Verbick v. The Movement Technology Company, Inc.

Opinion

TODD E. VERBICK, an individual, Case No.: 20-CV-611 TWR (DEB)

Plaintiff, ORDER (1) TAKING MATTER v. UNDER SUBMISSION WITHOUT ORAL ARGUMENT; (2) GRANTING DEFENDANT THE COMPANY, INC., a Washington MOVEMENT COMPANY, INC.’S corporation; PREDICTUV MOTION TO DISMISS WITH TECHNOLOGIES, INC., a Delaware PREJUDICE; AND corporation; PREDICTUV LLC, a (3) FOR PLAINTIFF TO SHOW Delaware limited liability company; CAUSE WHY DEFENDANTS KELVIN HILL, an individual; ZSOLT PREDICTUV TECHNOLOGIES, CSENDE, an individual; VIVIEN INC. AND PREDICTUV LLC SZAKACS, an individual; SHOULD NOT BE DISMISSED CHRISTOPHER KEIL, an individual; PURSUANT TO CIVIL LOCAL NIALL LAWLOR, an individual; RULES 41.1(a) AND 55.1 GERRY LAWLOR, an individual; ROB

GRINNELL, an individual; and DOES 1 (ECF No. 65) to 100, Defendants. Presently before the Court is Defendant The Movement Technology Company, Inc.’s (“TMC”) Motion to Dismiss Plaintiff Todd E. Verbick’s Second Amended Complaint. (“Mot.,” ECF No. 65.) The Court takes this matter under submission without oral argument pursuant to Civil Local Rule 7.1(d)(1). Having carefully considered the parties’ arguments, Plaintiff’s Second Amended Complaint (“SAC,” ECF No. 63), and the relevant law, the Court GRANTS WITH PREJUDICE Defendant’s Motion. The Court also ORDERS Plaintiff TO SHOW CAUSE why this action should not be dismissed as to Defendants Predictuv Technologies, Inc. and Predictuv LLC pursuant to Civil Local Rules 41.1(a) and 55.1. The Court incorporates the factual and procedural background from the Court’s November 19, 2021, Order (1) Granting Motion to Dismiss First Amended Complaint, and (2) Dismissing Without Prejudice Plaintiff’s First Amended Complaint. (See ECF No. 62 at 2–4.) “A Court’s power to exercise jurisdiction over a party is limited by both statutory and constitutional considerations.” In re Packaged Seafood Prod. Antitrust Litig., 338 F. Supp. 3d 1118, 1135 (S.D. Cal. 2018). Constitutionally, “[t]he Due Process Clause of the Fourteenth Amendment constrains a State’s authority to bind a nonresident defendant to a judgment of its courts.” Walden v. Fiore, 571 U.S. 277, 283 (2014) (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980)). Statutorily, “California’s long- arm statute allows the exercise of personal jurisdiction to the full extent permissible under the U.S. Constitution.” Daimler AG v. Bauman, 571 U.S. 117, 125 (2014); see also Cal. Civ. Proc. Code § 410.10. The Supreme Court has recognized “two types of personal jurisdiction: ‘general’ (sometimes called ‘all-purpose’) jurisdiction and ‘specific’ (sometimes called ‘case-

1 Plaintiff contends that he was “forced to wait almost a year from the time of [Defendants’ April 2020] jurisdictional challenge to Plaintiff’s original Complaint for a ruling[,]” which was issued on March 25, 2021. (See ECF No. 66 (“Opp’n”) at 2; see also id. at 7.) Plaintiff, however, fails to take into consideration that this case—along with over 200 others—was not transferred to the undersigned until October 6, 2020. (See ECF No. 41.) The Court also notes that Plaintiff’s lack of compliance with this District’s Civil Local Rules and the undersigned’s Standing Order for Civil Cases has delayed the Court’s linked’) jurisdiction.” Bristol-Myers Squibb Co. v. Super. Ct., 582 U.S. ___, 137 S. Ct. 1773, 1780 (2017) (citing Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)). “For an individual, the paradigm forum for the exercise of general jurisdiction is the individual’s domicile; for a corporation, it is an equivalent place, one in which the corporation is fairly regarded as at home.” Id. (quoting Goodyear, 564 U.S. at 924). “A court with general jurisdiction may hear any claim against that defendant, even if all the incidents underlying the claim occurred in a different State.” Id. (emphasis in original) (citing Goodyear, 564 U.S. at 919). For a court to exercise specific jurisdiction, by contrast, “‘the suit’ must ‘aris[e] out of or relat[e] to the defendant's contacts with the forum.’” Id. (alterations and emphasis in original) (quoting Daimler, 571 U.S. at 127 (2014)) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472–473 (1985); Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984)). “In other words, there must be ‘an affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State and is therefore subject to the State’s regulation.’” Id. (alteration in original) (quoting Goodyear, 564 U.S. at 919). “For this reason, ‘specific jurisdiction is confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction.’” Id. (quoting Goodyear, 564 U.S. at 919). TMC moves to dismiss Plaintiff’s Second Amended Complaint for lack of personal jurisdiction pursuant to Rule 12(b)(2). (See Mot. at 1.) Alternatively, TMC requests transfer of this action to the Western District of Washington pursuant to the provisions in the disputed contract and 28 U.S.C. sections 1406 and 1631. (See id.) Plaintiff opposes both requests, asserting that TMC is subject to personal jurisdiction due to it “actively selling convertible securities and seeking high level investors to purchase TMC in California.” (See Opp’n at 5.) / / / / / / I. Personal Jurisdiction For the reasons discussed previously, (see ECF Nos. 48, 62), Plaintiff again fails to establish personal jurisdiction over Defendant TMC. The redline of the Second Amended Complaint, as compared to the First Amended Complaint, indicates that most of Plaintiff’s “amendments” were decapitalizing Defendants’ names. (Compare ECF No. 70 (redline of SAC), with ECF No. 49 (FAC).) The only substantive addition that touches the jurisdictional analysis is Plaintiff’s allegation he was also in attendance at the 2017 San Diego meeting with Dean Graziano. (See SAC ¶ 24.) This fact, however, does not impact the Court’s analysis. The Court previously found that the nexus between the San Diego meeting and Plaintiff’s purchase of the convertible security was “too attenuated to find that the underlying alleged harm in the instant case arose from TMC’s actions at the initial meeting.” (See ECF No. 62 at 9.) The Court noted in a footnote that the Plaintiff’s absence from the meeting simply “further demonstrat[ed] the attenuation,” (id. (emphasis added)), i.e., it was not the sole, or even main, factor in the Court’s finding that jurisdiction does not exist. Thus, the Court again DISMISSES, this time WITH PREJUDICE, Plaintiff’s Second Amended Complaint against Defendant TMC for lack of personal jurisdiction. II. Transfer of Venue Defendant TMC contends that the Western District of Washington “has personal jurisdiction over TMC and would be a more appropriate venue for the action.” (Mot. at 8.) Plaintiff opposes the transfer, but states that if “any relief is warranted it is only an order transferring the venue of the case.” (See Opp’n at 3–4.) In light of its dismissal of this action as to Defendant TMC, see supra Section I, the Court DENIES AS MOOT TMC’s alternative request for transfer of venue to the Western District of Washington. III. Breach of Contract Although the Court has dismissed Defendant TMC, which does not seek to dismiss Plaintiff’s breach of contract claim, the Court briefly addresses the claim solely to correct an error in Plaintiff’s Opposition. Plaintiff claims that the Court found in its prior dismissal order, (see ECF No. 62), that “Plaintiff’s Breach of Contract cause of action could only be maintained against TMC because it is the only party to the Convertible Security Agreement.” (See Opp’n at 8.) Further, Plaintiff contends that the Court found the breach of contract cause of action against TMC to be viable. (See id. at 3.) The Court, however, made no such findings. TMC did not move to dismiss the breach of contract claim. (See ECF No. 52 at 7.) Instead, Defendants asserted only that the “Individual Defendants Should be Dismissed From the First Cause of Action for Breach of Contract.” (Id.) Because the issue was never briefed, and thus never ruled upon, it is inappropriate for Plaintiff to interpret the lack of dismissal against TMC as any affirmative finding by the Court. IV. Attorneys’ Fees and Costs Defendant TMC requests that, should the Court grant the instant Motion, the Court “entertain a separate attorneys’ fees and costs motion pursuant to the terms of the contract, namely Paragraph 5(d) of the Convertible Security Agreements.” (See Mot. at 8.) This language indicates that Defendant TMC plans to file an independent motion pursuant to Federal Rule of Civil Procedure 54(d).2 Therefore, the Court RESERVES ruling on the fee issue until the requisite motion is filed. / / / 2 Federal Rule of Civil Procedure 54(d), regarding attorneys’ fees, states in relevant part: (A) Claim to Be by Motion. A claim for attorney’s fees and related nontaxable expenses must be made by motion . . . .

(B) Timing and Contents of the Motion. Unless a statute or a court order provides otherwise, the motion must:

(i) be filed no later than 14 days after the entry of judgment;

(ii) specify the judgment and the statute, rule, or other grounds entitling the movant to the award; (iii) state the amount sought or provide a fair estimate of it; and

(iv) disclose, if the court so orders, the terms of any agreement about fees for Southern District of California Civil Local Rule 55.1 states: “If plaintiff(s) fail(s) to move for default judgment within thirty (30) days of the entry of a default, the Clerk will prepare, with notice, an order to show cause why the complaint against the defaulted party should not be dismissed.” Further, “[a]ctions or proceedings [that] have been pending in this court for more than six months, without any proceeding or discovery having been taken therein during such period, may, after notice, be dismissed by the Court for want of prosecution.” S.D. Cal. CivLR 41.1(a); see also Fed. R. Civ. P. 41(b) (“If the plaintiff fails to prosecute or to comply with these rules or a court order, a defendant may move to dismiss the action or any claim against it.”); Link v. Wabash R.R. Co., 370 U.S. 626, 633 (1962) (“[A] District Court may dismiss a complaint for failure to prosecute even without affording notice of its intention to do so or providing an adversary hearing before acting.”). On September 2, 2021, Plaintiff filed requests for entry of clerk default against Predictuv Technologies, Inc. and Predictuv LLC, (see ECF Nos. 55, 56), and the Clerk of the Court entered default against both parties on September 8, 2021. (See ECF No. 57.) Although Plaintiff states that he “intends to pursue default judgment against both parties,” (see Opp’n at 3), Plaintiff has taken no action—including moving for default judgment— against Defendants Predictuv Technologies, Inc. and Predictuv LLC for over six months. (See generally Docket.) Therefore, the Court ORDERS Plaintiff TO SHOW CAUSE within fourteen (14) days of the date this Order is docketed why the Complaint against Predictuv Technologies, Inc. and Predictuv LLC should not be dismissed pursuant to Civil Local Rules 41.1(a) and 55.1. In light of the foregoing, the Court GRANTS Defendant TMC’s Motion and DISMISSES WITH PREJUDICE Plaintiff’s Second Amended Complaint as to Defendant TMC for lack of personal jurisdiction. Accordingly, the Court DENIES AS MOOT Defendant’s alternative request to transfer venue. Finally, the Court ORDERS Plaintiff TO SHOW CAUSE within fourteen (14) days of the electronic docketing of this Order why Defendants Predictuv Technologies, Inc. and Predictuv LLC should not be dismissed pursuant to Civil Local Rules 41.1(a) and 55.1. Dated: May 10, 2022 “Ten 12 D (ore Honorable Todd W. Robinson United States District Judge