Elite Semiconductor, Inc. v. Anchor Semiconductor, Inc.

• Court: District Court, N.D. California
• Decided: July 19, 2021
• Docket: 5:20-cv-06846
• Status: Unknown

Opinion

1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 ELITE SEMICONDUCTOR, INC., Case No. 5:20-cv-06846-EJD

8 Plaintiff, ORDER GRANTING MOTION TO DISMISS FOR IMPROPER SERVICE 9 v. AND LACK OF PERSONAL JURISDICTION 10 ANCHOR SEMICONDUCTOR, INC., et al., 11 Re: Dkt. No. 36 Defendants.

12 13 Elite Semiconductor, Inc. (“ESI”) brings this suit against its former employee Chin-Hsen 14 Lin (“Lin”), Anchor Semiconductor, Inc. (“Anchor”), and Anchor’s president and chief executive 15 officer Chen Ming Hu (“Hu”) in connection with the alleged misappropriation of ESI’s trade 16 secrets. Lin now moves to dismiss the claims asserted against him for insufficient service of 17 process and for lack of personal jurisdiction. ESI opposes the motion. For the reasons discussed 18 below, Lin’s motion to dismiss is GRANTED for insufficient service of process and lack of 19 personal jurisdiction.1 20 I. BACKGROUND 21 ESI’s operative complaint (“Compl.”) alleges the following facts. Dkt. No. 1. ESI, a 22 corporation headquartered in Hscinchu, Taiwan, is a software company known for its 23 semiconductor manufacturing verification tools. Compl. ¶ 1, 15. ESI has developed defect 24 identification technology which allows for defects in the inspection image to be reviewed 25

26 1 The Court took this motion under submission without oral argument pursuant to Civil Local Rule 27 7-1(b). Case No.: 5:20-cv-06846-EJD 1 automatically by a machine, system, or computer such that the defect judgment can be achieved 2 accurately in a small period of time. Id. ¶ 18. 3 In March 2009, ESI hired Lin as its chief technology officer (“CTO”). Id. ¶ 24. ESI 4 alleges that as CTO, Lin had access to ESI’s electronic source code repository and the electronic 5 platforms where ESI trade secrets were stored. Id. ¶ 25, 31. This meant Lin had access to ESI’s 6 confidential software architectural plans, patent invention disclosures, product plans and 7 strategies, and the company’s trade secret files. Id. ¶¶ 25, 27. In January 2010, ESI began 8 creating the Killer Defect Screen System which would become a primary product for the 9 company. Id. ¶ 30. Lin helped create ESI’s trade secret software code for the Killer Defect 10 Screen System and continued to have access to all electronic and paper records related to ESI’s 11 trade secrets. Id. While serving as CTO, however, ESI believes Lin was “secretly hired” by 12 Anchor. Id. ¶ 24. ESI contends the Anchor Defendants made this hire so Lin could maintain 13 access to and take ESI’s intellectual property for Anchor’s benefit. Id. ¶ 68. 14 ESI notes that in April 2011, Lin gained access to and made a copy of patent invention 15 disclosure documents related to four of the company’s U.S. patents so that he could transmit the 16 disclosure documents to Anchor. Id. ¶ 50. After receiving the patent invention disclosure 17 documents, Anchor allegedly copied “ESI’s technology” described in the documents and 18 incorporated the information in its own U.S. patent application, which Anchor filed in April 2011. 19 Id. ¶ 86. ESI also alleges Lin visited its offices after hours in June 2012 and several times 20 thereafter to download source code and system architecture documents from the ESI server. Id. ¶¶ 21 45, 52. According to ESI, Lin did this to transfer ESI’s trade secrets to the Anchor Defendants 22 who knew of and encouraged the taking and using of ESI’s trade secrets to develop its own defect 23 detection products. Id. ¶¶ 46, 67. ESI claims Lin and the Anchor Defendants made direct and 24 deliberate use of ESI’s trade secrets in order to develop Anchor’s competing products, including 25 its HPA detection tool. Id. ¶¶ 70, 76. Anchor’s use of ESI’s trade secrets is alleged to have 26 increased the timeline for the development and production of its products. Id. ¶ 70. 27 Case No.: 5:20-cv-06846-EJD 1 Lin served as ESI’s CTO until January of 2013, when he transitioned to a senior consultant 2 position within the company. Id. ¶ 24. According to ESI, Lin told ESI he wanted to become a 3 consultant so he could take care of his wife in the United States. Id. ¶ 83. ESI contends, however, 4 that Lin actually left his position as CTO so “he could join Defendant Anchor and pillage trade 5 secret information from ESI. . . .” Id. He continued to serve as a senior consultant until January 6 of 2017 when he resigned. Id. ¶ 24. As part of his resignation, Lin agreed to and signed a 7 Confidentiality Agreement and Departure Clearance Checklist (collectively “Departure 8 Agreement”) which asked Lin to indicate whether he had taken any source code. Id. ¶ 61. By 9 signing, Lin asserted that he had not taken any ESI source code with him and agreed to not 10 disclose any of ESI’s trade secrets or intellectual property. Id. 11 On September 30, 2021, ESI filed its complaint against Lin, Hu, and Anchor. Dkt. No. 1. 12 The Complaint contains five claims: (1) a claim for misappropriation of trade secrets in violation 13 of California’s Uniform Trade Secrets Act (CUTSA), California Civil Code § 3426 et seq., against 14 all defendants, (2) a claim for violation of the Defense of Trade Secrets Act, 18 U.S.C. § 1836 et 15 seq., against all Defendants, (3) a common law breach of contract claim against Lin, (4) a claim 16 for tortious interference with contract against Hu and Anchor, and (5) a conversion claim against 17 all Defendants. Id. ¶¶ 103-143. 18 On January 4, 2021, Lin moved to dismiss the claims asserted against him for insufficient 19 service of process and for lack of personal jurisdiction. Motion to Dismiss for Improper Service 20 and Lack of Jurisdiction (“Mot.”), Dkt. No. 36. ESI filed an opposition to Lin’s motion 21 (“Opp’n”), to which Lin has filed a reply (“Reply iso Mot.”). Dkt. Nos. 47, 49. 22 II. LEGAL STANDARDS 23 A. Motion to Dismiss for Insufficient Service of Process 24 A federal court lacks personal jurisdiction over a defendant “unless the defendant has been 25 served in accordance with Fed. R. Civ. P. 4.” Travelers Cas. & Sur. Co. of Am. v. Brenneke, 551 26 F.3d 1132, 1135 (9th Cir. 2009) (quoting Benny v. Pipes, 799 F.2d 489, 492 (9th Cir. 1986)). 27 Case No.: 5:20-cv-06846-EJD 1 Accordingly, Rule 12(b)(5) permits a court to dismiss an action for insufficient service of process. 2 Fed. R. Civ. P. 12(b)(5). Rule 12(b)(5) also allows the defendant to attack the manner in which 3 service was, or was not, attempted. Id. When the validity of service is contested, the burden is on 4 the plaintiff to prove that service was valid under Rule 4. Brockmeyer v. May, 383 F.3d 798, 801 5 (9th Cir. 2004). If the plaintiff does not satisfy this burden, the Court has the discretion to either 6 dismiss the action or retain the action and quash the service of process. Stevens v. Sec. Pac. Nat. 7 Bank, 538 F.2d 1387, 1389 (9th Cir. 1976). 8 Rule 4(e) provides that an individual may be served by “doing any of the following: (A) 9 delivering a copy of the summons and of the complaint to the individual personally; (B) leaving a 10 copy of each at the individual’s dwelling or usual place of abode with someone of suitable age and 11 discretion who resides there; or (C) delivering a copy of each to an agent authorized by 12 appointment or by law to receive service of process.” Fed. R. Civ. P. 4(e)(2). Service may also be 13 carried out in any manner allowed by the law of the state in which the federal court sits or where 14 service is made. Fed. R. Civ. P. 4(e)(1). 15 B. Motion to Dismiss for Lack of Personal Jurisdiction 16 Rule 12(b)(2) authorizes a defendant to seek dismissal of an action for lack of personal 17 jurisdiction. Fed. R. Civ. P. 12(b)(2). When a defendant moves to dismiss for lack of personal 18 jurisdiction, the plaintiff bears the burden of demonstrating that the court has jurisdiction over the 19 defendant. See Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004). 20 “Where, as here, a motion to dismiss is based on written materials rather than an evidentiary 21 hearing, the plaintiff need only make a prima facie showing of jurisdictional facts.” Love v. 22 Associated Newspapers, Ltd., 611 F.3d 601, 608 (9th Cir. 2010). The Court then “only inquire[s] 23 into whether [the plaintiff’s] pleadings and affidavits make a prima facie showing of personal 24 jurisdiction.” Caruth v. Int’l Psychoanalytical Ass’n, 59 F.3d 126, 128 (9th Cir. 1995). A prima 25 facie showing means that “the plaintiff need only demonstrate facts that if true would support 26 jurisdiction over the defendant.” Doe v. Unocal Corp., 248 F.3d 915, 922 (9th Cir. 2001). 27 Case No.: 5:20-cv-06846-EJD 1 “Uncontroverted allegations in the complaint must be taken as true, and factual disputes 2 are construed in the plaintiff’s favor.” Freestream Aircraft (Bermuda) Ltd. v. Aero L. Grp., 905 3 F.3d 597, 602 (9th Cir. 2018). If, however, the defendant adduces evidence controverting the 4 allegations, the plaintiff must “come forward with facts, by affidavit or otherwise, supporting 5 personal jurisdiction,” Scott v. Breeland, 792 F.2d 925, 927 (9th Cir. 1986), for a court “may not 6 assume the truth of allegations in a pleading which are contradicted by affidavit.” Data Disc, Inc. 7 v. Sys. Tech. Assocs., Inc., 557 F.2d 1280, 1284 (9th Cir. 1977). Moreover, conclusory allegations 8 or “formulaic recitation of the elements” of a claim are not entitled to the presumption of truth. 9 Ashcroft v. Iqbal, 556 U.S. 662, 681 (2009). “Nor is the court required to accept as true allegations 10 that are . . . unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Sec. 11 Litig., 536 F.3d 1049, 1055 (9th Cir. 2008). 12 Further, personal jurisdiction may either be authorized by federal statute or permissible to 13 the extent provided under state law. With respect to the latter, “the district court applies the law of 14 the state in which the court sits.” Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 15 (9th Cir. 2011). Under California law, courts may exercise jurisdiction “to the full extent that such 16 exercise comports with due process.” Williams v. Yamaha Motor Co., 851 F.3d 1015, 1020 (9th 17 Cir. 2017) (citing Cal. Civ. Proc. Code § 410.10). As a result, “the jurisdictional analyses under 18 state law and federal due process are the same.” Mavrix Photo, Inc., 647 F.3d at 1223. 19 Due process “constrains a state’s authority to bind a nonresident defendant to a judgment 20 of its courts.” Walden v. Fiore, 571 U.S. 277, 283 (2014). Although a nonresident’s physical 21 presence within the territorial jurisdiction of the court is not required, the nonresident generally 22 must have “certain minimum contacts . . . such that the maintenance of the suit does not offend 23 traditional notions of fair play and substantial justice.” Int’l Shoe Co. v. State of Wash., Off. of 24 Employment Comp. & Placement, 326 U.S. 310, 316 (1945) (quotation marks and citation 25 omitted). “The strength of contacts required depends on which of the two categories of personal 26 jurisdiction a litigant invokes: specific jurisdiction or general jurisdiction.” Ranza v. Nike, Inc., 27 Case No.: 5:20-cv-06846-EJD 1 793 F.3d 1059, 1068 (9th Cir. 2015) (citing Daimler AG v. Bauman, 571 U.S. 117, 127 (2014)). 2 C. Leave to Amend 3 If the Court determines that a complaint should be dismissed, it must then decide whether 4 to grant leave to amend. Under Federal Rule of Civil Procedure 15(a), leave to amend “shall be 5 freely given when justice so requires,” bearing in mind “the underlying purpose of Rule 15 to 6 facilitate decisions on the merits, rather than on the pleadings or technicalities.” Lopez v. Smith, 7 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (alterations and internal quotation marks omitted). 8 When dismissing a complaint for failure to state a claim, “a district court should grant leave to 9 amend even if no request to amend the pleading was made, unless it determines that the pleading 10 could not possibly be cured by the allegation of other facts.” Id. at 1130 (internal quotation marks 11 omitted). Accordingly, leave to amend generally shall be denied only if allowing amendment 12 would unduly prejudice the opposing party, cause undue delay, be futile, or if the moving party 13 has acted in bad faith. Leadsinger, Inc. v. BMG Music Pub., 512 F.3d 522, 532 (9th Cir. 2008). 14 III. DISCUSSION 15 A. Improper Service 16 Lin first argues that this Court lacks jurisdiction over him as service was improper. 17 “[B]efore a court may exercise personal jurisdiction over a defendant, there must be more than 18 notice to the defendant and a constitutionally sufficient relationship between the defendant and the 19 forum. There also must be a basis for the defendant’s amenability to service of summons.” 20 Omni Cap. Int’l, Ltd. v. Rudolf Wolff & Co., Ltd., 484 U.S. 97, 104 (1987). Here, ESI contends 21 Lin has been properly served with process twice, once in California and the other time in Taiwan. 22 The Court addresses both instances in turn. 23 1. Attempt to Serve Process in California 24 According to Lin, ESI attempted service on October 18, 2020. ESI’s process server made 25 a substituted service on Lin by leaving a copy of the summons and complaint at a residence 26 located at 985 Joshua Place in Fremont, California (“Fremont Residence”) with Lin’s adult son 27 Case No.: 5:20-cv-06846-EJD 1 Derek Lin. See Dkt. No. 22. The process server then mailed a copy of the summons and 2 complaint to Lin at the same address. Id. On October 22, 2020, ESI filed the proof of service for 3 the October 18, 2020 service. Id. 4 California law allows for substituted service if the summons and complaint cannot be 5 personally served with reasonable diligence. Section 415.20 of the California Code of Civil 6 Procedure provides the following:

7 (b) If a copy of the summons and complaint cannot with reasonable diligence be personally delivered to the person to be served . . . a 8 summons may be served by leaving a copy of the summons and complaint at the person’s dwelling house, usual place of abode, usual 9 place of business, or usual mailing address other than a United States Postal Service post office box, in the presence of a competent member 10 of the household or a person apparently in charge of his or her office, place of business . . . 11 12 Cal. Civ. Proc. Code § 415.20(b). (emphasis added). 13 Based on the evidence presented, the Court finds that ESI has not established it properly 14 effectuated substituted service on Lin in California. First, before relying on substituted service, 15 the serving party must show that the summons and complaint could not “with reasonable diligence 16 be personally serviced.” Cal. Civ. Proc. Code § 415.20(b); see, e.g., Am. Express Centurion Bank 17 v. Zara, 199 Cal. App. 4th 383, 389 (2011) (stating that “an individual may be served by substitute 18 service only after a good faith effort at personal service has first been made: the burden is on the 19 plaintiff to show that the summons and complaint ‘cannot with reasonable diligence be personally 20 delivered’ to the individual defendant”); Espindola v. Nunez, 199 Cal. App. 3d 1389, 1392 (1988) 21 (stating that, “‘[o]rdinarily, . . . two or three attempts at personal service at a proper place should 22 fully satisfy the requirement of reasonable diligence and allow substituted service to be made’”). 23 Here, there is nothing to indicate that a reasonably diligent attempt at personal delivery was made 24 prior to resort to substituted service. Indeed, the proof of service submitted by ESI suggests that 25 no attempts were made. See Dkt. No. 22. 26 Second, even if reasonable diligence were not an issue, ESI has not presented sufficient 27 Case No.: 5:20-cv-06846-EJD 1 evidence establishing that it left a copy of the summons and complaint at Lin’s “dwelling house, 2 usual place of abode, usual place of business, or usual mailing address.” See Cal. Civ. Proc. Code 3 § 415.20(b). A dwelling house or usual place of abode means the place where the defendant holds 4 out as his or her principal residence, and where he or she is most likely to receive actual notice.” 5 Zirbes v. Stratton, 187 Cal. App. 3d 1407, 1415-17 (1986). Although Lin does not contest that he 6 is the owner of the Fremont Residence, he states that he has not lived at the residence or in the 7 United States since 2013 and therefore it is not his dwelling house or usual place of abode. Decl. 8 of Chin-Hsen Lin (“Lin Decl.”), Dkt. No. 36-1 ¶ 4; see also Decl. of Derek Lin (“D. Lin Decl.”), 9 Dkt. No 49-2 ¶ 11. ESI offers the following evidence in support of its contention that the Fremont 10 Residence was Lin’s place of usual abode in October of 2020:

11 -An invoice from a casino in Macau dating from March 2013 for Lin, which lists the Fremont Residence. Decl. of Iyun Leu (“Leu Decl.”), 12 Ex. A, Dkt. No. 47-2

13 -An undated blank check from an E*Trade account in Lin’s name made out to a casino in Macau listing the Fremont Residence. Leu 14 Decl., Ex. B, Dkt. No. 47-3

15 -An unsigned registered mail receipt from January 2020 for a piece of mail addressed to Lin and sent to the Fremont Residence by ESI’s 16 chief executive officer Iyun Kevin Leu (“Leu”). Leu Decl., Ex. C, Dkt. No. 47-4.2 17 -ESI asserts it has access to Lin’s California tax returns from 2011 18 and that Lin still had checking accounts with Citibank. Leu Decl. ¶ 19. 19 -Lin executed a confidentiality agreement and departure clearance 20 checklist in 2017 which listed the Freemont Residence’s address and a Taiwanese address. See Compl., Ex A, Dkt. No. 1-1. 21 -Lin emailed ESI’s president in March 2020 and again on October 22, 22 2020 informing him that he had received registered mail in January 2020 and the “litigation document” informing him of the action 23 brought by ESI. Decl. of Jennifer Shih (“Shih Decl.”), Dkt. No. 47-6, ¶ 4, Ex. B. Lin also told ESI’s president in March 2020 that he had 24 “returned to Taipei and [was] now under quarantine at home” and 25

26 2 ESI alleges that Lin signed the receipt of the express mail service on January 25, 2020, but the documents submitted by ESI do not establish that Lin was the individual who signed for receipt of 27 the express mail. Case No.: 5:20-cv-06846-EJD provided a hotel address. Id. In his October 2020 email, Lin provided 1 ESI’s president with the mobile phone number he would be using “during [his] stay in Taipei.” Id. 2 Much of this evidence documents Lin’s activities and possible location years prior to the 3 attempted service. Moreover, ESI’s belief that Lin was in the United States during 2020 because 4 he informed ESI’s president in March 2020 that he was staying at a quarantine hotel” in Taiwan 5 does not provide support for its argument. See Opp’n 7-8. Lin presents evidence that he had just 6 returned to Taipei from Seoul, South Korea in December 2019 and not the United States. Decl. of 7 Chin-Hsen Lin in Support of Motion to Dismiss for Improper Service and Lack of Personal 8 Jurisdiction (“Supp. Lin. Decl.), Dkt. No. 49-1 ¶¶ 10-13, Exs. A-B. Thus, upon review of the 9 allegations and evidence presented, the Court finds that ESI has not presented sufficient evidence 10 establishing that the Fremont Residence was Lin’s dwelling house or usual place of abode in 11 October 2020. Process on Defendant Lin was therefore not properly served through substituted 12 service in California. 13 In opposition, ESI also argues that service in California was proper under § 413.30 of 14 California Code of Civil Procedure because Lin received actual notice of the complaint. Opp’n at 15 4. Section 413.30 provides that a court “may direct that summons be served in a manner which is 16 reasonably calculated to give actual notice to the party served.” “To satisfy constitutional norms 17 of due process, the alternative method of service must be ‘reasonably calculated, under all the 18 circumstances, to apprise the interested parties of the action and afford them an opportunity to 19 present their objections.’” Facebook, Inc. v. Banana Ads, LLC, No. C-11-3619-YGR, 2012 WL 20 1038752, at *1 (N.D. Cal. Mar. 27, 2012) (quoting Rio Properties, Inc. v. Rio Int’l Interlink, 284 21 F.3d 1007, 1016 (9th Cir. 2002)). 22 Courts within this district have authorized service upon individuals via certified mail when 23 personal service was unsuccessful. For example, a court permitted service by certified mail under 24 California Code of Civil Procedure § 413.30 when the plaintiff alleged five unsuccessful attempts 25 at addresses found in corporate filings and six attempts at a personal address, a gated home with an 26 intercom. Lagree Techs., Inc., v. Spartacus 20th L.P., No. 17-CV-00795-JST, 2017 WL 1374598, 27 Case No.: 5:20-cv-06846-EJD 1 at *1 (N.D. Cal. Apr. 17, 2017). The Court found that the plaintiff had adequately alleged the 2 defendant “lived in the gated property and evaded process servers.” Id. at *3. Therefore, the Court 3 determined that certified mail was a “reasonable alternative likely to provide [defendants] with 4 actual notice.” Id. 5 As discussed above, ESI has not shown it made any attempts to serve Lin prior to its 6 substituted service attempt in October 2020. Still, ESI argues that service on Lin was proper 7 because he received actual notice of this action after ESI completed substituted service at the 8 Fremont Residence and then mailed a copy of service to the same residence. This however is not 9 sufficient to establish that the service attempt was adequate. Service of process may not be upheld 10 solely on the ground that the defendant received actual notice when service does not 11 “substantial[ly] comply” with Rule 4. Benny, 799 F.2d at 492; see also Travelers Cas. and Sur. 12 Co. of America, 551 F.3d at 1135; American Express Centurion Bank, 199 Cal. App. 4th at 392 13 (“Actual notice of the action alone is not a substitute for proper service and is not sufficient to 14 confer jurisdiction.”). Although “service of process should be liberally construed to effectuate 15 service and uphold the jurisdiction of the court if actual notice has been received by the 16 defendant,” the Court concludes that actual notice is not sufficient here because the service did not 17 substantially comply with Rule 4. Summers v. McClanahan, 140 Cal. App. 4th 403, 410–11 18 (2006) (internal quotation marks and citations omitted); see also Travelers Cas. And Sur. Co. of 19 America, 551 F.3d at 1135. 20 2. Attempt to Serve Process in Taiwan 21 ESI next claims that it effected service on Lin pursuant to Rule 4(f)(2)(A) when counsel 22 for ESI mailed a copy of the summons and complaint from Irvine, California to an address in 23 Taiwan via Federal Express in January 2021. See Opp’n at 8-9; see also Shih Decl. ¶ 5, Ex. C. In 24 support, ESI presents a shipment tracking document which it argues establishes that Lin received a 25 copy of the summons and complaint on January 13, 2021. The exhibit ESI relies on lacks a 26 specific address and indicates that it was signed for by “S. Yang.” Shih Decl., Ex. C. ESI, 27 Case No.: 5:20-cv-06846-EJD 1 however, does not inform the Court however of who “S. Yang” is or provide additional 2 information about which Taiwanese address it mailed the documents to. Still, ESI argues that this 3 method of service satisfies Rule 4(f)(2)(A) because it employed a method that is “prescribed by 4 Taiwanese law for service in Taiwan in an action in the Taiwanese courts of general jurisdiction.” 5 Opp’n at 6. According to ESI, Taiwan does not prohibit service of process by mail and courts in 6 Taiwan will serve litigation documents through the post office. Opp’n at 9 (citing Power 7 Integrations, Inc. v. Sys. Gen. Corp., No. C 04-02581 JSW, 2004 WL 2806168, at *3 (N.D. Cal. 8 Dec. 7, 2004)). 9 Setting aside the factual deficiencies in ESI’s evidence, the Court finds that its attempt to 10 serve process on Lin in Taiwan was improper. In Brockmeyer v. May, the Ninth Circuit held that 11 Rule 4(f)(2)(A) does not include service by international mail. 383 F.3d at 806. The court 12 provided several justifications for its conclusion. First, the court noted that “the common 13 understanding of Rule 4(f)(2)(A) is that it is limited to personal service.” Id. Next, the court 14 noted the “explicit mention of international registered mail in Rule 4(f)(2)(C)(ii) and the absence 15 of any such mention in Rule 4(f)(2)(A).” Id. Third, the court considered the British 16 Government’s preferences regarding service of process. Specifically, in considering the British 17 Government’s laws regarding service of process, the court found that the British Government’s 18 desire to exclude international mailing from Rule 4(f)(2)(A) supported its decision that service 19 through international mail to England was not a proper method under the rule. Id. at 807. 20 Finally, the court cited a string of cases rejecting service of process by international mail 21 under Rule 4(f)(2)(A). Id. (citing Prewitt Enterprises, Inc. v. Org. of Petroleum Exporting 22 Countries, 353 F.3d 916, 925 (11th Cir. 2003)) (rejecting plaintiff’s argument that Rule 4(f)(2)(A) 23 authorizes service of process on OPEC by international registered mail sent to Austria); Res. 24 Ventures, Inc. v. Res. Mgmt. Int’l, Inc., 42 F. Supp. 2d 423, 430 (D. Del. 1999) (holding that 25 service of process by international registered mail to Indonesia was not an appropriate method of 26 service under Rule 4(f)(2)(A)); Dee–K Enterprises Inc. v. Heveafil Sdn. Bhd., 174 F.R.D. 376, 27 Case No.: 5:20-cv-06846-EJD 1 378–79 (E.D. Va. 1997) (holding that Rule 4(f)(2)(A) did not authorize service of process by 2 international mail to Indonesia or Malaysia). 3 Accordingly, ESI’s attempted service through international mail via Federal Express did 4 not comport with the requirements of Rule 4(f)(2)(A). ESI’s attempt to serve process in Taiwan 5 was thus invalid. Because ESI’s two separate attempts to serve process on Lin were improper, the 6 Court now has the discretion to either quash service of process or dismiss the case. 7 B. Lack of Personal Jurisdiction 8 As noted above, Lin also moves to dismiss this action against him for lack of personal 9 jurisdiction. See Mot. at 1. In opposition to Lin’s motion, ESI asserts that Lin can be subject to 10 both general jurisdiction and specific jurisdiction in this district based on his contacts with the 11 forum State. The Court first considers whether the Court can assume general jurisdiction over 12 Lin. 13 1. General Jurisdiction 14 General jurisdiction refers to personal jurisdiction over a defendant to adjudicate any and 15 all claims against the defendant, regardless of whether those claims arise from the defendant’s 16 contacts with the forum. Coremetrics, Inc. v. Atomic Park.com, LLC, 370 F. Supp. 2d 1013, 1016 17 (N.D. Cal. 2005). The standard for establishing general jurisdiction is “exacting” and requires that 18 the defendant’s contacts be “‘so substantial and of such a nature as to justify suit against [the 19 defendant] on causes of action arising from dealings entirely distinct from those activities .’” 20 Daimler AG, 571 U.S. at 118 (quoting Int’l Shoe Co., 326 U.S. at 318). 21 The “paradigm” for general jurisdiction over an individual is “the individual’s domicile.” 22 Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2853 (2011). But courts 23 have, in rare instances, exercised general jurisdiction over an individual when the individual’s 24 contacts with a forum are so substantial that “the defendant can be deemed to be ‘present’ in that 25 forum for all purposes” so that exercising general jurisdiction over the defendant does not offend 26 traditional notions of fair play and substantial justice. Yahoo! Inc. v. La Ligue Contre Le Racisme 27 Case No.: 5:20-cv-06846-EJD 1 Et L’Antisemitisme, 433 F.3d 1199, 1205 (9th Cir. 2006). An individual’s frequent visits to a 2 forum, or even his owning property in a forum, do not, alone, justify the exercise of general 3 jurisdiction over him. See Span Const. & Eng’g, Inc. v. Stephens, No. CIVF 06–0286 AWIDLB, 4 2006 WL 1883391, at *5 (E.D. Cal. July 7, 2006). 5 Lin argues that general jurisdiction over him is improper because he has not lived in 6 California since 2013 and is currently domiciled in Taiwan. See Lin. Decl. ¶ 4; D Lin Decl. ¶¶ 3, 7 10-12. ESI counters, arguing Lin should be subject to general jurisdiction in California because 8 Lin is the owner of the Fremont Residence and still has an outstanding mortgage on the property. 9 Opp’n at 10; Shih Decl., Ex. A. ESI also alleges Lin maintains an E*Trade Financial account, and 10 as of 2011, still had checking accounts with Citibank. Opp’n at 10; Leu Decl. ¶ 19, Ex. B. The 11 Court does not find this sufficient to establish general jurisdiction. As discussed above, property 12 ownership in the forum State can justify the exercise of general jurisdiction over a defendant, but 13 this alone is not enough. “Courts in this Circuit have required far more than property ownership 14 prior to the exercise of general jurisdiction.” Cardenas v. McLane FoodService, Inc., No. 15 SACV10473DOCFFMX, 2010 WL 11465450, at *2 (C.D. Cal. Oct. 25, 2010). Moreover, ESI’s 16 additional allegations do not connect Lin to California, nor do they concern the relevant time 17 period.3 As such, Lin’s contacts with California are not so substantial as to approximate his 18 physical presence here. Thus, the Court finds Lin’s contacts do not meet the “exacting standard” 19 required for this Court to assume general jurisdiction over Lin. See Schwarzenegger, 374 F.3d at 20 804. 21 2. Specific Jurisdiction 22 “The inquiry whether a forum State may assert specific jurisdiction over a nonresident 23 defendant ‘focuses on the relationship among the defendant, the forum, and the litigation.’” 24

25 3 ESI relies on the declaration of its chief executive officer, Iyun Kevin Leu, and his purported 26 knowledge of Lin’s Citibank checking accounts because of his access to Lin’s tax returns from 2011. Leu Decl. ¶ 19. The E*Trade account evidence which lists the Fremont Residence address 27 does not include any date. Case No.: 5:20-cv-06846-EJD 1 Walden, 571 U.S. at 283–84 (quoting Keeton v. Hustler Mag., Inc., 465 U.S. 770, 775 (1984)). 2 There are two principles undergirding the defendant-focused inquiry. First, the relationship 3 between the nonresident defendant, the forum, and the litigation “must arise out of contacts that 4 the ‘defendant himself’ creates with the forum State.” Axiom Foods, Inc. v. Acerchem Int’l, Inc., 5 874 F.3d 1064, 1068 (9th Cir. 2017) (quoting Walden, 571 U.S. at 284). “Second, the minimum 6 contacts analysis examines ‘the defendant’s contacts with the forum State itself, not the 7 defendant’s contacts with persons who reside there.’” Id. (quoting Walden, 571 U.S. at 285). 8 The Ninth Circuit has set forth a three-prong test for the exercise of specific jurisdiction: 9 (1) the defendant either “purposefully direct[s]” its activities or “purposefully avails” itself of the 10 benefits afforded by the forum’s laws; (2) the plaintiff’s claim “arises out of or relates to the 11 defendant’s forum-related activities; and (3) the exercise of jurisdiction [ ] comport[s] with fair 12 play and substantial justice, i.e., it [is] reasonable.” Williams, 851 F.3d at 1023 (alterations in 13 original) (quoting Dole Food Co. v. Watts, 303 F.3d 1104, 1111 (9th Cir. 2002)). The burden is 14 on the plaintiff to establish the first two prongs. Axiom Foods, Inc., 874 F.3d at 1068 (citing 15 Schwarzenegger, 374 F.3d at 802). If the plaintiff satisfies the first two prongs then the defendant 16 must present a “‘compelling case’ that exercise of jurisdiction would not be reasonable.” 17 CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1076 (9th Cir. 2011) (quoting Burger 18 King Corp. v. Rudzewicz, 471 U.S. 462, 476–78 (1985)). 19 With respect to the first prong, the Ninth Circuit has said that “purposeful availment” and 20 “purposeful direction” are “two distinct concepts.” Schwarzenegger, 374 F.3d at 802 21 (acknowledging that the Ninth Circuit has sometimes “use[d] the phrase ‘purposeful availment,’ in 22 shorthand fashion, to include both purposeful availment and purposeful direction”). In tort cases, 23 the Court typically inquires whether a defendant “purposefully direct[s] his activities” at the forum 24 State. Yahoo!, 433 F.3d at 1206 (citing Schwarzenegger, 374 F.3d at 803). In contract cases, the 25 Court inquires whether a defendant “purposefully avails itself of the privilege of conducting 26 activities” or “consummate[s] [a] transaction” in the forum, focusing on activities such as 27 Case No.: 5:20-cv-06846-EJD 1 delivering goods or executing a contract. Id. Because ESI alleges both trade secret 2 misappropriation and breach of contract claims, the Court analyzes the “purposeful availment” 3 prong for both. See Hong Kong uCloudlink Network Tech. Ltd. v. SIMO Holdings Inc., No. 18- 4 CV-05031-EMC, 2019 WL 331161, at *4 (N.D. Cal. Jan. 25, 2019) (finding a purposeful direction 5 analysis appropriate because trade secret misappropriation claims “are based in tort, not 6 contract.”). 7 a. Purposeful Direction 8 For ESI’s trade secret misappropriation claims, the Court employs the purposeful direction 9 analysis, also known as the “effects” test from Calder v. Jones, 465 U.S. 783 (1984). See Axiom 10 Foods, Inc., 874 F.3d at 1069. This test requires that the defendant have “(1) committed an 11 intentional act, (2) expressly aimed at the forum State, (3) causing harm that the defendant knows 12 is likely to be suffered in the forum State.” Id. (internal quotation marks and citation omitted). 13 ESI contends that the trade secret misappropriation claims asserted against Lin are based on direct 14 contacts that Lin had with California, but the argument is not persuasive for several reasons. 15 First, the theft of trade secrets itself appears to have taken place in Taiwan, not California. 16 The second prong of the “effects test” requires that the defendant act in a way that is wrongful and 17 targeted at the forum State. See Dole Food Co., 303 F.3d at 1111. Under Walden v. Fiore, 571 18 U.S. 277 (2014), the Court’s analysis must take into consideration the defendant’s contacts with 19 California, not simply the effects of the contacts with the Plaintiff. Walden rejected the Ninth 20 Circuit’s then-existing view that knowledge of a plaintiff’s forum connections – combined with 21 foreseeable effects in that forum – are enough to constitute “minimum contacts.” Walden, 571 22 U.S. at 286 (“Due process requires that a defendant be haled into court in a forum State based on 23 his own affiliation with the State . . .”) (emphasis added). Instead, courts should focus “on the 24 relationship among the defendant, the forum, and the litigation” and examine the “various 25 contacts” the defendants have with the forum State. Id. at 277, 287. 26 In opposition, ESI argues that the claims arise out of Lin’s forum related activities in 27 Case No.: 5:20-cv-06846-EJD 1 California because when trade secrets were allegedly misappropriated, Lin was working remotely 2 from California. Opp’n at 10. The allegations in the complaint, however, are contradictory. ESI, 3 for example, alleges in its complaint that Lin “visited ESI’s offices [located in Taiwan] after hours 4 during the middle of the night and the weekends and unlawfully and without authorization 5 downloaded ESI’s [t]rade [s]ecrets.” Compl. ¶ 43. ESI also alleges that Lin gained access to 6 ESI’s server and downloaded materials such as source code, architectural documents, and patent 7 invention disclosure documents in 2011 and 2012. Id. ¶¶ 45, 50. Moreover, Lin has stated that all 8 of the work he performed for ESI was performed in Taiwan and that all ESI offices, facilities, and 9 the server referenced in the complaint are located in Taiwan. Lin Decl. 6-8. In this instance, ESI 10 does not make a prima facie showing over Lin. ESI has not alleged it has any connections with 11 California and given the evidence presented, there is no reasonable way this Court can construe 12 Lin’s alleged wrongful actions as targeted at the forum State. 13 Second, ESI attempts to argue that there are California contacts because Lin conspired with 14 Anchor and its principals to transmit ESI’s trade secrets to Anchor, a company with its principal 15 place of business in California. Opp’n at 10. The Ninth Circuit, however, has declined to find 16 jurisdiction based on a “bare allegation of a conspiracy between the defendant and a person within 17 the personal jurisdiction” of this Court. Chirila v. Conforte, 47 F. App’x 838, 842-43 (9th Cir. 18 2002) (holding that knowledge and consent of unlawful activity in the forum State do not 19 constitute intentional acts committed in the forum State.). Here, ESI makes a bare allegation that 20 Lin entered into a conspiracy with Anchor and its principals to make use of ESI trade secrets and 21 bring the trade secrets to Anchor. Opp’n at 10; see also SAC ¶¶ 69, 84. Such allegations are the 22 kind of knowledge and consent of intentional acts allegedly committed in the forum State that do 23 not confer jurisdiction without “something more” that shows Lin targeted the forum State itself. 24 Id. 25 Accordingly, ESI has failed to show how Lin purposefully directed his conduct at 26 California to the extent that this Court can hale him into the forum State without violating due 27 Case No.: 5:20-cv-06846-EJD 1 process. 2 b. Purposeful Availment 3 For ESI’s breach of contract claim, a “purposeful availment” analysis is relevant here. “To 4 be subject to specific jurisdiction, a defendant must have ‘purposefully avail[ed] itself of the 5 privilege of conducting activities within the forum State, thus invoking the benefits and 6 protections of its laws.’” Sher v. Johnson, 911 F.2d 1357, 1362 (9th Cir. 1990) (quoting Burger 7 King Corp., 471 U.S. at 475). “[T]he ‘purposeful availment’ requirement is satisfied if the 8 defendant has taken deliberate action within the forum State or if he has created continuing 9 obligations to forum residents.” Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir. 1995) (citing 10 Hirsch v. Blue Cross, Blue Shield of Kansas City, 800 F.2d 1474, 1478 (9th Cir. 1986)). 11 As mentioned, “[a] showing that a defendant purposefully availed himself of the privilege 12 of doing business in a forum State typically consists of evidence of the defendant’s actions in the 13 forum, such as executing or performing a contract there.” Schwarzenegger, 374 F.3d at 802. Still, 14 the mere existence of a contract does not necessarily constitute sufficient minimum contacts for 15 jurisdiction. Burger King Corp., 471 U.S. at 478. Rather, a court must look to “prior negotiations 16 and contemplated future consequences, along with the terms of the contract and the parties’ actual 17 course of dealing to determine if the defendant’s contacts are ‘substantial’ and not merely 18 ‘random, fortuitous, or attenuated.’” Id. at 479, 480 (internal quotations omitted). 19 The focus of ESI’s breach of contract claim is the Departure Agreement Lin signed when 20 he resigned from the company in 2017. See Compl. ¶ 58; Lin Decl. ¶ 9. Specifically, the 21 Departure Agreement asked Lin to verify whether he had taken any source code and agree to not 22 disclose any of ESI’s trade secrets or intellectual property. Compl. ¶ 61. For jurisdiction 23 purposes, however, ESI does not discuss the necessary additional substantial contacts with 24 California aside from the fortuitous fact that Anchor’s principal place of business is in California. 25 The work Lin did for ESI was performed in Taiwan, where Lin was based, and where the alleged 26 theft of trade secrets took place. Lin Decl. ¶ 6-9. Accordingly, the Court finds the evidence in the 27 Case No.: 5:20-cv-06846-EJD 1 record does not demonstrate that Lin “has taken deliberate action within [California and] has [not] 2 || created continuing obligations to [California] residents.” Ballard, 65 F.3d at 1498 (citing Hirsch, 3 800 F.2d at 1478. 4 Because ESI has not met its burden of establishing that Lin “purposely directed” or 5 “purposefully availed” himself to California, ESI has failed to establish a prima facie case that Lin 6 || is subject to specific personal jurisdiction in this Court. 7 || IV. CONCLUSION 8 In light of the foregoing, Lin’s motion to dismiss is GRANTED. ESI may be able to 9 furnish additional allegations and arguments with respect to general jurisdiction upon amendment. 10 || Thus, the dismissal shall be with leave to amend. Any amended complaint is due within thirty 11 (30) days. ESI is directed to file a redlined complaint as an attachment to its amended complaint. 12 || ESI shall also ensure that proper service of process as to Lin is executed. 13 IT IS SO ORDERED. 14 |] Dated: July 19, 2021

EDWARD J. DAVILA 17 United States District Judge 18 19 20 21 22 23 24 25 26 Case No.: 5:20-cv-06846-EJD 28 || ORDER GRANTING MOTION TO DISMISS FOR IMPROPER SERVICE AND LACK OF PERSONAL JURISDICTION