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Piper v. Gooding & Company Inc.

United States District Court, D. Arizona

February 15, 2018

Peter J Piper, Plaintiff,
Gooding & Company Incorporated, et al., Defendants.


          Douglas L. Rayes United States District Judge

         Before the Court is Defendant Gooding & Company's ("Gooding") motion to dismiss for lack of subject matter jurisdiction. (Doc. 17.) The motion is fully briefed and the Court heard oral argument telephonically on February 5, 2018. (Docs. 19-21.) The Court also considers the merits of Plaintiff Peter Piper's Petition to Perpetuate Testimony under Federal Rule of Civil Procedure 27(a) because Plaintiff raises the issue in response to Gooding's motion to dismiss. For the following reasons, Gooding's motion and Plaintiff's petition are denied.

         I. Background

         This case involves a dispute over the ownership of a rare 1954 Ferrari. Plaintiff alleges that his father, James Piper, purchased the Ferrari in 1962 and later died under suspicious circumstances. Afterward, Plaintiff unsuccessfully searched for the Ferrari and other high value assets owned by his late father. Nearly 30 years later, Plaintiff discovered that a Ferrari was being sold by Gooding, a well-known auctioneer, on January 20, 2018 in Scottsdale, Arizona. Plaintiff alleges that he attended the auction with his sister, non-party Janice Ednoff, and determined based on the Ferrari's provenance (which was based on the purported sale and transfer of title by James Piper in 1991-two years after his death) and his own observations that it was his father's. Plaintiff notified Gooding of his claim to the Ferrari, leading Gooding to withdraw it from the auction.

         Plaintiff filed this lawsuit on January 23, 2018, alleging conversion, trespass to chattels, and unjust enrichment claims against Gooding and the yet unknown person or entity (who is believed to reside somewhere in Asia) claiming to be the Ferrari's current owner. Plaintiff's verified complaint also included a request for an order perpetuating testimony under Rule 27. (Doc. 1.)

         Concurrent with his verified complaint, Plaintiff filed an application for a temporary restraining order ("TRO"), in which he requested that the Court temporarily enjoin Gooding from moving the Ferrari out of the state or country. (Doc. 3.) The Court granted Plaintiff's application, temporarily enjoined Gooding for moving the Ferrari, and scheduled a telephonic conference for January 25, 2018 to discuss Plaintiff's request for discovery, the adequacy of the bond ordered by the Court to secure the TRO, and a proposed briefing and hearing schedule on whether to convert the TRO to a preliminary injunction. (Docs. 8, 13.)

         During that conference call, Gooding informed the Court that it had moved the Ferrari to California prior to Plaintiff filing this lawsuit, but that it would keep the Ferrari at its current location consistent with the TRO. Gooding also raised concerns about the Court's subject matter jurisdiction. The Court set an expedited briefing schedule on the subject matter jurisdiction issue and scheduled a second telephonic conference for February 5, 2018 to discuss jurisdiction, discovery, and potentially a preliminary injunction briefing and hearing schedule. (Doc. 15.) After reviewing the briefs, however, the Court determined that the February 5, 2018 telephonic conference would be better spent addressing the jurisdictional issues. After hearing oral argument, the Court took Gooding's motion to dismiss under advisement and the parties stipulated to a fourteen-day extension of the TRO to allow the Court time to issue a decision.

         II. Discussion

         Gooding argues that this case must be dismissed because Plaintiff has not joined necessary and indispensable parties under Rule 19, and that joinder of the absent parties would defeat complete diversity. In addition to responding to Gooding's Rule 19 argument, Plaintiff has raised two alternative bases for the Court to exercise subject matter jurisdiction. First, Plaintiff argues that Rule 27 provides an independent basis for subject matter jurisdiction over this action. (Doc. 19 at 5-7.) Second, he contends that 28 U.S.C. § 1331 confers subject matter jurisdiction. (Id. at 2.) Before addressing Gooding's Rule 19 argument, the Court will dispose of Plaintiff's two unrelated counterarguments.

         A. Plaintiff's Rule 27 Petition

         As previously noted, Plaintiff filed his verified complaint in combination with a Rule 27 petition to perpetuate testimony. Rule 27(a) governs the circumstances under which a person may obtain an order to "perpetuate testimony" before an action is filed.[1]A Rule 27(a) petition must show:

(A) that the petitioner expects to be a party to an action cognizable in a United States court but cannot presently bring it or cause it to be brought;
(B) the subject matter of the expected action and the petitioner's interest;
(C) the facts that the petitioner wants to establish by the proposed testimony and the reasons to perpetuate it;
(D) the names or a description of the persons whom the petitioner expects to be adverse parties and their addresses, so far as known; and
(E) the name, address, and expected substance of the testimony of each deponent.

         Though "[t]here need not be an independent basis of federal jurisdiction in a proceeding to perpetuate, . . . it must be shown that in the contemplated action, for which the testimony is being perpetuated, federal jurisdiction would exist and thus is a matter that may be cognizable in the federal courts." Dresser Indus., Inc. v. U.S., 596 F.2d 1231, 1238 (5th Cir. 1979). Stated differently, although a petitioner need not establish an independent basis for jurisdiction over the Rule 27 petition itself, the filing of the Rule 27 petition does not confer subject matter jurisdiction over the contemplated future (or, in this case, existing) action for which the testimony will be used. Accordingly, Plaintiff's Rule 27 petition does not confer subject matter jurisdiction over his conversion, trespass to chattels, and unjust enrichment claims.

         Moreover, Plaintiff's Rule 27 petition is patently improper. Indeed, Plaintiff's filing does not read like a Rule 27 petition. Other than its title and paragraph A of its prayer for relief, Plaintiff's filing simply is a verified complaint. Although some of the information required by Rule 27(a)(1) can be gleaned from the verified complaint, the information is not presented as a petition to perpetuate testimony. This is unsurprising because Rule 27 clearly is inapplicable here.

         "Rule 27 applies where testimony or evidence might be lost to a prospective litigant unless a deposition is taken immediately to preserve the testimony for future use." In re Certain Investor in EFT Holdings Inc. to Perpetuate Testimony of Mr. Jack Qin Under FRCP Rule 27, No. CV 13-0218 UA (SS), 2013 WL 3811807, at *3 (C.D. Cal. 2013). Further, "[i]t is well-established in case law that perpetuation means the perpetuation of known testimony." In Re Petition of Allegretti, 29 F.R.D. 93, 96 (S.D.N.Y. 2005). Thus, to obtain relief under Rule 27(a), a petitioner must satisfy three elements:

First, they must furnish a focused explanation of what they anticipate any testimony would demonstrate. Such testimony cannot be used to discover evidence for the purpose of filing a complaint. Second, they must establish in good faith that they expect to bring an action cognizable in federal court, but are presently unable to bring it or cause it to be brought. Third, petitioners must make an objective ...

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