United States District Court, D. Columbia
August 23, 2005.
MILAN JANKOVIC, a/k/a Philip Zepter, et al. Plaintiffs,
INTERNATIONAL CRISIS GROUP, et al. Defendants.
The opinion of the court was delivered by: REGGIE B. WALTON, District Judge
Currently before the Court are (1) defendant Lyon's Motion to
Dismiss the Complaint, or Alternatively, to Strike Portions of
the Complaint ("Lyon's Mot.") and his Memorandum in Support of
his Motion to Dismiss the Complaint, or Alternatively, to Strike
Portions of the Complaint ("Lyon's Mem.");*fn1 (2) defendant
International Crisis Group's ("Crisis Group") Motion to Dismiss
the Complaint, or Alternatively, to Strike Portions of the
Complaint ("Crisis Group's Mot.") and its Memorandum in Support
of its Motion to Dismiss the Complaint, or Alternatively, to
Strike Portions of the Complaint ("Crisis Group's
Mem.");*fn2 (3) the plaintiffs' Joint Memorandum of Points
and Authorities in Opposition to Defendants' Motions to Dismiss
("Pls.' Opp'n"); (4) defendant Lyon's Reply Memorandum in Support
of his Motion to Dismiss the Complaint or, Alternatively, to Strike Portions of the
Complaint ("Lyon's Reply"); and (5) defendant Crisis Group's
Reply Memorandum in Support of its Motion to Dismiss the
Complaint, or Alternatively, to Strike Portions of the Complaint
("Crisis Group's Reply"). For the reasons set forth below, this
Court grants the defendants' motions to dismiss, but will permit
the plaintiffs leave to file an amended complaint to attempt to
cure the jurisdictional defect discussed herein.
The events giving rise to the plaintiffs' complaint began on or
about March 18, 2003, when the International Crisis Group
("Crisis Group") printed, published, circulated and distributed a
report authored in whole or in part by defendant James Lyon
entitled "Serbia After Djindjic" ("Report No. 141"). Complaint
("Compl.") ¶¶ 45-46. According to the Crisis Group, Report No.
141 addressed the political situation leading up to and resulting
from the assassination of Serbian Prime Minister Zoran Djindjic.
Crisis Group's Mem. at 6. The plaintiffs allege, however, that
this report included libelous material concerning plaintiff Milan
Jankovic*fn3 and his companies, collectively known as the
Zepter Group. Compl. ¶¶ 83-84. Likewise, the plaintiffs allege
that a similar report, authored in part or in whole by defendant
Lyon and printed, published, circulated and distributed by
defendant Crisis Group, entitled "Serbian Reform Stalls Again"
("Report No. 145"), also contained libelous matter concerning the
plaintiffs. Id. ¶¶ 53, 83-84. On the other hand, the defendants
assert that Report No. 145 analyzes the "aftermath of the
Djindjic assassination, and in particular the effectiveness of
the new government's crackdown on the military and criminal
network behind the assassination." Crisis Group Mem. at 7. In addition to their claims about the
other two publications, the plaintiffs also allege that a June
10, 2003 e-mail sent by defendant Lyon to a Serbian official,
which included an article concerning the situation in Serbia
after the assassination of Prime Minister Djindjic ("Lyon
e-mail"), contained false or defamatory statements about the
plaintiffs. Compl. ¶¶ 67, 83.
The plaintiffs filed their complaint in this action on July 15,
2004. Count I of the complaint alleges that both Report No. 141
and 145 were libelous, as they contain "false and defamatory
statements" about the plaintiffs. Id. ¶¶ 55, 80-93. Count II
alleges that the defendants "interfered with the normal business
execrations" of plaintiff Jankovic and his businesses by
"writing, printing, publishing, or intending for others to
republish or circulate Report No. 141, Report No. 145," and the
Lyon e-mail, which allegedly falsely depict plaintiff Jankovic as
a "criminal and a central member of a broader criminal network."
Id. ¶ 95. In Count III, the plaintiffs allege that by writing,
publishing, and circulating Report No.'s 141 and 145, and by
disseminating the article attached to the Lyon e-mail, the
defendants invaded plaintiff Jankovic's right to privacy. Id. ¶
On October 21, 2004, the defendants moved to dismiss the
complaint, or alternatively, to strike portions of the complaint.
The defendants' advance several positions as support for their
motions to dismiss. Specifically, they contend: (1) that this
Court does not have subject matter jurisdiction over this case;
(2) that all claims arising from Report No. 141 and the Lyon
e-mail must be dismissed as barred by the statute of limitations;
(3) that all claims by plaintiff Fieldpoint and United Business
must be dismissed because none of the publications are "of and
concerning" these plaintiffs; and (4) that the claims raised
solely by plaintiff Jankovic must also be dismissed because each statement is either not "of and concerning"
plaintiff Jankovic, is not capable of a defamatory meaning, or is
otherwise not actionable. Crisis Group's Mem. at 13, 15, 16,
20-22, 40-42. This opinion will address whether this Court
possesses subject matter jurisdiction in this case.
II. Standard of Review
Under Federal Rule of Civil Procedure 12(b)(1), which governs
motions to dismiss for lack of subject matter jurisdiction,
"[t]he plaintiff bears the burden of persuasion to establish
subject matter jurisdiction by a preponderance of the evidence."
Pitney Bowes, Inc. v. United States Postal Serv.,
27 F. Supp. 2d 15, 19 (D.D.C. 1998). In reviewing such a motion, this Court
must accept as true all the factual allegations contained in the
complaint. Leatherman v. Tarrant County Narcotics Intelligence &
Coordination Unit, 507 U.S. 163, 164 (1993). Additionally, in
deciding a Rule 12(b)(1) motion, it is well established in this
Circuit that a court is not limited to the allegations in the
complaint, but may also consider material outside of the
pleadings in its effort to determine whether the court has
jurisdiction in the case. See EEOC v. St. Francis Xavier
Parochial Sch., 117 F.3d 621, 624-25 n. 3 (D.C. Cir. 1997);
Herbert v. Nat'l Acad. of Sciences, 974 F.2d 192, 197 (D.C.
Cir. 1992); Haase v. Sessions, 835 F.2d 902, 906 (D.C. Cir.
1987); Grand Lodge of Fraternal Order of Police v. Ashcroft,
185 F. Supp. 2d 9, 14 (D.D.C. 2001).
III. Legal Analysis
(A) Subject Matter Jurisdiction under 28 U.S.C. § 1332
The defendants have moved to dismiss the complaint pursuant to
Rule 12(b)(1) for lack of subject matter jurisdiction.*fn4 Lyon's Mem. at 6; Crisis
Group's Mem. at 11. Specifically, the defendants allege that
because defendant Lyon lives in Serbia, and intends to remain in
Serbia for the foreseeable future, he is not a citizen of any
American state, but an American citizen domiciled abroad. Lyon's
Mem. at 9-10. For that reason, the defendants allege that this
Court does not possess subject matter jurisdiction to hear this
case as the requirements of complete diversity are not satisfied.
Id. at 8. In response, the plaintiffs contend that this Court
does possess subject matter jurisdiction because Lyon is
domiciled in Utah and is thus diverse from the plaintiffs and his
co-defendant, the Crisis Group.*fn5 Pls.' Opp'n at 29-30.
28 U.S.C. § 1332(a) provides that
district courts shall have original jurisdiction of
all civil actions where the matter in controversy
exceeds . . . $75,000 . . . and is between (1)
citizens of different States; (2) citizens of a State
and citizens or subjects of a foreign state; (3)
citizens of different States and in which citizens or
subjects of a foreign state are additional parties;
and (4) a foreign state, defined in section 1603(a)
of this title, as plaintiff and citizens of a State
or of different States.
28 U.S.C. § 1332(a) (2000). The Supreme Court has held that for a
case to come within the diversity statute, there must be complete
diversity. See Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365
, 373-74 (1978). As such, when a plaintiff sues more
than one defendant in a diversity action, the plaintiff must meet
the requirements of the diversity statute for each defendant or
face dismissal. See Strawbridge v. Curtiss, 7 U.S. (3 Cranch)
267, 267 (1806). It is undisputed that all three named plaintiffs
are foreign nationals domiciled abroad. Compl. ¶¶ 8-10. For
example, Zepter is a citizen of Serbia and Montenegro and is
domiciled in the Republic of Monaco; plaintiff Fieldpoint is a
company operating under the laws of the Netherlands; and
plaintiff United Business Activities Holding, A.G., is organized
under the laws of Switzerland. Accordingly, for jurisdictional
purposes under § 1332(a), the plaintiffs must be treated as
citizens or subjects of a foreign state, as they are not citizens
of a State. See JPMorgan Chase Bank v. Traffic Stream (BVI)
Infrastructures Ltd., 536 U.S. 88, 91 (2002) ("A corporation of
a foreign State is, for purposes of jurisdiction in the courts of
the United States, to be deemed, constructively, a citizen or
subject of such State.") (internal quotation marks omitted).
Moreover, for jurisdictional purposes, defendant Crisis Group is
a citizen of the State in which it is incorporated the District
of Columbia. See 28 U.S.C. § 1332 (c)(1) (A corporation is a
citizen of both the state in which it is incorporated and the
state in which it has its principal place of business);
28 U.S.C. § 1332(e) (the term "state" includes the District of Columbia);
Crisis Group's Reply at 2. Accordingly, defendant Lyon is the
only party whose citizenship is in dispute.
For purposes of diversity jurisdiction, it is well-settled that
citizenship is substantially synonymous with domicile. See
Gilbert v. David, 235 U.S. 561, 568 (1915); Williamson v.
Osenton, 232 U.S. 619, 624 (1914); Prakash v. Am. Univ.,
727 F.2d 1174, 1180 (D.C. Cir. 1984). A party's domicile is
determined by two factors: (1) physical presence in the
jurisdiction, and (2) an intent to remain there for an unspecified or
indefinite period of time. See Prakash, 727 F.2d at 1180;
see also Anwo v. INS, 607 F.2d 435, 437-38 (D.C. Cir. 1979)
(noting that domicile is established when a person intends to
remain in that place permanently or indefinitely); Green v.
Keim, 74 F. Supp. 950 (E.D. Pa. 1948); Sherman v. Roosevelt
Co., 48 F. Supp. 434, 434 (D. Mass. 1943). The plaintiffs allege
that defendant Lyon resides in both Belgrade and Utah, compl. ¶
12, but is domiciled in Utah, Pls.' Opp'n at 4. To support this
contention, the plaintiffs reference the fact that defendant Lyon
maintains a Utah driver's license and is registered to vote
there. Pls.' Opp'n at 4. Defendant Lyon, on the other hand,
states that he is domiciled in Serbia, having resided in Belgrade
continuously since late 2000 and intending to remain there for
the foreseeable future. Lyon's Mem. at 4. Defendant Lyon further
posits that he has minimal contacts with the United States, as he
does not maintain a residence in the United States and has not
done so since the Spring of 1996, Lyon's Mem., declaration of Dr.
James Lyon, dated October 18, 2004 ("Lyon Decl.") at ¶ 9, does
not own property in the Utah, or anywhere else in the United
States, and does not pay federal or state income taxes in Utah,
or anywhere else in the United States. Id. ¶¶ 9, 10. Defendant
Lyon further alleges that he has not lived in Utah since 1988.
Upon close review of the information provided to this Court, it
is clear that defendant Lyon is domiciled in Belgrade. Defendant
Lyon's physical presence in Belgrade is uncontested and his
intention to remain domiciled there can be adduced from his
statements and his course of conduct, see Texas v. Florida,
306 U.S. 398, 425 (1939) (noting that a person's real attitude
and intention with respect to residency can be deduced by his
"entire course of conduct"), including his active participation
in the Belgrade Church of Jesus Christ of Latter Day Saints and
his full-time employment in Belgrade as the Crisis Group's Serbian Project
Director, Lyon Decl. ¶¶ 6, 7. The plaintiffs' contention that
defendant Lyon is a citizen of Utah because he maintains a Utah
drivers licence and is registered to vote in Utah is not
convincing. Defendant Lyon's ties to Utah, including the
maintenance of a driver's license and voter registration, are
superficial proof of intent at best. Voter registration is
relatively insignificant when a person has otherwise not
participated in the electoral process and defendant Lyon has not
voted in the United States since 1992. Lyon's Mem. at 6. And,
renewing one's driver's license is equally unrevealing, as it is
a teak easily accomplished. See Leon v. Caribbean Hosp.
Corp., 848 F. Supp. 317, 318 (D.P.R. 1994) ("[V]oter
registration is indicative of very little for a person who has
previously shown no interest in participating in the electoral
process; and obtaining a driver's license is not necessarily a
complicated procedure for one who already has the skill"); Lyon's
Mem. at 6; accord Galva Foundry Co. v. Heiden, 924 F.2d 729,
730 (7th Cir. 1991) (noting that changing ones voter registration
or obtaining a driver's license in a jurisdiction does not
necessarily establish domicile in that jurisdiction).
In addition, the plaintiffs' argument that defendant Lyon
cannot intend to stay in Serbia indefinitely because the Crisis
Group may at some point decide to leave Serbia is also
unpersuasive. In this regard, it must be remembered that domicile
is determined on the date the action is commenced. See
Freeport-McMoRan, Inc. v. KN Energy, Inc., 498 U.S. 426, 428-29
(1991); Prakash, 727 F.2d at 1179. When this action was
commenced in July 2004, defendant Lyon was, and currently is,
residing in Serbia. Lyon Decl. ¶¶ 5, 7. The plaintiffs'
speculation that Lyon's employer may choose to leave Serbia is
also of no moment because Lyon lived in the Balkan region prior
to his employment with the Crisis Group. Lyon Decl. ¶¶ 4-6.
Presented with an analogous situation, the Seventh Circuit held, among other
things, that the mere possibility that the defendant may decide
to retire to Florida eventually, but for the foreseeable future
intended to spend most of his time in Illinois, did not support
the defendant's contention that he was presently a Florida
domiciliary. Galva Foundry Co., 924 F.2d at 730. Accordingly,
Lyon's residence in Serbia when this action was filed, coupled
with his expressed intention and corresponding actions to
continue to do so override the mere speculation that the
situation may change in the future.
The plaintiffs also argue that because Lyon's legal residency
in Serbia is dependent on the Serbian government's renewal of his
visa, Lyon "cannot reasonably expect to remain in Belgrade
indefinitely." Pls.'s Opp'n at 4. This argument has no merit.
Simply because there is a possibility that the Serbian government
may not renew Lyon's visa in the future does not change the fact
that when this action was commenced he was residing in Serbia and
intends to remain there indefinitely. Lyon Decl. ¶¶ 5, 7.
Similarly, other district courts have held that a party's
residence abroad on authority of a "Tourist Card" renewable every
six months does not defeat the party's intention of remaining
domiciled in that location for the foreseeable future. See
Pemberton v. Colonna, 189 F. Supp. 430, 431-42 (E.D. Pa. 1960),
aff'd, 290 F.2d 220 (3d Cir. 1961). Accordingly, although
defendant Lyon maintains minimal connections to Utah, such
connections do not warrant the finding that he is domiciled in
Based on the above analysis, the Court concludes that defendant
Lyon is clearly domiciled in Belgrade, Serbia. "It is well
established [that a] United States citizen? who [is] domiciled
abroad [is] neither [a] citizen? of any state of the United
States nor a citizen or subject of a foreign state" for diversity
purposes. Cresswell v. Sullivan & Cromwell, 922 F.2d 60, 68 (2nd Cir. 1990). With the finding that defendant Lyon is a
stateless American citizen, the diversity statute does not
provide this Court with subject matter jurisdiction.
Specifically, defendant Lyon's stateless status precludes this
Court from having jurisdiction under Section 1332(a)(2) as this
provision only confers jurisdiction over matters between
"citizens of a State and citizens or subject of a foreign state."
28 U.S.C. 1332(a)(2). See Newman-Green, Inc. v.
Alfonzo-Larrain, 490 U.S. 826, 829 (1989) (noting that the
plaintiff's status as an American citizen domiciled abroad
destroys complete diversity under 1332(a)(2) and 1332(a)(3));
Cresswell, 922 F.2d at 68 ("[T]he language of § 1332(a) is
specific and requires the conclusion that a suit by or against
United States citizens domiciled abroad may not be premised on
diversity."). Thus, because defendant Lyon is a party to this
suit, and he cannot be sued in federal court pursuant to the
diversity statute, 28 U.S.C. § 1332, the plaintiffs cannot
maintain this action under this statute.*fn6 (B) The Consequences of Dismissing the Claim Against Defendant
The Court could dismiss this case in its entirety solely based
upon the plaintiffs' failure to properly assert a basis for this
Court having subject matter jurisdiction.*fn7 See
Strawbridge, 3 Cranch at 267; Cresswell, 922 F.2d at 68.
Notably, however, the Supreme Court has held that pursuant to
Federal Rule of Civil Procedure 21, courts may dismiss a
dispensable nondiverse party and cure a jurisdictional defect.
See Newman-Green, 490 U.S. at 828-30; see also Long v.
District of Columbia; 820 F.2d 409, 416-17 (D.C. Cir. 1987)
("District courts may drop nondiverse parties . . . at any stage
of the litigation."); Caspary v. La. Land & Exploration Co.,
725 F.2d 185, 191-92 (2d Cir. 1984); Anderson v. Moorer,
372 F.2d 747, 750 n. 4 (5th Cir. 1967) (dismissing nondiverse
dispensable defendant from action initially brought in federal
court under the pretense of diversity of citizenship in order to
perfect diversity). It is widely accepted that Rule 21 permits
district courts to dismiss a nondiverse party to cure a
jurisdictional defect so long as the nondiverse party is not
indispensable to the action.*fn8 See Newman-Green,
490 U.S. at 832; Saadeh v. Farouki, 107 F.3d 52, 56 (D.C. Cir.
1997); Fritz v. Am. Home Shield Corp., 751 F.2d 1152, 1154-55
(11th Cir. 1985). However, if a party is indispensable, the Court
must "determine whether in equity and good conscience the action
should proceed among the parties before it, or should be
dismissed. . . ." Fed.R.Civ.P. 19(b). In the alternative, the
Court may provide the plaintiff the opportunity to file an
amended complaint. Fed.R.Civ.P. 15(a); Harrison v. Rubin,
174 F.3d 249, 252 (D.C. Cir. 1999). Because the parties have
failed to address whether Lyon is a dispensable or indispensable
party, the Court concludes that the proper course to take is to
afford the plaintiffs leave to file an amended complaint to
potentially cure the jurisdictional defect.*fn9 The parties
will then have the opportunity to submit to the Court new papers
addressing any additional issues the parties deem appropriate.
As the requirement of complete diversity has not been
satisfied, this Court lacks subject matter jurisdiction over the
plaintiffs' claims.*fn10 However, rather than dismissing the
entire case at this juncture, this Court will provide the
plaintiffs the opportunity to file an amended complaint, which
may cure this jurisdictional defect.
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