California. And,

Plaintiff alleges that he is a resident of San Francisco,

California. Therefore, from the face of Plaintiff's complaint,

complete diversity does not exist in this case, and the Court

Case 4:05-cv-02051-CW Document 5 Filed 05/24/05 Page 3 of 4
United States District Court

For the Northern District of California

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lacks subject matter jurisdiction to hear it.

Plaintiff may, as a matter of right, amend his complaint to

include facts that would establish subject matter jurisdiction,

if he can truthfully do so without contradicting the allegations

in his current complaint. If Plaintiff can successfully amend

his complaint to establish subject matter jurisdiction, he may

also file again a motion for a temporary restraining order, or

he may file and notice for hearing a motion for a preliminary

injunction. However, Plaintiff's current motion for a temporary

restraining order is deficient in factual support. 

Specifically, Plaintiff does not submit evidence that he was

entitled to stock certificates as a result of his investments. 

In addition, Plaintiff does not proffer evidence that Mediagate,

N.V. will be unable, if a temporary restraining order or

preliminary injunction is not issued, to redeem Plaintiff's

shares. Thus, if Plaintiff wishes to file again a motion for

injunctive relief, he must remedy these deficiencies.

CONCLUSION

For the foregoing reasons, Plaintiff's motion for a

temporary restraining order is DENIED for lack of subject matter

jurisdiction.

IT IS SO ORDERED.

Dated: 5/24/05 /s/ CLAUDIA WILKEN 

CLAUDIA WILKEN

United States District Judge

Case 4:05-cv-02051-CW Document 5 Filed 05/24/05 Page 4 of 4