Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_07-cv-00367/USCOURTS-caed-1_07-cv-00367-5/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 28:1332 Diversity-Fraud

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1

IN THE UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF CALIFORNIA

CARL L. JIMENA, )

)

)

)

Plaintiff, )

)

vs. )

)

)

UBS AG BANK, INC., et al., )

)

)

Defendants. )

)

)

No. CV-F-07-367 OWW/GSA

MEMORANDUM DECISION AND

ORDER DENYING PLAINTIFF'S

MOTION TO SET ASIDE ORDER

DISMISSING WITH LEAVE TO

AMEND UBS FS AND TO ENTER

DEFAULT AGAINST UBS FS 

(Doc. 68)

Before the Court is Plaintiff’s October 30, 2007 “Motion to

Set Aside Order Dismissing With Leave to Amend UBS FS and To

Enter Default Against UBS FS” (Doc. 68).

A. BACKGROUND.

In the Memorandum Decision and Order filed on June 6, 2007

(hereafter referred to as the June 6, 2007 Order), the Court

addressed Defendant UBS Financial Services, Inc. (UBS FS)’s

motion to dismiss for failure to state a claim upon which relief

can be granted pursuant to Rule 12(b)(6), Federal Rules of Civil

Procedure (Doc. 18):

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A. Background Facts

Plaintiff has apparently been defrauded in a

variant on the ‘Nigerian advance fee scam’ by

individuals who sent him forged emails that

falsely purported to come from an officer of

UBS AG in Zurich, Switzerland. According to

Plaintiff, he was contacted by an individual

who had set up an email account under the

name clive_standish@yahoo.com. This

individual claimed to be Clive Standish, the

Chief Financial Officer of UBS AG. This

impersonator apparently offered to transfer

$19 million to Plaintiff’s bank account. 

Plaintiff was convinced to wire $51,000 via

Washington Mutual Bank, Bank of New York, and

UBS AG to an account of a fourth bank, HSBC,

allegedly to satisfy a non existent ‘Anti

Drug/Terrorist Clearance’ fee required for

transfers from Nigeria. Plaintiff never

received the 19 million that he expected. He

has sued UBS AG and Clive Standish, Chief

Financial Officer of UBS AG. Plaintiff

brings a cause of action against all named

defendants, including UBS FS, for 

1. Fraud

2. California Commercial Code § 11302, and §

11103, UCC § 4A-302(a)(1), 301(b), § 4A-103(a)(1)

3. Intentional Tort

4. Interest on Damages.

B. UBS Financial Services

Defendant UBS AG is incorporated and has its

principal place of business in Switzerland. 

(Doc. 1, Notice of Removal, Ex. 1 Complaint ¶

1, filed March 6, 2007.) Defendant UBS

Financial Services (‘UBS FS’) is a

corporation that is wholly owned by an entity

that is itself wholly owned by UBS AG. UBS

FS is incorporated in Delaware with its

principal place of business at its

headquarters in New Jersey. (Doc. 11,

Declaration of Tambra King (‘King

Declaration’), ¶ 3, Filed April 16, 2007.)

UBS AG Bank Inc. owns, operates, and controls

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all named branches and is the parent company

of 1. UBS AG Bank, Manhattan Branch 2. UBS FS

Inc., Weehawken Branch and 3. UBS FS Inc.,

Bakersfield Branch. (Doc. 1-2, Notice of

Removal, Exhibit A, Complaint, p. 5, filed

May 6, 2007.)

UBS FS, Inc. has approximately 550 branch

offices throughout the United States. (Id.

at ¶ 4.) UBS FS, Inc. Bakersfield office is

one such branch office. Id. Plaintiff joins

UBS FS, Inc. Bakersfield as a defendant to

establish that the parent corporation UBS AG,

Inc. is doing business in the Eastern

District of California. Plaintiff further

alleges that UBS AG, Inc. is liable for the

acts of Clive Standish ‘even though he was

acting for his own purpose.’

....

In footnotes 1-5, the Court ruled that California Commercial Code

§§ 11302 and 11303 have no application to Plaintiff’s action and

that the Uniform Commercial Code sections do create a private

right of action.

With regard to the claim for fraud against UBS FS, the June

8, 2007 Memorandum Decision, ruled:

Plaintiff does not allege what specific

conduct UBS FS engaged in that resulted in

defrauding Plaintiff. Throughout his

complaint Plaintiff makes general allegations

that Defendants ‘falsely represent[ed] to

Plaintiff by many promises that Defendants

[would] electronically wire transfer the 19

million dollars at Washington Mutual Bank,

California ... within 24 hours after

confirmed payment of $51,000 which was in

fact false based on the fact that after

payment of the $51,000 on June 14, 2006,

defendant failed to electronically wire

transfer the 19 million ...’ (Doc. 1-2,

Notice of Removal, Exhibit A, Complaint, p.

18 ....)

In his complaint Plaintiff specifically

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alleges that UBS AG and Clive Standish

engaged in an email exchange with Plaintiff

where they allegedly made misrepresentations

promising Plaintiff $19 million after

Plaintiff wired $51,000. (Id., p.24.) 

However, no where in his complaint does

Plaintiff specifically allege that UBS FS

sent any of the emails or otherwise had

anything to do with Plaintiff in this

dispute. In his complaint, Plaintiff joins

UBS FS, Bakersfield as defendant for ‘doing

business in behalf of or together with its

parent corporation UBS AG.’ However,

Plaintiff cannot allege claims against UBS FS

merely by asserting that they were at the

time of the accused conduct corporate,

affiliates, and subsidiaries of UBS AG. see

TPS Utilicom Servs. v. AT&T Corp., 223

F.Supp.2d 1089, 1103 (C.D.Cal.2002).

With regard to the claim for intentional infliction of emotional

distress, the June 8, 2007 Memorandum Decision ruled:

In his complaint, Plaintiff alleges that

‘Clive Standish, UBS AG Bank Head Office, and

all the rest of the above captioned-named

defendants were the legal (proximate) cause

of damages ...’ (Doc. 1-2, ... Complaint, p.

36 ....) Plaintiff claims that he has

suffered ‘sleepless nights, headaches,

causing his blood pressure to rise, loss of

appetite, mental anguish, mental or emotional

distress, humiliation, and other

psychological damage, whenever he thinks of

this fraudulent case ...’ (Id.) While

Plaintiff does alleged [sic] that the ‘above

captioned-named’ Defendants were the cause of

his damages, Plaintiff does not allege any

specific conduct on the part of UBS FS that

caused such damages. Further, even if it

were inferred from the complaint that

Plaintiff is arguing UBS FS somehow engaged

in material misrepresentations towards

Plaintiff, he has failed to show how such

conduct is so extreme or outrageous that it

exceeds all bounds of conduct usually

tolerated in a civilized community. 

Plaintiff has failed to state a claim against

UBS FS or intentional infliction of emotional

distress or any other intentional tort he

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alleges.

Defendants’ motion to dismiss UBS FS from the

complaint is GRANTED WITH LEAVE TO AMEND.

On June 14, 2007, Defendants lodged a proposed Order dismissing

UBS FS and ordering Plaintiff to file an amended complaint within

15 days (Doc. 19). On June 15, 2007, Plaintiff filed a Notice of

Appeal to the Ninth Circuit, purporting to appeal the June 8,

2007 Memorandum Decision (Doc. 27). On September 24, 2007,

Plaintiff’s appeal was dismissed by the Ninth Circuit for lack of

appellate jurisdiction. (Docs. 61-62). On October 31, 2007,

Plaintiff filed the “Motion to Set Aside Order Dismissing With

Leave to Amend UBS FS and To Enter Default Against UBS FS”,

noticing the motion for hearing on December 3, 2007 (Doc. 68).

By Order filed on November 9, 2007, Plaintiff was ordered to

appear on January 7, 2008 and show cause why this action should

not be dismissed for Plaintiff’s failure to file an amended

complaint as required by the June 8, 2007 Memorandum Decision

(Doc. 70). Plaintiff filed a written response to this OSC (Doc.

82). In pertinent part, Plaintiff asserted:

Defendants in this case contended that UBS FS

has no wrong doing. The Court found UBS FS

has no wrong doing. Plaintiff agrees with

the Court that UBS FS committed no wrong

doing. Plaintiff admits UBS FS committed no

wrong doing. Plaintiff by agreeing and

admitting that UBS FS committed no wrong

doing means there are no facts of wrong doing

by UBS FS that could be alleged in the

complaint by way of amendment. The facts of

any wrong doing by UBS FS are none-existent

[sic] in this case. It is therefore

impossible to amend the complaint against UBS

FS when there are no facts of wrong doing to

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allege in the complaint against UBS FS by way

of amendment. 

At the OSC hearing on January 7, 2008, Plaintiff specifically

represented to the Court that he did not intend to amend the

Complaint but then referred to his “Motion to Set Aside Order

Dismissing With Leave to Amend UBS FS and To Enter Default

Against UBS FS”. Because Plaintiff’s positions appeared

contradictory and because Defendants had not yet responded to the 

“Motion to Set Aside Order Dismissing With Leave to Amend UBS FS

and To Enter Default Against UBS FS”, the Court set a briefing

schedule and deferred ruling on the Order to Show Cause.

B. MERITS OF MOTION.

Plaintiff’s “Motion to Set Aside Order Dismissing With Leave

to Amend UBS FS and To Enter Default Against UBS FS” “prays that

the order filed on June 8, 207 [sic] (Doc. 18) dismissing UBS FS

with leave to amend, from this case be set aside and instead, or

order issue entering default upon UBS FS.” 

Plaintiff is seeking reconsideration of the June 8, 2007

Order dismissing UBS FS with leave to amend. 

Because the June 8, 2007 Order is an interlocutory order,

see WMX Techs., Inc. v. Miller, 104 F.3d 1133 (9 Cir.1997), th

discretion exists to reconsider. Kern-Tulare Water Dist. v. City

of Bakersfield, 634 F.Supp. 656, 665 (E.D.Cal.1986), aff’d in

part and rev’d in part on other grounds, 828 F.2d 514 (9th

Cir.1987), cert. denied, 486 U.S. 1015 (1988). “[T]his Court’s

opinions are not intended as mere first drafts, subject to

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revision and reconsideration at a litigant’s pleasure.” Quaker

Alloy Casting Co. v. Gulfco Indus., Inc., 123 F.R.D. 282, 288

(N.D.Ill.1988). “Courts have distilled various grounds for

reconsideration of prior rulings into three major grounds for

justifying reconsideration: (1) an intervening change in

controlling law; (2) the availability of new evidence or an

expanded factual record; and (3) need to correct a clear error or

to prevent manifest injustice.” Kern-Tulare Water Dist., id.. 

Pursuant to Rule 78-230(k)(3), Local Rules of Practice, the party

seeking reconsideration has the duty to indicate “what new or

different facts or circumstances are claimed to exist which did

not exist or were not shown upon such prior motion, or what other

grounds exist for the motion,’ and “why facts or circumstances

were not shown at the time of the prior motion.”

Plaintiff argues that UBS FS is liable for the fraud

committed by its parent corporation, UBS AG, under the doctrine

of piercing the corporate veil. Plaintiff places primary

reliance on FMC Financial Corporation v. Murphee, 632 F.2d 413

(5 Cir.1980). th

In Murphee, the Fifth Circuit reversed a directed verdict on

piercing the corporate veil. Applying Illinois law, the Fifth

Circuit ruled that there was sufficient evidence relevant to

application of the piercing the corporate veil doctrine to make a

subsidiary liable for the acts of the parent corporation, for the

issue to have been presented to the jury.

Plaintiff’s reliance on Murphee is misplaced. The law of

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the forum state is applied in determining whether a corporation

is an alter ego. S.E.C. v. Hickey, 322 F.3d 1123, 1128 (9th

Cir.2003).

As explained in Neilson v. Union Bank of California, N.A.,

290 F.Supp.2d 1101, 1115-1116 (C.D.Cal.2003):

‘The alter ego doctrine arises when a

plaintiff comes into court claiming that an

opposing party is using the corporate form

unjustly and in derogation of the plaintiff’s

interests. In certain circumstances the

court will disregard the corporate entity and

will hold the individual shareholders liable

for the actions of the corporation.’ Mesler

v. Bragg Management Co., 39 Cal.3d 290, 300

... (1985). The purpose of the doctrine is

to bypass the corporate entity for the

purpose of avoiding injustice. Its ‘essence

... is that justice be done[,] ... [and t]hus

the corporate form will be disregarded only

in narrowly defined circumstances and only

when the ends of justice so require.’ Id. at

301 ... See also Roman Catholic Archbishop of

San Francisco v. Superior Court, 15

Cal.App.3d 405, 411 ... (1971)(‘The

terminology “alter ego” or “piercing the

corporate veil” refers to situations where

there has been an abuse of corporate

privilege, because of which the equitable

owner of a corporation will be held liable

for the actions of the corporation,’ citing

Minton v. Cavaney, 56 Cal.2d 576, 579 ...

(1961).

Before the doctrine may be invoked, two

elements must be alleged: ‘First, there must

be such a unity of interest and ownership

between the corporation and its equitable

owner that the separate personalities of the

corporation and the shareholder do not in

reality exist. Second, there must be an

inequitable result if the acts in question

are treated as those of the corporation

alone.’ Sonora Diamond Corp. v. Superior

Court, 83 Cal.App.4th 523, 526 ... (2000);

Mesler, supra, 39 Cal.3d at 300 ... (‘There

is no litmus test to determine when the

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corporate veil will be pierced; rather the

result will depend on the circumstances of

each particular case. There are

nevertheless, two general requirements: “(1)

that there be such unity of interest and

ownership that the separate personalities of

the corporation and the individual no longer

exist and (2) that, if the acts are treated

as those of the corporation alone, an

equitable result will follow,”’ quoting

Automotriz Del Golfo De California S.A. De

C.V. v. Resnick, 47 Cal.2d 792, 796 ...

(1957). See also AT & T V. Compagnie

Bruxelles Lambert, 94 F.3d 586, 591 (9th

Cir.1996).

‘[O]nly a difference in wording is used in

stating the ... concept where the entity

sought to be held liable is another

corporation instead of an individual.’ Las

Palmas Associates v. Las Palmas Center

Associates, 235 Cal.App.3d 1220, 1249 ...

(1991). Like other shareholders, a parent

company is presumed to have an existence

separate from its subsidiaries. Accordingly,

the mere fact that it owns the stock of the

subsidiary will not suffice to prove that the

two entities are alter egos of one another;

rather, the evidence must show that the

wholly-owned subsidiary is merely a conduit

for, or is financially dependent on, the

parent corporation. Institute of Veterinary

Pathology, Inc. v. California Health

Laboratories, Inc., 116 Cal.App.3d 111, 119

... (1981)(‘”With increasing frequency,

courts have demonstrated a readiness to

disregard the corporate entity when a wholly

owned subsidiary is merely a conduit for, or

is financially dependent on, a parent

corporation. In the interests of justice and

to prevent fraud, the courts will ignore the

existence of a corporate entity used to cut

off either causes of action against or

defenses by another corporate entity,”’

quoting 1A Ballantine & Sterling, CALIFORNIA

CORPORATION LAWS, § 296.02, PP.14-32.1-14-33

(4 ed.1980)). TH

Conclusory allegations of ‘alter ego status

are insufficient to state a claim. Rather, a

plaintiff must allege specifically both of

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the elements of alter ego liability, as well

as facts supporting each. In re Currency

Conversion Fee Antitrust Litigation, 265

F.Supp.2d 385, 426 (S.D.N.Y.2003)(‘These

purely conclusory allegations cannot suffice

to state a claim based on veil-piercing or

alter-ego liability, even under the liberal

notice pleading standard’); Wady v. Provident

Life and Accident Co. of America, 216

F.Supp.2d 1060, 1067 (C.D.Cal.2002)(‘More

pertinent for purposes of the current

discussion, none [of the allegations]

contains any reference to UnumProvident being

the alter ego of Provident. None alleges

that UnumProvident treats the assets of

Provident as its own, that it commingles

funds with Provident, that it controls the

finances of Provident, that it shares

officers or directors with Provident, that

Provident is undercapitalized, or that the

separateness of the subsidiary has ceased. 

Without such allegations, the issue is not

adequately raised, and UnumProvident was not

put on notice that this was a theory against

which it should be prepared to defend’);

Kingdom 5-KR-41, Ltd. v. Star Cruises PLC,

... 2002 WL 432390, * 12 (S.D.N.Y., Mar. 20,

2002)(‘[I]n order to overcome the presumption

of separateness afforded to related

corporations, [plaintiff] is required to

plead more specific facts supporting its

claims, not mere conclusory allegations’);

Hokama v. E.F. Hutton & Co., Inc., 566

F.Supp. 636, 647 (C.D.Cal.1983)(‘Defendants

further argue that plaintiffs cannot

circumvent the requirements for secondary

liability by blandly asserting that Madgett,

Consolidated, and Frane are “alter egos” of

other defendants accused of committing

primary violations. This point is well-taken

... If plaintiffs wish to pursue such a

theory of liability, they must allege the

elements of the doctrine. Conclusory

allegations of alter ego status such as those

made in the present complaint are not

sufficient’).

Plaintiff asserts that the Court “found” in the June 6, 2007

Order that “UBS AG Bank Inc. owns, operates, and controls all

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named branches and is the parent company of 1. UBS AG Bank,

Manhattan Branch 2. UBS FS Inc., Weehawken Brach and 3. UBS FS

Inc., Bakersfield Branch. (Doc. 1-2, Notice of Removal, Exhibit

A, Complaint, p. 5, filed May 6, 2007).” Plaintiff contends that

this “finding” satisfies the control element stated in Murphee. 

Plaintiff then refers to allegations in the Amended Complaint

detailing alleged fraudulent actions or representations by UBS

AG. In his reply brief, Plaintiff asserts:

Annex 3, amended complaint (also Exh. 3) in

the second to the last paragraph, advertises

that ‘UBS Financial Services, Inc., a

registered dealer/broker offering securities,

trading, brokerage and related services and

products’ [different fact] proves, admits,

means that UBS FS is being used by UBS AG ‘as

a marketing conduit’. Attempts to shield

itself from liability based on its subsidiary

activities, is futile because piercing the

corporate veil is appropriate and the alter

ego is satisfied.

Plaintiff cites United States v. Toyota Motor Corp., 561 F.Supp.

354, 359 (C.D.Cal.1983) as authority for imposition of alter ego

liability on UBS FS for the actions of UBS AG based on this

assertion. Toyota Motor Corp. does not involve the issue of

alter ego liability but, rather, in personam jurisdiction.

Plaintiff further refers in his reply brief to the

allegations in the Amended Complaint that: 

Defendant UBS Financial Services Inc. with

address at 10000 Stockdale Highway, 1

Riverwalk, Suite 270, Bakersfield,

California, is a branch of UBS AG Bank Inc

headquartered at Zurich, Switzerland as

explained (Annex 2) by its internet

advertisement .... When the latter website is

mouse clicked, the linkage to UBS AG Bank

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appears showing that UBS AG Bank of

Switzerland is the parent company of UBS

Financial Services, Bakersfield Branch (Annex

3). 

Plaintiff argues that:

The portrayal, advertisement by UBS AG that

UBS FS is directly linked to UBS AG not to

UBS FS in Weehawken, New Jersey, not to UBS

Americas, Inc. proves that UBS AG is the

parent corporation and UBS FS is a branch of

UBS AG. UBS AG and UBS FS are both estopped

to show by its documentation that parent

corporation of UBS FS Bakersfield is UBS FS

Weehawken, N.J. and UBS Americas, Inc. is

completely out of the picture. This shows

unity of interest and ownership between UBS

AG and UBS FS as far as UBS FS and UBS AG

have portrayed themselves to the public.

The allegation in the complaint that UBS AG

‘owns, operates, controls all above-named

branches’ (amended complaint, p. 5, line 7-8)

and the allegation that ‘liability of the

head office of UBS AG Bank Inc. is a

liability of all its branches being part of

the same corporation’ (p. 6, line 13-14,

amended complaint) [different fact] [sic]

which include UBS FS are allegations that UBS

AG operates and controls UBS FS as a branch

and therefor [sic] is an allegation of unity

of ownership and interest between them as

evidenced by Exh. 1, advertisement and

portrayal by UBS AG that UBS FS is a branch,

when the word ‘Locations’ is mouse clicked it

gives a list of states in the US with ‘Branch

Locations’ of UBS AG and when California is

mouse clicked it gives a list of cities with

‘Branch Locations’ of UBS AG leading to UBS

FS Bakersfiled [sic] branch. The

advertisement does not say ‘Subsidiary

Locations’ and nothing is stated that UBS FS

is a branch of UBS Americas Inc. nor is there

anything stated that UBS FS Bakersfield,

California is a branch of UBS FS head office

in Weehawken, New Jersey. Also evidenced by

Exh. 2, when the website address of

Bakersfield Branch is mouse clicked it leads

to UBS AG of Switzerland. Further evidenced

by Exh. 3 that UBS FS is ‘offering

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securities, trading, brokerage and related

products and services’ showing that UBS FS is

a ‘marketing conduit’ of UBS AG satisfying

the alter ego doctrine ... The advertisement

of UBS AG that UBS FS is a branch puts both

entities in estoppel to show that UBS FS is a

subsidiary.

Plaintiff’s assertions are obscure. Plaintiff seriously

misunderstands the procedural posture of this action and the

function and effect of Rule 12 pleading motions. At the hearing

on January 7, 2007, Plaintiff specifically represented to the

Court that he did not intend to amend the Complaint. Plaintiff’s

motion for reconsideration cannot be granted in the absence of

amendment because no facts are alleged in the Complaint from

which the required elements to pierce the corporate veil to make

UBS FS liable for the actions or omissions of UBS AG. If

Plaintiff intends to precede against UBS FS on the theory that it

is the alter ego of UBS AG, Plaintiff must file an amended

complaint alleging the elements for alter ego liability required

by California law and facts to support that claim. For example,

in Associated Vendors, Inc. v. Oakland Meat Co., 210 Cal.App.2d

825, 838-840 (1962), the Court of Appeal listed the variety of

factors pertinent to the imposition of alter ego liability:

Commingling of funds and other assets,

failure to segregate funds of the separate

entities, and the unauthorized diversion of

corporate funds or assets to other than

corporate uses ...; the treatment by an

individual of the assets of the corporation

as his own ...; the failure to obtain

authority to issue stock or to subscribe to

or issue the same ...; the holding out of an

individual that he is personally liable for

the debts of the corporation ...; the failure

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to maintain minutes or adequate corporate

records, and the confusion of the records of

separate entities ...; the identical

equitable ownership in the two entities; the

identification of the equitable owners

thereof with the domination and control of

the two entities; identification of the

directors and officers of the two entities in

the responsible supervision and management;

sole ownership of all of the stock in a

corporation by one individual or the members

of a family ...; the use of the same office

or business location; the employment of the

same employees and/or attorney ...; the use

of a corporation as a mere shell,

instrumentality or conduit for a single

venture or the business of an individual or

another corporation ...; the concealment and

misrepresentation of the identity of the

responsible ownership, management and

financial interest, or concealment of

personal business activities ...; the

disregard of legal formalities and the

failure to maintain arms-length relationships

among related entities ...; the use of the

corporate entity to procure labor, services

or merchandise for another person or entity

...; the diversion of assets from a

corporation by or to a stockholder or other

person or entity, to the detriment of

creditors, or the manipulation of assets and

liabilities between entities so as to

concentrate the assets in one and the

liabilities in another ...; the contracting

with another with intent to avoid performance

by use of a corporate entity as a shield

against personal liability, or the use of a

corporation as a subterfuge of illegal

transactions ...; and the formation and use

of a corporation to transfer to it the

existing liability of another person or

entity. 

Plaintiff’s reliance on the ownership connections between UBS AG

and UBS FS is simply not sufficient to allege a claim against UBS

FS based on alter ego; Plaintiff must allege facts from which it

may be inferred that there is such unity of interest and

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ownership that the separate personalities of UBS FS and UBS AG 

no longer exist and that, if the acts are treated as those of UBS

AG alone, an equitable result will follow. Unless Plaintiff

files a Second Amended Complaint to adequately allege the

liability of UBS FS for the actions or representations of UBS AG

as an alter ego, UBS FS is no longer a party to this action.

Plaintiff further seeks reconsideration of the June 6, 2007

Order on the ground that UBS FS is liable for the actions or

inactions of UBS AG on the basis of agency.

Plaintiff’s contention is without merit. Plaintiff has

conceded that UBS FS engaged in no wrongdoing. The cases upon

which Plaintiff relies in asserting that UBS FS may be liable as

an agent all involved whether personal jurisdiction existed. See

S & R Davis Intern., Inc. v. The Republic of Yemen, 218 F.3d

1292, 1298 (11 Cir.2000); Chan v. Society Expeditions, Inc., 39 th

F.3d 1398, 1405 (9 Cir.1994), cert. denied, 514 U.S. 1004 th

(1995); Gallagher v. Mazda Motor of America, Inc., 781 F.Supp.

1079, 1084 (E.D.Pa.1992). 

Plaintiff seeks reconsideration of the June 6, 2007 Order on

the ground that “the presence of UBS FS is necessary to establish

and maintain the original jurisdiction of the Court.” Plaintiff,

citing International Shoe Co. v. Washington, 326 U.S. 310 (1945),

and Perkins v. Benguet Consol. Min. Co., 342 U.S. 437 (1952),

argues:

[UBS Financial Services, Bakersfield Branch]

has been doing financial services in

Bakersfield, California as further shown by

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its appearance in the Southern Pacific Bell

Company’s directory telephone listing for a

long time. UBS Financial Service,

Bakersfield Branch, California has been doing

business with the people of Bakersfield on a

permanent, continuous, systematic basis

subjecting it and its parent company UBS AG

Bank to the general jurisdiction of this

Court.

Plaintiff misunderstands the difference between subject

matter jurisdiction and personal jurisdiction. As explained in

Insurance Corp. v. Compagnie des Bauxites, 456 U.S. 694, 701-703

(1982):

The validity of an order of a federal court

depends upon that court’s having jurisdiction

over both the subject matter and the parties

... The concepts of subject-matter and

personal jurisdiction, however, serve

different purposes, and these different

purposes affect the legal character of the

two requirements ....

Federal courts are courts of limited

jurisdiction. The character of the

controversies over which federal authority

may extend are delineated in Art. III, § 2,

cl. 1. Jurisdiction of the lower federal

courts is further limited to those subjects

encompassed within a statutory grant of

jurisdiction. Again, this reflects the

constitutional source of federal judicial

power: Apart from this Court, that power only

exists ‘in such inferior Courts as the

Congress may from time to time ordain and

establish.’ Art. III, § 1.

...

... The requirement that a court have

personal jurisdiction flows not from Art.

III, but from the Due Process Clause. The

personal jurisdiction requirement recognizes

and protects an individual liberty interest. 

It represents a restriction on judicial power

not as a matter of sovereignty, but as a

matter of individual liberty. Thus, the test

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for personal jurisdiction requires that ‘the

maintenance of the suit ... not offend

“traditional notions of fair play and

substantial justice.”’ International Shoe Co.

v. Washington, 326 U.S. 310, 316 (1945) ....

This Court has subject matter jurisdiction over this action

because of the complete diversity of citizenship of the parties;

this subject matter jurisdiction is conferred by statute. There

is no issue in this action of personal jurisdiction; it has not

been raised by any of the Defendants. “Because the requirement

of personal jurisdiction represents first of all an individual

right, it can, like other such rights, be waived.” Id. at 703.

Plaintiff’s premise that UBS Financial Services, Bakersfield

Branch, is necessary to establish the original jurisdiction of

this Court is mistaken.

Plaintiff’s motion seeks to impose a default against UBS FS

based on Plaintiff’s contentions that the Answer of UBS FS raises

sham and frivolous defenses. This issue has been rejected in

other rulings in this action and will not be addressed again. 

Plaintiff’s reply brief asserts that the June 6, 2007 Order

should be set aside because the parties mischaracterized Docket

No. 33. This issue also has been rejected by another ruling in

this action and will not be addressed again. Plaintiff is again

admonished that his misunderstanding of the law and stubborn

refusal to accept the analysis of the law provided, coupled with

his insistence on converting pleading moitons to dispositive

motions by arguing the underlying merits of his claims, is

unduly, unnecessarily, and vexatiously multiplying the

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proceedings. There is no justification for the overly prolix and

erroneous arguments and “legal” contentions repeatedly raised by

Plaintiff after he has been advised by the Court of the

applicable law. The Court is not required to do more,

Plaintiff’s pro se status notwithstanding. Continued failure to

follow the Court’s orders may result in sanctions, including

terminating sanctions.

For the reasons stated:

1. Plaintiff’s “Motion to Set Aside Order Dismissing With

Leave to Amend UBS FS and To Enter Default Against UBS FS” is

DENIED.

IT IS SO ORDERED.

Dated: July 14, 2008 /s/ Oliver W. Wanger 

668554 UNITED STATES DISTRICT JUDGE

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