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2 3 4 5 6 7 United States District Court 8 Central District of California 9 10 11 ENRICO GREEN, Case No. 2:19-cv-10522-ODW (MRWx) 12 Plaintiff, ORDER GRANTING DEFENDANT’S 13 v. MOTION TO DISMISS FOR LACK 14 HEPTA RUN, INC, et al., OF PERSONAL JURISDICTION [9] 15 Defendants. 16 I. INTRODUCTION 17 Before the Court is Defendant Ed Tseng’s (“Tseng”) Motion to Dismiss for 18 Lack of Personal Jurisdiction. For the reasons discussed below, the Court GRANTS 19 the Motion, and DISMISSES Plaintiff Enrico Green’s (“Green”) Complaint with 20 leave to amend.1 (ECF. No. 9.) 21 II. FACTUAL BACKGROUND 22 Green, also known as Khaleel Muhammad, is a truckdriver domiciled in 23 California. (See Second Am. Compl. (“SAC”) ¶¶ 2, 7, ECF No. 1-1.) Defendant 24 Hepta Run, Inc. (“Hepta Run”) is a Texas corporation and contracts with truckdrivers 25 to transport goods. (Mot. to Dismiss (“Mot.”) 2, ECF No. 9; SAC ¶ 2.) Defendant 26 Tseng is a resident of Texas, the owner, CEO, Secretary, and CFO of Hepta Run. 27
28 1 After carefully considering the papers filed in connection with the Motion, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. 1 (Mot. 2.) 2 Green was employed by Defendants and transported goods throughout Long 3 Beach, California. (SAC ¶¶ 2, 7.) Green alleges that throughout his employment, 4 Defendants: (1) made unlawful deductions to his remuneration; (2) failed to reimburse 5 for business expenses such as liability insurance, fuel, mileage, and parking; (3) failed 6 to separately compensate for rest periods; (4) failed to provide required meal and rest 7 periods, or alternatively, pay the additional hour in wages; (5) failed to pay all earned 8 wages after separation from employment; and (6) failed to provide an accurate 9 itemized wage statement. (SAC ¶ 2.) 10 On September 30, 2019, Green filed a Second Amended Complaint (“SAC”) 11 before the Los Angeles Superior Court, alleging eight claims: (1) failure to reimburse 12 all necessary expenditures in violation of California Labor Code sections 2802, 2802, 13 and 558.1; (2) failure to pay piece rate employee minimum wages for nonproductive 14 time in violation of California Labor Code sections 226.2, 1194, and 558.1; (3) failure 15 to pay piece rate employee separate compensation for rest periods in violation of 16 California Labor Code sections 226.2, 1194, and 558.1; (4) failure to provide required 17 meal periods in violation of California Labor Code sections 226.7, 512, and 558.1; (5) 18 failure to provide required rest periods in violation of California Labor Code sections 19 218, 218.6, 226.7, and 558.1; (6) failure to pay all earned wages upon separation in 20 violation of California Labor Code sections 203 and 558.1; (7) failure to provide 21 accurate wage statements in violation of California Labor Code sections 218.6, 22 226.2(a)(2), 226.3, and 558.1; and (8) unfair business practices in violation of 23 California Business and Professions Code section 17200 et seq. (SAC ¶¶ 13–69.) 24 On December 12, 2019, Defendants removed the action based on diversity 25 jurisdiction. (See generally Notice of Removal (“Notice”) ¶ 10, ECF No. 1.) Then on 26 December 24, 2019, Defendant Tseng filed the instant motion to dismiss for lack of 27 personal jurisdiction. (See Mot.) 28 1 III. LEGAL STANDARD 2 “When no federal statute governs personal jurisdiction, the district court applies 3 the law of the forum state.” Boschetto v. Hansing, 539 F.3d 1011, 1015 (9th Cir. 4 2008); Fed. R. Civ. P. 4(k). “California’s long-arm statute is co-extensive with 5 federal standards, so a federal court may exercise personal jurisdiction if doing so 6 comports with federal constitutional due process.” Id.; Cal. Civ. Proc. Code § 410.10. 7 When a defendant moves to dismiss for lack of personal jurisdiction under 8 Federal Rule of Civil Procedure (“Rule”) 12(b)(2), the plaintiff has the burden of 9 demonstrating that the court has jurisdiction over the defendant. Menken v. Emm, 503 10 F.3d 1050, 1056 (9th Cir. 2007). When the motion is based on written materials 11 rather than an evidentiary hearing, “the plaintiff need only make a prima facie 12 showing of jurisdictional facts.” Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 13 1990). While the plaintiff cannot “simply rest on the bare allegations of its complaint, 14 uncontroverted allegations in the complaint must be taken as true.” Schwarzenegger 15 v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004) (internal quotation 16 marks and citations omitted). Additionally, “the court resolves all disputed facts in 17 favor of the plaintiff.” Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 (9th Cir. 18 2006). 19 A district court may exercise personal jurisdiction against a non-resident 20 defendant if the defendant has “at least ‘minimum contacts’ with the relevant forum 21 such that the exercise of jurisdiction ‘does not offend traditional notions of fair play 22 and substantial justice.’” Dole Food Co. v. Watts, 303 F.3d 1104, 1110 (9th Cir. 23 2002) (quoting Int’l Shoe Co. v. State of Wash. 326 U.S. 310, 326 (1945)). A non- 24 resident defendant may be subject to either general or specific personal jurisdiction. 25 Fed. Deposit Ins. Corp. v. British-Am. Ins. Co., 828 F.2d 1439, 1442 (9th Cir. 1987). 26 IV. DISCUSSION 27 Here, Parties only dispute whether the Court may exercise specific jurisdiction 28 over Tseng; accordingly, general jurisdiction is not at issue. (See Opp’n to Mot. 1 (“Opp’n”) 4–10, ECF No. 12.) Green asserts that specific jurisdiction is proper 2 because Tseng purposefully directed his activities to California. (Opp’n 6–10.) For 3 instance, Green alleges that Tseng “set in motion the [business] model . . . which lead 4 to the wage and hour violations that are at issue in this case.” (Opp’n 7.) Specifically, 5 Green alleges: (1) Tseng created Hepta Run and approved of its operations in 6 California; (2) approved Hepta Run’s business model of reimbursing truck drivers’ 7 fuel costs; (3) paid Hepta Run’s drivers with his own money when the company could 8 not pay drivers; and (4) paid the rent for Hepta Run’s office in California. (Opp’n 6.) 9 Tseng, on the other hand, argues that “his involvement in Hepta Run is at a high 10 level only and is concerned primarily with the company’s financials.” (Mot. 2.) 11 Moreover, Tseng asserts that other Hepta Run employees, such as the office manager 12 and safety department manager, are responsible for supervising invoicing, driver 13 settlements, and contracting drivers like Green. (Mot. 2.) For instance, another 14 employee—the dispatch manager based in Houston—was responsible for assigning 15 Green his trucking jobs. (Mot. 2.) Tseng further denies that Hepta Run has a 16 California office, and claims he has never met nor spoken with Green. (Mot.
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2 3 4 5 6 7 United States District Court 8 Central District of California 9 10 11 ENRICO GREEN, Case No. 2:19-cv-10522-ODW (MRWx) 12 Plaintiff, ORDER GRANTING DEFENDANT’S 13 v. MOTION TO DISMISS FOR LACK 14 HEPTA RUN, INC, et al., OF PERSONAL JURISDICTION [9] 15 Defendants. 16 I. INTRODUCTION 17 Before the Court is Defendant Ed Tseng’s (“Tseng”) Motion to Dismiss for 18 Lack of Personal Jurisdiction. For the reasons discussed below, the Court GRANTS 19 the Motion, and DISMISSES Plaintiff Enrico Green’s (“Green”) Complaint with 20 leave to amend.1 (ECF. No. 9.) 21 II. FACTUAL BACKGROUND 22 Green, also known as Khaleel Muhammad, is a truckdriver domiciled in 23 California. (See Second Am. Compl. (“SAC”) ¶¶ 2, 7, ECF No. 1-1.) Defendant 24 Hepta Run, Inc. (“Hepta Run”) is a Texas corporation and contracts with truckdrivers 25 to transport goods. (Mot. to Dismiss (“Mot.”) 2, ECF No. 9; SAC ¶ 2.) Defendant 26 Tseng is a resident of Texas, the owner, CEO, Secretary, and CFO of Hepta Run. 27
28 1 After carefully considering the papers filed in connection with the Motion, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. 1 (Mot. 2.) 2 Green was employed by Defendants and transported goods throughout Long 3 Beach, California. (SAC ¶¶ 2, 7.) Green alleges that throughout his employment, 4 Defendants: (1) made unlawful deductions to his remuneration; (2) failed to reimburse 5 for business expenses such as liability insurance, fuel, mileage, and parking; (3) failed 6 to separately compensate for rest periods; (4) failed to provide required meal and rest 7 periods, or alternatively, pay the additional hour in wages; (5) failed to pay all earned 8 wages after separation from employment; and (6) failed to provide an accurate 9 itemized wage statement. (SAC ¶ 2.) 10 On September 30, 2019, Green filed a Second Amended Complaint (“SAC”) 11 before the Los Angeles Superior Court, alleging eight claims: (1) failure to reimburse 12 all necessary expenditures in violation of California Labor Code sections 2802, 2802, 13 and 558.1; (2) failure to pay piece rate employee minimum wages for nonproductive 14 time in violation of California Labor Code sections 226.2, 1194, and 558.1; (3) failure 15 to pay piece rate employee separate compensation for rest periods in violation of 16 California Labor Code sections 226.2, 1194, and 558.1; (4) failure to provide required 17 meal periods in violation of California Labor Code sections 226.7, 512, and 558.1; (5) 18 failure to provide required rest periods in violation of California Labor Code sections 19 218, 218.6, 226.7, and 558.1; (6) failure to pay all earned wages upon separation in 20 violation of California Labor Code sections 203 and 558.1; (7) failure to provide 21 accurate wage statements in violation of California Labor Code sections 218.6, 22 226.2(a)(2), 226.3, and 558.1; and (8) unfair business practices in violation of 23 California Business and Professions Code section 17200 et seq. (SAC ¶¶ 13–69.) 24 On December 12, 2019, Defendants removed the action based on diversity 25 jurisdiction. (See generally Notice of Removal (“Notice”) ¶ 10, ECF No. 1.) Then on 26 December 24, 2019, Defendant Tseng filed the instant motion to dismiss for lack of 27 personal jurisdiction. (See Mot.) 28 1 III. LEGAL STANDARD 2 “When no federal statute governs personal jurisdiction, the district court applies 3 the law of the forum state.” Boschetto v. Hansing, 539 F.3d 1011, 1015 (9th Cir. 4 2008); Fed. R. Civ. P. 4(k). “California’s long-arm statute is co-extensive with 5 federal standards, so a federal court may exercise personal jurisdiction if doing so 6 comports with federal constitutional due process.” Id.; Cal. Civ. Proc. Code § 410.10. 7 When a defendant moves to dismiss for lack of personal jurisdiction under 8 Federal Rule of Civil Procedure (“Rule”) 12(b)(2), the plaintiff has the burden of 9 demonstrating that the court has jurisdiction over the defendant. Menken v. Emm, 503 10 F.3d 1050, 1056 (9th Cir. 2007). When the motion is based on written materials 11 rather than an evidentiary hearing, “the plaintiff need only make a prima facie 12 showing of jurisdictional facts.” Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 13 1990). While the plaintiff cannot “simply rest on the bare allegations of its complaint, 14 uncontroverted allegations in the complaint must be taken as true.” Schwarzenegger 15 v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004) (internal quotation 16 marks and citations omitted). Additionally, “the court resolves all disputed facts in 17 favor of the plaintiff.” Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 (9th Cir. 18 2006). 19 A district court may exercise personal jurisdiction against a non-resident 20 defendant if the defendant has “at least ‘minimum contacts’ with the relevant forum 21 such that the exercise of jurisdiction ‘does not offend traditional notions of fair play 22 and substantial justice.’” Dole Food Co. v. Watts, 303 F.3d 1104, 1110 (9th Cir. 23 2002) (quoting Int’l Shoe Co. v. State of Wash. 326 U.S. 310, 326 (1945)). A non- 24 resident defendant may be subject to either general or specific personal jurisdiction. 25 Fed. Deposit Ins. Corp. v. British-Am. Ins. Co., 828 F.2d 1439, 1442 (9th Cir. 1987). 26 IV. DISCUSSION 27 Here, Parties only dispute whether the Court may exercise specific jurisdiction 28 over Tseng; accordingly, general jurisdiction is not at issue. (See Opp’n to Mot. 1 (“Opp’n”) 4–10, ECF No. 12.) Green asserts that specific jurisdiction is proper 2 because Tseng purposefully directed his activities to California. (Opp’n 6–10.) For 3 instance, Green alleges that Tseng “set in motion the [business] model . . . which lead 4 to the wage and hour violations that are at issue in this case.” (Opp’n 7.) Specifically, 5 Green alleges: (1) Tseng created Hepta Run and approved of its operations in 6 California; (2) approved Hepta Run’s business model of reimbursing truck drivers’ 7 fuel costs; (3) paid Hepta Run’s drivers with his own money when the company could 8 not pay drivers; and (4) paid the rent for Hepta Run’s office in California. (Opp’n 6.) 9 Tseng, on the other hand, argues that “his involvement in Hepta Run is at a high 10 level only and is concerned primarily with the company’s financials.” (Mot. 2.) 11 Moreover, Tseng asserts that other Hepta Run employees, such as the office manager 12 and safety department manager, are responsible for supervising invoicing, driver 13 settlements, and contracting drivers like Green. (Mot. 2.) For instance, another 14 employee—the dispatch manager based in Houston—was responsible for assigning 15 Green his trucking jobs. (Mot. 2.) Tseng further denies that Hepta Run has a 16 California office, and claims he has never met nor spoken with Green. (Mot. 2.) 17 To exercise specific personal jurisdiction, courts apply a three-prong test. First, 18 the defendant must either purposefully direct its activities or purposefully avail itself 19 of the benefits afforded by the forum’s laws. Williams v. Yamaha Motor Co., 851 20 F.3d 1015, 1023 (9th Cir. 2017). Second, “the claim must arise[] out of or relate[] to 21 the defendant’s forum-related activities.” Id. Third, the exercise of jurisdiction must 22 be reasonable, such that it comports with fair play and substantial justice. Id. Each 23 prong must be met. 24 Accordingly, when analyzing specific personal jurisdiction, “[e]ach defendant’s 25 contacts with the forum must be assessed individually.” Calder, 465 U.S. at 790; see 26 also id. at 788 (“In judging minimum contacts, a court properly focuses on the 27 relationship among the defendant, the forum, and the litigation.”). Moreover, 28 “[c]orporate officers can be liable for corporate actions where they are the guiding 1 spirit behind the wrongful conduct, or the central figure in the challenged corporate 2 activity.” In re Boon Glob. Ltd., 923 F.3d 643, 651 (9th Cir. 2019) (internal quotation 3 marks omitted). Nonetheless, “mere ‘bare bones’ assertions of minimum contacts 4 with the forum or legal conclusions unsupported by specific factual allegations will 5 not satisfy a plaintiff’s pleading burden.” Swartz v. KPMG LLP, 476 F.3d 756, 766 6 (9th Cir. 2007). Comparatively, random, fortuitous, or attenuated contacts will not be 7 sufficient to establish specific personal jurisdiction. Burger King Corp. v. Rudzewicz, 8 471 U.S. 462, 475 (1985) 9 In M.O. Dion & Sons, Inc. v. VP Racing Fuels, Inc., California plaintiffs 10 similarly brought an action against a Texas defendant Racing Fuel Company, its 11 president, vice president, and chief financial officer, and alleged that the defendants 12 breached their contract by misrepresenting the quality of their racing fuel. No. 19-cv- 13 5154-MWF (SSx), 2019 WL 4750116, *1–3 (C.D. Cal. Sept. 27, 2019). Plaintiffs 14 initially voiced their concerns directly to the company and met with the vice president 15 and chief financial officer, but not the President. Id. at *3. Consequently, the court 16 ruled that it could exercise specific personal jurisdiction over the vice president and 17 chief financial officer, but not the president. Id. at 6–8. The court held that the 18 president was not a “central figure” in the disputed activities because he did not attend 19 the meeting between plaintiffs and co-defendants, and he also was not involved in the 20 decision to use or market the fraudulent fuel. Id. at *6. As such, the court could not 21 exercise specific personal jurisdiction over the president, and the court granted his 22 motion to dismiss. Id. 23 Similarly, in Delman v. J. Crew Grp., Inc., the California plaintiff brought an 24 action against the defendant clothing company and its New York chief executive 25 officer (“CEO”) for deceptive marketing tactics regarding its discounted clothing line. 26 No. 16-cv-9219-MWF (ASx), 2017 WL 3048657, at *1–2 (C.D. Cal. May 15, 2017). 27 The plaintiff argued that jurisdiction for the CEO was proper because he purposefully 28 directed his actions towards California by managing a company with high sale 1 volumes in California. Id. at *4. The district court disagreed and found it lacked 2 jurisdiction over the CEO. Id. It reasoned that “[s]imply alleging, without more, that 3 [the CEO] is very involved with the business, and that California is an important 4 market for the business, is not sufficient to make [the CEO] subject to the Court’s 5 personal jurisdiction.” Id.; see also Wolf Designs, Inc. v. DHR Co., 322 F. Supp. 2d 6 1065, 1072 (C.D. Cal. 2004) (“[M]ere knowledge of tortious conduct by the 7 corporation is not enough to hold a director or officer liable for the torts of the 8 corporation absent other ‘unreasonable participation’ in the unlawful conduct by the 9 individual.”) 10 Here, Green fails to make a prima facie showing that this Court may exercise 11 specific personal jurisdiction over Tseng. Foremost, Green fails to adequately allege 12 jurisdictional facts to warrant the exercise of personal jurisdiction over Tseng. As in 13 M.O. Dion & Sons, Inc., Tseng does not appear to be a central figure in the disputed 14 activities. 2019 WL 4750116 at *6. For instance, Hepta Run’s office manager, safety 15 manager, and dispatch managers, all had more direct contacts and responsibilities 16 concerning Green’s wage and hour violations, which according to the SAC, does not 17 appear to be true for Tseng. (See generally SAC; Mot. 2.) 18 Further, Plaintiff’s allegations regarding Tseng’s role in creating Hepta Run and 19 approving its business model are insufficient to allow this Court to exercise specific 20 jurisdiction over him in a California wage and hour action. Delman, 2017 WL 21 3048657 at *4. Rather, Green must allege facts that establish Tseng as the guiding 22 spirit behind the wage and hour violations. See Delman, 2017 WL 3048657 at *4 23 (“[T]o exercise personal jurisdiction over a corporate officer, the plaintiff must allege 24 with sufficient specificity that the defendant was the ‘guiding spirit’ behind the 25 wrongful conduct, . . . or the ‘central figure’ in the challenged corporate activity.”). 26 Nevertheless, Green is granted leave to allege only specific instances in which 27 Tseng cooperated in or instigated the alleged wage and hour violations. Accordingly, 28 the Court GRANTS Tseng’s motion to dismiss and permits Green to amend his 1 || Complaint only to address the personal jurisdiction issue related to Tseng. See Gaudio v. Critical Mass Indus. LLC, No. 19-cv-8214-MWF (AGRx), 2019 WL 3 || 8163804, at *8 (C.D. Cal. Dec. 9, 2019) (granting defendant’s 12(b)(2) motion to 4] dismiss but granting plaintiff leave to amend and address personal jurisdiction 5 || deficiencies). 6 V. CONCLUSION 7 For the reasons discussed above, the Court GRANTS Tseng’s Motion to 8 || Dismiss, but GRANTS Green leave to amend his Complaint. (ECF No. 9.) 9 10 IT IS SO ORDERED. 11 12 April 2, 2020 13 ‘ “ 14 Gill: Ya dh 1s OTIS D. WRIGHT, II 16 UNITED STATES DISTRICT JUDGE
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