243 F.3d 546, 2000 WL 1681044 (9th Cir.(Nev.))

Armstrong v. Miscavige, et al. (Nevada)


(The Court's decision is referenced in a "Table of Decisions Without Reported Opinions" appearing in the Federal Reporter. Use FI CTA9 Rule 36-3 for rules regarding the citation of unpublished opinions.)

United States Court of Appeals, Ninth Circuit.
Gerald ARMSTRONG, Plaintiff-Appellant-Cross-Appellee,
CHURCH OF SCIENTOLOGY INTERNATIONAL, a California corporation; Religious
Technology Center, a California corporation, Defendants-Appellees-Cross-
Nos. 98-17024, 99-15203.
D.C. No. CV-97-00670-ECR.

Argued and Submitted Oct. 31, 2000.
Decided Nov. 8, 2000.

Appeal from the United States District Court for the District of Nevada, Edward C. Reed, Jr., District Judge, Presiding.

Before B. FLETCHER, O'SCANNLAIN, and GOULD, Circuit Judges.


FN* This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3.

**1 Armstrong appeals the district court's dismissal of his defamation action for lack of subject matter jurisdiction. The Church of Scientology International ("CSI") and Religious Technology Center ("RTC") appeal the district court's denial of their request for attorneys' fees. The facts and prior proceedings are known to the parties; they are not restated herein except as necessary.

The asserted basis of subject matter jurisdiction over Armstrong's defamation action was diversity. CSI and RTC are citizens of California for diversity purposes; Armstrong claimed to be a citizen of Nevada. After an evidentiary hearing, the district court found that Armstrong failed to establish a Nevada domicile and hence remained a domiciliary of California, where he resided for over six years prior to his alleged relocation to Nevada.

For purposes of diversity jurisdiction, an individual is a citizen of his or her state of domicile, which is determined at the time the lawsuit is filed. See Lew v. Moss, 797 F.2d 747, 750 (9th Cir.1986). "[A] person is 'domiciled' in a location where he or she has established a 'fixed habitation or abode in a particular place, and [intends] to remain there permanently or indefinitely." ' Id. at 749-50 (quoting Owens v. Huntling, 115 F.2d 160, 162 (9th Cir.1940) (second insertion in original)). A person's old domicile is not lost until a new domicile is acquired. A change in domicile requires: "(a) physical presence at the new location with (b) an intention to remain there indefinitely." Id. at 750. Courts apply a presumption in favor of an established domicile as against a newly acquired one. See id. at 751. Because Armstrong sought to assert diversity jurisdiction, he had the burden of proof. See id. at 749.

The district court's factual findings on jurisdictional issues are reviewed for clear error. See Prudential Real Estate Affiliates, Inc. v. PPR Realty, Inc., 204 F.3d 867, 872-73 (9th Cir.2000). Here, the district court's finding that Armstrong failed to establish Nevada domicile was not clearly erroneous. Armstrong spent less than 30 days in Nevada during the course of the litigation; he slept in the office of his attorney, Mr. Abbott, or as a guest in Mr. Abbott's home. He lived with his mother in British Columbia the rest of the time. Armstrong also lacked a Nevada driver's license, voting registration, bank account, or other indicia of domiciliary status at the time the lawsuit was filed. Armstrong clearly failed to establish a Nevada domicile.

Because we affirm the district court's dismissal of the action for lack of subject matter jurisdiction, we need not reach the issue of whether the action should have been dismissed under the fugitive disentitlement doctrine.

In their cross-appeal, CSI and RTC contend that the district court abused its discretion in denying their request for attorneys' fees under 28 U.S.C. § 1927 to sanction Armstrong and his attorney for their alleged bad faith in filing a declaration in which Armstrong claimed Nevada residency.

**2 An award of sanctions under § 1927 requires a finding that counsel has acted in "subjective bad faith," that is, has knowingly or recklessly raised a frivolous argument or has raised a meritorious argument solely to harass the opposing party. See Salstrom v. Citicorp Credit Servs., Inc., 74 F.3d 183, 184 (9th Cir.1996). Because the principal issue of a § 1927 determination is the state of mind of the offender, the district court's determination is one which "deserves substantial deference from a reviewing court." Pacific Harbor Capital, Inc. v. Carnival Air Lines, Inc., 210 F.3d 1112, 1119 n. 12 (9th Cir.2000).

The district court analyzed seven statements in Armstrong's declaration that the defendants alleged were false or misleading and determined that they did not constitute false or frivolous positions, even though they did not support the conclusion that Armstrong was a legitimate Nevada domiciliary. The district court concluded that the conduct of Armstrong and his attorney, while hardly exemplary, did not quite rise to the level of bad faith. We cannot say that the district court thereby abused its discretion.

The judgment of the district court is accordingly AFFIRMED. [FN1]

FN1. Appellant's motion for leave to amend complaint and suggestion that this case be stayed until further court order, filed October 30, 2000, are DENIED.

243 F.3d 546 (Table), 2000 WL 1681044 (9th Cir.(Nev.)) Unpublished Disposition

Briefs and Other Related Documents (Back to top)

. 2000 WL 34026068 (Appellate Brief) Appellees' Consolidated Brief in Opposition on Appellant's Appeal and Brief in Support of Appellees' Cross-Appeals (Jan. 26, 2000)Original Image of this Document (PDF)

. 1999 WL 33757040 (Appellate Brief) Appellant/Cross-Appellee's Opening Brief (Nov. 17, 1999)Original Image of this Document (PDF)

. 99-15203 (Docket) (Feb. 10, 1999)

. 98-17024 (Docket) (Oct. 27, 1998)