Paradise Entertainment Limited et al. v. Empire Technological Group Limited et al.

• Court: District Court, D. Nevada
• Decided: October 17, 2025
• Docket: 2:24-cv-00428
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 DISTRICT OF NEVADA 6 * * *

7 PARADISE ENTERTAINMENT LIMITED, Case No.2:24-CV-428 JCM (BNW) et al., 8 Plaintiff(s), ORDER 9 v. 10 EMPIRE TECHNOLOGICAL GROUP 11 LIMITED, et al.,

12 Defendant(s).

13 14 Presently before the court is defendant Yi Zhao’s motion to dismiss. (ECF No. 77). 15 Plaintiffs Paradise Entertainment Limited, (“Paradise”), LT Game, Inc. (“LT Game”), and LT 16 Game Ltd. (“LTG Limited”) (collectively “plaintiffs”) filed a response (ECF No. 78), to which 17 defendant replied (ECF No. 81). 18 I. Background 19 20 This is an action for state and federal claims of misappropriation of trade secrets, copyright 21 infringement, fraud, constructive fraud, conspiracy, racketeering, breach of fiduciary duty, aiding 22 and abetting, and breach of contract. (ECF No. 69 ¶ 1). 23 Plaintiff Paradise is a global supplier of electronic gaming equipment and systems. 24 (Id. ¶ 2). It was incorporated in Bermuda in 1996 and has been listed on the main board of the 25 26 stock exchange of Hong Kong Limited since 1997. (Id.) Plaintiff Paradise is the parent company 27 of plaintiffs LT Game and LTG Limited. (Id. ¶ 2). Plaintiff LT Game is a Nevada corporation 28 with its principal place of business in Nevada, and LT Game Limited is a British Virgin Islands 1 Corporation with its principal place of business in Macau, China. (Id. ¶¶ 3–4). 2 As a contender in the highly competitive electronic gaming equipment and systems 3 business, plaintiffs explain that they have developed highly confidential and proprietary business 4 information and trade secrets. (Id. ¶¶ 17–19). 5 6 In 2008, Dr. Jay Chun, controlling shareholder, executive and managing director, and 7 chairman of plaintiff Paradise, hired his brother-in-law, Mr. Feng as the North American 8 Representative of Paradise. (Id. ¶¶ 22–25). Mr. Feng became the president, secretary, and sole 9 director of LT Game, and was placed in charge of Empire Technological Group in 2015. 10 (Id. ¶¶ 27, 32). Plaintiffs claim that Empire was intended to be the long-term exclusive distributor 11 12 for Paradise and its subsidiaries and supported it with this goal in mind. (Id. ¶ 35). However, 13 plaintiffs allege that Mr. Feng induced other Paradise employees, including Ms. Zhao, to assist 14 him with a scheme to transform Empire into a direct competitor of Paradise and its subsidiaries. 15 (Id. at 38). 16 Defendant Zhao is a resident of Macau, China, where she has lived since 2007. (Id. ¶ 10; 17 18 ECF No. 77 at 5). She began working for Paradise in 2007 and was promoted to chief operating 19 officer in 2012. (ECF No. 69 ¶ 69). Ms. Zhao resigned from her position at Paradise in October 20 2023 and began working for Empire as its senior vice president of international operations about 21 one month later. (Id. ¶ 99). According to Ms. Zhao, she is “responsible for Empire’s operations 22 in Macau, China.” (ECF No. 77-1 ¶ 49). 23 24 . . . 25 . . . 26 . . . 27 . . . 28 1 At all relevant times, she has maintained a physical office in Macau, China; she has never 2 had an office in the United States. (Id. ¶¶ 20–22, 40–42, 50–52). Ms. Zhao states that she visited 3 Las Vegas for business purposes on four occasions: twice while she worked for Paradise, and twice 4 as an employee of Empire. (Id. ¶¶ 40–42, 54). She denies any wrongful conduct during such trips. 5 6 (Id. ¶ 44). 7 Plaintiffs filed a complaint against Empire, Mr. Feng, and the other defendants in this case 8 on March 1, 2024. (ECF No. 1). They later filed an amended complaint, adding Ms. Zhao as a 9 defendant in the action. (ECF No. 69). Defendant Zhao contests this court’s personal jurisdiction 10 over her and accordingly moves this court to dismiss her from this action under Federal Rule of 11 12 Civil Procedure 12(b)(2). (ECF No. 77). 13 II. Legal Standard 14 Federal Rule of Civil Procedure 12(b)(2) allows a defendant to move to dismiss a complaint 15 for lack of personal jurisdiction. See Fed. R. Civ. P. 12(b)(2). To avoid dismissal under Rule 16 12(b)(2), a plaintiff bears the burden of demonstrating that its allegations establish a prima facie 17 18 case for personal jurisdiction. See Boschetto v. Hansing, 539 F.3d 1011, 1015 (9th Cir. 2008). 19 Allegations in the complaint must be taken as true, and factual disputes should be construed in the 20 plaintiff's favor. Rio Props., Inc. v. Rio Int'l Interlink, 284 F.3d 1007, 1019 (9th Cir. 2002). 21 Personal jurisdiction is a two-prong analysis. First, an assertion of personal jurisdiction 22 must comport with due process. See Wash. Shoe Co. v. A-Z Sporting Goods Inc., 704 F.3d 668, 23 24 672 (9th Cir. 2012). Next, “[w]hen no federal statute governs personal jurisdiction, the district 25 court applies the law of the forum state.” Boschetto, 539 F.3d at 1015; see also Panavision Int'l 26 L.P. v. Toeppen, 141 F.3d 1316, 1320 (9th Cir. 1998). However, Nevada's “long-arm” statute 27 applies to the full extent permitted by the due process clause, so the inquiry is the same, and the 28 1 court need only address federal due process standards. See Arbella Mut. Ins. Co. v. Eighth Judicial 2 Dist. Court, 122 Nev. 509, 134 P.3d 710, 712 (Nev. 2006) (citing Nev. Rev. Stat. § 14.065); see 3 also Boschetto, 539 F.3d at 1015. 4 Two categories of personal jurisdiction exist: (1) general jurisdiction and (2) specific 5 6 jurisdiction. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 413-15, 104 7 S. Ct. 1868, 80 L. Ed. 2d 404 (1984); see also LSI Indus., Inc. v. Hubbell Lighting, Inc., 232 F.3d 8 1369, 1375 (Fed. Cir. 2000). 9 III. Discussion 10 A. General Jurisdiction 11 12 A court may assert general jurisdiction over a defendant when the plaintiff shows that “the 13 defendant has sufficient contacts that approximate physical presence.” In re W. States Wholesale 14 Nat. Gas Litig., 605 F. Supp. 2d 1118, 1131 (D. Nev. 2009) (internal quotation marks and citations 15 omitted). In other words, the defendant's affiliations with the forum state must be so “continuous 16 and systematic” so as to render the defendant essentially “at home” in that forum. See Daimler 17 18 AG v. Bauman, 571 U.S. 117, 137, 134 S. Ct. 746, 187 L. Ed. 2d 624 (2014). General jurisdiction 19 is appropriate even if the defendant’s continuous and systematic ties to the forum state are 20 unrelated to the litigation. See Tuazon v. R.J. Reynolds Tobacco Co., 433 F.3d 1163, 1171 (9th 21 Cir. 2006) (citing Helicopteros Nacionales de Colombia, S.A., 466 U.S. at 414–16). 22 Plaintiffs fail to establish that this court has general jurisdiction over Ms. Zhao.1 See 23 24 Boschetto, 539 F.3d at 1015. Ms. Zhao is a citizen of Macau, works from Macau, and has visited 25 Nevada only on a few occasions for business purposes for approximately a week each time. (ECF 26 No. 67 ¶ 10; ECF No. 77 at 5; ECF No. 77-1 ¶¶ 20–22, 24, 40–42, 50–52, 54). Her presence and 27

28 1 Plaintiffs do not discuss general jurisdiction in their response. 1 connection to Nevada are not so continuous and systematic to render her “at home” there. See 2 Daimler, 571 U.S. at 137. 3 B. Specific Jurisdiction 4 The Ninth Circuit has established a three-prong test for analyzing an assertion of specific 5 6 personal jurisdiction: 7 (1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some 8 act by which he purposefully avails himself of the privilege of conducting activities 9 in the forum, thereby invoking the benefits and protections of its laws; 10 (2) the claim must be one which arises out of or relates to the defendant's forum- related activities; and 11 12 (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e., it must be reasonable. 13 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004). 14 15 Plaintiffs argue that this court has specific jurisdiction over the defendant because Ms. 16 Zhao “has a contract with Empire, a Nevada corporation, to work as an employee of Empire, has 17 traveled to Nevada to do business on behalf of Empire, and receives direction from and works 18 closely with individuals located in and operating out of Nevada[.]” (ECF No. 69 ¶ 12). 19 1. Purposeful direction/purposeful availment 20 21 Under the first prong of the Ninth Circuit’s specific jurisdiction test, plaintiffs must 22 establish that Ms. Zhao either purposefully availed herself of the privilege of conducting activities 23 in Nevada, or purposefully directed her activities toward Nevada. Purposeful availment and 24 purposeful direction are two distinct concepts. Purposeful availment is most often used in suits 25 sounding in contract, while purposeful direction is most often used in suits sounding in tort. 26 27 Schwarzenegger, 374 F.3d at 802. Plaintiffs’ claims largely sound in tort, with nine of plaintiffs’ 28 claims sounding in tort and only one sounding in contract. (See ECF No. 69 at 33–53). 1 i. Purposeful direction 2 Demonstrating purposeful direction usually requires evidence of the defendant’s actions 3 outside the forum state that are directed at the forum. Schwarzenegger, 374 F.3d at 802. Courts 4 in the Ninth Circuit apply the Calder effects test, which requires that the defendant have (1) 5 6 committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the 7 defendant knows is likely to be suffered in the forum state. Id. at 805. The defendant need not 8 have physical contact with the forum state. Id. at 802 (citing Burger King v. Rudzewicz, 471 U.S. 9 462, 476 (1985)). 10 Although the parties dispute a number of facts surrounding the nature of Ms. Zhao’s 11 12 departure from Paradise, plaintiffs sufficiently allege that Ms. Zhao acted with intention. In the 13 amended complaint, plaintiffs claim that Ms. Zhao performed substantive work for Empire “in 14 furtherance of Mr. Feng’s plan to supplant [plaintiffs] at a time when” Ms. Zhao was still working 15 for plaintiffs. (ECF No. 69 ¶ 111). 16 The following facts are uncontroverted: Ms. Zhao had access to confidential or trade secret 17 18 information as part of her job at plaintiff Paradise. (ECF No. 81-2 ¶ 29). Ms. Zhao had an oral 19 contract with Paradise during her tenure there. (ECF No. 69 ¶ 305). She began working for Empire 20 only two months after resigning in September 2023. (Id. ¶¶ 97–99). The data on Ms. Zhao’s hard 21 drive was removed or erased, leading plaintiffs to believe Ms. Zhao had done so with ill intention. 22 (See id. ¶ 100). Ms. Zhao disputes altering the drive and claims she handed in hard copies of her 23 24 files. (ECF No. 81-2 ¶ 15). 25 Ms. Zhao refutes attempting to be part of Empire management while at Paradise, but there 26 are other ways that she could contribute substantively to Empire’s alleged plans to break off and 27 become a competitor of Paradise Group. (See ECF No. 77-1 ¶ 57; ECF No. 81-2 ¶¶ 22, 31). She 28 1 also disputes making promises regarding her future employment, contractual or otherwise. (ECF 2 No. 81-2 ¶¶ 25, 26). Even if this is true, Ms. Zhao should have known that her swift re-employment 3 by a competitor was poor form and might look suspicious in such a highly competitive industry. 4 After considering the uncontroverted facts, and construing the disputed facts in favor of plaintiffs, 5 6 the court finds that plaintiffs satisfied this element. See Freestream Aircraft (Berm.) Ltd. v. Aero 7 Law Grp., 905 F.3d 597, 602 (9th Cir. 2018). 8 Plaintiffs do not allege sufficient facts to satisfy the second element of the Calder effects 9 test, which focuses on Ms. Zhao’s contacts with Nevada. See Schwarzenegger, 374 F.3d at 802. 10 The amended complaint does not allege that Ms. Zhao expressly aimed her conduct at Nevada. 11 12 The allegations against her could easily apply to her duties in Macau. 13 In fact, the only direction on the face of the complaint expressly tied to her conduct is 14 Macau. (ECF No. 69 ¶¶ 151, 156). Plaintiffs allege that Ms. Zhao failed to report her colleague 15 Mr. Wu’s concern that “Mr. Feng may be using Empire to develop competing products…in 16 Macau.” (Id. ¶ 151; see generally ECF No. 79-4). Furthermore, plaintiffs express their concern 17 18 that Ms. Zhao “failed to disclose her involvement in Mr. Feng’s plans to compete…in the Macau 19 market” and that Empire set up a branch “in Macau.”2 (ECF No. 69 ¶ 156). There is no mention 20 of Nevada. 21 In their response to the motion to dismiss, plaintiffs argue that Ms. Zhao’s conduct would 22 nevertheless amount to express aiming because she “was a director of LT Game, [which] is a 23 24 Nevada corporation.” (ECF No. 78 at 15). But plaintiffs do not allege in their complaint that Ms. 25 Zhao was a director of LT Game. They state, and Ms. Zhao agrees, that she was the chief operating 26

27 2 Again, in Mr. Leo Chan’s declaration, he specifically indicates that Ms. Zhao was “poised to manage 28 Empire’s expansion into Macau to compete directly with Paradise there” and does not allege any particular activity directed at Nevada by Ms. Zhao. (ECF No. 79-2 ¶ 12). 1 officer of LTG Limited and Paradise Group, neither of which is a Nevada corporation. (ECF No. 2 69 ¶ 69). 3 Although Mr. Chan’s declaration clarifies that Ms. Zhao was assigned the director role in 4 March of 2022 after Mr. Feng’s departure, plaintiffs do not explain how this role changed Ms. 5 6 Zhao’s substantive duties, if at all. (ECF No. 79-2 ¶ 8). To the contrary, Ms. Zhao declares that 7 she did not have authority to make business decisions in this role and was not involved in day-to- 8 day operations of LT Game. (ECF No. 81-2 ¶¶ 6, 10). Furthermore, plaintiffs submit no specific 9 acts that Ms. Zhao supposedly committed as director of LT Game that would have or could have 10 caused the company harm in Nevada. 11 12 The final element of the Calder effects test requires that Ms. Zhao knew harm was likely 13 to result in Nevada from her conduct. See Schwarzenegger, 374 F.3d at 802. Plaintiffs argue that 14 this element is satisfied because Ms. Zhao knew that LT Game is in Las Vegas. (ECF No. 78 at 15 15). This is unpersuasive. LT Game cannot be the only link between Ms. Zhao and Nevada—Ms. 16 Zhao’s relationship to the state must arise out of the contacts that she created with the state. See 17 18 Walden v. Fiore, 571 U.S. 277, 287–88 (2014). Because plaintiffs fail to plead facts alleging that 19 Ms. Zhao’s conduct was directed at Nevada, see supra, it is unlikely that she would know harm 20 would likely result there. 21 ii. Purposeful availment 22 Purposeful availment requires the plaintiff to provide evidence of defendant’s actions in 23 24 the forum, e.g., executing or performing a contract; “by taking such actions, a defendant 25 ‘purposefully avails [herself] of the privilege of conducting activities within the forum State, thus 26 invoking the benefits and protections of its laws.’” Id. (quoting Hanson v. Denckla, 357 U.S. 235, 27 253, 2 L.Ed. 2d 1283, 78 S. Ct. 1228 (1958)). 28 1 Plaintiffs allege one contract claim—breach of contract—against Ms. Zhao, which stems 2 from the same set of facts as the tort-based claims. Plaintiffs do not point to any conduct by 3 defendant Zhao in Nevada related to the purposeful availment analysis. (See ECF No. 78 at 10). 4 Although courts generally “must have in personam jurisdiction with respect to each claim,” the 5 6 Ninth Circuit also recognizes the theory of pendent personal jurisdiction. Data Disc, Inc. v. Sys. 7 Tech. Assocs., Inc. 557 F.2d 1280, 1289 (9th Cir. 1977); see Action Embroidery Corp. v. Atl. 8 Embroidery, Inc., 368 F.3d 1174, 1180 (9th Cir. 2004). Under this doctrine, 9 a court may assert pendent personal jurisdiction over a defendant with respect to a 10 claim for which there is no independent basis of personal jurisdiction so long as it arises out of a common nucleus of operative facts with a claim in the same suit over 11 which the court does have personal jurisdiction. 12 Action Embroidery Corp., 368 F.3d at 1180. 13 The court reserves judgment on this issue. As provided later in this order, plaintiffs will 14 15 be given an opportunity to amend the complaint. 16 2. Arises out of or relates to 17 Under the second prong of the specific jurisdiction test, plaintiffs must establish that their 18 claims “arise out of or relate to the defendant’s contacts with the forum.” Ford Motor Co. v. Mont. 19 Eighth Jud. Dist. Ct., 592 U.S. 351, 362 (2021). The Ninth Circuit applies a “but for” test to 20 21 determine whether a particular claim arises out of forum-related activities and therefore satisfies 22 this requirement for specific jurisdiction. Ballard v. Savage, 65 F.3d 1495, 1500 (9th Cir. 1995). 23 In their response to the motion to dismiss, plaintiffs claim that this prong is satisfied 24 because all the claims arise from Ms. Zhao’s “direct participation in defendants’ conspiracy to 25 undermine LT Game in Las Vegas,” “aiding and abetting of co-conspirators,” and her “breach of 26 27 fiduciary duty to…LT Game…of which she was the sole director.” (ECF No. 78 at 16–17). 28 Plaintiffs fail to establish that there is a direct nexus between Ms. Zhao’s contacts with the forum 1 and the causes of action against her because they fail to establish what contacts she had with the 2 forum that give rise to this action. See In re W. States Wholesale Nat. Gas Antitrust Litig., 715 3 F.3d 716, 742 (9th Cir. 2013) (internal quotation marks omitted). As previously mentioned, the 4 complaint does not specifically set forth what actions Ms. Zhao took as director of LT Games or 5 6 what actions were directed at Nevada (rather than in her capacity as an executive of LTG Limited 7 and Paradise Group). 8 3. Reasonableness 9 Plaintiffs fail the first two elements of the specific jurisdiction test; accordingly, the court 10 does not have personal jurisdiction over the plaintiffs. Because it is possible for plaintiffs to cure 11 12 the underlying deficiencies in those claims, the court considers the third prong of the test to 13 determine whether it would be futile to grant leave to amend. 14 At the final stage of the test for specific jurisdiction, the burden is on the defendant to 15 present a compelling case that exercising jurisdiction would be unreasonable. Burger King, 471 16 U.S. at 477. The court considers the following factors in making this determination: (1) the extent 17 18 of a defendant’s purposeful availment (or direction); (2) the burden on defendant in appearing in 19 the forum; (3) conflicts between the forum state and defendant’s home state; (4) the forum’s 20 interest in the dispute; (5) judicial efficiency; (6) the plaintiff’s interest in the forum; and (7) the 21 existence of an alternate forum. Id.; see Harris Rutsky & Co. Ins. Services v. Bell & Clements, 22 Ltd., 328 F.3d 1122, 1132 (9th Cir. 2003). 23 24 The court has already addressed defendant’s purposeful direction. Plaintiffs fail to specify 25 what conduct of hers, if any, was directed at Nevada. 26 Haling Ms. Zhao into court will require her physical presence only in the event that this 27 case goes to trial. Plaintiffs indicate that they are willing to take Ms. Zhao’s deposition over Zoom. 28 1 Beyond complying with her duties as a witness-defendant, there appears to be little else for her to 2 do, as plaintiffs expect that Empire will handle most discovery tasks. The greatest conceivable 3 burden appears to be travel, which will occur only in the event of trial. Perhaps Ms. Zhao will 4 have to pay $7,500 in fees, plus room and board. But what is the alternative? Is it requiring Mr. 5 6 Feng, Mr. Allison, and Mr. Kiely, residents of Nevada, to travel to Macau, at greater cumulative 7 cost? Ms. Zhao does not explain. This factor favors plaintiffs. See Panavision Int’l L.P. v. 8 Toeppen, 141 F.3d 1316, 1323 (9th Cir. 1998) (finding that the inconvenience must be “so great 9 as to constitute a deprivation of due process”). 10 There do not appear to be any legal conflicts between resolving this matter in Nevada 11 12 versus Macau. Nevada has a particular interest in the resolution of trade secret and related state 13 claims as to businesses located within the state. See Gordy v. Daily News, L.P., 95 F.3d 829, 836 14 (9th Cir. 1996). 15 The factors of judicial efficiency and plaintiffs’ convenience favor the plaintiffs. Plaintiffs 16 are also interested in resolving these claims for relief in this forum, given that they have invested 17 18 over a years’ worth of time and money into this case. While plaintiffs have indicated an interest 19 in pursuing legal action in foreign jurisdictions, it is not apparent what for, what claims, or what 20 conduct, and whether plaintiffs would be afforded the same or similar relief as against Ms. Zhao. 21 Naturally, with the restarting of the case in another jurisdiction, justice would be delayed. 22 On balance the factors weigh in favor of the plaintiffs, or could be reinforced through an 23 24 appropriately amended complaint, see infra. 25 B. Co-conspirator Jurisdiction 26 In the alternative, plaintiffs ask the court to adopt a co-conspirator theory of personal 27 jurisdiction. The Ninth Circuit has not expressly adopted this theory of jurisdiction. To the extent 28 1 that the theory is viable, it is limited to specific jurisdiction. See In re Western States Wholesale 2 Natural Gas Litig., 605 F. Supp. 2d. 1118, 1139 (D. Nev. 2009). 3 A plaintiff “must establish that the defendant purposefully availed himself of the forum.” 4 Id. at 1139–40. An allegation that the defendant “caused or contributed to an effect in the forum 5 6 state, by itself, is insufficient[.]” Id. at 1140. Relevant here is that the defendant, not her co- 7 conspirators, must choose to direct her activities at the forum. See id. A co-conspirator’s activity 8 in the forum cannot constitute purposeful direction at the forum by the foreign defendant. Id. 9 Essentially, plaintiffs rest their argument for co-conspiracy jurisdiction on the allegation 10 that her co-conspirators purposefully directed conduct to Nevada. Plaintiffs cannot circumvent 11 12 due process in this way. 13 IV. Conclusion 14 Accordingly, 15 IT IS HEREBY ORDERED, ADJUDGED, and DECREED that defendant’s motion to 16 dismiss (ECF No. 77) be, and the same hereby is, GRANTED without prejudice. Plaintiffs shall 17 18 have twenty (20) days to file a motion for leave to amend the complaint. They must attach a 19 proposed second amended complaint to the motion. In the body of the motion, they should explain 20 what changes they made to the complaint, and why the court should exercise personal jurisdiction 21 over Ms. Zhao in light of those changes. 22 23 DATED October 17, 2025. 24 ________________________________________ 25 UNITED STATES DISTRICT JUDGE 26 27 28