TigerGraph, Inc. v. Peak

District Court, N.D. California·Decided October 21, 2020·No. 4:20-cv-05489·Unknown

Opinion

Case No. 20-cv-05489-PJH Plaintiff,

v. ORDER DENYING MOTION TO DISMISS AND DENYING MOTION TO Defendant. Re: Dkt. No. 9

Before the court is defendant Brendon Peak’s (“defendant”) motion to dismiss and, in the alternative, motion to transfer venue. The matter is fully briefed and suitable for decision without oral argument. Having read the parties’ papers and carefully considered their arguments and the relevant legal authority, and good cause appearing, the court rules as follows. On July 6, 2020, plaintiff TigerGraph, Inc. (“TigerGraph” or “plaintiff”) filed a complaint (“Compl.”) in San Francisco County Superior Court against defendant asserting one claim for declaratory relief. Dkt. 1-1. Defendant removed the case to federal court on August 6, 2020, (Dkt. 1), and now moves to dismiss the complaint for lack of personal jurisdiction, improper venue, and forum non conveniens, or, in the alternative, moves to transfer the case to the district court for the District of Massachusetts, (Dkt. 9). Plaintiff is a Delaware corporation with its principal place of business in Redwood City, California. Compl. ¶ 1. TigerGraph is a technology company that provides a “graph employee of TigerGraph who resides in Hingham, Massachusetts. Id. ¶ 2. On or about January 9, 2018, TigerGraph offered a letter agreement to defendant for his employment as a regional sales director, which Peak executed the following day. Id. ¶ 6, Ex. A. Under the terms of the letter agreement, defendant’s employment was “at will,” he received a base salary, and was eligible to receive additional commission based on annual sales targets. Id. ¶¶ 7–8. In 2019 and 2020, the parties entered into annual Sales Compensation Plans that provided for Peak’s employee commission plan. Id. ¶ 9, Exs. C, D. Each new annual plan superseded and replaced the previous year’s sales compensation plan. Id. ¶ 11. Due to the COVID-19 pandemic, plaintiff determined that it could not afford to retain its entire workforce and on May 14, 2020, TigerGraph notified defendant that his employment with the company would terminate effective the next day. Id. ¶¶ 13–14. Plaintiff alleges that under the 2020 Sales Compensation Plan, commissions for orders that defendant made before his termination are paid when the customer pays plaintiff. Id. ¶ 16. With the exception of one customer who has yet to pay TigerGraph, TigerGraph alleges that it has paid Peak all commissions owed for customers who have already paid TigerGraph. Id. On June 24, 2020, defendant threatened to file a lawsuit against plaintiff if it would not agree to pay Peak commission on terms different than the Sales Compensation Plans required and for commissions on uncertain potential orders where no actual signed order existed prior to defendant’s termination. Id. ¶ 17. On July 6, 2020, plaintiff filed this declaratory relief action for a declaration that Peak has been fully compensated by TigerGraph for all commissions owed to him under the Sales Compensation Plans on accepted orders and Peak is not entitled to future commissions on uncertain potential orders where the orders were obtained by other TigerGraph employees or made and accepted after Peak’s termination. Id. ¶ 20, Prayer for Relief. Separately, on August 10, 2020, defendant filed a complaint against TigerGraph and two of the company’s executives and a related company, GraphSQL, Inc., in the 20-cv-11496 (D. Mass.). A. Legal Standard 1. Rule 12(b)(2) The party seeking to invoke a federal court’s jurisdiction bears the burden of demonstrating jurisdiction. Picot v. Weston, 780 F.3d 1206, 1211 (9th Cir. 2015). A federal court may dismiss an action under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction. When resolving a motion to dismiss under Rule 12(b)(2) on written materials, the court accepts uncontroverted facts in the complaint as true and resolves conflicts in affidavits in the plaintiffs’ favor. Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011). “Federal courts ordinarily follow state law in determining the bounds of their jurisdiction over persons.” Daimler AG v. Bauman, 571 U.S. 117, 125 (2014); see Fed. R. Civ. Proc. 4(k)(1)(a). California’s long arm statute permits exercise of personal jurisdiction to the fullest extent permissible under the U.S. Constitution, therefore, the court’s inquiry “centers on whether exercising jurisdiction comports with due process.” Picot, 780 F.3d at 1211; see Cal. Code Civ. Proc. § 410.10. The Due Process Clause of the Fourteenth Amendment “limits the power of a state’s courts to exercise jurisdiction over defendants who do not consent to jurisdiction.” Martinez v. Aero Caribbean, 764 F.3d 1062, 1066 (9th Cir. 2014). Due process requires that the defendant “have certain minimum contacts with it such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotation marks omitted) (citations omitted). Under the “minimum contacts” analysis, a court can exercise either “general or all-purpose jurisdiction,” or “specific or conduct-linked jurisdiction.” Daimler, 571 U.S. at 121–22 (citing Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)). 2. Rule 12(b)(3) division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.” 28 U.S.C. § 1406(a). If a defendant files a motion pursuant to Federal Rule of Civil Procedure 12(b)(3) to dismiss for improper venue, it is the plaintiff’s burden to establish that venue is properly in the district where the suit was filed. Piedmont Label Co. v. Sun Garden Packing Co., 598 F.2d 491, 496 (9th Cir. 1979). In considering a motion to dismiss under Rule 12(b)(3), a court need not accept the pleadings as true and may consider facts outside the pleadings. See Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 324 (9th Cir. 1996). Where venue is improper, a court has discretion to dismiss the case pursuant to Rule 12(b)(3) or transfer the case in the interests of justice to an appropriate jurisdiction under 28 U.S.C. § 1406(a). See King v. Russell, 963 F.2d 1301, 1304 (9th Cir. 1992) (per curiam). 3. 28 U.S.C. § 1404 “For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought . . . .” 28 U.S.C. § 1404(a). The party moving for transfer for the convenience of parties and witnesses the burden of demonstrating transfer is appropriate. Commodity Futures Trading Comm’n v. Savage, 611 F.2d 270, 279 (9th Cir. 1979). In considering a § 1404(a) motion to transfer, the court must look at each of the enumerated factors—whether the action could hav

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