Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_05-cv-00393/USCOURTS-caed-1_05-cv-00393-0/pdf.json

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

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1 All citations are to Documents filed in the surviving case

(i.e., Case No. 1:05-00393). 

1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

CIGARETTE KING and SHAUKAT “SAL”

MAREDIA,

Plaintiffs,

v.

PHILIP MORRIS USA, and DOES 1

through 10, inclusive,

Defendants.

________________________________

)

)

)

)

)

)

)

)

)

)

)

)

)

)

1:05-cv-00393 OWW SMS

1:05-CV-00402 OWW SMS

MEMORANDUM DECISION AND

ORDER RE DEFENDANT’S MOTION

TO DISMISS AND PLAINTIFF’S

REQUEST FOR LEAVE TO AMEND

I. INTRODUCTION

This memorandum decision and order relates to two cases with

the same parties and identical issues that were consolidated

under Case No. 1:05-cv-00393. Defendant Philip Morris USA, Inc.

(“Defendant” or “Philip Morris”) moves to dismiss the Complaints

of Plaintiffs Cigarette King and Shaukat “Sal” Maredia’s

(“Plaintiffs”). (Doc. 11, Def.’s Mem.).1 Plaintiffs do not

oppose the motions and request leave to amend. (Doc. 20, Pl.’s

Case 1:05-cv-00393-OWW -SMS Document 24 Filed 06/15/05 Page 1 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

Response). Defendant opposes Plaintiffs’ request for leave to

amend. (Doc. 21, Def.’s Reply).

II. PROCEDURAL HISTORY AND FACTUAL BACKGROUND

Plaintiffs filed their original Complaints pro se in the

Superior Court of California, County of Kern and in the Superior

Court of California, County of Tulare on February 3, 2005. (See

Case Nos. 1:05-cv-00393, 1:05-cv-00402, Doc. 1, Notice of

Removal, Ex. A). Philip Morris removed the cases to federal

district court on March 3, 2005, based on diversity of

citizenship. (Id. at ¶ 4). On March 28, 2005, Philip Morris

moved for dismissal pursuant to Fed. R. Civ. P. 12(b)(6). (Doc.

11, Def.’s Mem.).

On May 10, 2005, Plaintiffs filed a Response to

Philip Morris’ Motion to Dismiss. (Doc. 20, Pl.’s Response). 

The “Response” is a non-opposition to Philip Morris’ motion and a

request for leave to amend. (Id. at 3 (“Plaintiff respectfully

requests that Defendants [sic] Motion be sustained and that the

Court grant Plaintiff sufficient leave to properly amend the

Complaint as to any causes of action, the allegations

constituting such cause of action and/or the prayer for damages,

as appropriate.”)). Philip Morris opposes the request for leave

to amend. (Doc. 21, Def.’s Reply).

This breach of contract action arises out of Plaintiffs’

allegation that Philip Morris breached its agreement with

Plaintiffs to pay for merchandise, including “tobacco, supplies,

promotional allowances and merchandise payments.” (See Case No.

Case 1:05-cv-00393-OWW -SMS Document 24 Filed 06/15/05 Page 2 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

1:05-cv-00402, Doc. 1, Compl. ¶¶ 5, 6, 8, 10, 12). Plaintiffs’

claims in Case No. 1:05-cv-00402 relate to three “Cigarette King

Retail Tobacco Stores” located in Bakersfield, California. (See

id. at Ex. A). Plaintiffs claim Philip Morris owes them

approximately $262,676.00 for merchandise relating to the

Bakersfield stores.

Plaintiffs filed an identical Complaint against Philip

Morris in the Superior Court of California, County of Tulare, on

February 3, 2005. (See Case No. 1:05-cv-00393, Doc. 1, Notice of

Removal, Ex. A Tulare Compl. at Ex. A). The Tulare County Case

relates to “Cigarette King Retail Tobacco Stores” located in

Visalia, California, and another store located in Porterville,

California. Plaintiffs allege that Philip Morris owes them

$74,184.00 as to the Visalia and Porterville stores. (Id. at Ex.

A, Tulare Compl. ¶¶ 5, 6, 8, 10, 12). 

Oral argument was heard on May 23, 2005. (Doc. 23,

Minutes). Mr. Shaukat Maredia appeared pro se. 

Steven S. Spaulding, Esq., appeared on behalf of Defendant. At

oral argument, Case No. 1:05-cv-00393 and 1:05-cv-00402 were

consolidated for all purposes under Case No. 1:05-cv-00393. This

memorandum decision relates to the Complaints for both cases.

III. LEGAL ANALYSIS

A. Legal Standard for Motion to Dismiss Pursuant to Fed.

R. Civ. P. 12(b)(6).

Plaintiffs do not oppose Defendant’s Motion to Dismiss and

request leave to amend. 

Case 1:05-cv-00393-OWW -SMS Document 24 Filed 06/15/05 Page 3 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

Plaintiff Mr. Maredia is a pro se litigant. The court has a

“duty...to construe pro se pleadings liberally.” Zichko v.

Idaho, 247 F.3d 1015, 1020 (9th Cir. 2001) (citing Hamilton v.

U.S., 67 F.3d 761, 764 (9th Cir. 1995) (citing Hughes v. Rowe,

449 U.S. 5, 9 (1980) (quotation omitted)). The pleadings of pro

se litigants “are held to less stringent standards than formal

pleadings drafted by lawyers.” Hughes, 449 U.S. at 10 (quotation

omitted). A pro se litigant should be given leave to amend after

the deficiencies in the complaint have been explained, unless

there are no facts alleged that would entitle the litigant leave

to amend. Eldridge v. Block, 832 F.2d 1132, 1135-6 (9th Cir.

1987); Ramirez v. Galaza, 334 F.3d 850, 861 (9th Cir. 2003).

Fed. R. Civ. P. 12(b)(6) allows a defendant to attack a

complaint for failure to state a claim upon which relief can be

granted. A motion to dismiss under Fed. R. Civ. P. 12(b)(6) is

disfavored and rarely granted: “[a] complaint should not be

dismissed unless it appears beyond doubt that plaintiff can prove

no set of facts in support of his claim which would entitle him

to relief.” Van Buskirk v. CNN, Inc., 284 F.3d 977, 980

(9th Cir. 2002) (citations omitted). In deciding whether to

grant a motion to dismiss, the court “accept[s] all factual

allegations of the complaint as true and draw[s] all reasonable

inferences in favor of the nonmoving party.” TwoRivers v. Lewis,

174 F.3d 987, 991 (9th Cir. 1999). 

“The court need not, however, accept as true allegations

that contradict matters properly subject to judicial notice or by

exhibit. Nor is the court required to accept as true allegations

that are merely conclusory, unwarranted deductions of fact, or

Case 1:05-cv-00393-OWW -SMS Document 24 Filed 06/15/05 Page 4 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5

unreasonable inferences.” Sprewell v. Golden State Warriors,

266 F.3d 979, 988 (9th Cir. 2001) (citations omitted). For

example, matters of public record may be considered, including

pleadings, orders and other papers filed with the court or

records of administrative bodies. See Mack v. South Bay Beer

Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986). Conclusions of

law, conclusory allegations, unreasonable inferences, or

unwarranted deductions of fact need not be accepted. See Western

Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981). 

B. Standing.

Philip Morris argues that Plaintiff’s Complaints should be

dismissed because Plaintiffs fail to properly allege standing. 

(Doc. 10, Def.’s Mem. 3). Standing to sue is “an essential and

unchanging part of the case-or-controversy requirement of Article

III [of the United States Constitution].” Lujan v. Defenders of

Wildlife, 504 U.S. 555, 560 (1992). “In essence the question of

standing is whether the litigant is entitled to have the court

decide the merits of the dispute or of particular issues.” 

Warth v. Seldin, 422 U.S. 490, 498 (1975). To establish a “case

or controversy” within the meaning of Article III, a plaintiff

must establish three elements: (1) an injury in fact; (2) a

causal connection between the injury and defendant’s conduct or

omissions; and (3) redressability, or the likelihood that the

injury will be redressed by a favorable decision. Id. at 560-1. 

In addition to these requirements, the doctrine of standing is

also based on “prudential considerations,” including that the

alleged injury be in the plaintiff’s own interest, as opposed to

Case 1:05-cv-00393-OWW -SMS Document 24 Filed 06/15/05 Page 5 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

6

in the interest of some third party. See Elk Grove Unified

School Dist. v. Newdow, 542 U.S. 1, 124 S.Ct. 2301, 2308-9

(2004).

Philip Morris does not argue that Plaintiffs have failed to

establish an injury-in-fact, causation, or redressability. Such

arguments pertain to the accuracy of Plaintiff’s allegations

(rather than to their sufficiency) and would therefore be

properly addressed by a motion to dismiss for lack of subject

matter jurisdiction under Fed. R. Civ. P. 12(b)(1). Stevens v.

Harper, 213 F.R.D. 358, 370 n. 12 (E.D. Cal. 2002) (“[T]he proper

vehicle for contesting a court’s subject matter jurisdiction,

including the plaintiff’s lack of standing, is Rule 12(b)(1).”). 

Instead, Philip Morris argues that Plaintiff’s Complaints should

be dismissed pursuant to Rule 12(b)(6) for a failure to

sufficiently allege standing. When a motion to dismiss

challenges the sufficiency of the allegations, the motion is

properly brought under Rule 12(b)(6) or 12(b)(1). See id.

(citing Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982)). 

“[W]here a defendant contends that the complaint ‘simply fails to

allege facts upon which subject matter jurisdiction can be

based,’ the court must assume that all facts alleged in the

complaint are true; thus, ‘the plaintiff, in effect, is afforded

the same procedural protection’ under Rule 12(b)(1) as he would

receive on a 12(b)(6) motion.” Id. (quoting Adams, 697 F.2d at

1219).

Prudential considerations require a court to gauge a party’s

standing or capacity to sue through consideration of the specific

common law, statutory, or constitutional claims that a party

Case 1:05-cv-00393-OWW -SMS Document 24 Filed 06/15/05 Page 6 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2 The handwritten portions of what appears to be a Philip

Morris standard form contract (attached to Plaintiffs’ Complaints

at Exhibit C) are almost illegible. During oral argument,

counsel for Philip Morris stated that Philip Morris was not able

to locate the contract.

7

presents; i.e., “whether the particular plaintiff is entitled to

an adjudication of the particular claims asserted.” Allen v.

Wright, 468 U.S. 737, 752 (1984). Plaintiffs’ claims here arise

out of an alleged breach of contract. Philip Morris argues that

Plaintiffs fail to allege facts supporting their standing to sue

because the contract attached to Plaintiffs’ Complaint “is devoid

of any reference to Mr. Maredia or Cigarette King.” (Doc. 11,

Def.’s Mem. 3-4 (emphasis in original)). Furthermore,

Philip Morris notes that the contracts attached to the Complaints

are between Philip Morris and Wonder Cigarettes; the contracts

were executed by a person named Masoud Abbasi on behalf of

Wonder Cigarettes; and the address listed in the contract does

not match the addresses of the stores alleged in the Complaints.2

(Id.). 

Philip Morris argues that Plaintiffs’s allegations are not

clear as to “whether [Plaintiffs] are the real parties in

interest in this matter, or whether Wonder Cigarettes is the real

party in interest.” (Id. at 4). Philip Morris cites Fed. R.

Civ. P. 17(a) in support of its argument, which provides that

“[e]very action shall be prosecuted in the name of the real party

in interest.” Rule 17(a) further provides that “[n]o action

shall be dismissed on the ground that it is not prosecuted in the

name of the real party in interest until a reasonable time has

been allowed after objection for ratification of commencement of

Case 1:05-cv-00393-OWW -SMS Document 24 Filed 06/15/05 Page 7 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3 Plaintiffs cite Cal. Civ. Proc. § 472 in support of its

request for leave to amend. (See Doc. 18, Pl.’s Non-Opposition). 

Federal district courts sitting in diversity apply the

substantive law of the forum state, but apply procedural rules as

stated in the Federal Rules of Civil Procedure. Erie R.R. Co. v.

Tompkins, 30 U.S. 64, 78 (1938). Fed. R. Civ. P. 15(a) therefore

governs Plaintiffs’ request to amend. The sections of the

California Code of Civil Procedure that Plaintiffs cite do not

apply.

8

the action by, or joinder of substitution of, the real party in

interest....”

Plaintiffs allege that they “entered into a contract

(Attached Exhibit “C”) with Phillip [sic] Morris USA....” 

(Doc. 1, Compl. ¶ 12). The contracts to which the Complaints

refers are almost illegible, although they appear to name

“Wonder Cigarettes” as a party. A plaintiff must allege facts

supporting its standing to sue, including that it is the correct

plaintiff. Plaintiffs’ allegations, viewed in light of the

contracts attached to Plaintiffs’ Complaints, are ambiguous at

best and are not sufficient to establish that Plaintiffs are the

correct parties in interest. 

Plaintiffs do not oppose Defendants’ motion to dismiss. 

Plaintiffs instead request leave to amend their Complaints. 

During oral argument, Plaintiff Mr. Maredia stated that “Wonder

Cigarettes” is a fictitious name and that he possesses and can

produce a contract that names himself and/or Cigarette King as a

party. Fed. R. Civ. P. 15(a) provides that “a party may amend

the party’s pleading only by leave of court or by written consent

of the adverse party; and leave shall be freely given when

justice so requires.”3 The propriety of a motion for leave to

Case 1:05-cv-00393-OWW -SMS Document 24 Filed 06/15/05 Page 8 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

9

amend is generally determined by reference to several factors:

(1) undue delay; (2) bad faith; (3) futility of amendment; and

(4) prejudice to the opposing party. Hurn v. Retirement Fund

Trust of Plumbing, Heating and Piping Indus. of S. Cal., 648 F.2d

1252, 1254 (9th Cir. 1981). 

Philip Morris opposes Plaintiffs’ request for leave to

amend. (Doc. 21, Def.’s Reply). Philip Morris argues that

Plaintiffs’ Complaints should be dismissed without leave to amend

because Plaintiffs’ Response does not explain how it intends to

cure the defects in its Complaints. (Id. at 1). Philip Morris’

argument against granting leave to amend is not persuasive in

view of clear Ninth Circuit precedent that a pro se litigant must

be given leave to amend after the deficiencies in the complaint

have been explained, unless there are no facts on which a claim

could succeed. Eldridge, 832 F.2d at 1135-6; Ramirez, 334 F.3d

at 861. In addition, Philip Morris does not explain why

amendment would be futile and does not argue that Plaintiffs’

request would cause undue delay, that it is the result of bad

faith, or that granting leave to amend would cause Philip Morris

prejudice. 

Philip Morris’ only argument against granting leave to amend

is that no weight should be given to Plaintiff’s argument that he

is without counsel, and cites the Court’s Informational Order

that requires pro se plaintiffs to adhere to the same legal

standards as all other parties appearing before the court. (Id.

at 2). However, Philip Morris fails to identify a single Local

Rule, Federal Rule of Civil Procedure, or Order with which

Plaintiff has not complied. This demonstrates a lack of

Case 1:05-cv-00393-OWW -SMS Document 24 Filed 06/15/05 Page 9 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

10

knowledge of the law regarding pro se pleadings and the

precedence the Federal Rules of Civil Procedure take over local

court rules. 

Philip Morris’ argument for dismissal is that Plaintiffs do

not have standing because they fail to plead facts supporting

that they are the parties in interest. Defendant cites Fed. R.

Civ. P. 17(a) in support of its argument, which requires that an

action be brought by the real party in interest. However, Fed.

R. Civ. P. 17(a) further provides that no action shall be

dismissed because it is not prosecuted by the correct party in

interest until a reasonable time has been allowed for the real

party in interest to commence the action.

Defendant’s Motion to Dismiss Plaintiff’s Complaints on the

grounds of failure to allege standing to sue is GRANTED with

leave to amend.

2. Requirement for Corporation to be Represented by

Counsel.

Philip Morris also argues that Plaintiff Cigarette King be

dismissed from the matter because it is not represented by an

attorney. Plaintiffs’ Complaints do not specify what type of

entity Plaintiff Cigarette King claims to be. Assuming

Cigarette King is a corporation, the rule is that a corporation

can only appear in court through a licensed attorney. U.S. v.

High Country Broadcasting Co., Inc., 3 F.3d 1244, 1245 (9th Cir.

1993); In re America West Airlines, 40 F.3d 1058, 1059 (9th Cir.

1994); see also Merco Constr. Engineers, Inc. v. Municipal Ct.,

21 Cal.3d 724, 730 (1978); Thomas G. Ferruzo, Inc. v. Super. Ct.,

Case 1:05-cv-00393-OWW -SMS Document 24 Filed 06/15/05 Page 10 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

11

104 Cal. App. 3d 501, 502 (1980). 

Plaintiff Mr. Maredia stated during oral argument that

Cigarette King is a fictitious name. Plaintiff was informed that

the proper way to name such an entity use the phrase “doing

business as” or “dba.” Plaintiff was also informed that he must

properly identify all parties named in the complaint.

Philip Morris’ Motion to Dismiss Cigarette King as a

plaintiff on the grounds it is not properly identified in the

pleading is GRANTED with leave to amend.

IV. CONCLUSION

For all the foregoing reasons, Defendant’s Motions to

Dismiss Plaintiff’s Complaints are GRANTED with leave to

amend. Plaintiffs shall have 30 days following the date of

service of this order to file an amended complaint. 

Defendant shall have 30 days following service of the

amended complaint to respond.

SO ORDERED. 

DATED: June 15, 2005. 

/s/ OLIVER W. WANGER 

______________________________

 Oliver W. Wanger

UNITED STATES DISTRICT JUDGE

Case 1:05-cv-00393-OWW -SMS Document 24 Filed 06/15/05 Page 11 of 11