Habbaba v. Gorilla Mind, LLC

[7] 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA [10] 11 ALPHONSO HABBABA, Case No.: 24-CV-921 JLS (AHG) 12 Plaintiff, ORDER: 13 v. (1) GRANTING DEFENDANT 14 GORILLA MIND, LLC; NUTRACAP NUTRACAP LABS, LLC’S MOTION HOLDINGS, LLC; NUTRACAP LABS, 15 TO DIMISS FOR LACK OF LLC; AND DOES 1–500, JURISDICTION AND [16] Defendants. 17 (2) DENYING DEFENDANT NUTRACAP HOLDINGS, LLC’S [18] MOTION TO DISMISS FOR LACK 19 OF JURISDICTION WITHOUT PREJUDICE IN LIGHT OF [20] AUTOMATIC BANKRUPTCY STAY [21] (ECF Nos. 28, 29) [22] 23 Presently before the Court are Defendant Nutracap Labs, LLC’s (“Labs”) Motion to 24 Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(2) (“Labs Mot.,” ECF No. 29) 25 and Memorandum of Points and Authorities in Support Thereof (“Labs Mem.,” ECF 26 No. 29-1). Also before the Court are Plaintiff Alphonso Habbaba’s (“Plaintiff”) 27 Opposition (“Opp’n,” ECF No. 33) and Labs’ Reply thereto (“Reply,” ECF No. 40). 28 Defendant Nutracap Holdings, LLC’s (“Holdings”) also filed a Motion to Dismiss 1 Pursuant to Federal Rule of Civil Procedure 12(b)(2), which Plaintiff opposed. See ECF 2 Nos. 28, 32. Subsequently, the Court received a Notification of Bankruptcy Filing and 3 Automatic Stay as to Nutracap Holdings, LLC (“Bankr. Notice,” ECF No. 39). 4 The Court took the matters under submission without oral argument pursuant to Civil 5 Local Rule 7.1(d)(1). See ECF No. 38. Having carefully reviewed Plaintiff’s First 6 Amended Complaint (“FAC,” ECF No. 17), the Parties’ arguments, and the law, the Court 7 rules as follows. 8 BACKGROUND 9 I. Procedural Background 10 Plaintiff initiated the present matter by filing his original Complaint on March 11, 11 2024, in the Superior Court of California, County of San Diego, against Defendants Gorilla 12 Mind, LLC (“Gorilla”) and Does 1–500. See ECF No. 1, Exhibit A. Gorilla removed the 13 action to this Court on May 24, 2024. See ECF No. 1. On October 14, 2024, the Court 14 received a Joint Motion to Amend/Correct to Add Parties which the Court subsequently 15 granted. See ECF No. 15. On October 28, 2024, Plaintiff filed his FAC, which added 16 Holdings and Labs as Defendants. See FAC. In the FAC, Plaintiff raises claims of 17 negligence, strict products liability, and breach of implied warranties against Holdings and 18 Labs.1 See generally id. 19 On November 15, 2024, Defendant Gorilla filed an Answer to the Amended 20 Complaint. See ECF No. 22. On December 11, 2024, Labs and Holdings filed the instant 21 Motions to Dismiss. 22 II. Factual Background 23 Plaintiff—a resident of Spring Valley, California—alleges he relied on Defendants 24 Gorilla, Holdings, and Labs’ (collectively, “Defendants”) representations and warranties 25 in making his decisions to purchase purported nutritional/dietary supplements (“Gorilla [28] 1 Plaintiff also raises a claim of breach of express warranties, but this claim is only as to Defendants Gorilla 1 Products”), “believing they would be safe and effective for their advertised use and relying 2 on the expertise of the [Defendants].” FAC ¶¶ 1, 14. He alleges Defendants marketed 3 Gorilla Products as safe despite the fact that they contained a known hepatotoxin and “a 4 synthetic hepatotoxin at astronomical levels never before seen in other recalled 5 supplements causing liver injury.” Id. ¶ 30. Plaintiff alleges he began using Gorilla 6 Products in August 2022, and in September 2023, he experienced drug-induced liver failure 7 that was most likely caused by his use of Defendants’ products. Id. ¶¶ 15–16. 8 Plaintiff groups Labs and Holdings together in his FAC as “Nutracap” and alleges 9 “Nutracap” was contracted to assist in the manufacture, formulation, packaging, labeling, 10 distribution, and sale of Gorilla Products to Gorilla. Id. ¶ 9. He alleges Gorilla then sold 11 Gorilla Products directly to Plaintiff, through its website, and mailed Gorilla Products to 12 Plaintiff, who was located in and consumed said products in California. Id. ¶ 4. 13 Defendant Labs is incorporated in Georgia and has its principal place of business in 14 Norcross, Georgia. Id. ¶ 6. Defendant Holdings is incorporated in Delaware and also has 15 its principal place of business in Norcross, Georgia. Id. ¶ 7. 16 Labs, in support of its Motion, attached a Declaration of John Wesley Houser, IV 17 (“Mr. Houser”) (“Houser Decl.,” ECF No. 29-2). And Plaintiff, in support of his 18 Opposition, attached a Declaration of his counsel, Roy BenDavid (“Mr. BenDavid”). 19 (“BenDavid Decl.,” ECF No. 33-1). With its Reply, Labs attached a Second Declaration 20 of Mr. Houser (“Second Houser Decl.,” ECF No. 40-1). 21 DEFENDANT LABS’ MOTION TO DISMISS 22 In its Motion, Labs seeks to dismiss Plaintiff’s claims against it for lack of personal 23 jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(2). See Labs Mot. at 1. 24 I. Legal Standard 25 Federal Rule of Civil Procedure 12(b)(2) allows for a responding party to move for 26 an action to be dismissed due to a lack of personal jurisdiction. “A court’s power to 27 exercise jurisdiction over a party is limited by both statutory and constitutional 28 considerations.” In re Packaged Seafood Prods. Antitrust Litig., 338 F. Supp. 3d 1118 , 1 1135 (S.D. Cal. 2018). In this case, those considerations are one and the same. See 2 Daimler AG v. Bauman, 571 U.S. 117, 125 (2014) (“California’s long-arm statute allows 3 the exercise of personal jurisdiction to the full extent permissible under the 4 U.S. Constitution.”). 5 The Due Process Clause of the Fourteenth Amendment of the U.S. Constitution 6 requires that a defendant “have certain minimum contacts with [a forum state] such that 7 the maintenance of the suit does not offend ‘traditional notions of fair play and substantial 8 justice.’” Int’l Shoe Co. v. Washington, Off. of Unemployment Comp. & Placement, [9] 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). Courts 10 have personal jurisdiction over a party where they have either general or specific 11 jurisdiction. See Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 , 919 12 (2011). 13 “A court may assert general jurisdiction over foreign (sister-state or foreign-country) 14 corporations to hear any and all claims against them when their affiliations with the State 15 are so ‘continuous and systematic’ as to render them essentially at home in the forum 16 State.” Goodyear, 564 U.S. at 919 (citing Int’l Shoe, 326 U.S. at 317 ). Specific jurisdiction 17 relies on an “‘affiliatio[n] between the forum and the underlying controversy,’ principally, 18 activity or an occurrence that takes place in the forum State and is therefore subject to the 19 State’s regulation.” Id. (citations omitted). Furthermore, specific jurisdiction is more 20 limited than general jurisdiction as it “is confined to adjudication of ‘issues deriving from, 21 or connected with, the very controversy that establishes jurisdiction.’” Id. (internal 22 quotation omitted). 23 Plaintiff has the burden of establishing that jurisdiction is proper. CollegeSource, 24 Inc. v. AcademyOne Inc., 653 F.3d 1066, 1073 (9th Cir. 2011). “Where . . . the defendant’s 25 motion is based on written materials rather than an evidentiary hearing, the plaintiff need 26 only make a prima facie showing of jurisdictional facts to withstand the motion to dismiss.” 27 Yamashita v. LG Chem, Ltd., 62 F.4th 496, 502 (9th Cir. 2023) (quoting CollegeSource, [28] 653 F.3d at 1073 )). Furthermore, “[u]ncontroverted allegations in the complaint are taken 1 as true, but in the face of a contradictory affidavit, the ‘plaintiff cannot simply rest on the 2 bare allegations of its complaint.’” Id. (quoting Mavrix Photo Inc. v. Brand Techs., Inc., [3] 647 F.3d 1218, 1223 (9th Cir. 2011)). “Conflicts between parties over statements 4 contained in affidavits must be resolved in the plaintiff’s favor.” Dole Food Co. v. Watts, [5] 303 F.3d 1104, 1108 (9th Cir. 2002). 6 II. Analysis 7 The Court must make a finding as to whether Plaintiff has made a prima facie 8 showing of jurisdictional facts to withstand Labs’ Motion. Thus, the Court first considers 9 whether a showing has been made as to either general or specific jurisdiction. 10 A. General Jurisdiction 11 The Court preliminarily disposes of the issue of whether it may exercise general 12 jurisdiction over Labs. To determine this, the Court turns to the question of whether Labs 13 is “at home” in California. Daimler AG, 571 U.S. at 122 (citation omitted). The paradigm 14 forums in which a corporation is found to be “at home” are the forums where a corporation 15 is incorporated and where it has its principal place of business. Id. at 137 (citing Goodyear [16] 564 U.S. at 924 ). Labs is incorporated and has its principal place of business in Georgia. 17 FAC ¶ 6. This indicates that it is not “at home” in California. 18 Courts may also find that a defendant is “at home” in a forum other than the place 19 of incorporation and principal place of business, where a defendant is “so heavily engaged 20 in activity [in the forum] ‘as to render [it] essentially at home’ in that State.” BNSF Ry. 21 Co. v. Tyrrell, 581 U.S. 402, 414 (2017) (citation omitted). Plaintiff does not appear to 22 argue, much less demonstrate that Labs is “so heavily engaged in activity” in California. 23 Therefore, the Court finds Plaintiff has not shown general jurisdiction exists over Labs. 24 B. Specific Jurisdiction 25 In order to determine whether specific jurisdiction may be exercised over a non26 resident defendant, courts in the Ninth Circuit turn to the following three prong test: 27 (1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or [28] 1 raevsaiidlse nhti tmheserelfo fo;f o trh ep eprrfiovrimle g seosm oef accot nbdyu wcthinicgh hacet ipvuirtipeoss ienfu tlhlye [2] forum, thereby invoking the benefits and protections of its laws; 3 (2) the claim must be one which arises out of or relates to the defendant’s forum-related-activities; and (3) the exercise of [4] jurisdiction must comport with fair play and substantial justice, 5 i.e. it must be reasonable. 6 Dole Food Co., 303 F.3d at 1111 (citations omitted). The burden of satisfying the first two 7 prongs belongs to Plaintiff, and “if the plaintiff fails to satisfy either of these prongs, 8 personal jurisdiction is not established in the forum State.” Schwarzenegger v. Fred Martin 9 Motor Co., 374 F.3d 797, 802 (9th Cir. 2004) (citation omitted) (cleaned up). “If the 10 plaintiff succeeds in satisfying both of the first two prongs, the burden then shifts to the 11 defendant to ‘present a compelling case’ that the exercise of jurisdiction would not be 12 reasonable.” Id. (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462 , 476–78 (2006)). 13 1. Purposeful Direction or Purposeful Availment 14 “Purposeful direction” and “purposeful availment” encompass two distinct concepts. 15 Herbal Brands, Inc. v. Photoplaza, Inc., 72 F.4th 1085, 1090 (9th Cir. 2023) (citing Glob. 16 Commodities Trading Grp., Inc. v. Beneficio de Arroz Choloma, S.A., 972 F.3d 1101 , 1107 17 (9th Cir. 2020)). Courts generally use the purposeful availment analysis “for unintentional 18 tort claims” or for “suits sounding in contract.” Id. (citations omitted). In contrast, a 19 purposeful direction analysis is generally used in suits where “claims require[] an 20 intentional tortious or ‘tort-like’ act.” Id. (citing Ayla, LLC v. Alya Skin Pty. Ltd., 11 F.4th 21 972, 979 (9th Cir. 2021)). While these two tests are distinct, the Ninth Circuit has provided 22 that, “when considering specific jurisdiction, courts should comprehensively evaluate the 23 extent of the defendant’s contacts with the forum state and those contacts’ relationship to 24 the plaintiff’s claims—which may mean looking at both purposeful availment and 25 purposeful direction.” Davis v. Cranfield Aerospace Sols., Ltd., 71 F.4th 1154, 1162 (9th 26 Cir. 2023). 27 Given that the present lawsuit involves unintentional tort claims, see generally FAC, 28 the Court first conducts a purposeful availment analysis. 1 a. Purposeful Availment 2 For a party to have purposefully availed themselves of the laws of a forum state, 3 “they must have ‘deliberately reached out beyond [their] home[s]—by, for example, 4 exploiting a market in the forum State or entering a contractual relationship centered 5 there.’” Yamashita, 62 F.4th at 503 (quoting Ford Motor Co. v. Mont. Eighth Jud. Dist. 6 Ct., 592 U.S. 351, 359 (2021)). Courts in the Ninth Circuit employ the “stream-of7 commerce-plus test” which provides that “‘[t]he placement of a product into the stream of 8 commerce, without more, is not an act purposefully directed toward a forum state,’ even if 9 the defendant is ‘aware[] that the stream of commerce may or will sweep the product into 10 the forum state.’” Id. (citations omitted). 11 Labs argues that it has not purposefully availed itself of the privilege of conducting 12 business in California. In furtherance of its argument, Labs states that it “did not conduct 13 relevant contractual activities within California and did not, thereby, invoke the privilege 14 or protection of California law.” Labs Mem. at 9. In Labs’ attached Declaration, 15 Mr. Houser attests that Labs “did not sell or ship the Gorilla Products to Plaintiff in 16 California or otherwise ship or sell Gorilla Products to California at all.” Houser Decl. ¶ 8. 17 Moreover, Labs “did not sell any products manufactured for Gorilla direct to consumers, 18 as any and all products manufactured by [Labs] for Gorilla were sold solely to Gorilla and 19 shipped directly to Gorilla in Idaho.” Id. ¶ 9. Mr. Houser attests that any and all of Labs’ 20 business activities were performed in Georgia and Labs neither “advertise[d] products 21 manufactured for Gorilla in California or elsewhere and did not provide any customer 22 support for Gorilla product consumers in California or elsewhere.” Id. ¶¶ 10, 11. Further, 23 Mr. Houser asserts Labs “had no control over Gorilla’s sale or distribution of the products 24 it sold to Gorilla.” Id. ¶ 12. Accordingly, Labs argues that it “simply placed products in 25 the stream of commerce which, without more, is insufficient to establish purposeful 26 availment.” Labs Mem. at 9. 27 In response, Plaintiff first argues that purposeful availment exists here based on 28 Labs’ relationship with Gorilla. Opp’n at 11. Plaintiff contends that Labs “purposefully 1 availed itself of doing business in California when it agreed to manufacture and supply 2 Green Tea Supplements to [Gorilla] who Labs knew to be a nationwide retailer of 3 supplements.” Id. Additionally, Plaintiff argues that “Labs is not simply a manufacturer 4 with no control over the ultimate distribution of the product,” because “Labs had control 5 over the distribution of the Green Tea Supplements when it agreed to sell their products to 6 a nationwide distributor, and did not limit the territorial reach of where [Gorilla] could sell 7 Green Tea Supplements by contract or otherwise.” Id. at 14. 8 The Court is not persuaded that Labs entering into an agreement with Gorilla, a 9 nationwide distributor, demonstrates anything more than the placement of a product into 10 the stream of commerce, with the knowledge that it could potentially enter the forum state. 11 And “for the placement of a product into the stream of commerce to count as purposeful 12 availment, there needs to be some indication that [Defendant] made a deliberate effort to 13 target the forum state.” Huntington v. Smoke City for Less LLC, No. 4:22-CV-0501414 MKD, 2023 WL 2996729 , at *7 (E.D. Wash. Apr. 18, 2023) (citing Yamashita, 62 F.4th 15 at 503). Plaintiff’s argument that it did not limit the territorial reach of Gorilla is 16 insufficient to demonstrate it made a “deliberate effort” to target California. Huntington, [17] 2023 WL 2996729 , at *7 (finding plaintiff failed to show more than “bare stream of 18 commerce” where the plaintiff proffered no evidence that defendant sold consumer 19 products directly to the forum state’s residents or that it targeted the state when it sold its 20 products to third parties). Rather, the Court finds merit in Labs’ contention that “[t]he fact 21 that Labs did not impose any distribution requirements or limitations evidences Labs’ lack 22 of control over Gorilla’s distribution.” Reply at 6 (emphasis in original). 23 The Court notes that Plaintiff also suggests Labs had control over Gorilla because it 24 “provided marketing services to Gorilla,” which allowed Labs to “influence[] the final 25 destination of their products.” Opp’n at 13. However, Plaintiff cites no support for this 26 contention. Assuming Plaintiff is referring to his proffered evidence that Gorilla stated in 27 discovery responses that Labs was responsible for marketing Green Tea Supplements, see 28 Opp’n at 7 (citing Defendant Gorilla Mind LLC’s Response to Plaintiff’s Special 1 Interrogatories, Set One, Exhibit A, ECF No. 33-2), Plaintiff has not explained, much less 2 provided evidence demonstrating, how such marketing services “influenced” the 3 destination of Gorilla’s products. Accordingly, Plaintiff’s allegations are insufficient to 4 overcome Mr. Houser’s Declaration that Labs “had no control over Gorilla’s sale or 5 distribution of the products it sold Gorilla.” Houser Decl. ¶ 12; see also Second Houser 6 Decl. ¶ 5 (“Labs did not have any input, influence, or control over how or where Gorilla 7 distributed products [Labs] sold to Gorilla.”); Yamashita, 62 F.4th at 502 (“[I]n the face of 8 a contradictory affidavit, the plaintiff cannot simply rest on the bare allegations of its 9 complaint.” (internal quotation marks and citation omitted)). 10 Next, Plaintiff claims that “Labs had clear notice of [its] exposure to suits arising 11 from California, which is why it signed an indemnity agreement with Gorilla . . . .” Opp’n 12 at 14. Plaintiff argues that by entering into the indemnity agreement, “Labs contemplated 13 the future consequences of supplying [Gorilla] with Green Tea Supplements” and “the fact 14 that there would be end users of Green Tea Supplements who could potentially bring 15 lawsuits related to Labs’ products . . . .” Id.; see also Indemnification Agreement, ECF 16 No. 33-2, Exhibit E. However, the referenced indemnification agreement is not 17 geographic-specific and does not mention or discuss California. The Court is not 18 persuaded that such a general agreement shows Labs “deliberately ‘reached out beyond’ 19 its home—by, for example, ‘exploiting a market’ in the forum State or entering a 20 contractual relationship centered there.” See Ford, 592 U.S. at 359 (citing Walden v. Fiore, [21] 571 U.S. 277, 285 (2014) (alterations omitted)). 22 Plaintiff also argues that purposeful availment is met based on Labs’ California 23 contacts. First, Plaintiff argues that Labs “admits at least 5% of its business—which 24 operates worldwide—came from the state of California,” citing to “Declaration of Marcos 25 Lima ¶ 6.” Opp’n at 15 (emphasis in original). However, no such declaration is attached 26 to Labs’ Motion or Plaintiff’s Opposition; rather Plaintiff appears to be referencing the 27 Declaration by Marcos Lima in Support of Holdings’ Motion, where Mr. Lima attests that 28 “[b]etween and including 2021 and 2024 to date, only 5.36% of Nutracap Holdings’ total 1 sales came from the State of California.” See Declaration of Maros Lima in Support of 2 Nutracap Holdings, LLC’s Motion to Dismiss Pursuant to FRCP 12(B)(2), ECF No. 28-2 3 ¶ 6 (emphasis added). 4 But plaintiff must make a prima facie showing that “each entity defendant 5 purposefully availed itself of the benefit of doing business in the forum.” NuCal Foods, 6 Inc. v. Quality Egg LLC, 887 F. Supp. 2d 977, 990 (E.D. Cal. 2012). As enunciated by the 7 Ninth Circuit: 8 Purposeful availment analysis examines whether the defendant’s contacts with the forum are attributable to his own [9] actions or are solely the actions of the plaintiff. In order to have 10 purposefully availed oneself of conducting activities in the forum, the defendant must have performed some type of [11] affirmative conduct which allows or promotes the transaction of 12 business within the forum state. 13 Sinatra v. National Enquirer, 854 F.2d 1191, 1195 (9th Cir. 1988) (citations omitted). It 14 goes unchallenged that Holdings and Labs are distinct entities. Houser Decl. ¶ 2. 15 Plaintiff’s allegations with respect to Holdings, thus, are insufficient to demonstrate 16 affirmative conduct by Labs that allows or promotes the transaction of business within 17 California.2 [19] 20 2 The Court recognizes in some instances contacts by one entity may be imputed to another for the purposes of personal jurisdiction, such as under “alter ego” or “agency” theories of liability. See Wehlage 21 v. EmpRes Healthcare, Inc., 791 F. Supp. 2d 774, 782 (N.D. Cal. 2011) (citation omitted) (holding to avail themself of the alter ego doctrine, a plaintiff must allege two elements: “First, there must be such a unity 22 of interest and ownership between the corporation and its equitable owner that the separate personalities of the corporation and the shareholder do not in reality exist. Second, there must be an inequitable result [23] if the acts in question are treated as those of the corporation alone.” (citation omitted)); see also Williams 24 v. Yamaha Motor Co., 851 F.3d 1015, 1023 (9th Cir. 2017) (noting that while the Supreme Court “voided [the Ninth Circuit's] agency approach for imputing contacts for the purpose of general jurisdiction, it left 25 open the question of whether an agency relationship might justify the exercise of specific jurisdiction”). However, Plaintiff does not raise any such theory, nor argue actions by Holdings should be imputed to 26 Labs. Accordingly, the Court will not consider any purported contacts of Holdings to be imputed to Labs for the purposes of this Order. See Calvert v. Huckins, 875 F. Supp. 674, 678 (E.D. Cal. 1995) [27] (“Disregarding the corporate entity is recognized as an extreme remedy, and ‘[c]ourts will pierce the 28 corporate veil only in exceptional circumstances.’” (citation omitted)). 1 Similarly, Plaintiff then asserts that “through Holdings, Labs itself has directly sold 2 supplements and products to the residents of California through the brand MyoBlox.” Id. 3 at 15. And Plaintiff represents that, “[t]hrough Holdings, Labs is subject to a consent 4 judgment that requires the company to take specific actions related to products known to 5 be specifically targeted to California.” Id. at 15–16. 6 However, Plaintiff’s supporting Declaration does not demonstrate involvement by 7 Labs. Rather his counsel avers only that Holdings sells products directly to California 8 consumers through brands such as MyoBlox, and that Holdings entered into a consent 9 agreement on August 24, 2024, in the California Superior Court of Alameda County. 10 BenDavid Decl. ¶¶ 7–9. Such allegations are thus likewise insufficient to make a prima 11 facie showing of purposeful availment as to Labs, a distinct entity defendant. NuCal 12 Foods, Inc, 887 F. Supp. 2d at 990 . 13 Plaintiff also states that “[i]ndirectly, Labs has sold products to California by 14 entering into contracts with companies such as DBD [DTA Corporation] that have directly 15 targeted California consumers.” Opp’n at 16. And one of these brands, GenOne, Plaintiff 16 represents in his Opposition, is owned by DBD and “manufactured by Labs,” and is 17 “actively marketed on Amazon with labels specifically designed to conform to California 18 law under Proposition 65.” Id. However, Plaintiff’s supporting Declaration from his 19 counsel appears to contradict these assertions, as Mr. BenDavid attests that Marcos Lima, 20 Chief Operating Officer for Holdings owns DBD DTA Corporation (“DBD”), and that 21 DBD has five brands, four of which promote supplements manufactured by Holdings. 22 BenDavid Decl. ¶¶ 10–11. Similarly, Plaintiff references two recalls voluntarily issued by 23 Holdings—not Labs—for products in California in November 2021, see Opp’n at 16, but 24 provides no evidence as to why these demonstrate contacts by Labs, a distinct entity that [26] That said, the Court does not make any findings with respect to the existence of personal jurisdiction or [27] lack thereof as to Holdings in this Order, in light of the automatic stay of this action against Holdings. 28 And nothing in this Order should be construed as suggestive of the Court’s thoughts as to whether Plaintiff 1 had ceased to operate as a manufacturing, distributing, and selling entity at such time. 2 Again, these allegations are insufficient to establish Labs made deliberate efforts to 3 avail itself of the privilege of doing business in California. See Helicopteros Nacionales 4 de Colombia, S.A. v. Hall, 466 U.S. 408, 417 (1984) (“[U]nilateral activity of another party 5 or a third person is not an appropriate consideration when determining whether a defendant 6 has sufficient contacts with a forum State to justify an assertion of jurisdiction.”); see also 7 Ford, 592 U.S. at 359 (The “contacts must be the defendant’s own choice and not ‘random, 8 isolated, or fortuitous.’” (citation omitted)). 9 And in any event, the Court is persuaded by Labs that Plaintiff’s argument “merely 10 shows an ‘awareness that the stream of commerce may or will sweep the product into the 11 forum State,’” Reply at 7 (quoting Asahi Metal Indus. Co., Ltd. v. Superior Ct. of Ca., 12 Solano Cnty., 480 U.S. 102, 112 (1987)), which is insufficient to establish the requisite 13 targeting. Furthermore, Plaintiff has not demonstrated any additional conduct by Labs, 14 such as it “designing the product for the market in the forum State, advertising in the forum 15 State, establishing channels for providing regular advice to customers in the forum State, 16 or marketing the product through a distributor who has agreed to serve as the sales agent 17 in the forum State.” Asahi, 480 U.S. at 112 . Plaintiff’s stance is merely that Labs indirectly 18 sold the products. Thus, purposeful availment is not met. 19 Based on the Parties’ arguments, the Court finds that Labs did not purposefully avail 20 itself of the privilege of doing business in California. Therefore, Plaintiff has not met his 21 burden of proving the first prong of the test for specific jurisdiction, based on the purposeful 22 availment test. Although this case fits within those that are typically considered through a 23 purposeful availment analysis, the Court also considers purposeful direction to 24 “comprehensively evaluate” the extent of Labs’ contacts with the forum state. See Davis, [25] 71 F.4th at 1162 . 26 b. Purposeful Direction 27 A showing “that a defendant [purposefully] directed [its] conduct toward a forum 28 state . . . usually consists of evidence of the defendant’s actions outside the forum state that 1 are directed at the forum, such as the distribution in the forum state of goods originating 2 elsewhere.” Schwarzenegger, 374 F.3d at 803 (emphasis added). When conducting a 3 purposeful direction analysis, courts take into consideration the Calder “effects” test which 4 requires a plaintiff to establish that the defendant: 5 (1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm the defendant knows is likely to be [6] suffered in the forum state. [8] Id. (citing Dole Food Co., 303 F.3d at 1111 ). 9 In its Motion, Labs contends that any claim of personal jurisdiction based on 10 purposeful direction must fail because it “simply placed Gorilla products into the stream 11 of commerce with no direct sale to Plaintiff or any other California resident.” Labs Mem. 12 at 9 (citing Houser Decl. ¶¶ 8–9). Labs also asserts that it “exercised no control over where 13 Gorilla sold or distributed the product.” Id. (citing Houser Decl. ¶ 12). 14 In his Opposition, Plaintiff appears to set forth a purposeful direction analysis as a 15 means of furthering his purposeful availment analysis. Plaintiff turns to Herbal Brands, 16 where the court held that “if a defendant, in its regular course of business, sells a physical 17 product via an interactive website and causes that product to be delivered to the forum, the 18 defendant has purposefully directed its conduct at the forum such that the exercise of 19 personal jurisdiction may be appropriate.” 72 F.4th at 1088 . When conducting a 20 purposeful direction analysis in this specific context, the test set forth by the court in Herbal 21 Brands asks whether (1) the sale was part of the defendant’s regular course of business 22 instead of being random and isolated and (2) the defendant exercised some level of control 23 over the ultimate distribution of its product. Id. at 1094 . 24 Plaintiff’s position is that “the sale of products manufactured by Labs in California 25 was part of Labs’ normal course of business.” Opp’n at 12. In support of this, Plaintiff 26 states that “Labs is a supplement manufacturer that advertises itself as a wholesale supplier 27 of supplements and offers an interactive website where retailers can exchange information 28 with Labs.” Id. at 13. Plaintiff also states that “Labs supplied [Gorilla] with at least 65,000 1 bottles of Green Tea Supplements as part of the normal course of their business selling 2 supplements at a wholesale price . . . .” Id. Further, Plaintiff contends that “Labs 3 manufactured these products with the clear knowledge and understanding that the products 4 would be sold nationally” because “this is not a volume that can be reasonably anticipated 5 to be sold in just a single state.” Id. 6 There are several problems with this argument. First, the website referred to appears 7 to be that of Holdings, not Labs. See BenDavid Decl. ¶ 4. Next, it was Gorilla, not Labs, 8 that sold Gorilla Products to consumers and caused the products to be delivered to the 9 forum. See Houser Decl. ¶¶ 8–9 (“Labs did not sell or ship Gorilla Products to Plaintiff in 10 California or otherwise ship or sell Gorilla Products to California at all . . . it did not sell 11 any products manufactured for Gorilla direct to consumers, as any and all products 12 manufactured by [Labs] for Gorilla were sold solely to Gorilla and shipped directly to 13 Gorilla in Idaho.”). Finally, as explained above, the Court is not persuaded that Labs 14 exercised some level of control over the ultimate distribution of Gorilla Products because 15 it “did not limit the territorial reach” of Gorilla’s sales and signed general and non16 geographic specific indemnity agreements with Gorilla. See Opp’n at 14. Nor is the Court 17 swayed by Plaintiff’s unsupported contention that Labs “provided marketing services to 18 [Gorilla] which allowed Labs to exercise control over marketing decisions and further 19 influenced the final destination of their products,” id. at 13, in light of Labs’ sworn 20 Declaration to the contrary, see Second Houser Decl. ¶¶ 2–5 (“Labs did not control the 21 marketing decisions of Gorilla. . . . Labs did not have any input, influence, or control over 22 how or where Gorilla distributed products Nutracap Labs sold to Gorilla.”). Rather, as 23 explained above, Plaintiff has only demonstrated Labs placed products into the stream of 24 commerce, which is insufficient to establish purposeful direction. Herbal Brands, 72 F.4th 25 at 1094. 26 Accordingly, Plaintiff has not established purposeful direction as an independent 27 analysis, nor as Plaintiff frames it as supporting that Labs purposefully availed itself of the 28 privilege of conducting business in California. Therefore, Plaintiff has not met his burden 1 of demonstrating that the first prong for specific jurisdiction has been met. 2 2. Relatedness 3 Plaintiff has neither shown that Labs purposefully availed itself of the privileges of 4 conducting business in California, nor that it purposefully directed its activities to the 5 forum state. Nonetheless, the Court addresses Plaintiff’s argument that “a strong showing 6 on the relatedness prong allows for a lesser showing on the availment prong and vice 7 versa.” Opp’n at 16–17 (citing Yahoo! Inc. v. La Ligue Contre La Racisme Et 8 L’Antisemitisme, 433 F.3d 1199, 1210 (9th Cir. 2006)). In Yahoo!, the Ninth Circuit stated 9 that, “[a] single forum state contact can support jurisdiction if the cause of action arises out 10 of that particular purposeful contact of the defendant with the forum state.” Yahoo!, 433 11 F.3d at 1210 (internal quotations and citations omitted) (cleaned up). 12 Here, Plaintiff has not demonstrated any particular purposeful contact by Labs with 13 California. Rather, as explained above, Plaintiff has only alleged actions by Labs that 14 constitute a bare stream of commerce. Accordingly, as Plaintiff failed to satisfy the first 15 prong, personal jurisdiction is not established in the forum state. Schwarzenegger, [16] 374 F.3d at 802 . 17 3. Fair Play and Substantial Justice 18 The burden of proving that the third prong of the test for specific jurisdiction, or that 19 exercise of jurisdiction would not be reasonable, shifts to a defendant, after a plaintiff has 20 met their burden of demonstrating the first two prongs. Id. Given that Plaintiff has not 21 met his burden here, the issue of whether Labs is subject to this Court’s personal 22 jurisdiction can be disposed of based on the first two prongs. 23 For the above reasons, Labs is not subject to personal jurisdiction in California. 24 Consequently, the Court GRANTS Labs’ Motion to Dismiss (ECF No. 29). 25 4. Plaintiff’s Request for Jurisdictional Discovery 26 In the alternative, Plaintiff requests that the Court grant him jurisdictional discovery. 27 Jurisdictional discovery “should ordinarily be granted where pertinent facts bearing on the 28 question of jurisdiction are controverted or where a more satisfactory showing of the facts 1 is necessary.” Butcher’s Union Loc. No. 498 v. SDC Invest., Inc., 788 F.2d 535 , 540 (9th 2 Cir. 1986) (citations and internal quotation marks omitted). A mere “hunch that 3 [discovery] might yield jurisdictionally relevant facts,” or “bare allegations in the face of 4 specific denials” are insufficient reasons for a court to grant jurisdictional discovery. LNS 5 Enters. LLC v. Cont’l Motors, Inc., 22 F.4th 852, 865 (9th Cir. 2022) (internal citations 6 omitted). 7 Plaintiff argues jurisdictional discovery is appropriate as he has controverted facts 8 stated by Labs “by more than mere allegations.” Opp’n at 21. First, Plaintiff indicates that 9 Mr. Houser’s statements that “Labs does not direct any advertising towards citizens of 10 California,” is controverted by Plaintiff’s counsel’s Declaration that Plaintiff’s counsel, in 11 California, viewed a Holdings advertisement on Youtube.com after “spending a short 12 amount of time Googling and researching Nutracap.” Id.; see also BenDavid Decl. ¶ 5. 13 The Court is not persuaded that Plaintiff’s counsel’s receipt of an advertisement by 14 Holdings, a distinct entity, controverts Mr. Houser’s denials that Labs directs advertising 15 towards the citizens of California. 16 Next, Plaintiff argues Mr. Houser’s statements that Labs “did not advertise products 17 manufactured for Gorilla in California or elsewhere[,]” and later that Labs “had no control 18 over Gorilla’s sale or distribution of the products it sold to Gorilla[,]” are “directly 19 contradicted by statements of [Gorilla] in verified discovery responses, as well as the 20 agreements produced by [Gorilla] between Labs and Gorilla.” Opp’n at 21. Plaintiff does 21 not cite to what statements he refers, and the Court is unable to identify the purported 22 contradiction. For instance, nothing in the sales agreement between Gorilla and Labs 23 addresses Gorilla’s sale or distribution of products manufactured for it, much less give Labs 24 control thereof. See Gorilla Mind & Nutracap Supplier Agreement, Exhibit B, ECF 25 No. 33-2 at 6–9.3 And notably, Gorilla’s Response to Plaintiff’s Interrogatory No. 3 asserts [28] 3 Pin citations to this docket entry refer to the CM/ECF page numbers stamped across the top margin of 1 that Gorilla has no common ownership or control with Labs. See Defendant Gorilla Mind 2 LLC’s Response to Plaintiff’s Special Interrogatories, Set One, Exhibit A, ECF No. 33-2 3 at 2. While the discovery responses from Gorilla indicate that Labs provided marketing 4 services for Gorilla, id., the Court does not find this controverts Mr. Houser’s statement or 5 any pertinent fact, as Mr. Houser attests that Labs did not control the marketing decisions 6 of Gorilla and none of the advertisements with which Labs was involved targeted 7 California, see Second Houser Decl. ¶¶ 3–4 (“The marketing services provided by [Labs] 8 to Gorilla involved Gorilla’s Facebook advertisements and Gorilla made the final decision 9 as to and controlled what was ultimately posted on Facebook . . . [and] [n]one of the 10 Facebook advertisements with which [Labs] was involved targeted California.”). 11 Finally, Plaintiff contends he is entitled to discovery of evidence of Labs’ marketing 12 and sales to entities unknown to Plaintiff like MyoBlox, or “indirectly through retailers like 13 DBD or any of the other 60 brands from the list of products recalled in California by Labs, 14 and whether or not any of those products contain green tea or EGCG.” Opp’n at 22. 15 However, this argument fails, as explained above, because as stated by Plaintiff’s counsel 16 in his sworn Declaration, it was in fact Holdings that issued recalls, see BenDavid Decl. 17 ¶¶ 13–14, Holdings that does business as MyoBlox, see id. ¶¶ 7–9, and Holdings that 18 manufactures supplements promoted by DBD’s five brands, see id. ¶ 11. 19 Plaintiff has not provided evidence of any deliberate efforts by Labs to target 20 California and has failed to controvert Labs’ supporting Declarations that Labs ceased its 21 manufacturing, distributing, and selling operations in November 2020, id. ¶ 3, performed 22 no business activity as to Gorilla Products in California, id. ¶ 10, had no control over 23 Gorilla’s sale or distribution of the products it sold Gorilla, id. ¶ 12, had no contracts with 24 supplement retailers or providers involving the targeting of California consumers, Second 25 Houser Decl. ¶ 7, and its sales and marketing did not target California, id. ¶ 9. Accordingly, 26 the Court finds Plaintiff has not demonstrated that any “pertinent facts bearing on the 27 question of jurisdiction are controverted.” Butcher’s Union, 788 F.2d at 540. Thus, the 28 Court DENIES Plaintiff’s request for jurisdictional discovery. 1 III. Conclusion 2 For the reasons stated above, the Court GRANTS Defendant’s Motion (ECF No. 29) 3 and DISMISSES WITHOUT PREJUDICE Plaintiff’s claims against Labs. 4 Additionally, the Court DENIES Plaintiff’s request for jurisdictional discovery. 5 HOLDINGS’ MOTION TO DISMISS 6 On January 15, 2025, Holdings filed a Notice of Bankruptcy Filing and Automatic 7 Stay as to Nutracap Holdings (ECF No. 39), notifying the Court that Holdings had “filed a 8 Chapter 11 bankruptcy petition seeking relief under Title 11, United States Code to the 9 United States Bankruptcy Court for the Northern District of Georgia,” under case number 10 25-50430. Bankr. Notice ¶¶ 1–2. Because Holdings filed a Chapter 11 bankruptcy, the 11 action against Holdings is stayed pursuant to 11 U.S.C. § 362 . See In re Tuscon Ests., Inc., [12] 912 F.2d 1162 , 1166 (9th Cir. 1990) (“A bankruptcy filing imposes an automatic stay of 13 all litigation against the debtor.” (citing 11 U.S.C. § 362 (a)). As for Holdings’ 14 codefendants in this action, as a general rule, “section 362(a) does not stay actions 15 against . . . non-debtor parties liable on the debts of the debtor.” In re Chugach Forrest 16 Prods., Inc., 23 F.3d 241 , 246 (9th Cir. 1994). 17 Because this action as to Holdings is now stayed, Holdings’ pending motions cannot 18 proceed unless and until the automatic stay is lifted. See e.g., McCarley v. Stout Ins. Co., 19 LLC, No. 2:24-cv-001697-CDS-MDC, 2024 WL 4956583 , at *1 (D. Nev. Dec. 3, 2024). 20 Consequently, Holdings’ Motion to Dismiss for Lack of Jurisdiction (ECF No. 28) is 21 DENIED WITHOUT PREJUDICE. 22 CONCLUSION 23 In light of the foregoing, the Court ORDERS as follows: 24 1. Labs’ Motion to Dismiss for Lack of Jurisdiction (ECF No. 29) is 25 GRANTED. Plaintiff’s request for jurisdictional discovery is DENIED. 26 2. Plaintiff’s claims against Labs are DISMISSED WITHOUT PREJUDICE. 27 3. This action as to Holdings is STAYED pursuant to 11 U.S.C. § 362 . 28 / / / 1 Therefore, Holdings’ Motion to Dismiss for Lack of Jurisdiction (ECF No. 28) is 2 || DENIED WITHOUT PREJUDICE. 3 IT IS SO ORDERED. 4 || Dated: April 29, 2025 psi L. Lo meeaitie5 on. Janis L. Sammartino 6 United States District Judge