Scheibe v. Berg Holdings, LLC

District Court, S.D. California·Decided October 31, 2023·No. 3:23-cv-00084·Unknown

Opinion

Case No.: 23-cv-00084-DMS-JLB JACOB SCHEIBE, individually and on

behalf of all those similarly situated, ORDER DENYING DEFENDANT’S Plaintiff, MOTION TO DISMISS FOR LACK v. OF PERSONAL JURISDICTION THE HEALTH AND WELNESS CENTER, INC., dba Dr. Berg Nutritionals, a Virginia corporation, Defendant. Pending before the Court is Defendant The Health and Wellness Center’s (“HWC”) motion to dismiss for lack of personal jurisdiction. (ECF No. 10.) In this action, Plaintiff Jacob Schiebe, on behalf of himself and a putative class of others who have purchased “Original Keto Electrolytes” powder, alleges that the product, which Defendant manufactures and sells, is misbranded and falsely advertised. Plaintiff brings claims against Defendant for violations of California consumer protection statutes, unjust enrichment, and breach of express warranty. Plaintiff is a citizen of California and Defendant is a Virginia corporation with its principal place of business located in Virginia. For the reasons set forth below, the Court DENIES Defendant’s motion to dismiss for lack of personal jurisdiction; and DENIES Defendant’s motion to stay proceedings. On or about October 18, 2022, Plaintiff Jacob Scheibe purchased Dr. Berg’s Original Keto Electrolytes powder in various flavors (“Products”) from Amazon.com. Defendant HWC formulates, manufactures, and sells the Products. The front labels on all flavors of the Products state: “no artificial anything!” HWC operates an Amazon storefront which states that the Products contain “Zero Artificial Ingredients.” Plaintiff alleges he viewed this storefront. The back labels of the Products state that they contain malic acid. Plaintiff alleges that independent third-party laboratory testing shows that the malic acid used in the Products is “DL malic acid, a synthetic substance derived from petrochemicals.” (Am. Compl. (“AC”) ¶ 36, ECF No. 5.) Plaintiff alleges the Products are therefore deceptively labelled and misbranded. Plaintiff brings claims against HWC, on behalf of himself and a class of all California consumers who purchased the Products within the four-year period prior to Plaintiff’s filing, for violations of California consumer protection statutes—the Consumer Legal Remedies Act (“CLRA”), Cal. Civ. Code § 1750 et seq.; the Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200 et seq.; and the False Advertising Law (“FAL”), Cal. Bus. & Prof. Code § 17500 et seq.—unjust enrichment, and breach of express warranty. Plaintiff filed the initial Complaint (ECF No. 1) on January 17, 2023 and filed the Amended Complaint (ECF No. 5) on February 23, 2023. Defendant moved to dismiss the complaint for lack of personal jurisdiction on April 4, 2023. (ECF No. 10.) On May 5, 2023, Plaintiff filed its Opposition. (ECF No. 11.) On May 11, 2023, Defendant filed a Reply. (ECF No. 12). The Court took the motion under submission without hearing on May 15, 2023. (See Order, ECF No. 13.) On September 13, 2023, the Court on its own motion directed the parties to submit supplemental briefs addressing the Ninth Circuit’s decision in Herbal Brands, Inc. v. Photoplaza, Inc., 72 F.4th 1085 (9th Cir. 2023). Each Party filed a supplemental brief on September 25, 2023. (Pl.’s Suppl. Br., ECF No. 15; Def.’s Suppl. Br., ECF No. 16.) Each Party filed a response on October 2, 2023. (Def.’s Resp. to Pl.’s Suppl. Br., ECF No. 17; Pl.’s Resp. to Def.’s Suppl. Br., ECF No. 18.) A defendant may move to dismiss a complaint for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). “In opposing a defendant’s motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing that jurisdiction is proper.” Ranza v. Nike, Inc., 793 F.3d 1059, 1068 (9th Cir. 2015) (quoting CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1073 (9th Cir. 2011)). When a defendant’s motion to dismiss on jurisdictional grounds rests “on written materials rather than an evidentiary hearing, ‘the plaintiff need only make a prima facie showing of jurisdictional facts.’” Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004) (quoting Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990)). “[U]ncontroverted allegations in the complaint must be taken as true.” Id. A. Personal Jurisdiction “Where,” as here, “there is no applicable federal statute governing personal jurisdiction, the district court applies the law of the state in which the district court sits.” Id. (citing Fed. R. Civ. P. 4(k)(1)(A)). California’s long-arm statute permits a court to exercise personal jurisdiction over a defendant to the extent permitted by the Due Process Clause of the Constitution. Cal. Code Civ. Proc. § 410.10. Therefore, “the jurisdictional analyses under state law and federal due process are the same.” Schwarzenegger, 374 F.3d at 801. Due process requires that a nonresident defendant have at least “minimum contacts” with the relevant forum such that the exercise of jurisdiction “does not offend traditional notions of fair play and substantial justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). “Personal jurisdiction may be founded on either general jurisdiction or specific jurisdiction.” Panavision Int’l, L.P. v. Toeppen, 141 F.3d 1316, 1320 (9th Cir. 1998). “A court may assert general jurisdiction over foreign (sister-state or foreign- country) corporations to hear any and all claims against them when their affiliations with the State are so ‘continuous and systematic’ as to render them essentially at home in the forum State.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011). The parties agree that general jurisdiction does not apply here. Plaintiff argues only that Defendant is subject to specific jurisdiction in this Court. The Ninth Circuit uses a three-prong test to determine whether the exercise of specific personal jurisdiction is proper: (1) “‘[t]he non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum’”; (2) “the claim must arise out of or relate to the defendant’s forum-related activities”; and (3) “the exercise of jurisdiction must be reasonable.” Glob. Commodities Trading Grp., Inc. v. Beneficio de Arroz Choloma, S.A., 972 F.3d 1101, 1107 (9th Cir. 2020) (quoting Schwarzenegger, 374 F.3d at 802 (9th Cir. 2004)). The plaintiff bears the initial burden of satisfying the first two prongs of this test. Id. “If the plaintiff succeeds in satisfying both of the first two prongs, the burden then shifts to the defendant to present a compelling case that the exercise of jurisdiction would not be reasonable.” Id. (quoting Schwarzenegger, 374 F.3d at 802). 1. Purposeful Availment Under the first prong of the three-part specific jurisdiction test, Plaintiff must establish that Defendant either purposefully availed itself of the privilege of conducting activities in California, or purposefully directed its activities toward California. Although courts “often use the phrase ‘purposeful availment,’ in shorthand fas

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