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Yueh-Lan Wang, By and Through Her Attorney-In-Fact, Winston Wen-Young Wong v. New Mighty U.S. Trust

January 27, 2012

YUEH-LAN WANG, BY AND THROUGH HER ATTORNEY-IN-FACT, WINSTON WEN-YOUNG WONG, PLAINTIFF,
v.
NEW MIGHTY U.S. TRUST, ET AL., DEFENDANTS.



The opinion of the court was delivered by: James E. Boasberg United States District Judge

MEMORANDUM OPINION

In this case, Plaintiff Yueh-Lan Wang, a citizen and domiciliary of Taiwan, seeks to recover property allegedly transferred by her late husband Yung-Ching Wang (Y.C.) to Defendant New Mighty U.S. Trust (NM-US Trust) during the five years prior to his death. She contends that the Civil Code of Taiwan establishes her right as a surviving spouse to 50% of the marital estate, which includes distributions of property made during this five-year period, without her consent, and for the purpose of reducing her share. To that end, she has named as Defendants here the trust, a trustee, and a beneficiary of the trust. These Defendants have now moved to dismiss on numerous grounds. Because the Court finds that Plaintiff has not established subject matter jurisdiction, it will dismiss her First Amended Complaint without prejudice.

I.Factual Background

According to the First Amended Complaint, which at this juncture the Court must credit, Yueh-Lan married Y.C., who was also a Taiwanese citizen, as teenagers in 1935. Compl., ¶ 10. Y.C. and Yueh-Lan never divorced and remained married until Y.C.'s death in 2008. Id., ¶¶ 10-11. During this 72-year marriage, Y.C. accumulated a substantial fortune. See id., ¶ 12. As the founder of the Formosa Plastics Group (FPG), "one of Taiwan's biggest and most profitable manufacturing conglomerates," Y.C. was ranked by Forbes magazine as the 178th wealthiest person in the world - and the second wealthiest person in Taiwan - with an estimated net worth of up to $6.8 billion. Id.

But if Y.C. was a businessman first, he was a family man second. Although Yueh-Lan has been recognized as Y.C.'s only legal spouse by both the Taipei National Tax Administration and the Taiwan courts, Y.C. established three distinct "families" during his lifetime. See id., ¶¶ 27-30. Y.C. and Yueh-Lan, referred to by the parties as the "First Family," had no children. Id., ¶ 30. Y.C. did, however, "ha[ve] several children with his female companions, Wang Yang Chiao and P.C. Lee." Id. Y.C., Wang Yang Chiao (who is now deceased), and their five children constituted the "Second Family," while Y.C., P.C. Lee, and their four children made up the "Third Family." See id.

Defendant NM-US Trust was formed on or about May 5, 2005, "to hold certain of Y.C.'s assets, including stock he owned in FPG's U.S. companies." Id., ¶ 119. Defendant Clearbridge, LLC, a limited liability company organized under the law of, and primarily engaging in business in, the District of Columbia, is the trustee of NM-US Trust. Id., ¶ 16. Defendant New Mighty Foundation (NMF) is a beneficiary of the trust. See id., ¶¶ 15, 123. "[C]ertain charities, philanthropies and the grantors of Defendant NM-US Trust," three British Virgin Islands-based "holding companies through which Y.C. held stock in FPG's U.S. affiliates," are also beneficiaries of the trust. Id., ¶¶ 123-24.

Dr. Winston Wen-Young Wong, who is himself Y.C.'s son (despite the difference in spelling) and a member of the Second Family, brings the instant action on Yueh-Lan's behalf "pursuant to a duly executed power of attorney," id., ¶ 13, in order to recover property allegedly transferred from Y.C. to NM-US Trust. She claims an interest under Taiwanese law in any property, such as that held in the NM-US Trust, conveyed by Y.C. during the last five years of his life, without her consent, and with the purpose of reducing her inheritance. See id., ¶¶ 3-6. In support, her First Amended Complaint identifies nine distinct causes of action stemming primarily from provisions of the Civil Code of Taiwan that she claims entitle her to recovery. See id. Defendants have now filed a Motion to Dismiss on several grounds.

II.Legal Standard

In evaluating Defendants' Motion to Dismiss, the Court must "treat the complaint's factual allegations as true . . . and must grant plaintiff 'the benefit of all inferences that can be derived from the facts alleged.'" Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1113 (D.C. Cir. 2000) (quoting Schuler v. United States, 617 F.2d 605, 608 (D.C. Cir. 1979)) (internal citation omitted); see also Jerome Stevens Pharms., Inc. v. FDA, 402 F.3d 1249, 1253 (D.C. Cir. 2005). This standard governs the Court's considerations of Defendants' Motion under both Rules 12(b)(1) and 12(b)(6). See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974) ("in passing on a motion to dismiss, whether on the ground of lack of jurisdiction over the subject matter or for failure to state a cause of action, the allegations of the complaint should be construed favorably to the pleader"); Walker v. Jones, 733 F.2d 923, 925-26 (D.C. Cir. 1984) (same). The Court need not accept as true, however, "a legal conclusion couched as a factual allegation," nor an inference unsupported by the facts set forth in the Complaint. Trudeau v. Fed. Trade Comm'n, 456 F.3d 178, 193 (D.C. Cir. 2006) (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)) (internal quotation marks omitted).

To survive a motion to dismiss under Rule 12(b)(1), Plaintiff bears the burden of proving that the Court has subject matter jurisdiction to hear her claims. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992); U.S. Ecology, Inc. v. U.S. Dep't of Interior, 231 F.3d 20, 24 (D.C. Cir. 2000). A court has an "affirmative obligation to ensure that it is acting within the scope of its jurisdictional authority." Grand Lodge of Fraternal Order of Police v. Ashcroft, 185 F. Supp. 2d 9, 13 (D.D.C. 2001). For this reason, "'the [p]laintiff's factual allegations in the complaint . . . will bear closer scrutiny in resolving a 12(b)(1) motion' than in resolving a 12(b)(6) motion for failure to state a claim." Id. at 13-14 (quoting 5A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1350 (2d ed. 1987) (alteration in original)). Additionally, unlike with a motion to dismiss under Rule 12(b)(6), the Court "may consider materials outside the pleadings in deciding whether to grant a motion to dismiss for lack of jurisdiction." Jerome Stevens, 402 F.3d at 1253; see also Venetian Casino Resort, L.L.C. v. E.E.O.C., 409 F.3d 359, 366 (D.C. Cir. 2005) ("given the present posture of this case - a dismissal under Rule 12(b)(1) on ripeness grounds - the court may consider materials outside the pleadings"); Herbert v. Nat'l Academy of Sciences, 974 F.2d 192, 197 (D.C. Cir. 1992).

III.Analysis

Defendants move to dismiss Yueh-Lan's Complaint on myriad grounds. They argue, for example, that 1) Winston lacks standing to bring this action in Yueh-Lan's name because of defects under Taiwanese law in the power of attorney granted him, 2) the Court lacks subject matter jurisdiction, 3) NMF has not been properly served, 4) necessary parties have not been joined, and 5) Plaintiff's claims are legally deficient under Taiwanese and U.S. law. See Mot. at 3-4.

"Subject matter jurisdiction 'is, of necessity, the first issue for an Article III court,' for '[t]he federal courts are courts of limited jurisdiction, and they lack the power to presume the existence of jurisdiction in order to dispose of a case on any other grounds.'" Loughlin v. United States, 393 F.3d 155, 170 (D.C. Cir. 2004) (quoting Tuck v. Pan Am. Health Org., 668 F.2d 546, 549 (D.C. Cir. 1981)); see also Am. Farm Bureau v. EPA, 121 F. Supp. 2d 84, 90 (D.D.C. 2000) ("The court cannot address any issue if it lacks subject matter jurisdiction . . . ."). The Court, therefore, will address this question first. Because it concludes that the citizenship of a trust - for purposes of deciding whether diversity jurisdiction exists - requires consideration of the citizenship of the ...


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