Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_09-cv-05597/USCOURTS-cand-3_09-cv-05597-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Contract Dispute

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

PROTECH GROUP ASIA, LIMITED,

Plaintiff,

 v.

NETWORK SCRAP METAL, et al.,

Defendants /

No. C-09-5597 MMC

ORDER DISMISSING ACTION WITHOUT

PREJUDICE

Before the Court is plaintiff Protech Group Asia, Limited’s (“PGA”) Statement, filed

January 19, 2010 in response to the Court’s order of December 29, 2009, by which order

the Court directed PGA to show cause why the instant action should not be dismissed or

transferred for improper venue.

In the instant action, PGA asserts claims arising from an alleged breach of contract

and related torts pertaining to an agreement between PGA, a citizen of Hong Kong, and

Network Scrap Metal Corporation (“Network Scrap”), a Florida corporation with its principal

place of business in Florida. Specifically, PGA alleges it was fraudulently induced into

entering a contractual relationship with Network Scrap, which entity subsequently breached

the agreement and posted libelous statements about PGA on its website.

PGA alleges the district court has diversity jurisdiction over the instant action. 

Venue in a diversity action is governed by 28 U.S.C. § 1391(a), which provides as follows: 

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“A civil action wherein jurisdiction is founded only on diversity of citizenship” may only be

brought in “(1) a judicial district where any defendant resides, if all defendants reside in the

same State, (2) a judicial district in which a substantial part of the events or omissions

giving rise to the claim occurred, or a substantial part of property that is the subject of the

action is situated, or (3) a judicial district in which any defendant is subject to subject

jurisdiction at the time the action is commenced, if there is no district in which the action

may otherwise br brought.” See 28 U.S.C. § 1391(a).

In its order filed December 29, 2009, the Court set forth its concerns with respect to

the propriety of laying venue in the Northern District of California, under any of the abovereferenced subsections. First, the Court stated that venue under § 1391(a)(1) appeared

improper, because all defendants do not reside in California. Second, the Court observed

that venue under § 1391(a)(2) appeared improper, because a substantial part of the events

and omissions giving rise to PGA’s claims did not occur in the Northern District of

California. Third, the Court noted that venue under § 1391(a)(3) appeared improper

because, although two defendants allegedly reside in this district, the action could have

been brought in Florida, a district in which a substantial part of the events and omissions

giving rise to PGA’s claims occurred.

In its Statement, PGA does not assert venue is proper in the Northern District of

California under either § 1391(a)(1) or § 1391(a)(2). Rather, PGA argues, venue is proper

in this district under § 1391(a)(3), on the theory that a substantial part of the events giving

rise to its claims occurred in New York, and that, according to PGA, the instant action

cannot be brought in New York because no defendant resides in New York. Specifically,

PGA states that defendant Samuel W. Miller (“Miller”) a Florida resident who is the Chief

Executive Officer of Network Scrap, directed PGA to deposit funds owed to Network Scrap

into a bank account owned by Miller, which account was held in a bank located in New

York.

Assuming, arguendo, a substantial part of the events giving rise to PGA’s claims

occurred in New York, and further assuming the instant action could not have been brought

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in New York, such showing does not assist PGA, for the reason that PGA has failed to

argue, let alone show, it could not bring the instant action in Florida. In particular, PGA has

not shown that a substantial part of the events giving rise to its claims did not arise in

Florida. See 28 U.S.C. § 1391(a)(2) (providing venue in diversity action proper in district

where substantial part of events on which claims are based occurred). As discussed in the

Court’s December 29, 2009 order, a substantial part of the events on which PGA’s claims

rely are alleged to have occurred in Florida. Specifically, PGA’s complaint alleges that

defendant Network Scrap, the party assertedly in breach of the contract at issue herein and

which is alleged to have posted libelous matter about PGA on its webpage, is

“headquartered” in Florida. (See Compl. ¶ 18.) Further, according to the complaint and

exhibits attached thereto, Network Scrap acted at all times through Miller, a Florida

resident. (See Compl. ¶¶ 3, 61, 80, Exs. C, D, E.) Moreover, according to the complaint,

defendant Forestille Holdings, LLC, which has its “address of record” in Florida (see Compl.

¶ 4) and which is “headquartered” in Florida (see Compl. ¶ 18), also posted libelous

material about PGA on a website (see Compl. ¶ 61).

Accordingly, PGA has failed to show venue is proper in the Northern District of

California under 28 U.S.C. § 1391(a)(3) or otherwise.

In its December 29, 2009 order, the Court directed PGA to show cause why the

instant action should not be dismissed or transferred to the Middle District of Florida. 

Because PGA has not requested transfer in the event of a finding of improper venue, the

Court will dismiss the instant action without prejudice.

Accordingly, the instant action is hereby DISMISSED pursuant to 28 U.S.C.

§ 1406(a), without prejudice to PGA’s refiling the action in an appropriate district or other

forum.

IT IS SO ORDERED.

Dated: January 21, 2010 

MAXINE M. CHESNEY

United States District Judge

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