Qiu v. Diamond, Jr.
- Edgardo Ramos
- 1:19-cv-02050
- U.S. District Court · Southern District of New York
- 5
In Qiu v. Diamond, Jr., Judge Ramos dismissed the action without prejudice for lack of jurisdiction and denied Qiu’s request for costs.
The action was dismissed without prejudice, and Qiu was not awarded the costs he requested from Atlas’s earlier motion to dismiss.
What happened
In Qiu v. Diamond, Jr., Qiu sued Robert Diamond, Jr. and Atlas Merchant Capital LLC over claims involving breach of contract, unjust enrichment, and payment for services. Atlas initially sought dismissal on other grounds, but the court denied that request.
Atlas later informed the court that diversity jurisdiction was lacking because Qiu was a citizen of Hong Kong and Atlas had a member who was a citizen of the Cayman Islands. Qiu agreed that the court lacked authority to hear the case and asked for dismissal without prejudice, along with costs from defending Atlas’s earlier motion.
Judge Edgardo Ramos dismissed the action without prejudice under Rule 41(a)(2), allowing it to be filed again, but denied Qiu’s request for costs. The court held that Qiu had not shown a legal or equitable basis for shifting those costs to Atlas.
The detailed version
- Qiu v. Diamond, Jr. · No. 1:19-cv-02050
- Edgardo Ramos
- May 6, 2020
Background
Zhi Zhong Qiu brought claims for breach of contract, unjust enrichment, and quantum meruit against Robert Diamond, Jr. and Atlas Merchant Capital LLC. Qiu’s complaint alleged federal jurisdiction based on diversity of citizenship. Atlas was described in the complaint as a Delaware corporation with its headquarters and principal place of business in New York.
Atlas previously moved to dismiss, arguing that Qiu’s claims were barred by New York’s Statute of Frauds and contradicted by the record. The court denied that motion in its entirety on February 27, 2020. Atlas later advised the court that it was a limited liability company with a member who was a citizen of the Cayman Islands. Because Qiu was a citizen of Hong Kong, Atlas argued that diversity jurisdiction was lacking. Qiu did not contest that the court lacked subject-matter jurisdiction.
Dismissal
Qiu requested dismissal without prejudice under Federal Rule of Civil Procedure 41(a)(2). Atlas consented to dismissal but opposed Qiu’s request for costs. The court explained that Rule 41(a)(2) permits dismissal by court order on terms the court considers proper and that such a dismissal is generally without prejudice unless the order states otherwise.
The court granted Qiu’s request for dismissal without prejudice. It noted that both parties agreed to that result and found no reason to change the agreed condition of voluntary dismissal.
Request for Costs
The court denied Qiu’s request for costs. Applying the American Rule, which generally requires each side to pay its own attorneys’ fees, the court found that Qiu had cited no authority supporting an award of costs to a plaintiff in this situation. The court also rejected Qiu’s reliance on 28 U.S.C. § 1919 and his argument that the court should award costs under its equitable powers.
The court acknowledged that Atlas’s failure to identify the jurisdictional problem earlier reflected serious negligence. But the record did not show that Atlas intentionally or tactically withheld the issue, and Qiu had the burden of establishing subject-matter jurisdiction. The court also explained that a lack of subject-matter jurisdiction may be raised at any stage of the case.
Disposition
The court dismissed the action without prejudice under Rule 41(a)(2) and denied Qiu’s request for costs.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.