UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION LUIS A. GARCIA SAZ, and wife, MARIA DEL ROCIO BURGOS GARCIA, Plaintiffs, vs. CASE NO. 8:13-CV-220-T27 TBM CHURCH OF SCIENTOLOGY RELIGIOUS TRUST; CHURCH OF SCIENTOLOGY FLAG SERVICE ORGANIZATION, INC.; CHURCH OF SCIENTOLOGY FLAG SHIP SERVICE ORGANIZATION, INC d/b/a MAJESTIC CRUISE LINES; U.S. IAS MEMBERS TRUST. Defendants.

 / PLAINTIFFS’ MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANTS IAS ADMINISTRATIONS, INC., U.S. IAS MEMBERS TRUST AND CHURCH OF SCIENTOLOGY RELIGIOUS TRUST’S JOINT MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION

Plaintiffs Luis A. Garcia Saz and Maria Del Rocio Burgos Garcia respectfully submit their Memorandum of Law in Opposition to Defendants IAS Administrations, Inc. (“IASA”), U.S. IAS Members Trust (“USIMT”), and Church of Scientology Religious Trust’s (“CSRT”) Joint Motion to Dismiss for Lack of Subject Matter Jurisdiction (the “Joint Motion”).

I.

 

Summary of Argument

After ten months of protracted litigation addressing everything

but 

 the merits of this fraud suit, three Church-related Defendants now profess to have recently discovered the citizenship of their own entities. It is inconceivable that, with Defendants’ scorched earth approach to litigation and the layers of lawyers engaged to defend them, questions on the threshold issue of jurisdiction

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were not discussed at the outset of this case. It is also significant that Defendants have chosen to raise jurisdiction for the first time only after the Court has requested the existing, written arbitration procedures in support of the pending motion to compel arbitration. As Plaintiffs will demonstrate in their response to Defendants’ papers, no arbitration has ever taken place and no  procedures written to govern the arbitration process exist. The strong belief is that the latest motion to dismiss based on the claimed citizenship of their entities is a ploy to change the forum and gain control over the outcome. The Court should deny Defendants’ motion for two equally compelling reasons.

First 

,

 

it is impossible to determine, based on the record before the Court, whether diversity jurisdiction is defeated. CSRT and USIMT claim that they are citizens of California  because some or all of their trustees live there

now

. But they do not provide the Court with their Trust documents demonstrating that that they are established as Trusts and identifying their trustees. Nor do the declarations attached to the Joint Motion establish that the self-declared trustees lived in California

at the time

 this action was filed. As to IASA, the bald and conclusory statement that its principal place of business is now Los Angeles does not satisfy the requisite “nerve center” test and is insufficient to defeat diversity jurisdiction. Defendants should be ordered to present the necessary facts and the support for those facts before asking the Court to dismiss this action outright. Until then, the Court has subject matter jurisdiction over this action and all the issues before it.

Second 

, even if Defendants can establish their citizenship in California, the Court can and should permit Plaintiffs to amend the Complaint to cure the jurisdictional defect. CSRT and USIMT acted merely as the bank accounts into which some of Plaintiffs’ monies were deposited. The fraudulent procurement of Plaintiffs’ monies was committed by individuals associated with 2

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and at the physical premises of Defendant Church of Scientology Flag Service Organization, Inc. in Clearwater, Florida. As nominal parties to the litigation, citizenship of the trust defendants should not be employed to defeat diversity. An amendment can easily remedy the jurisdictional defect without delay or prejudice to Defendants. If it is determined that Defendants are not completely diverse and an amendment cannot cure the jurisdictional defect, Defendants should be required to pay the costs and attorneys’ fees that Plaintiffs have incurred in this litigation. Defendants’ motion-

cum-

litigation tactic should not go without accountability.

II. Legal Argument A.

 

Legal Standard

Three rules of law govern consideration of Defendants’ motion to dismiss.

First,

in determining whether complete diversity exists, the Court must examine the citizenship of the

real parties

to the controversy.

Frederick Bearse v. Main Street Investments,

220 F. Supp. 2d 1338 (M.D. Fla. 2002).

Second,

defective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts. 28 U.S.C. § 1653 (2006);

 see also Firemen's Ins. Co. of  Newark, N.J. v. Robbins Coal Co.,

288 F.2d 349, 350 (5th Cir. 1961).

Third 

, when, as here, the existence of the Court’s subject matter jurisdiction is challenged based upon matters outside of the allegations in the Complaint, Plaintiffs must be afforded an opportunity to conduct discovery and present evidence supporting their allegations of jurisdiction.

See Stonington Ins. Co. v.  Motiva Enters., LLC 

, 2009 U.S. Dist. LEXIS 112357, 2-4 (S.D. Fla. 2009) (Corporate defendant’s conclusory affidavit offered in support of its motion to dismiss did not provide sufficient grounds for the Court to determine the defendant’s citizenship.);

Colonial Pipeline Co. v. Collins

, 921 F.2d 1237, 1243 (11th Cir. 1991) (“Although a district court has wide discretion 3

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