N2 Packaging Systems LLC v. N2 Pack Canada Incorporated

• Court: District Court, D. Arizona
• Decided: May 15, 2020
• Docket: 2:19-cv-02351
• Status: Unknown

Opinion

1 WO 2

6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8

9 N2 Packaging Systems, LLC, an Arizona No. CV-19-02351-PHX-NVW 10 limited liability company,

11 Plaintiff,

12 v. ORDER

13 N2 Pack Canada Inc., an unincorporated fictitious entity; Eric Marciniak, 14 individually; Brendan Pogue, individually; Alejo Abellan aka Alex Abellan, 15 individually; Chakra Cannabis Corp., a Canadian federal corporation; and DOES 1- 16 10, inclusive,

17 Defendants. 18 1079765 B.C. Limited d/b/a N2 Pack Canada, Inc., a British Columbia entity; Eric 19 Marciniak; Brendan Pogue; Alejo Abellan 20 aka Alex Abellan; Chakra Cannabis Corp., a Canadian federal corporation, 21 Counterclaimants, 22 v. 23 N2 Packaging Systems, LLC, an Arizona 24 limited liability company,

25 Counter-defendant.

27 28 1 Before the Court are Plaintiff and Counter-defendant N2 Packaging Systems, LLC’s 2 Motion for Leave to Amend First Amended Complaint (Doc. 72) and the opposition of 3 Defendants and Counterclaimants Eric Marciniak, Brendan Pogue, Alejo Abellan aka Alex 4 Abellan, and Chakra Cannabis Corp., and of Counterclaimant 1079765 B.C. Limited d/b/a 5 N2 Pack Canada, Inc. (Doc. 73). The motion will be denied. 6 I. BACKGROUND 7 N2 Packaging alleges it has a proprietary process for packaging certain controlled 8 substances (the Proprietary Process). This litigation concerns an alleged scheme among 9 Defendants and a nonparty to misappropriate the Proprietary Process. 10 A. Procedural History 11 N2 Packaging brought the Original Complaint on February 22, 2019 in the Arizona 12 Superior Court in and for Maricopa County alleging claims against N2 Pack, Marciniak, 13 Pogue, Abellan (the Original Defendants) and fictitious parties for (1) breach of contract, 14 (2) breach of the implied covenant of good faith and fair dealing, (3) alter ego, (4) patent 15 infringement, (5) inducement of patent infringement abroad, (6) violation of Section 43(a) 16 of the Lanham Act, and (7) violation of A.R.S. § 44-1522. The action was removed to this 17 Court. 18 Eight days later, N2 Packaging filed the First Amended Complaint and a motion to 19 remand. The First Amended Complaint (1) added Chakra as a defendant, (2) added breach 20 of contract claims against Abellan and Chakra, (3) added a claim for tortious interference 21 with contract against Abellan, (4) added a fraud in the inducement claim against Abellan, 22 (5) added a fraud in the inducement claim against Abellan, Marciniak, and Pogue, and (6) 23 added a punitive damage claim. Notably, it also attempted to remove the patent claims and 24 the Lanham Act claim. 25 N2 Packaging argued for remand under an exclusive forum selection clause in the 26 N2 Pack Canada Supply Agreement. The Court denied remand because the First Amended 27 Complaint, in substance, retained N2 Packaging’s patent infringement claims, over which 28 federal courts have exclusive jurisdiction. While N2 Packaging purported to delete the 1 patent infringement claims, it relabeled the patents as “intellectual property” and alleged 2 them in detail. 3 Defendants also moved to dismiss the First Amended Complaint for lack of personal 4 jurisdiction over Marciniak and Pogue and failure to state a claim for alter ego, punitive 5 damages, and A.R.S. § 44-1522, the latter of which N2 Packaging withdrew. The motion 6 was denied because Marciniak and Pogue were personally bound by the consent to personal 7 jurisdiction in Arizona in the Supply Agreement. Though they signed the Supply 8 Agreement in the name of N2 Pack, they never formed it and were therefore individually 9 bound by that contract under promoter liability. Arizona personal jurisdiction over 10 Marciniak and Pogue flows from their consent in the Supply Agreement. 11 On November 8, 2019, Defendants answered the First Amended Complaint and, 12 along with B.C. Limited, pleaded counterclaims against Plaintiff for (1) breach of contract, 13 (2) breach of the implied covenant of good faith and fair dealing, (3) a declaration of non- 14 infringement of United States Patent No. 8,863,947, and (4) a declaration of no confidential 15 information or trade secret in published patent and/or patent application. 16 Discovery, however, was already underway. The parties exchanged disclosures that 17 “may be relevant to any party’s claims or defenses.” (Doc. 4 at 7.) On December 20, 2019, 18 Defendants served discovery requests on N2 Packaging. Supplemental disclosures were 19 served by all parties in January and February 2020. 20 At the case management conference on February 6, 2020, N2 Packaging stated it 21 would likely move to file another amended complaint to “clarify the claims and the facts 22 of which each arise.” (Doc. 67 at 17:4.) The case management order set March 6, 2020 as 23 the deadline for filing a motion for leave to amend, August 28, 2020 for completion of fact 24 discovery, and November 20, 2020 for completion of expert discovery. N2 Packaging 25 moved to file the proposed Second Amended Complaint. 26 B. The Second Amended Complaint 27 The Second Amended Complaint again aims to transform this case. It would 28 “clarify the factual basis for causes of action previously stated,” add Nitrotin, Inc., as an 1 additional defendant, and “assert additional causes of action against Nitrotin relating to 2 Nitrotin’s misappropriation of N2 Packaging’s trade secrets and confidential information.” 3 (Doc. 72 at 2.) But the Second Amended Complaint would do much more. It would also 4 (1) convert the tortious interference with contract claim against Abellan into tortious 5 interference with business expectancy claim against Abellan, Marciniak, and Pogue, (2) 6 convert the fraud in the inducement claim against Abellan into a fraud claim, (3) convert 7 the fraud in the inducement claim against Abellan, Marciniak, and Pogue into a fraud claim, 8 and (4) add one trade secret misappropriation claim under the federal Defend Trade Secrets 9 Act and another under the Arizona Uniform Trade Secrets Act. 10 This addition of two trade secret claim shows how substantially the Second 11 Amended Complaint departs from the first. N2 Packaging (1) removes most of the 12 contentions regarding its patents, including all of the patent descriptions, (2) adds sections 13 titled “Plaintiff’s Equipment Trade Secrets” and “Confidential Information under the N2 14 Canada Supply Agreement,” and (3) adds two sections concerning Nitrotin’s conduct. 15 Many of the allegations, including those in support of the legacy causes of action, reflect 16 the assets that are now centerstage, N2 Packaging’s “Confidential Information.” (See, e.g., 17 Doc. 72-1 at ¶¶ 201-02.) 18 II. DISCUSSION 19 “The court should freely give leave [to amend] when justice so requires.” Fed. R. 20 Civ. P. 15(a)(2). This policy is applied with “extreme liberality.” Owens v. Kaiser Found. 21 Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001).1 However, leave “is not to be granted 22 automatically.” In re W. States Wholesale Nat. Gas Antitrust Litig., 715 F.3d 716, 738 (9th 23 Cir. 2013). Five factors are to be considered on whether to grant leave to amend: “undue 24 delay, the movant’s bad faith or dilatory motive, repeated failure to cure deficiencies by 25 amendments previously allowed, undue prejudice to the opposing party, and futility.” 26 Brown v. Stored Value Cards, Inc., 953 F.3d 567, 574 (9th Cir. 2020) (citing Foman v. 27

28 1 Unless otherwise indicated, in citing cases, all internal alterations, emphases, footnotes, quotation marks, and citations are omitted. 1 Davis, 371 U.S. 178, 182 (1962)). While prejudice carries the most weight, id., “the court’s 2 discretion to deny such leave is particularly broad where the plaintiff has previously 3 amended its complaint.” Ecological Rights Found. v. Pac. Gas and Elec. Co., 713 F.3d 4 502, 520 (9th Cir. 2013). 5 First, Defendants say N2 Packaging, having already amended their pleading once, 6 unduly delayed in raising its new allegations and amending a second time would prejudice 7 them. Second, they say amendment would be futile, as Nitrotin is not subject to personal 8 jurisdiction in Arizona. Both objections are well taken. 9 A. Undue Delay and Prejudice 10 Prejudice is the “touchstone of the inquiry under rule 15(a),” and absent prejudice 11 or a strong showing of the remaining factors, “there exists a presumption under Rule 15(a) 12 in favor of granting leave to amend.” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 13 1048, 1052 (9th Cir. 2003). This is not to say the other factors are unimportant— 14 particularly delay. See Lockheed Martin Corp. v. Network Sols., Inc., 194 F.3d 980, 986 15 (9th Cir. 1999) (“Although delay is not a dispositive factor in the amendment analysis, it 16 is relevant, especially when no reason is given for the delay.”). For instance, one type of 17 prejudice is “the burden of necessary future discovery.” See Jackson v. Bank of Haw., 902 18 F.2d 1385, 1387-88 (9th Cir. 1990); see also Priddy v. Edelman, 883 F.2d 438, 447 (6th 19 Cir. 1989) (“Putting the defendants through the time and expense of continued litigation 20 on a new theory, with the possibility of additional discovery, would be manifestly unfair 21 and unduly prejudicial.”). This type of prejudice can result from a delayed motion for leave 22 to amend. See, e.g., Lockheed Martin, 194 F.3d at 986 (“A need to reopen discovery and 23 therefore delay the proceedings supports a district court’s finding of prejudice from a 24 delayed motion to amend the complaint.”). In addition, even if a delayed motion for leave 25 is made well before the close of discovery, opposing parties can still be prejudiced by 26 having to scramble to address new theories and allegations and resultingly incur high, 27 additional litigation costs that could have been avoided had the moving party pursued such 28 theories and allegations in its original complaint. See AmerisourceBergen Corp. v. 1 Dialysist W., Inc., 465 F.3d 946, 953-54 (9th Cir. 2006) (finding the district court did not 2 abuse its discretion in denying a motion for leave to amend when the motion was made 3 with eight months of discovery remaining). 4 In evaluating undue delay, the court should inquire “whether the moving party knew 5 or should have known the facts and theories raised by the amendment in the original 6 pleading.” Id. at 953. Whether a motion to amend is filed within the time allowed by a 7 scheduling order is not dispositive. Id. at 952-53. 8 N2 Packaging’s new allegations concerning Defendants are untimely and would 9 prejudice Defendants and B.C. Limited. The Second Amended Complaint was proposed 10 thirteen months into this lawsuit and is based on facts known or knowable to N2 Packaging 11 in February 2019. Indeed, N2 Packaging already alleged Defendants “misappropriated 12 confidential information and trade secrets from Plaintiff to Nitrotin.” (Doc. 72 at 2.) 13 Moreover, the First Amended Complaint is replete with allegations regarding the conduct 14 that is now being given a new legal sheen—Defendants’ creation of Nitrotin and Nitrotin’s 15 successful attempts to pass off N2 Packaging’s packaging systems as its own. (See 16 generally Doc. 9 at ¶¶ 92-116.) 17 That new legal sheen would transform this case. Though N2 Packaging contends 18 the Second Amended Complaint would merely “clarify the allegations” in the First 19 Amended Complaint and not introduce “new concepts to this litigation,” it would change 20 the rights on which many of N2 Packaging’s claims are based. Indeed, numerous contract- 21 based claims in the First Amended Complaint are founded on Defendants’ alleged 22 misappropriation of N2 Packaging’s “Intellectual Property”—which is defined as five 23 patents that are detailed therein. (See Doc. 9 at ¶¶ 25, 28, 31, 34, 37 n.1, 38.) These claims, 24 notwithstanding their labels, “are rights of action under the patents . . . [that] necessarily 25 require resolution of Plaintiff’s patent rights which are necessary elements of express or 26 implied agreements not to infringe the Intellectual Property/Patent rights.” N2 Packaging 27 Sys. LLC v. N2 Pack Canada Inc., No. CV-19-02351-PHX-NVW, 2019 WL 8326681, at 28 *1 (D. Ariz. June 12, 2019). 1 However, the Second Amended Complaint does not mention these patents. Rather, 2 they primarily concern different assets, N2 Packaging’s “Confidential Information”2 (see, 3 e.g., Doc. 72-1 at ¶¶ 201-02), and “trade secret modifications.” (Doc. 72-1 at ¶ 36.) For 4 example, while the breach of contract claim in Count 1 of the First Amended Complaint 5 alleges N2 Pack Canada, Abellan, Marciniak, and Pogue breached section 11(1) of the 6 Supply Agreement in part by providing certain individuals and entities “with access to the 7 Proprietary Process and N2 Packaging’s Intellectual Property,” (id. at ¶ 123), that same 8 claim in the Second Amended Complaint does not refer to “Intellectual Property.” (See 9 generally Doc. 172-1 at ¶¶ 167-76.) Instead, it states N2 Pack Canada, Abellan, Marciniak, 10 and Pogue breached section 11 of the Supply Agreement in part by “improperly disclosing 11 Confidential Information related to the Proprietary Process.” (Id. at ¶ 172.) These claims 12 are no longer “rights of action under patents.” See N2 Packaging Sys. LLC, 2019 WL 13 8326681, at *1. 14 Further, the Second Amended Complaint would prejudice Defendants and B.C. 15 Limited. They have already spent months conducting discovery on the claims in the First 16 Amended Complaint, as they have propounded their disclosure responses and written 17 discovery. They have also received discovery requests from N2 Packaging. Now, they 18 would be forced to begin discovery on the claims in the Second Amended Complaint with 19 only months to go until the close of discovery. “Justice does not so require[]” forcing them 20 to scramble to address N2 Packaging’s latest theory of the case. See Fed. R. Civ. P. 21 15(a)(2). 22 2 N2 Packaging’s “Confidential Information” that was shared with the N2 23 Canada Defendants include, but is not limited to: the N2 Packaging Equipment Trade Secrets; confidential business leads; information relating 24 to N2 Packaging’s manufacturers; policies and procedures; internal product testing and design information; N2 proposed patent modifications, 25 betterments, and improvements; confidential customer information; business plans; business and financial projections; business models; marketing 26 strategies and plans; internal business practices; business contracts and other confidential business documentation; research and development information; 27 consumer survey information; training manuals; confidential vendor information; and confidential compliance documentation. 28 (Doc. 72-1 at ¶ 89.) 1 In the Court’s discretion and in the detailed context of this litigation, N2 Packaging 2 will be denied leave to amend their allegations regarding Defendants. 3 B. Futility 4 “Where the legal basis for a cause of action is tenuous, futility supports the refusal 5 to grant leave to amend.” Lockheed Martin, 194 F.3d at 986. “Futility of amendment can, 6 by itself, justify the denial of a motion for leave to amend.” Gonzalez v. Planned 7 Parenthood of L.A., 759 F.3d 1112, 1116 (9th Cir. 2014). “[L]eave to amend should be 8 denied as futile only if no set of facts can be proved under the amendment to the pleadings 9 that would constitute a valid and sufficient claim or defense.” Barahona v. Union Pac. 10 R.R. Co., 881 F.3d 1122, 1134 (9th Cir. 2018). 11 Leave to amend to add claims against Nitrotin must be denied as futile. Allegations 12 in the Second Amended Complaint demonstrate that Nitrotin is subject to jurisdiction in 13 other states and therefore is not subject to personal jurisdiction in this Arizona federal court 14 under Federal Rule of Civil Procedure 4(k)(2). 15 1. Rule 4(k)(2) Does Not Give Jurisdiction Over Nitrotin in Arizona 16 Because Utah and Idaho Courts Have Jurisdiction 17 Personal jurisdiction can be established under Rule 4(k)(1) or Rule 4(k)(2). Rule 18 4(k)(1) is not relevant to this case, as Nitrotin is not subject to general or specific 19 jurisdiction in Arizona. But N2 Packaging argues Nitrotin is subject to the jurisdiction of 20 this Court (or any federal district court) under Rule 4(k)(2), which states: 21 Federal Claim Outside State-Court Jurisdiction. For a claim that arises under federal law, serving a summons or filing a waiver of service establishes 22 personal jurisdiction over a defendant if: (A) the defendant is not subject to 23 jurisdiction in any state’s courts of general jurisdiction; and (B) exercising jurisdiction is consistent with the United States Constitution and laws. 24 “First, the claim against the defendant must arise under federal law. Second, the 25 defendant must not be subject to the personal jurisdiction of any state court of general 26 jurisdiction. Third, the federal court's exercise of personal jurisdiction must comport with 27 due process.” Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1159 (9th Cir. 2006). Rule 28 1 4(k)(2) “provides for what amounts to a federal long-arm statute in a narrow band of cases 2 in which the United States serves as the relevant forum for a minimum contacts analysis.” 3 Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain Co., 284 F.3d 1114, 1126 (9th 4 Cir. 2002) (citing Fed. R. Civ. P. 4(k)(2) advisory committee’s note to 1993 Amendment). 5 “The due process analysis under Rule 4(k)(2) is nearly identical to traditional personal 6 jurisdiction analysis with one significant difference: rather than considering contacts 7 between the [foreign] entities and the forum state, we consider contacts with the nation as 8 a whole.” Holland Am. Line Inc. v. Wartsila N. Am., Inc., 485 F.3d 450, 462 (9th Cir. 9 2007). 10 Here, the first and third requirements are not in play. At least one of N2 Packaging’s 11 proposed claims against Nitrotin arises under federal law, and Defendants and B.C. Limited 12 do not contest that it would comport with due process for the United States to exercise 13 jurisdiction over that claim against Nitrotin. At issue is the second requirement of Rule 14 4(k)(2) that the claim against Nitrotin not be within the jurisdiction of any state’s courts of 15 general jurisdiction. 16 The allegations in the Second Amended Complaint itself subject Nitrotin to the 17 personal jurisdiction of Utah and Idaho courts for N2 Packaging’s federal claim. N2 18 Packaging alleges Nitrotin fulfilled an order for a customer in California (Doc. 72-1 at ¶ 19 162), has solicited a prospective customer in Kentucky (id. at ¶ 165), and has installers 20 working in Utah and Idaho (id. at ¶ 164). Courts in Utah and Idaho can exercise 21 jurisdiction over Nitrotin because Nitrotin has employees in those states contributing to 22 Nitrotin’s misappropriation of N2 Packaging’s trade secrets. See, e.g., Island Tobacco Co. 23 v. R.J. Reynolds Indus., Inc., 513 F. Supp. 726, 739 (D. Haw. 1981) (“Personal jurisdiction 24 will be found when foreign corporations have placed their employees within the forum 25 state.” (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 295 (1980)); cf. 26 Wood v. Kinetic Sys., Inc., No. CV 09-575-S-CWD, 2010 WL 893647, at *6 (D. Idaho 27 Mar. 9, 2010) (finding the defendant “purposefully availed itself of the privilege of 28 1 conducting activities in Idaho by hiring an Idaho employee and maintaining the ability to 2 do business as a contractor in Idaho”). It is a closer question whether Nitrotin is subject to 3 jurisdiction in California or Kentucky for the federal claim, but the question need not be 4 answered, given the dispositive allegations regarding Utah and Idaho. 5 As N2 Packaging’s allegations show Nitrotin is subject to the personal jurisdiction 6 of Utah and Idaho courts, Rule 4(k)(2) cannot apply and does not confer jurisdiction over 7 Nitrotin in this federal court or in any federal court. That is the end of the discussion and 8 requires denial of N2 Packaging’s attempt to add Nitrotin as a defendant. 9 2. Rule 4(k)(2) Does Not Require an Absent Foreign Defendant to 10 Stipulate to Jurisdiction in Another State to Defeat Jurisdiction in any District under that Rule 11 That should be the end of the discussion to reject the claim of Rule 4(k)(2) 12 jurisdiction. But more discussion is appropriate to explain the etiology of N2 Packaging’s 13 bold contention that the second requirement of Rule 4(k)(2) jurisdiction can be defeated 14 only by the absentee foreign defendant stipulating to jurisdiction in some other state— 15 which, of course, the absentee cannot be compelled to do because it is not currently a party 16 to this proceeding. And since the absentee foreign defendant is never a current party on a 17 motion to add that new defendant, N2 Packaging’s contention means that the second 18 requirement of Rule 4(k)(2) jurisdiction can never be defeated and is always established 19 merely by a plaintiff amending to bring in a new foreign defendant. But no rule of law 20 works that way, where one side always wins or loses. It turns out that this rule of law does 21 not work that way either. 22 The grant of in personam jurisdiction under Rule 4(k)(2) is extremely rare3 and even 23 more extremely narrow. A plaintiff invoking that jurisdiction must plead facts showing 24 25 3 “Indeed, in the fourteen years since Rule 4(k)(2) was enacted, none of our cases has 26 countenanced jurisdiction under the rule.” Holland Am. Line Inc., 485 F.3d at 462. AMA Multimedia LLC v. Wanat, No. CV-15-01674-PHX-ROS, 2017 WL 5668025, at *5 (D. 27 Ariz. Sept. 29, 2017) (“The situation after 2007 has not changed. The parties have not cited, nor has the Court located, any post-2007 case from the Ninth Circuit allowing jurisdiction 28 under Rule 4(k)(2).”) 1 the foreign defendant and the claim have enough contacts with the United States as a whole 2 that basic fairness allows this country to exercise adjudicatory jurisdiction over the claim 3 and the defendant. But the plaintiff cannot plead—and there cannot be—enough contacts 4 between the claim, the defendant, and the forum for the courts of any particular state to 5 have adjudicatory jurisdiction. It is not logically impossible for such a space to exist, but 6 it is planted around with procedural punji stakes. The slightest short step or overstep is 7 fatal. In this case, N2 Packaging stepped on the punji stakes by pleading bases for 8 jurisdiction in Utah and Idaho, so Nitrotin is subject to jurisdiction in those states but not 9 to nationwide federal court jurisdiction under Rule 4(k)(2). 10 The unusual character and structure of Rule 4(k)(2) has led to a court-made rule in 11 the Ninth Circuit and elsewhere4 placing the burden of proof on a foreign defendant who 12 denies Rule 4(k)(2) jurisdiction to identify or stipulate to another state which does have 13 jurisdiction over him. A foreign defendant defeats Rule 4(k)(2) jurisdiction by showing 14 any state has personal jurisdiction. “Ordinarily, the plaintiff bears the burden of proving 15 personal jurisdiction over the defendant. However, proving the lack of personal 16 jurisdiction in every state could be quite onerous, and it is the defendant, not the plaintiff, 17 that likely possesses most of the information to do so.” Holland Am. Line Inc., 485 F.3d 18 at 461. Rather than the plaintiff having to show, as under the usual standard of pleading 19 and proof, that none of 50 states has jurisdiction, the foreign defendant can defeat Rule 20 4(k)(2) jurisdiction in the district of the plaintiff’s choice by stating, and thus stipulating, 21 what state does have jurisdiction. This gives the foreign defendant the benefit of not being 22 sued in any of 94 districts of the plaintiff’s choice, but it also frees the plaintiff from having 23 to prove personal jurisdiction in the state the foreign defendant has elected: 24

25 26 4 Holland Am. Line Inc., 485 F.3d at 461; ISI Int’l, Inc. v. Borden Ladner Gervais LLP, 27 256 F.3d 548, 552 (7th Cir. 2001); Adams v. Unione Mediterranea Di Sicurta, 364 F.3d 646, 651 (5th Cir. 2004); Mwani v. bin Laden, 417 F.3d 1, 11 (D.C. Cir. 2005); Oldfield v. 28 Pueblo De Bahia Lora, S.A., 558 F.3d 1210, 1219 n.22 (11th Cir. 2009); Touchcom, Inc. v. Bereskin & Parr, 574 F.3d 1403, 1415 (Fed. Cir. 2009). 1 A defendant who wants to preclude use of Rule 4(k)(2) has only to name some other state in which the suit could proceed. Naming a more appropriate 2 state would amount to a consent to personal jurisdiction there . . . . If, 3 however, the defendant contends that he cannot be sued in the forum state and refuses to identify any other where suit is possible, then the federal court 4 is entitled to use Rule 4(k)(2). This procedure makes it unnecessary to traipse 5 through the 50 states, asking whether each could entertain the suit. 6 Id. (This elimination of the second element of Rule 4(k)(2) does not satisfy Rule 4(k)(2) 7 entirely. A foreign defendant can still defeat Rule 4(k)(2) jurisdiction by showing 8 insufficient contacts with the United States as a whole. Holland Am. Line Inc., 485 F.3d 9 at 462.) 10 N2 Packaging argues the second requirement of Rule 4(k)(2) has been eliminated 11 because Nitrotin has not consented to personal jurisdiction in some other state. If Nitrotin 12 were a party to this action, this burden-shifting rule requiring Nitrotin to name a more 13 appropriate state to blunt the requirement that no other state have jurisdiction still would 14 not apply because, as discussed above, N2 Packaging has already alleged sufficient 15 jurisdiction in Utah and Idaho. But even without N2 Packaging’s own fatal allegations, 16 Nitrotin is not an existing party to this case, and the existing parties have no authority or 17 ability to stipulate on Nitrotin’s behalf what states have jurisdiction over it. 18 The Ninth Circuit has never held the court-created burden to “name some other state 19 in which the suit could proceed”—and thereby consent to jurisdiction there—can be placed 20 on a party that cannot do so, who is not a pending party within the jurisdiction of the court. 21 See id. at 461. No court has so held. More concretely, no court has ever held that existing 22 parties opposing amendment to add defendants have any burden or authority to stipulate to 23 jurisdiction for absentees they do not represent. 24 Moreover, even where it applies, the Holland rule is not mandatory. The Holland 25 test does not require district courts to find the second requirement is satisfied even if a 26 defendant declines to identify an alternative forum. The Holland test in part states, “If, 27 however, the defendant contends that he cannot be sued in the forum state and refuses to 28 identify any other state where suit is possible, then the federal court is entitled to use Rule ! A4(k)(2).” Id.; e.g., Falcon Enters., Inc. v. Centurion Ltd., No. CO7-O065RSL, 2007 WL 2 3046201, at *3 (W.D. Wash. Oct. 18, 2007) (finding “the ‘is entitled to’ language .. . 3 mean|[s] what its [sic] says, namely that the Court has the option to presume that nationwide 4 service 1s appropriate if defendant refuses to identify an alternative forum but that it 1s not > required to do so” and declining to impose Rule 4(k)(2) jurisdiction.) 6 Finally, N2 Packaging argues “If for any reason the Court finds, at this stage, that it would not have jurisdiction over Nitrotin, ample authority supporting an opportunity to 8 correct the SAC exists.” (Doc. 74 at 10 (internal citations omitted).) However, N2 9 Packaging keeps it a perfect secret what new allegations it would make to cure the 10 deficiency in its motion and the Second Amended Complaint. That too is denied. i IT IS THEREFORE ORDERED that Plaintiff and Counter-defendant N2 Packaging 12 Systems, LLC’s Motion for Leave to Amend First Amended Complaint (Doc. 72) is IS denied. Dated this 15th day of May, 2020.

ha hile Neil V. Wake 17 Senior United States District Judge 18 19 20 21 22 23 24 25 26 27 28

-12-