8 UNITED STATES DISTRICT COURT
9 NORTHERN DISTRICT OF CALIFORNIA 10 SAN JOSE DIVISION 11
12 LEGALFORCE RAPC WORLDWIDE Case No. 19-CV-01538-LHK P.C., 13 Plaintiff, ORDER GRANTING MOTION TO DISMISS FOR LACK OF PERSONAL 14 v. JURISDICTION WITH LEAVE TO AMEND 15 GLOTRADE, et al., Re: Dkt. No. 18 16 Defendants. 17 18 LegalForce RAPC Worldwide, P.C. (“Plaintiff”) sued eighteen defendants, including 19 Worldwide Mail Solutions, Inc. (“Defendant”), for alleged violations of the Lanham Act, 20 California’s False Advertising Law, and California’s Unfair Competition Law, as well as a claim 21 for intentional interference with prospective economic advantage. ECF No. 1. Before the Court is 22 Defendant’s motion to dismiss for lack of personal jurisdiction.1 ECF No. 18. Having considered 23 the submissions of the parties, the relevant law, and the record in this case, the Court GRANTS 24 25 1 Defendant’s motion to dismiss contains a notice of motion that is separately paginated from the 26 memorandum of points and authorities in support of the motion. See Mot. at 1-2. Civil Local Rule 7-2(b) provides that the notice of motion and points and authorities should be contained in 27 one document with a combined limit of 25 pages. See Civ. Loc. R. 7-2(b). 1 1 Defendant’s motion to dismiss with leave to amend. 2 I. BACKGROUND 3 A. Factual Background 4 Plaintiff is a California professional corporation that “offers services including trademark 5 preparation and prosecution, patent preparation and prosecution, copyright registration and 6 counseling, international trademark and patent filings, and corporate formation and stock and 7 equity structuring.” ECF No. 1 at ¶¶ 18,41 (“Compl.”). Plaintiff alleges that companies, termed 8 “Mailer Defendants,” “use publicly available trademark filer information to send targeted 9 ‘solicitations’ to . . . trademark applicants.” Id. ¶¶ 2, 43. The “‘solicitations’ are constructed to 10 [deceptively] make the trademark applicant believe that an official U.S. government agency or the 11 [United States Patent & Trademark Office (USPTO)] itself is sending a letter to them, raising fear 12 among the unsuspecting public that they must pay large amounts of money or forfeit trademark 13 rights.” Id. ¶ 2. These “Mailer Defendants” provide no real services and “result in no value to 14 trademark owners.” Id. 15 As a result of the Mailer Defendants’ actions, Plaintiff asserts that “significant business” 16 was deceptively diverted to Mailer Defendants. Id. ¶ 198. Plaintiff also alleges that Plaintiff 17 “received inquiries from its clients confused about the unsolicited actions by the Mailer 18 Defendants and worried that [Plaintiff’s] services to the clients were somehow deficient.” Id. 19 ¶ 199. Plaintiff claims that it spent “valuable time and expenses to investigate the facts to 20 appropriately advise its clients.” Id. ¶ 200. 21 Plaintiff alleges that Mailer Defendants “appear to originate . . . [in] countries outside the 22 United States (most frequently from eastern Europe).” Id. ¶ 3. As relevant to the instant motion to 23 dismiss, Plaintiff asserts that “GLOTRADE” is one such “Mailer Defendant,” operates out of the 24 Czech Republic, and sends advertisements or mailers that falsely state that GLOTRADE protects a 25 trademark from copyright infringement when GLOTRADE in fact provides no such services. Id. 26 ¶¶ 78, 83-91. According to Plaintiff, GLOTRADE—because it operates out of the Czech 27 2 1 Republic—must obtain a domestic U.S. mailing address in order to appear as a legitimate 2 organization and to receive payments from its allegedly false advertisements. Id. ¶ 78-79. 3 GLOTRADE relies on Defendant, who is in the business of “provid[ing] a U.S. street address to 4 customers and allow[ing] them to receive mail at a U.S. address that can then be forwarded 5 internationally.” Id. ¶ 80. Plaintiff alleges that Defendant, by allowing GLOTRADE to obtain a 6 U.S. mailing address, helps GLOTRADE “mask[] its true identity from people sending the 7 checks.” Id. ¶ 81. On this basis, Plaintiff claims that Defendant is liable as a “logistics enabler” of 8 GLOTRADE. Id. ¶ 1. 9 Furthermore, Plaintiff alleges that Defendant advertises its mail services to business 10 owners in California. ECF No. 24-2, Exs. 4-5. According to Plaintiff, Defendant has multiple 11 California customers who use Defendant’s mailing services. Id. Defendant, however, is not a 12 California corporation and has no employees in California. ECF No. 18-2 ¶ 11. Defendant is a 13 corporation duly formed under the laws of the State of Texas with a principal place of business in 14 Houston, Texas. Id. ¶¶ 4-5. Defendant has never owned, leased, possessed, or maintained any 15 real or personal property in California, nor has Defendant maintained any bank, savings, or loan 16 accounts in California. Id. ¶¶ 9-10. Finally, Defendant acknowledges that it provided 17 GLOTRADE with a mailing address in Houston, Texas, but notes that Defendant never sent any 18 mail to Plaintiff. Id. ¶¶ 13, 17. 19 B. Procedural History 20 On March 25, 2019, Plaintiff sued eighteen defendants and alleged the following causes of 21 action: (1) violations of the Lanham Act, 15 U.S.C. § 1125(a); (2) violations of California’s False 22 Advertising Law, Cal. Bus. & Prof. Code § 17500; (3) violations of California’s Unfair 23 Competition Law, Cal. Bus. & Prof. Code § 17200; and (4) intentional interference with 24 prospective economic advantage. Compl. ¶¶ 203-61. The eighteen defendants fell into two 25 categories: “Mailer Defendants,” which are entities that directly engaged in the allegedly false 26 advertising; and “Logistics Enablers,” which are companies that provided mailing addresses that 27 3 1 facilitated the allegedly fraudulent conduct. Id. ¶ 1; see generally id. ¶¶ 203-61. 2 To date, Plaintiff has voluntarily dismissed six of the seven “Logistics Enablers” and three 3 of the eleven “Mailer Defendants.” ECF Nos. 16, 25, 28, 33, 42, 48, and 72. Six of the “Mailer 4 Defendants” were served but did not appear, and the Clerk entered default against them. See ECF 5 Nos. 47, 64, and 66. Of the two other Mailer Defendants, one filed a motion to dismiss, and 6 another filed an answer. ECF Nos. 51 and 78. 7 As pertaining to the instant Order, on May 8, 2019, Defendant, who is the sole remaining 8 “Logistics Enabler” Defendant, filed a motion to dismiss for lack of personal jurisdiction. ECF 9 No. 18 (“Mot.”). Plaintiff filed an opposition on May 22, 2019, ECF No. 24 (“Opp.”), and 10 Defendant filed a reply on May 28, 2019, ECF No. 26 (“Reply”). The motion to dismiss is now 11 fully briefed and ripe for adjudication. 12 II. LEGAL STANDARD 13 A. Motion to Dismiss under Rule 12(b)(2) 14 In a motion challenging personal jurisdiction under Federal Rule of Civil Procedure 15 12(b)(2), the plaintiff, as the party seeking to invoke the jurisdiction of the federal court, has the 16 burden of establishing that jurisdiction exists. See Schwarzenegger v. Fred Martin Motor Co., 374 17 F.3d 797, 800 (9th Cir. 2004). When the motion to dismiss constitutes a defendant’s initial 18 response to the complaint, the plaintiff need only make a prima facie showing that personal 19 jurisdiction exists. See Data Disc, Inc. v. Sys. Tech. Assocs., Inc., 557 F.2d 1280, 1285 (9th Cir. 20 1977).
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8 UNITED STATES DISTRICT COURT
9 NORTHERN DISTRICT OF CALIFORNIA 10 SAN JOSE DIVISION 11
12 LEGALFORCE RAPC WORLDWIDE Case No. 19-CV-01538-LHK P.C., 13 Plaintiff, ORDER GRANTING MOTION TO DISMISS FOR LACK OF PERSONAL 14 v. JURISDICTION WITH LEAVE TO AMEND 15 GLOTRADE, et al., Re: Dkt. No. 18 16 Defendants. 17 18 LegalForce RAPC Worldwide, P.C. (“Plaintiff”) sued eighteen defendants, including 19 Worldwide Mail Solutions, Inc. (“Defendant”), for alleged violations of the Lanham Act, 20 California’s False Advertising Law, and California’s Unfair Competition Law, as well as a claim 21 for intentional interference with prospective economic advantage. ECF No. 1. Before the Court is 22 Defendant’s motion to dismiss for lack of personal jurisdiction.1 ECF No. 18. Having considered 23 the submissions of the parties, the relevant law, and the record in this case, the Court GRANTS 24 25 1 Defendant’s motion to dismiss contains a notice of motion that is separately paginated from the 26 memorandum of points and authorities in support of the motion. See Mot. at 1-2. Civil Local Rule 7-2(b) provides that the notice of motion and points and authorities should be contained in 27 one document with a combined limit of 25 pages. See Civ. Loc. R. 7-2(b). 1 1 Defendant’s motion to dismiss with leave to amend. 2 I. BACKGROUND 3 A. Factual Background 4 Plaintiff is a California professional corporation that “offers services including trademark 5 preparation and prosecution, patent preparation and prosecution, copyright registration and 6 counseling, international trademark and patent filings, and corporate formation and stock and 7 equity structuring.” ECF No. 1 at ¶¶ 18,41 (“Compl.”). Plaintiff alleges that companies, termed 8 “Mailer Defendants,” “use publicly available trademark filer information to send targeted 9 ‘solicitations’ to . . . trademark applicants.” Id. ¶¶ 2, 43. The “‘solicitations’ are constructed to 10 [deceptively] make the trademark applicant believe that an official U.S. government agency or the 11 [United States Patent & Trademark Office (USPTO)] itself is sending a letter to them, raising fear 12 among the unsuspecting public that they must pay large amounts of money or forfeit trademark 13 rights.” Id. ¶ 2. These “Mailer Defendants” provide no real services and “result in no value to 14 trademark owners.” Id. 15 As a result of the Mailer Defendants’ actions, Plaintiff asserts that “significant business” 16 was deceptively diverted to Mailer Defendants. Id. ¶ 198. Plaintiff also alleges that Plaintiff 17 “received inquiries from its clients confused about the unsolicited actions by the Mailer 18 Defendants and worried that [Plaintiff’s] services to the clients were somehow deficient.” Id. 19 ¶ 199. Plaintiff claims that it spent “valuable time and expenses to investigate the facts to 20 appropriately advise its clients.” Id. ¶ 200. 21 Plaintiff alleges that Mailer Defendants “appear to originate . . . [in] countries outside the 22 United States (most frequently from eastern Europe).” Id. ¶ 3. As relevant to the instant motion to 23 dismiss, Plaintiff asserts that “GLOTRADE” is one such “Mailer Defendant,” operates out of the 24 Czech Republic, and sends advertisements or mailers that falsely state that GLOTRADE protects a 25 trademark from copyright infringement when GLOTRADE in fact provides no such services. Id. 26 ¶¶ 78, 83-91. According to Plaintiff, GLOTRADE—because it operates out of the Czech 27 2 1 Republic—must obtain a domestic U.S. mailing address in order to appear as a legitimate 2 organization and to receive payments from its allegedly false advertisements. Id. ¶ 78-79. 3 GLOTRADE relies on Defendant, who is in the business of “provid[ing] a U.S. street address to 4 customers and allow[ing] them to receive mail at a U.S. address that can then be forwarded 5 internationally.” Id. ¶ 80. Plaintiff alleges that Defendant, by allowing GLOTRADE to obtain a 6 U.S. mailing address, helps GLOTRADE “mask[] its true identity from people sending the 7 checks.” Id. ¶ 81. On this basis, Plaintiff claims that Defendant is liable as a “logistics enabler” of 8 GLOTRADE. Id. ¶ 1. 9 Furthermore, Plaintiff alleges that Defendant advertises its mail services to business 10 owners in California. ECF No. 24-2, Exs. 4-5. According to Plaintiff, Defendant has multiple 11 California customers who use Defendant’s mailing services. Id. Defendant, however, is not a 12 California corporation and has no employees in California. ECF No. 18-2 ¶ 11. Defendant is a 13 corporation duly formed under the laws of the State of Texas with a principal place of business in 14 Houston, Texas. Id. ¶¶ 4-5. Defendant has never owned, leased, possessed, or maintained any 15 real or personal property in California, nor has Defendant maintained any bank, savings, or loan 16 accounts in California. Id. ¶¶ 9-10. Finally, Defendant acknowledges that it provided 17 GLOTRADE with a mailing address in Houston, Texas, but notes that Defendant never sent any 18 mail to Plaintiff. Id. ¶¶ 13, 17. 19 B. Procedural History 20 On March 25, 2019, Plaintiff sued eighteen defendants and alleged the following causes of 21 action: (1) violations of the Lanham Act, 15 U.S.C. § 1125(a); (2) violations of California’s False 22 Advertising Law, Cal. Bus. & Prof. Code § 17500; (3) violations of California’s Unfair 23 Competition Law, Cal. Bus. & Prof. Code § 17200; and (4) intentional interference with 24 prospective economic advantage. Compl. ¶¶ 203-61. The eighteen defendants fell into two 25 categories: “Mailer Defendants,” which are entities that directly engaged in the allegedly false 26 advertising; and “Logistics Enablers,” which are companies that provided mailing addresses that 27 3 1 facilitated the allegedly fraudulent conduct. Id. ¶ 1; see generally id. ¶¶ 203-61. 2 To date, Plaintiff has voluntarily dismissed six of the seven “Logistics Enablers” and three 3 of the eleven “Mailer Defendants.” ECF Nos. 16, 25, 28, 33, 42, 48, and 72. Six of the “Mailer 4 Defendants” were served but did not appear, and the Clerk entered default against them. See ECF 5 Nos. 47, 64, and 66. Of the two other Mailer Defendants, one filed a motion to dismiss, and 6 another filed an answer. ECF Nos. 51 and 78. 7 As pertaining to the instant Order, on May 8, 2019, Defendant, who is the sole remaining 8 “Logistics Enabler” Defendant, filed a motion to dismiss for lack of personal jurisdiction. ECF 9 No. 18 (“Mot.”). Plaintiff filed an opposition on May 22, 2019, ECF No. 24 (“Opp.”), and 10 Defendant filed a reply on May 28, 2019, ECF No. 26 (“Reply”). The motion to dismiss is now 11 fully briefed and ripe for adjudication. 12 II. LEGAL STANDARD 13 A. Motion to Dismiss under Rule 12(b)(2) 14 In a motion challenging personal jurisdiction under Federal Rule of Civil Procedure 15 12(b)(2), the plaintiff, as the party seeking to invoke the jurisdiction of the federal court, has the 16 burden of establishing that jurisdiction exists. See Schwarzenegger v. Fred Martin Motor Co., 374 17 F.3d 797, 800 (9th Cir. 2004). When the motion to dismiss constitutes a defendant’s initial 18 response to the complaint, the plaintiff need only make a prima facie showing that personal 19 jurisdiction exists. See Data Disc, Inc. v. Sys. Tech. Assocs., Inc., 557 F.2d 1280, 1285 (9th Cir. 20 1977). While a plaintiff cannot “simply rest on the bare allegations of its complaint, 21 uncontroverted allegations in the complaint must be taken as true [and] [c]onflicts between parties 22 over statements contained in affidavits must be resolved in the plaintiff’s favor.” Schwarzenegger, 23 374 F.3d at 800 (quotation marks and citations omitted). 24 B. Motion to Dismiss under Rule 12(b)(6) 25 Rule 8(a)(2) of the Federal Rules of Civil Procedure requires a complaint to include “a 26 short and plain statement of the claim showing that the pleader is entitled to relief.” A complaint 27 4 1 that fails to meet this standard may be dismissed pursuant to Federal Rule of Civil Procedure 2 12(b)(6). The U.S. Supreme Court has held that Rule 8(a) requires a plaintiff to plead “enough 3 facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 4 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content 5 that allows the court to draw the reasonable inference that the defendant is liable for the 6 misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “The plausibility standard is 7 not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant 8 has acted unlawfully.” Id. (internal quotation marks omitted). For purposes of ruling on a Rule 9 12(b)(6) motion, the Court “accept[s] factual allegations in the complaint as true and construe[s] 10 the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & 11 Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). 12 The Court, however, need not “assume the truth of legal conclusions merely because they 13 are cast in the form of factual allegations.” Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) 14 (per curiam) (internal quotation marks omitted). Mere “conclusory allegations of law and 15 unwarranted inferences are insufficient to defeat a motion to dismiss.” Adams v. Johnson, 355 16 F.3d 1179, 1183 (9th Cir. 2004). 17 C. Leave to Amend 18 If the Court determines that a complaint should be dismissed, it must then decide whether 19 to grant leave to amend. Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to 20 amend “shall be freely given when justice so requires,” bearing in mind “the underlying purpose 21 of Rule 15 to facilitate decisions on the merits, rather than on the pleadings or technicalities.” 22 Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (alterations and internal quotation 23 marks omitted). When dismissing a complaint for failure to state a claim, “a district court should 24 grant leave to amend even if no request to amend the pleading was made, unless it determines that 25 the pleading could not possibly be cured by the allegation of other facts.” Id. at 1130 (internal 26 quotation marks omitted). Accordingly, leave to amend generally shall be denied only if allowing 27 5 1 amendment would unduly prejudice the opposing party, cause undue delay, or be futile, or if the 2 moving party has acted in bad faith. Leadsinger, Inc. v. BMG Music Publ’g, 512 F.3d 522, 532 3 (9th Cir. 2008). 4 III. DISCUSSION 5 A. Personal Jurisdiction 6 Defendant contends that Plaintiff fails to allege personal jurisdiction over Defendant. 7 “Where a defendant moves to dismiss a complaint for lack of personal jurisdiction, the plaintiff 8 bears the burden of demonstrating that jurisdiction is appropriate.” Schwarzenegger, 374 F.3d at 9 800. “Where, as here, the motion is based on written materials rather than an evidentiary hearing, 10 the plaintiff need only make a prima facie showing of jurisdictional facts. In such cases, we only 11 inquire into whether [the plaintiff’s] pleadings and affidavits make a prima facie showing of 12 personal jurisdiction.” Id. (quotation marks omitted). 13 To determine the propriety of asserting personal jurisdiction over a defendant, the Court 14 examines whether such jurisdiction is permitted by the applicable state’s long-arm statute and 15 comports with the demands of federal due process. Harris Rutsky & Co. Ins. Servs., Inc. v. Bell & 16 Clements, Ltd., 328 F.3d 1122, 1129 (9th Cir. 2003) (determining scope of California’s long-arm 17 statute and examining federal due process requirements). California’s long-arm statute, Cal. Civ. 18 Proc. Code § 410.10, is coextensive with federal due process requirements, and therefore the 19 jurisdictional analyses under state law and federal due process merge into one. See Cal. Civ. Proc. 20 Code § 410.10 (“[A] court of this state may exercise jurisdiction on any basis not inconsistent with 21 the Constitution of this state or of the United States.”); Mavrix Photo, Inc. v. Brand Techs., Inc., 22 647 F.3d 1218, 1223 (9th Cir. 2011) (“California’s long-arm statute, Cal. Civ. Proc. Code 23 § 410.10, is coextensive with federal due process requirements, so the jurisdictional analyses 24 under state law and federal due process are the same.”). For a court to exercise personal 25 jurisdiction over a defendant consistent with due process, that defendant must have “certain 26 minimum contacts” with the relevant forum “such that the maintenance of the suit does not offend 27 6 1 traditional notions of fair play and substantial justice.” Int’l Shoe Co. v. Washington, 326 U.S. 2 310, 316 (1945) (quotation marks omitted). In addition, “the defendant’s ‘conduct and connection 3 with the forum State’ must be such that the defendant ‘should reasonably anticipate being haled 4 into court there.’” Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990) (quoting World-Wide 5 Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)). 6 Courts “recognize[] two types of personal jurisdiction: ‘general’ (sometimes called ‘all- 7 purpose’) jurisdiction and ‘specific’ (sometimes called ‘case-linked’) jurisdiction.” Bristol-Myers 8 Squibb Co. v. Superior Court of Cal., San Francisco Cty., 137 S. Ct. 1773, 1779 (2017) (quoting 9 Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 918 (2011)). General 10 jurisdiction exists where a defendant is physically present or where a defendant’s activities in the 11 state are so “continuous and systematic” such that the contacts approximate physical presence in 12 the forum state. See Schwarzenegger, 374 F.3d at 801 (citation omitted). “A court with general 13 jurisdiction may hear any claim against that defendant, even if all the incidents underlying the 14 claim occurred in a different State,” “[b]ut only a limited set of affiliations with a forum will 15 render a defendant amenable to general jurisdiction in that State.” Id. at 1780. Plaintiff does not 16 allege that general jurisdiction is proper here. 17 Rather, Plaintiff contends that the Court has specific jurisdiction over Defendant. Opp. at 18 6. Specific jurisdiction is proper when a suit “aris[es] out of or relate[s] to the defendant’s 19 contacts with the forum.” Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 20 n.8 (1984). Whether a court has specific jurisdiction over a nonresident defendant “focuses on the 21 relationship among the defendant, the forum, and the litigation,” and “the defendant’s suit-related 22 conduct must create a substantial connection with the forum.” Walden v. Fiore, 571 U.S. 277, 285 23 (2014). “When there is no such connection, specific jurisdiction is lacking regardless of the extent 24 of a defendant’s unconnected activities in the State.” Bristol-Myers, 137 S. Ct. at 1781; see 25 Goodyear, 564 U.S. at 931 n.6 (“[E]ven regularly occurring sales of a product in a State do not 26 justify the exercise of jurisdiction over claims unrelated to those sales.” (emphasis added)). 27 7 1. Specific Jurisdiction 1 For specific jurisdiction, the Ninth Circuit has adopted a three-prong test that requires the 2 plaintiff to show that: (1) the defendant purposefully directed its activities at residents of the forum 3 or purposefully availed itself of the privilege of doing business in the forum; (2) the plaintiff’s 4 claim arises out of or relates to those activities; and (3) the assertion of personal jurisdiction is 5 reasonable and fair. Schwarzenegger, 374 F.3d at 802. It is the plaintiff’s burden to plead 6 allegations satisfying the first two prongs. Id. If the plaintiff does so, the burden shifts to the 7 defendant to show why the exercise of personal jurisdiction would not be reasonable and fair. Id. 8 The parties contest all three prongs of the specific jurisdiction test. Mot. at 5-8; Opp. at 5- 9 13. The Court holds that specific jurisdiction—and therefore personal jurisdiction—is absent here 10 because Plaintiff fails to allege that the claims arise out of or relate to Defendant’s forum-related 11 activities. Because the Court resolves this case on the second prong of specific jurisdiction 12 inquiry, the Court declines to address the arguments pertaining to the first and third prongs. 13 a. Arise Out of Defendant’s Forum-Related Activities 14 Plaintiff bears the burden of demonstrating that jurisdiction is appropriate, and specifically, 15 that Plaintiff’s claims arise out of or relate to Defendant’s forum-related activities. 16 Schwarzenegger, 374 F.3d at 800, 802. The Ninth Circuit applies a “but for” test to analyze the 17 “arises out of” requirement. Menken v. Emm, 503 F.3d 1050, 1058 (9th Cir. 2007). Under this 18 inquiry, a “plaintiff must show that ‘but for’ the defendant’s forum-related conduct, the injury 19 would not have occurred.” San Diego Cty. Credit Union v. Citizens Equity First Credit Union, 20 325 F. Supp. 3d 1088, 1101 (S.D. Cal. 2018) (quotation marks omitted). 21 Plaintiff asserts that it satisfies the “arises out of” requirement because Defendant provides 22 GLOTRADE with a Houston, Texas address “to aid and abet the deception on consumers while 23 actively masking the true foreign origin of GLOTRADE.” Opp. at 12. Additionally, Plaintiff 24 contends that Defendant “forwards all mail and ill-gotten checks it receives on behalf of” 25 GLOTRADE. Id. Therefore, according to Plaintiff, “but for [Defendant] masking GLOTRADE’s 26 true mail address by providing GLOTRADE with a domestic address, there would be significantly 27 8 1 fewer people, if any, who would be deceived, . . . including consumers in California.”2 Id. (citing 2 Compl. ¶ 169). 3 Plaintiff’s reasoning is flawed because Plaintiff misidentifies the proper subject of the “but 4 for” inquiry. Under Plaintiff’s argument, personal jurisdiction is proper due to GLOTRADE’s 5 forum-related activities—namely, the “GLOTRADE s.r.o solicitations” to Plaintiff and other 6 California consumers. But the proper inquiry is whether Defendant’s forum-related activities are a 7 but-for cause of Plaintiff’s claims and injuries. 8 In regards to Defendant’s forum-related activities, “we must look to the defendant’s ‘own 9 contacts’ with the forum, not to the defendant’s knowledge of a plaintiff’s connections to a 10 forum.” Axiom Foods, Inc. v. Acerchem Int’l, Inc., 874 F.3d 1064, 1070 (9th Cir. 2017) (citing 11 Walden, 571 U.S. at 289-90); see id. at 1068 (“[T]he relationship between the nonresident 12 defendant, the forum, and the litigation must arise out of contacts that the defendant himself 13 creates with the forum State.” (quotation marks omitted)). Plaintiff can only point to 14 advertisements on Defendant’s website that promote Defendant’s mail services to California 15 consumers. Opp. at 10. The problem, however, is that as alleged in the complaint, Defendant’s 16 advertising of its mail services to California consumers is not a but-for cause of Plaintiff’s claims 17 and injuries. Rather, the complaint only alleges that Defendant’s non-forum-related activities in 18 Texas—namely the provision of a mailing address and forwarding services to a foreign entity— 19 are connected to Plaintiff’s claims and injuries. In effect, Plaintiff’s argument appears to be that 20 specific jurisdiction is proper because Defendant advertises its services to California residents. 21 However, Plaintiff’s claims do not arise out of these forum contacts. But-for Defendant’s 22 provision of a Texas mailing address to GLOTRADE, Plaintiff would not have been harmed by 23 GLOTRADE’s alleged misconduct. 24
25 2 Plaintiff proffers an exhibit that provides copies of GLOTRADE mailers sent to Plaintiff in California that include a Houston, Texas address allegedly provided by Defendant. ECF No. 24-2, 26 Ex. 1. But Plaintiff acknowledges that these mailers were “GLOTRADE s.r.o. solicitations” and were not sent by Defendant. ECF No. 24-1 ¶ 3. Defendant filed a declaration stating that 27 Defendant “did not send any mail to” Plaintiff. ECF No. 18-2 at 3. 9 1 Plaintiff’s argument is woefully insufficient for specific jurisdiction. The United States 2 Supreme Court has repeatedly reiterated that it is “the defendant’s suit-related conduct [that] must 3 create a substantial connection with the forum.” Walden, 571 U.S. at 285. “When there is no such 4 connection, specific jurisdiction is lacking regardless of the extent of a defendant’s unconnected 5 activities in the State.” Bristol-Myers, 137 S. Ct. at 1781; see also Goodyear, 564 U.S. at 931 n.6 6 (“[E]ven regularly occurring sales of a product in a State do not justify the exercise of jurisdiction 7 over claims unrelated to those sales.” (emphasis added)). Indeed, Bristol-Myers is particularly 8 instructive to this case. 9 In Bristol-Myers, the California Supreme Court held that specific jurisdiction was proper 10 because “the strength of the requisite connection between the forum and the specific claims at 11 issue [could be] relaxed [because] the defendant ha[d] extensive forum contacts that [were] 12 unrelated to those claims.” 137 S. Ct. at 1781. The United States Supreme Court reversed, 13 concluding that “[f]or specific jurisdiction, a defendant’s general connections with the forum are 14 not enough,” and that rather, “there must be an affiliation between the forum and the underlying 15 controversy, principally, an activity or an occurrence that takes place in the forum State.” Id. 16 (quotation marks and internal alterations omitted). A contrary holding, the United States Supreme 17 Court held, would conflate specific and general jurisdiction and elide important distinctions 18 between the two. See id. (“Under the California [Supreme Court’s] approach, the strength of the 19 requisite connection between the forum and the specific claims at issue is relaxed if the defendant 20 has extensive forum contacts that are unrelated to those claims. Our cases provide no support for 21 this approach, which resembles a loose and spurious form of general jurisdiction.”). 22 None of Defendant’s forum-related activities—principally, Defendant’s alleged internet 23 advertising of its services to California residents—can plausibly be characterized as a but-for 24 cause of Plaintiff’s claims and injuries. Plaintiff’s claims and injuries did not arise just because 25 Defendant happened to advertise on the internet its mailing services to California consumers 26 uninvolved in the instant case. This conclusion is especially true given that GLOTRADE—the 27 10 1 Mailer Defendant responsible for the allegedly fraudulent conduct that directly harmed Plaintiff— 2 is not located in California but in the Czech Republic. Compl. ¶ 78. Until Plaintiff can plausibly 3 allege a chain of causation connecting Defendant’s advertisement of its services to Plaintiff’s 4 claims and alleged injuries, personal jurisdiction is absent. 5 Accordingly, the Court GRANTS Defendant’s motion to dismiss for lack of personal 6 jurisdiction. Nonetheless, because granting Plaintiff an additional opportunity to amend the 7 complaint would not be futile, cause undue delay, or unduly prejudice Defendants, and Plaintiff 8 has not acted in bad faith, the Court GRANTS Plaintiff leave to amend. See Leadsinger, Inc., 512 9 F.3d at 532. 10 2. Jurisdictional Discovery and Defendant’s Evidentiary Objections 11 Plaintiff makes a request for jurisdictional discovery in the event the Court determines that 12 Plaintiff has not sufficiently pleaded facts to support personal jurisdiction. Opp. at 14. 13 “[D]iscovery should ordinarily be granted where pertinent facts bearing on the question of 14 jurisdiction are controverted or where a more satisfactory showing of the facts is necessary.” Laub 15 v. U.S. Dep’t of the Interior, 342 F.3d 1080, 1093 (9th Cir. 2003) (quotation marks omitted). A 16 court can deny jurisdictional discovery, however, “when it is clear that further discovery would 17 not demonstrate facts sufficient to constitute a basis for jurisdiction,” Am. W. Airlines, Inc. v. 18 GPA Group, Ltd., 877 F.2d 793, 801 (9th Cir. 1989) (quotation marks omitted), or where the 19 request for discovery is “based on little more than a hunch that it might yield jurisdictionally 20 relevant facts,” Boschetto v. Hansing, 539 F.3d 1011, 1020 (9th Cir. 2008). 21 The Court notes that Defendant opposes jurisdictional discovery for the first time in its 22 reply, Reply at 10-11, and the Court “need not consider arguments raised for the first time in a 23 reply brief,” Zamani v. Carnes, 491 F.3d 990, 997 (9th Cir. 2007). The Court also notes that it 24 would allow jurisdictional discovery in any event because discovery could demonstrate facts 25 sufficient to confer jurisdiction. See Am. W. Airlines, Inc., 877 F.2d at 801. The Court therefore 26 permits jurisdictional discovery. 27 11 1 With regard to Defendant’s evidentiary objections, see Reply at 11, the Court DENIES 2 Defendant’s objections as moot. The Court considered the exhibits to which Defendant objected 3 and still concluded that there was no basis for personal jurisdiction. 4 IV. CONCLUSION 5 For the foregoing reasons, the Court GRANTS Defendant’s motion to dismiss for lack of 6 personal jurisdiction with leave to amend. Plaintiff shall file any amended complaint within 30 7 days of this Order. Failure to file an amended complaint within 30 days or failure to cure the 8 deficiencies identified herein or in Defendant’s motion to dismiss will result in dismissal of 9 Plaintiff’s claims with prejudice. Plaintiff may not add new causes of action or parties without a 10 stipulation or leave of the Court. 11 IT IS SO ORDERED. 12 13 Dated: October 23, 2019 14 ______________________________________ LUCY H. KOH 15 United States District Judge 16 17 18 19 20 21 22 23 24 25 26 27 12