The opinion
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF PENNSYLVANIA
FRANK TUFANO,
Plaintiff CIVIL ACTION NO. 3:23-cv-2106
v. | (JUDGE MANNION)
JAKE LEVY and BETTER LIFE □
FOODS INC., :
Defendants :
MEMORANDUM
Magistrate Judge Susan E. Schwab has issued a Report and
Recommendation, (Doc. 14) (the “Report’), recommending that Plaintiff
Frank Tufano’s Amended Complaint, (Doc. 10), be dismissed without
prejudice for lack of subject-matter jurisdiction. Plaintiff has filed a timely
objection to the Report. (Doc. 15).
I. BACKGROUND
Plaintiff alleges that he owns a small business which launched the
“Best Bar,” a product containing a “unique formulation” of whey protein
powder, beef fat tallow, honey, vanilla, and salt. (Doc. 10 41-2). Defendant
Jake Levy, who operates Defendant Better Life Foods Inc. and advertises its
products on social media, purchased 5 orders of the “Best Bar.” (Id. 74).
The Amended Complaint further alleges that Defendants own a
product called the “Whey Better Bar,” which contains a formulation of
ingredients “identical” to that of Plaintiffs product, and has achieved
significant sales via their TikTok shop. (Id. 94, 8). Plaintiff claims that
Defendants (1) violated the Unfair Trade Practices and Consumer Protection
Law, 73 Pa. Stat. Ann. §201-3(a), by passing off goods as those of another;'
(2) violated the UTPCPL by “appropriating the use of the product and falsely
claiming its uniqueness and authorship”: (3) misappropriated a trade secret;
and (4) were thereby unjustly enriched. (Doc. 10 ¥]13-—23). He seeks
compensatory damages exceeding $150,000, punitive damages, and
injunctive relief. (Id. 924).
Plaintiffs original Complaint, (Doc. 1), brought the same state-law
claims but did not allege his or Defendants’ citizenship. Judge Schwab
therefore recommended that the complaint be dismissed with leave to
amend because the court lacked subject-matter jurisdiction. (Doc. 7). The
court adopted this recommendation and dismissed Plaintiff's complaint with
leave to amend. (Doc. 13).
Plaintiffs Amended Complaint, (Doc. 10), alleges that he is domiciled
in Pennsylvania, that Defendant Jake Levy is domiciled in New York, and
' See 73 Pa. Stat. Ann. §201-2(4)(i).
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that Defendant Better Life Foods Inc. is registered in Delaware. (Id. §]10—
12). Because jurisdiction under 28 U.S.C. §1332 requires complete diversity
of citizenship among the parties, Caterpillar Inc. v. Lewis, 519 U.S. 61, 68
(1996), because 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,” §1332(c)(1), and because Plaintiff has made no allegation
regarding Better Life’s principal place of business, the Report again
concludes that subject-matter jurisdiction is lacking. (Doc. 14 at 6-8). It
concludes that further leave to amend would be futile, but recommends that
the Amended Complaint be dismissed without prejudice. (Id. at 8-9). Plaintiff
has filed an objection to the Report, in which he alleges that “it can be
assumed that Better Life Foods, Inc. is operating from Jake Levy’s temporary
apartment in Austin, TX.” (Doc. 15 79).
ll. LEGAL STANDARD
When objections are made to the report and recommendation of a
magistrate judge, the district court must review de novo those portions of the
report to which objections are made. 28 U.S.C. §636(b)(1); Brown v. Astrue,
649 F.3d 193, 195 (3d Cir. 2011).
Plaintiff here proceeds pro se, but not in forma pauperis. Therefore, we
do not at this juncture screen his complaint for failure to state a claim. See
28 U.S.C. §1915(e)(2)(B)(ii). Instead, the Report was issued sua sponte
pursuant to the court’s “independent obligation to determine whether subject-
matter jurisdiction exists, even in the absence of a challenge from any party.”
Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006): see also Fed. R. Civ. P.
12(h)(3). As such, only jurisdiction is currently at issue.
Pro se filings such as Plaintiff's must be construed liberally. Vogt v.
Weizel, 8 F.4th 182, 185 (3d Cir. 2021). That means the court should “remain
flexible,” and “apply the relevant legal principle even when the complaint has
failed to name it.” /d. It does not mean, however, that pro se litigants may
“flout procedural rules—they must abide by the same rules that apply to all
other litigants.” /d.
Because Plaintiff brings only state-law claims, he asserts that
jurisdiction exists pursuant to 28 U.S.C. §1332. Section 1332 extends federal
court jurisdiction to actions between “citizens of different States,”
§1332(a)(1). This provision has been interpreted to require “complete
diversity,” meaning that “the citizenship of each plaintiff is diverse from the
citizenship of each defendant.” Lewis, 519 U.S. at 68. Here, then, Plaintiffs
citizenship must be diverse from both Levy’s and Better Life Foods, Inc.’s.
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For purposes of §1332, a corporation is a citizen of its state of
incorporation and the state “where it has its principal place of business.”
§1332(c)(1). A corporation’s principal place of business is its “nerve
center’—“the place where [its] officers direct, control, and coordinate the
corporation's activities.” Hertz Corp. v. Friend, 559 U.S. 77, 92—93 (2010).
lil. DISCUSSION
The Complaint here alleges that Better Life Foods, Inc. is registered in
Delaware. (Doc. 10 912). Though registration is not synonymous with
incorporation, the court takes judicial notice that a “BETTER LIFE FOODS
INC.” is incorporated in Delaware.? As the Report recognizes, however, the
Amended Complaint also fails to specifically allege Better Life’s principal
place of business. (Doc. 14 at 7).
2 BETTER LIFE FOODS INC. (File No. 2388071) is listed as a
Delaware Corporation by the Delaware Department of State’s website. See
Entity | Search, Del. Dep't of State, Div. of _Corps.,
icis.corp.delaware.gov/eCorp/EntitySearch/NameSearch.aspx. The court
may take judicial notice of this public record. See, e.g., Hasson v. FullStory,
Inc., No. 2:22-cv-1246, 2023 WL4727619, at *2 (W.D. Pa. July 25, 2023);
Zangara Vv. Nat’! Bd. of Med. Examiners, No. 22-1559, 2023 WL 2868223, at
*5 (D. N.J. Apr. 6, 2023); Amansec v. Midland Credit Mgmt., Inc., No. 2:15-
cv-8798, 2017 WL 579936, at *3 n.38 (D. N.J. 2017); Airlines Reporting Corp.
v. Belfon, No. 2003/146, 2010 WL 3664065, at *20 (D. V.I. 2010).
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Plaintiffs objection (which he labels a “response”) appears to be an
attempt to amend his pleading to include an allegation that Better Life “is
operating from” Texas. (Doc. 15 8).
A federal statute provides that “[dJefective allegations of jurisdiction
may be amended, upon terms, in the trial or appellate courts.” 28 U.S.C.
§1653. “This statute applies in particular to amendments that affect a court's
diversity jurisdiction, and it permits amendments broadly so as to avoid
dismissal of diversity suits on technical grounds.” Kiser v. Gen. Elec. Corp.,
831 F.2d 423, 427 (3d Cir. 1987). “Accordingly, it is not only within the power,
but it is a duty, of a federal court to consider on the merits a proposed
amendment of a defective allegation once the court’s attention is called to
the defect.” /d.
Plaintiffs proposed amendment would not cure the jurisdictional
defect. He intends only to allege that Better Life operates from Texas; not
that Texas is Better Life’s principal place of business. Corporations can
operate outside their principal place of business. So this allegation does not
inform us of Better Life’s citizenship. See J&R Ice Crearn Corp. v. Cal.
Smoothie Licensing Corp., 31 F.3d 1259, {265 n.3 (‘The complaint stated
that [the defendant] had ‘a’ principal place of business in New Jersey, leaving
open the possibility that it had ‘its’ principal place of business in Florida.
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Thus, the complaint did not properly plead diversity jurisdiction.”); Kovacs v.
Zumstein, Inc., No. 3:11-cv-656, 2011 WL 1541297, at *2 (M.D. Pa. 2011).
Despite Plaintiff's pro se status, this defect cannot be overlooked. That
is because “[f]ederal courts are courts of limited jurisdiction” that “possess
only that power authorized by Constitution and statute.” Kokkenen v.
Guardian Life Ins. Co., 511 U.S. 375, 377 (1994). “It is to be presumed that
a cause lies outside this limited jurisdiction, and the burden of establishing
the contrary rests upon the party asserting jurisdiction.” /d. And “i]t is well
established that ‘the basis upon which jurisdiction depends must be alleged
affirmatively and distinctly and cannot be ‘established argumentatively or by
mere inference.” S. Freedman & Co., Inc. v. Raab, 180 Fed. App’x 316, 320
(3d Cir. 2006) (non-precedential) (first quoting 5 C. Wright & A. Miller, Fed.
Practice & Procedure §1206, and then citing Thomas v. Bd. of Trustees of
Ohio State Univ., 195 U.S. 207, 210 (1904)).
An allegation that Better Life operates from Texas, or from New York,
would not affirmatively establish that its principal place of business is not in
Pennsylvania. The court may not simply infer that fact. That said, there is no
indication in the record that Better Life’s principal place of business js in
Pennsylvania. So the court cannot conclude that amendment would be futile.
And though Plaintiff has already been given one opportunity to amend,
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considering his pro se status and the interest in “avoid[ing] dismissal of
diversity suits on technical grounds,” Kiser, 831 F.2d at 427, the court
concludes that dismissal with leave to amend is appropriate here.
IV. CONCLUSION
The court agrees with the Report's reasoning except for its conclusion
that further leave to amend would be futile. The Report will therefore be
adopted in part and not adopted in part. Plaintiff's Amended Complaint will
be dismissed with leave to amend. An appropriate order will follow.
/ Px i_\ -
MALACHY E. MANNION
United States District Judge
DATE: February 21, 2024
23-2106-01
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