Moskovits v. Grigsby

Background

Alexander Moskovits sued Calvin Grigsby, Bank of America N.A., Raimundo Colombo, and Jorge Siega, asserting unjust-enrichment and breach-of-contract claims. Moskovits alleged that he developed a financing structure and helped create business opportunities for transactions involving Brazilian entities, but did not receive compensation. He originally filed the action in New York Supreme Court. The Federal Republic of Brazil and several Brazilian governmental entities removed the case to the Southern District of New York under 28 U.S.C. § 1441(d), which permits a foreign state to remove a case from state court.

After removal, Moskovits voluntarily dismissed the foreign states and governmental entities. The remaining parties included Moskovits, a citizen of Brazil; Grigsby, a citizen of California; Bank of America, a citizen of North Carolina; and Siega and Colombo, citizens of Brazil. Moskovits then moved to remand, meaning to return the case to state court.

Jurisdiction

The court held that the original basis for federal jurisdiction—the foreign-state defendants’ presence—no longer existed after their dismissal. The court also rejected diversity jurisdiction under 28 U.S.C. § 1332(a). Diversity jurisdiction generally requires the parties to be citizens of different states and the amount in controversy to exceed $75,000, but the court explained that federal courts generally do not have diversity jurisdiction when one side consists only of aliens and the other side includes both U.S. citizens and aliens. Because Moskovits was a Brazilian citizen and the defendants included both U.S. and Brazilian citizens, the court concluded that diversity jurisdiction was unavailable.

Fraudulent Joinder

The defendants argued that Siega and Colombo had been fraudulently joined, a legal theory allowing a court to disregard a non-diverse defendant when the removing parties show by clear and convincing evidence that there is no possible claim against that defendant. The court analyzed Siega’s alleged liability and stated that the complaint had to be read liberally because Moskovits filed it without a lawyer.

The court rejected the defendants’ arguments that the unjust-enrichment claim against Siega was untimely, barred by New York’s statute of frauds, or insufficiently pleaded for purposes of the remand motion. The court found that Moskovits’s allegations about providing a financing structure could support a possible claim for equitable restitution, and that the allegations about Siega’s participation in meetings, communications, and transactions created a possibility that Siega had been enriched at Moskovits’s expense. The court expressly stated that it was not deciding whether the complaint would survive a motion to dismiss under Rule 12(b)(6); it was applying the lower standard used to decide whether Siega was fraudulently joined. The court did not decide the sufficiency of the allegations against Colombo because Siega’s presence alone was enough to require remand.

Disposition

The court granted Moskovits’s motion to remand and remanded the case to the Supreme Court of the State of New York, New York County. The defendants’ motion to dismiss and Moskovits’s motion to amend the complaint were denied as moot. Judge Vernon S. Broderick directed the clerk to close the motions and terminate the federal case.