Hukui Tech, Inc. v. Intelligent Solutions, LLC

CourtDistrict Court, N.D. California
DecidedNovember 22, 2024
Docket5:23-cv-00991
StatusUnknown

This text of Hukui Tech, Inc. v. Intelligent Solutions, LLC (Hukui Tech, Inc. v. Intelligent Solutions, 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
Hukui Tech, Inc. v. Intelligent Solutions, LLC, (N.D. Cal. 2024).

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 HUKUI TECH, INC., et al., Case No. 5:23-cv-00991-PCP

8 Plaintiffs, ORDER GRANTING MOTION TO 9 v. DISMISS

10 INTELLIGENT SOLUTIONS, LLC, et al., Re: Dkt. No. 73 Defendants. 11

12 Defendants Joseph Featherstone and Seth Egan move to dismiss, for lack of personal 13 jurisdiction and improper venue, the lawsuit brought against them by plaintiffs Hukui Tech, Inc., 14 Hukui Technology, Inc., and Hukui Bio Co., LTD. For the following reasons, the Court grants the 15 motion to dismiss for lack of personal jurisdiction and does not reach the question of proper 16 venue. 17 BACKGROUND 18 Hukui Tech is a California-based corporation that provides import-export and distribution 19 services in the medical devices industry. Defendant Intelligent Solutions is a Nevada-based 20 company with offices in California that provides sales-lead and distribution services. Defendant 21 Co-Diagnostics Inc. (“CDX”) is a Utah-based medical-devices company that developed COVID- 22 19 diagnostic tests. Defendant Joseph Featherstone is the head of business development at CDX, 23 and defendant Seth Egan is the vice president of sales at CDX. Both Featherstone and Egan are 24 residents of Utah. 25 This dispute arises from Hukui Tech’s agreement with CDX to distribute COVID-19 tests. 26 Hukui Tech and CDX entered into that distribution agreement in March 2020, early in the global 27 COVID-19 pandemic. The agreement authorized Hukui Tech and its subsidiaries to sell and 1 customer referral agreement with Intelligent Solutions, pursuant to which Intelligent Solutions 2 would provide sales-lead services for Hukui Tech’s distribution of CDX’s COVID-19 tests. That 3 agreement could only be terminated “by either Party upon 30 days written notice to the other 4 party.” Dkt. No. 1-3, at 3. 5 In CDX’s view, its agreement with Hukui Tech required Hukui Tech to be the sole 6 distributor of its COVID-19 tests and to refrain from contracting with other sub-distributors like 7 Intelligent Solutions. Dkt. No. 24, at 6. CDX sued Hukui Tech in Utah state court in April 2021 8 seeking a declaration that it no longer had any contractual relationship with Hukui Tech. By that 9 time, CDX had already begun distributing its tests directly through Intelligent Solutions. CDX 10 argued that Hukui Tech had breached its distribution agreement by contracting with Intelligent 11 Solutions, and that CDX was not liable to pay Hukui Tech for the COVID-19 tests that CDX sold 12 thereafter. In response to CDX’s lawsuit, Hukui Tech filed a countercomplaint alleging that CDX 13 had breached its agreement with Hukui Tech by prematurely terminating their business 14 relationship. Hukui Tech alleged that at least 750,000 COVID-19 tests were sold by CDX to 15 Intelligent Solutions for $7 each rather than to Hukui Tech for $6 each (per the distribution 16 agreement). Hukui Tech allegedly suffered $750,000 in damages due to CDX’s breach of the 17 agreement. On November 7, 2023, the Utah state court granted summary judgment against Hukui 18 Tech and in favor of CDX. Dkt. No. 74-3. 19 In March 2023, plaintiffs filed this federal lawsuit alleging 10 contract-related claims 20 against Intelligent Solutions and Joseph Sarro, the sole managing member of Intelligent Solutions. 21 Dkt. No. 1. Plaintiffs allege that Intelligent Services interfered with Hukui Tech’s initial 22 distribution agreement with CDX and unlawfully profited from the unilateral sale of COVID-19 23 tests from CDX. A year later, in March 2024, plaintiffs filed their amended complaint adding 24 defendants Featherstone and Egan and alleging that they acted outside their official roles at CDX 25 to enrich themselves by inducing CDX and Intelligent Solutions to breach their contracts with 26 Hukui Tech. Dkt. No. 59, at 16. Featherstone and Egan now move to dismiss, arguing that this 27 Court lacks jurisdiction over them and that this District is an improper venue for the dispute. Dkt. 1 LEGAL STANDARDS 2 Federal Rule 4(k)(1)(A) provides that, in the absence of a federal statute governing 3 personal jurisdiction, “the district court applies the law of the state in which the district court sits.” 4 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004). Since “California’s 5 long-arm jurisdictional statute is coextensive with federal due process requirements, the 6 jurisdictional analyses under state law and federal due process are the same.” Id. at 800–01. 7 In order for a court to exercise personal jurisdiction over a particular defendant, due 8 process requires that the defendant have “minimum contacts” with the chosen forum such that the 9 exercise of jurisdiction “does not offend traditional notions of fair play and substantial justice.” 10 Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (cleaned up). The “minimum contacts” 11 required by due process depend upon whether a court is exercising general or specific jurisdiction. 12 General jurisdiction extends to all claims that might be asserted against a defendant and 13 thus requires a substantial degree of contact with the forum. “For an individual, the paradigm 14 forum for the exercise of general jurisdiction is the individual’s domicile.” Goodyear Dunlop 15 Tires Operations, S.A. v. Brown, 564 U.S. 915, 924 (2011). “A court may assert general 16 jurisdiction over foreign … corporations to hear any and all claims against them when their 17 affiliations with the State are so ‘continuous and systematic’ as to render them essentially at home 18 in the forum State.” Id. at 919. For corporations, the “paradigm” bases for general jurisdiction are 19 “the place of incorporation and principal place of business,” although operations in another state 20 might also be “so substantial and of such a nature as to render the corporation at home in that 21 State.” Daimler AG v. Bauman, 571 U.S. 117, 137, 139 n.19 (2014). 22 Specific jurisdiction “covers defendants less intimately connected with a State, but only as 23 to a narrower class of claims.” Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct., 592 U.S. 351, 352 24 (2021). For a court to exercise specific personal jurisdiction, the defendant must have “take[n] 25 some act by which it purposefully avail[ed] itself of the privilege of conducting activities” in the 26 forum state, and the claims “must arise out of or relate to the defendant’s contacts with the forum.” 27 Id. (cleaned up). District courts in California apply a three-part test to determine whether they can 1 purposefully direct its activities or consummate some transaction with the forum or resident 2 thereof, or perform some act by which it purposefully avails itself of the privilege of conducting 3 activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim must 4 be one which arises out of or relates to the defendant’s forum-related activities; and (3) the 5 exercise of jurisdiction must comport with fair play and substantial justice. See, e.g., Core-Vent 6 Corp. v. Nobel Indus., AB, 11 F.3d 1482, 1485 (9th Cir. 1993). For purposes of the test’s first part, 7 “availment and direction are, in fact, two distinct concepts,” and whether a court applies the 8 purposeful availment or purposeful directiontest depends on the nature of the claim. 9 Schwarzenegger, 374 F.3d at 802. For tort claims, courts apply the purposeful direction test. 10 Nichols v. Guidetoinsure, LLC, No. 23-CV-04920-PCP, 2024 WL 1643701, at *2 (N.D. Cal. Apr. 11 15, 2024).

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Hukui Tech, Inc. v. Intelligent Solutions, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hukui-tech-inc-v-intelligent-solutions-llc-cand-2024.