Opinion
CIVIL 3:23-CV-02106
01-17-2024
FRANK TUFANO, Plaintiff v. JAKE LEVY, et al., Defendants
Mannion, Judge
REPORT AND RECOMMENDATION
Susan E. Schwab, United States Magistrate Judge
Because the court is required to consider sua sponte whether it has subject-matter jurisdiction, Fort Bend Cty., Tex. v. Davis, 139 S.Ct. 1843, 1849 (2019), and because the plaintiff Frank Tufano has not pleaded facts from which it can reasonably be inferred that the court has subject-matter jurisdiction, we recommend that the court dismiss the complaint. We also recommend, however, that the court grant Tufano leave to file an amended complaint.
Tufano names four defendants in the caption of his complaint: (1) Jake Levy; (2) Better Life Foods Inc.; (3) Legalinc Corporate Services Inc.; and (4) Giannuzzi Lewendon. See doc. 1 at 1. But in the body of his complaint, Tufano mentions only Jake Levy. Tufano alleges that in 2020, he launched a product called “Best Bar,” which combines whey protein powder, beef fat tallow, honey, vanilla, and salt. Id. ¶¶ 1-2. In June 2023, Levy placed his first of several orders for some of Tufano's “Best Bars.” Id. ¶¶ 4-5. In November 2023, Tufano became aware of a product called “Whey Better Bar” that contained the same formulation as his “Best Bar.” Id. ¶ 3. The “Whey Better Bar” also comes in the same flavors as Tufano's “Best Bar,” has a similar name to Tufano's “Best Bar,” and is subject to a similar marketing campaign as Tufano's “Best Bar.” Id. Levy is the owner of the “Whey Better Bar.” Id. ¶ 4. According to Tufano, Levy ordered his “Best Bar” to do research with “malicious intent to copy and replicate his unique formula, product line, and marketing ideas.” Id. ¶¶ 4, 5. Although Tufano had difficulty marketing his “Best Bar,” Levy has had “massive success” with his “Whey Better Bar,” with total sales estimated to be between $150,000 and $250,000 to date. Id. ¶¶ 6-7.
Tufano asserts that this court has subject-matter jurisdiction under 28 U.S.C. § 1332 “because there is a complete diversity of citizenship between each plaintiff and Defendant and the amount in controversy exceeds $75,000.” Id. ¶ 8. He presents four Claims under Pennsylvania law. Claims One and Two are based on Pennsylvania's Unfair Trade Practices and Consumer Protection Law, 73 P.S. § 201-1 et seq. Id. ¶¶ 9-13. Claim Three is a state-law claim for misappropriation of trade secrets. Id. ¶¶ 14-16.And Claim four is for unjust enrichment. Id. ¶¶ 17-19. As relief, Tufano seeks compensatory damages of no less than $150,000 as well as punitive damages. Id. ¶ 20(b). He also seeks an order to the defendants to “[c]ease and desist of all business operations relating to ‘Whey Better Bar,' ‘Better Life Foods Inc.,' or any identical product derived from” his “Best Bar.” Id. ¶ 20(c).
A claim of misappropriation of trade secrets can be made under either Pennsylvania law or federal law. Because Tufano does not mention federal law, because he asserts that the court has diversity jurisdiction, and because he sets forth this trade secret claim between other state law claims, we construe his trade secret claim as brought under Pennsylvania law.
Although Tufano asserts that the court has diversity jurisdiction under 28 U.S.C. § 1332, he has failed to plead diversity jurisdiction.
The court has diversity jurisdiction over civil actions where the matter in controversy exceeds the sum or value of $75,000 and is between inter alia citizens of different states. 28 U.S.C. § 1332. Section 1332 requires complete diversity. Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996). There is complete diversity only when “the citizenship of each plaintiff is diverse from the citizenship of each defendant.” Id. “A plaintiff invoking a federal court's diversity jurisdiction bears the burden of stating ‘all parties' citizenships such that the existence of complete diversity can be confirmed.'” Kissi v. Gillespie, 348 Fed.Appx. 704, 705-06 (3d Cir. 2009) (quoting Chem. Leaman Tank Lines, Inc. v. Aetna Cas. & Sur. Co., 177 F.3d 210, 222 n. 13 (3d Cir. 1999)).
“The citizenship of a natural person is the state where that person is domiciled.” GBForefront, L.P. v. Forefront Mgmt. Grp., LLC, 888 F.3d 29, 34 (3d Cir. 2018). An individual's domicile ‘“is his true, fixed and permanent home and place of habitation. It is the place to which, whenever he is absent, he has the intention of returning.”' McCann v. Newman Irrevocable Tr., 458 F.3d 281, 286 (3d Cir. 2006) (quoting Vlandis v. Kline, 412 U.S. 441, 454 (1973)). “To acquire a domicile, a person must be physically present in a state and intend to remain in that state.” Pierro v. Kugel, 386 Fed.Appx. 308, 309 (3d Cir. 2010). (emphasis in original).
A corporation is a citizen of “every State . . . by which it has been incorporated and of the State . . where it has its principal place of business.” 28 U.S.C. § 1332(c)(1). A corporation's principal place of business is the corporation's “nerve center,” which is “the place where a corporation's officers direct, control, and coordinate the corporation's activities.” Hertz Corp. v. Friend, 559 U.S. 77, 92-93 (2010). “For ‘artificial entities other than corporations,' the general rule is that the citizenship of the entity is determined by the citizenship of ‘all [its] members.'” Peace Church Risk Retention Grp. v. Johnson Controls Fire Prot. LP, 49 F.4th 866, 870 (3d Cir. 2022) (quoting Americold Realty Tr. v. Conagra Foods, Inc., 577 U.S. 378, 381 (2016)).
Here, Tufano has not alleged in his complaint either his citizenship or the citizenship of any of the defendants. We note that Tufano lists his address as in Carbondale, Pennsylvania. Even assuming that is Tufano's residence, “[r]esidence is not the same as domicile and does not establish citizenship for diversity purposes.” Pepper v. Covington, No. 3:19-CV-00758, 2019 WL 2324558, at *2 (M.D. Pa. May 31, 2019). Thus, “[a]lleging residency alone is insufficient to plead diversity of citizenship.” GBForefront, 888 F.3d at 35. Moreover, even if Tufano had sufficiently pleaded his citizenship for diversity purposes (which he has not), he has not pleaded the citizenship of any of the defendants. Thus, he has failed to plead that there is diversity of citizenship. Accordingly, this court lacks subject-matter jurisdiction.
Because this court lacks subject-matter jurisdiction, we will recommend that the court dismiss the complaint. We will also recommend, however, that Tufano be given leave to amend to assert, if he can honestly do so, diversity jurisdiction. See 28 U.S.C. § 1653 (“Defective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts.”); Pierro, 386 Fed.Appx. at 310 (stating that “a court should ordinarily allow a plaintiff to amend his complaint to properly allege the parties' citizenship, unless amendment would be inequitable or futile”).
Based on the foregoing, it is recommended that the court dismiss the complaint for lack of subject-matter jurisdiction. It is also recommended that the court give Tufano leave to file an amended complaint to attempt to plead subject-matter jurisdiction.
The Parties are further placed on notice that pursuant to Local Rule 72.3:
Any party may object to a magistrate judge's proposed findings, recommendations or report addressing a motion or matter described in 28 U.S.C. § 636 (b)(1)(B) or making a recommendation for the disposition of a prisoner case or a habeas corpus petition within fourteen (14) days after being served with a copy thereof. Such party shall file with the clerk of court, and serve on the magistrate judge and all parties, written objections which shall specifically identify the portions of the proposed findings, recommendations or report to which objection is made and the basis for such objections. The briefing requirements set forth in Local Rule 72.2 shall apply. A judge shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made and may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge. The judge, however, need conduct a new hearing only in his or her discretion or where required by law, and may consider the record developed before the magistrate judge, making his or her own determination on the basis of that record. The judge may also receive further evidence, recall witnesses or recommit the matter to the magistrate judge with instructions.