Thanks for the question and this is a slightly tricky one. The key here is we are missing a US citizen from any state other than California as a defendant. There is no diversity jurisdiction if one side has a mix of foreign and US parties (e.g., Mexico + CA) and the other side has only a foreign party or parties (e.g., Japan).
If you look at 28 USC 1332 (a)(3) we can have diversity jurisdiction if citizens of different states sue each other and there are additional foreign parties. For example, Mexico + CA v. Japan + NY works. In that case we have citizens of different states and additional foreign parties.
But your example eliminates the NY defendant. Now we have a foreign party and a US party on one side and a foreign party on the other side.
1332 (a)(2) provides for diversity jurisdiction if a foreign party and citizens of a US state are on opposite sides (e.g., Japan v. NY) but here we have a mix of foreign and US parties against a foreign defendant. 1332(a)(2) will not help the plaintiffs in this case.
