Salvare La Vita Water, LLC v. Crazy Bottling Company, LLC

• Court: Court of Appeals for the Ninth Circuit
• Decided: July 19, 2021
• Docket: 20-16513
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED JUL 19 2021 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

SALVARE LA VITA WATER, LLC, a No. 20-16513 California Limited Liability Company, D.C. No. 4:19-cv-07497-DMR Plaintiff-Appellant,

v. MEMORANDUM*

CRAZY BOTTLING COMPANY, LLC; FAMOUS MINERAL WATER COMPANY, LP, DBA Famous Mineral Water Company,

Defendants-Appellees.

Appeal from the United States District Court for the Northern District of California Donna M. Ryu, Magistrate Judge, Presiding

Submitted July 6, 2021** San Francisco, California

Before: GRABER and LEE, Circuit Judges, and VRATIL,*** District Judge.

Salvare La Vita Water, LLC, (“Vita Water”) appeals the district court’s

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). *** The Honorable Kathryn H. Vratil, United States District Judge for the order granting Crazy Bottling Company, LLC and Famous Mineral Water

Company LP’s (“Defendants”) motion to dismiss for lack of personal jurisdiction.

Vita Water also appeals the district court’s denial of jurisdictional discovery. We

have jurisdiction under 28 U.S.C. § 1291, and we affirm.

Vita Water, a California company, contacted the Defendants — both Texas

companies — to order bottled water for a California customer, Apple Inc.

Although the parties discussed entering a long-term contract, they failed to do so

and instead opted for a single purchase order. Upon delivery of the bottles, the

customer reported that the water contained brown particles, which apparently

turned out to be live protozoa. Apple canceled its contract with Vita Water, and

Vita Water sued the Defendants in the Northern District of California for breach of

contract and related claims.

We review de novo a dismissal for lack of personal jurisdiction. Picot v.

Weston, 780 F.3d 1206, 1211 (9th Cir. 2015). Though we take uncontroverted

allegations in the complaint as true and resolve conflicts in Vita Water’s favor,

“disputed allegations in the complaint that are not supported with evidence or

affidavits cannot establish jurisdiction.” AMA Multimedia, LLC v. Wanat, 970

F.3d 1201, 1207 (9th Cir. 2020), petition for cert. filed, (U.S. Apr. 8, 2021) (No.

20-1430).

District of Kansas, sitting by designation.

2 1. To determine whether a defendant has sufficient contacts with the forum

state to establish specific jurisdiction, we employ either a “purposeful availment”

or “purposeful direction” test. Picot, 780 F.3d at 1212. Vita Water argues that the

district court improperly applied the purposeful availment test when it should have

applied the purposeful direction test. But purposeful availment applies to “claims

sounding in contract,” id., and here, each of Vita Water’s claims depends on the

existence of a contract between the parties, even if some of them are styled as tort

claims. Thus, the claims sound in contract, and the purposeful availment test

applies to Vita Water’s claims. See Stanford Ranch, Inc. v. Md. Cas. Co., 89 F.3d

618, 625 (9th Cir. 1996).

2. The Defendants are not subject to specific jurisdiction in California.

When analyzing minimum contacts using the purposeful availment test, we ask

“whether a defendant has purposefully availed himself of the privilege of

conducting activities within the forum State, thus invoking the benefits and

protections of its laws.” Picot, 780 F.3d at 1212 (quoting Schwarzenegger v. Fred

Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004)) (cleaned up). Because “a

contract alone does not automatically establish minimum contacts,” Boschetto v.

Hansing, 539 F.3d 1011, 1017 (9th Cir. 2008), we must examine the parties’ prior

negotiations, the contemplated future consequences, the terms of the contract, and

the parties’ actual course of dealing, see Picot, 780 F.3d at 1212.

3 The parties’ negotiations do not show that the Defendants “reach[ed] out” to

the forum state. Burger King v. Rudzewicz, 471 U.S. 462, 473 (1985). The

Defendants do not advertise or distribute in California, and Vita Water — not the

Defendants — initiated the transaction. The parties negotiated via phone and

email, and the Defendants’ representatives never traveled to California. In similar

circumstances, we have found that purposeful availment has not been satisfied.

See Roth v. Garcia Marquez, 942 F.2d 617, 621–22 (9th Cir. 1991); Gray & Co. v.

Firstenberg Mach. Co., 913 F.2d 758, 760–61 (9th Cir. 1990) (per curiam). The

Defendants’ knowledge of Vita Water’s California customer base does not alter

this conclusion, as foreseeability of causing harm in the forum state, without more,

is insufficient for purposeful availment. See Holland Am. Line, Inc. v. Wartsila N.

Am., Inc., 485 F.3d 450, 459 (9th Cir. 2007).

Regarding the future consequences, there is no evidence of “any continuing

commitments assumed by [d]efendants under the contract.” Boschetto, 539 F.3d at

1017. The parties failed to sign a long-term contract, and their emails show that

they agreed to only a single purchase order without future obligations. This factor

thus weighs against purposeful availment. See Burger King, 471 U.S. at 479–80.

And for the terms of the contract, we have previously found isolated transactions

like this one to be insufficient for purposeful availment. See Boschetto, 539 F.3d at

1019; Gray, 913 F.2d at 761.

4 Finally, the parties’ course of dealing shows that the Defendants did not

have a substantial role in any actions that would have “invok[ed] the benefits and

protections” of California law. Picot, 780 F.3d at 1211. Though they connected

Vita Water to a potential shipper, the Defendants did not coordinate shipment to

California. Similarly, the Defendants provided the label sizing requirements to

Vita Water, but they did not participate in designing the labels. And the

Defendants’ names do not appear anywhere on the labels, suggesting they had no

intent to advertise in California. The evidence therefore shows that the

Defendants’ connection to California arose because Vita Water happened to do

business there, and that is insufficient for purposeful availment. See Burger King,

471 U.S. at 475; Picot, 780 F.3d at 1212.

Considering the above factors collectively, Vita Water has not shown that

the Defendants purposefully availed themselves of “the privilege of conducting

activities” in California. Picot, 780 F.3d at 1212. They are thus not subject to

personal jurisdiction in California.

3. The district court did not improperly resolve factual disputes in the

Defendants’ favor. See Schwarzenegger, 374 F.3d at 802. First, it accepted Vita

Water’s claim that the parties intended to enter a long-term contract. But based on

the documentary evidence, it properly found that no such contract was finalized.

See AMA Multimedia, 970 F.3d at 1207. Second, the district court appropriately

5 concluded that the parties had a limited co-packing relationship, as their emails

show that the Defendants had a minimal role in shipping and labeling, and Vita

Water presented no evidence indicating more substantial involvement. Finally, the

court did not accept the Defendants’ claim that they were unaware of Vita Water’s

California client base. Rather, it conducted its analysis assuming that the

Defendants knew about the California customers, thereby resolving the conflict in

Vita Water’s favor. See Schwarzenegger, 374 F.3d at 800.

4. We review the district court’s denial of jurisdictional discovery for abuse

of discretion. AMA Multimedia, 970 F.3d at 1207. Vita Water sought discovery

on each of the alleged factual disputes discussed above. But the district court

properly considered Vita Water’s evidence and resolved conflicts in its favor, so “a

more satisfactory showing of the facts” is unnecessary. Laub v. U.S. Dep’t of the

Interior, 342 F.3d 1080, 1093 (9th Cir. 2003). Vita Water has also offered no

explanation as to how additional discovery would affect the personal jurisdiction

analysis. See Boschetto, 539 F.3d at 1020. The district court thus did not abuse its

discretion by denying jurisdictional discovery. See Laub, 342 F.3d at 1093.

AFFIRMED.1

1 Defendants’ motion to take judicial notice is GRANTED.