Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_12-cv-01998/USCOURTS-casd-3_12-cv-01998-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1331 Fed. Question

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

STEVEN SCHNEIDER, and All Others

Similarly Situated,

Plaintiff,

CASE NO. 12cv1998 JM(DHB)

ORDER DENYING MOTION TO

DISMISS FOR LACK OF SUBJECT

MATTER JURISDICTION;

GRANTING MOTION TO DISMISS

FOR IMPROPER VENUE 

vs.

BISHOP, WHITE, MARSHALL & WEIBEL,

P.S.,

Defendant.

Defendant Bishop, White, Marshall & Weibel, P.S. (“Defendant”) moves to dismiss the

complaint for lack of subject matter jurisdiction and for improper venue and to strike the class

allegations. Plaintiff Steven Schneider opposes all motions. Pursuant to Local Rule. 7.1(d)(1), the

court finds the matters presented appropriate for decision without oral argument. For the reasons set

forth below, the court denies the motion to dismiss for lack of subject matter jurisdiction but grants

the motion to dismiss for improper venue. The Clerk of Court is instructed to close the file. 

BACKGROUND

On August 13, 2012, Plaintiff commenced this action pursuant to 28 U.S.C. §1332(d)(2), the

Class Action Fairness Act (“CAFA”), alleging two state law causes of action for violation of Penal

Code §632 and negligence. Plaintiff, a citizen of California, alleges that Defendant is incorporated

in Washington State, maintains its principal place of business in that state, and does business in the

state of California. (Compl. ¶ 3). Defendant is a law firm. (White Decl. ¶1).

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Plaintiff’s claims arise from a telephone call from Defendant to Plaintiff “about an alleged debt

that Defendant was attempting to collect from Plaintiff.” (Compl. ¶10). During the June 20, 2012

conversation,the parties discussed “highlypersonal and private financial information that Plaintiff had

not openly discussed with others.” (Compl. ¶11). Unbeknownst to Plaintiff, Defendant recorded the

conversation. (Compl. ¶12). Plaintiff was not informed of Defendant’s policy to record all

conversations until he asked whether the telephone calls were recorded or monitored. (Compl. ¶15). 

In broad brush, Plaintiff alleges that he and the class he seeks to represent, consisting of all

California residents who had their telephone conversations monitored by the Defendant without their

consent, are entitled to recover statutory or actual damages under Cal. Penal Code §632. (Compl.

¶¶31-40). With respect to the negligence claim, Plaintiff alleges that Defendant “negligently and

recklessly” engaged in eavesdropping, thereby violating Plaintiff’s right to privacy.

Defendant moves to dismiss the complaint for lack of subject matter jurisdiction or,

alternatively, to dismissfor improper venue and to strike the class action allegations. Plaintiff opposes

the motion.

DISCUSSION

Subject Matter Jurisdiction Under CAFA

Defendant contends that it “is incorporated in California, White declaration at ¶9, Ex. 3,”

(Motion at p.11 at 15-16), and therefore the court lacks diversity jurisdiction over the action under

CAFA because both parties are citizens of the same state. Based upon the evidence submitted by

Defendant, the argument is devoid of merit. 

Under CAFA, the court possesses original jurisdiction where the amount in controversy

exceeds $5,000,000 and “any member of a class of plaintiffs is a citizen of a State different from any

defendant.” 28 U.S.C. §1332(d)(2)(A). For diversity purposes, a corporation is a citizen of its state

of incorporation and its principal place of business. 28 U.S.C. §1332(c)(1). Plaintiff alleges that

Defendant is incorporated in Washington State and maintains its principal place of business in that

state. (Compl. ¶3). These allegations establish the minimal diversity required by CAFA.

Even though subject matter jurisdiction may never be waived and is always subject to attack,

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Attorneys Trust v. Videotape Computer Products, Inc., 93 F.3d 593, 594-95 (9 Cir. 1996), th

Defendant’s showing is woefully inadequate. In its brief, Defendant purports to make an evidentiary

showing that it “is incorporated in California.” (Motion at p.11 at 15-16). However, the White

Declaration relied upon for this evidentiary showing does not establish that Defendant is incorporated

in California. Rather, the White declaration simply states that Defendant “is registered as a California

corporation.” (White Decl. ¶9). Notably, the supporting exhibit simply evidences the name change

of a Foreign Corporation from Bishop, White & Marshall, P.S. to Bishop, White, Marshall & Weibel,

P.S. The exhibit, issued by the California State Secretary of State, notes that Defendant is “a

corporation organized and existing under the laws of Washington.” (White Decl. Exh. 3). While

Defendant is licensed to do business in California, the exhibit establishes that Defendant is

incorporated in Washington State, and not California. This evidence is directly contrary to 1

Defendant’s erroneous assertion in its brief that “it is incorporated in California.” Accordingly,

Defendant fails to undermine the complaint’s allegations that CAFA subject matter jurisdiction is

appropriate.

In sum, the court denies the motion to dismiss for lack of subject matter jurisdiction.

The Venue Motion

Plaintiff alleges that venue is appropriate under 28 U.S.C. §§1391(b) and 1441(a). (Compl.

¶4). At the outset the court notes that the removal statute, 28 U.S.C. §1441(a), does not apply as this

action was originally filed in this court. Applying the general venue provision relied upon byPlaintiff,

the court concludes that venue is improper in this judicial district. As no prejudice appears to arise

from the dismissal of the action, the court dismisses the action without prejudice rather than

transferring the action pursuant to 28 U.S.C. §1406. 

Under the general venue statute, 28 U.S.C. §1391(b), venue is proper (1) in the judicial district

where Defendant resides; (2) in the judicial district “in which a substantial part of the events or

omissions giving rise to the claim occurred;” or (3) if there is no district in which an action may

otherwise be brought, the judicial district in which Defendant is subject to the court’s personal

In its moving papers, Defendant does not argue that it maintains its principal place of business 1

in California.

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jurisdiction. 28 U.S.C. §§1391(b)(1) - (3). In this circuit, the term “resides” is not synonymous with

citizenship. Arley v. United Pacific Ins. Co., 379 F.2d 183, 185 (9 Cir. 1967). Under this view,

th

venue under 28 U.S.C. §1391(b)(1) is appropriate either in Washington State, where Defendant

maintains its principal office, or in Concord, CA, located in the Northern District of California, where

Defendant maintains an office. Under 28 U.S.C. §1391(b)(2) venue is appropriate (at least) in the

Central District of California, the judicial district where Plaintiff received the telephone call and a

substantial part of the events occurred. (Schneider Decl. ¶5). Venue in this district is not appropriate 2

under 28 U.S.C. §1391(b)(3) because venue is otherwise appropriate under 28 U.S.C. §§1391(b)(1)

and 1391(b)(2). As venue is not appropriate in this judicial district under the general venue statute,

the court dismisses the action without prejudice.

Even if Plaintiff alleged venue pursuant to 28 U.S.C. §1391(d), he would not prevail under the

complaint’s current allegations. Under the special venue rule for corporations in states with multiple

districts, a corporation is deemed to reside in any judicial district in which it is subject to personal

jurisdiction. 28 U.S.C. §1391(d). Defendant is deemed to reside in any district in which its “contacts”

would subject it to personal jurisdiction if that district were a separate state; or, if there is no such

judicial district, then it is “deemed to reside in the district within which it has the most significant

contacts.” 28 U.S.C. §1391(d). Here, there are no allegations, or evidence, that Defendant possesses

any contacts with this judicial district. Consequently, 28 U.S.C. §1391(d) is not helpful to Plaintiff. 

In sum, the court denies the motion to dismissfor lack of subject matter jurisdiction but grants

the motion to dismiss for improper venue. All other motions are denied as moot. The Clerk of Court

is instructed to close the file.

IT IS SO ORDERED.

DATED: November 27, 2012

 Hon. Jeffrey T. Miller

 United States District Judge

cc: All parties

The court notes that venue would also be appropriate in the judicial district from which the 2

telephone call originated. The parties do not identify the originating location of the telephone call.

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