Amazon.com Services LLC v. Paradigm Clinical Research Institute Inc

• Court: District Court, W.D. Washington
• Decided: March 31, 2025
• Docket: 2:21-cv-00753
• Status: Unknown

Opinion

1 2

3 4 5 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 6 AT SEATTLE 7 AMAZON.COM SERVICES LLC, a CASE NO. 2:21-cv-00753 8 Delaware limited liability company, ORDER 9 Plaintiff,

10 v.

11 PARADIGM CLINICAL RESEARCH INSTITUTE INC., a California 12 corporation, RAMPRASAD DANDILLAYA, M.D., JUAN JESUS 13 ROJAS DE BORBON, KARMA FAMILY LLC, KAREEM MARMOSH, 14 Defendants. 15

PARADIGM CLINICAL RESEARCH 16 INSTITUTE INC., a California corporation, 17 Counter Claimant, 18 v. 19 AMAZON.COM SERVICES LLC, a 20 Delaware limited liability company,

21 Counter Defendant. 22 23 1 1. INTRODUCTION 2 This case arises from a $20 million transaction for personal protective

3 equipment during the early stages of the COVID-19 pandemic. Amazon.com 4 Services LLC (“Amazon”) alleges that defendants engaged in a coordinated scheme 5 to defraud it through misrepresentations about nitrile gloves that were either never 6 delivered or failed to meet required specifications. 7 Before the Court is a motion by defendants Karma Family LLC (“Karma”) 8 and its owner, Kareem Marmosh (collectively, “Moving Defendants”), to dismiss

9 Amazon’s Second Amended Complaint (SAC) for lack of personal jurisdiction under 10 Federal Rule of Civil Procedure 12(b)(2). Dkt. No. 96. This motion follows the 11 Court’s earlier denial of a similar jurisdictional challenge by defendants Ramprasad 12 Dandillaya and Juan Jesus Rojas de Borbon (collectively, “Individual Defendants”), 13 the owners of defendant Paradigm Clinical Research Institute, Inc. (“Paradigm”). 14 Dkt. No. 93. 15 The Court has read the papers submitted in support of and opposition to the

16 motions, and being otherwise informed, finds oral argument unnecessary. Because 17 Amazon has established the Moving Defendants functioned as alter egos of 18 Paradigm for purposes of jurisdictional analysis, the Court DENIES their motion 19 for the reasons stated below. 20 2. BACKGROUND 21 The Court previously detailed the factual background of this case in its Order

22 Denying Individual Defendants’ Motion to Dismiss. Dkt. No. 93 at 2–6. In summary, 23 during the early COVID-19 pandemic in April 2020, Amazon contracted with 1 Paradigm to buy 80 million nitrile gloves for $20 million, paying a $10 million 2 deposit upfront. Paradigm failed to deliver the vast majority of the promised gloves,

3 and those delivered were non-conforming to Amazon’s specifications. Amazon now 4 seeks to hold Karma and its owner Kareem Marmosh accountable alongside 5 Paradigm and its owners. 6 The following additional facts are particularly relevant to the relationship 7 between Karma, Marmosh, and the other defendants: 8 Marmosh established Karma on April 16, 2020, and Marmosh and his spouse

9 are the only members. Dkt. No. 66 ¶ 25. At the relevant time, Marmosh was 10 Karma’s only officer and a resident of California. Id. ¶¶ 15, 22. On May 4, 2020, 11 three weeks after Marmosh formed Karma, Paradigm entered a contract with 12 Karma to buy 120 million nitrile gloves. Id. ¶¶ 58–59. This was not Marmosh’s first 13 dealings with Paradigm’s owners: Marmosh and Paradigm’s co-owners de Borbon 14 and Dandillaya had all served as officers of a company called C3 International, Inc. 15 Id. ¶ 60.

16 After contracting with Karma, Paradigm continued to represent to Amazon 17 that they were negotiating with various manufacturers to procure the gloves. Id. 18 ¶ 64. Marmosh played a significant role in the communications with Amazon. He 19 prepared documents and a video purportedly from glove manufacturer W.A. 20 Rubbermate that de Borbon then forwarded to Amazon. Id. ¶¶ 71, 73, 79. Marmosh 21 also represented himself to Amazon as the corporate representative for another

22 supposed manufacturer, VRG. Id. ¶ 88. 23 1 The financial relationship between the defendants is particularly relevant. Of 2 Amazon’s $10 million deposit, approximately $8 million was transferred from

3 Paradigm to Karma, with $4 million transferred after June 29, 2020—the date 4 when Defendants learned that conforming gloves could not be procured. Id. ¶¶ 138– 5 143; Dkt. Nos. 77 ¶¶ 3, 19; 77-18 at 118, 122, 124; 77-2 at 222:3-6. Additionally, de 6 Borbon transferred $2 million to Karma not from Paradigm’s account but from an 7 account of Goal Set Media, Inc., an entity he controlled. Dkt. Nos. 66 ¶ 123; 77 ¶¶ 8 18, 19; 77-17 at 729; 77-18 at 118; 77-1 at 118:24-119:22; 77-2 at 179:2-7, 201:25-

9 202:5, 214:24-215:2, 215:11-216:6, 222:3-6. 10 The record also reveals other financial transactions between Defendants. On 11 March 20, 2020, Paradigm wired $69,440 to the KishKindha Group, and Marmosh 12 wired back $45,000 five days later. Dkt. Nos. 102 ¶ 4; 102-3 at 3. Marmosh 13 identifies himself on LinkedIn as a co-owner of KishKindha Healthcare beginning 14 April 2020. Dkt. No. 102-1 at 2–3. On December 4, 2020, months after the Amazon 15 transaction failed, de Borbon wired $100,000 to Karma. Dkt. No. 77-18 at 16.

16 In his supplemental declaration, Marmosh explains that the wire to 17 KishKindha occurred before he had an interest or involvement with the company 18 and the March 2020 transfer he made to Paradigm was for an unrelated real estate 19 transaction, Dkt. No. 104-1 ¶¶ 3–4; the $2 million wire was to facilitate the Amazon 20 transaction with Karma using most of those funds to pay Brellaba LLC, for 40 21 million disposable gloves, Id. ¶ 6; and the December 2020 payment was for “an

22 entirely unrelated business transaction, Id. ¶ 9. Marmosh also states he is suing 23 Brellaba in Los Angeles Superior Court for fraud and breach of contract. Id. ¶ 6. 1 As of February 28, 2023, Paradigm’s primary business checking account had 2 a balance of only $199,178.74. Dkt. No. 66 ¶ 149.

3 3. DISCUSSION 4 3.1 Rule 12(b)(2) motion. 5 Amazon bears the burden of proving that the Court has personal jurisdiction 6 over Karma and Marmosh. Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 (9th 7 Cir. 2006). On this procedural posture—when the court receives declarations and 8 discovery materials after jurisdictional discovery—“a plaintiff must make only a 9 prima facie showing of jurisdictional facts through the submitted materials in order 10 to avoid a defendant’s motion to dismiss.” Data Disc, Inc. v. Sys. Tech. Assocs., Inc., 11 557 F.2d 1280, 1285 (9th Cir. 1977). Under this standard, the Court must take 12 Amazon’s uncontroverted allegations as true and resolve factual conflicts in 13 Amazon's favor. Harris Rutsky & Co. Ins. Services, Inc. v. Bell & Clements Ltd., 328 14 F.3d 1122, 1129 (9th Cir. 2003). 15 A “court’s exercise of personal jurisdiction over a nonresident defendant may 16 be either general or specific.” Doe v. Am. Nat’l Red Cross, 112 F.3d 1048, 1050 (9th 17 Cir. 1997). The parties do not contend the Court has general jurisdiction, so the 18 Court will focus its analysis on the presence of specific jurisdiction. 19 3.2 The Moving Defendants lack sufficient minimum contacts with 20 Washington. 21 The Ninth Circuit uses a three-part test to determine whether specific 22 jurisdiction exists: 23 1 (1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or 2 perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and 3 protections of its laws; (2) the claim must be one which arises out of or relates to the defendant’s forum-related activities; and (3) the exercise 4 of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable. 5 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004) 6 (internal citation omitted). 7 Amazon bears the burden of satisfying the first two prongs of the test. Id. If it 8 meets this requirement, the burden shifts to Karma and Marmosh to “present a 9 compelling case” that the exercise of jurisdiction would not be reasonable. Burger 10 King Corp. v. Rudzewicz, 471 U.S. 462, 476–78 (1985). 11 In its previous order denying the Individual Defendants’ motion to dismiss, 12 the Court concluded that Amazon failed to establish that the Individual Defendants 13 “expressly aimed” their conduct at Washington as required under the effects test for 14 purposeful direction. Dkt. No. 93 at 8–10. 15 Like the Individual Defendants, Moving Defendants lack sufficient contacts 16 with Washington to establish traditional specific jurisdiction. Marmosh is a 17 California resident who has never lived, worked, had bank accounts, or owned 18 property in Washington. Dkt. No. 85-1 ¶ 8. Karma Family is a California LLC that 19 has never conducted or solicited business in Washington. Id. ¶ 12. The Moving 20 Defendants did not directly solicit, negotiate, or contract with Amazon in 21 Washington. Id. ¶¶ 14–15. At most, Moving Defendants had knowledge that 22 Amazon is headquartered in Washington. As the Court previously held, “[e]xpress 23 1 aiming requires more than the defendant's awareness that the plaintiff it is alleged 2 to have harmed resides in or has strong ties to the forum, because ‘the plaintiff

3 cannot be the only link between the defendant and the forum.’” Dkt. No. 93 at 9 4 (quoting Ayla, LLC v. Alya Skin Pty. Ltd., 11 F.4th 972, 980 (9th Cir. 2021)). 5 Thus, the Court cannot find that Moving Defendants purposefully directed 6 their activities at Washington under the traditional specific jurisdiction analysis. 7 3.3 Amazon has established a prima facie case for piercing the corporate veil. 8 Despite the lack of traditional minimum contacts, Amazon argues that the 9 Court should impute Paradigm’s jurisdictional contacts to the Moving Defendants 10 under the alter ego doctrine. Dkt. No. 101 at 4. Moving Defendants dispute this 11 theory, contending that they had no ownership interest in Paradigm, operated at 12 arm’s length, and conducted only legitimate business transactions. Dkt. Nos. 96 at 13 3; 104 at 3. 14 “To allege liability under the ‘alter ego’ doctrine, a plaintiff must show ‘(1) 15 that there is such unity of interest and ownership that the separate personalities of 16 the two entities no longer exists, and [that] (2) that failure to disregard their 17 separate identities would result in fraud or injustice.’” Williams v. Yamaha Motor 18 Co., 851 F.3d 1015, 1021 (9th Cir. 2017) (citing Ranza v. Nike, Inc., 793 F.3d 1059, 19 1073 (9th Cir. 2015)). A plaintiff arguing that the alter ego doctrine applies must 20 specifically allege both elements of the alter ego test, and facts supporting each 21 element. MH Pillars Ltd. v. Realini, No. 15-CV-1383-PJH, 2017 WL 916414, at *12 22 (N.D. Cal. Mar. 8, 2017). The alter ego standard for alleging personal jurisdiction is 23 1 “lower” than the standard used for determining liability. San Mateo Cnty. Transit 2 Dist. v. Dearman, Fitzgerald & Roberts, Inc., 979 F.2d 1356, 1358 (9th Cir. 1992). It

3 is met if the “plaintiff makes a non-frivolous allegation that the defendant 4 controlled a person liable.” Id. 5 3.3.1 Amazon adequately alleges unity of interest between Moving Defendants and Paradigm. 6 Turning to the first factor—unity of interests—Amazon argues that Karma 7 and Marmosh “commingled their funds in Paradigm’s bank account and played a 8 transactional shell game with Amazon’s money,” to which they then helped 9 themselves. Dkt. No. 101 at 8. Amazon supports its argument by alleging that 10 Paradigm was a “shell company” due to its inadequate capitalization, lack of 11 employees, nonexistent office space, inability to generate material revenue, and 12 minimal assets. Dkt. No. 66 ¶¶ 110–114. Amazon further alleges that Paradigm did 13 not maintain adequate funds to reimburse its customers’ deposits in case it could 14 not provide conforming products. Id. ¶ 115. Indeed, the evidence shows that 15 Paradigm transferred $8 million to Karma and de Borbon transferred another $2 16 million to facilitate the Amazon deal. This illustrates how de Borbon, Dandillaya, 17 Karma, and Marmosh commingled funds with Paradigm and how they may have 18 misappropriated Amazon’s deposit for their own uses. Marmosh offers explanations 19 for these transactions, but at this stage, the Court must resolve factual conflicts in 20 Amazon’s favor. Harris Rutsky, 328 F.3d at 1129. 21 Beyond the financial transactions, the timing is suspicious, as Marmosh 22 formed Karma on April 16, 2020, and just three weeks later, on May 4, it contracted 23 1 with Paradigm to buy 120 million nitrile gloves—conveniently timed to fulfill 2 Paradigm’s commitment to Amazon. Dkt. No. 66 ¶¶ 15, 22, 59. This strongly

3 suggests Karma was created specifically as a vehicle for the Amazon deal. 4 And the fact that Marmosh had preexisting business relationships with 5 Paradigm’s owners before the Amazon transaction undermines the Moving 6 Defendants’ claim that they were strangers to Paradigm operating at arm’s length. 7 Dkt. Nos. 96 at 3; 104 at 3. 8 These factual allegations and the supporting documents provide a sufficient

9 basis to conclude that Amazon has stated a prima facie case that Karma and 10 Marmosh share a unity of interest with Paradigm such that Paradigm may not 11 really exist as a separate entity. 12 3.3.2 Fraud or injustice would result from respecting the corporate separateness. 13 As to the second factor—whether disregarding their separate entities would 14 work an injustice—Amazon argues that Paradigm has almost no assets to satisfy a 15 potential judgment against it because of its commingling with Karma and 16 Marmosh. “[A]lthough insolvency ‘does not of itself constitute an inequitable result,’ 17 ‘[c]ourts have found this prong satisfied when a corporation is so undercapitalized 18 that it is unable to meet debts that may reasonably be expected to arise in the 19 normal course of business.’” Intelligent SCM, LLC v. Qannu PTY Ltd., No. CV-14- 20 06417-MMM (VBKX), 2015 WL 13916820, at *21 (C.D. Cal. July 2, 2015) (quoting 21 Laborers Clean-Up Cont. Admin. Tr. Fund v. Uriarte Clean-Up Serv., Inc., 736 F.2d 22 516, 525 & n. 13 (9th Cir. 1984)); City & Cnty. of San Francisco v. Purdue Pharma 23 1 L.P., 491 F. Supp. 3d 610, 635 (N.D. Cal. 2020) (“An inequitable result includes 2 enabling a ‘shell game.”’); Pac. Mar. Freight, Inc. v. Foster, No. 10-CV-0578-BTM-

3 BLM, 2010 WL 3339432 (S.D. Cal. Aug. 24, 2010), at *7 (“Inequitable results 4 flowing from the recognition of the corporate form include the frustration of a 5 meritorious claim, perpetuation of a fraud, and the fraudulent avoidance of personal 6 liability.”). 7 Amazon alleges that Paradigm did not have enough capital to support the 8 orders that it accepted and, as of February 28, 2023, Paradigm’s primary business

9 checking account had a balance of $199,178.74. Dkt. No. 66 ¶¶ 147–49. It also 10 submitted evidence showing that most of its deposit were transferred out of 11 Paradigm’s account and into Karma’s. This was done even though Paradigm knew it 12 would be unable to provide conforming products. Dkt. No. 66 ¶¶ 138–143. 13 Moving Defendants argue that they are suing Brellaba LLC in California 14 court for fraud and breach of contract. Dkt. No. 104-1 ¶ 6. But this litigation does 15 not negate the inequity that would result from treating Moving Defendants as

16 separate from Paradigm. Even if Moving Defendants prevail against Brellaba, there 17 is no guarantee that recovered funds would be returned to Amazon. 18 Thus, the totality of the evidence establishes that respecting the corporate 19 separateness of Moving Defendants would allow them to retain proceeds from the 20 alleged fraudulent scheme while Paradigm remains judgment-proof. This would 21 result in precisely the type of injustice the alter ego doctrine is designed to prevent.

22 23 1 3.3.3 Moving Defendants are alter egos of Paradigm for jurisdictional purposes. 2 Amazon has established a prima facie case that Karma and Marmosh are 3 alter egos of Paradigm for purposes of personal jurisdiction. The Court attributes 4 the contacts of Paradigm to Karma and Marmosh. Because it is uncontested that 5 the Court has personal jurisdiction over Paradigm, it follows that it also has 6 personal jurisdiction over Karma and Marmosh. 7 This conclusion is consistent with the Court’s prior ruling regarding the 8 Individual Defendants. Dkt. No. 93 at 13. Although Moving Defendants are 9 technically distinct from Paradigm and the Individual Defendants—with Karma 10 being a separate LLC and Marmosh being neither an owner nor officer of 11 Paradigm—the evidence shows they functioned as part of a unified enterprise for 12 purposes of the Amazon transaction. 13 The Court notes that this finding is limited to the jurisdictional inquiry only. 14 At trial, Amazon will bear the burden of proving alter ego liability by a 15 preponderance of the evidence. See Data Disc, 557 F.2d at 1285. 16 4. CONCLUSION 17 In sum, the Court DENIES Moving Defendants’ Motion to Dismiss for lack of 18 personal jurisdiction. Dkt. No. 96. 19 Dated this 31st day of March, 2025. 20

21 A 22 Jamal N. Whitehead United States District Judge 23