White v. PayPal, Inc.

Background

Todd White filed a complaint against PayPal, Inc. on December 6, 2019, along with an application to proceed without paying the filing fee. His complaint asserted state-law claims for breach of contract, fraud, and violations of California Business and Professions Code section 17200 and following sections.

Jurisdiction

The court explained that federal courts have limited jurisdiction and may hear a case based on either a federal question or diversity jurisdiction. Because White’s claims arose under state law, they did not establish federal-question jurisdiction.

For diversity jurisdiction, the parties must be citizens of different states, and the amount in controversy must exceed $75,000, excluding interest and costs. A corporation is a citizen of every state or foreign country where it is incorporated and of the state or foreign country where it has its principal place of business.

The complaint identified White as a citizen of California and PayPal as a “Delaware corporation.” The court found that the complaint did not explain whether PayPal was incorporated in Delaware, had its principal place of business there, or both. The opinion’s text is partially garbled at this point, but the court clearly required more information about PayPal’s citizenship to determine whether diversity jurisdiction existed.

Order

The court issued an order to show cause, meaning it required White to explain why the complaint should not be dismissed for lack of jurisdiction. It ordered White to file a written response by January 10, 2020, explaining PayPal’s state of incorporation and principal place of business. The court did not dismiss the complaint in this order.

The opinion is signed by Donna M. Ryu, United States Magistrate Judge.