Juniper Networks, Inc. v. Andrade et al, No. 5:2020cv02360 - Document 66 (N.D. Cal. 2020)

Court Description: ORDER GRANTING 26 MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION, WITH LEAVE TO AMEND; AND DEFERRING 26 MOTION TO DISMISS OR STAY BASED ON FORUM NON CONVENIENS AND COMITY. Amended Pleadings due by 12/21/2020. Signed by Judge Beth Labson Freeman on 9/21/2020. (blflc1S, COURT STAFF) (Filed on 9/21/2020)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 JUNIPER NETWORKS, INC., Plaintiff, 9 10 United States District Court Northern District of California 11 12 13 14 Case No. 20-cv-02360-BLF v. BRUNO ANDRADE, MARS INVESTMENT ACCELERATOR FUND INC., NORTHSPRING CAPITAL PARTNERS INC., JOSMEYR ALVES DE OLIVEIRA, and RUBEN MARCOS SEIDL, ORDER GRANTING MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION, WITH LEAVE TO AMEND; AND DEFERRING MOTION TO DISMISS OR STAY BASED ON FORUM NON CONVENIENS AND COMITY [Re: ECF 26] Defendants. 15 16 This suit arises from the acquisition of a software company, HTBase Corporation 17 (“HTBase”), by Plaintiff Juniper Networks, Inc. (“Juniper”) through Juniper’s wholly owned 18 subsidiary, 1187474 B.C. Unlimited Liability Company (“118 ULC”). 118 ULC entered into a 19 Share Purchase Agreement (“SPA”) with HTBase and its shareholders (referred to as “Vendors”) 20 for the purchase of all common and preferred shares of HTBase, with Juniper signing as guarantor 21 of the purchase price. Juniper claims that although the Vendors represented in the SPA that all 22 third-party technology and intellectual property incorporated into HTBase products had been 23 disclosed, Juniper discovered after close of the transaction that HTBase’s flagship product, Juke, 24 incorporates undisclosed open source software. Juniper sues five of the signatory Vendors for 25 breach of the SPA: Bruno Andrade (“Andrade”), Mars Investment Accelerator Fund Inc. 26 (“Mars”), Northspring Capital Partners Inc. (Northspring”), Josmeyr Alves De Oliveira 27 (“Oliveira”), and Ruben Marcos Seidl (“Seidl”). Juniper also sues Andrade for fraudulent and 28 negligent misrepresentation. Defendants have filed a motion seeking multiple forms of relief. Canadian companies 1 2 Mars and Northspring, and Brazilian domiciliaries Oliveira and Seidl (collectively, “Foreign 3 Defendants”), seek dismissal of the complaint under Federal Rule of Civil Procedure 12(b)(2) for 4 lack of personal jurisdiction. In addition, all Defendants move to dismiss the complaint or stay the 5 action based the doctrine of forum non conveniens and principles of comity. For the reasons discussed below, the Foreign Defendants’ motion to dismiss for lack of 6 7 personal jurisdiction is GRANTED WITH LEAVE TO AMEND. The motion to dismiss or stay 8 based on forum non conveniens and comity is DEFERRED. 9 United States District Court Northern District of California 10 I. BACKGROUND Juniper is a California-based corporation that designs and sells networking products and 11 services. In 2018, Juniper considered investing in HTBase, a Canadian company that “developed 12 software that helps companies manage their storage, computing, and networking infrastructures 13 across private data centers and cloud providers (e.g., Amazon Web Services, Google Cloud 14 Platform, Microsoft Azure, etc.).” Hutchins Decl. ¶ 6, ECF 27-4. The storage capabilities of 15 HTBase’s Juke product was of particular interest to Juniper. See id. ¶ 16. 16 Juniper officers began negotiations with Andrade, HTBase’s founder and Chief Executive 17 Officer (“CEO”), first for Juniper’s investment in HTBase and ultimately for Juniper’s acquisition 18 of HTBase. See Hutchins Decl. ¶¶ 7-16. Andrade visited Juniper’s Sunnyvale, California campus 19 numerous times between February and October of 2018. See id. Andrade was in regular contact 20 with Juniper employees throughout 2018, through in-person meetings, emails, and telephone calls. 21 Id. ¶ 25. 22 In October 2018, Juniper sent a Letter of Intent (“LOI”) to Andrade, setting forth a 23 proposal for Juniper’s acquisition of HTBase. See Hutchins Decl. ¶ 23 and Exh. B. Andrade 24 presented the proposal to HTBase’s Board and then sent Juniper comments regarding the proposal. 25 See Sitter Decl. Exh. M, ECF 29-13. Juniper responded by sending Andrade an updated LOI, 26 which Andrade took to the Board. See Sitter Decl. Exh N, ECF 29-14. After the Board accepted 27 that offer, Andrade executed the updated LOI as “CEO – Founder” of HTBase. See Sitter Decl. 28 Exh C, ECF 29-3 2 1 2 California. Hutchins Decl. ¶ 26. As part of the due diligence process, HTBase submitted source 3 code and binary files to be scanned by Black Duck, a company specializing in determining 4 whether a company’s software incorporates open source software. See Compl. ¶ 34, ECF 23; 5 Andrade Decl. ¶ 7, ECF 21-1. Open source software is software that a developer can use, 6 generally free of charge, subject to licensing restrictions. See Compl. ¶ 35. Juniper claims that 7 Andrade personally selected which source code and binary files HTBase sent to Black Duck for 8 scanning. See Compl. ¶ 40. Black Duck’s scan did not identify any open source software in 9 HTBase’s source code or binary files. See Compl. ¶ 41. 10 United States District Court Northern District of California During Juniper’s due diligence review, Andrade worked with Juniper employees located in On November 16, 2018, a group of Juniper’s engineers and product managers met with 11 HTBase representatives in Toronto to discuss HTBase’s intellectual property and products, 12 including Juke. See Compl. ¶ 43. Andrade was present at the meeting and answered questions 13 about Juke. See Compl. ¶ 44; Andrade Decl. ¶ 6, ECF 21-1. According to Juniper, Andrade stated 14 that Juke’s file system was proprietary to HTBase, was HTBase’s intellectual property, and was a 15 core component of Juke. See Compl. ¶ 45. 16 Juniper decided to go forward with the acquisition of HTBase, creating a Canadian 17 subsidiary, 118 ULC, specifically for the acquisition. Hutchins Decl. ¶ 28. On November 28, 18 2018, 118 ULC entered into the SPA with HTBase and the Vendors for the purchase of all 19 common and preferred shares of HTBase. See SPA, Compl. Exh. A, ECF 23-1. Juniper signed 20 the SPA as guarantor of the purchase price. See id. Paragraph 4.2 of the SPA, “Vendors’ 21 Representations and Warranties Concerning the Corporation,” states that 118 ULC entered into the 22 SPA in reliance on the representations and warranties of the Vendors set out in Paragraph 4.2, 23 each representation and warranty being made by each Vendor “severally as to itself, and not 24 jointly or jointly and severally as to any other Vendor.” SPA ¶ 4.2. Each Vendor represented and 25 warrantied among other things that all third-party technology and intellectual property 26 incorporated into HTBase products had been disclosed; all HTBase intellectual property was 27 transferrable without restriction; and HTBase owned or had licenses to all source code in its 28 software. See id. 3 Paragraph 7.2 of the SPA requires the Vendors to indemnify the other parties to the SPA 1 2 for damages arising from breach of the Vendors’ representations and warranties. SPA ¶ 7.2. The 3 Indemnified Party must submit a Claim Notice to each relevant Vendor through the “Vendors’ 4 Representative.” SPA ¶ 7.4. The Vendors’ Representative has authority to give and receive 5 notices, settle claims, and take other action on behalf of each Vendor. SPA ¶ 12.4(2). The SPA 6 designates Andrade as the Vendors’ Representative. SPA ¶ 12.4(1). Juniper and HTBase announced the acquisition on November 29, 2018. See Hutchins United States District Court Northern District of California 7 8 Decl. ¶ 29. Juniper wired the purchase price on December 7, 2018. See id. ¶ 30. After the 9 acquisition, Andrade and other HTBase employees joined Juniper. See Compl. ¶ 54. Juniper 10 alleges that Andrade maintained strict control over the Juke source code, and prevented other 11 employees from accessing it. See Compl. ¶ 55. Andrade resigned from Juniper effective October 12 15, 2019. See Compl. ¶ 56. Juniper alleges that around that time, a Juniper product manager 13 discovered that Juke contains copies of files from an open source code project called Lizard FS. 14 See Compl. ¶¶ 61-65. Juniper removed Juke from its product catalog. See Compl. ¶ 68. On December 5, 2019, Juniper sent a Claim Notice to Andrade as the Vendors’ 15 16 Representative under the SPA. See Compl. ¶ 69. The Claim Notice identified two alleged 17 breaches of the SPA by Vendors: breach of representations and warranties regarding the amount 18 of HTBase’s accounts receivable, and breach of representations and warranties regarding 19 HTBase’s intellectual property. On the latter breach, Juniper asserted in its Claim Notice that the 20 Vendors breached provisions of Paragraph 4.2 of the SPA by failing to disclose that Juke includes 21 LizardFS open source software components. See Compl. ¶¶ 69-78. 22 On February 28, 2020, Juniper filed the present action in the Santa Clara County Superior 23 Court, asserting a claim for breach of the SPA against Andrade, Mars, Northspring, Oliveira, and 24 Seidl. The contract claim is based on those Vendors’ alleged breach of representations and 25 warranties contained in the SPA. See Compl. ¶¶ 84-93. Juniper also asserts claims for fraudulent 26 and negligent misrepresentation against Andrade. See Compl. ¶¶ 94-125. Defendants removed 27 the action to federal district court based on diversity of citizenship. See Notice of Removal, ECF 28 1. 4 1 United States District Court Northern District of California 2 II. MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION The Foreign Defendants – Mars, Northspring, Oliveira, and Seidl – move to dismiss the 3 complaint for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2). 4 Juniper contends that dismissal is inappropriate because it has made the requisite showing that the 5 Court has personal jurisdiction over the Foreign Defendants. 6 A. Legal Standard 7 “Federal courts ordinarily follow state law in determining the bounds of their jurisdiction 8 over persons.” Walden v. Fiore, 571 U.S. 277, 283 (quoting Daimler AG v. Bauman, 571 U.S. 9 117, 125 (2014)). California’s long-arm statute is coextensive with federal due process 10 requirements. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800-01 (9th Cir. 2004). 11 “Although a nonresident’s physical presence within the territorial jurisdiction of the court is not 12 required, the nonresident generally must have ‘certain minimum contacts . . . such that the 13 maintenance of the suit does not offend traditional notions of fair play and substantial justice.’” 14 Walden, 571 U.S. at 283 (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). 15 When a defendant raises a challenge to personal jurisdiction, the plaintiff bears the burden 16 of establishing that jurisdiction is proper. Ranza v. Nike, Inc., 793 F.3d 1059, 1068 (9th Cir. 17 2015). “Where, as here, the defendant’s motion is based on written materials rather than an 18 evidentiary hearing, the plaintiff need only make a prima facie showing of jurisdictional facts to 19 withstand the motion to dismiss.” Id. “[T]he plaintiff cannot simply rest on the bare allegations of 20 its complaint,” but the uncontroverted allegations in the complaint must be accepted as true. 21 Schwarzenegger, 374 F.3d at 800 (quotation marks and citation omitted). Factual disputes created 22 by conflicting affidavits must be resolved in the plaintiff’s favor. Id. 23 B. Discussion 24 A federal district court may exercise either general or specific personal jurisdiction over a 25 nonresident defendant. Daimler, 134 S. Ct. at 754. General jurisdiction exists when the 26 defendant’s contacts “are so continuous and systematic as to render [it] essentially at home in the 27 forum State.” Id. (internal quotation marks and citation omitted). Specific jurisdiction exists 28 when the defendant’s contacts with the forum state are more limited but the plaintiff’s claims arise 5 1 2 1. General Jurisdiction 3 The Foreign Defendants challenge the existence of general jurisdiction, submitting 4 declarations establishing that they do not own property or bank accounts in California, do not pay 5 taxes in California, are not licensed or registered to do business in California, have no employees 6 in California, do not travel to California for business, and do not have regular contacts with 7 California or California residents as part of their normal business operations. See Leonard Decl. 8 ¶¶ 2-4, ECF 21-2; Hunter Decl. ¶¶ 2-4, ECF 21-3; Oliveira Decl. ¶ 5, ECF 21-4; Seidl Decl. ¶ 4, 9 ECF 21-5. Juniper does not attempt to rebut these declarations or to establish that the Foreign 10 11 United States District Court Northern District of California out of or relate to those contacts. Daimler, 571 U.S. at 127. 12 Defendants are subject to this Court’s general jurisdiction. 2. Specific Jurisdiction Foreign Defendants also challenge the existence of specific jurisdiction, submitting 13 declarations establishing that they did not have communications or other dealings directly with 14 Juniper or any of its representatives in the United States in connection with the HTBase 15 acquisition, and that they executed the SPA in Canada (Mars and Northspring) and Brazil 16 (Oliveira and Seidl). See Leonard Decl. ¶ 5; Hunter Decl. ¶¶ 5-6; Oliveira Decl. ¶ 3; Seidl Decl. ¶ 17 3. Juniper must make a prima facie showing of specific personal jurisdictional to withstand this 18 challenge. See Ranza, 793 F.3d at 1068. 19 The Ninth Circuit has established a three-prong test for whether a court can exercise 20 specific personal jurisdiction: (1) the defendant must have “either purposefully availed itself of 21 the privilege of conducting activities in California, or purposefully directed its activities toward 22 California”; (2) the claim must arise out of or relate to the defendant’s forum-related activities; 23 and (3) the exercise of jurisdiction must be reasonable, i.e. it must comport with fair play and 24 substantial justice. Schwarzenegger, 374 F.3d at 802. The plaintiff bears the burden on the first 25 two prongs. Id. “If the plaintiff fails to satisfy either of these prongs, personal jurisdiction is not 26 established in the forum state.” Id. “If the plaintiff succeeds in satisfying both of the first two 27 prongs, the burden then shifts to the defendant to present a compelling case that the exercise of 28 jurisdiction would not be reasonable.” Id. (quotation marks and citation omitted). 6 a. 1 United States District Court Northern District of California 2 Purposeful Availment As stated above, the first prong of the Schwarzenegger test requires Juniper to show either 3 purposeful availment or purposeful direction by the Foreign Defendants. “A showing that a 4 defendant purposefully availed himself of the privilege of doing business in a forum state typically 5 consists of evidence of the defendant’s actions in the forum, such as executing or performing a 6 contract there.” Freestream Aircraft (Bermuda) Ltd. v. Aero Law Grp., 905 F.3d 597, 605 (9th 7 Cir. 2018) (quotation marks and citation omitted). “By contrast, [a] showing that a defendant 8 purposefully directed his conduct toward a forum state . . . usually consists of evidence of the 9 defendant’s actions outside the forum state that are directed at the forum, such as the distribution 10 in the forum state of goods originating elsewhere.” Id. (quotation marks and citation omitted). 11 “[A] purposeful availment analysis is most often used in suits sounding in contract, whereas a 12 purposeful direction analysis is most often used in suits sounding in tort.” Id. (quotation marks 13 and citation omitted). 14 A purposeful availment analysis is most appropriate here, as the Foreign Defendants are 15 sued only for breach of contract. Juniper argues that the Foreign Defendants purposefully availed 16 themselves of the privilege of doing business in California through Andrade, asserting that 17 Andrade acted as the Foreign Defendants’ agent both before and after execution of the SPA. 18 Under this agency theory, Juniper contends that Andrade’s contacts with California may be 19 imputed to the Foreign Defendants. 20 The Ninth Circuit’s Williams decision sets forth the controlling law. See Williams v. 21 Yamaha Motor Co., 851 F.3d 1015 (9th Cir. 2017). Observing that the Supreme Court’s Daimler 22 opinion “voided our agency approach for imputing contacts for the purpose of general 23 jurisdiction,” the Ninth Circuit noted that Daimler “left open the question of whether an agency 24 relationship might justify the exercise of specific jurisdiction.” Williams, 851 F.3d at 1023. 25 “Assuming [ ] that some standard of agency continues to be relevant to the existence of specific 26 jurisdiction,” the Ninth Circuit held, “[f]undamental tenets of agency theory require that an agent 27 act on the principal’s behalf and subject to the principal’s control.” Id. at 1024 (quotation marks 28 and citations omitted). 7 United States District Court Northern District of California 1 The Williams court applied this standard to the appellants’ assertion that appellee Yamaha 2 Motor Co. Ltd. (“YMC”) was subject to specific personal jurisdiction in California based on the 3 contacts of its subsidiary, appellee Yamaha Motor Corporation, U.S.A. (“YMUS”). See Williams, 4 851 F.3d at 1024-25. The Ninth Circuit determined that the appellants “neither allege nor 5 otherwise show that YMC had the right to control YMUS’s activities in any manner at all.” Id. at 6 1025. The Ninth Circuit therefore concluded that “even assuming the validity of some 7 formulation of agency analysis such that a subsidiary’s contacts could be attributed to its parent, 8 Appellants failed to establish specific jurisdiction over YMC.” Id. 9 Like the appellants in Williams, Juniper “neither allege[s] nor otherwise show[s]” that the 10 Foreign Defendants had the right to control Andrade’s activities. The only agency allegations in 11 the complaint are generic. Paragraph 12 of the complaint states that “Defendants, and each of 12 them, were partners, joint venturers, agents, employees, alter egos, and/or representatives of each 13 other in doing the things herein alleged and, in doing so, were acting within the scope of their 14 respective authorities as agents, employees, and representatives, and are jointly and severally 15 liable to Juniper.” Compl. ¶ 12. Paragraph 13 states that “[t]his Court also has jurisdiction over 16 all Defendants because, upon information and belief, they engaged in intentional conduct, either 17 directly or through agents, directed at Juniper that caused harm to Juniper in California.” Compl. 18 ¶ 13. In Williams, the Ninth Circuit disregarded similar language as “a conclusory legal statement 19 unsupported by any factual assertion regarding YMC’s control over YMUS (or regarding any 20 other aspect of the parent-subsidiary relationship).” Williams, 851 F.3d at 1025 n.5. 21 Juniper’s arguments and evidence in opposition to the motion to dismiss similarly are 22 lacking. Juniper devotes a single sentence in its opposition brief to the issue of control during the 23 period prior to execution of the SPA, asserting that “[t]he HTBASE shareholders maintained 24 control over Andrade insofar as they rejected Juniper’s initial acquisition structure before 25 ultimately allowing Andrade to sign the LOI.” Pl.’s Opp. at 8, ECF 28. In support of this 26 assertion, Juniper cites Exhibits C, M, and N to the Sitter Declaration, which are emails between 27 Andrade and Juniper regarding the LOI. Exhibit M reflects that Juniper sent Andrade a draft LOI 28 on October 25, 2018, which Andrade presented to HTBase’s Board. See Sitter Decl. Exh. M, ECF 8 United States District Court Northern District of California 1 29-13. After the Board meeting, Andrade responded to Juniper with comments that resulted from 2 the Board meeting. See id. Exhibit N shows that Juniper thereafter sent Andrade an updated LOI. 3 Sitter Decl. Exh. N, ECF 29-14. Finally, Exhibit C is Andrade’s email to Juniper stating that 4 HTBase’s Board accepted the offer set forth in the updated LOI. See Sitter Decl. Exh. C, ECF 29- 5 3. Andrade attached the executed updated LOI, as well as an exclusivity agreement, which he 6 signed as “CEO – Founder” of HTBase. See id. Nothing in this evidence suggests that Andrade 7 was acting as an agent for, and subject to the control of, Foreign Defendants Mars, Northspring, 8 Oliveira and Seidl. To the contrary, it appears that Andrade was acting in his role as CEO of 9 HTBase, on behalf of and subject to the control of HTBase’s Board. See Colt Studio, Inc. v. 10 Badpuppy Enter., 75 F. Supp. 2d 1104, 1111 (C.D. Cal. 1999) (“For jurisdictional purposes, the 11 acts of corporate officers and directors in their official capacities are the acts of the corporation 12 exclusively.”). 13 With respect to the period after execution of the SPA, Juniper argues that Andrade’s 14 contacts with California may be imputed to the Vendors in light of the SPA’s express designation 15 of Andrade as the Vendor’s Representative. Juniper points out that Andrade took actions in his 16 role as Vendors’ Representative between the execution of the SPA on November 28, 2018, and the 17 close of the transaction on December 7, 2018, when the purchase price was paid. At the hearing, 18 the Court indicated that it agreed with Juniper that Andrade qualified as the Vendors’ agent as of 19 the execution of the SPA, but it questioned whether Juniper’s claim for breach of contract arose 20 out of any post-execution actions taken by Andrade. As discussed below, the Court concludes that 21 Juniper has failed to show that its contract claim against the Foreign Defendants arose out of any 22 conduct by Andrade after execution of the SPA. Moreover, after further review if the SPA in light 23 of the parties’ arguments, the Court is not persuaded that the SPA’s designation of Andrade as the 24 Vendors’ Representative satisfies the Williams requirements for agency. 25 Under Williams, specific jurisdiction may be based on an agent’s contacts with the forum 26 state only where the “agent act[s] on the principal’s behalf and subject to the principal’s control.” 27 Williams, 851 F.3d at 1024 (quotation marks and citations omitted, emphasis added). While the 28 SPA certainly establishes that Andrade acted on the Vendors’ behalf in his role as Vendors’ 9 United States District Court Northern District of California 1 Representative, it does not establish that Andrade was subject to the Vendors’ control. To the 2 contrary, the SPA grants Andrade “the full and unconditional authority, on behalf of each Vendor, 3 to give and receive notices, to settle claims or disputes and to take or omit to take, on behalf of 4 each Vendor, such action as the Vendors’ Representative deems necessary or appropriate with 5 respect to this Agreement.” SPA ¶ 12.4(2). Further, the SPA provides that “[a]ll decisions and 6 actions taken by the Vendors’ Representative shall be binding upon all Vendors, and no Vendor 7 shall have the right to object, dissent, protest or otherwise contest the same.” Id. (emphasis 8 added). Absent some evidence that the Vendors nonetheless did exercise control over the manner 9 in which Andrade fulfilled his obligations as Vendors’ Representative, the Court concludes that 10 Juniper has not demonstrated that Andrade’s contacts with California may be imputed to the 11 Foreign Defendants. 12 Juniper’s reliance on cases that pre-date Daimler and Williams is misplaced. As the 13 Foreign Defendants point out in their reply brief, Daimler and Williams altered the standard for 14 exercising personal jurisdiction based on contacts of agents. Thus, citation to earlier cases that do 15 not address the control issue are unhelpful to the analysis required here. 16 At the hearing, a dispute arose between counsel as to whether HTBase moved its 17 headquarters from Canada to California prior to the close of the transaction. Juniper’s counsel 18 pointed to evidence that the move was made, while Defendant’s counsel pointed to evidence that it 19 was not. Juniper’s counsel argued, correctly, that on a Rule 12(b)(2) motion all factual disputes 20 created by conflicting affidavits must be resolved in the plaintiff’s favor. See Schwarzenegger, 21 374 F.3d at 800. Whether HTBase moved its headquarters to California has no bearing on the 22 issue of agency, which is the only basis upon which Juniper has asserted personal jurisdiction over 23 the Foreign Defendants. 24 For the reasons discussed above, Juniper has not alleged or otherwise demonstrated that 25 Andrade’s contacts with California may be imputed to the Foreign Defendants under an agency 26 theory, as governed by Williams. Accordingly, Juniper has failed to meet its burden of showing 27 that the Foreign Defendants purposefully availed themselves of the privilege of doing business in 28 California as required under the first prong of the Schwarzenegger test. 10 b. 1 2 In determining whether a plaintiff’s claim arises out of or relates to the defendant’s forum- 3 related activities, “the Ninth Circuit follows the ‘but for’ test.” Menken v. Emm, 503 F.3d 1050, 4 1058 (9th Cir. 2007) (internal quotation marks and citation omitted). Under this test, Juniper must 5 show that it would not have suffered an injury “but for” the Foreign Defendants’ California-related 6 conduct. 7 United States District Court Northern District of California Arising Out Of Juniper sues the Foreign Defendants for breaching representations and warranties that they 8 themselves made in the SPA. Each of the Foreign Defendants signed the SPA on its own behalf. 9 The SPA provides that the representations and warranties therein were made by each Vendor 10 “severally as to itself, and not jointly or jointly and severally as to any other Vendor.” SPA ¶ 4.2. 11 Accordingly, it appears from the face of the complaint and the SPA attached thereto that Juniper’s 12 breach of contract claims against the Foreign Defendants arise from the Foreign Defendants’ own 13 representations and warranties in the SPA, which was executed on November 28, 2018. 14 Given the nature of Juniper’s contract claim, it is unclear how the claim arises from or 15 relates to Andrade’s conduct. At the hearing, Juniper’s counsel pointed to language in the SPA 16 requiring that the representations and warranties of the Vendors be true at the time of closing. 17 Although the SPA was executed on November 28, 2018, the transaction did not close until 18 December 7, 2018. Juniper attaches great significance to Andrade’s performance of duties as the 19 Vendors’ Representative during the period between November 28, 2018 and December 7, 2018, 20 arguing that Andrade’s contacts with California during that period may be imputed to the Foreign 21 Defendants. Counsel recited Andrade’s acts in finalizing the purchase price, providing the closing 22 statement, and providing the closing spreadsheet after the SPA was executed and before the 23 transaction closed. But as Defendants’ counsel pointed out at the hearing, Juniper’s contract claim 24 does not allege breaches relating to the purchase price or closing spreadsheets. Juniper’s claim is 25 for breach of the representations and warranties made in the SPA, none of which were made after 26 the date the SPA was signed. 27 28 The Court finds that Juniper has failed to show that its contract claim arises from or relates to Andrade’s conduct under the “but for” test applicable to the second prong of Schwarzenegger. 11 c. 1 Because Juniper has failed to satisfy its burden with respect to the first two prongs, the 2 3 burden does not shift to the Foreign Defendants to satisfy the third prong of the Schwarzenegger 4 test. See Schwarzenegger, 374 F.3d at 802 (burden shifts to the defendant to show that exercise of 5 personal jurisdiction would not be reasonable only if the plaintiff satisfies both of the first two 6 prongs). d. 7 United States District Court Northern District of California Reasonableness Juniper’s Evidentiary Objections to Reply Evidence 8 Juniper objects to the Supplemental Andrade Declaration and the Elliott Declaration 9 submitted with Defendants’ reply brief. According to Juniper, submission of those declarations is 10 an improper attempt to introduce new evidence in the reply. See Rivera v. Saul Chevrolet, Inc., 11 No. 16-CV-05966-LHK, 2017 WL 3267540, at *6 (N.D. Cal. July 31, 2017) (“[T]he Court need 12 not consider this evidence because the submission of new facts in a reply brief is improper.”). 13 Juniper also raises specific objections to portions of the declarations based on foundation, hearsay, 14 and relevance. The Court need not address Juniper’s evidentiary objections because it did not rely 15 on the Supplemental Andrade Declaration or the Elliott Declaration in evaluating the Foreign 16 Defendants’ motion for dismiss for lack of personal jurisdiction. e. 17 Conclusion In light of the foregoing, the Court concludes that Jupiter has failed to make a prima facie 18 19 showing that the Foreign Defendants are subject to this Court’s specific personal jurisdiction 20 under California’s long-arm statute. The Foreign Defendants are entitled to dismissal on this 21 basis. 22 The allegations of Juniper’s complaint do not satisfy the agency requirements set forth in 23 Williams, which is understandable given that the complaint was filed in state court. While 24 Juniper’s opposition to the motion to dismiss likewise fails to make a prima facie showing of 25 personal jurisdiction based on agency, it may be that Juniper could make such a showing 26 consistent with the guidance provided in this order, particularly if jurisdictional discovery is 27 permitted. Juniper requests that, in the event the Court grants the Foreign Defendants’ motion to 28 dismiss for lack of personal jurisdiction, the Court permit Juniper to take jurisdictional discovery 12 1 regarding the asserted agency relationship between Andrade and the Foreign Defendants. See 2 Pl.’s Opp. at 14, ECF 28. While the Court would be amenable to allowing appropriate 3 jurisdictional discovery in this case, Juniper’s request is so vague that it cannot be granted as 4 framed. Juniper’s discovery request is denied without prejudice to a renewed request that sets 5 forth a reasonable plan for limited jurisdictional discovery targeted to the asserted agency 6 relationship. Accordingly, the Court finds that dismissal for lack of personal jurisdiction with leave to United States District Court Northern District of California 7 8 amend is appropriate. In order to afford Juniper time to file a renewed request for jurisdictional 9 discovery and/or to amend the complaint with additional jurisdictional facts that may be in 10 Juniper’s possession, the Court will grant Juniper ninety days to amend its complaint. The Court 11 grants a more generous period for amendment than ordinarily would be afforded in light of the 12 COVID-19 pandemic and the fact that trial in this case is not set to commence until February 13 2023. Accordingly, the Foreign Defendants’ motion to dismiss for lack of personal jurisdiction is 14 15 GRANTED WITH LEAVE TO AMEND. Juniper’s request for leave to take jurisdictional 16 discovery is DENIED WITHOUT PREJUDICE to a renewed request submitted as an 17 administrative motion under Civil Local Rule 7-11. The deadline to respond to such motion shall 18 be extended to seven days. No reply shall be permitted. 19 20 III. MOTION TO DISMISS BASED ON FORUM NON CONVENIENS AND COMITY All Defendants move to dismiss or stay this action based on the doctrine of forum non 21 conveniens and principles of comity. Defendants assert that Canada is the proper forum for 22 resolving this litigation, and that this action either should be dismissed so that Juniper may file its 23 claims there, or should be stayed pending resolution of a parallel lawsuit regarding the SPA that 24 currently is proceeding in Canada. In opposition, Juniper contends that California is a proper 25 forum for this litigation, and that Defendants have not met their heavy burden to establish that it is 26 appropriate to dismiss or stay this litigation. 27 28 For the reasons discussed below, the Court finds it appropriate to defer consideration of Defendants’ motion to dismiss or stay on these grounds. 13 1 2 3 Legal Standard 1. Forum Non Conveniens “Federal district courts have discretion to dismiss an action under the doctrine of forum 4 non conveniens.” Ayco Farms, Inc. v. Ochoa, 862 F.3d 945, 948 (9th Cir. 2017). “Dismissal is 5 appropriate only if the defendant establishes (1) the existence of an adequate alternative forum, 6 and (2) that the balance of private and public interest factors favors dismissal.” Id. (quotation 7 marks and citation omitted). “[A] plaintiff is generally entitled to deference in its choice of forum, 8 especially if the plaintiff is a U.S. citizen or resident Id. at 949-50. “For a U.S. citizen’s choice of 9 forum to be rejected, the private and public interest factors must strongly favor trial in a foreign 10 11 United States District Court Northern District of California A. country.” Id. (quotation marks and citation omitted). “The private interest factors are: (1) the residence of the parties and the witnesses; (2) the 12 forum’s convenience to the litigants; (3) access to physical evidence and other sources of proof; 13 (4) whether unwilling witnesses can be compelled to testify; (5) the cost of bringing witnesses to 14 trial; (6) the enforceability of the judgment; and (7) all other practical problems that make trial of a 15 case easy, expeditious and inexpensive.” Ayco Farms, 862 F.3d at 950 (quotation marks and 16 citation omitted). “The public interest factors are (1) [the] local interest of [the] lawsuit; (2) the 17 court’s familiarity with governing law; (3) [the] burden on local courts and juries; (4) [the amount 18 of] congestion in the court; and (5) the costs of resolving a dispute unrelated to [the] forum.” Id. 19 (quotation marks and citation omitted, alterations in original). 20 District courts within the Ninth Circuit have found that a balancing of the forum non 21 conveniens factors may warrant a stay of litigation rather than dismissal. See, e.g., MGA Entm’t 22 Inc. v. Deutsche Bank AG, No. CV 11-4932-GW(RZX), 2012 WL 12892902, at *9 (C.D. Cal. Feb. 23 27, 2012) (finding that dismissal or stay was appropriate on forum non conveniens grounds); 24 Ministry of Health, Province of Ontario, Canada v. Shiley Inc., 858 F. Supp. 1426, 1442 (C.D. 25 Cal. 1994) (staying action on forum non conveniens grounds). 26 27 28 2. Comity “International comity is a doctrine of prudential abstention, one that counsels voluntary forbearance when a sovereign which has a legitimate claim to jurisdiction concludes that a second 14 United States District Court Northern District of California 1 sovereign also has a legitimate claim to jurisdiction under principles of international law.” Mujica 2 v. AirScan Inc., 771 F.3d 580, 598 (9th Cir. 2014) (quotation marks and citation omitted). The 3 aspect of the doctrine referred to as “comity among courts” or “adjudicatory comity,” is “viewed 4 as a discretionary act of deference by a national court to decline to exercise jurisdiction in a case 5 properly adjudicated in a foreign state.” Id. (quotation marks and citation omitted). “[C]ourts 6 have struggled to apply a consistent set of factors in their comity analyses.” Id. at 603. 7 The Ninth Circuit has found the following factors to be a useful starting point: (1) the 8 strength of the United States’ interest in using a foreign forum, (2) the strength of the foreign 9 governments’ interests, and (3) the adequacy of the alternative forum. Mujica, 771 F.3d at 603. 10 “The (nonexclusive) factors we should consider when assessing U.S. interests include (1) the 11 location of the conduct in question, (2) the nationality of the parties, (3) the character of the 12 conduct in question, (4) the foreign policy interests of the United States, and (5) any public policy 13 interests.” Id. at 604. “The proper analysis of foreign interests essentially mirrors the 14 consideration of U.S. interests.” Id. at 607. 15 B. 16 As set forth above, the propriety of dismissing or staying an action under either the 17 doctrine of forum non conveniens or principles of comity turns on (1) whether there is an adequate 18 alternative forum and (2) the Court’s balancing of multiple factors relating to the private interests 19 of the parties and the public interests of the alternative fora. 20 Discussion There is no dispute that Ontario, Canada, is an adequate alternative forum. The SPA 21 provides that “[e]ach Party agrees (a) that any Legal Proceeding relating to this Agreement may 22 (but need not) be brought in any court of competent jurisdiction in the Province of Ontario.” SPA 23 ¶ 12.12. The SPA also provides that “[t]his Agreement shall be governed by and construed in 24 accordance with the laws of the Province of Ontario and the laws of Canada applicable in such 25 Province and this Agreement shall be treated, in all respects, as an Ontario contract.” SPA ¶ 26 12.13. Defendants argue expressly that Canada is an adequate forum, and Juniper concedes that 27 point in its opposition brief. See Defs.’ Motion at 12-13, ECF 26; Pl.’s Opp. at 15, ECF 28. 28 The Court’s ruling on Defendants’ motion to dismiss or stay thus depends on the balancing 15 1 of the relevant private and public interest factors. That balancing will be significantly impacted by 2 the Court’s ultimate determination whether it has personal jurisdiction over the Foreign 3 Defendants. For example, the weight given to private interest factors relevant to a forum non 4 conveniens analysis may be substantially different if the Court is considering only the claims 5 against Andrade or the claims against all Defendants. In the former circumstance, the interests of 6 one resident party, Juniper, would be weighed against the interests of one nonresident party, 7 Andrade, who spent a great deal of time in California during the period in which the facts giving 8 rise to this suit occurred. In the latter circumstance, Juniper’s interests would be weighed against 9 those of multiple non-resident parties. United States District Court Northern District of California 10 Similarly, the public interest factors relevant to both forum non conveniens and comity 11 principles may be substantially different if there are multiple nonresident defendants or only one. 12 Under a forum non conveniens analysis, the Court must weigh the local interest in the suit, which 13 the Ninth Circuit has characterized as the “local interest in having localized controversies decided 14 at home.” See Ranza, 793 F.3d at 1078 (quotation marks and citation omitted). Under a comity 15 analysis, the Court must weigh the interests of both the United States and Canada. See Mujica, 16 771 F.3d at 603. The interests of the United States and California in having the litigation decided 17 here would be fairly strong if the Court were considering only the claims of a local plaintiff 18 against a single foreign defendant arising out of numerous in-person contacts with the forum. 19 However, those interests likely would be less strong if the Court were considering the claims of a 20 local plaintiff against multiple foreign defendants, especially taking into account the parties’ 21 choice of Canada law. 22 The Court therefore concludes that the most sensible course is to defer Defendants’ motion 23 to dismiss or stay based on forum non conveniens and comity pending resolution of whether this 24 Court has personal jurisdiction over the Foreign Defendants. Other courts in this district have 25 deferred consideration of forum non conveniens pending a determination on personal jurisdiction. 26 See Facebook, Inc. v. Studivz Ltd., No. C 08-3468 JF (HRL), 2009 WL 1190802, at *2 (N.D. Cal. 27 May 4, 2009) (“[T]he Court will defer ruling on forum non conveniens until the issue of personal 28 jurisdiction is ripe for consideration.”). 16 Accordingly, a ruling on Defendants’ motion to dismiss and stay on grounds of forum non 1 2 conveniens and comity is DEFERRED pending resolution of the Court’s personal jurisdiction over 3 the Foreign Defendants. The motion to dismiss and stay is TERMINATED WITHOUT 4 PREJUDICE to renewal, if appropriate, upon disposition of the personal jurisdiction issues. 5 6 ORDER (1) The Foreign Defendants’ motion to dismiss for lack of personal jurisdiction under 7 Rule 12(b)(2) is GRANTED WITH LEAVE TO AMEND. Any amended complaint shall be filed 8 on or before December 21, 2020. Leave to amend is limited to factual allegations relating to 9 personal jurisdiction. Juniper may not add new claims or parties without obtaining express leave 10 11 United States District Court Northern District of California IV. of the Court. (2) Defendants’ motion to dismiss or stay based on forum non conveniens and comity 12 is DEFERRED pending resolution of the Court’s personal jurisdiction over the Foreign 13 Defendants. The motion to dismiss and stay is TERMINATED WITHOUT PREJUDICE to 14 renewal, if appropriate, upon disposition of the personal jurisdiction issues. 15 (3) This order terminates ECF 26. 16 17 18 19 Dated: September 21, 2020 ______________________________________ BETH LABSON FREEMAN United States District Judge 20 21 22 23 24 25 26 27 28 17

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