RMS NA, Inc. v. RMS (AUS) PTY LTD

[7] 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA [10] 11 RMS NA, INC., Case No.: 24-cv-01366-AJB-MMP Plaintiff, 12 ORDER: v. [13] (1) GRANTING DEFENDANTS’ RMS (AUS) PTY LTD, an Australian 14 MOTIONS TO DISMISS; and limited proprietary company; RMS 15 GLOBAL PTY LTD, an Australian (2) DENYING AS MOOT limited proprietary company; P & J 16 PLAINTIFF’S MOTION FOR BUTTIGIEG NOMINEES PTY LTD, an PRELIMINARY INJUNCTION 17 Australian limited proprietary company; PETER ANTHONY BUTTIGIEG, an 18 (Doc. Nos. 22, 23, 43) individual; JENNIFER LYNN 19 BUTTIGIEG, an individual; ASCOTT 2 PTE LTD, an Australian limited [20] proprietary company; ADVENT 21 PARTNERS 3 FUND LP, an Australian limited proprietary company; and DOES [22] 1–100 23 Defendants. [24] Presently pending before the Court are Defendants RMS Global Pty Ltd (“RMS [25] Global”), P & J Buttigieg Nominees Pty Ltd (“P&J”), Peter Buttigieg, Jennifer Buttigieg, [26] Ascott 2 Pte Ltd (“Ascott”), and Advent Partners 3 Fund LP’s (“Advent”) (collectively, [27] the “Affiliate Defendants”) motion to dismiss (Doc. No. 22), RMS (Aus) Pty Ltd’s (“RMS [28] 1 Australia”) motion to dismiss (Doc. No. 23) (all Defendants collectively, “Defendants”), 2 and Plaintiff RMS NA, Inc.’s motion for preliminary injunction (Doc. No. 43). For the 3 reasons provided in detail below, the Court GRANTS Defendants’ motions to dismiss for 4 lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2) and DENIES 5 AS MOOT Plaintiff’s motion for preliminary injunction. 6 I. BACKGROUND 7 RMS Australia is an Australian company that develops and produces software 8 (“RMS Software”) for use in the hospitality industry for various types of booking services. 9 (Complaint (“Compl.”), Doc. No. 1, ¶ 18.) Plaintiff is a Delaware corporation formed by 10 Reza Paydar for the purposes of the joint operation of RMS NORTH AMERICA LLC (the 11 “Joint Venture”), with its principal place of business in San Diego County, California. (Id. 12 ¶¶ 9, 19.) 13 On March 31, 2011, Plaintiff and RMS Australia entered into a Second Amended 14 and Restated Limited Liability Company Agreement (the “Operating Agreement”) for the 15 Joint Venture. (Id. ¶¶ 9, 20.) The express goal for establishing the Joint Venture was for 16 marketing and distributing the RMS Software in North America. (Id. ¶ 20; Operating 17 Agreement, Doc. No. 1-2, at 6 (Recitals § F).) The Operating Agreement is governed by 18 Delaware law. (Operating Agreement § 15.5.) 19 At some point, Defendants Mr. Buttigieg, Ms. Buttigieg, and P&J (collectively, the 20 “Buttigieg Defendants”) restructured RMS Global as the sole member of RMS Australia. 21 (Compl. ¶ 36.) Then, without informing Plaintiff, Buttigieg Defendants sold more than a 22 combined controlling share of their interest in RMS Global to Defendants Ascott and 23 Advent. (Id. ¶ 37.) 24 Plaintiff states it consistently met its obligations under the Operating Agreement and 25 its amendments, including by successfully marketing and selling the RMS Software to 26 clients in the American markets. (Id. ¶ 40.) Plaintiff asserts, however, that RMS Australia, 27 through the direction and control of Defendants, consistently failed in its obligations, which 28 interfered with Plaintiff’s ability to procure additional clients. (Id. ¶ 41.) Specifically, 1 Plaintiff asserts RMS Australia failed to provide customization services, resulting in the 2 loss of multiple existing and prospective clients; adequate quality assurance and customer 3 support and training, resulting in further loss of clients and an erosion of the Joint Venture’s 4 goodwill; and adequate training to Joint Venture staff and clients, instead directing them 5 to watch videos on YouTube in lieu of working with them individually. (Id.) Further, 6 despite the express goal to make the Joint Venture locally autonomous, Plaintiff alleges 7 RMS Australia never established, or attempted to develop, locally autonomous engineering 8 or quality assurance teams for the Joint Venture. (Id. ¶ 43.) Instead, RMS Australia 9 purportedly relied on its own staff, who were “poorly trained and incapable” of conducting 10 the Joint Venture’s business. (Id. ¶ 44.) RMS Australia also allegedly failed to satisfy 11 multiple capital calls and notices from the Joint Venture and to maintain a positive balance 12 in its capital account. (Id. ¶ 48.) 13 On September 23, 2024, Plaintiff filed an ex parte motion for temporary restraining 14 order and a motion for preliminary injunction. (See Doc. Nos. 7, 8.) The Court denied the 15 motion for temporary restraining order on October 15, 2024. (See Doc. No. 36.) Thereafter, 16 on October 21, 2024, the Court denied Plaintiff’s subsequent motion for preliminary 17 injunction with leave to amend. (See Doc. No. 40.) The instant motions follow. 18 II. LEGAL STANDARD 19 Under Rule 12(b)(2), a party may move to dismiss a complaint for lack of personal 20 jurisdiction. Fed. R. Civ. P. 12(b)(2). “Where a defendant moves to dismiss a complaint 21 for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating that 22 jurisdiction is appropriate.” Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797 , 800 23 (9th Cir. 2004) (citing Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990)). If the Rule 24 12(b)(2) motion “is based on written materials rather than an evidentiary hearing, the 25 plaintiff need only make a prima facie showing of jurisdictional facts to withstand the 26 motion to dismiss.” Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 27 2011), abrogated on other grounds as recognized by Axiom Foods, Inc. v. Acerchem Int’l, 28 Inc., 874 F.3d 1064 (9th Cir. 2017) (citing Brayton Purcell LLP v. Recordon & Recordon, [1] 606 F.3d 1124, 1127 (9th Cir. 2010), as amended, abrogated on other grounds as 2 recognized by Axiom Foods, 874 F.3d at 1069–70). While uncontroverted allegations in 3 the complaint are taken as true, the court “cannot ‘assume the truth of allegations in a 4 pleading which are contradicted by affidavit.’” LNS Enters. LLC v. Cont’l Motors, Inc., 22 5 F.4th 852 , 858 (9th Cir. 2022) (quoting Data Disc., Inc. v. Sys. Tech. Assocs., Inc., 557 6 F.2d 1280 , 1284 (9th Cir. 1977)). Where both sides submit affidavits, conflicts over the 7 statements contained in affidavits are resolved in the plaintiff’s favor. Id. (quoting 8 Boschetto v. Hansing, 539 F.3d 1011, 1015 (9th Cir. 2008)). “Additionally, any evidentiary 9 materials submitted on the motion ‘are construed in the light most favorable to the 10 plaintiff[s] and all doubts are resolved in [their] favor.’” Ochoa v. J.B. Martin & Sons 11 Farms, 287 F.3d 1182, 1187 (9th Cir. 2002) (quoting Metro Life Ins. Co. v. Neaves, 912 12 F.2d 1062 , 1064 n.1 (9th Cir. 1990)). 13 III. DISCUSSION 14 Plaintiff bears the burden to show the Court has either general personal jurisdiction 15 or specific personal jurisdiction over Defendants. Boschetto, 539 F.3d at 1015 . 16 When there is no applicable federal statute governing personal jurisdiction, as is the 17 case here, the law of the forum state determines personal jurisdiction. See Schwarzenegger, [18] 374 F.3d at 800 (“Where, as here, there is no applicable federal statute governing personal 19 jurisdiction, the district court applies the law of the state in which the district court sits.”). 20 California’s long arm statute, Cal. Code Civ. Proc. § 410.10, is co-extensive with federal 21 due process requirements, and therefore the jurisdictional analyses under California law 22 and federal due process are the same. See Cal. Code Civ. Proc. § 410.10 (“[A] court of this 23 state may exercise jurisdiction on any basis not inconsistent with the Constitution of this 24 state or of the United States.”); Mavrix Photo, Inc., 647 F.3d at 1223 (“California’s long25 arm statute . . . is coextensive with federal due process requirements, so the jurisdictional 26 analyses under state law and federal due process are the same.”). 27 For a court to exercise personal jurisdiction over a defendant consistent with due 28 process, that defendant must have “certain minimum contacts” with the relevant forum 1 “such that the maintenance of the suit does not offend ‘traditional notions of fair play and 2 substantial justice.’” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting 3 Milliken v. Meyer, 311 U.S. 457, 463 (1940)). In addition, “[t]he defendant’s ‘conduct and 4 connection with the forum State’ must be such that the defendant ‘should reasonably 5 anticipate being haled into court there.’” Sher, 911 F.2d at 1361 (quoting World-Wide 6 Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)). 7 A. General Jurisdiction 8 Plaintiff’s Complaint asserts the Court has personal jurisdiction “over the parties 9 because the parties, through the Joint Venture and their conduct related thereto, had 10 continuous and systemic contacts with California.” (Compl. ¶ 16.) Affiliate Defendants 11 and RMS Australia argue Plaintiff does not plead any “continuous and systematic” contacts 12 that would render these defendants “essentially at home” in California. (Doc. No. 22 at 12– 13 13; Doc. No. 23 at 18.) 14 “For general jurisdiction to exist over a nonresident defendant . . . , the defendant 15 must engage in ‘continuous and systematic general business contacts’ that ‘approximate 16 physical presence’ in the forum state.” Schwarzenegger, 374 F.3d at 801 (quoting 17 Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416 (1984), and Bancroft 18 & Masters, Inc. v. Augusta Nat’l, Inc., 223 F.3d 1082, 1086 (9th Cir. 2000), overruled in 19 part on other grounds by Yahoo! Inc. v. La Ligue Contre Le Racisme Et L’Antisemitisme, [20] 433 F.3d 1199 (9th Cir. 2006)) (internal citations omitted). A nonresident defendant’s 21 “continuous activity of some sorts within a state,” however, is not enough by itself to 22 support exercise of general jurisdiction. Goodyear Dunlop Tires Operations, S.A. v. Brown, [23] 564 U.S. 915, 927 (2011). “Unless a defendant’s contacts with a forum are so substantial, 24 continuous, and systematic that the defendant can be deemed to be ‘present’ in that forum 25 for all purposes,” a forum may not exercise general jurisdiction. Yahoo! Inc., 433 F.3d at 26 1205. Where general jurisdiction exists, the Court has jurisdiction over the defendant for 27 all purposes, even in cases where the claims arise from dealings unrelated to those that 28 establish jurisdiction. Daimler AG v. Bauman, 571 U.S. 117, 140 (2014). 1 Peter and Jennifer Buttigieg are both Australian citizens domiciled in Victoria, 2 Australia. (Compl. ¶¶ 5, 6.) Moreover, RMS Australia, RMS Global, P&J, and Advent are 3 Australian companies with their principal places of business in Victoria, Australia, (id. 4 ¶¶ 2–4, 8), and Ascott is a Singaporean company with its principal place of business in 5 Singapore, (id. ¶ 7). Thus, Defendants are not “at home” in California. To render 6 Defendants subject to general personal jurisdiction in California, their contacts must be so 7 “continuous and systematic” as to render them “essentially at home” in California. 8 Daimler, 571 U.S. at 127 (quoting Goodyear, 564 U.S. at 919 ). 9 Plaintiff asserts that because the Affiliate Defendants “have covertly become owners 10 of RMS Australia (through the shell of RMS Global), which entered into the Operating 11 Agreement here to become a 50% owner of the Joint Venture, which has its principal place 12 of business in San Diego,” the Court should find general jurisdiction. (Doc. No. 39 at 14– 13 15.) As to RMS Australia, Plaintiff similarly contends “RMS Australia entered into the 14 Operating Agreement here to become a 50% owner of the Joint Venture, which has its 15 principal place of business in San Diego.” (Doc. No. 38 at 15.) Plaintiff further argues the 16 Joint Venture’s intent was to market and sell RMS Australia’s product throughout North 17 American markets, and that since 2011, RMS Australia has been doing business from San 18 Diego vis-à-vis the Joint Venture. (Id. at 15; Doc. No. 39 at 15.) However, Plaintiff’s 19 Complaint states only that the parties “had continuous and systemic contacts with 20 California,” (Compl. ¶ 16) and makes no other mention of California. Plaintiff’s arguments 21 as to Defendants’ contacts does not meet the high threshold for general jurisdiction. Thus, 22 the Court does not have general jurisdiction over Defendants. 23 The Court’s analysis proceeds to whether specific jurisdiction is proper. 24 B. Specific Jurisdiction 25 “The inquiry whether a forum State may assert specific jurisdiction over a 26 nonresident defendant ‘focuses on the relationship among the defendant, the forum, and 27 the litigation.’” Walden v. Fiore, 571 U.S. 277 , 283–84 (2014) (quoting Keeton v. Hustler 28 Magazine, Inc., 465 U.S. 770, 775 (1984)). “For a State to exercise jurisdiction consistent 1 with due process, the defendant’s suit-related conduct must create a substantial connection 2 with the forum State.” Id. at 284. In analyzing the relationship between the defendant, the 3 forum, and the particular lawsuit, “the relationship must arise out of contacts that the 4 ‘defendant himself’ creates with the forum State” and that analysis “looks to the 5 defendant’s contacts with the forum State itself, not the defendant’s contacts with persons 6 who reside there.” Id. at 284–85. 7 To exercise specific personal jurisdiction, courts apply a three-prong test. First, the 8 defendant must either purposefully direct its activities or purposefully avail itself of the 9 benefits afforded by the forum’s laws. Williams v. Yamaha Motor Co., 851 F.3d 1015 , 1023 10 (9th Cir. 2017). Second, the claim must arise out of or relate to the defendant’s forum11 related activities. Id. Third, the exercise of jurisdiction must be reasonable, such that it 12 comports with fair play and substantial justice. Id. 13 “The plaintiff bears the burden of satisfying the first two prongs of the test.” 14 Schwarzenegger, 374 F.3d at 802 . “If the plaintiff meets that burden, ‘the burden then shifts 15 to the defendant to “present a compelling case” that the exercise of jurisdiction would not 16 be reasonable.’” Axiom Foods, 874 F.3d at 1068–69 (quoting Burger King Corp. v. 17 Rudzewicz, 471 U.S. 462 , 476–78 (1985)). 18 The Ninth Circuit has emphasized that under the first prong of the specific personal 19 jurisdiction test, purposeful availment and purposeful direction are two distinct concepts. 20 “The exact form of our jurisdictional inquiry depends on the nature of the claim at issue.” 21 Picot v. Weston, 780 F.3d 1206, 1212 (9th Cir. 2015). For claims sounding in contract, 22 courts generally apply the “purposeful availment” analysis, which considers whether a 23 defendant has purposefully availed themselves of the privilege of conducting business with 24 the forum state. Id. (citing Schwarzenegger, 374 F.3d at 802 ). For claims sounding in tort, 25 courts apply a “purposeful direction” test, and analyze whether the defendant “has directed 26 his actions at the forum state, even if those actions took place elsewhere.” Id. (citing 27 Schwarzenegger, 374 F.3d at 802–03). 28 /// 1 1. Affiliate Defendants 2 Affiliate Defendants argue the Court lacks specific personal jurisdiction because 3 Plaintiff fails to plead sufficient facts that its claims against Affiliate Defendants have any 4 substantial connection to its limited presence in California. (Doc. No. 22 at 13–14.) 5 Moreover, Affiliate Defendants contend Plaintiff’s allegations are improperly collective, 6 and are purely conclusory. (Id. at 14.) Plaintiff responds that the Court has specific 7 jurisdiction over Affiliate Defendants because they: “(1) (though indirectly) contracted 8 with a California entity (Plaintiff); (2) collectively have a 50% ownership of the Joint 9 Venture, which operates primarily in California and is the subject of this lawsuit; and 10 (3) purposely directed their misconduct at Plaintiff and the Joint Venture in California.” 11 (Doc. No. 39 at 15.) Plaintiff’s Complaint asserts “the individually named Defendants 12 personally directed and engaged in activities toward California that give rise to this 13 Complaint.” (Compl. ¶ 16.) 14 As an initial matter, the parties do not indicate which approach applies to Affiliate 15 Defendants, although in their respective briefs, the Parties appear to apply the purposeful 16 direction analysis. (See Doc. No. 22 at 13–15; Doc. No. 39 at 18.) Because Plaintiff’s 17 claims against Affiliate Defendants sound in tort,1 the Court applies the purposeful 18 direction test here. 19 Next, personal jurisdiction over each defendant must be assessed individually. 20 Calder v. Jones, 465 U.S. 783, 790 (1984); Sher, 911 F.2d at 1365 . Plaintiff asserts its 21 allegations are not improperly collective as to Affiliate Defendants, as the Complaint 22 alleges that “all Defendants were knowing players in this fraudulent scheme[.]” (Doc. No. 23 39 at 18.) Specifically, the Complaint details that Buttigieg Defendants created RMS 24 Global as a first step in the scheme, (Compl. ¶ 36); Buttigieg Defendants then sold more 25 than a combined controlling share of their interest in RMS Global to Ascott and Advent, [27] 1 Plaintiff brings claims against Affiliate Defendants for breach of fiduciary duty, intentional interference [28] 1 (id. ¶¶ 37–38); all Defendants worked in concert to breach their contractual obligations and 2 engage in fraudulent conduct to cripple Plaintiff’s ability to run the Joint Venture 3 independently, (id. ¶ 39); Buttigieg Defendants diverted Joint Venture funds to separate 4 business ventures, and the other Defendants knowingly received that benefit, (id. ¶ 45); 5 and “Defendants acted in concert to develop a plan” to devalue the Joint Venture to attempt 6 to force Plaintiff to sell its interest to Defendants, (id. ¶ 57). 7 The Court finds the Complaint does not establish specific personal jurisdiction over 8 Defendants Ascott, Advent, and RMS Global. Plaintiff’s Complaint merely asserts Ascott 9 and Advent bought a combined controlling share of Buttigieg Defendants’ interest in RMS 10 Global, (Compl. ¶ 37), and that, “on information and belief,” Ascott and Advent knew that 11 the restructuring of RMS Global and their purchase of their interest was a fraudulent 12 scheme, (id. ¶ 38). The remainder of the Complaint collectively refers to “Defendants” and 13 does not separate out Ascott’s, Advent’s, or RMS Global’s actions in the alleged 14 challenged conduct. Thus, the Court GRANTS Affiliate Defendants’ motion to dismiss for 15 lack of personal jurisdiction over Defendants Ascott, Advent, and RMS Global. See Zeiger 16 v. WellPet LLC, 304 F. Supp. 3d 837, 849 (N.D. Cal. 2018) (no personal jurisdiction over 17 one defendant as complaint only referenced group defendants together); Johnson v. LVNV 18 Funding, No.: 23-cv-00412-WQH-BLM, 2023 WL 3689989 , at *3 (S.D. Cal. May 26, 19 2023) (“However, the Complaint does not establish personal jurisdiction over Defendants 20 Picciano and Falerio because it is completely devoid of any allegations concerning those 21 Defendants’ roles in the challenged conduct or their relationships to Defendant LVNV 22 Funding.”); Medimpact Healthcare Sys., Inc. v. IQVIA Holdings Inc., No.: 19cv186523 GPC(LL), 2020 WL 1433327 , at *5 (S.D. Cal. Mar. 24, 2020) (granting motion to dismiss 24 for lack of personal jurisdiction over two defendants where the “[p]laintiffs do not 25 specifically isolate the jurisdictional facts amongst the different IQVIA entities and 26 improperly lump IQVIA defendants together”). 27 /// 28 /// 1 Purposeful Direction 2 Under the first prong, the Ninth Circuit applies the purposeful direction test 3 enunciated in Calder to claims sounding in tort. Schwarzenegger, 374 F.3d at 802–03; 4 Axiom Foods, 874 F.3d at 1069 . Under the three-part Calder “effects” test to evaluate 5 purposeful direction, Plaintiff must establish that the defendants allegedly “(1) committed 6 an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the 7 defendant knows is likely to be suffered in the forum state.” Dole Food Co. v. Watts, 303 8 F.3d 1104 , 1111 (9th Cir. 2002). “Failing to sufficiently plead any one of these three 9 elements is fatal to Plaintiff’s attempt to show personal jurisdiction.” Rupert v. Bond, 68 10 F. Supp. 3d 1142, 1163 (N.D. Cal. 2014) (citing Brayton Purcell, 606 F.3d at 1128–29). 11 As to an intentional act, the Court finds Plaintiff sufficiently pleads the remaining 12 Buttigieg Defendants committed intentional acts to engage in a fraudulent scheme. 13 Next, Affiliate Defendants assert that while Plaintiff claims Affiliate Defendants 14 “directed and engaged in activities toward California,” the Complaint does not identify 15 what those activities were, nor does it allege how the activities have any nexus to 16 California. (Doc. No. 22 at 14.) In response, Plaintiff asserts Affiliate Defendants have an 17 ownership interest in RMS Global, a wholly owned subsidiary of RMS Australia, which 18 was used as a shell to transfer RMS Australia’s ownership interest in the California-based 19 Joint Venture. (Doc. No. 39 at 17.) Plaintiff asserts Affiliate Defendants’ actions were felt 20 by both Plaintiff and the Joint Venture in California, and that Affiliate Defendants’ goal 21 was to continue to operate in California. (Id. at 17–18.) 22 To determine whether the defendant expressly aims at the forum state, “[t]he proper 23 question is not where the plaintiff experienced a particular injury or effect but whether the 24 defendant’s conduct connects him to the forum in a meaningful way.” Walden, 571 U.S. at 25 290. Thus, “mere injury to a forum resident is not a sufficient connection to the forum,” 26 nor is the defendant’s knowledge of plaintiff’s “‘strong forum connections’ . . . combined” 27 with the “foreseeable harm” the plaintiff suffered in the forum. Id. at 289–90. 28 /// 1 First, Plaintiff’s arguments on express aiming which rest on the “individualized 2 targeting” theory has been called into doubt by Axiom Foods. For example, in its 3 opposition, Plaintiff asserts “Defendants necessarily should have known their actions 4 would have been felt by Plaintiff in California.” (Doc. No. 39 at 18.) However, by itself, 5 individualized targeting may not support the exercise of specific jurisdiction over a 6 defendant. See Axiom Foods, 874 F.3d at 1070–71 (“Following Walden, we now hold that 7 while a theory of individualized targeting may remain relevant to the minimum contacts 8 inquiry, it will not, on its own, support the exercise of specific jurisdiction, absent 9 compliance with what Walden requires.”). 10 This is not to say that allegations of individualized targeting cannot be considered. 11 Id. at 1070. It “may remain relevant”, but “mere satisfaction of the test outlined in 12 Washington Shoe, without more, is insufficient.” Id. Here, Buttigieg Defendants’ conduct 13 does not connect them to California as required by Walden. Buttigieg Defendants’ 14 allegedly tortious conduct consists of: Buttigieg Defendants (in Australia) restructuring 15 RMS Global (an Australian company) as a wholly owned subsidiary of RMS Australia (an 16 Australian company); Buttigieg Defendants selling more than a combined controlling share 17 of their interest in RMS Global to Ascott and Advent; and allegedly crippling Plaintiff’s 18 ability to run the Joint Venture independently and attempting to force Plaintiff’s sale of its 19 interest of the Joint Venture to Defendants. Buttigieg Defendants did all this from their 20 residence and/or principal place of business in Australia, without entering California, 21 contacting any person in California, or otherwise reaching out to California. “In short, none 22 of [Buttigieg Defendants’] challenged conduct had anything to do with [California] itself.” 23 Picot, 780 F.3d at 1215 (quoting Walden, 571 U.S. at 278 ). 24 Moreover, Plaintiff relies on pre-Axiom Foods authority embracing the Ninth 25 Circuit’s individualized targeting test. For example, Plaintiff relies on Poga Mgmt Partners 26 LLC v. Medfiler, No: C 12–06087 SBA, 2013 WL 5487343 (N.D. Cal. Sept. 30, 2013), 27 which held the defendant’s “acts were expressly aimed at California because, at the time 28 of the acts giving rise to the instant action, [defendant] knew that POGA was a California 1 limited liability company with an office in San Francisco, California.” 2013 WL 5487343 , 2 at *6. Moreover, the court found “the effects of this conduct were felt, as [defendant] knew 3 they would be, in California.” Id. However, Poga Mgmt Partners relied both on Bancroft 4 & Masters, 223 F.3d 1082 , and Dole Food, 303 F.3d 1104 , which predate Walden. 5 The Court also finds Plaintiff’s reliance on Newman v. Sherman, No. C05-2989 6 SBA, 2005 WL 2739299 (N.D. Cal. Oct. 24, 2005), is misplaced. In Newman, the court 7 held the plaintiff established personal jurisdiction over the defendant where the defendant 8 admitted the two companies he had an ownership interest in were located in California, “he 9 served as the managing director of the companies, and that he invested a substantial amount 10 of capital into these companies. He also admits that the operations of both companies are 11 governed by California law.” 2005 WL 2739299 , at *6 (internal citations omitted). Here, 12 however, Plaintiff has not pled that Affiliate Defendants ever transacted any business in 13 California, nor is the Joint Venture governed by California law. Indeed, the Operating 14 Agreement explicitly states that RMS North America is a Delaware corporation and 15 includes a Delaware choice of law provision. (Doc. No. 1-2 at 6, 37.) 16 Similarly, Plaintiff’s reliance on Global Commodities Trading Group Inc. v. 17 Beneficio de Arroz Choloma, S.A., 972 F.3d 1101 (9th Cir. 2020), is distinguishable. The 18 Ninth Circuit held the district court had personal jurisdiction over the corporate out-of-state 19 defendant because it “sustained a relationship with Global over several years and hundreds 20 of contracts, purchasing millions of dollars of goods to be shipped from the United States.” 21 Glob. Commodities Trading Grp., 972 F.3d at 1108 . The court further noted that inspection 22 certificates were issued in California, the defendant made payments on the contracts to 23 Global in California, and the defendant “induced Global to continue doing business with it 24 by acknowledging its ongoing obligations to make payments in California.” Id. Here, 25 Plaintiff makes no such showing of a sustained relationship or extensive business 26 transactions between itself and Affiliate Defendants in California. 27 Plaintiff also makes a passing remark that “Defendants took over RMS Australia and 28 directed its operations with the aim of devaluing the Joint Venture.” (Doc. No. 39 at 18.) 1 However, as argued by Affiliate Defendants, Plaintiff does not attempt to address either of 2 the two theories under which a parent/subsidiary relationship could establish jurisdiction. 3 See Williams, 851 F.3d at 1021–25. Nor does Plaintiff provide the Court with evidence or 4 even allegations regarding the relationship between Affiliate Defendants. The Complaint 5 does not include allegations regarding the level of control RMS Global has over RMS 6 Australia, only alleging that, “[o]n information and belief, Mr. Buttigieg, Ms. Buttigieg, 7 Ascott, and/or Advent may be held personally liable for the breaches of RMS Australia 8 because they personally (individually or in concert with one another) . . . [acted] on an alter 9 ego or agency basis.” (Compl. ¶ 11.) 10 Plaintiff has not made a prima facie showing of express aiming by Affiliate 11 Defendants. Because Plaintiff “has not established the second prong of [the] purposeful 12 direction test, [express aiming, the Court] need not address the third prong.” Picot, 780 13 F.3d at 1215 n.4 (citing Schwarzenegger, 374 F.3d at 807 n.1). “Failing to sufficiently 14 plead any one of these three elements is fatal to Plaintiff’s attempt to show personal 15 jurisdiction.” Rupert, 68 F. Supp. 3d at 1163 (addressing three-part Calder effects test) 16 (citation omitted). 17 As discussed above, the purposeful direction test is the first prong of the Ninth 18 Circuit’s specific jurisdiction test for torts or tort-like claims, and Plaintiff “bears the 19 burden of proving the first two prongs” of the test. Picot, 780 F.3d at 1211 . Because 20 Plaintiff has not established the first prong of the specific jurisdiction test, the Court need 21 not reach the remaining prongs. Schwarzenegger, 374 F.3d at 802 (“If the plaintiff fails to 22 satisfy either of these prongs, personal jurisdiction is not established in the forum state.”). 23 Plaintiff has not established personal jurisdiction over Affiliate Defendants in California. [24] Id. 25 Accordingly, the Court GRANTS Affiliate Defendants’ motion to dismiss 26 Plaintiff’s Complaint pursuant to Rule 12(b)(2). 27 /// 28 /// 1 2. RMS Australia 2 Similarly, RMS Australia asserts Plaintiff pleads insufficient facts to establish 3 specific personal jurisdiction over it. (Doc. No. 23 at 18–19.) Specifically, RMS Australia 4 argues Plaintiff’s allegation is conclusory, and that there are no facts alleged that would 5 establish that RMS Australia purposefully availed itself of the benefits of conducting 6 business in California. (Id. at 19–20.) Plaintiff responds that the Court has specific 7 jurisdiction over RMS Australia because RMS Australia (1) contracted with a California 8 entity; and (2) is a 50% owner of the Joint Venture, which operates its principal place of 9 business in California. (Doc. No. 38 at 16.) However, as noted by RMS Australia, 10 Plaintiff’s allegations in its Opposition are not stated in the Complaint. (Doc. No. 42 at 6– 11 7.) 12 As with Affiliate Defendants, the parties do not indicate which approach applies to 13 RMS Australia. However, in their respective briefs, the Parties appear to apply both the 14 purposeful direction and purposeful availment analyses. (See Doc. No. 23 at 19–20; Doc. 15 No. 38 at 17.) Because Plaintiff’s claims against RMS Australia sound in both contract and 16 tort, the Court proceeds to analyze the first prong of the specific jurisdiction test under both 17 approaches. 18 Purposeful Availment and Purposeful Direction 19 In determining whether a defendant purposefully availed themselves of the forum, 20 there must be “actions by the defendant himself that create a ‘substantial connection’ with 21 the forum State.” Burger King, 471 U.S. at 475 (quoting McGee v. Int’l Life Ins. Co., 355 22 U.S. 220 , 223 (1957)). The defendant must have “performed some type of affirmative 23 conduct which allows or promotes the transaction of business within the forum state.” Sher, [24] 911 F.2d at 1362 (quoting Sinatra v. Nat’l Enquirer, Inc., 854 F.2d 1191, 1195 (9th Cir. 25 1988)). “Merely ‘random, fortuitous, or attenuated’ contacts are not sufficient.” Picot, 780 26 F.3d at 1212 (quoting Burger King, 471 U.S. at 475 ). 27 The Supreme Court has “emphasized that courts must evaluate the parties’ entire 28 course of dealing, not solely the particular contract or tortious conduct giving rise to the 1 claim, when assessing whether a defendant has minimum contacts with a forum.” Glob. 2 Commodities Trading Grp., 972 F.3d at 1108 . “In cases where we have held that a contract 3 between a forum resident and a non-resident did not give rise to specific jurisdiction in the 4 forum, we have done so because the business relationship between the parties was fleeting 5 or its center of gravity lay elsewhere.” Id. 6 Here, the Court concludes it lacks specific jurisdiction over RMS Australia for the 7 claims alleged in the Complaint. Plaintiff’s Opposition as to RMS Australia’s Motion to 8 Dismiss mirrors its Opposition to Affiliate Defendants’ Motion to Dismiss, and the Court 9 finds Plaintiff’s reliance on Poga Mgmt Partners, Newman, and Global Commodities 10 Trading Group fail for the same reasons. (Compare Doc. No. 38 at 17, with Doc. No. 39 11 at 16–17.) As discussed above, the Complaint alleges “the individually named Defendants 12 personally directed and engaged in activities toward California that give rise to this 13 Complaint.” The Complaint further states “Plaintiff and RMS Australia entered into the 14 Operating Agreement for the Joint Venture, with the express goal of marketing and 15 distributing the RMS Software in North America” but does not mention any affirmative 16 conduct or transaction in California. Indeed, the Complaint is devoid of any facts that the 17 Joint Venture has any operations in California or that RMS Australia “reach[ed] out beyond 18 [Australia]” to “create continuing relationships and obligations with citizens of 19 [California].” Burger King, 471 U.S. at 473 . The fact that Plaintiff and the Joint Venture 20 have their principal place of business in California does not alone support the exercise of 21 specific jurisdiction over RMS Australia. See Nazos v. Toyota Motor Corp., No. CV 2222 2214 PA (Ex), 2023 WL 4240184 , at *6 (C.D. Cal. Mar. 3, 2023). 23 Accordingly, the Court GRANTS RMS Australia’s motion to dismiss based on lack 24 of personal jurisdiction. 25 /// 26 /// 27 /// 28 /// 1 |}IV. CONCLUSION 2 Based on the foregoing, the Court GRANTS Defendants’ motions to dismiss under 3 12(b)(2) WITH LEAVE TO AMEND. Plaintiff's motion for preliminary injunction 4 ||is thus DENIED AS MOOT. Should Plaintiff choose to do so, it may file an Amended 5 ||Complaint by December 2, 2024. Defendants must file a responsive pleading no later than 6 || December 16, 2024. [7] 8 IT IS SO ORDERED. 9 || Dated: November 20, 2024 © 10 Hon, Anthony J.Battaglia 11 United States District Judge