Jason A Perlow v. Perry Mann, No. 2:2013cv00749 - Document 47 (C.D. Cal. 2013)
Court Description: ORDER GRANTING DEFENDANT MICHAEL MORTONS MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND DENYING CHANGE OF VENUE 33 by Judge Otis D. Wright, II . (lc.) Modified on 10/22/2013 (lc).
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Jason A Perlow v. Perry Mann Doc. 47 O 1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 CENTRAL DISTRICT OF CALIFORNIA 11 12 JASON A. PERLOW, 13 v. 14 15 Case No. 2:13-cv-00749-ODW(SHx) Plaintiff, PERRY MANN; MICHAEL MORTON, Defendants. 16 I. 17 ORDER GRANTING DEFENDANT MICHAEL MORTON’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND DENYING CHANGE OF VENUE [33] INTRODUCTION 18 On September 12, 2013, Defendant Michael Morton moved to dismiss Plaintiff 19 Jason A. Perlow’s First Amended Complaint (“FAC”) for defamation and conspiracy 20 to defame under Federal Rule of Civil Procedure 12(b)(2). 21 Alternatively, Morton moved to transfer venue to the United States District Court for 22 the District of Nevada under 28 U.S.C. § 1404(a). (Id.) Morton argues that California 23 lacks personal jurisdiction over him and that Nevada provides a more convenient 24 forum for all parties. (Mot. 3, 8.) For the following reasons, the Court GRANTS 25 Morton’s Motion to Dismiss for Lack of Personal Jurisdiction and DENIES Morton’s 26 Motion to Transfer Venue.1 (ECF No. 33.) 27 28 1 Having carefully considered the papers filed with respect to this Motion, the Court deems the matter appropriate for decision without oral argument. Fed. R. Civ. P.78; L.R. 7-15. Dockets.Justia.com 1 II. FACTUAL BACKGROUND 2 Perlow, Mann, and Morton are co-investors in NM Ventures, a nationwide 3 business group that operates entertainment venues at the Palms Hotel and Casino in 4 Las Vegas, Nevada. (FAC ¶ 14.) The Venture operates through an entity called 5 N9NE Group. (Id.) On August 8, 2012, Defendant Perry Mann sent the following 6 alleged email to Perlow, copying several other members of NM Ventures: “Perlow—I 7 respect your loyalty to your pals SY but let’s all remember you where [sic] the 8 schmuck that got caught doing blow in the elevator at the Palms and subsequently 9 banded [sic] from all the N9NE Venus [sic].” (FAC ¶ 19.) 10 An hour later, Mann allegedly sent another email to reiterate his previous 11 statement: “You [Perlow] were banned from the N9NE venues by the mangers [sic], 12 that’s a fact my friend.” 13 organization, investors in California, Illinois, New Mexico, Nevada, and Colorado 14 received the email. (Silver Decl. Ex. I at ¶ 6.) The parties also hail from different 15 states: Perlow resides in Chicago, Illinois; Morton lives in Las Vegas, Nevada; and 16 Mann lives in Manhattan Beach, California. (FAC ¶¶ 7, 9.; Mann Decl. Ex. H at ¶ 1.) (FAC ¶ 24.) Because the Venture is a nationwide 17 Morton served as NM Ventures’s manager at the time Perlow allegedly used 18 cocaine in the Palms Hotel elevator. (Mann Decl. Ex. B. at ¶ 10.) According to 19 Mann, right before he sent the email, Morton “verbally told [him]” that Perlow had 20 been caught using cocaine in the Palms Hotel elevator and had subsequently been 21 banned from Palms’ venues. (Id.) Mann then sent the alleged email from his home in 22 Manhattan Beach, California. (Mann Decl. Ex. H at ¶ 10.) 23 In response to the allegedly defamatory emails, Perlow had George Maloof—a 24 managing member of the Palms Hotel and Casino—send Perlow a letter, stating that 25 Mann’s claims were “totally false.” (FAC ¶ 29, Ex B.) On August 9, 2012, Perlow’s 26 counsel sent a letter to Mann demanding that Mann retract the allegedly libelous 27 comments. (Id. Ex. C.) Then on July 16, 2013, Perlow filed his FAC. He added 28 Morton as a defendant, alleging that Morton defamed and conspired to defame him by 2 1 communicating the allegedly defamatory material to Mann, who then republished the 2 statements in the email. (FAC ¶ 36.) On September 26, 2013, Perlow filed an Ex 3 Parte Application requesting limited jurisdictional discovery on the personal- 4 jurisdiction issue. (ECF No. 40.) The Court subsequently denied the Application, 5 finding that the requested jurisdictional discovery would be futile. (ECF No. 41.) 6 Morton’s Motion to Dismiss is now before the Court for decision. III. 7 A defendant may move to dismiss a case for lack of personal jurisdiction under 8 9 LEGAL STANDARD Federal Rule of Civil Procedure 12(b)(2). The plaintiff bears the burden of 10 demonstrating that jurisdiction exists. Love v. Assoc. Newspapers Ltd., 611 F.3d 601, 11 608 (9th Cir. 2010). 12 District courts have the power to exercise personal jurisdiction to the extent of 13 the law of the state in which they sit. Fed. R. Civ. P. 4(k)(1)(A); Panavision Int’l, 14 L.P. v. Toeppen, 141 F.3d 1316, 1320 (9th Cir. 1988). 15 jurisdictional statute is coextensive with federal due-process requirements. Cal. Civ. 16 Proc. Code § 410.10; Roth v. Garcia Marquez, 942 F.2d 617, 620 (9th Cir. 1991). California’s long-arm 17 For a court to exercise personal jurisdiction over a nonresident defendant 18 consistent with due process, the defendant must have sufficient “minimum contacts” 19 with the forum state so that the exercise of jurisdiction “does not offend traditional 20 notions of fair play and substantial justice.” 21 Unemployment Comp. & Placement, 326 U.S. 310, 316 (1945). Using the “minimum 22 contacts” analysis, a court may obtain either general jurisdiction or specific 23 jurisdiction over a nonresident defendant. Doe v. Unocal Corp., 248 F.3d 915, 923 24 (9th Cir. 2001). If the defendant’s activities are insufficient to subject him to general 25 jurisdiction, then the court looks to the nature and quality of the defendant’s contacts 26 in relation to the cause of action to determine whether specific jurisdiction exists. 27 Data Disc, Inc. v. Sys. Tech. Assoc. Inc., 557 F.2d 1280, 1287 (9th Cir. 1977). 28 /// 3 Int’l Shoe Co. v. Wash., Office of 1 Under 28 U.S.C. § 1404(a), district courts have broad discretion to determine 2 whether to transfer a case “according to an individualized, case-by-case consideration 3 of convenience and fairness” for the parties and the witnesses involved. Jones v. GNC 4 Franchising, Inc., 211 F.3d 495, 498 (9th Cir. 2000). Specifically, a court should 5 consider the following factors: 6 (1) the location where the relevant agreements were negotiated and 7 executed, (2) the state that is most familiar with the governing law, (3)the 8 plaintiff’s choice of forum, (4) the respective parties’ contacts with the 9 forum, (5) the contacts relating to the plaintiff’s cause of action in the 10 chosen forum, (6) the differences in the costs of litigation in the two 11 forums, (7) the availability of compulsory process to compel attendance 12 of unwilling non-party witnesses, . . . (8) the ease of access to sources of 13 proof, . . . [(9)] the presence of a forum selection clause[,] . . . [and (10)] 14 the relevant public policy of the forum state. 15 Id. at 498–99. IV. 16 DISCUSSION 17 Morton moves to dismiss the FAC for lack of general or specific jurisdiction 18 and improper venue. Perlow responds that Morton is subject to personal jurisdiction 19 in California because he owns and pays taxes on a house in Manhattan Beach, he 20 allegedly purposefully defamed Perlow to a California resident, and the “effects of 21 [his] defamation were felt in California.” (Opp’n 8.) The Court addresses each of 22 these arguments in turn. 23 A. 24 25 General jurisdiction Perlow argues that Morton is subject to general jurisdiction in California resulting from owning a house in Manhattan Beach. 26 A court has general jurisdiction over a defendant whose contacts with a state are 27 “substantial” or “continuous and systematic,” even if the action is unrelated to those 28 contacts. Bancroft & Masters, Inc. v. August Nat’l Inc., 223 F.3d 1082, 1086 (9th Cir. 4 1 2000). In the general-jurisdiction inquiry, “substantial” has been recognized as a 2 fairly high standard. Gates Learjet Corp. v. Jensen, 743 F.2d 1325, 1330 (9th Cir. 3 1984). Given due-process concerns, the focus must be on the relationship among the 4 defendant, the forum, and the litigation. Shaffer v. Heitner, 433 U.S. 186, 204 (1977). 5 Moreover, a defendant’s contacts must be of the sort that approximate physical 6 presence. Bancroft, 223 F.3d at 1086. Indeed, the defendant must be “essentially at 7 home” in the forum state to be subject to general jurisdiction. Goodyear Dunlop Tires 8 Operations, S.A. v. Brown, 131 S. Ct. 2846, 2851 (2011). 9 Perlow argues that Morton is subject to general jurisdiction because he owns 10 property in California, has paid property taxes to the County of Los Angeles since 11 May 2008, and received “benefits” from owning the property like “trash removal, fire 12 and police services, the use of public beaches, etc.” (Opp’n 2, 19.) Perlow adds that 13 Morton has minimum contacts with the forum state because he frequently conducts 14 business in California. (FAC ¶ 9.) Morton disagrees, arguing that he rarely visits his 15 Manhattan Beach house and his last California-related business venture was at the 16 latest in 2007. (Reply 9.) 17 The Court finds that Morton is not subject to general jurisdiction in California. 18 First, Morton’s Manhattan Beach property does not establish general jurisdiction. 19 While real property is a contact with the forum state, the mere presence of such 20 property is not dispositive of general jurisdiction. See Rush v. Savchuk, 444 U.S. 320, 21 328 (1980). 22 California, but this sole contact does not render Morton—a Las Vegas resident— 23 “essentially at home” in California. Id. at 328. And while Perlow exhaustively 24 attaches exhibits regarding Morton’s property taxes and email exchanges showing that 25 Mann and Morton’s families are acquaintances, the Court agrees with Morton that 26 “[a]s a matter of law, neither acquaintance, nor even friendship with a state’s resident 27 subjects a party to the jurisdiction of that state.” (Reply 2.) Finally, because Morton’s 28 California house has nothing to do with the defamatory email that is the subject of this Here, Morton’s Manhattan Beach house is a single contact with 5 1 litigation, the Court is not inclined to stretch due process in order to accommodate the 2 conclusory jurisdictional facts that Perlow has presented. 3 Next, even if Morton facilitated the defamatory email by communicating with 4 Mann in California, this act is insufficient to establish general jurisdiction. Gates, 743 5 F.2d at 1331 (9th Cir. 1984) (characterizing telephone calls and letters to the forum 6 state as “more occasional than continuous, and more infrequent than systematic”). 7 Here, Perlow has only alleged that Morton communicated the defamatory material to 8 Mann, a California resident, right before he sent the email. This single contact falls 9 far below the “extensive communications” that failed to establish general jurisdiction 10 in Gates. 11 Perlow’s argument that Morton conducts substantial business in California also 12 fails. Certain factors showing general jurisdiction are whether the defendant makes 13 sales, solicits or engages in business in the state, or serves the state’s markets. Hirsch 14 v. Blue Cross, Blue Shield of Kan. City, 800 F.2d 1474, 1478 (9th Cir. 1986). And 15 general-jurisdiction business contacts have not been established under even stronger 16 facts. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416 17 (1984) (sending a CEO to Houston for contract negotiations, training personnel in Fort 18 Worth, and drawing checks from a Houston bank did not subject the defendant to 19 general jurisdiction in Texas). Beyond the vague allegation in the FAC that Morton 20 “frequently conducts business” in California, and Morton’s role on an April 2007 21 management project in Palm Springs, Perlow does not allege specific facts to 22 demonstrate that Morton has continuous business contacts in California. 23 Gutierrez Decl. ¶ 6.) Therefore, Morton’s activity does not meet the high standard of 24 general jurisdiction. 25 B. (See Specific jurisdiction 26 Perlow also argues that Morton is subject to specific jurisdiction in California 27 based on Perlow allegedly directing his defamatory comments to a California resident. 28 /// 6 1 Even if a defendant is not subject to general jurisdiction, specific jurisdiction 2 applies when the cause of action arises from the defendant’s purposeful contact with 3 the forum state. Lake v. Lake, 817 F.2d 1416, 1420 (9th Cir. 1987). The three-factor 4 test adopted by the Ninth Circuit requires the plaintiff to show that (1) the nonresident 5 defendant has purposefully directed his activities or consummated some transaction 6 with the forum state; (2) the claim arises out of or relates to the defendant’s forum- 7 related activity; and (3) the exercise of jurisdiction comports with fair play and 8 substantial justice. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 9 (9th Cir. 2004). 10 The first prong is evaluated under the Calder effects test. Under this test, the 11 defendant must have (1) committed an intentional act; (2) which was expressly aimed 12 at the forum state; and (3) caused harm, the brunt of which is suffered and which the 13 defendant knows is likely to be suffered in the forum state. Calder v. Jones, 465 U.S. 14 783, 789–90 (1984); see Core-Vent Corp. v. Nobel Industries AB, 11 F.3d 1482, 1486 15 (9th Cir. 1993) (reasoning that allegedly defamatory articles did not have an effect on 16 California, because they could not be seen as a comment on a California event and 17 plaintiffs did not allege that California was a primary audience for the medical 18 journals). Further, in a defamation action, the circulation of defamatory material in 19 the forum state is an important factor in the minimum-contacts analysis. Cas. 20 Assurance Risk Ins. Brokerage Co. v. Dillon, 976 F.2d 596, 599 (9th Cir. 1992). 21 Perlow avers that Morton is also subject to specific jurisdiction in California 22 because he (1) intentionally defamed Perlow to Mann; (2) directed the defamatory 23 statements at the state of California and one of its residents; and (3) knew that the 24 harm from his alleged defamation would be felt in California. (Opp’n 2.) But Morton 25 responds that he did not purposefully direct his defamatory email at California. 26 (Mot. 6.) 27 purposefully direct his defamatory activity at California. While circulation of the libel 28 in the forum state is a key factor in the specific-jurisdiction inquiry, the Court does not Morton cannot be subject to specific jurisdiction, because he did not 7 1 see how uttering defamatory statements to a single California resident about an Illinois 2 resident constitutes “circulation.” 3 Perlow’s Ex Parte Application, “one conversation [between Morton and Mann] would 4 pale in comparison to targeting a state’s residents with a widely circulated magazine.” 5 (ECF No. 41, at 2.) Here, as in Core-Vent, the allegedly libelous email was circulated 6 to Venture recipients all over the country—rather than exclusively California. Perlow 7 has not established that California was the “primary audience” for the defamatory 8 remarks. As the Court explained in its Order Denying 9 Moreover, the brunt of the harm was not suffered in California. Perlow and 10 Morton squabble over whether Morton knew that Mann was located in California 11 when he encouraged the republication of the allegedly defamatory remarks. But the 12 Calder effects test focuses on the harm to the plaintiff, rather than the location of the 13 defendants. Calder, 465 U.S. at 788–89. In Calder, the Supreme Court found that 14 California had specific jurisdiction over two Florida newspapermen for an allegedly 15 libelous story written about a Californian actress. 16 “effects” of defendants’ article were felt in California because California was the 17 “focal point of both the story and of the harm suffered.” Id. at 789. Specifically, the 18 article attacked the professionalism of a California-based entertainer, drew upon 19 California sources, and caused the actress emotional distress and injury in California. 20 Id. The Court explained that the 21 But here, the defamatory email attacked the professionalism of Perlow, an 22 Illinois resident, and the focus of the email was on an incident at the Palms Hotel and 23 Casino, which is located in Nevada. Because the “effects” of the defamatory email 24 were felt in Illinois or Nevada, these forums would more likely have jurisdiction over 25 Morton than California. 26 Additionally, the brunt of the harm from a defamatory statement can be felt at 27 an individual’s domicile. See Brainerd v. Governors of the Univ. of Alberta, 873 F.2d 28 1257, 1259 (9th Cir. 1989) (holding that the defendant knew the plaintiff would suffer 8 1 harm in Arizona from an allegedly defamatory phone conversation because the 2 plaintiff lived and worked in Arizona). Here, the bulk of the harm—that Perlow was a 3 “schmuck” caught doing blow in the Palms hotel—was felt either in Illinois, where 4 Perlow lives and works, or even in Nevada, the site of several N9NE business 5 ventures—not in California. 6 While Perlow correctly cites Keeton for the proposition that a plaintiff’s 7 residence in the forum state is not a requirement for specific jurisdiction, in Keeton the 8 defendant, Hustler magazine, could reasonably anticipate being haled into New 9 Hampshire court because it “continuously and deliberately exploited the New 10 Hampshire market.” Keeton v. Hustler Magazine, 465 U.S. 770, 781 (1984). While 11 the Court does not predicate its reasoning on the sole fact that Perlow is not a 12 California resident, here, unlike in Keeton, Morton has not continuously exploited the 13 California market through a magazine; rather, he allegedly communicated a 14 defamatory remark which later surfaced in a single email. 15 Accordingly, the Court finds that Morton is not subject to either general or 16 specific jurisdiction in California and GRANTS Morton’s Motion to Dismiss for Lack 17 of Personal Jurisdiction. 18 C. Venue 19 Both parties disagree whether California or Nevada is the most convenient 20 forum for witnesses and evidence. Under 28 U.S.C § 1404(a), a district court may 21 transfer a civil action to any other district where it may have been brought. The 22 statute provides three factors for a court to consider in deciding upon a motion to 23 transfer: (1) convenience of the parties; (2) convenience of the witnesses; and (3) the 24 interests of justice. See Commodity Futures Trading Comm’n v. Savage, 611 F.2d 25 270, 279 (9th Cir. 1979). 26 The Court declines to transfer this case to the District of Nevada because 27 transferring the case will just present the same jurisdictional dilemma but in reverse. 28 Were the case to proceed in Nevada, Mann—a California resident—may not be 9 1 subject to personal jurisdiction in that state. The District of Nevada would then have 2 exactly the same problem this Court currently faces. Accordingly, the Court DENIES 3 Morton’s Motion to Transfer Venue. V. CONCLUSION 4 5 For the reasons discussed above, the Court GRANTS Morton’s Motion to 6 Dismiss for Lack of Personal Jurisdiction and DENIES Morton’s Motion to Transfer 7 Venue. (ECF No. 33.) 8 IT IS SO ORDERED. 9 10 October 22, 2013 11 12 13 ____________________________________ OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10
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