Shanmugam v. Sheikha Hind Suhail Al Mukhaini Bahwan

Background

Durgaprasad Shanmugam filed various tort, contract, and statutory claims under California law in Santa Clara County Superior Court. He alleged that, during a December 19, 2025 meeting in Dubai, United Arab Emirates, Defendant Sheikha Hind Suhail Al Mukhaini Bahwan coerced him into resigning his position and giving up his interest in the Bahwan CyberTek Group.

The defendants are Bahwan CyberTek LLC, Sheikha Hind Suhail Al Mukhaini Bahwan, Bahwan CyberTek, Inc., and dt360, Inc. The opinion states that Shanmugam is a citizen of India, has been a lawful permanent resident of the United States since 2008, and has lived in California since 2021. It states that Bahwan CyberTek LLC and Bahwan are citizens of Oman, while Bahwan CyberTek, Inc. and dt360, Inc. are U.S. citizens.

The defendants removed the case from state court to the Northern District of California, arguing that the federal court had diversity jurisdiction under 28 U.S.C. § 1332. The defendants also moved to dismiss on several grounds, including that another forum was more appropriate, lack of personal jurisdiction, and failure to state claims against the two U.S. subsidiary defendants. Shanmugam separately moved to remand the case to state court.

Jurisdictional Analysis

The court treated the motion to remand as a threshold jurisdictional issue and considered it before the motion to dismiss. Federal law requires a federal court to return a removed case to state court if, before final judgment, it lacks subject matter jurisdiction.

The court explained that diversity jurisdiction generally requires the parties’ citizenship to satisfy the conditions in 28 U.S.C. § 1332. A lawful permanent resident who is not a U.S. citizen is not a “citizen” of a U.S. state for purposes of that statute. Because Shanmugam is not a U.S. citizen, his residence in California did not make him a California citizen for diversity-jurisdiction purposes.

The defendants argued that a different part of the diversity statute, § 1332(a)(3), allowed jurisdiction because U.S. citizens were also defendants. The court rejected that argument. It concluded that a 2011 amendment to the statute removed the prior rule treating certain lawful permanent residents as citizens of the state where they lived. The court held that the case lacked diversity jurisdiction because foreign citizens were present on both sides and one side—Shanmugam’s—had no U.S. citizen.

Disposition

Judge Noél Wise granted Shanmugam’s motion to remand because the court lacked subject matter jurisdiction. The action was remanded to Santa Clara Superior Court.

The court dismissed as moot the defendants’ motion to dismiss, Shanmugam’s motion for service by other means, and the related sealing motions identified in the order. The court directed that all provisionally sealed documents remain under seal.