Woolfson v. Conn Appliances, Inc.

District Court, N.D. California·Decided August 5, 2022·No. 3:21-cv-07833·Unknown

Opinion

AARON WOOLFSON, et al., Case No. 21-cv-07833-MMC

Plaintiffs, ORDER DENYING DEFENDANTS’ v. MOTIONS TO DISMISS FIRST AMENDED COMPLAINT FOR LACK CONN APPLIANCES, INC., et al., OF PERSONAL JURISDICTION; DENYING DEFENDANTS’ JOINT Defendants. MOTION TO DISMISS FOR IMPROPER VENUE OR, IN THE ALTERNATIVE, TO TRANSFER

Before the Court are the following three motions, each filed May 16, 2022: (1) defendant Conn Appliances, Inc.’s (“Conn Appliances”) “Renewed Motion to Dismiss Based on Lack of Personal Jurisdiction”; (2) defendant Munsch Hardt Kopf & Harr, P.C.’s (“MHKH”) “Motion to Dismiss First Amended Complaint Based on Lack of Personal Jurisdiction”; and (3) defendants’ “Renewed Motion to Dismiss for Improper Venue or, in the Alternative, to Transfer Venue to the Southern District of Texas.” Plaintiffs have filed opposition to the first two motions, to which defendants have replied. Having read and considered the papers filed in support of and in opposition to the motions, the Court rules as follows.1 FACTUAL BACKGROUND2 Plaintiff Aaron Woolfson (“Woolfson”) is a database and Telephone Consumer

1 By order filed July 25, 2022, the Court took the matters under submission. 2 The following facts are taken from the allegations in the operative complaint, the Protection Act (“TCPA”) expert and the founder of plaintiff TelSwitch, Inc. (“TelSwitch”), a “California-based telecommunications and technology company.” (See FAC at 4:11-14.) From mid-2016 to April 2017, Woolfson provided “consulting and expert legal services” to defendant Conn Appliances, a Texas-based “retail furniture and appliance outlet,” in connection with “legal actions” brought by Conn Appliance customers who “complained they [had] receive[d] calls relating to past due payments in violation of the TCPA.” (See FAC at 5:15-19, 5:28-6:1.) Those legal actions (hereinafter, “TCPA cases”), were “handled primarily” by defendant MHKH, a Texas law firm. (See FAC at 2:2-5, 6:17-18.) In November 2016, Woolfson “traveled to [Conn Appliances’] facilities in Texas” and “inspected [its] telephone systems and operating procedures . . . so that [he] could offer opinions and expert testimony about . . . those systems.” (See FAC at 6:9-13.) Based on said inspection, Woolfson prepared an expert report (hereinafter, “Harper Report”),3 which was filed in a TCPA case brought against Conn Appliances in a district court in Texas, and from which he derived “similar” expert reports, including a report (hereinafter, “Johnson Report”) prepared for an arbitration to be conducted by the American Arbitration Association (“AAA”). (See FAC at 7:7-22.) In March 2017, “shortly after” Woolfson prepared the Johnson Report, Conn Appliances “stopped paying” plaintiffs for their services, and, in April 2017, plaintiffs stopped doing work for Conn Appliances. (See FAC at 8:8-11.) On July 21, 2020, Woolfson “received an email from an attorney,” alerting him that Conn Appliances and MHKH “had listed him as an expert witness and had submitted” an “altered version of the Johnson Report” in one of its TCPA cases (hereinafter, “Hernandez case”). (See FAC at 9:4-24.) Plaintiffs allege that Conn Appliances and MHKH used the report “to create the false impression that [p]laintiffs had been retained as experts in the case without having to actually pay [p]laintiffs for that retention . . . ,

3 The Harper Report was registered with the United States Copyright Office on even though they knew that [p]laintiffs had not done any services for [them] since April 2017.” (See FAC at 11:8-12.) On October 6, 2021, plaintiffs filed their initial Complaint, wherein Woolfson, based on the above allegations, asserted a cause of action for “Copyright Infringement,” and both Woolfson and TelSwitch asserted causes of action for “Unfair Business Practices Under Cal. Bus. & Prof. Code 17200” (“UCL”) and for “Quantum Meruit.” On December 6, 2021, Conn Appliances and MHKH each filed a motion to dismiss for lack of personal jurisdiction, as well as a joint motion to dismiss for improper venue or, in the alternative, to transfer the instant action to the Southern District of Texas. In a declaration submitted in support of their motions, Conn Appliances’ General Counsel identified another TCPA case in which an altered version of the Johnson Report was used (hereinafter, “Parras case”). (See Decl. of Mark Prior in Supp. of Mot. to Dismiss Initial Compl. (hereinafter, “Prior Decl.”) ¶¶ 15-16.) By order filed March 25, 2022, the Court, finding the alleged wrongful acts identified in plaintiffs’ complaint were not sufficient to establish the requisite minimum contacts with California, dismissed the complaint for lack of personal jurisdiction, but afforded plaintiffs leave to amend for the limited purpose of pleading claims based on defendants’ use of Woolfson’s report in the Parras case. (See Doc. No. 42.) On April 11, 2022, plaintiffs filed their FAC, reasserting the above-referenced three causes of action, after which defendants filed the instant three motions. By their respective motions, defendants again seek an order dismissing the above- titled action, or, in the alternative, transferring it to the Southern District of Texas, on the grounds that neither defendant is subject to personal jurisdiction in California, the Northern District of California is not a proper venue, and the Northern District is not a convenient forum. A. Personal Jurisdiction For a court to exercise personal jurisdiction over a non-resident defendant, “due process requires that the defendant have certain minimum contacts with the forum state such that the maintenance of the suit does not offend traditional notions of fair play and substantive justice.” See Ranza v. Nike, Inc., 793 F.3d 1059, 1068 (9th Cir. 2015) (internal quotation and citation omitted). “The strength of the contacts required depends on which of the two categories of personal jurisdiction a litigant invokes: specific jurisdiction or general jurisdiction.” Id. Here, plaintiffs contend defendants are subject to specific jurisdiction in California. (See Pls.’ Combined Opp. to Defs.’ Mots. to Dismiss (hereinafter, “Opp.”) at 7:3-7.) Specific jurisdiction over a non-resident defendant is analyzed under the following three- prong test:

(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 purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws;

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Woolfson v. Conn Appliances, Inc., (N.D. Cal. 2022).

Woolfson v. Conn Appliances, Inc. (Woolfson v. Conn Appliances, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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