Lil' Man in the Boat, Inc. v. Auk Ta Shaa Discovery, LLC, No. 3:2016cv01471 - Document 32 (N.D. Cal. 2016)
Court Description: ORDER GRANTING DEFENDANT'S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION by Judge Jon S. Tigar granting 11 Motion to Dismiss. (wsn, COURT STAFF) (Filed on 8/1/2016)
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Lil&#039; Man in the Boat, Inc. v. Auk Ta Shaa Discovery, LLC Doc. 32 1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 LIL’ MAN IN THE BOAT, INC., Case No. 16-cv-01471-JST Plaintiff, 8 v. 9 10 AUK TA SHAA DISCOVERY, LLC, Defendant. ORDER GRANTING DEFENDANT’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION Re: ECF No. 11 United States District Court Northern District of California 11 12 Defendant Auk Ta Shaa Discovery, LLC’s has moved to dismiss the complaint in this 13 14 breach of contract action. ECF No. 11. Auk Ta Shaa moves to dismiss on several grounds, 15 including failure of the parties to agree on the terms of the contract; violation of the statute of 16 frauds; violation of the parol evidence rule; lack of damages; and lack of personal jurisdiction. 17 Because the Court concludes that it lacks personal jurisdiction over Defendant, it will grant the 18 motion on that ground alone without reaching Defendant’s other arguments. 19 I. BACKGROUND 20 On February 16, 2016, Plaintiff Lil’ Man in the Boat, Inc. filed this action against 21 Defendant Auk Ta Shaa Discovery, LLC in the San Francisco Superior Court, alleging breach of 22 contract. ECF No. 1-1 at 6. In its form complaint, Plaintiff alleges that it accepted a counter offer 23 submitted by Defendant on December 31, 2015 for the sale of the vessel “Queen of Seattle,” 24 USCG #667926, for the sum of $12,500. Id. at 7. Plaintiff claims that Defendant has refused to 25 deliver the vessel to Plaintiff and has promised to sell it to another company in violation of the 26 parties’ agreement. Id. 27 28 On March 24, 2016, Defendant removed the case to federal court. ECF No. 1. On April 14, 2016, Defendant filed a motion to dismiss the Complaint under Rules 12(b)(2) and 12(b)(6) of Dockets.Justia.com 1 the Federal Rules of Civil Procedure 12(b)(2) and 12(b)(6), ECF No. 11, which motion the Court 2 now considers. 3 II. LEGAL STANDARD When a defendant objects to the Court’s personal jurisdiction over it pursuant to Federal 4 Rule of Civil Procedure 12(b)(2), the plaintiff bears the burden of establishing that jurisdiction is 6 proper. Boschetto v. Hansing, 539 F.3d 1011, 1015 (9th Cir. 2008). Absent an evidentiary 7 hearing, however, the plaintiff need only make a prima facie showing of personal jurisdiction. Id. 8 Uncontroverted allegations in the plaintiff’s complaint must be taken as true, and “[c]onflicts 9 between the parties over statements contained in affidavits must be resolved in the plaintiff’s 10 favor.” Id. (quoting Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 11 United States District Court Northern District of California 5 2004)). 12 “Where, as here, there is no applicable federal statute governing personal jurisdiction, the 13 district court applies the law of the state in which the district court sits.” Schwarzenegger, 374 14 F.3d at 800. “Because California’s long-arm jurisdictional statute is coextensive with federal due 15 process requirements, the jurisdictional analyses under state law and federal due process are the 16 same.” Id. at 800–01. The relevant question, therefore, is whether non-resident Defendant Auk 17 Ta Shaa Discovery has “at least ‘minimum contacts’ with [California] such that the exercise of 18 jurisdiction ‘does not offend traditional notions of fair play and substantial justice.’” Id. at 801 19 (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). 20 There are two types of personal jurisdiction: “general or all-purpose” and “specific or case- 21 linked.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S.Ct. 2846, 2851 (2011). 22 General jurisdiction permits jurisdiction over a defendant even when the claims at issue do not 23 arise from or relate to activity in that forum. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473 24 n.15 (1985). A court may assert general personal jurisdiction over defendants “when their 25 affiliations with the State are so ‘continuous and systematic’ as to render them essentially at home 26 in the forum State.” Goodyear, 131 S.Ct. at 2851 (quoting Int’l Shoe, 326 U.S. at 317). 27 28 “Specific jurisdiction, on the other hand, depends on an affiliation between the forum and the underlying controversy, principally, activity or an occurrence that takes place in the forum 2 1 State and is therefore subject to the State’s regulation.” Goodyear, 131 S. Ct. at 2851 (internal 2 quotation marks omitted). The Ninth Circuit has established a three-part test to determine whether 3 a court has specific personal jurisdiction over a defendant: 4 (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; 5 6 (2) the claim must be one which arises out of or relates to the defendant’s forumrelated activities; and 7 8 (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable. 9 Schwarzenegger, 374 F.3d at 802. “The plaintiff bears the burden of satisfying the first two 11 United States District Court Northern District of California 10 prongs of the test.” Id. If the plaintiff does so, “the burden then shifts to the defendant to ‘present 12 a compelling case’ that the exercise of jurisdiction would not be reasonable.” Id. 13 III. 14 ANALYSIS The first prong of the Ninth Circuit’s test for specific personal jurisdiction1 asks whether 15 Defendant “purposefully direct[ed]” its activities at the forum or “purposefully avail[ed]” itself of 16 the privilege of conducting activities in the forum. Schwarzenegger, 374 F.3d at 802. Although 17 the terms “purposeful availment” and “purposeful direction” are sometimes used interchangeably, 18 they represent two distinct concepts. Id. A “purposeful availment” analysis is used most 19 frequently in contract cases. Id.; Picot v. Weston, 780 F.3d 1206, 1212 (9th Cir. 2015). Thus, the 20 Court must first determine whether Defendant purposefully availed itself of the privilege of 21 conducting business in California. “In determining whether such contacts exist, [courts] consider 22 ‘prior negotiations and contemplated future consequences, along with the terms of the contract and 23 the parties’ actual course of dealing.’” Picot, 780 F.3d at 1212 (quoting Burger King, 471 U.S. at 24 479). 25 26 Defendant argues that Plaintiff has not met its burden of establishing purposeful availment because Defendant’s “only arguable connection to California is the fact that Plaintiff resides in 27 28 1 Plaintiff does not argue that general jurisdiction exists. ECF No. 18 at 15–17. 3 1 California.” ECF No. 11 at 21. According to Defendant, to the extent any transaction occurred 2 between Plaintiff and Defendant, “it concerned the Queen of Seattle, a steam powered paddle 3 wheel boat located in Lake Union near Seattle, Washington.” Meier Decl., ECF No. 13 ¶ 6. 4 Defendant further claims that “[t]he alleged transaction was negotiated entirely through a third- 5 party broker located in the State of Florida.” Id. Indeed, as Plaintiff’s own declaration asserts, 6 Plaintiff first became aware of the Queen of Seattle when it “came across an internet 7 advertisement” for the boat, which was posted by Defendant’s Florida-based broker. Murray 8 Decl., ECF No. 19 ¶ 14. 9 Plaintiff responds that purposeful availment is shown here because Defendant had “repeated contacts with [Plaintiff] in the state of California through advertisement, dozens of 11 United States District Court Northern District of California 10 phone calls, dozens of emails, [and] numerous text messages, culminating in the transmittals of an 12 offer from California and a counter offer to California for the sale of a vessel to a California 13 company.” ECF No. 18 at 16. Plaintiff also argues that it is “noteworthy” that “the vessel in 14 question was originally built in California, operated in California, and was purchased with the 15 intent to return it for use [to California].” Id. 16 The Court agrees with Defendant that Plaintiff “fails at step one of the test for specific 17 jurisdiction, as the lone transaction for the sale of one item does not establish that the Defendant[] 18 purposefully availed [itself] of the privilege of doing business in California.” Boschetto, 539 F.3d 19 at 1017 (9th Cir. 2008). A “contract alone does not automatically establish minimum contacts in 20 the plaintiff’s home forum.” Id. (citing Burger King, 471 U.S. at 475). Instead, specific personal 21 jurisdiction requires “actions by the defendant himself that create a substantial connection with the 22 forum State.” Burger King, 471 U.S. at 475 (internal quotation marks omitted) (emphasis in 23 original). Accordingly, the fact that Plaintiff resides in California, that the boat was originally 24 built in California, and that the boat was originally operated in California by someone other than 25 Defendant does not factor into the Court’s analysis. 26 Similarly, Plaintiff’s unstated intent to return the vessel to California is irrelevant because 27 the focus of the Court’s inquiry is on “actions by the defendant himself.” Id. (emphasis in 28 original). Indeed, the Complaint states that the purported contract contemplated Plaintiff taking 4 1 possession of the Queen of Seattle “on Lake Union, Washington.” ECF No. 1-1 at 7. The Court 2 thus concludes that the purported contract envisioned performance in Washington, not California. 3 Whatever Plaintiff planned on doing with the boat after purchasing it from Defendant in 4 Washington cannot confer on this Court personal jurisdiction over Defendant. See Picot, 780 F.3d 5 at 1213 (“[T]he fact that a contract envisions one party discharging his obligations in the forum 6 state cannot, standing alone, justify the exercise of jurisdiction over another party to the 7 contract.”). 8 9 Finally, even assuming that the actions of Defendant’s Florida-based broker in negotiating the alleged contract with Plaintiff are attributable to Defendant, see Martensen v. Koch, 942 F. Supp. 2d 983, 993 (N.D. Cal. 2013) (stating that “for purposes of personal jurisdiction, the actions 11 United States District Court Northern District of California 10 of an agent are attributable to the principal”), such contacts are not sufficient to show purposeful 12 availment here. See Boschetto, 539 F.3d at 1019 (“[A] one-time contract for the sale of a good 13 that involved the forum state only because that is where the purchaser happened to reside, but 14 otherwise created no ‘substantial connection’ or ongoing obligations there” does not satisfy the 15 “purposeful availment” prong); Shisler v. Sanfer Sports Cars, Inc., 146 Cal. App. 4th 1254, 1261 16 (2006) (finding no purposeful availment where “there were an unknown number of 17 communications between the parties” but there was “no evidence [of] anything other than a one- 18 time transaction.”). As in Boschetto, the alleged contract would not have “create[d] any ongoing 19 obligations with [Plaintiff] in California; once the [boat] was sold the parties were to go their 20 separate ways.” Boschetto, 539 F.3d at 1017. Neither the Complaint nor Plaintiff’s declaration in 21 support of its Opposition “point to any continuing commitments assumed by the Defendant[] 22 under the contract.” Id. Nor would “performance of the contract require the Defendant[] to 23 engage in any substantial business in California,” for, as noted previously, the purported contract 24 called for Plaintiff to take possession of the Queen of Seattle in Washington. Id.2 25 26 27 28 2 The principal case relied on by Plaintiff, Bancroft & Masters, Inc. v. Augusta Nat. Inc., is distinguishable because that case involved a defendant who “expressly aimed” its conduct at the plaintiff in the forum state by sending a cease-and-desist letter to the plaintiff demanding that the plaintiff stop using its website and “transfer it immediately” to the defendant. 223 F.3d 1082, 1085, 1088 (9th Cir. 2000) (“The presence of individualized targeting is what separates these 5 1 Ultimately, the Court concludes that it lacks personal jurisdiction over Defendant because 2 Plaintiff has not satisfied its burden of showing that Defendant purposefully availed itself of the 3 privilege of conducting activities in California. CONCLUSION 4 5 The Court grants Defendant’s motion to dismiss for lack of personal jurisdiction. “An 6 order granting such a motion must be accompanied by leave to amend unless amendment would 7 be futile.” Knevelbaard Dairies v. Kraft Foods, Inc., 232 F.3d 979, 983 (9th Cir. 2000) (citing 8 Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir.2000)). Because it is not clear that the Complaint 9 cannot be amended to add facts establishing personal jurisdiction over the Defendant, the Court 10 United States District Court Northern District of California 11 12 grants Plaintiff’s request for leave to amend. IT IS SO ORDERED. Dated: July 31, 2016 13 14 15 ______________________________________ JON S. TIGAR United States District Judge 16 17 18 19 20 21 22 23 24 25 26 27 28 cases from others in which we have found the effects test unsatisfied.”) (emphasis added). By contrast, here, Defendant admits that it became aware of the Queen of Seattle when it “came across an internet advertisement” for the boat, which was posted by Defendant’s Florida-based broker. Murray Decl., ECF No. 19 ¶ 14. Defendant does not argue that Plaintiff did anything to “expressly aim” its conduct at California besides “trying to sell a vessel in California.” ECF No. 18 at 16. However, this assertion is controverted by the Complaint itself, which states that the purported contract contemplated Plaintiff taking possession of the Queen of Seattle “on Lake Union, Washington.” ECF No. 1-1 at 7. Accordingly, the Court concludes that Bancroft & Masters is inapposite. 6
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