William J. Musgrave v. TheVaultMS.com LLC, et al.

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 San Francisco Division 11 WILLIAM J MUSGRAVE, Case No. 25-cv-10904-LB

12 Plaintiff, ORDER DENYING THE MOTION TO DISMISS AND ORDERING 13 v. JURISDICTIONAL DISCOVERY

14 THEVAULTMS.COM LLC, et al., Re: ECF No. 23 15 Defendants. 16 17 INTRODUCTION AND STATEMENT 18 TheVaultMS.com LLC (a Mississippi LLC) deals in antique cars and states on its website that 19 it sells to a global market on more than twenty websites in over fifty countries and has “1,000’s of 20 new customers weekly.”1 In June 2025, the plaintiff (a California resident) contacted Vault about 21 purchasing a restored 1954 Jaguar XK120 SE Roadster that he saw on the third-party website 22 Autotrader.com.2 Vault’s asking price was $185,000, the plaintiff made an initial offer of 23 24 1 Screenshot, Ex. A to Req. Judicial Notice – ECF No. 25-3 at 11. The court takes judicial notice of the screenshots at exhibits A, D, and E, though exhibit A required significant zooming to read. See 25 Gustavson v. Wrigley Sales Co., 961 F. Supp. 2d 1100, 1113 n.1 (N.D. Cal. 2013) (taking judicial notice of product packaging and website screenshots). The court does not take judicial notice of 26 exhibits B, C, F, and G because they are unreadable, even with zooming. Reply – ECF No. 27-1 at 3. Citations refer to material in the Electronic Case File (ECF); pinpoint citations are to the ECF- 27 generated page numbers at the top of documents. 2 1 $130,000, and after over a month of negotiating by phone and email, the parties agreed on 2 $160,000.3 Vault represented that the vehicle was in exceptional condition, suitable for immediate 3 use, and “perfect in every way.”4 Both JD Pass (Vault’s principal owner) and Shana Krapovicky 4 (Vault’s general manger) participated in negotiations.5 During negotiations, the plaintiff told the 5 defendants that he wanted to enter the vehicle in the Mille Miglia, a 1,000-mile race across Florida 6 in February 2026.6 7 On July 7, 2025, Vault issued an invoice confirming the purchase price of $160,000 and 8 promising that the vehicle would be delivered with a full detail, complete tool kit, and all 9 ownership paperwork in the defendants’ possession.7 The plaintiff paid the invoice the same day.8 10 Vault then hired a third-party transporter to deliver the vehicle from its lot in Mississippi to the 11 plaintiff’s residence in California.9 12 The vehicle was delivered on July 29, 2025, but without its title, bill of sale, or registration 13 paperwork.10 The plaintiff messaged Vault throughout August about the missing documents but 14 only received “vague responses” saying that the documents were coming.11 A few weeks after 15 receiving the vehicle, the plaintiff contacted Vault about “significant mechanical defects, missing 16 components, and cosmetic deficiencies” with the vehicle and demanded that Vault reimburse him 17 for the repairs.12 Vault refused.13 18 19 20 3 FAC – ECF No. 18 at 3 (¶ 17); Pass Decl. – ECF No. 23-1 at 2 (¶¶ 4–5). 21 4 FAC – ECF No. 18 at 3 (¶¶ 17–18). 22 5 Id. at 1–2 (¶¶ 3–4). 23 6 Musgrave Decl. – ECF No. 25-1 at 2 (¶ 5). 7 FAC – ECF No. 18 at 3 (¶ 19). 24 8 Id. at 4 (¶ 20). 25 9 Pass Decl. – ECF No. 23-1 at 2 (¶ 6). 26 10 FAC – ECF No. 18 at 4 (¶ 22); Musgrave Decl. – ECF No. 25-1 at 4 (¶ 16). 11 Musgrave Decl. – ECF No. 25-1 at 5 (¶ 19). 27 12 FAC – ECF No. 18 at 4 (¶ 23); Pass Decl. – ECF No. 23-1 at 3 (¶ 12). 1 In October 2025, the plaintiff received the vehicle’s title from Vault, but Vault had left the 2 seller section blank and unsigned and did not include an odometer disclosure statement.14 The 3 vehicle currently requires a new transmission and clutch, and the plaintiff was unable to 4 participate in the Mille Miglia race.15 The plaintiff filed claims against the defendants for (1) 5 breach of contract, (2) breach of express warranty, (3) fraud, (4) violation of the California 6 Consumer Legal Remedies Act, Cal. Civ. Code § 1750 et seq., and (5) violation of the California 7 Unfair Competition Law, Bus. & Prof. Code § 17200.16 8 The defendants moved to dismiss for lack of personal jurisdiction, contending that the sale of 9 the vehicle was a single transaction that is insufficient to subject them to personal jurisdiction in 10 California. The plaintiff counters that Vault’s spending months negotiating price, coordinating 11 delivery, and sending documentation created continuing obligations subjecting the defendants to 12 personal jurisdiction in California. 13 The parties consented to magistrate-judge jurisdiction. 28 U.S.C. § 636(c). The court held a 14 hearing on March 19, 2026. 15 The court denies the motion. Vault is correct that, on this record, a single sale from a passive 16 website without any facts pointing to conduct by Vault directed at other California residents does 17 not support personal jurisdiction. But the plaintiff contends that discovery would reveal that Vault 18 derives significant business from California, pointing to its global presence, high volume of sales, 19 and the demand for classic vehicles in California. The extent of Vault’s sales and marketing in 20 California could tip the scales in favor of exercising personal jurisdiction, and the court orders 21 limited jurisdictional discovery. 22 23 24

25 14 Musgrave Decl. – ECF No. 25-1 at 6 (¶¶ 26, 28–29); Pass Decl. – ECF No. 23-1 at 2 (¶¶ 7–8). Vault’s request to strike plaintiff’s counsel’s declaration regarding California vehicle-registration 26 requirements is moot because the court does not rely on it in deciding the motion to dismiss. See Reply – ECF No. 27 at 10–11. 27 15 Musgrave Decl. – ECF No. 25-1 at 7 (¶¶ 32, 35). 1 ANALYSIS 2 A plaintiff opposing a defendant’s challenge to personal jurisdiction must establish that 3 jurisdiction is proper. Ranza v. Nike, Inc., 793 F.3d 1059, 1068 (9th Cir. 2015). The court may 4 consider affidavits and other evidence. Doe v. Unocal Corp., 248 F.3d 915, 922 (9th Cir. 2001), 5 abrogated on other grounds by Williams v. Yamaha Motor Co., 851 F.3d 1015 (9th Cir. 2017). 6 When a defendant relies on written materials, rather than an evidentiary hearing, the plaintiff need 7 make only a prima facie showing of jurisdictional facts to withstand a motion to dismiss. Ranza, 8 793 F.3d at 1068. Uncontroverted allegations are taken as true, and conflicts between parties — 9 such as conflicting statements in affidavits — must be resolved in the plaintiff’s favor. Id. A court 10 may not assume as true allegations in a pleading that are contradicted by affidavit. Mavrix Photo, 11 Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011); accord Ranza, 793 F.3d at 1068 (a 12 plaintiff may not rest on the bare allegations of the complaint). 13 No federal statute conveys personal jurisdiction. The court thus applies California law. Fed. R. 14 Civ. P. 4(k)(1)(A); Herbal Brands, Inc. v. Photoplaza, Inc., 72 F.4th 1085, 1089 (9th Cir. 2023). 15 California’s long-arm statute provides for personal jurisdiction to the maximum that due process 16 allows. Cal. Civ. Proc. Code § 410.10; World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 17 291 (1980). A court may exercise personal jurisdiction over a nonresident defendant with “certain 18 minimum contacts” with the forum “such that the maintenance of the suit does not offend 19 traditional notions of fair play and substantial justice.” Mavrix, 647 F.3d at 1223 (cleaned up) 20 (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). 21 Personal jurisdiction is general or specific. Bristol-Myers Squibb Co. v. Super. Ct., 582 U.S. 22 255, 262 (2017). The plaintiff asserts specific personal jurisdiction.17 The court’s specific- 23 jurisdiction inquiry focuses on the relationship among the defendant, the forum, and the litigation. 24 Walden v. Fiore, 571 U.S. 277, 284 (2014). The Ninth Circuit employs a three-part test: 25 (1) The 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 26 27 purposefully avails himself of the privilege of conducting activities in the forum, 1 thereby invoking the benefits and protections of its laws; 2 (2) the claim must be one which arises out of or relates to the defendant’s forum- related activities; and 3 (3) the exercise of jurisdiction must comport with fair play and substantial justice, 4 i.e. it must be reasonable. 5 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004). The plaintiff must 6 prove the first two parts. Picot v. Weston, 780 F.3d 1206, 1211–12 (9th Cir. 2015). If it does, then 7 the defendant must present a compelling case that the presence of other considerations renders 8 jurisdiction unreasonable. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985). 9 A plaintiff can satisfy the first requirement by “demonstrating that the defendant either 10 purposefully availed itself of the privilege of conducting activities in the forum or purposefully 11 directed its activities at the forum,” Washington Shoe Co. v. A-Z Sporting Goods Inc., 704 F.3d 668, 12 672 (9th Cir. 2012), abrogated on other grounds by Axiom Foods, Inc. v. Acerchem Int’l, Inc., 874 13 F.3d 1064 (9th Cir. 2016), or “some combination thereof,” Yahoo! Inc. v. La Ligue Contre Le 14 Racisme et L’Antisemitisme, 433 F.3d 1199, 1206 (9th Cir. 2006) (en banc) (per curiam). The Ninth 15 Circuit most often applies a purposeful-availment test to claims sounding in contract and a 16 purposeful-direction test for claims sounding in tort. Herbal Brands, 72 F.4th at 1090; Briskin v. 17 Shopify, Inc., 135 F.4th 739, 751 & n.10 (9th Cir. 2025) (en banc). The plaintiff argues that he has 18 established the first requirement under both tests. 19 20 1. Purposeful Availment 21 The plaintiff asserts that Vault created continuing obligations that satisfy purposeful availment 22 by its (1) selling the vehicle to the plaintiff while knowing that he was a California resident, (2) 23 coordinating delivery of the vehicle over multiple weeks, (3) communicating with the plaintiff 24 about delivery of the vehicle’s documentation, (4) marketing on a national level combined with 25 California being “the nation’s largest automobile market,” and (5) deriving $160,000 from the 26 sale.18 Vault contends that the plaintiff cannot demonstrate purposeful availment by a single sale 27 1 through a passive website when the post was available nationwide with no advertisements targeted 2 at California residents, analogizing this case to Boschetto v. Hansing where there was no personal 3 jurisdiction under similar circumstances.19 539 F.3d 1011 (9th Cir. 2008). 4 On this record, the plaintiff has not shown purposeful availment by Vault. 5 The purposeful availment test is satisfied “where the defendant ‘deliberately’ has engaged in 6 significant activities within a State, or has created ‘continuing obligations’ between himself and 7 residents of the forum,” because then the defendant “manifestly has availed himself of the privilege 8 of conducting business” in the forum. Burger King, 471 U.S. at 475–76 (cleaned up). “A showing 9 that a defendant purposefully availed himself of the privilege of doing business in a forum state 10 typically consists of evidence of the defendant’s actions in the forum, such as executing or 11 performing a contract there.” Schwarzenegger, 374 F.3d at 802. 12 Vault’s analogy to Boschetto is apt. In Boschetto, the defendants (a group of automotive dealers 13 and one employee) advertised a 1964 Ford Galaxie 500 XL 427/425 hp on eBay, Boschetto won the 14 bid, and the parties coordinated delivery of the vehicle to arrive in California five weeks later. 15 539 F.3d at 1014. Boschetto filed claims against the defendants because the vehicle was defective 16 and did not match the advertised description. Id. at 1015. The court reasoned that Boschetto had not 17 established purposeful availment through a lone sale because there was no continuing commitment 18 by the defendants and no allegations that the defendants regularly used eBay to sell vehicles. Id. at 19 1016–19. The same relevant facts exist here. The parties performed a one-time sale of a vehicle — 20 which included transporting it to California — over a third-party website, and there are no 21 allegations showing that Vault sold any other vehicles in California. 22 The plaintiff contends that Boschetto is distinguishable because, unlike the Boschetto 23 defendants, Vault (1) is a national dealer with over 1,000 sales, (2) knew the plaintiff lived in 24 California from the beginning of their communications, (3) and engaged in substantial 25 communications with the plaintiff, including negotiating for weeks about price, coordinating 26 27 19 1 delivery, and communicating about registration documents after delivery.20 Even if the court had 2 judicially noticed the screenshot allegedly stating that Vault has over 1,000 sales, this fact would 3 only be material if a high enough percentage of those sales were made in California. The complaint 4 lacks that information. The other differences cited by the plaintiff are not material. While price 5 negotiations and the disputes over the vehicle’s documentation required additional time and 6 communication, those issues stem from the sale and do not show a continuing obligation by Vault.21 7 The plaintiff cites no authority that a single sale, even when the steps are attenuated over multiple 8 months, creates a continuing obligation. Thus, the plaintiff has not shown significant activities by 9 Vault in California or continuing obligations establishing purposeful availment. 10 11 2. Purposeful Direction 12 The plaintiff contends that his fraud claim independently establishes purposeful direction 13 because Vault’s misrepresentations caused him harm in California.22 Vault counters that the 14 purposeful-direction test does not apply because his claims sound in contract and that, even if it 15 did, a connection between Vault and one California resident is insufficient to satisfy the test.23 16 Although the plaintiff asserts a fraud claim, his claims still sound primarily in contract because 17 the alleged fraud stems from “the representations in the contract that gave rise to the breach.”24 18 HK China Group, Inc. v. Beijing United Auto. & Motorcycle Mfg. Corp., 417 F. App’x 664, 665– 19 66 (9th Cir. 2011). Even so, a purposeful-direction analysis would suffer from the same defect as 20 with purposeful availment. 21 Purposeful direction exists if the defendant (1) commits an intentional act (2) expressly aimed at 22 the forum (3) that causes harm that the defendant knows will be suffered in the forum. Washington 23 Shoe, 704 F.3d at 673. There is personal jurisdiction when the acts are such that the defendants 24

25 20 Opp’n – ECF No. 25 at 9–11. 26 21 Reply – ECF No. 27 at 4. 22 Opp’n – ECF No. 25 at 14. 27 23 Reply – ECF No. 27 at 8–9. 1 “must reasonably anticipate being haled into court” in the forum to answer for their acts. Calder v. 2 Jones, 465 U.S. 783, 788–90 (1984) (cleaned up) (asserted specific jurisdiction over the non- 3 resident National Enquirer for a libelous story distributed in California about a well-known 4 California actor because the acts were aimed at California, and the actor suffered injury here). 5 Without more information about Vault’s contacts with California, the court cannot say that 6 Vault expressly aimed the alleged conduct at California based on a single sale. Walden, 571 U.S. 7 at 285 (“[T]he plaintiff cannot be the only link between the defendant and the forum.”). The 8 plaintiff says that Walden is distinguishable because the conduct in Walden (a police officer’s 9 confiscating two California residents’ gambling winnings in a Georgia airport) had only incidental 10 effects in California, while Vault’s conduct was aimed at California from the beginning.25 But this 11 difference does not change the fact that the plaintiff has only shown one contact between Vault 12 and California: himself. 13 Even though the plaintiff has not satisfied the first requirement for personal jurisdiction, the 14 court addresses the other requirements because limited discovery is warranted to determine if 15 Vault has additional contacts with California sufficient to exercise personal jurisdiction.26 16 17 3. Arises Out of or Relates to Forum-Related Activities 18 The plaintiff asserts that his claims arise from Vault’s delivery of the vehicle to California and 19 breach of the contract.27 Vault contends that there are no forum-related activities related to the 20 plaintiff’s claims because the sale was completed in Mississippi with no intention by Vault to 21 conduct ongoing business with the plaintiff.28 22 The plaintiff has met the second requirement for personal jurisdiction. 23 A plaintiff may satisfy the second requirement for personal jurisdiction through either the 24 “arises out of” or “relates to” test. Zep Solar Inc. v. Westinghouse Solar Inc., No. C 11–06493 25 26 25 Opp’n – ECF No. 25 at 14. 26 See infra § 5, Discovery. 27 27 Opp’n – ECF No. 25 at 11. 1 JSW, 2012 WL 1309180, *2 (N.D. Cal. Apr. 16, 2012). The “arises out of” test requires the 2 defendant’s contacts with the forum to be a but-for cause of the plaintiff’s claims. See Yamashita 3 v. LG Chem, Ltd., 62 F.4th 496, 506 (9th Cir. 2023). The “relates to” test only requires a 4 “connection between a plaintiff’s suit and a defendant’s activities.” Ford Motor Co. v. Mont. 5 Eighth Jud. Dist. Ct., 592 U.S. 351, 361 (2021) (cleaned up). 6 This dispute arises out of Vault’s forum-related activities. Vault contracted with a California 7 resident and transported a vehicle that allegedly did not comply with the advertised description. 8 No more is needed to satisfy the second requirement. See Doe v. Deutsche Lufthansa, 157 F.4th 9 1103, 1112 (9th Cir. 2025) (breach of confidentiality terms for contract to fly the plaintiff to 10 California satisfied the forum-related-activities prong). 11 12 4. Reasonableness 13 Part three of the test requires Vault to present a compelling case that the exercise of 14 jurisdiction is not reasonable. Schwarzenegger, 374 F.3d at 802. The Ninth Circuit applies a 15 seven-factor balancing test to assess the reasonableness of asserting personal jurisdiction: (1) the 16 extent of the defendant’s interjection into the forum state’s affairs; (2) the defendant’s burden 17 defending a case in the forum; (3) any conflict with the sovereignty of the defendant’s state; (4) 18 the forum state’s interest in adjudicating the dispute; (5) the most efficient resolution of the 19 controversy; (6) the importance of the forum to the plaintiff’s interest in convenient and effective 20 relief; and (7) the existence of an alternative forum. Herbal Brands, 72 F.4th at 1096. 21 Vault contends that exercising personal jurisdiction would be unreasonable because (1) it did 22 not inject itself into California, (2) it does not target advertisements to California residents, (3) the 23 burden of litigating in California would be high because Vault has no employees, offices, or 24 presence here, (4) California does not have a strong interest in adjudicating a dispute arising from 25 an out-of-state sale, (5) the weight of the plaintiff’s convenience is minimal, and (6) finding 26 27 1 reasonableness here would require Vault to “stop all online marketing, stop all sales outside of 2 Mississippi, and reject a chance sale simply to avoid being subject to personal jurisdiction.”29 3 The plaintiff responds that exercising jurisdiction would be reasonable because (1) Vault 4 directed its conduct at California for nearly three months through its communicating with the 5 plaintiff and delaying sending the vehicle’s documentation, (2) the burden on Vault is minimal 6 because of the availability of remote participation, (3) there is no conflict with Mississippi 7 sovereignty, (4) California has a strong interest in protecting its consumers, (5) efficiency is 8 neutral because the plaintiff and vehicle are in California and witnesses in Mississippi can appear 9 remotely, (6) the plaintiff’s convenience weighs in favor of exercising jurisdiction, and (7) 10 Mississippi would be a less adequate forum.30 11 Vault has not presented a compelling case that exercising jurisdiction would be unreasonable. 12 The burden on Vault in litigating in California has little weight because “modern advances in 13 communications and transportation have significantly reduced the burden of litigating in a non- 14 home forum.” Komaiko v. Baker Techs, Inc., No. 19-cv-03795-DMR, 2020 WL 1915884, at *9 15 (N.D. Cal. Apr. 20, 2020) (quoting Sinatra v. Nat’l Enquirer, Inc., 854 F.2d 1191, 1201 (9th Cir. 16 1988)). Factors three, four, and six weigh in favor of exercising jurisdiction: Vault does not 17 dispute a lack of conflict with Mississippi’s sovereignty, California has an interest in enforcing 18 laws that protect its citizens, and litigating in California would be convenient for the plaintiff. The 19 remaining factors (the extent that Vault interjected itself in this forum, efficiency, and the 20 existence of an alternate forum) weigh slightly in Vault’s favor. Even with more factors weighing 21 in Vault’s favor than not, none weigh strongly in Vault’s favor, and these circumstances do not 22 make a compelling case against the reasonableness of exercising personal jurisdiction. 23 24 25 26

27 29 Id. at 10–11; Reply – ECF No. 27 at 7. 1 5. Discovery 2 The plaintiff asserts that jurisdictional discovery is warranted on (1) Vault’s California sales, 3 (2) its national-marketing practices, (3) its knowledge of the vehicle’s condition and California 4 registration requirements, and (4) the timelines for the parties’ communications and Vault’s 5 sending the vehicle’s documentation.31 Vault responds that the facts show that the plaintiff cannot 6 establish personal jurisdiction and has only offered speculative support.32 7 Limited jurisdictional discovery is warranted. 8 While a district court is vested with broad discretion to permit or deny jurisdictional discovery, 9 courts generally require a plaintiff to make out a “colorable basis” for jurisdiction to warrant 10 discovery. See, e.g., Teras Cargo Transp. (Am.), LLC v. Cal Dive Int’l (Austl.) Pty Ltd., No. 15- 11 cv-03566-JSC, 2015 WL 6089276, at *8 (N.D. Cal. Oct. 16, 2015) (citing cases). Courts may 12 properly deny jurisdictional discovery where “there is insufficient evidence to give rise to more 13 than a ‘hunch’” that discovery will make out a case for exercising personal jurisdiction over a 14 defendant. Id. (denying jurisdictional discovery where “there is insufficient evidence to give rise 15 to more than a ‘hunch’ that jurisdictional discovery might assist [plaintiff] in making out a case for 16 personal jurisdiction over [defendant]” and observing that “speculation cannot rise above the 17 ‘mere hunch’ bar that the Ninth Circuit requires cleared to obtain jurisdictional discovery”). 18 In support of his request for discovery, the plaintiff points to the fact that Vault holds itself out 19 as a global dealer of vehicles that has sold many vehicles advertised on over twenty websites.33 20 This supports more than a hunch that discovery might assist his establishing personal jurisdiction. 21 See Boschetto v. Hansing, 539 F.3d 1011, 1019 (9th Cir. 2008) (“Where eBay is used as a means 22 for establishing regular business with a remote forum such that a finding of personal jurisdiction 23 comports with “traditional notions of fair play and substantial justice,” then a defendant’s use of 24 25 26 31 Id. at 15. 27 32 Reply – ECF No. 27 at 9–10. ] eBay may be properly taken into account for purposes of establishing personal jurisdiction.”). 2 || Limited jurisdictional discovery is warranted on Vault’s California sales and marketing practices. 3 4 CONCLUSION

5 The court denies the motion and orders limited jurisdiction discovery into Vault’s California

‘ sales and marketing practices. This order resolves ECF No. 23.

5 IT IS SO ORDERED.

Dated: March 26, 2026 LAE LAUREL BEELER 10 United States Magistrate Judge 1] as 12

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