A&C Trade Consultants, Inc. v. Alvarez

District Court, N.D. California·Decided July 12, 2021·No. 3:18-cv-05356-MMC·Unknown

Opinion

1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 9 A&C TRADE CONSULTANTS, INC., Case No. 18-cv-05356-MMC

10 Plaintiff, ORDER GRANTING IN PART AND 11 v. DENYING IN PART PLAINTIFF’S AMENDED MOTION TO ENTER 12 JOEL E. ALVAREZ, et al., DEFAULT JUDGMENT 13 Defendants. Re: Doc. No. 74

14 15 Before the Court is plaintiff A&C Trade Consultants, Inc.’s (“A&C”) Amended 16 Motion to Enter Default Judgment, brought pursuant to Rule 55(b)(2) of the Federal Rules 17 of Civil Procedure, and filed April 28, 2021.1 Having read and considered the papers filed 18 in support of the instant motion, the Court rules as follows.2 19 BACKGROUND3 20 A&C sells “high quality industrial washdown equipment.” (See Compl. ¶ 1.) In 21 1996, A&C hired defendant Joel E. Alvarez (“Alvarez”) and, “[i]n recent years,” he “was 22 responsible for overseeing . . . the South American market.” (See id. ¶ 9.) 23 In 2017, however, A&C “became aware” that its “monies . . . were being diverted 24 1 On April 28, 2021, A&C served each defendant named in the above-titled action 25 with notice of the instant motion. To date, no defendant has filed a response. 26 2 By order filed June 1, 2021, the Court took the matter under submission. 27 3 The following facts are taken from the complaint and declarations filed in support 1 into an account in the name[s] of Alvarez” and defendants Revolution Racing Team 2 (“RRT”) and Importtrix, two businesses A&C “understood to be owned by Alvarez and his 3 [now ex-wife], Ethel Nogal (“Nogal”).” (See Hsu Decl. ¶ 4; see also Compl. ¶ 10.)4 4 Additionally, A&C “learned” that Alvarez and Nogal, along with defendant Martin Alonso 5 Guerra Espinosa (“Espinosa”), “had been utilizing the trade secrets of A&C . . . to help 6 establish and promote their joint business venture,” namely, defendant Suministros 7 Industriales Joma S.A.S. (“SIJOMA”). (See id. ¶ 11.) 8 Based on the above allegations, A&C, on August 30, 2018, filed the instant action, 9 by which it asserts the following thirteen “Claims for Relief”: (1) “Misappropriation of 10 Trade Secrets under the Defend Trade Secrets Act of 2016 (18 U.S.C. § 1836(b)(1)),” (2) 11 “Misappropriation of Trade Secrets under California Uniform Trade Secrets Act, Cal. Civ. 12 Code § 3426, et seq.,” (3) “Violation of the Computer Fraud and Abuse Act, 18 U.S.C. 13 § 1030,” (4) “Violation of Cal. Penal Code § 502,” (5) “Violation of Cal. Penal Code 14 § 528.5,” (6) “Violation of Cal. Penal Code § 496(c),” (7) “Breach of Contract,” (8) “Breach 15 of Fiduciary Duty,” (9) “Conversion,” (10) “Money Had and Received,” (11) “Fraud,” (12) 16 “Unjust Enrichment,” and (13) “Unlawful, Unfair[,] and Fraudulent Competition under Cal. 17 Bus[.] and Prof. Code § 17200, et seq.”5 18 Subsequently, on October 16, 2018, A&C completed service of the summons and 19 complaint on RRT and Importtrix, followed by service on Alvarez on November 14, 2018. 20 (See Doc. Nos. 15-17). On March 15, 2019, after Alvarez, RRT, and Importtrix failed to 21 respond to the complaint or otherwise appear, A&C moved for entry of default against 22 those three defendants (see Doc. No. 26), which defaults were entered by the Clerk of 23 Court on March 19, 2019 (see Doc. No. 27). On January 2, 2020, A&C then completed 24

25 4 By order filed March 19, 2021, the Court approved a stipulation for dismissal of A&C’s claims against Nogal. 26 5 The above numbers do not fully correspond to the claims asserted by A&C. In particular, A&C mislabeled the eighth of the above-listed claims as “Ninth Claim for 27 Relief” and continued to mislabel, in the same manner, the five claims following 1 service on Espinosa and SIJOMA. (See Doc. Nos. 41-42.) On March 4, 2020, A&C 2 moved for entry of default against those two defendants (see Doc. No. 43), which 3 defaults were entered by the Clerk of Court on March 5, 2020 (see Doc. No. 44). 4 Default having been entered against Alvarez, RRT, Importtrix, Espinosa, and 5 SIJOMA, A&C, on March 19, 2021, moved for entry of default judgment against all five 6 defendants. (See Doc. No. 69.) On March 23, 2021, however, the Court, after identifying 7 specific deficiencies in A&C’s motion, denied the motion without prejudice to A&C’s filing 8 an amended motion; additionally, in so ruling, the Court directed A&C, in any such 9 amended motion, to “address the issue of personal jurisdiction, cite to the particular 10 allegations in the complaint on which [A&C] relies to establish liability, and cite to the 11 particular evidence on which [A&C] relies to support its claim for damages.” (See Order 12 at 2:14-16.) 13 DISCUSSION 14 By the instant motion, A&C seeks, pursuant to Rule 55(b)(2), entry of a default 15 judgment against Alvarez, RRT, Importtrix, Espinosa, and SIJOMA, as well as damages, 16 various forms of equitable relief, and attorneys’ fees and costs. 17 A. Jurisdiction 18 Before a default judgment may be entered, the district court must determine it has 19 subject matter jurisdiction over the action and personal jurisdiction over each of the 20 defendants. See In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999) (holding, where entry of 21 default judgment is sought, court has “affirmative duty to look into its jurisdiction over both 22 the subject matter and the parties”). 23 Here, the Court has original jurisdiction over A&C’s claims alleging violations of the 24 Defend Trade Secrets Act and the Computer Fraud and Abuse Act, see 28 U.S.C. 25 § 1331, and supplemental jurisdiction over the remaining claims, see id. § 1367. 26 Additionally, the Court has personal jurisdiction over Alvarez, “an individual residing 27 within this judicial district.” (See Compl. ¶ 2.) As set forth below, however, personal 1 “For a court to exercise personal jurisdiction over a nonresident defendant 2 consistent with due process, that defendant must have certain minimum contacts with the 3 . . . forum,” see Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 801 (9th Cir. 4 2004) (internal quotation and citation omitted), and depending on the nature and extent of 5 its contacts with the forum, “a defendant may be subject to either general or specific 6 personal jurisdiction,” see Easter v. Am. W. Fin., 381 F.3d 948, 960 (9th Cir. 2004). “It is 7 the plaintiff's burden to establish the court's personal jurisdiction over a defendant.” See 8 Doe v. Unocal Corp., 248 F.3d 915, 922 (9th Cir. 2001). 9 Here, although the Court, as noted, directed A&C, in the instant motion, to 10 “address the issue of personal jurisdiction” (see Order at 2:14), A&C has failed to do so 11 and, consequently, has not met its burden. With respect to RRT and Importtrix, A&C 12 alleges both “business entit[ies]” are “doing business within this judicial district” (see 13 Compl. ¶¶ 4-5), but has provided no details as to the nature and extent of any such 14 contacts. As to Espinosa, “an individual residing in Medellin, Col[o]mbia” (see id. ¶ 6), 15 and SIJOMA, “a business entity . . . doing business in Medellin, Col[o]mbia” (see id. ¶ 7), 16 A&C fails to allege any contacts whatsoever. 17 Accordingly, to the extent A&C seeks entry of a default judgment against RRT, 18 Importtrix, Espinosa, and SIJOMA, the motion will be denied. See In re Tuli, 172 F.3d at 19 712 (holding “judgment entered without personal jurisdiction over the parties is void”).

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