ZTE (USA) Inc. v. AGIS Software Development LLC

• Court: District Court, N.D. California
• Decided: September 12, 2019
• Docket: 4:18-cv-06185
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ZTE (USA) INC., Case No. 18-cv-06185-HSG

8 Plaintiff, ORDER DENYING MOTION TO SUPPLEMENT RECORD; DENYING 9 v. MOTION TO DISMISS; AND DENYING MOTION FOR SANCTIONS 10 AGIS SOFTWARE DEVELOPMENT LLC, Re: Dkt. Nos. 41, 48, 107 11 Defendant.

12 13 Pending before the Court is Defendant AGIS Software Development LLC’s (“AGIS 14 Software”) motion to dismiss the Second Amended Complaint (“SAC”) for lack of personal 15 jurisdiction and Defendant’s motion for sanctions. See Dkt. Nos. 41, 48. The Court held a 16 hearing on the motions and took them under submission on June 14, 2019. See Dkt. No. 85. 17 Plaintiff subsequently filed a motion to supplement the record. See Dkt. No. 107. The Court finds 18 this motion appropriate for disposition without oral argument and the matter is deemed submitted. 19 See Civil L.R. 7-1(b). 20 Having carefully considered the parties’ arguments, the Court DENIES Plaintiff’s motion 21 to supplement the record, DENIES WITHOUT PREJUDICE Defendant’s motion to dismiss, 22 and DENIES Defendant’s motion for sanctions. 23 I. BACKGROUND 24 A. Procedural History 25 On June 21, 2017, AGIS Software filed a patent infringement action in the Eastern District 26 of Texas against ZTE (USA) Inc., as well as ZTE Corporation and ZTE (TX) Inc. See AGIS 27 Software Dev. LLC v. ZTE Corp., No. 2:17-cv-517 (E.D. Tex. June 21, 2017) (“AGIS I”), ECF No. 1 for improper venue and transferred the action to the Northern District of California. See AGIS I, 2 ECF No. 85. In doing so, the district court reasoned that ZTE (USA) did not have a regular and 3 established place of business in the Eastern District of Texas. Id. at 3–7. ZTE (USA) requested 4 that the case be transferred to the Northern District of California, and the district court noted that 5 AGIS Software did not proffer an alternative. Id. at 7. AGIS Software subsequently filed a 6 voluntary dismissal, and the district court dismissed the patent infringement action without 7 prejudice. See id., ECF Nos. 86, 87. 8 On the day of the dismissal, October 9, 2018, Plaintiff filed this declaratory judgment 9 action in the Northern District of California, initially naming three defendants: (1) AGIS 10 Software; (2) AGIS Holdings, Inc. (“AGIS Holdings”); and (3) Advanced Ground Information 11 Systems, Inc. (“AGIS Inc.”). See Dkt. No. 1. Plaintiff later amended the complaint, removing 12 AGIS Holdings and AGIS Inc. as defendants. See Dkt. No. 18. In the operative Second Amended 13 Complaint (“SAC”), Plaintiff seeks a declaratory judgment of non-infringement or 14 unenforceability against Defendant AGIS Software as to five patents.1 See Dkt. No. 39. 15 B. Factual Allegations 16 Plaintiff alleges that Defendant AGIS Software is a wholly-owned subsidiary of AGIS 17 Holdings. See SAC ¶ 3. AGIS Software, for its part, is a Texas limited liability company with its 18 principal place of business in Texas. See id. ¶ 7. Plaintiff alleges that Defendant asserted the 19 same patents-in-suit in other patent infringement actions2; some of these actions were against 20 California-based companies; and as part of these cases, Defendant “conducted meaningful 21 enforcement activities in California,” including traveling to and deposing witnesses there. Id. 22 ¶¶ 8–10. 23 Defendant now moves to dismiss the complaint, contending that notwithstanding 24 Plaintiff’s allegations, the Court lacks personal jurisdiction over AGIS Software. See Dkt. No. 41; 25

26 1 U.S. Patent Nos. 8,213,970; 9,408,055; 9,445,251; 9,467,838; and 9,749,829 (the “patents-in- suit”). 27 2 See AGIS I; AGIS Software Dev. LLC v. Huawei Device USA Inc. et al., No. 2:17-cv-513 (E.D. 1 see also SAC ¶ 3. Defendant also seeks monetary sanctions against Plaintiff for filing this action 2 in the Northern District of California without a proper basis for exercising personal jurisdiction. 3 See Dkt. No. 48. In support of its motion to dismiss, Defendant has filed a declaration from 4 Malcolm K. Beyer, Jr., Defendant’s Chief Executive Officer, stating that Mr. Beyer resides in 5 Florida and that AGIS Software: 6 • is the “sole and exclusive owner” of the patents-in-suit; 7 • is not registered to do business in California; 8 • does not have a registered agent for service of process in California; 9 • does not have “offices, employees, equipment, bank accounts or other assets in 10 California”; 11 • does not pay taxes in California; 12 • does not manufacture or sell products in California; 13 • does not solicit or engage in business in California; 14 • does not recruit employees in California; 15 • does not own, rent, or lease any property in California; 16 • has not filed a lawsuit in California; and 17 • has not retained counsel in California related to enforcing the patents-in-suit. 18 See Dkt. No. 41-1 ¶¶ 4–22. 19 Plaintiff does not dispute these facts. Rather, Plaintiff alleges that the Court should 20 consider contacts that Defendant’s related entities have with California. See Dkt. No. 59 at 8–10. 21 Additionally, after Defendant’s motion to dismiss and motion for sanctions had been heard and 22 taken under submission, Plaintiff filed a motion to supplement the record. See Dkt. No. 107. In it, 23 Plaintiff seeks to add two transcripts, which it states “suggest that AGIS conducted and solicited 24 business in California.” See id. at 3. 25 II. LEGAL STANDARD 26 Federal Rule of Civil Procedure 12(b)(2) authorizes a defendant to seek dismissal of an 27 action for lack of personal jurisdiction. See Fed. R. Civ. P. 12(b)(2). Federal Circuit law governs 1 Metabolite Labs., Inc., 444 F.3d 1356, 1361 (Fed. Cir. 2006). In analyzing personal jurisdiction, 2 the Federal Circuit engages in a two-part inquiry: (1) whether the state’s long-arm statute 3 authorizes service of process on the defendant; and (2) whether the exercise of jurisdiction 4 comports with due process. Celgard, LLC v. SK Innovation Co., 792 F.3d 1373, 1377 (Fed. Cir. 5 2015). 6 Where a state, like California, “authorize[s] its courts to exercise jurisdiction over persons 7 on any basis not inconsistent with . . . the Constitution of the United States,” see Walden v. Fiore, 8 571 U.S. 277, 283 (2014), federal courts ask whether the exercise of jurisdiction over a defendant 9 “comports with the limits imposed by federal due process,” Daimler AG v. Bauman, 571 U.S. 117, 10 125 (2014); see also Cal. Civ. Proc. Code § 410.10 (California’s long-arm statute is co-extensive 11 with the federal due process clause). “Due process requires that the defendant have sufficient 12 ‘minimum contacts with [the forum state] such that maintenance of the suit does not offend 13 traditional notions of fair play and substantial justice.’” Celgard, 792 F.3d at 1377 (quoting Int’l 14 Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). 15 There are two categories of personal jurisdiction a plaintiff can invoke: general and 16 specific. LSI Indus. Inc. v. Hubbell Lighting, Inc., 232 F.3d 1369, 1375 (Fed. Cir. 2000). 17 “General jurisdiction arises when a defendant maintains ‘continuous and systematic’ contacts with 18 the forum state even when the cause of action has no relation to those contacts.” LSI Indus. Inc., 19 232 F.3d at 1375 (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414– 20 16 (1984)). “Specific jurisdiction ‘arises out of’ or ‘relates to’ the cause of action even if those 21 contacts are ‘isolated and sporadic.’” Id. (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 22 472–73 (1985)). 23 When a district court’s determination of personal jurisdiction is based on affidavits and 24 other written materials rather than an evidentiary hearing, the plaintiff only bears the burden of 25 making a prima facie showing of jurisdictional facts. Celgard, 792 F.3d at 1378. Under a prima 26 facie standard, the court must resolve all factual disputes, including conflicts in affidavits, in the 27 plaintiff’s favor. Avocent Huntsville Corp. v. Aten Int’l Co., 552 F.3d 1324, 1329 (Fed. Cir. 1 III. ANALYSIS 2 A. Personal Jurisdiction 3 Plaintiff asserts that the Court has both general and specific jurisdiction over Defendant.3 4 See SAC ¶ 7. Because Plaintiff relies, at least in part, on the contacts of Defendant’s related 5 entities—particularly AGIS Inc.—for purposes of establishing personal jurisdiction, the Court first 6 addresses Plaintiff’s imputation argument. 7 i. Imputation 8 Plaintiff posits that AGIS Software is a sham entity designed to preclude jurisdiction 9 outside the Eastern District of Texas.4 See SAC ¶ 11; see also Dkt. No. 59 at 1, 4–10. As such, 10 Plaintiff argues that the activities of AGIS Inc. “should be attributed” to AGIS Software and that 11 “the two entities should be treated jointly for personal jurisdiction.” See Dkt. No. 59 at 10. 12 The Federal Circuit has cautioned that “the corporate form is not to be lightly cast aside” 13 and “the corporate entity should be recognized and upheld, unless specific, unusual circumstances 14 call for an exception.” 3D Sys., Inc. v. Aarotech Labs., Inc., 160 F.3d 1373, 1380 (Fed. Cir. 1998). 15 Nevertheless, the corporate form is not intended to frustrate personal jurisdiction. See In re 16 Microsoft Corp., 630 F.3d 1361, 1364–65 (Fed. Cir. 2011) (collecting cases). Accordingly, “the 17 contacts of a third-party may be imputed to the defendant under either an agency or alter ego 18 theory.” Celgard, 792 F.3d at 1379. Courts have invoked these theories where (1) “there is a 19 unity of interest and ownership such that separate personalities [of the two entities] no longer 20 exist”; and (2) “failure to disregard [their separate identities] would result in fraud or injustice.” 21 See Ranza v. Nike, Inc., 793 F.3d 1059, 1073 (9th Cir. 2015) (quotations omitted). 22 3 To the extent Plaintiff suggests that the district court in AGIS I addressed the issue of personal 23 jurisdiction, the Court is not persuaded. The district court only analyzed venue under 28 U.S.C. § 1400(b), and was careful to acknowledge that its analysis was limited to the specific facts before 24 it. See AGIS I, ECF. No. 85 at 6, n.5. The Court is similarly unpersuaded that the district court’s personal jurisdiction analysis in Life360, Inc. v. Advanced Ground Information Systems, Inc., No. 25 5:15-cv-00151-BLF (N.D. Cal.), somehow settles the issue, as AGIS Software was not a party to that suit. The Court thus conducts its own independent analysis. 26 4 The Court declines Defendant’s invitation to disregard Plaintiff’s imputation argument because Plaintiff raised it in opposition, see Dkt. No. 47 at 2–3. The nature of Defendant and AGIS Inc.’s 27 relationship directly bears on the question of personal jurisdiction. Cf. Beverly Hills Fan Co. v. 1 The Federal Circuit has also noted that exercising jurisdiction over a subsidiary may also 2 be “fair and reasonable” for purposes of due process where the parent company:

3 Incorporate[d] a holding company in another state, transfer[red] its patents to the holding company, arrange[d] to have those patents 4 licensed back to itself by virtue of its complete control over the holding company, and threaten[ed] its competitors with infringement 5 without fear of being a declaratory judgment defendant, save perhaps in the state of incorporation of the holding company. 6 7 Dainippon Screen Manufacturing Co. v. CFMT, Inc., 142 F.3d 1266, 1267, 1270–71, & n.2 (Fed. 8 Cir. 1998) (analyzing whether asserting personal jurisdiction was “reasonable and fair” after 9 finding a subsidiary had sufficient contacts, on its own, with the forum state). In short, the Federal 10 Circuit suggested in Dainippon that the subsidiary was created specifically to manipulate 11 jurisdiction. Id. at 1271, & n.3 (“[A] patent holding subsidiary . . . cannot fairly be used to 12 insulate patent owners from defending declaratory judgment actions in those fora where its parent 13 company operates under the patent and engages in activities sufficient to create personal 14 jurisdiction and declaratory judgment jurisdiction.”); accord Google Inc. v. Rockstar Consortium 15 U.S. LP, No. C 13-5933 CW, 2014 WL 1571807, at *3–4, & n.3 (N.D. Cal. Apr. 17, 2014) 16 (finding evidence supported plaintiff’s allegation that patent-holding subsidiary was alter ego of 17 its parent, and “created . . . solely to dodge jurisdiction”). 18 To support imputation in this case, Plaintiff asserts that (1) the two entities have 19 overlapping officers, employees, and past legal representation,5 Dkt. No. 59-2, Ex. A, ¶ 17, Dkt. 20 No. 59-14, Ex. M at 21, Dkt. No. 30-2, ¶¶ 2–3; (2) Defendant’s CEO once stated in a deposition 21 that Defendant and AGIS Inc. “work closely with one another,” Dkt. No. 59-2, Ex. A, ¶ 8; and 22 (3) AGIS Inc. has a non-exclusive license for the patents-in-suit from Defendant, see Dkt. No. 59- 23 3, Ex. B. Yet these facts, even if true, do not establish that Defendant has no identity separate and 24 apart from AGIS Inc. At best, Plaintiff has established that the entities share a parent-subsidiary 25 relationship, which is “insufficient, on its own, to justify imputing one entity’s contacts with a 26

27 5 The Court notes that some of this alleged “overlap” occurred before Defendant was created. See 1 forum state to another for the purpose of establishing personal jurisdiction.” See Ranza, 793 F.3d 2 at 1070; compare Google Inc., No. C 13-5933 CW, 2014 WL 1571807, at *3–4 (finding 3 circumstances suggested subsidiary was a sham where, inter alia, all subsidiary employees also 4 work for the parent; all subsidiary officers are also parent board members; and the parent and 5 subsidiary operate out of the same suite). 6 Plaintiff also contends that Defendant’s very creation supports a finding that it was 7 designed to avoid jurisdiction outside Texas. See Dkt. No. 59 at 10. 8 • Defendant first registered with the Texas Secretary of State on June 1, 2017, see 9 Dkt. No. 59-13; 10 • Approximately two weeks later, on June 15, 2017, AGIS Inc. assigned the patents- 11 in-suit to AGIS Holdings, who in turn assigned them to Defendant, see SAC ¶ 11; 12 Dkt. No. 59-15, Ex. N; and 13 • The day after the assignments became effective, Defendant filed four patent 14 infringement actions in Texas. See Section I, n.2, supra. 15 The Court acknowledges that the Federal Circuit’s dicta in Dainippon cautions that patent holding 16 subsidiaries cannot be used to circumvent jurisdiction. See Dainippon, 142 F.3d at 1270–71. Yet 17 the Federal Circuit has not held that the mere assignment of patents to a subsidiary renders that 18 assignee a sham entity. See Dainippon, 142 F.3d at 1267, 1270–71. Although suggestive, the 19 Court does not find that Plaintiff’s allegations establish that Defendant is merely the alter ego of 20 AGIS Inc. or was created solely to circumvent jurisdiction. See Ranza, 793 F.3d at 1073. The 21 Court finds that imputation would be improper on the basis of this record, and thus cabins its 22 subsequent analysis to those allegations specifically against Defendant.6 23 ii. General Jurisdiction 24 “[A]n assertion of general jurisdiction requires that the defendant have continuous and 25 systematic contacts with the forum state,” although such contacts will still confer jurisdiction 26 6 Because the Court finds imputation is improper, the Court does not consider the two transcripts 27 Plaintiff has attached to its motion to supplement the record. See Dkt. No. 107. Both transcripts 1 “even when the cause of action has no relationship with those contacts.” Avocent, 552 F.3d at 2 1331–32 (quotation omitted). This is a high bar. As the Supreme Court has explained, for 3 purposes of general jurisdiction, such contacts must “render [the entity] essentially at home in the 4 forum State.” Daimler, 571 U.S. at 122. 5 Here, Plaintiff contends that Defendant is subject to the Court’s general jurisdiction based 6 on Defendant’s marketing, promotion, and sales of its “LifeRing and HoundDog applications” in 7 California. See Dkt. No. 59 at 10–11. Plaintiff also asserts that Defendant has an interactive 8 website and mobile applications available in California, and has a “strategic partnership” with 9 Green Hills Software, which is based in Santa Barbara, California. Id. at 11. The Court is 10 skeptical that these contacts would render an entity “essentially at home” in California, but more 11 fundamentally, these alleged contacts relate to AGIS Inc. and not to Defendant. See Dkt. No. 59- 12 7, Ex. F; Dkt. No. 59-9, Ex. H. As Plaintiff acknowledges, Defendant “is a limited liability 13 company organized and existing under the laws of the State of Texas, and maintains its principal 14 place of business” in Texas. See SAC ¶ 3. Plaintiff has failed to make a prima facie showing that 15 the Court has general jurisdiction over Defendant. 16 iii. Specific Jurisdiction 17 When analyzing specific personal jurisdiction, the Federal Circuit considers whether 18 “(1) the defendant purposefully directed its activities at residents of the forum, (2) the claim arises 19 out of or relates to those activities, and (3) assertion of personal jurisdiction is reasonable and 20 fair.” Avocent, 552 F.3d at 1332 (quotations omitted). “The first two factors correspond with the 21 ‘minimum contacts’ prong of the International Shoe analysis, and the third factor corresponds to 22 the ‘fair play and substantial justice’ prong of the analysis.” Id. (quotation omitted). Additionally, 23 in a declaratory judgment action, “the nature of the claim . . . arises out of or relates to the 24 activities of the defendant patentee in enforcing the patent or patents in suit.” Id. Thus, “only 25 enforcement or defense efforts related to the patent rather than the patentee’s own 26 commercialization efforts are to be considered for establishing specific personal jurisdiction.” 27 Autogenomics, Inc. v. Oxford Gene Tech. Ltd., 566 F.3d 1012, 1020 (Fed. Cir. 2009) (emphasis 1 Stripped down to those allegations solely related to Defendant and the patents-in-suit, 2 Plaintiff contends that the Court has specific jurisdiction over Defendant because (1) Defendant 3 filed patent infringement suits against California residents in the Eastern District of Texas; and 4 (2) in litigating those actions, Defendant conducted discovery in California, including traveling 5 there for depositions and subpoenaing third-party entities that reside in California. See Dkt. No. 6 59 at 14–22; SAC ¶¶ 8, 10, 12. The Court addresses each in turn. 7 First, Plaintiff explains that Defendant filed patent infringement actions against Apple, 8 Inc., which is incorporated under the laws of California, and against ZTE (TX), Inc., which 9 Plaintiff asserts is a California resident.7 See AGIS Software Development LLC v. Apple, Inc., No. 10 2:17-cv-00516-JRG (E.D. Tex.), ECF No. 1 at ¶ 2 (“Upon information and belief, Defendant 11 Apple is a California corporation having a principal place of business in Cupertino, California.”); 12 AGIS I, ECF No. 1 (Complaint against, inter alia, ZTE (TX), Inc.). Even assuming ZTE (TX), 13 Inc. is indeed a resident of California, Defendant filed these two actions in the Eastern District of 14 Texas. Id. Courts have repeatedly found that out-of-state enforcement activities are insufficient to 15 establish personal jurisdiction. See, e.g., Radio Sys. Corp. v. Accession, Inc., 638 F.3d 785, 792 16 (Fed. Cir. 2011) (“[E]nforcement activities taking place outside the forum state do not give rise to 17 personal jurisdiction in the forum.”); AU Optronics Corp. Am. v. Vista Peak Ventures, LLC, No. 18 18-CV-04638-HSG, 2019 WL 690282, at *3 (N.D. Cal. Feb. 19, 2019) (collecting cases); Kyocera 19 Int’l, Inc. v. Semcon IP, Inc., No. 18-cv-1575-CAB-MDD, 2018 WL 5112056, at *3 (S.D. Cal. 20 Oct. 19, 2018) (considering lawsuits outside of California, but against entities with principal 21 places of business in California, “unequivocally tangential and decidedly inadequate to justify the 22 exercise of personal jurisdiction in this case”). Indeed, the Supreme Court has explained that “the 23 ‘minimum contacts’ analysis looks to the defendant’s contacts with the forum State itself, not the 24 defendant’s contacts with persons who reside there.” See Walden, 571 U.S. at 285. 25

26 7 The Court notes that Plaintiff has not provided any support for the suggestion in its opposition that ZTE (TX), Inc. resides in California, other than a cite to the complaint in AGIS I. See Dkt. 27 No. 59 at 15. The complaint in that case, however, alleges that ZTE (TX) is incorporated under 1 Plaintiff nevertheless suggests that filing an action against a California resident, albeit in 2 another jurisdiction, is tantamount to sending a cease-and-desist letter to an entity in the forum 3 state. See Dkt. No. 59 at 14. Even if the Court were to accept this analogy, Plaintiff’s cases do 4 not hold that such contacts satisfy “traditional notions of fair play and substantial justice” such that 5 personal jurisdiction is warranted. See New World Int’l, Inc. v. Ford Glob. Techs., LLC, 859 F.3d 6 1032, 1038 (Fed. Cir. 2017); Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355, 7 1360–61 (Fed. Cir. 1998). To the contrary, the Federal Circuit has explained that: 8 Principles of fair play and substantial justice afford a patentee 9 sufficient latitude to inform others of its patent rights without subjecting itself to jurisdiction in a foreign forum. A patentee should 10 not subject itself to personal jurisdiction in a forum solely by informing a party who happens to be located there of suspected 11 infringement. Grounding personal jurisdiction on such contacts alone would not comport with principles of fairness. 12

13 Red Wing, 148 F.3d at 1360–61. 14 Second, Plaintiff cites to discovery efforts that Defendant conducted as part of these Texas 15 cases: subpoenaing documents from a third-party California corporation, and noticing depositions 16 of witnesses located in California. See, e.g., Dkt. No. 59-20, Ex. S; Dkt. No. 59-21, Ex. T. As an 17 initial matter, Plaintiff does not cite any authority finding such contacts sufficient to establish 18 personal jurisdiction. The Supreme Court has explained that contacts that are “‘random,’ 19 ‘fortuitous,’ or ‘attenuated’ . . . or [the result] of the unilateral activity of another party or a third 20 person,” are insufficient for purposes of the minimum contacts analysis. Burger King, 471 U.S. at 21 475 (quotations omitted); accord Red Wing, 148 F.3d at 1359 (Fed. Cir. 1998). The Court finds 22 that Defendant’s discovery efforts are the result of unilateral third-party activity, namely where 23 documents and witnesses that are related to these Eastern District of Texas infringement actions 24 may be located. Cf. Walden, 571 U.S. at 285. 25 Although acknowledging that these contacts may be insufficient on their own to establish 26 specific jurisdiction, see Dkt. No. 59 at 15–16, Plaintiff contends that when viewed collectively, 27 specific jurisdiction is nevertheless proper. The Court is not persuaded. Plaintiff’s two categories 1 companies. As explained above, the Court finds this ground for personal jurisdiction unavailing. 2 Thus, the Court does not find personal jurisdiction has been established under these circumstances. 3 iv. Jurisdictional Discovery 4 The Court has broad discretion to permit jurisdictional discovery, which “should ordinarily 5 be granted where pertinent facts bearing on the question of jurisdiction are controverted or where a 6 more satisfactory showing of the facts is necessary.” Butcher’s Union Local No. 498 v. SDC 7 Investment, Inc., 788 F.2d 535, 540 (9th Cir. 1986) (quotation omitted). Nevertheless, the Court 8 may deny jurisdictional discovery if “it is clear that further discovery would not demonstrate facts 9 sufficient to constitute a basis for jurisdiction,” Wells Fargo & Co. v. Wells Fargo Express Co., 10 556 F.2d 406, 430 n.24 (9th Cir. 1977), or when the request is “based on little more than a hunch 11 that it might yield jurisdictionally relevant facts,” Boschetto v. Hansing, 539 F.3d 1011, 1020 (9th 12 Cir. 2008). 13 The Court finds that additional discovery may yield relevant jurisdictional facts. The 14 Court finds that Plaintiff has raised enough of a question regarding whether Defendant is a sham 15 entity such that AGIS Inc.’s contacts with California should be imputed to Defendant for purposes 16 of jurisdiction to warrant further discovery. Accordingly, the Court exercises its discretion and 17 GRANTS Plaintiff’s request to conduct jurisdictional discovery. Because the Court does not 18 intend to indefinitely delay this action, Plaintiff shall have one month to conduct targeted 19 discovery to support personal jurisdiction, consistent with this order. The Court therefore SETS 20 October 14, 2019, as the jurisdictional discovery cut-off. 21 B. Sanctions 22 In connection with its motion to dismiss, Defendant has also filed a motion for sanctions 23 against Plaintiff for filing this suit in the Northern District of California. See Dkt. No. 48. 24 Sanctions under Federal Rule of Civil Procedure 11 are appropriate when an attorney has certified 25 “claims . . . [not] warranted by existing law or by a nonfrivolous argument for the extension, 26 modification, or reversal of existing law or the establishment of new law.” Fed. R. Civ. P. 27 11(b)(2). Although the Court has concluded as part of this order that Plaintiff has not yet alleged 1 || highly fact-intensive inquiry. The Court is not persuaded that Plaintiffs claims are frivolous, and 2 || thus DENIES the motion for sanctions. 3 || IV. CONCLUSION 4 Accordingly, the Court DENIES WITHOUT PREJUDICE the motion to dismiss and 5 || DENIES the motion for sanctions. The Court also DENIES Plaintiff's pending motion to 6 supplement the record, but will permit limited jurisdictional discovery. The Court SETS October 7 14, 2019, as the jurisdictional discovery cut-off, and further SETS a case management conference 8 on October 22, 2019, at 2:00 p.m. 9 IT IS SO ORDERED. 10 || Dated: 9/12/2019 11 Appr 8 Mei HAYWOOD S. GILLIAM, JR. 12 United States District Judge

© 15 16 & = 17

Z 18 19 20 21 22 23 24 25 26 27 28