1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 Alpine 4 Technologies Limited, No. CV-20-01679-PHX-DJH
10 Plaintiff, ORDER
11 v.
12 Alan W Martin, et al.,
13 Defendants. 14 15 Pending before the Court is Defendant Huffacker’s (“Defendant” or “Huffacker”) 16 Motion to Dismiss (Doc. 41). Plaintiff Alpine 4 Technologies Limited (“Plaintiff” or 17 “Alpine”) filed a Response (Doc. 47), and Defendant filed a Reply (Doc. 48). 18 Defendant seeks to dismiss this matter under Fed. R. Civ. P. 12(b)(2), (3), and (6), 19 arguing this Court lacks general and specific personal jurisdiction over him. Defendant 20 further argues Plaintiff’s claims should be dismissed against him because of improper 21 venue and because Plaintiff’s claims are barred by the two-year statute of limitations set 22 forth in A.R.S § 12-542. 23 I. Background 24 This case concerns claims for Defendants’ breach of contract, interference with 25 business expectancy, and tortious interference with contact. (Doc. 1 at ¶¶ 7–11). As 26 alleged in the Complaint, Defendants Alan W. Martin, Jason Huffacker, and Donald G. 27 Belcher tortiously interfered with Alpine’s purchase of Martin’s business, Horizon Well 28 Testing, L.L.C. (“HWT”). (Id. at ¶¶ 8–9). HWT is an Oklahoma business entity engaged 1 in fracking and related industry support services. (Id.) 2 On November 30, 2016, Alpine and Martin executed a Securities Purchase 3 Agreement (the “Contract”), under which Alpine agreed to purchase and Martin agreed 4 to sell HWT. (Id. at ¶ 3). At the conclusion of the purchase, HWT became a wholly- 5 owned subsidiary of Alpine, a publicly-traded corporation headquartered in Arizona. (Id. 6 at ¶ 23) 7 Thereafter, on March 29, 2017, Defendant Belcher organized an entity, 8 RapidWater Resources, LLC (“RWR”) as an Oklahoma limited liability company. (Id. at 9 ¶ 30). A month later, on April 24, 2017, Huffacker called HWT’s president, Terry Protto, 10 and informed Mr. Protto that Huffacker was giving two weeks’ notice of his intention to 11 terminate his employment with HWT. (Id. at ¶ 24). Huffacker further informed Mr. 12 Prottot that Huffacker was taking all water transfer employees with him in his imminent 13 departure. (Id. at ¶ 26). Huffacker then joined RWR. (Id. at ¶ 31). 14 Plaintiff thus alleges Huffacker stole equipment and diverted HWT’s business to 15 RWR, an entity Belcher planned to co-own with Huffacker. (Doc. 47 at 3). Plaintiff 16 further alleges Huffacker interfered with the business expectancy between HWT and its 17 customers. (Id.) Huffacker alleges every purported wrongful act on which Alpine bases 18 its claims against him took place entirely in Oklahoma. (Doc. 41 at 7). 19 In sum, Huffacker, an Oklahoma resident, is alleged to have been in Oklahoma 20 when he stole labor and equipment from HWT, an Oklahoma limited liability company 21 that is the wholly-owned subsidiary of Alpine, a company headquartered in Arizona. 22 Huffacker moves to dismiss this matter, arguing the Court lacks personal jurisdiction over 23 him. (Doc. 41). The Court will grant Huffacker’s Motion. 24 II. Legal Standard 25 A plaintiff bears the burden of establishing personal jurisdiction over all defendants. 26 Ziegler v. Indian River County, 64 F.3d 470, 473 (9th Cir. 1995) (citing Farmers Ins. Exch. 27 v. Portage La Prairie Mut. Ins. Co., 907 F.2d 911, 912 (9th Cir. 1990)). A defendant may 28 move to dismiss a complaint for lack of personal jurisdiction. Fed. R. Civ. P. 12(b)(2). 1 When a defendant does so, “the plaintiff is obligated to come forward with facts, by 2 affidavit or otherwise, supporting personal jurisdiction.” Cummings v. W. Trial Lawyers 3 Assoc., 133 F. Supp. 2d. 1144, 1151 (D. Ariz. 2001). Where the motion is based on written 4 materials, “the plaintiff need only make a prima facie showing of jurisdictional facts.” Sher 5 v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990). In determining whether the plaintiff has 6 met this burden, “conflicts between the facts contained in the parties’ affidavits must be 7 resolved in [the plaintiff’s] favor for purposes of deciding whether a prima facie case for 8 personal jurisdiction exists.” AT&T v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588 9 (9th Cir. 1996). 10 “Where . . . there is no applicable federal statute governing personal jurisdiction, the 11 district court applies the law of the state in which the district court sits.” Dole Food Co. v. 12 Watts, 303 F.3d 1104, 1110 (9th Cir. 2002). Arizona exerts personal jurisdiction to the 13 “maximum extent permitted by the Arizona Constitution and the United States 14 Constitution.” Ariz. R. Civ. P. 4.2(a); see also A. Uberti and C. v. Leonardo, 892 P.2d 15 1354, 1358 (Ariz. 1995). Therefore, the analysis of personal jurisdiction under Arizona 16 law and federal law are the same. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 17 797, 800–01 (9th Cir. 2004). Under the Due Process Clause, “[a]lthough a nonresident’s 18 physical presence within the territorial jurisdiction of the court is not required, the 19 nonresident generally must have certain minimum contacts . . . such that the maintenance 20 of the suit does not offend traditional notions of fair play and substantial justice.” Walden 21 v. Fiore, 571 U.S. 277, 283 (2014) (internal citations omitted). 22 A court may assert general or specific jurisdiction over the nonresident defendant. 23 Cybersell v. Cybersell, 130 F.3d 414, 416 (9th Cir. 1997). General jurisdiction exists when 24 the defendant has “continuous and systematic” contacts with the forum state, whereas 25 specific jurisdiction exists when the controversy arises from or is related to the defendant’s 26 specific contact with the forum state. See Helicopteros Nacionales de Colombia v. Hall, 27 466 U.S. 408, 414 (1984). The “mere fact that [a defendant’s] conduct affected plaintiffs 28 with connections to the forum State does not suffice to authorize jurisdiction.” Walden, 1 571 U.S. at 291. Where neither general nor specific jurisdiction exists, the court must 2 dismiss the defendant under Rule 12(b)(2). 3 III. Analysis 4 The Court will analyze whether Plaintiff has made a prima facie showing that this 5 Court has either general or specific jurisdiction over Defendant. 6 A. General Jurisdiction 7 Defendant argues he has no systematic contacts with Arizona that would confer 8 general personal jurisdiction. (Doc. 41 at 10). Huffacker claims he is a resident of, and 9 domiciled in, Oklahoma, not Arizona. (Id.) He has lived in Oklahoma throughout his 10 childhood and entire adult life and has never lived in or traveled to Arizona for personal or 11 professional reasons. (Id.) Huffaker further claims he does not own or maintain any real 12 or personal property in Arizona. (Id.) Neither does he hold any money or bank accounts 13 there. (Id.) Thus, he argues no general jurisdiction exists. 14 Alpine, on the other hand, argues when it purchased HWT from Martin, he 15 identified Huffacker as a key employee “who oversaw all of HWT’s water transfer 16 services, logistics, and implementation.” (Doc 1. at ¶ 10).
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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 Alpine 4 Technologies Limited, No. CV-20-01679-PHX-DJH
10 Plaintiff, ORDER
11 v.
12 Alan W Martin, et al.,
13 Defendants. 14 15 Pending before the Court is Defendant Huffacker’s (“Defendant” or “Huffacker”) 16 Motion to Dismiss (Doc. 41). Plaintiff Alpine 4 Technologies Limited (“Plaintiff” or 17 “Alpine”) filed a Response (Doc. 47), and Defendant filed a Reply (Doc. 48). 18 Defendant seeks to dismiss this matter under Fed. R. Civ. P. 12(b)(2), (3), and (6), 19 arguing this Court lacks general and specific personal jurisdiction over him. Defendant 20 further argues Plaintiff’s claims should be dismissed against him because of improper 21 venue and because Plaintiff’s claims are barred by the two-year statute of limitations set 22 forth in A.R.S § 12-542. 23 I. Background 24 This case concerns claims for Defendants’ breach of contract, interference with 25 business expectancy, and tortious interference with contact. (Doc. 1 at ¶¶ 7–11). As 26 alleged in the Complaint, Defendants Alan W. Martin, Jason Huffacker, and Donald G. 27 Belcher tortiously interfered with Alpine’s purchase of Martin’s business, Horizon Well 28 Testing, L.L.C. (“HWT”). (Id. at ¶¶ 8–9). HWT is an Oklahoma business entity engaged 1 in fracking and related industry support services. (Id.) 2 On November 30, 2016, Alpine and Martin executed a Securities Purchase 3 Agreement (the “Contract”), under which Alpine agreed to purchase and Martin agreed 4 to sell HWT. (Id. at ¶ 3). At the conclusion of the purchase, HWT became a wholly- 5 owned subsidiary of Alpine, a publicly-traded corporation headquartered in Arizona. (Id. 6 at ¶ 23) 7 Thereafter, on March 29, 2017, Defendant Belcher organized an entity, 8 RapidWater Resources, LLC (“RWR”) as an Oklahoma limited liability company. (Id. at 9 ¶ 30). A month later, on April 24, 2017, Huffacker called HWT’s president, Terry Protto, 10 and informed Mr. Protto that Huffacker was giving two weeks’ notice of his intention to 11 terminate his employment with HWT. (Id. at ¶ 24). Huffacker further informed Mr. 12 Prottot that Huffacker was taking all water transfer employees with him in his imminent 13 departure. (Id. at ¶ 26). Huffacker then joined RWR. (Id. at ¶ 31). 14 Plaintiff thus alleges Huffacker stole equipment and diverted HWT’s business to 15 RWR, an entity Belcher planned to co-own with Huffacker. (Doc. 47 at 3). Plaintiff 16 further alleges Huffacker interfered with the business expectancy between HWT and its 17 customers. (Id.) Huffacker alleges every purported wrongful act on which Alpine bases 18 its claims against him took place entirely in Oklahoma. (Doc. 41 at 7). 19 In sum, Huffacker, an Oklahoma resident, is alleged to have been in Oklahoma 20 when he stole labor and equipment from HWT, an Oklahoma limited liability company 21 that is the wholly-owned subsidiary of Alpine, a company headquartered in Arizona. 22 Huffacker moves to dismiss this matter, arguing the Court lacks personal jurisdiction over 23 him. (Doc. 41). The Court will grant Huffacker’s Motion. 24 II. Legal Standard 25 A plaintiff bears the burden of establishing personal jurisdiction over all defendants. 26 Ziegler v. Indian River County, 64 F.3d 470, 473 (9th Cir. 1995) (citing Farmers Ins. Exch. 27 v. Portage La Prairie Mut. Ins. Co., 907 F.2d 911, 912 (9th Cir. 1990)). A defendant may 28 move to dismiss a complaint for lack of personal jurisdiction. Fed. R. Civ. P. 12(b)(2). 1 When a defendant does so, “the plaintiff is obligated to come forward with facts, by 2 affidavit or otherwise, supporting personal jurisdiction.” Cummings v. W. Trial Lawyers 3 Assoc., 133 F. Supp. 2d. 1144, 1151 (D. Ariz. 2001). Where the motion is based on written 4 materials, “the plaintiff need only make a prima facie showing of jurisdictional facts.” Sher 5 v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990). In determining whether the plaintiff has 6 met this burden, “conflicts between the facts contained in the parties’ affidavits must be 7 resolved in [the plaintiff’s] favor for purposes of deciding whether a prima facie case for 8 personal jurisdiction exists.” AT&T v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588 9 (9th Cir. 1996). 10 “Where . . . there is no applicable federal statute governing personal jurisdiction, the 11 district court applies the law of the state in which the district court sits.” Dole Food Co. v. 12 Watts, 303 F.3d 1104, 1110 (9th Cir. 2002). Arizona exerts personal jurisdiction to the 13 “maximum extent permitted by the Arizona Constitution and the United States 14 Constitution.” Ariz. R. Civ. P. 4.2(a); see also A. Uberti and C. v. Leonardo, 892 P.2d 15 1354, 1358 (Ariz. 1995). Therefore, the analysis of personal jurisdiction under Arizona 16 law and federal law are the same. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 17 797, 800–01 (9th Cir. 2004). Under the Due Process Clause, “[a]lthough a nonresident’s 18 physical presence within the territorial jurisdiction of the court is not required, the 19 nonresident generally must have certain minimum contacts . . . such that the maintenance 20 of the suit does not offend traditional notions of fair play and substantial justice.” Walden 21 v. Fiore, 571 U.S. 277, 283 (2014) (internal citations omitted). 22 A court may assert general or specific jurisdiction over the nonresident defendant. 23 Cybersell v. Cybersell, 130 F.3d 414, 416 (9th Cir. 1997). General jurisdiction exists when 24 the defendant has “continuous and systematic” contacts with the forum state, whereas 25 specific jurisdiction exists when the controversy arises from or is related to the defendant’s 26 specific contact with the forum state. See Helicopteros Nacionales de Colombia v. Hall, 27 466 U.S. 408, 414 (1984). The “mere fact that [a defendant’s] conduct affected plaintiffs 28 with connections to the forum State does not suffice to authorize jurisdiction.” Walden, 1 571 U.S. at 291. Where neither general nor specific jurisdiction exists, the court must 2 dismiss the defendant under Rule 12(b)(2). 3 III. Analysis 4 The Court will analyze whether Plaintiff has made a prima facie showing that this 5 Court has either general or specific jurisdiction over Defendant. 6 A. General Jurisdiction 7 Defendant argues he has no systematic contacts with Arizona that would confer 8 general personal jurisdiction. (Doc. 41 at 10). Huffacker claims he is a resident of, and 9 domiciled in, Oklahoma, not Arizona. (Id.) He has lived in Oklahoma throughout his 10 childhood and entire adult life and has never lived in or traveled to Arizona for personal or 11 professional reasons. (Id.) Huffaker further claims he does not own or maintain any real 12 or personal property in Arizona. (Id.) Neither does he hold any money or bank accounts 13 there. (Id.) Thus, he argues no general jurisdiction exists. 14 Alpine, on the other hand, argues when it purchased HWT from Martin, he 15 identified Huffacker as a key employee “who oversaw all of HWT’s water transfer 16 services, logistics, and implementation.” (Doc 1. at ¶ 10). Plaintiff argues after Alpine 17 purchased HWT, all Huffacker’s subsequent conduct was as an employee of HWT, owned 18 and operated by an Arizona business. (Doc. 47 at 6). Plaintiff thus contends Huffacker 19 was conducting regular, systematic and continuous business with the forum state. (Id.) 20 The Court finds Alpine has failed to make a prima facie case that Defendant has 21 “continuous and systematic general business contacts” making Defendant appear at home 22 in the forum state. See Helicopteros, 466 U.S. at 414. First, Plaintiff provided no authority 23 to support his contention that being an employee of a subsidiary company whose parent 24 company was headquartered in Arizona conferred Arizona courts personal jurisdiction over 25 the employee. Plaintiff merely states Defendant knew he was working for “an Arizona 26 owner of HWT.” (Doc. 47 at 7). For an individual, however, the paradigm forum for the 27 exercise of general jurisdiction is the individual’s domicile. Goodyear Dunlop Tires 28 Operations, S.A. v. Brown, 564 U.S. 915, 924 (2011). Defendant is a resident of, and 1 domiciled in, Oklahoma—not Arizona. (Doc. 41 at 3). The services Defendant provided 2 for HWT were performed in Oklahoma. (Id. at 5). Therefore, the Court finds that it does 3 not have general jurisdiction over Defendant. 4 B. Specific Jurisdiction 5 Defendant further argues that Plaintiff has not made a prima facie showing that 6 Defendant has availed himself of the forum of Arizona, arguing that he never purposefully 7 directed any of his conduct toward Arizona. (Doc. 41 at 13). In response, Plaintiff argues 8 that it has established that Defendant engaged in a pattern of conduct that meets the tests 9 to place him within this Court’s jurisdiction. (Doc. 15). 10 Courts in the Ninth Circuit apply a three-part test to determine whether specific 11 personal jurisdiction has been established. These include: “(1) the non-resident defendant 12 must purposefully direct his activities or consummate some transaction with the forum or 13 resident thereof; or perform some act by which he purposefully avails himself of the 14 privilege of conducting activities in the forum, thereby invoking the benefits and 15 protections of its laws; (2) the claim must be one which arises out of or relates to the 16 defendant’s forum-related activities; and (3) the exercise of jurisdiction must comport with 17 fair play and substantial justice, i.e. it must be reasonable.” Morrill v. Scott Fin. Corp., 18 873 F.3d 1136, 1142 (9th Cir. 2017). The “‘purposeful availment’ requirement ensures 19 that a defendant will not be hauled into a jurisdiction solely as a result of ‘random,’ 20 ‘fortuitous,’ or ‘attenuated’ contacts.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 21 (1985). 22 A plaintiff must satisfy both of the first two prongs in order to establish personal 23 jurisdiction. Id. “If the plaintiff succeeds in satisfying both of the first two prongs, the 24 burden then shifts to the defendant to ‘present a compelling case’ that the exercise of 25 jurisdiction would not be reasonable.” Id. at 476–78. If one of the first two prongs is not 26 met, the Court does not have personal jurisdiction over the defendant and the inquiry ends. 27 Id. 28 / / / 1 1. Purposeful Availment & Direction 2 Plaintiff argues that Defendant personally availed himself of Arizona law when he 3 stole business and property from Alpine, the new owner of HWT that happened to be 4 headquartered in Arizona. (Doc. 47 at 7). Plaintiff further asserts that when Defendant 5 stole HWT’s equipment from an Oklahoma oil field, he knew he was injuring Alpine. (Id. 6 at 8). 7 Defendant argues Alpine’s Complaint provides no factual basis on which the Court 8 could conclude that Huffaker had any contact with Arizona, or that Huffaker conducted 9 any activities in Arizona to avail himself of some benefit or privilege available there, or 10 that Arizona was the focal point of any of the tortious acts Huffaker allegedly committed. 11 (Doc. 41 at 13). 12 Although Defendant injured Alpine when he stole HWT’s physical equipment and 13 took HWT business and formed a competitor (Id. at 14), “mere injury to a forum resident 14 is not a sufficient connection to the forum.” Stuckey v. Leath, 2019 WL 1558079 (D. Ariz. 15 May 10, 2019). “The proper question is not where the plaintiff experienced a particular 16 injury or effect, but whether the defendant’s conduct connects him to the forum in a 17 meaningful way.” Id. Plaintiff felt these alleged injuries in Arizona “not because anything 18 independently occurred there,” but because, at the time of Huffaker’s actions, Plaintiff—a 19 Delaware corporation—was headquartered in Phoenix, Arizona. See Walden, 571 U.S. at 20 290. But a defendant does not purposefully direct conduct at the forum state when the 21 plaintiff is “the only link between defendant and the forum.” Picot v. Weston, 780 F.3d 22 1206, 1215 (9th Cir. 2015); see also Morrill, 873 F.3d at 1148–49 (holding that “to 23 establish the basis for specific personal jurisdiction, a tort must involve the forum state [of 24 Arizona] itself, and not just have some effect on a party who resides there”). Because 25 Plaintiff has failed to demonstrate the first element of the specific jurisdiction test, the 26 Court cannot exercise personal jurisdiction over Defendant.1 27 1 Since the Court lacks personal jurisdiction over Defendant Huffacker, it will not consider 28 Huffacker’s alternative arguments about improper venue or the statute of limitations under A.R.S § 12-542. IV. Conclusion 2 Since Plaintiff failed to make a prima facie case that jurisdiction is proper, the Court 3 || must dismiss Defendant Huffacker pursuant to Rule 12(b)(2). 4 Accordingly, 5 IT IS HEREBY ORDERED that Defendant Huffacker’s Motion to Dismiss (Doc. 6|| granted. The Clerk of Court is directed to dismiss Huffacker from this action. 7 Dated this 26th day of October, 2021. 8 9 ( . fe □□ 10 norable'Diang/. Hunfetewa 1 United States District Fudge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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