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Pilkin v. Sony Interactive Entertainment, LLC

United States District Court, District of Columbia

February 14, 2019




         Plaintiff Vitaly Pilkin is a citizen of the Russian Federation who, appearing pro se, brings this suit seeking $340 million in damages “based on the doctrine of unjust enrichment.” Dkt. 12 at 2 (Amend. Compl. ¶ 4). On November 13, 2017, Pilkin filed a 152-page single-spaced complaint asserting claims against Sony Interactive Entertainment LLC, Sony Corporation, Hogan Lovells U.S. LLP (“Hogan Lovells”), the United States Department of Justice, and then-Attorney General Jefferson Sessions in his official capacity. See Dkt. 1 at 2, 3. The Court dismissed the claims against the Department of Justice and Attorney General Sessions on grounds of sovereign immunity, Dkt. 8 at 3, and, with respect to the remaining defendants, ordered Pilkin to show cause why the complaint should not be dismissed for failure to comply with Federal Rule of Civil Procedure 8 or, in the alternative, to file an amended complaint that satisfied the requirements of Rule 8, Dkt. 9 at 2. Pilkin filed an amended complaint on May 1, 2018, against Sony Interactive Entertainment, Sony Corporation, and Hogan Lovells. Dkt. 12. On January 16, 2019, the Court dismissed Pilkin's claim against Sony Interactive Entertainment for lack of personal jurisdiction. Dkt. 45 at 2. As a result, the only remaining defendants are Hogan Lovells and Sony Corporation. Sony Corporation has not yet been served. See Minute Order (Feb. 13, 2019).

         Currently before the Court is Hogan Lovells's motion to dismiss for lack of subject-matter jurisdiction and for failure to state a claim upon which relief can be granted, Dkt. 26, and Pilkin's motion for leave to file a second amended complaint, Dkt. 31. As explained below, the Court agrees that Pilkin has failed to allege facts sufficient to establish federal question jurisdiction. In the current procedural posture, however, the Court cannot determine whether Pilkin can establish diversity jurisdiction. The Court, moreover, cannot decide whether the amended complaint states a claim upon which relief can be granted without first determining whether it has subject-matter jurisdiction. As a result, the Court will deny Hogan Lovells's motion to dismiss without prejudice. Finally, because Hogan Lovells opposes Pilkin's motion for leave to amend solely on the ground that the proposed second amended complaint does not cure any of the deficiencies identified in Hogan Lovells's motion to dismiss; because resolution of those defenses is premature at this time; and because Pilkin's proposed changes to the complaint are, in any event, minimal, the Court will grant Pilkin's motion for leave to amend as a matter of administrative convenience and without expressing any view on Hogan Lovells's defenses.

         I. ANALYSIS

         “Federal courts are courts of limited jurisdiction” and “possess only that power authorized by the Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Moreover, given “the nature and limits of the judicial power of the United States, ” the Court must assess its jurisdiction “as a threshold matter” and may not decide whether the complaint states a claim on the merits without first addressing the issue of jurisdiction. Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94-95 (1998) (quoting Mansfield, C. & L.M.R. Co. v. Swain, 111 U.S. 379, 382 (1884)). Pilkin relies on two statutory fonts of federal jurisdiction: federal question jurisdiction and diversity jurisdiction. See Dkt. 12 at 2 (Amended Compl. ¶ 3). As explained below, the first cannot support Pilkin's state-law claim for relief, and the second will not exist if Sony Corporation is served and remains a party to this action.

         A. Federal Question Jurisdiction

         Pilkin first argues that this Court has jurisdiction under 28 U.S.C. § 1331, which vests district courts with “original jurisdiction [over] all civil actions arising under the Constitution, laws, or treaties of the United States.” The “vast majority of cases brought under the general federal-question jurisdiction of the federal courts are those in which federal law creates the cause of action.” Merrell Dow Pharms. Inc. v. Thompson, 478 U.S. 804, 808 (1986). This, however, is not such a case; the parties agree that Pilkin has not alleged a federal cause of action. Pilkin alleges only one claim, and that claim is for unjust enrichment. Dkt. 12 at 26 (Amend. Compl. ¶ 93). In support of this common law claim, Pilkin alleges that he was deprived of his Russian patent rights and that Sony Corporation and Sony Interactive Entertainment were unjustly enriched at his expense due to an array of alleged wrongful acts, “including the commission of federal offenses.” Id. at 27 (Amend. Compl. ¶ 94). He alleges, for example, that Hogan Lovells, Sony Electronics, and others made “false representation[s]” in the patent proceedings in Russia, engaged in “fraudulent concealment, ” “bribed top executives” of the Russian Patent and Trademark Office, and committed “multiple acts of racketeering activity.” Id. at 27-28 (Amend. Compl. ¶¶ 94-95). But he does not allege that he is entitled to relief pursuant to any federal statute or law.

         The requirement that a plaintiff allege a federal cause of action in order to invoke federal question jurisdiction, however, admits of a narrow exception, which the Supreme Court explicated in Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing, 545 U.S. 308, 312 (2005). Under Grable, a state law claim will suffice if, and only if, it “necessarily raise[s] a stated federal issue, ” that is “actually disputed and substantial, ” and that “a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities.” Gunn v. Minton, 568 U.S. 251, 258 (2013) (alteration in original) (quoting Grable, 545 U.S. at 314). “Where all” of these “requirements are met, ” a district court may exercise federal question jurisdiction “because there is a ‘serious federal interest in claiming the advantages thought to be inherent in a federal forum,' which can be vindicated without disrupting Congress's intended division of labor between state and federal courts.” Id. (quoting Grable, 545 U.S. at 313-14). For several reasons, Pilkin's unjust enrichment claim does not satisfy this demanding test.

         As an initial matter, Pilkin cannot show that a federal question is “necessarily raised” by his unjust enrichment claim. Gunn, 568 U.S. at 258. To be sure, he points to a host of federal statutes that he alleges Defendants violated. But he is clear that those purported acts of wrongdoing are not exclusive and that his claim of unjust enrichment is premised, at least in the alternative, on various “fraudulent representations” and acts of “fraudulent concealment and nondisclosure.” Dkt. 12 at 27 (Amend. Compl. ¶27). The fact that he also alleges violations of numerous federal statutes-again, exclusively in service of his unjust enrichment claim-may add gravity to his claim, but his cause of action does not turn on whether any federal statute was violated. For a federal issue to be “necessarily raised, ” “vindication of [the] right [asserted] under state law [must] necessarily turn[] on some construction of federal law.” Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Trust for S. Cal., 463 U.S. 1, 9 (1983). That is not the case here.

         Pilkin's effort to invoke § 1331 also founders on the substantiality requirement. See Grable, 545 U.S. at 313. Under that prong of the test, “it is not enough that the federal issue be significant to the particular parties in the immediate suit.” Gunn, 568 U.S. at 260 (quoting Grable, 545 U.S. at 314). “The substantiality inquiry under Grable looks instead to the importance of the issue to the federal system as a whole.” Id. Accordingly, “[w]here state-law claims implicate federal statutes or regulations, but do not involve disputes as to their meaning, courts have uniformly found federal jurisdiction under Grable lacking.” Wash. Consulting Grp., Inc. v. Raytheon Tech. Servs. Co., LLC, 760 F.Supp.2d 94, 106 (D.D.C. 2011); see also Pritika v. Moore, 91 F.Supp.3d 553, 558 (S.D.N.Y. 2015) (“[C]ourts have typically found a substantial federal issue only in those exceptional cases that go beyond the application of some federal legal standard to private litigants' state law claims, and instead implicate broad consequences to the federal system or the nation as a whole.”).

         As the Supreme Court observed in Gunn, two examples illustrate the kind of unique circumstances that justify extending federal question jurisdiction to state law claims. The first example comes from Grable itself. In that case, the Internal Revenue Service (“IRS”) seized a parcel of property belonging to the plaintiff, Grable & Sons Metal Products, to satisfy a tax delinquency. 545 U.S. at 310. Years later, after the IRS had sold the property to a third party, Grable & Sons brought a quiet title action asserting a superior interest in the property on the theory that the IRS had failed to provide the notice required under federal law, thus invalidating the seizure and subsequent sale. Id. at 311. As the Supreme Court explained, the allegation that Grable & Sons was not provided the notice required by federal law formed an essential element of the claim; the case posed only a legal-and not a factual-dispute; and “[t]he meaning of the federal tax provision [was] an important issue of federal law that sensibly belong[ed] in a federal court, ” particularly given the federal government's “strong interest in the ‘prompt and certain collection of delinquent taxes.'” Id. at 315 (internal citation omitted). In deciding that the case raised a “significant” federal issue, the Supreme Court “focused not on the interests of the litigants themselves, but rather on the broader significance of the notice question for the Federal Government.” Gunn, 568 U.S. at 260.

         The second example comes from a case discussed in Grable: Smith v. Kansas City Title & Trust Co., 255 U.S. 180 (1921). Grable described Smith as “[t]he classic example” of a state-law claim that raises a significant federal issue. 545 U.S. at 312. In Smith, the plaintiff brought suit “claiming that the defendant corporation could not lawfully buy certain bonds of the National Government because their issuance was unconstitutional.” Id. As the Court explained in Grable, even though state law “provided the cause of action, ” the district court had federal question jurisdiction “because the principal issue in the case was the federal constitutionality of the bond issue.” Id. Again, the Supreme Court premised its holding on the existence of “a serious federal interest” in the “principal issue” raised by the litigation. Id. at 312-13.

         Like other cases that the Supreme Court has characterized as “poles apart from Grable” and Smith, Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677, 700 (2006); see also Gunn, 568 U.S. at 262, Pilkin's unjust enrichment claim does not turn on an important question of federal law. The central issue in the case is not a “pure issue of law” that might affect a federal interest; rather, the case raises a “fact-bound and situation-specific” question about whether Defendants deprived Pilkin of his interest in a Russian patent by means of wrongful conduct, such as bribery or fraudulent misrepresentations. Empire Healthchoice Assurance, Inc., 547 U.S. at 700-01 (internal citations omitted). There is no reason to believe that Pilkin's claim that Defendants were unjustly enriched through their wrongful conduct rises or falls based on whether the alleged misconduct-bribery and fraudulent misrepresentations-violated federal, as opposed to state or foreign, law.

         There is no “‘single, precise, all-embracing' test for jurisdiction over federal issues embedded in state-law claims between nondiverse parties.” Grable, 545 U.S. at 314 (quoting Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 821 (1988) (Stevens, J., concurring)). As the plaintiff in this action, however, Pilkin bears the burden of alleging facts or offering evidence sufficient to establish federal jurisdiction, and he has failed to offer any basis for this Court to conclude that this is one of those “extremely rare” ...

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