Freeman v. Summit Filtration Technology, LLC

CourtDistrict Court, N.D. California
DecidedNovember 19, 2021
Docket3:21-cv-06838
StatusUnknown

This text of Freeman v. Summit Filtration Technology, LLC (Freeman v. Summit Filtration Technology, LLC) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Freeman v. Summit Filtration Technology, LLC, (N.D. Cal. 2021).

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 MICHAEL D. FREEMAN, Case No. 21-cv-06838-JSC

8 Plaintiff, ORDER RE: PARTIAL MOTION TO 9 v. DISMISS FOR LACK OF PERSONAL JURISDICTION OR TRANSFER 10 SUMMIT FILTRATION TECHNOLOGY, VENUE LLC, et al., 11 Re: Dkt. No. 19 Defendants.

12 13 Before the Court is Defendants’ partial motion to dismiss for lack of personal jurisdiction 14 or, alternatively, to transfer venue.1 (Dkt. No. 19.)2 After carefully considering the parties’ 15 briefing, and having had the benefit of oral argument on November 18, 2021, the Court DENIES 16 the motion to dismiss for lack of personal jurisdiction and declines to transfer venue. 17 BACKGROUND 18 I. Complaint Allegations 19 Plaintiff is a former employee and former member of Summit Filtration Technology, LLC 20 (“Summit”), which he sues along with its owner and managing member Stanley E. Kieffer.3 (Dkt. 21 No. 8 ¶ 1.) Plaintiff originally filed in Alameda County Superior Court and Defendants removed 22 to federal court on the basis of diversity jurisdiction. (Dkt. No. 1.) Plaintiff then filed the 23 operative First Amended Complaint (“FAC”), the gravamen of which is that Defendants withheld 24

25 1 All parties have consented to the jurisdiction of a magistrate judge pursuant to 28 U.S.C. § 26 636(c). (Dkt. Nos. 7, 11.) 2 Record citations are to material in the Electronic Case File (“ECF”); pinpoint citations are to the 27 ECF-generated page numbers at the top of the documents. 1 his wages and other monies in an attempt to pressure Plaintiff to buy out Mr. Kieffer’s majority 2 interest in Summit. (Dkt. No. 8 ¶¶ 3–4, 38–47, 52–61.) Plaintiff brings claims under the laws of 3 California and Wisconsin. (Id. ¶¶ 62–119.) 4 Mr. Kieffer, a citizen of Wisconsin, founded Summit in 2001 and served as its sole 5 member. (Id. ¶¶ 8–9, 20.) In 2006, Summit hired Plaintiff as a W-2 employee. (Id. ¶ 21.) In 6 2007, Plaintiff became a member of Summit; he owned a 40% stake and Mr. Kieffer retained a 7 60% majority stake. (Id. ¶¶ 23, 25–26.) By 2013, Plaintiff had moved to California and become a 8 California citizen. (Id. ¶¶ 29, 7.) That year, Plaintiff and Mr. Kieffer executed the “True-Up 9 Agreement,” which provided that they would earn equal compensation from Summit through 10 different percentages of profits and W-2 wages, allowing Plaintiff to retain 40% control and Mr. 11 Kieffer to retain 60%. (Id. ¶¶ 29–30.) Plaintiff was compensated pursuant to the True-Up 12 Agreement from 2013 through 2019. (Id. ¶ 32.) 13 In 2020, Mr. Kieffer wanted to sell his 60% stake in Summit. (Id. ¶ 38.) Mr. Kieffer 14 discussed selling to Plaintiff, but they did not reach an agreement. (Id. ¶ 39.) Thereafter, Mr. 15 Kieffer caused Summit to withhold Plaintiff’s 2020 wages in order to “strong-arm [Plaintiff] into 16 paying an exorbitant price” and “artificially inflat[e] the value of Summit to make [Mr. Kieffer’s] 17 majority interest look more valuable to potential third-party purchasers in the event he could not 18 come to terms with [Plaintiff].” (Id. ¶¶ 3, 41.) On April 2, 2021, Plaintiff resigned from 19 employment with Summit and dissociated his membership, leaving Mr. Kieffer the sole member 20 of Summit. (Id. ¶¶ 53–55, 9.) Mr. Kieffer caused Summit to not pay out Plaintiff’s membership 21 distribution. (Id. ¶¶ 4, 56–57.) Plaintiff contends he is owed at least $200,000 in wages and 22 $1,666,666.67 in profit distributions. (Id. ¶¶ 47, 66, 87, 95, 102, 106, 112.) 23 II. Mr. Kieffer’s Affidavit 24 In an affidavit supporting Defendants’ motion, Mr. Kieffer attests that he is a citizen of 25 Wisconsin and has never been a citizen of or owned property in California. (Dkt. No. 19-2 ¶¶ 4– 26 6.) According to Mr. Kieffer, Plaintiff lived in Illinois at the time of his hire in 2007. (Id. ¶ 10.) 27 Plaintiff traveled to Wisconsin frequently as part of his work for Summit. (Id.) Plaintiff 1 that she move to California.” (Id. ¶ 13.) With Summit’s approval, Plaintiff moved to California in 2 2012, and continued to communicate extensively with Mr. Kieffer and Summit staff in Wisconsin. 3 (Id. ¶¶ 13–15; see Dkt. No. 24-1 ¶¶ 2–5.) 4 III. Plaintiff’s Affidavit 5 In an affidavit supporting his opposition to Defendants’ motion, Plaintiff disputes Mr. 6 Kieffer’s declaration. (Dkt. No. 20-1.) According to Plaintiff, he did not request permission to 7 move, but rather “told Mr. Kieffer of my family’s intention to relocate and discussed with him the 8 possible effects of the move with regard to Summit’s business and operations. Mr. Kieffer did not 9 oppose my move to California. To the contrary, with Mr. Kieffer’s blessing, Summit took 10 advantage of my move and began advertising that Summit now had a formal business presence in 11 California.” (Id.) Plaintiff submits an Illinois K-1-P tax form showing his address in Pleasanton, 12 California as of December 2012. (Id. at 8.) 13 DISCUSSION 14 Defendants move to dismiss Mr. Kieffer for lack of personal jurisdiction or, alternatively, 15 to transfer the case to the Eastern District of Wisconsin. Defendants conceded at oral argument 16 that the Court has personal jurisdiction over Summit. Summit was a citizen of California from at 17 2013 to April 2, 2021, because Plaintiff was a member of Summit and a citizen of California. See 18 Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006) (“[A]n LLC is a 19 citizen of every state of which its owners/members are citizens.”). 20 I. Dismissal Under Rule 12(b)(2) 21 When a defendant moves to dismiss for lack of personal jurisdiction, the plaintiff bears the 22 burden of demonstrating that the court has jurisdiction over the defendant. See Harris Rutsky & 23 Co. Ins. Servs., Inc. v. Bell & Clements Ltd., 328 F.3d 1122, 1128–29 (9th Cir. 2003). “Where, as 24 here, the motion is based on written materials rather than an evidentiary hearing, the plaintiff need 25 only make a prima facie showing of jurisdictional facts.” Schwarzenegger v. Fred Martin Motor 26 Co., 374 F.3d 797, 800 (9th Cir. 2004) (internal quotation marks and citation omitted). Moreover, 27 “for the purpose of this demonstration, the court resolves all disputed facts in favor of the 1 between the parties over statements contained in affidavits must be resolved in the plaintiff’s 2 favor.” Schwarzenegger, 374 F.3d at 800. 3 In diversity jurisdiction cases, federal courts apply the law of the forum state to determine 4 whether they may exercise personal jurisdiction over foreign parties. See Harris Rutsky, 328 F.3d 5 at 1129. “California’s long-arm statute allows courts to exercise personal jurisdiction over 6 defendants to the extent permitted by the Due Process Clause of the United States Constitution. 7 Hence, we need only determine whether personal jurisdiction in this case would meet the 8 requirements of due process.” Id. (internal quotation marks and citations omitted). 9 Plaintiff asserts that the Court may exercise specific personal jurisdiction over Mr. Kieffer. 10 Plaintiff must satisfy two elements. First, that Mr. Kieffer purposefully directed his activities to 11 California, consummated some transaction within California, or performed some act by which he 12 purposefully availed himself of the privilege of conducting activities in California, thereby 13 invoking the benefits and protections of California’s laws. Second, Plaintiff’s claims must arise 14 out of or relate to Mr. Kieffer’s forum-related activities.

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Freeman v. Summit Filtration Technology, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/freeman-v-summit-filtration-technology-llc-cand-2021.