United States District Court, W.D. North Carolina, Asheville Division
MEMORANDUM OF DECISION AND ORDER
REIDINGER, UNITED STATES DISTRICT JUDGE
MATTER is before the Court on the Motion to Dismiss the
Complaint or, in the Alternative, Stay the Action and Request
for Expedited Consideration filed by the Defendant CEI Kings
Mountain Holdings, LLC (“CEI”) and Wattage
Finance-NC, LLC (“Wattage”) [Doc. 15] and the
Motion Joining Motion to Stay the Action and for Relief from
Restraining Order filed by the Defendant Castillo Investment
Holdings, LLC (“Castillo”) [Doc. 28].
FACTUAL AND PROCEDURAL HISTORY
January 17, 2019, the Plaintiff NTE Energy Services Company,
LLC, initiated this statutory interpleader action, seeking
the Court's assistance pursuant to 28 U.S.C. § 1335
in determining a fair, equitable, and just distribution of
$13, 269, 397.88 under the Plaintiff's control. [Doc. 1].
The Plaintiff sought leave to pay into the Court $13, 269,
397.88 (“the Disputed Funds”) pursuant to
statutory interpleader. [Doc. 3]. The Plaintiff also moved
for an Order restraining the Defendants/Claimants from
initiating or pursuing state or federal actions which would
impact the Disputed Funds. [Doc. 5]. On January 22, 2019, the
Court entered an Order granting the Plaintiff's motion
for the deposit of funds and restraining the
Defendants/Claimants from initiating, instituting or
prosecuting any action that affects any party's right to
the Disputed Funds. [Doc. 10]. The Court noted, however, that
the Order was intended to be “without prejudice to any
Defendant/Claimant's right to seek relief from this Order
to continue pursuing claims or counterclaims at issue in the
various Arbitrations described in the Complaint.”
[Id. at 9].
Wattage now move the Court to dismiss this action for lack of
subject matter jurisdiction under 28 U.S.C. § 1335,
arguing that the Plaintiff is not in custody or possession of
the funds at issue, and for failure to state a claim upon
which relief may be granted, arguing that the Plaintiff's
fears of multiple liability are not legitimate and the
pending arbitrations render the interpleader action
unnecessary. [Doc. 15]. In the alternative, CEI and Wattage
move the Court to stay the action and to allow the pending
arbitrations to go forward. [Id.]. Castillo joins in
the motion to stay the action and for relief from the
restraining order. [Doc. 28].
STANDARD OF REVIEW
Motion to Dismiss for Lack of Subject Matter Jurisdiction
district courts are courts of limited jurisdiction.
United States ex rel. Vuyyuru v. Jadhav, 555 F.3d
337, 347 (4th Cir. 2009). “Thus, when a
district court lacks subject matter jurisdiction over an
action, the action must be dismissed.” Id. The
lack of subject matter jurisdiction is an issue that may be
raised at any time. See Ellenburg v. Spartan Motors
Chassis, Inc., 519 F.3d 192, 196 (4th Cir.
2008). “If the court determines at any time that it
lacks subject-matter jurisdiction, the court must dismiss the
action.” Fed.R.Civ.P. 12(h)(3).
Motion to Dismiss for Failure to State a Claim
central issue for resolving a Rule 12(b)(6) motion is whether
the claims state a plausible claim for relief. See
Francis v. Giacomelli, 588 F.3d 186, 189 (4th Cir.
2009). In considering Defendant's motion, the Court
accepts the allegations in the Complaint as true and
construes them in the light most favorable to Plaintiff.
Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc.,
591 F.3d 250, 253 (4th Cir. 2009); Giacomelli, 588
F.3d at 190-92. Although the Court accepts well-pled facts as
true, it is not required to accept “legal conclusions,
elements of a cause of action, and bare assertions devoid of
further factual enhancement....”
Consumeraffairs.com, 591 F.3d at 255; see also
Giacomelli, 588 F.3d at 189.
claims need not contain “detailed factual allegations,
” but must contain sufficient factual allegations to
suggest the required elements of a cause of action. Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007); see
also Consumeraffairs.com, 591 F.3d at 256.
“[A] formulaic recitation of the elements of a cause of
action will not do.” Twombly, 550 U.S. at 555.
Nor will mere labels and legal conclusions suffice.
Id. Rule 8 of the Federal Rules of Civil Procedure
“demands more than an unadorned, the
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
complaint is required to contain “enough facts to state
a claim to relief that is plausible on its face.”
Twombly, 550 U.S. at 570, 127 S.Ct. at 1974; see
also Consumeraffairs.com, 591 F.3d at 255. “A
claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Iqbal, 556 U.S. at 678; see also
Consumeraffairs.com, 591 F.3d at 255. The mere
possibility that a defendant acted unlawfully is not
sufficient for a claim to survive a motion to dismiss.
Consumeraffairs.com, 591 F.3d at 256;
Giacomelli, 588 F.3d at 193. Ultimately, the
well-pled factual allegations must move a plaintiff's
claim from possible to plausible. Twombly, 550 U.S.
at 570; Consumeraffairs.com, 591 F.3d at 256.
district courts have original jurisdiction over a civil
action for interpleader filed by any person or entity having
in its custody or possession five hundred dollars or more if
two or more adverse claimants of diverse citizenship claim to
be entitled to the money and the money has been paid into
court. 28 U.S.C. § 1335(a). CEI and Wattage argue that
this Court lacks subject matter jurisdiction under §
1335 because the Plaintiff was not in “custody or
possession” of the funds at issue. The Defendants'
argument in this regard is belied by the fact that the
Plaintiff successfully directed the deposit such funds into
the Court registry. Regardless of whether some other entity
in fact possessed the Disputed Funds, the deposit into the
Court's registry clearly demonstrates that the Plaintiff
had the power to direct the payment of such funds and thus
had the requisite “control.” See General
Atomic Co. v. Duke Power Co., 553 F.2d 53, 57 (10th ...