-GWF Holiday Systems International Of Nevada v. Vivarelli, Schwarz and Associates, S.A. de C.V. et al, No. 2:2010cv00471 - Document 86 (D. Nev. 2013)
Court Description: ORDER Denying 56 Defendant Resort Solutions, Inc.'s Motion to Dismiss. IT IS FURTHER ORDERED that 64 Plaintiff Holiday Systems International of Nevada's Counter Motion for Jurisdictional Discovery is Granted. Limited jurisdictional discovery due 4/8/13. Renewed motion to dismiss due 5/6/13. Signed by Judge Miranda M. Du on 2/8/13. (Copies have been distributed pursuant to the NEF - EDS)
Download PDF
<![CDATA[
-GWF Holiday Systems International Of Nevada v. Vivarelli, Schwarz and As...tes, S.A. de C.V. et al Doc. 86 1 2 3 4 5 UNITED STATES DISTRICT COURT 6 DISTRICT OF NEVADA 7 8 HOLIDAY SYSTEMS INTERNATIONAL OF NEVADA, ORDER 9 Plaintiff, v. 10 11 12 *** Case No. 2:10-cv-00471-MMD-GWF (Defs.’ Motion to Dismiss – dkt. no. 56; Plf.’s Counter Motion for Jurisdictional Discovery - dkt. no. 4) VIVARELLI, SCHWARZ, AND ASSOCIATES, S.A. de. C.V., et al., Defendants. 13 14 15 Before the Court is Defendants Resort Solutions, Inc. (“RSI”), Royal Elite 16 Vacation, LLC (“REV”), and Royal Elite Exchanges, LLC’s (“REE”) Motion to Dismiss. 17 (Dkt. no. 56.) Plaintiff Holiday Systems International of Nevada (“HSI”) opposes the 18 Motion, and filed a Counter Motion for Jurisdictional Discovery. (Dkt. nos. 63 and 64) 19 I. BACKGROUND 20 HSI provides vacation-related business services for vacation ownership resorts 21 and their owners. It has used its name since March 31, 2004, and registered its name 22 as a trademark with the United States Patent and Trademark Office on February 24, 23 2009. 24 On or about March 16, 2007, HSI entered into an agreement with Defendant 25 Vivarelli, Schwarz and Associations (“VSA”) to market and sell HSI services in Mexico, 26 VSA’s principal place of business. On or about February 1, 2008, HSI entered into a 27 second agreement with VSA for the right to market and sell lodging week packages to 28 members of HSI whom VSA had enrolled pursuant to the first agreement. HSI alleges Dockets.Justia.com 1 that VSA breached various provisions of the two contracts beginning in January 2008, 2 including but not limited to continuing to market to VSA clients services that compete 3 with HSI, infringing on an HSI mark, and wrongfully appropriating HSI’s confidential 4 assets to benefit HSI competitors. HSI alleges that Defendants RSI, REV, and REE 5 were complicit in these various breaches. 6 HSI filed this Complaint on April 5, 2010, against VSA, VSA agent/officer/principal 7 Aaron Schwarz, RSI, REV, and REE alleging Lanham Act trademark infringement, 8 Lanham Act unfair competition and false designation of origin, breach of contract, breach 9 of the covenant of good faith and fair dealing, misappropriation, interference with 10 contractual relationships, unjust enrichment, conversion, inducement to breach contract, 11 and declaratory judgment. 12 RSI, REV, and REE are Virginia corporations. VSA is a Mexico corporation, and 13 Schwarz is alleged to be a Mexican citizen. RSI, REV, and REE filed this Motion to 14 Dismiss on May 7, 2012, arguing inter alia that the suit should be dismissed for lack of 15 personal jurisdiction. (Dkt. no. 56.) HSI responded, arguing that the Court has personal 16 jurisdiction over the claims. (Dkt. no. 63.) In the alternative, HSI seeks an order allowing 17 limited jurisdictional discovery on the personal jurisdiction question. (Dkt. no. 64.) 18 II. DISCUSSION 19 RSI, REV, and REE (hereinafter “Virginia Defendants”) seek dismissal of HSI’s 20 Complaint on two principal grounds: (1) failure to effectuate proper service; and (2) lack 21 of personal jurisdiction. 22 A. 23 Virginia Defendants complain that HSI failed to timely serve them in violation of 24 Service of Process Fed. R. Civ. P. 4(m), 12(b)(4), and 12(b)(5). The Court disagrees. 25 HSI underwent an exhaustive and court-approved journey to serve Schwarz and 26 VSA, which led to the delays that Virginia Defendants now complain about. This process 27 required, among other extraordinary measures, navigating of a complex web of Mexican 28 legal rules, retaining legal services provided by Mexican co-counsel, hiring private 2 1 investigators in the United States and in Mexico, and involving the United States 2 Department of State. At the same time, HSI sought court approval to extend service 3 deadlines, all of which were granted. 4 Of course, the delays in service resulted from the inability to locate and serve 5 VSA and Schwarz, not Virginia Defendants. However, HSI represented to the Court that 6 it needed to serve the former first so as to not jeopardize its extended efforts at 7 effectuating service to the latter. HSI feared that serving Virginia Defendants first would 8 lead to VSA and Schwarz evading service overseas. By issuing its August 6, 2010, and 9 November 5, 2010, Orders, the Magistrate Judge effectively agreed with HSI that service 10 upon VSA and Schwarz before Virginia Defendants was proper. Furthermore, the Court 11 took no action in response to HSI’s March 12, 2012, Status Report filed after the Court’s 12 Local Rule 41-1 Notice, thereby authorizing the delays in service as to all Defendants. 13 Even putting aside the Court’s tacit authorization of HSI’s pursuit of service, the 14 Court holds that Virginia Defendants have not been unjustifiably prejudiced by delays in 15 service. While there can be no serious doubt that the interests in judicial economy and 16 in speedy resolution of litigants’ disputes are best served when service is effectuated 17 with dispatch, this case presents an exceptional circumstance that justifies these 18 otherwise lengthy delays. Service upon Mr. Schwarz and VSA was essential to moving 19 this case forward; timely serving Virginia Defendants in advance would have had little 20 effect in pushing the litigation toward resolution. In fact, it might have flustered HSI’s 21 efforts to serve all Defendants, if HSI’s fears of evading service proved true. As a result, 22 HSI has not unreasonably delayed pursuing its claims to the prejudice of Virginia 23 Defendants, and any invocation of laches must fail. 24 25 For these reasons, the Court declines Virginia Defendants’ request to dismiss this case with prejudice for failure to effectuate timely service. 26 B. 27 Virginia Defendants also seek dismissal of HSI’s Complaint arguing that this Court 28 Personal Jurisdiction lacks personal jurisdiction over them. 3 1 In opposing a defendant’s motion to dismiss for lack of personal jurisdiction, the 2 plaintiff bears the burden of establishing that jurisdiction is proper. Boschetto v. Hansin, 3 539 F.3d 1011, 1015 (9th Cir. 2008). Where, as here, the defendant’s motion is based 4 on written materials rather than an evidentiary hearing, “the plaintiff need only make a 5 prima facie showing of jurisdictional facts to withstand the motion to dismiss.” Brayton 6 Purcell LLP v. Recordon & Recordon, 606 F.3d 1124, 1127 (9th Cir. 2010) (internal 7 quotation marks omitted). The plaintiff cannot “simply rest on the bare allegations of its 8 complaint,” but uncontroverted allegations in the complaint must be taken as true. 9 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004) (quoting 10 Amba Mktg. Sys., Inc. v. Jobar Int’l, Inc., 551 F.2d 784, 787 (9th Cir. 1977)). The court 11 “may not assume the truth of allegations in a pleading which are contradicted by 12 affidavit,” Data Disc, Inc. v. Sys. Tech. Assocs., Inc., 557 F.2d 1280, 1284 (9th Cir. 13 1977), but it may resolve factual disputes in the plaintiff’s favor, Pebble Beach Co. v. 14 Caddy, 453 F.3d 1151, 1154 (9th Cir. 2006). 15 A two-part analysis governs whether a court retains personal jurisdiction over a 16 nonresident defendant. “First, the exercise of jurisdiction must satisfy the requirements 17 of the applicable state long-arm statute.” Chan v. Society Expeditions, 39 F.3d 1398, 18 1404 (9th Cir. 1994). This requirement is satisfied since “Nevada’s long-arm statute, 19 NRS § 14.065, reaches the limits of due process set by the United States Constitution." 20 See Baker v. Eighth Judicial District Court ex rel. Cnty. of Clark, 999 P.2d 1020, 1023 21 (Nev. 2000). “Second, the exercise of jurisdiction must comport with federal due 22 process.” 23 defendants have certain minimum contacts with the forum state so that the exercise of 24 jurisdiction does not offend traditional notions of fair play and substantial justice.” Id. 25 (citing Int’l Shoe v. Washington, 326 U.S. 310, 316 (1945)). 26 constitutional question with reference to two forms of jurisdiction: general and specific 27 jurisdiction. 28 /// “Due process requires that nonresident Chan, 39 F.3d at 1404-05. 4 Courts analyze this 1 1. General Jurisdiction 2 “A court may assert general jurisdiction over foreign (sister-state or foreign- 3 country) corporations to hear any and all claims against them when their affiliations with 4 the State are so ‘continuous and systematic’ as to render them essentially at home in the 5 forum State.” Goodyear Dunlop Tires Operations, S.A. v. Brown, ___ U.S. ___, 131 S. 6 Ct. 2846, 2851 (2011). 7 “continuous and systematic general business contacts” that “approximate physical 8 presence” in the forum state. CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 9 1074 (9th Cir. 2011) (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 10 U.S. 408, 416 (1984) and Bancroft & Masters, Inc. v. Augusta Nat’l, Inc., 223 F.3d 1082, 11 1086 (9th Cir. 2000)). “The standard for general jurisdiction ‘is an exacting standard, as 12 it should be, because a finding of general jurisdiction permits a defendant to be haled 13 into court in the forum state to answer for any of its activities anywhere in the world.’” 14 CollegeSource, Inc., 653 F.3d at 1074 (quoting Schwarzenegger, 374 F.3d at 801). “To 15 determine whether a nonresident defendant’s contacts are sufficiently substantial, 16 continuous, and systematic, [courts] consider their ‘[l]ongevity, continuity, volume, 17 economic impact, physical presence, and integration into the state’s regulatory or 18 economic markets.’” CollegeSource, Inc., 653 F.3d at 1074 (quoting Tuazon v. R. J. 19 Reynolds Tobacco Co., 433 F.3d 1163, 1172 (9th Cir. 2006)). General jurisdiction requires that the defendant engage in 20 There can be no doubt that Virginia Defendants’ contacts with Nevada are 21 insufficient to confer to this Court general jurisdiction over any claims against them. Like 22 the defendant in CollegeSource, Virginia Defendants have no office or staff in Nevada, 23 are not registered to do business in Nevada, and do not have an agent for service of 24 process in Nevada. See CollegeSource, Inc., 653 F.3d at 1074. HSI does not argue 25 that Virginia Defendants’ challenged conduct was part and parcel of “continuous and 26 systematic” activity within the state to render them “essentially at home” in Nevada. See 27 Brown, 131 S. Ct. at 2851. HSI points to Virginia Defendants’ interactive websites as 28 conferring personal jurisdiction, but as the Ninth Circuit has held, Virginia Defendants’ 5 1 maintenance of an interactive website is insufficient to support general jurisdiction in all 2 states where the website may be accessed from. See CollegeSource, Inc., 653 F.3d at 3 1075-76. 2. 4 Specific Jurisdiction 5 Specific jurisdiction exists where “[a] nonresident defendant’s discrete, isolated 6 contacts with the forum support jurisdiction on a cause of action arising directly out of its 7 forum contacts.” CollegeSource, Inc., 653 F.3d at 1075. Courts use a three-prong test 8 to determine whether specific jurisdiction exists over a particular cause of action: “(1) 9 The non-resident defendant must purposefully direct his activities or consummate some 10 transaction with the forum or resident thereof; or perform some act by which he 11 purposefully avails himself of the privilege of conducting activities in the forum, thereby 12 invoking the benefits and protections of its laws; (2) the claim must be one which arises 13 out of or relates to the defendant’s forum-related activities; and (3) the exercise of 14 jurisdiction must comport with fair play and substantial justice, i.e., it must be 15 reasonable.” 16 asserting jurisdiction bears the burden of satisfying the first two prongs. CollegeSource, 17 Inc., 653 F.3d at 1076 (citing Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990)). If it 18 does so, the burden shifts to the party challenging jurisdiction to set forth a “compelling 19 case” that the exercise of jurisdiction would be unreasonable. CollegeSource, Inc., 653 20 F.3d at 1076 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-78 (1985)). 21 22 Id. at 1076 (quoting Schwarzenegger, 374 F.3d at 802)). a. The party Purposeful Direction “The first prong of the specific jurisdiction test refers to both purposeful availment 23 and purposeful direction.” 24 tortious conduct are analyzed under the rubric of purposeful direction. 25 Schwarzenegger, 374 F.3d at 802). In tort cases, the Ninth Circuit asks whether a 26 defendant “purposefully directs” her activities at the forum state and applies an “effects” 27 test that looks to where the defendant’s actions were felt, rather than on where the 28 actions occurred. Yahoo! Inc. v. La Ligue Contre Le Racism Et L’Antisemitisme, 433 CollegeSource, Inc., 653 F.3d at 1076. 6 Cases involving Id. (citing 1 F.3d 1199, 1206 (9th Cir. 2006) (en banc) (quoting id. at 803.). [In contract cases, a 2 court inquires into whether the defendant “purposefully avails itself of the privilege of 3 conducting activities or consummates a transaction in the forum, focusing on activities 4 such as delivering goods or executing a contract.” 5 (quoting Schwarzenegger, 374 F.3d at 802).] 6 defendant allegedly must have (1) committed an intentional act, (2) expressly aimed at 7 the forum state, (3) causing harm that the defendant knows is likely to be suffered in the 8 forum state.” Yahoo! Inc., 433 F.3d at 1206 (quoting id. at 803). Yahoo! Inc., 433 F.3d at 1206 The “effects test” requires that “the 9 Here, HSI alleges that Virginia Defendants committed various intentional acts, but 10 it is not clear that these acts were expressly aimed at Nevada, or that Virginia 11 Defendants knew that the harm caused was likely to be suffered in Nevada. On its face, 12 HSI’s argument is as follows: (1) Virginia Defendants engaged in unlawful conduct; (2) 13 that unlawful conduct harmed HSI; (3) HSI is a Nevada company and entered into a 14 contract with VSA governed by Nevada law; (4) therefore the harm caused by Virginia 15 Defendants occurred in Nevada. There are no more allegations concerning how Virginia 16 Defendants’ various violations were targeted at the forum state and caused harm in the 17 forum state. Simply because the tort victim is itself a Nevada corporation does not 18 create purposeful direction against Nevada otherwise, the requirement for specific 19 jurisdiction would always be met so long as the plaintiff is a citizen of the forum state. 20 Nevertheless, the Court will permit the parties to engage in limited discovery on 21 the issue to determine whether Virginia Defendants’ conduct was directed toward 22 Nevada. See Wells Fargo & Co. v. Wells Fargo Exp. Co., 556 F.2d 406, 430 n.24 (9th 23 Cir. 1977) (noting that “a court may allow discovery to aid in determining whether it has 24 in personam or subject matter jurisdiction” if “pertinent facts bearing on the question of 25 jurisdiction are controverted or where a more satisfactory showing of the facts is 26 necessary”) (internal quotations and citations omitted). Specifically, discovery will be 27 opened to determine appropriate facts to answer each of the four issues raised on pages 28 21 to 22 of HSI’s Counter Motion. (See dkt. no. 64.) Virginia Defendants’ opposition to 7 1 limited discovery is meritless. HSI has alleged, albeit in conclusory fashion, that Virginia 2 Defendants purposefully direct actions in Nevada, some of which have given rise to the 3 violations complained about. (Dkt. no. 1 at ¶ 17.) Virginia Defendants’ websites may 4 create the level of contacts with Nevada required to establish specific jurisdiction, 5 contingent on the nature of the websites and their role in the conduct HSI complains 6 about. Without the required facts into the scope and nature of such conduct in Nevada, 7 and the extent to which Virginia Defendants conduct business in the state or with 8 consumers in the state, the Court cannot determine whether it may exercise jurisdiction 9 over HSI’s claims against Virginia Defendants. 10 Accordingly, limited discovery for “a more satisfactory showing of the facts is necessary.” Id. b. 11 Arising out of Forum-Related Activities As noted above, HSI has failed to establish how Virginia Defendants’ conduct is 12 Taking HSI’s allegations in the Complaint as true, the Court cannot 13 forum-related. 14 assure itself that Virginia Defendants’ alleged misconduct occurred in Nevada. 15 However, as ruled above, the Court opens limited discovery for the parties to present 16 sufficient facts on questions. c. 17 Reasonableness 18 Having insufficient facts to conclude whether it can exercise personal 19 jurisdiction over Virginia Defendants, the Court declines to consider the reasonableness 20 of haling Virginia Defendants to this Court until the close of limited discovery. 21 III. CONCLUSION 22 IT IS HEREBY ORDERED that Defendants Resort Solutions, Inc., Royal Elite 23 Vacation, LLC, and Royal Elite Exchanges, LLC’s Motion to Dismiss (dkt. no. 56) is 24 DENIED. 25 IT IS FURTHER ORDERED that Plaintiff Holiday Systems International of 26 Nevada’s Counter Motion for Jurisdictional Discovery (dkt. no. 64) is GRANTED as 27 follows: 28 /// 8 1 1. entry of this Order until and including April 8, 2013. 2 3 Limited jurisdictional discovery shall commence beginning on the date of 2. Virginia Defendants may file a renewed motion to dismiss for lack of 4 personal jurisdiction after the close of this discovery period, but must file 5 any such motion by May 6, 2013. 6 7 8 IT IS SO ORDERED. ENTERED THIS 8th day of February 2013. 9 10 11 MIRANDA M. DU UNITED STATES DISTRICT JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
