Wegbreit Group LLC v. Rite-Kem Incorporated

• Court: District Court, D. Arizona
• Decided: July 31, 2019
• Docket: 2:19-cv-01192
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Wegbreit Group LLC, No. CV-19-01192-PHX-DWL

10 Plaintiff, ORDER

11 v.

12 Rite-Kem Incorporated, et al.,

13 Defendants. 14 15 INTRODUCTION 16 Pending before the Court are motions to dismiss, or, in the alternative, transfer 17 venue filed by Defendants Rite-Kem Incorporated (“Rite-Kem”) and Mark C. Lovil 18 (“Lovil”) (together, “Defendants”). (Docs. 12, 14.) Both Defendants contend the Court 19 lacks personal jurisdiction over them. For the following reasons, the Court agrees and 20 grants both motions to dismiss. 21 BACKGROUND 22 Plaintiff Wegbreit Group LLC (“Wegbreit”) is a distributor of “personal amenity 23 items packaged in small sized containers (i.e. mouthwash, toothpaste, shampoo, 24 antibacterial wipes, etc.) generally designed to meet the needs of anyone who is away from 25 home such as guests in the hospitality industry, patients in the health care industry and 26 disaster victims.” (Doc. 1 ¶ 21.) Rite-Kem is “a vendor of emergency supply kits to the 27 General Services Administration . . . which kits were to be provided to the Federal 28 Emergency Management Agency . . . .” (Id. ¶ 22.) 1 The complaint alleges that Rite-Kem failed to pay for certain goods it received after 2 submitting purchase orders to Wegbreit. (Id. ¶¶ 28-31, 33.) The complaint further alleges 3 that, although Lovil, Rite-Kem’s president, agreed to be personally liable for Rite-Kem’s 4 debts, he also has not paid for the goods. (Id. ¶¶ 23-26, 32) 5 Wegbreit and Defendants have submitted declarations/affidavits in support of their 6 personal jurisdiction arguments. Wegbreit attached a declaration from Susan Wegbreit 7 (“Susan”), its vice president of sales, to its response to Rite-Kem’s motion (Doc. 17-1) and 8 its response to Lovil’s motion (Doc. 20-1). Lovil filed an affidavit in support of Rite- 9 Kem’s motion (Doc. 12-1) and another in support of his own motion (Doc. 14-1). The 10 relevant facts from those declarations/affidavits are as follows: 11 Rite-Kem is a Mississippi corporation with its principal place of business in 12 Mississippi. (Doc. 12-1 ¶ 2; Doc. 14-1 ¶ 3.) Lovil is also a Mississippi “resident citizen.” 13 (Doc. 14-1 ¶ 2.) 14 Wegbreit is an Arizona LLC with its principal place of business and headquarters 15 in Arizona. (Doc. 17-1 ¶¶ 3-4.)1 Wegbreit’s two employees both reside in Arizona. (Id. 16 ¶¶ 5, 27.) 17 Rite-Kem is not licensed to do business in Arizona, does not maintain an office in 18 Arizona, and does not own any real estate in Arizona. (Doc. 12-1 ¶¶ 4-6.) Furthermore, 19 Rite-Kem does not have an Arizona telephone number or statutory agent and does not 20 advertise or otherwise solicit business in Arizona. (Id. ¶¶ 6-8.) Similarly, Lovil also does 21 not own any property in Arizona or have an Arizona number. (Doc. 14-1 ¶¶ 6-7.) 22 1 The Court notes that, although the complaint alleges that Wegbreit is “a citizen of 23 Arizona” because it is “an Arizona limited liability company having its principal place of business in Phoenix, Arizona” (Doc. 1 ¶¶ 1, 6), neither the complaint nor the affidavits 24 from Susan identify the members of the LLC or allege the citizenship of those members. Because “an LLC is a citizen of every state of which its owners/members are citizens,” 25 Johnson v. Columbia Properties Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006), the Ninth Circuit has held that “to properly plead diversity jurisdiction . . . with respect to a 26 limited liability company, the citizenship of all of the members must be pled.” NewGen, LLC v. Safe Cig, LLC, 840 F.3d 606, 611 (9th Cir. 2016). Thus, Wegbreit has not met its 27 burden of establishing the Court has subject matter jurisdiction over this action. Although this deficiency would presumably be easy to cure, the Court will not require Wegbreit to 28 amend its complaint because, as discussed infra, dismissal is required due to a lack of personal jurisdiction. 1 On May 14, 2018, Lovil, on behalf of Rite-Kem, sent an email to Susan stating that 2 he “was given [her] contact information as a possible source for various personal care 3 (hygiene) items.” (Doc. 17-1 at 3 ¶ 11, 8.) 4 The next day, Lovil and Susan spoke by phone. (Id. at 3 ¶ 13.) They also exchanged 5 emails in which Susan indicated Wegbreit’s address was in Arizona and Lovil requested 6 pricing for certain products. (Id. at 3 ¶ 13, 10-11.) 7 After May 15, 2018, Rite-Kem and Wegbreit began exchanging “serial and 8 ongoing” emails and telephone calls. (Id. ¶ 14.) Rite-Kem’s calls and emails were 9 “directed from Mississippi to [Wegbreit] in Arizona.” (Id.) 10 “As a result of” these emails and calls, Rite-Kem and Wegbreit entered into a Credit 11 Application on or about July 2, 2018, which was “entered into and delivered . . . to 12 [Wegbreit] in Arizona.” (Id. ¶ 15.) This Credit Application lists an Arizona address for 13 Wegbreit. (Doc. 1-2 at 2-3.) Lovil “electronically signed” that form, as well as another 14 form allowing Wegbreit to obtain credit information about Rite-Kem from a bank in 15 Mississippi. (Doc. 12-1 ¶ 16.) 16 Susan states in her declaration that Rite-Kem and Lovil “jointly entered into” the 17 Credit Application. (Doc. 17-1 ¶ 15.) She further states that “Lovil was ‘unconditionally’ 18 obligated to pay” Rite-Kem’s debts to Wegbreit. (Doc. 20-1 ¶ 18.) In contrast, Lovil states 19 that he executed the Credit Application in his capacity as president of Rite-Kem, “did not 20 sign the Credit Application in [his] individual capacity,” and “did not personally guarantee 21 Rite-Kem’s payment obligations to Wegbreit.” (Doc. 14-1 ¶¶ 3-5.)2 22 Rite-Kem emailed its purchase orders from its office in Mississippi to Wegbreit in 23 Arizona. (Doc. 12-1 ¶ 18; Doc. 17-1 ¶ 17 [“All of [Rite-Kem’s] Purchase Orders were 24 directed from Mississippi to [Wegbreit] in Arizona . . . .”].) These purchase orders listed 25 Wegbreit’s Arizona address. (Doc. 1-2 at 6-15.) After Rite-Kem would receive a

26 2 In the Credit Application, under the text, “THE UNDERSIGNED AGREES TO UNCONDITIONALLY GUARANTEE PAYMENT OF ALL SUM OWED PURSUANT 27 TO THIS AGREEMENT AND FURTHER AGREES TO ITS TERMS AS STATED ABOVE. THANK YOU,” Lovil signed the line labeled “PERSONAL GUARANTOR.” 28 (Doc. 1-2 at 2.) Next to his signature, the text “Mark Lovil, President” is printed, and under his signature is a line labeled “TITLE,” next to which is printed “President.” (Id.) 1 shipment, Wegbreit would email an invoice to Rite-Kem seeking payment for the products 2 included in the shipment. (Doc. 12-1 ¶ 19.) Rite-Kem would mail the resulting payment 3 to Wegbreit’s Arizona address. (Id. ¶ 20.) 4 The products from the purchase orders at issue were shipped from Tennessee, 5 Mississippi, and New York to Rite-Kem in Mississippi. (Id. ¶¶ 23-26.) 6 Neither Lovil nor any other Rite-Kem representative traveled to Arizona for the 7 purpose of transacting business with Wegbreit. (Id. ¶ 28.) 8 ANALYSIS 9 I. Motion to Dismiss 10 A defendant may move to dismiss for lack of personal jurisdiction. Fed. R. Civ. P. 11 12(b)(2). “In opposing a defendant’s motion to dismiss for lack of personal jurisdiction, 12 the plaintiff bears the burden of establishing that jurisdiction is proper.” Ranza v. Nike, 13 Inc., 793 F.3d 1059, 1068 (9th Cir. 2015) (citation omitted). “Where, as here, the 14 defendant’s motion is based on written materials rather than an evidentiary hearing, the 15 plaintiff need only make a prima facie showing of jurisdictional facts to withstand the 16 motion to dismiss.” Id. (citations and internal quotation marks omitted). 17 “[U]ncontroverted allegations must be taken as true, and ‘[c]onflicts between parties over 18 statements contained in affidavits must be resolved in the plaintiff’s favor,’” but “[a] 19 plaintiff may not simply rest on the ‘bare allegations of [the] complaint.’” Id. (citations 20 omitted). 21 “Federal courts ordinarily follow state law in determining the bounds of their 22 jurisdiction over persons.” Morrill v. Scott Fin. Corp., 873 F.3d 1136, 1141 (9th Cir. 2017) 23 (quoting Daimler AG v. Bauman, 571 U.S. 117, 125 (2014)). “Arizona law permits the 24 exercise of personal jurisdiction to the extent permitted under the United States 25 Constitution.” Id. (citing Ariz. R. Civ. P. 4.2(a)). Accordingly, whether this Court has 26 “personal jurisdiction over Defendants is subject to the terms of the Due Process Clause of 27 the Fourteenth Amendment.” Id. 28 “Constitutional due process requires that defendants ‘have certain minimum 1 contacts’ with a forum state ‘such that the maintenance of the suit does not offend 2 ‘traditional notions of fair play and substantial justice.’” Id. (quoting Int’l Shoe Co. v. 3 Washington, 326 U.S. 310, 316 (1945)). Minimum contacts exist “if the defendant has 4 ‘continuous and systematic general business contacts’ with a forum state (general 5 jurisdiction), or if the defendant has sufficient contacts arising from or related to specific 6 transactions or activities in the forum state (specific jurisdiction).” Id. at 1142 (citation 7 omitted). 8 Wegbreit does not contend Defendants are subject to general jurisdiction in 9 Arizona.3 Thus, the Court must apply the Ninth Circuit’s three-prong test to determine 10 whether Defendants had sufficient contacts with Arizona to be subject to specific personal 11 jurisdiction:

12 (1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform 13 some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and 14 protections of its laws;

15 (2) the claim must be one which arises out of or relates to the defendant’s forum-related activities; and 16 (3) the exercise of jurisdiction must comport with fair play and substantial 17 justice, i.e., it must be reasonable. 18 Morrill, 873 F.3d at 1142. “The plaintiff bears the burden of satisfying the first two prongs 19 of the test.” Id. (citation omitted). “If the plaintiff succeeds in satisfying both of the first 20 two prongs, the burden then shifts to the defendant to ‘present a compelling case’ that the 21 exercise of jurisdiction would not be reasonable.” Id. (citations omitted). 22 In the Ninth Circuit, courts use the “purposeful availment” test for claims arising 23 from contract and the “purposeful direction” test for claims arising from tort. Id. Here, 24 Wegbreit’s claims arise from contract, so the “purposeful availment” test applies. 25 “To have purposefully availed itself of the privilege of doing business in the forum, 26 a defendant must have performed some type of affirmative conduct which allows or 27 3 Although Defendants apparently interpreted the complaint as asserting a general 28 jurisdiction claim (Doc. 13 at 6-7; Doc. 15 at 3-4), Wegbreit did not advance any general jurisdiction-based arguments in its response to either motion to dismiss. 1 promotes the transaction of business within the forum state.” Boschetto v. Hansing, 539 2 F.3d 1011, 1016 (9th Cir. 2008) (citation and internal quotation marks omitted). Courts 3 must “look[] to the defendant’s contacts with the forum State itself, not the defendant’s 4 contacts with persons who reside there.” Walden v. Fiore, 571 U.S. 277, 285 (2014). The 5 defendant must itself engage in actions “that create a ‘substantial connection’ with the 6 forum State.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985) (citation 7 omitted). Its contacts with the state must, thus, be more than “random, fortuitous, or 8 attenuated.” Id. (citation and internal quotation marks omitted). 9 When conducting this purposeful-availment analysis, courts must follow “the 10 Supreme Court’s admonition that the formation of a contract with a nonresident defendant 11 is not, standing alone, sufficient to create jurisdiction.” Boschetto, 539 F.3d at 1017 (citing 12 Burger King, 471 U.S. at 478). Thus, where there is a contract with a resident party, in 13 “determining whether the defendant purposefully established minimum contacts within the 14 forum,” courts should evaluate the parties’ “prior negotiations and contemplated future 15 consequences, along with the terms of the contract and the parties’ actual course of 16 dealing.” Burger King, 471 U.S. at 479. 17 In Burger King, the Supreme Court applied these factors and determined that the 18 district court in Florida had jurisdiction over the defendant. Id. at 478-82. The defendant 19 had entered into a franchise agreement with Burger King, a Florida corporation, which was 20 to last 20 years. Id. at 465-68. The governing contracts provided that the franchise 21 relationship was governed by Florida law and called for payment of all fees to Florida. Id. 22 at 465-66. Burger King’s Florida headquarters would set franchise policy and resolve 23 major problems, and other offices would conduct day-to-day monitoring. Id. at 466. The 24 Court found that the defendant’s contacts with Florida were substantial, given the 25 defendant’s “voluntary acceptance of the long-term and exacting regulation of his business 26 from Burger King’s Miami headquarters.” Id. at 480. In reaching this conclusion, the 27 Court emphasized the parties’ “20-year interdependent relationship,” “that Burger King’s 28 operations are conducted and supervised from the Miami headquarters, that all relevant 1 notices and payments must be sent there, . . . that the agreements were made in and 2 enforced from Miami,” and the “provisions in the various franchise documents providing 3 that all disputes would be governed by Florida law.” Id. at 479-82. 4 A. Rite-Kem 5 Rite-Kem’s contacts with Arizona differ substantially from those in Burger King 6 and are insufficient to conclude that Rite-Kem purposefully availed itself of privilege of 7 doing business in Arizona. First, the parties did not have a long-term contract; instead, 8 they had individual purchase orders for each transaction. “[A]s cases in this Circuit have 9 held, a contract for the sale of a good that is a ‘one-shot affair’ and does not create a 10 substantial connection or ongoing obligations in the forum state is not sufficient to establish 11 purposeful availment.” Nimbus Data Sys., Inc. v. Modus LLC, 2014 WL 7387200, *5 (N.D. 12 Cal. 2014); see also Boschetto, 539 F.3d at 1019 (finding no purposeful availment where 13 dispute involved “a one-time contract for the sale of a good that involved the forum state 14 only because that is where the purchaser happened to reside, but otherwise created no 15 ‘substantial connection’ or ongoing obligations there”). 16 Although this case may not literally be a “one-shot affair,” because the complaint 17 arises from the alleged breach of multiple purchase orders, it is significant that those 18 purchase orders did not create a long-term relationship between the parties imposing 19 continuing obligations.4 In LLC Wholesale Supply, L.L.C. v. Allion HealthCare, Inc., 2013 20 WL 12284460 (D. Ariz. 2013), the court encountered an analogous situation. There, the 21 defendants had received over 250 invoices from the plaintiffs for products purchased in an 22 almost three-year period. Id. at *1. In dispute were payments on 20 invoices. Id. at *2. 23 Despite the long-term relationship, the court found no purposeful availment because “the 24 parties [did not] contemplate[] a continuing relationship with ongoing obligations,” given 25 that “[t]he parties did not have a long-term formal contract, but each purchase order and

26 4 In support of its contention that the parties had “a continuing business relationship and continuous course of dealing,” Wegbreit cites both the purchase orders and “a 27 contractual undertaking in the form of a Credit Application binding [Rite-Kem] to make payments to [Wegbreit] in Arizona.” (Doc. 18 at 9.) But the Credit Application only 28 established the payment obligations under the individual purchase orders—it did not create additional obligations beyond those purchase orders. 1 delivery constituted a separate contract.” Id. at *4. 2 Similarly, in CTG Int’l (N. Am.), Inc. v. Fiberglass Indus., Inc., 2015 WL 1565428 3 (C.D. Cal. 2015), the dispute concerned the defendants’ failure to make payments on 17 4 separate orders of fiberglass. Even though the defendants had initiated the business 5 relationship with knowledge that the plaintiff’s office was in California, had submitted 6 purchase orders to the plaintiff’s California office, had directed payment to the plaintiff’s 7 California office, and had contacted the plaintiff at the plaintiff’s California office, the 8 court still found no purposeful availment because the “individual transactions” resulted in 9 “only ‘minimal future consequences.’” Id. at *5.5 10 Second, although Wegbreit’s two employees were located in Arizona, there is no 11 evidence that, other than responding to emails and phone calls and receiving payments 12 from Rite-Kem, these employees were doing anything in Arizona related to the purchase 13 orders with Rite-Kem. This case is thus unlike Burger King, where Burger King was 14 conducting and supervising franchise operations out of its headquarters in Florida. Here, 15 the products in the purchase orders in dispute were not being shipped from Arizona and no 16 Rite-Kem employees ever traveled to Arizona in connection with the relationship with 17 Wegbreit. Compare Azzarello v. Navagility, LLC, 2008 WL 4614667, *4 (N.D. Cal. 2008) 18 (no purposeful availment where plaintiff’s “California location [did not] have any bearing 19 on the terms or execution of the agreement”), and CTG, 2015 WL 1565428 at *4 (no 20 purposeful availment where Defendant’s “contact with Plaintiff in California was 21 incidental: the fiberglass Defendant purchased from Plaintiff was manufactured in China 22 and then shipped to Defendant in New York [and] no [Defendant] official ever entered 23 California for any purpose related to the purchase”), with Roth v. Garcia Marquez, 942 24 F.2d 617, 622 (9th Cir. 1991) (contacts with California were sufficient in part because “the

25 5 See also Amergent Techs, LLC v. TransAtlantic Lines, LLC, 2017 WL 3337166, *5- 6 (S.D. Cal. 2017) (granting motion to dismiss based on lack of personal jurisdiction, where 26 the plaintiff’s “core argument seems to be that the [defendant] solicited and received services from a California company and should [therefore] now be held accountable in 27 California courts,” because (1) “this was a one-off contract for a short-term, discrete project to service ships outside of California,” (2) “the parties engaged in minimal negotiations 28 before entering into the Agreement,” and (3) the contract did not contain a choice-of-law provision requiring that California law govern). 1 contract concerned a film, most of the work for which would have been performed in 2 California,” so “[t]his is not an instance where the contract was a one-shot deal that was 3 merely negotiated and signed by one party in the forum; on the contrary, most of the future 4 of the contract would have centered on the forum”). 5 Third, unlike in Burger King, there were no provisions in any contract between the 6 parties specifying that Arizona law would apply to any disputes between the parties. 7 To be sure, Rite-Kem knew Wegbreit was based in Arizona, engaged in telephone 8 and email communications with Wegbreit, and mailed payments to Wegbreit in Arizona. 9 Those actions are not, however, sufficient for Rite-Kem to have purposefully availed itself 10 of the privilege of doing business in Arizona. Azzarello, 2008 WL 4614667 at *3 11 (“[K]nowledge that a party to a transaction resides in the forum state fails to establish the 12 necessary minimum contacts.”); CTG, 2015 WL 1565428 at *4 (“[T]he mere fact that 13 Defendants opted to participate in a business agreement with Plaintiff knowing that 14 Plaintiff had an office in California is insufficient to create minimum contacts.”). Indeed, 15 the Ninth Circuit has held that “ordinarily use of the mails, telephone, or other international 16 communications simply do not qualify as purposeful activity invoking the benefits and 17 protection of the [forum] state.” Peterson v. Kennedy, 771 F.2d 1244, 1262 (9th Cir. 1985) 18 (citation and internal quotation marks omitted). The Ninth Circuit has further recognized 19 that the “normal incidents” of a business relationship, such as accepting payment, making 20 phone calls, and sending letters, “by themselves, do not establish purposeful availment; 21 this is not the deliberate creation of a substantial connection.” Sher v. Johnson, 911 F.2d 22 1357, 1262 (9th Cir. 1990).6 23 Notwithstanding all of this, Wegbreit contends that “[i]f, as here, the defendant 24 6 See also Hupe v. Mani, 2016 WL 3690093, *3 (D. Nev. 2016) (noting that “[t]he 25 agreement and practice of mailing or making payment in the forum state does not weigh heavily ‘in the calculus of contacts’” and finding that “the fact that Plaintiff Hupe is a 26 Nevada resident and that regular payments for the slice of NWA 5000 were sent to him in Nevada is insufficient to invoke the benefits and protections of Nevada for the purposes of 27 personal jurisdiction”) (citation omitted); Nimbus, 2014 WL 7387200 at *5 (“[T]he fact that a defendant has solicited a contract and communicated with the plaintiff in the forum 28 state by email and telephone is also insufficient to establish purposeful availment.”). 1 initiated or solicited the economic relationship with the plaintiff created by contract, the 2 jurisdictional inquiry usually comes to an end and personal jurisdiction is asserted by virtue 3 of the Initiation/Solicitation Element alone.” (Doc. 18 at 8.) 4 This argument fails for several reasons. First, the Supreme Court in Burger King 5 instructed courts not to apply “mechanical tests” in deciding whether a contractual 6 relationship is sufficient to establish purposeful availment and instead supplied various 7 factors for courts to consider in making this determination. 471 U.S. at 478-79; Azzarello, 8 2008 WL 4614667 at *3 (“[A]lthough the solicitation of a contract is relevant to the 9 jurisdictional analysis, Burger King requires more than such ‘reaching out.’”). Thus, any 10 contrary cases decided before Burger King are no longer good law.7 11 Second, the Ninth Circuit cases cited by Wegbreit are inapposite. In Cubbage v. 12 Merchent, 744 F.2d 665 (9th Cir. 1984), the court relied on the defendants’ extensive 13 advertising in California to determine that the defendants had purposefully availed 14 themselves of the privilege of conducting business in California. Id. at 668-70. In contrast, 15 Rite-Kem did not advertise in Arizona and only reached out to Wegbreit upon receiving 16 Susan’s contact information. And in Gates Learjet Corp. v. Jensen, 743 F.2d 1325 (9th 17 Cir. 1984), the defendant had solicited an agreement from an Arizona entity “contain[ing] 18 a choice of law provision specifying Arizona” and “made several visits to” and “accepted 19 delivery of airplanes” in Arizona. Id. at 1332-33. Here, the parties do not have an 20 agreement with a choice-of-law provision specifying that Arizona law applies and Rite- 21 Kem has not engaged in any activity in Arizona. 22 Third, the remaining cases cited by Wegbreit are non-binding and inapposite. In 23 Interfirst Bank Clifton v. Fernandez, 844 F.2d 279 (5th Cir. 1988), the defendant “called 24 to Texas to purchase the plane,” “voluntarily agreed to finance the plane through a Texas 25 bank,” “signed a loan agreement containing a Texas choice-of-law clause,” “agreed to

26 7 For example, Wegbreit places heavy reliance on McGee v. Int’l Life Ins. Co., 355 U.S. 220 (1957). (Doc. 17 at 3; Doc. 18 at 8-9.) Yet in Burger King, the Supreme Court 27 clarified that although McGee’s holding that “even a single act can support jurisdiction” remains good law, such single acts “may not be sufficient to establish jurisdiction if their 28 nature and quality and the circumstances of their commission create only an attenuated affiliation with the forum.” 471 U.S. at 475 n.18. 1 return the plane to Texas for sale,” and “signed a letter consenting to sale under Texas 2 foreclosure procedures and agreeing to liability for any deficiency between the sale price 3 and the amount of the note.” Id. at 283-84. And in First City Bank, N.A. v. Air Capitol 4 Aircraft Sales, Inc., 820 F.2d 1127 (10th Cir. 1987), the defendant’s representative had not 5 only “initiated the contact with the [plaintiff]” in Oklahoma but also traveled to Oklahoma 6 to meet with the plaintiff’s representative at its office to discuss the terms at issue. Id. at 7 1131. The court also considered the defendant’s “prior business arrangements with the 8 [plaintiff]” in finding that the parties “had a continuing and substantial business 9 relationship.” Id. The contacts in both of those cases are far more significant than those 10 here. 11 Because the Court finds that Wegbreit has failed to satisfy the first prong of the 12 Ninth Circuit’s three-part test for specific personal jurisdiction—purposeful availment— 13 the Court need not address the other two factors. 14 B. Lovil 15 Wegbreit argues that “[i]t is well recognized that, whereas [sic] here a nonresident 16 in the position of the Individual Defendant has executed and delivered a personal guaranty 17 or guaranty of performance to a plaintiff in another forum state, this constitutes personal 18 availment within that forum state and subjects the nonresident to personal jurisdiction in 19 the forum state both under controlling state law and federal law precedents.” (Doc. 20 at 20 8-11.)8 In support of this argument, Wegbreit cites Forsythe v. Overmyer, 576 F.2d 779 21 (9th Cir. 1978), and Hamada v. Valley National Bank, 555 P.2d 1121 (Ariz. Ct. App. 1976). 22 This argument misses the mark. Forsythe and Hamada were decided before Burger 23 King, in which the Supreme Court recognized that the act of contracting with an out-of- 24 state party does not automatically establish sufficient minimum contacts in that state. 471 25 8 To be clear, the parties dispute whether Lovil signed the Credit Application’s 26 guarantee provision in his individual or official capacity. Nevertheless, “[c]onflicts between parties over statements contained in affidavits must be resolved in the plaintiff’s 27 favor.” Ranza, 793 F.3d at 1068 (citation and internal quotation marks omitted). Thus, for purposes of ruling on Lovil’s motion to dismiss, the Court thus accept Wegbreit’s 28 contention that Lovil signed the guarantee provision in his individual capacity. 1 U.S. at 478. Here, neither the purchase orders nor the Credit Application were connected 2 to Arizona in any way other than the fortuitous fact that Wegbreit happens to be an Arizona 3 entity. Hamada also provided no reasoning in support of its conclusion that “the execution 4 of the letter which Mr. Hamada knew was going to be used in a transaction in Arizona 5 provided sufficient minimal contact with this state for it to exercise jurisdiction.” 555 P.2d 6 at 1124. It is, thus, unpersuasive to this Court.9 7 This case is also factually different from Forsythe, in which the defendant was 8 “assuming personal liability in the event of default on a contract expressly subject to 9 jurisdiction in the California forum” and the “guaranty was part of the negotiating strategy 10 in California.” 576 F.2d at 783. Here, the purchase orders are not “expressly subject to” 11 Arizona law, Lovil “electronically signed” the Credit Application while in Mississippi, and 12 there was no “negotiating strategy” in Arizona. Cf. Rosen Materials of Nevada, LLC v. 13 MDA LLC, 2018 WL 3232832, *3 (D. Nev. 2018) (distinguishing Forsythe and finding 14 that individual defendant who had executed personal guarantee had not “purposefully 15 availed himself of the privilege of conducting activities in Nevada” where “there [was] no 16 evidence . . . the personal guarantee . . . was negotiated in Nevada,” “it appear[ed] to be a 17 form contract, and [defendant] declare[d] that he executed it in his office in Utah,” and 18 “there [was] no evidence that [defendant] regularly involved himself personally in his 19 company’s ventures by personally guaranteeing their obligations like the owner in Forsythe 20 did”). 21 Finally, to the extent Wegbreit is contending that Lovil’s actions in his capacity as 22 president of Rite-Kem are sufficient to establish purposeful availment, this argument is 23 also unavailing. As a threshold matter, “a corporate officer who has contact with a forum 24 9 Wegbreit is mistaken in contending that Hamada is “controlling.” (Doc. 20 at 8, 9, 25 13, 14.) Federal courts do indeed “follow state law in determining the bounds of their jurisdiction over persons.” Morrill, 873 F.3d at 1141 (citation omitted). But in doing so, 26 this Court simply looks to Arizona’s long-arm statute to determine that “Arizona law permits the exercise of personal jurisdiction to the extent permitted under the United States 27 Constitution.” Id. (citing Ariz. R. Civ. P. 4.2(a)). Only where a federal court is interpreting state law is it “bound by the decisions of the highest state court.” Vernon v. City of Los 28 Angeles, 27 F.3d 1385, 1391 (9th Cir. 1994). The Court is not interpreting state law here, and, in any event, the Arizona Court of Appeals is not Arizona’s highest court. only with regard to the performance of his official duties is not subject to personal 2|| jurisdiction in that forum.” Forsythe, 576 F.2d at 783-84. Moreover, the Court has found that Rite-Kem’s contacts are insufficient to establish purposeful availment. 4 Again, because the Court finds that Wegbreit has failed to satisfy the first prong of 5|| the Ninth Circuit’s three-part test for specific personal jurisdiction—purposeful 6|| availment—as to Lovil, the Court need not address the other two factors. I. Motion to Transfer Venue 8 Because the Court grants both motions to dismiss, the Court will deny as moot the 9|| alternative requests to transfer venue. 10 Accordingly, IT IS ORDERED that: 11 (1) — Rite-Kem’s motion to dismiss for lack of personal jurisdiction (Doc. 12) is granted; 13 (2) Lovil’s motion to dismiss for lack of personal jurisdiction (Doc. 14) is 14|| granted; 15 (3) Rite-Kem’s and Lovil’s alternative requests to transfer venue are denied; and 16 (4) Wegbreit’s complaint is dismissed without prejudice. The Clerk of Court || 1s directed to enter judgment accordingly and shall terminate this case. 18 Dated this 31st day of July, 2019. 19 20 L~ — a1 fe 92 United States District Judge 23 24 25 26 27 28

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