Shandong Yuyuan Logistics, Co., Ltd. v. Soleil Chartered Bank, No. 1:17-cv-09421 (S.D.N.Y. June 28, 2018) [click for opinion]

Plaintiff Shandong Yuyuan Logistics Co., Ltd. ("Shandong"), a Chinese corporation, brought suit against Defendants Soleil Chartered Bank ("SCB"), Soleil Capitale Corporation ("SCC") and Govind Srivastava ("Srivastava"), for breach of contract and other causes of action in connection with a letter of credit that had been issued for Shandong's benefit.

Shandong alleged that the federal district court had diversity jurisdiction over the action pursuant to 28 U.S.C. § 1332, which requires complete diversity of citizenship and an amount in controversy of more than $75,000. Defendants moved to dismiss the action for lack of subject matter jurisdiction because Shandong had failed to plead complete diversity in its complaint.

The court agreed and dismissed the suit, reasoning that diversity jurisdiction does not exist where there are foreign parties on both sides of a case. Here, the court held that Shandong did not demonstrate that the parties were completely diverse in its complaint. While a corporation is a citizen of both the place where it is incorporated as well as its principal place of business, Shandong had failed to allege that SCB—a bank registered in the Union of Comoros with an office in New York—was actually incorporated or had its principal place of business anywhere in the United States.

Accordingly, the court granted Defendants' motion and dismissed the suit for lack of subject matter jurisdiction.