Alcon 3PL, Inc. v. Sun Group Partners LLC

• Court: District Court, C.D. California
• Decided: November 17, 2022
• Docket: 2:22-cv-02523
• Status: Unknown

Opinion

Case 2:22-cv-02523-RSWL-PVC Document 32 Filed 11/17/22 Page 1 of 13 Page ID #:167 'O' 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 CV 20-02523-RSWL-PVCx 12 ALCON 3PL, INC. a California corporation, ORDER re: MOTION TO 13 DISMISS [23] Plaintiff, 14 v. 15 16 SUN GROUP PARTNERS LLC, a California limited 17 liability company; GLENN SANDS, an individual; 18 BRENT SANDS, an 19 individual; DOES 1 THROUGH 10, INCLUSIVE 20 Defendants. 21 22 23 Plaintiff Alcon 3PL, Inc. (“Plaintiff”) brought the 24 instant Action against Defendants Sun Group Partners, 25 LLC (“Defendant Sun Group”), Glenn Sands, and Brent 26 Sands (“Individual Defendants”), alleging breach of 27 contract, open book account, account stated, and quantum 28 meruit. Currently before the Court is Defendants’ 1 Case 2:22-cv-02523-RSWL-PVC Document 32 Filed 11/17/22 Page 2 of 13 Page ID #:168

1 Motion to Dismiss for Lack of Personal Jurisdiction

2 [23].1

3 Having reviewed all papers submitted pertaining to 4 this Motion, the Court NOW FINDS AND RULES AS FOLLOWS: 5 the Court GRANTS Defendants’ Motion to Dismiss. 6 I. BACKGROUND 7 A. Factual & Procedural Background 8 Plaintiff alleges the following in its Complaint: 9 Plaintiff is a corporation with its principal place 10 of business in Los Angeles, California. Compl. ¶ 2, ECF 11 1 Local Rule 7-3 provides that “counsel contemplating the 12 filing of any motion shall first contact opposing counsel to discuss thoroughly, preferably in person, the substance of the 13 contemplated motion and any potential resolution. The conference shall take place at least seven (7) days prior to the filing of 14 the motion.” C.D. Cal. Local Civ. R. 7-3. “Failure to comply 15 with the Local Rules does not automatically require the denial of a party’s motion, however, particularly where the non-moving 16 party has suffered no apparent prejudice as a result of the failure to comply.” CarMax Auto Superstores Cal. LLC v. 17 Hernandez, 94 F. Supp. 3d 1078, 1088 (C.D. Cal. 2015); see also ECASH Techs., Inc. v. Guagliardo, 35 F. App’x 498, 500 (9th Cir. 18 2002) (“The Central District of California’s local rules do not 19 require dismissal of appellee’s motions for failure to satisfy the meet-and-confer requirements.”). Here, the parties are in 20 violation of Local Rule 7-3 because there is no indication the parties met and conferred. Nevertheless, Plaintiff does not seem 21 to have been prejudiced by the violation because, although it did not file an opposition, it did file a stipulation to continue the 22 hearing date for this Motion, showing that Plaintiff was aware of the Motion and its opportunity to oppose. See generally Pl.’s 23 Stipulation to Continue Hr’g Date on Defs.’ Mot. to Dismiss, ECF 24 No. 27. Moreover, Plaintiff had sufficient time to oppose since the Court granted Plaintiff’s stipulation. See generally Order 25 Granting Pl.’s Stipulation to Continue Hr’g Date on Defs.’ Mot. to Dismiss, ECF No. 28. Thus, the Court should exercise its 26 discretion to consider the Motion’s merits. See CarMax Auto Superstores Cal. LLC, 94 F. Supp. 3d at 1088 (electing to 27 consider a motion’s merits despite a violation of Local Rule 7- 28 3). 2 Case 2:22-cv-02523-RSWL-PVC Document 32 Filed 11/17/22 Page 3 of 13 Page ID #:169

1 No. 1. Defendant Sun Group is a limited liability

2 company with its principal place of business in Palm

3 Beach Gardens, Florida. Id. ¶ 3. Individual Defendants 4 are citizens of Florida. Id. 5 Individual Defendants are “members and/or managers, 6 and/or officers[,] and/or directors” of Defendant Sun 7 Group. Moreover, “[Defendant] Sun Group is, and at all 8 relevant times was, a mere shell, instrumentality, and 9 conduit through which Individual Defendants carried on 10 business in the name of [Defendant] Sun Group.” Id. 11 ¶ 12. Specifically, Individual Defendants “controlled, 12 dominated, and operated [Defendant] Sun Group in that 13 the activities and business of [Defendant] Sun Group 14 were carried out without holding annual meetings, and 15 without keeping records or minutes of any proceedings, 16 or maintaining written resolutions.” Id. Therefore, 17 Defendant Sun Group is the alter ego of the Individual 18 Defendants, and the Individual Defendants cannot use 19 their company to shield themselves from personal 20 liability. Id. at ¶¶ 12-13. 21 In or about late 2020 and early 2021, Plaintiff 22 entered into an agreement with Defendant Sun Group 23 through the Individual Defendants for warehouse personal 24 protective equipment. Id. ¶ 14. On or about May 4, 25 2021, however, Defendants stopped paying the monthly 26 sum. Id. ¶ 15. In addition, from May 4, 2021, to March 27 25, 2022, Defendants failed to make any payments for 28 business transactions conducted between Defendants and 3 Case 2:22-cv-02523-RSWL-PVC Document 32 Filed 11/17/22 Page 4 of 13 Page ID #:170

1 Plaintiff. Id.

2 Plaintiff filed its Complaint [1] on April 14,

3 2022. Defendant filed the instant Motion [23] on 4 September 1, 2022. 5 II. DISCUSSION 6 A. Legal Standard 7 Federal Rule of Civil Procedure 12(b)(2) authorizes 8 dismissal of an action for lack of personal 9 jurisdiction. Fed. R. Civ. P. 12(b)(2). Once a 10 defendant moves to dismiss for lack of personal 11 jurisdiction, the plaintiff bears the burden of 12 demonstrating that jurisdiction is appropriate. 13 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 14 800 (9th Cir. 2004). 15 Where the motion is “based on written materials 16 rather than an evidentiary hearing, the plaintiff need 17 only make a prima facie showing of jurisdictional facts” 18 to survive dismissal. Id. (internal quotation marks 19 omitted). Absent an evidentiary hearing this court 20 “only inquire[s] into whether [the plaintiff’s] 21 pleadings ands affidavits make a prima facie showing of 22 personal jurisdiction.” Caruth v. Int’l 23 Psychoanalytical Ass’n, 59 F.3d 126, 127-28 (9th Cir. 24 1995); Boschetto v. Hansing, 539 F.3d 1011 (9th Cir. 25 2008). To make a prima facie showing, the plaintiff 26 must allege facts that, if true, would support a finding 27 of jurisdiction. Ballard v. Savage, 65 F.3d 1495, 1498 28 (9th Cir. 1995). Although the plaintiff cannot rely on 4 Case 2:22-cv-02523-RSWL-PVC Document 32 Filed 11/17/22 Page 5 of 13 Page ID #:171

1 the bare allegations of the complaint, uncontroverted

2 allegations in the complaint must be taken as true and

3 conflicts between statements contained in the parties’ 4 affidavits must be resolved in the plaintiff’s favor. 5 Schwarzenegger, 374 F.3d at 800. 6 B. Discussion 7 1. Personal Jurisdiction 8 Whether a federal court can exercise personal 9 jurisdiction over a non-resident defendant turns on two 10 independent considerations: whether an applicable state 11 rule or statute permits service of process on the 12 defendant, and whether the assertion of personal 13 jurisdiction comports with constitutional due process 14 principles. See Pac. Atl. Trading Co. v. M/V Main 15 Express, 758 F.2d 1325, 1327 (9th Cir. 1985). District 16 courts in California may exercise specific personal 17 jurisdiction over a nonresident defendant to the extent 18 permitted by the Due Process Clause of the United States 19 Constitution. Cal. Civ. Prov. Code § 410.10. The Due 20 Process Clause permits courts to exercise personal 21 jurisdiction over any defendant who has sufficient 22 “minimum contacts” with the forum state such that the 23 “maintenance of the suit [would] not offend traditional 24 notions of fair play and substantial justice.” Int’l 25 Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). 26 There are two recognized bases for personal 27 28 5 Case 2:22-cv-02523-RSWL-PVC Document 32 Filed 11/17/22 Page 6 of 13 Page ID #:172

1 jurisdiction over non-resident2 defendants: (1) “general

2 jurisdiction,” which arises where the defendant's

3 activities in the forum state are sufficiently 4 “substantial” or “continuous and systematic” to justify 5 the exercise of jurisdiction over him in all matters; 6 and (2) “specific jurisdiction,” which arises when a 7 defendant’s specific contacts with the forum have given 8 rise to the claim in question. See Helicopteros 9 Nacionales de Columbia S.A. v. Hall, 466 U.S. 408, 414– 10 16 (1984); Doe v. Am. Nat’l Red Cross, 112 F.3d 1048, 11 1050–51 (9th Cir. 1997). To survive a 12(b)(2) motion, 12 a plaintiff must show the court has personal 13 jurisdiction over the defendants. See Schwarzenegger, 14 374 F.3d at 800. 15 Plaintiff has not satisfied its burden to show that 16 the Court has personal jurisdiction over Individual 17 Defendants. Plaintiff alleges in its Complaint that the 18 three Defendants3 are citizens of Florida and entered 19 into a contract with Plaintiff, a California 20 corporation, to “warehouse” Defendants’ goods. Compl.

21 2 Plaintiff stated in its Complaint that Individual 22 Defendants are citizens of Florida and Defendant Sun Group is organized under Florida laws and has its principal place of 23 business in Florida. Compl. ¶¶ 3-5. Therefore, with no allegations that any Defendant resides in California, all 24 Defendants are nonresidents. 25 3 Plaintiff asserts that Defendant Sun Group is the alter ego of Individual Defendants. See Compl. ¶¶ 12-13. The Court 26 declines to assess whether this theory is viable at this stage of litigation, and instead centers its analysis on whether Plaintiff 27 has met its burden of showing that the Court has personal 28 jurisdiction over Individual Defendants. 6 Case 2:22-cv-02523-RSWL-PVC Document 32 Filed 11/17/22 Page 7 of 13 Page ID #:173

1 ¶¶ 2-5, 14-15. Plaintiff fails to provide the location

2 of this warehouse or any other facts that could

3 conceivably support the notion that Defendants had 4 minimum contacts with California. See generally id. 5 Plaintiff merely states that Defendants entered into a 6 contract with a California corporation for warehousing 7 services when it is well established that a contract 8 alone does not automatically establish minimum contacts 9 with a plaintiff’s home forum. See Boschetto v. 10 Hansing, 539 F.3d 1011, 1017 (9th Cir. 2008) (“[A] 11 contract alone does not create minimum contacts with the 12 plaintiff’s forum.”); Burger King Corp. v. Rudzewicz, 13 471 U.S. 462, 475 (1985) (“[There must be] actions by 14 the defendant . . . that create a substantial connection 15 with the forum [s]tate [to establish personal 16 jurisdiction].”) (internal quotation marks omitted). 17 Moreover, Plaintiff did not file an opposition or 18 affidavits alleging that the Court has personal 19 jurisdiction over Individual Defendants. And even if 20 Plaintiff’s allegations in its Complaint did support 21 finding that Individual Defendants had minimum contacts 22 with California, Defendants dispute that contention by 23 arguing that “there exists no minimum contacts with the 24 forum state.” See Schwarzenegger, 374 F.3d at 800 25 (holding that only uncontroverted allegations in the 26 complaint must be taken as true for the purposes of 27 ascertaining whether a plaintiff has met its burden of 28 showing personal jurisdiction). Therefore, Plaintiff 7 Case 2:22-cv-02523-RSWL-PVC Document 32 Filed 11/17/22 Page 8 of 13 Page ID #:174

1 has failed to provide adequate information to establish

2 a prima facie case for exercising personal jurisdiction

3 over Individual Defendants. 4 2. Local Rule 7-12 5 Local Rule 7-12 reinforces the conclusion that 6 Plaintiff has not sufficiently alleged personal 7 jurisdiction. Local Rule 7-12 states in pertinent part: 8 “failure to file any required document, or the failure 9 to file it within the deadline, may be deemed consent to 10 the granting or denial of the motion.” C.D. Cal. Local 11 Civ. R. 7-12. In assessing whether this rule applies 12 and a court should grant an unopposed motion, the Ninth 13 Circuit considers the following five factors: (1) the 14 public’s interest in expeditious resolution in 15 litigation; (2) the court’s need to manage its docket; 16 (3) the risk of prejudice to the defendants; (4) the 17 public policy favoring disposition of cases of their 18 merits; and (5) the availability of less drastic 19 sanctions. Pagtalunan v. Galaza, 291 F.3d 639, 642 (9th 20 Cir. 2002). This test for dismissal is “a disjunctive 21 balancing test, so not all five factors must support 22 dismissal.” Sowinski v. Cal. Air Res. Board, No. SACV 23 15-2123-JLS (JCGx), 2016 WL 5886902 (C.D. Cal. Aug. 18, 24 2016) (citing Valley Eng’rs Inc. v. Elec. Eng’g Co., 158 25 F.3d 1051, 1057 (9th Cir. 1998)). 26 /// 27 /// 28 /// 8 Case 2:22-cv-02523-RSWL-PVC Document 32 Filed 11/17/22 Page 9 of 13 Page ID #:175

1 a. The Public’s Interest in Expeditious

2 Resolution of Litigation

3 Here, as to the first factor, the public’s interest 4 in expeditious resolution of litigation always favors 5 dismissal. Yourish v. Cal. Amplifier, 191 F.3d 983, 990 6 (9th Cir. 1999). Thus, this factor weighs in favor of 7 dismissal. 8 b. The Court’s Need to Manage Its Docket 9 Second, the Court’s need to manage its docket 10 depends on whether the delay in a particular case 11 interferes with docket management and the public 12 interest. Pagtalunan, 291 F.3d at 642. Here, 13 Plaintiff’s failure to file a response or request an 14 extension indicates that the Plaintiff does not intend 15 to prosecute the action against the Individual 16 Defendants. See Balsin v. Equable Ascent Fin., LLC, CV 17 11-01113 MMM (FMOx), 2011 WL 13218018 at *2 (C.D. Cal. 18 May 12, 2011) (finding in favor of dismissal where 19 plaintiff’s inattention and nonresponsive behavior 20 suggests further litigation would waste the court’s 21 valuable resources). Thus, this factor weighs in favor 22 of dismissal. 23 c. The Risk of Prejudice to the Defendants 24 Next, to prove risk of prejudice, a defendant must 25 establish that a plaintiff’s actions impaired a 26 defendant’s ability to proceed to trial or threatened to 27 interfere with the rightful decision of the case. 28 Pagtalunan, 291 F.3d at 642 (citing Malone v. U.S. 9 Case 2:22-cv-02523-RSWL-PVC Document 32 Filed 11/17/22 Page 10 of 13 Page ID #:176

1 Postal Serv., 833 F.2d 129, 131 (9th Cir. 1987)). Here,

2 Plaintiff neither provides an explanation for its

3 failure to file an opposition nor requests an extension 4 to do so. See, e.g., Foster v. Jacquez, No. CV 09-01406 5 JFW, 2009 WL 1559586, *3 (C.D. Cal. May 28, 2009) 6 (“Where a party offers a poor excuse for failing to 7 comply with a court's order, the prejudice to the 8 opposing party is sufficient to favor dismissal.”); 9 Grubb v. Hernandez, No. ED CV 06-00807SJOAJW, 2009 WL 10 1357411 at *2 (C.D. Cal. May 1, 2009) (“In the absence 11 of a showing to the contrary, prejudice to defendants or 12 respondents is presumed from unreasonable delay [for the 13 purpose of Local Rule 7-12].”). Therefore, this factor 14 weighs in favor of dismissal. 15 d. The Public Policy Favoring Disposition of 16 Cases on Their Merits 17 Fourth, public policy favors disposition of cases 18 on the merits, and therefore, this factor generally 19 weighs against dismissal. Hernandez v. City of El 20 Monte, 138 F.3d 393, 399 (9th Cir. 1998). This 21 presumes, however, that the plaintiff “has manifested a 22 diligent desire to prosecute his or her claims.” Ewing 23 v. Ruano, No. CV 09-08471 VAP, 2012 WL 2138159 at *2 24 (C.D. Cal. June 12, 2012). Here, Plaintiff has neither 25 filed a timely opposition nor applied for an extension 26 to file an opposition. See id. (finding this factor 27 favored dismissal where plaintiff failed to file a 28 10 Case 2:22-cv-02523-RSWL-PVC Document 32 Filed 11/17/22 Page 11 of 13 Page ID #:177

1 timely opposition or apply for an extension). Thus,

2 this factor weighs in favor of dismissal.

3 e. The Availability of Less Drastic Sanctions 4 Finally, this factor “ordinarily counsels against 5 dismissal” unless the court gave plaintiff an 6 opportunity to avoid dismissal, in which case no lesser 7 sanctions are available. Sperow v. Ponce, No. CV 19- 8 10525-KS, 2020 WL 3100645 at *2 (C.D. Cal. June 11, 9 2020). Here, the Court did not offer Plaintiff an 10 opportunity to avoid dismissal, nor did it find it 11 necessary to consider the availability of other less 12 drastic alternatives. See Pagtalunan, 291 F.3d at 643 13 (finding this factor weighed against dismissal because 14 the court did not consider the lesser alternative of 15 imposing sanctions). Therefore, this factor weighs 16 against dismissal. 17 Of the five factors, four factors weigh in favor of 18 dismissal. Thus, the Court dismisses the Complaint 19 against the Individual Defendants pursuant to Local Rule 20 7-12. 21 3. Leave to Amend 22 “Where a motion to dismiss is granted, a district 23 court must decide whether to grant leave to amend.” 24 Winebarger v. Pennsylvania Higher Educ. Assistance 25 Agency, 411 F. Supp. 3d 1070, 1082 (C.D. Cal. 2019). 26 “The court should give leave [to amend] freely when 27 justice so requires.” Fed. R. Civ. P. 15(a)(2). In the 28 Ninth Circuit, “Rule 15’s policy of favoring amendments 11 Case 2:22-cv-02523-RSWL-PVC Document 32 Filed 11/17/22 Page 12 of 13 Page ID #:178

1 to pleadings should be applied with ‘extreme

2 liberality.’” United States v. Webb, 655 F.2d 977, 979

3 (9th Cir. 1981). Against this extremely liberal 4 standard, the Court may consider “the presence of any of 5 four factors: bad faith, undue delay, prejudice to the 6 opposing party, and/or futility.” Owens v. Kaiser 7 Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 8 2001). 9 Here, leave to amend Plaintiff’s claims is 10 appropriate because Plaintiff can cure its failure to 11 meet its burden by pleading facts that support 12 exercising personal jurisdiction over the Individual 13 Defendants. Thus, leave to amend would not be futile. 14 Moreover, there is no evidence of bad faith by 15 Plaintiff. While Plaintiff’s failure to file an 16 opposition could weigh toward finding undue delay or 17 prejudice; ultimately, “[t]he purpose of the litigation 18 process is to vindicate meritorious claims. Refusing, 19 solely because of delay, to permit an amendment to a 20 pleading in order to state a potentially valid claim 21 would hinder this purpose without promoting any other 22 sound judicial policy.” Howey v. U.S., 481, F.2d 1187, 23 1191 (9th Cir. 1973). The Court therefore GRANTS 24 Defendants’ Motion to Dismiss Plaintiff’s claims with 25 leave to amend. 26 III. CONCLUSION 27 In sum, Plaintiff has not sufficiently alleged that 28 the Court has personal jurisdiction over the Individual 12 Case 2:22-cv-02523-RSWL-PVC Document 32 Filed 11/17/22 Page 13 of 13 Page ID #:179

1 Defendants. Based on the foregoing, the Court GRANTS

2 Defendant’s Motion to Dismiss with leave to amend.

3 IT IS SO ORDERED. 4 5 DATED: November 17, 2022 _ _ _ _ _ _ _ _/S_/ _R_O_N_AL_D_ S_._W_. _LE_W_ ________ HONORABLE RONALD S.W. LEW 6 Senior U.S. District Judge 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13