Ewing v. BF Advance, LLC et al, No. 3:2020cv01748 - Document 33 (S.D. Cal. 2021)
Court Description: Order Denying Defendants' Motion to Dismiss (ECF No. 24 ). Defendants must file an answer to Plaintiff's First Amended Complaint no later than 8/16/21. Signed by Judge Cynthia Bashant on 8/2/21. (All non-registered users served via U.S. Mail Service)(jmo)
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Ewing v. BF Advance, LLC et al Doc. 33 Case 3:20-cv-01748-BAS-WVG Document 33 Filed 08/02/21 PageID.383 Page 1 of 13 1 2 3 4 5 UNITED STATES DISTRICT COURT 6 SOUTHERN DISTRICT OF CALIFORNIA 7 ANTON EWING, 8 Plaintiff, 9 10 11 12 Case No. 20-cv-1748-BAS-WVG v. BF ADVANCE, LLC, a New York Limited Liability Company; JOSEPH COHN, an individual, Defendants. ORDER DENYING DEFENDANTS’ MOTION TO DISMISS (ECF No. 24) 13 14 Before the Court is Defendants’ Motion to Dismiss for lack of personal jurisdiction. 15 (ECF No. 24.) Plaintiff filed a Response in Opposition to Defendants’ Motion and 16 Defendants filed a Reply on April 28, 2021. (ECF Nos. 28, 32.) The Court finds the 17 Motion to Dismiss suitable for determination on the papers submitted and without oral 18 argument. See Fed. R. Civ. P. 78(b); CivLR 7.1(d)(1). Upon review of the parties’ 19 arguments, the Court DENIES Defendants’ Motion to Dismiss. 20 I. BACKGROUND 21 In the operative First Amended Complaint, Plaintiff alleges Defendants BF 22 Advance (“BFA”) and BFA manager Joseph Cohen violated the Telephone Consumer 23 Protection Act (“TCPA”), the California Invasion of Privacy Act, and the California 24 Consumer Privacy Act. (See generally, First Am. Compl. (“FAC”), ECF No. 18.) The 25 FAC alleges that Defendants or Defendants’ agents called Plaintiff’s cell phone beginning 26 around January 2017, after which Plaintiff told Defendants to stop calling. (Id. ¶ 48.) 27 Plaintiff documents nine phone calls, which form the basis of his allegations, from April 28 6, 2017, to August 11, 2020. (Id. ¶ 7.) Plaintiff asserts that on all calls, telemarketers -120cv1748 Dockets.Justia.com Case 3:20-cv-01748-BAS-WVG Document 33 Filed 08/02/21 PageID.384 Page 2 of 13 1 stated they were calling from “BF Advance” to attempt to sell Plaintiff a loan and obtain 2 Plaintiff’s social security number. 3 Defendants called Plaintiff to sell Plaintiff a medical device. (Id. ¶ 24.) Plaintiff alleges 4 that “a very distinct bubble popping sound” at the beginning of the calls indicated that 5 Defendants used an automatic telephone dialing system (“ATDS”) to call Plaintiff. (Id. ¶ 6 22.) Plaintiff did not consent to the calls, and Plaintiff’s telephone number was registered 7 on the National Do-Not-Call Registry. (Id. ¶¶ 22, 49.) (Id.) Elsewhere in the FAC, Plaintiff claims 8 Plaintiff broadly uses “Defendants” to describe BFA, Mr. Cohen, and currently 9 unascertained Doe Defendants. (FAC ¶ 20.) Parts of the FAC allege that Mr. Cohen is 10 individually liable because Mr. Cohen purchased and activated the ATDS and knew about 11 or directed the calls. (Id. ¶¶ 8, 24.) Plaintiff also alleges that Mr. Cohen directly called 12 him from Mr. Cohen’s phone number. (Id. ¶¶ 52, 59.) 13 Additionally, Plaintiff alleges that “each and every Defendant was acting as an 14 agent and/or employee of each of the other Defendants and was acting within the course 15 and scope of said agency and/or employment with the full knowledge and consent of each 16 of the other Defendants” and that each act was “made known to, and ratified by, each of 17 the other Defendants.” (FAC ¶ 21.) Specifically, Plaintiff alleges an agency relationship 18 between BFA and Mr. Cohen (id. ¶ 3), between BFA and a third-party telemarketing lead 19 source (id. ¶ 7), and between Mr. Cohen and the third-party telemarketing lead source (id. 20 ¶ 8). Plaintiff also alleges that Mr. Cohen is liable under an alter ego theory. (Id. ¶ 4.) 21 Plaintiff asserts the Court has personal jurisdiction over Defendants because “a 22 substantial part of the wrongful acts alleged in this Complaint were committed in 23 California and because Joseph Cohen has significant contacts and assets in California.” 24 (Id. ¶ 15.) Defendants state that the Court does not have general personal jurisdiction over 25 them because Defendants are not “essentially at home” in California and assert that they 26 have no connection to the alleged phone calls sufficient to establish specific personal 27 jurisdiction (Mem. of P. & A. in supp. of Mot. to Dismiss (“Mem. of P. & A.”) at 4:27, 28 5:7–8, ECF No. 24-1.). -220cv1748 Case 3:20-cv-01748-BAS-WVG Document 33 Filed 08/02/21 PageID.385 Page 3 of 13 1 II. LEGAL STANDARD 2 A. Federal Rule of Civil Procedure 12(b)(2) 3 When a defendant moves to dismiss for lack of personal jurisdiction, the plaintiff 4 “bears the burden of establishing that jurisdiction is proper.” Boschetto v. Hansing, 539 5 F.3d 1011, 1015 (9th Cir. 2008). To withstand a motion to dismiss without an evidentiary 6 hearing, the plaintiff “need make only a prima facie showing of jurisdictional facts.” 7 Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir. 1995). 8 demonstrate facts that if true would support jurisdiction over the defendant.” Id. (citing 9 Data Disc, Inc. v. Sys. Tech. Assocs., Inc., 557 F.2d 1280, 1285 (9th Cir. 1977)). The plaintiff “need only 10 “When considering a motion to dismiss for lack of personal jurisdiction, courts are 11 not confined to the plaintiff’s complaint; it is appropriate to consider evidence such as 12 party declarations.” Frankie Valli & The Four Seasons v. EMI Music Publ’g Ltd., No. 13 CV 17-7831-MWF (JCx), 2018 WL 6136818, at *3 (C.D. Cal. May 22, 2018). “Although 14 the plaintiff cannot ‘simply rest on the bare allegations of [his] complaint,’ uncontroverted 15 allegations in the complaint must be taken as true.” Schwarzenegger v. Fred Martin Motor 16 Co., 374 F.3d 797, 800 (9th Cir. 2004) (quoting Amba Mktg. Sys., Inc. v. Jobar Int’l, Inc., 17 551 F.2d 784, 787 (9th Cir.1977)). Conflicts between statements in parties’ affidavits 18 must be resolved in the plaintiff’s favor, id., and courts “draw reasonable inferences from 19 the complaint in favor of the plaintiff.” Fiore v. Walden, 688 F.3d 558, 575 (9th Cir. 20 2012), rev’d on other grounds, 571 U.S. 277 (2014). However, a court “may not assume 21 the truth of allegations in a pleading which are contradicted by affidavit.” Data Disc, 557 22 F.2d at 1284. 23 Inartful pleadings by pro se litigants “must be held to less stringent standards than 24 formal pleadings drafted by lawyers[.]” Hughes v. Rowe, 449 U.S. 5, 9 (1980) (internal 25 quotation marks omitted); Breedlove v. Wells Fargo Bank, N.A., No. CV-09-8135-PCT- 26 JAT, 2010 WL 3000012, at *8 (D. Ariz. July 28, 2010) (“[T]he Supreme Court has 27 instructed the federal courts to liberally construe the inartful pleading of pro se litigants.” 28 (citing Boag v. MacDougall, 454 U.S. 364, 365 (1982) (per curiam)). -320cv1748 Case 3:20-cv-01748-BAS-WVG Document 33 Filed 08/02/21 PageID.386 Page 4 of 13 1 B. Personal Jurisdiction 2 “Where . . . there is no applicable federal statute governing personal jurisdiction, 3 the district court applies the law of the state in which the district court sits.” Yahoo! Inc. 4 v. La Ligue Contre Le Racisme Et L’Antisemitisme, 433 F.3d 1199, 1205 (9th Cir. 2006). 5 “Because California’s long-arm jurisdictional statute is coextensive with federal due 6 process requirements, the jurisdictional analyses under state law and federal due process 7 are the same.” Id. (citing Cal. Civ. Proc. Code § 410.10). 8 Personal jurisdiction may be general or specific. Bristol-Myers Squibb Co. v. Sup. 9 Ct. Cal., S.F. Cty., 137 S. Ct. 1773, 1780 (2017). “For an individual, the paradigm forum 10 for the exercise of general jurisdiction is the individual’s domicile; for a corporation, it is 11 an equivalent place, one in which the corporation is fairly regarded as at home.” Goodyear 12 Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 924 (2011). “A corporation is 13 typically subject to general jurisdiction in its place of incorporation or principal place of 14 business. Abitbol v. Homelink, LLC, No. 2:20-cv-03654-RGK-PJW, 2020 WL 5102149, 15 at *2 (C.D. Cal. July 28, 2020) (citing Goodyear, 564 U.S. at 924). 16 If a defendant’s activities in a state do not establish general jurisdiction, the 17 defendant’s contacts related to the cause of action may still subject him to specific 18 jurisdiction. Data Disc, 557 F.2d at 1287. The defendant must have “certain minimum 19 contacts with [the forum state] such that the maintenance of the suit does not offend 20 traditional notions of fair play and substantial justice.” 21 Washington, 326 U.S. 310, 316 (1945). The Ninth Circuit requires the following to 22 establish minimum contacts for specific jurisdiction: 23 24 25 26 27 28 International Shoe Co. v. (1) [t]he 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; (2) the claim must be one which arises out of or relates to the defendant’s forum-related activities; and -420cv1748 Case 3:20-cv-01748-BAS-WVG Document 33 Filed 08/02/21 PageID.387 Page 5 of 13 (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable. 1 2 3 Schwarzenegger, 374 F.3d at 802. The plaintiff bears the burden of satisfying the first 4 two prongs of the test. Id. The burden then shifts to the defendant to show that jurisdiction 5 would not be reasonable. Id. 6 III. ANALYSIS 7 Here, Plaintiff does not assert the existence of general jurisdiction over any 8 Defendant; regardless, Defendants’ contacts with California do not support an exercise of 9 general jurisdiction. (See FAC ¶¶ 5–6; Decl. of Joseph Cohen (“Cohen Decl.”) ¶¶ 2, 4, 9, 10 ECF No. 24-2 (stating that Mr. Cohen resides in New York and that BFA is a New York 11 LLC that does no business in California).)1 Therefore, the only issue is whether the Court 12 has specific jurisdiction over BFA and Joseph Cohen. 13 A. Prong One: Purposeful Direction 14 The Ninth Circuit’s first specific jurisdiction prong requires purposeful direction or 15 purposeful availment. Courts “generally apply the purposeful availment test when the 16 underlying claims arise from a contract, and the purposeful direction test when they arise 17 from alleged tortious conduct.” Schwarzenegger, 374 F.3d at 802. “Claims for violation 18 of the TCPA sound squarely in tort and require application of the purposeful direction 19 analysis.” Born v. Celtic Mktg. LLC, No. 8:19-cv-01950-JLS-ADS, 2020 WL 3883273, 20 at *3 (C.D. Cal. May 20, 2020). 21 Courts evaluate purposeful direction under a three-part “effects” test. 22 Schwarzenegger, 374 F.3d at 803 (citing Calder v. Jones, 465 U.S. 783 (1984)). Under 23 this test, a defendant must have “(1) committed an intentional act, (2) expressly aimed at 24 the forum state, (3) causing harm that the defendant knows is likely to be suffered in the 25 forum state.” 374 F.3d at 803 (citation omitted). In context of the TCPA, the “intentional 26 act” prohibited by statute is “[making] any call (other than a call made for emergency 27 28 1 For this reason, the Court finds Defendants’ Request for Judicial Notice (ECF No. 25) moot. -520cv1748 Case 3:20-cv-01748-BAS-WVG Document 33 Filed 08/02/21 PageID.388 Page 6 of 13 1 purposes or made with the express prior consent of the called party) using any automatic 2 telephone dialing system or an artificial or prerecorded voice . . . to any telephone number 3 assigned to a . . . cellular telephone service.” See 47 U.S.C. § 227(b)(1)(A)(iii). 4 Plaintiff pleads multiple theories of liability to establish that Defendants purposely 5 directed their activities to California in violation of the TCPA. This order addresses them 6 one by one. 7 1. Direct Liability 8 One of Plaintiff’s theories is direct liability—he alleges many times that Defendants 9 directly called him in violation of the TCPA. (See, e.g., FAC ¶ 59 (“Defendants both 10 contacted or attempted to contact Plaintiff . . . .”).) Plaintiff claims that the telemarketers 11 identified themselves as “BF Advance” on each of the nine calls. (Id. ¶ 7.) He also alleges 12 that Defendant Joseph Cohen called him directly. (Id. ¶ 52.) 13 Under a theory of direct liability, the allegation that Defendants made phone calls 14 to Plaintiff’s California number in violation of the TCPA satisfies the purposeful direction 15 test because the Court can reasonably infer that Defendants (1) intentionally called a 16 number with a California area code, (2) expected to reach someone in California by calling 17 a California number, and (3) caused harm likely to be suffered in California by calling 18 Plaintiff’s California number in violation of the TCPA. See Ewing v. McCarthy, No. 3:17- 19 cv-01554-GPC-RBB, 2017 WL 4810098, at *3 (S.D. Cal. Oct. 25, 2017); see also Luna 20 v. Shac, LLC, No. C14-00607-HRL, 2014 WL 3421514, at *4 (N.D. Cal. July 14, 2014) 21 (finding that TCPA violations satisfied effects test and citing supporting cases). 22 However, Plaintiff’s allegations of Defendants’ direct contacts in violation of the 23 TCPA are contradicted in a declaration accompanying Defendants’ Motion to Dismiss. 24 The declaration is based on Mr. Cohen’s personal knowledge as manager of BFA. (Cohen 25 Decl. ¶¶ 1, 3.) He states that BFA does not engage in outbound telemarketing and that he 26 has not had any contact with California in his capacity as a BFA manager. (Id. ¶¶ 8, 17.) 27 Plaintiff’s Response does not allege facts contradicting those declarations. (See generally 28 Pl.’s Resp. in Opp’n to Defs.’ Mot. to Dismiss, ECF No. 28.) Mr. Cohen’s factual -620cv1748 Case 3:20-cv-01748-BAS-WVG Document 33 Filed 08/02/21 PageID.389 Page 7 of 13 1 statements under sworn testimony defeat Plaintiff’s allegations that BFA and Mr. Cohen 2 called him directly. 3 Because Mr. Cohen’s declaration contradicts Plaintiff’s allegations, the Court may 4 not assume the truth of the allegations. See Data Disc, 557 F.2d at 1284. Moreover, 5 Plaintiff proffers no declaration of his own, and therefore no conflict between the parties’ 6 statement is required to be resolved in the Plaintiff’s favor. See Schwarzenegger, 374 7 F.3d at 802. As such, Plaintiff has not satisfied his burden of establishing purposeful 8 direction under this theory. 9 2. Indirect Liability 10 Even if Defendants are not directly liable for purposefully directing conduct to 11 California in violation of the TCPA, purposeful direction may be attributed to Defendants 12 if Plaintiff makes a sufficient showing of an agency or alter ego relationship between 13 Defendants and alleged agents. See Daimler AG v. Bauman, 571 U.S. 117, 135 n.13 14 (2014) (recognizing that “[a]gency relationships . . . may be relevant to the existence of 15 specific jurisdiction” and that “a corporation can purposefully avail itself of a forum by 16 directing its agents or distributors to take action there”; Ranza v. Nike, Inc., 793 F.3d 1059, 17 1073 (9th Cir. 2015) (asserting that a party can establish personal jurisdiction based on an 18 alter ego theory); see also Brand v. Menlove Dodge, 796 F.2d 1070, 1074 (9th Cir. 1986) 19 (acknowledging that “there will be cases in which the defendant has not purposefully 20 directed its activities at the forum state, but has created sufficient contacts to allow the 21 state to exercise personal jurisdiction if such exercise is sufficiently reasonable”). 22 For individual corporate officers like Mr. Cohen, the individual’s mere relationship 23 with a corporation that caused injury in the forum state is not enough, on its own, to 24 establish personal jurisdiction. See Davis v. Metro Prods., Inc., 885 F.2d 515, 520 (9th 25 Cir. 1989). However, a defendant’s employee status “does not somehow insulate [him] 26 from jurisdiction.” Calder, 465 U.S. at 790. Individual defendants under a fiduciary 27 shield may be subject to jurisdiction if a court finds reason to “pierce the corporate veil.” 28 Davis, 885 F.2d at 520. “Courts pierce the corporate veil where the corporation is the -720cv1748 Case 3:20-cv-01748-BAS-WVG Document 33 Filed 08/02/21 PageID.390 Page 8 of 13 1 agent or ‘alter ego’ of the individual defendant.” Moser v. Lifewatch Inc., No. 19-cv-831- 2 WQH-BLM, 2020 WL 1849664, at *5 (S.D. Cal. Apr. 13, 2020) (citing Flynt Distrib. Co. 3 v. Harvey, 734 F.2d 1389, 1393 (9th Cir. 1984)). 4 a. Agency Liability 5 A defendant may be held vicariously liable for TCPA violations under federal 6 common-law principles of agency. Campbell-Ewald Co. v. Gomez, 577 U.S. 153, 168 7 (2016); In re the Joint Petition Filed by Dish Network, LLC (“In re Dish Network”), 28 8 FCC Rcd. 6574, 6574 (2013) 2 (“[W]hile a seller does not generally ‘initiate’ calls made 9 through a third-party telemarketer within the meaning of the TCPA, it nonetheless may be 10 held vicariously liable under federal common law principles of agency for violations of 11 either section 227(b) or section 227(c) that are committed by third-party telemarketers.”). 12 “In determining . . . the general common law of agency, [courts] have traditionally 13 looked for guidance to the Restatement of Agency.” Cmty. for Creative Non-Violence v. 14 Reid, 490 U.S. 730, 752 n.31 (1989). “Agency can be established expressly, via a showing 15 of actual authority, or it can be inferred, by finding apparent authority or ratification.” 16 Naiman v. TranzVia LLC, No. 17-cv-4813-PJH, 2017 WL 5992123, at *10 (N.D. Cal. 17 Dec. 4, 2017) (citing Restatement (Third) of Agency §§ 2.01, 2.03, 4.01). Actual agency 18 means a defendant “controlled or had the right to control [the agents] and, more 19 specifically, the manner and means of the [action].” See Thomas v. Taco Bell Corp., 879 20 F. Supp. 2d 1079, 1084 (C.D. Cal. 2012), aff’d, 582 F. App’x 678 (9th Cir. 2014). Agency 21 through apparent authority involves a principal’s manifestations to a third party, who 22 reasonably believes that the principal authorized the agent to act. Nat’l Lab. Rels. Bd. v. 23 Dist. Council of Iron Workers of the State of Cal. & Vicinity, 124 F.3d 1094, 1099 (9th 24 Cir. 1997). Ratification requires that a defendant either have actual knowledge of the facts 25 26 27 28 2 The Ninth Circuit has determined that courts must give Chevron deference to the FCC’s interpretation of agency theories because the interpretation was part of a fully adjudicated declaratory ruling and Congress has not spoken directly. Gomez v. Campbell-Ewald Co., 768 F.3d 871, 878 (9th Cir. 2014) (citing cases, including Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 843 (1984)), aff’d, 577 U.S. 153 (2016), as revised (Feb. 9, 2016)). -820cv1748 Case 3:20-cv-01748-BAS-WVG Document 33 Filed 08/02/21 PageID.391 Page 9 of 13 1 of an agent’s action or chooses to affirm the agent’s acts through willful ignorance without 2 knowledge of the material facts. Henderson v. United Student Aid Funds, Inc., 918 F.3d 3 1068, 1073 (9th Cir. 2019), as amended on denial of reh’g and reh’g en banc (May 6, 4 2019); In re Dish Network, 28 FCC Rcd. at 6592 (declaring that a seller may be responsible 5 for the TCPA violations of a third-party telemarketer if it “knew (or reasonably should 6 have known) that the telemarketer was violating the TCPA on the seller’s behalf and the 7 seller failed to take effective steps within its power to force the telemarketer to cease that 8 conduct”). “The focal point of ratification is an observable indication that a principal has 9 exercised an explicit or implicit choice to consent to the purported agent’s acts.” 10 Henderson, 918 F.3d at 1075. 11 i. BFA’s Liability Under Agency Theory 12 Plaintiff alleges that BFA is liable under an agency theory because BFA’s agents 13 called Plaintiff in violation of the TCPA. (FAC ¶ 38.) To support his allegations of agency 14 against BFA, Plaintiff alleges that BFA “requires a certain and specific script to be read 15 and only [their web domain] to be used” and that “Defendants [sic] controlled every aspect 16 of its agent’s operations including the scripts to be read on each call and . . . Defendant 17 required its agent to record each telemarketing call.” (Id. ¶¶ 21, 38.)3 The allegations that 18 BFA required agents to record calls and use a certain script and web domain support 19 Plaintiff’s agency theory given that the allegations amount to BFA controlling the manner 20 and means of the calls made in violation of the TCPA. See Thomas, 879 F. Supp. 2d at 21 1084. Furthermore, Mr. Cohen does not state that BFA does not utilize a third-party 22 telemarketing service; he asserts only that BFA does not itself engage in outbound 23 telemarketing. (Cohen Decl. ¶ 8.) Mr. Cohen also states that BFA “has never contracted 24 to perform any services or furnish any materials to any person or entity in California” (id. 25 26 27 28 3 Although Plaintiff uses “Defendants” rather than specifically naming BFA (see FAC ¶ 21), this factual allegation mirrors Plaintiff’s other allegation that BFA required a script (see id. ¶ 38). Because of the similarity of Plaintiff’s allegations, his use of the singular “Defendant,” and his use of the singular pronoun “its,” the Court makes the reasonable assumption in Plaintiff’s favor that this allegation refers to BFA. Cf. Hughes, 449 U.S. at 9 (requiring courts to liberally construe pro se pleadings). -920cv1748 Case 3:20-cv-01748-BAS-WVG Document 33 Filed 08/02/21 PageID.392 Page 10 of 13 1 ¶ 13), but this does not exclude the possibility that BFA contracted for telemarketing 2 services with an agency outside California that made calls into California. Because 3 Defendants have therefore not controverted Plaintiff’s allegations regarding BFA’s 4 control of the manner and means of the alleged agent’s TCPA violations, Plaintiff has 5 sufficiently pled agency liability against BFA. 6 ii. Joseph Cohen’s Liability Under Agency Theory 7 Plaintiff alternatively alleges that BFA and BFA’s telemarketing agents are agents 8 of Joseph Cohen. (FAC ¶ 7.) The FAC frequently alleges that BFA and BFA’s agents 9 worked at the direction and control of Mr. Cohen. (See, e.g., id. ¶ 8.) Plaintiff’s FAC 10 does not plead any facts specifying how Mr. Cohen exercised actual direction or control 11 over BFA or BFA’s agents; thus, Plaintiff’s allegations are too conclusory to state a claim 12 under an actual agency theory. However, Plaintiff’s FAC also alleges ratification. (Id. ¶¶ 13 21, 65.) In support, Plaintiff alleges that Mr. Cohen purchased, set up, and activated the 14 ATDS and that Defendants contacted Plaintiff from telephone numbers confirmed to be 15 Mr. Cohen’s numbers. (Id. ¶¶ 24, 59.) Mr. Cohen asserts he has not had any contact with 16 California in his capacity as manager of BFA (Cohen Decl. ¶ 17), but he does not 17 controvert Plaintiff’s allegations regarding the setup of the ATDS or that his phone 18 number was used to call Plaintiff. Mr. Cohen’s declaration that he did not “direct, oversee, 19 or manage BFA or any third party in initiating outbound calls” (id. ¶ 21) is not enough to 20 wholly refute agency because ratification exists when a principal knows or is willfully 21 ignorant of an agent’s conduct. See Henderson, 918 F.3d at 1073. If Mr. Cohen did 22 purchase, setup, and activate the ATDS used to call Plaintiff and/or allow another party to 23 use his phone number to call Plaintiff in violation of the TCPA, those facts would support 24 an agency relationship under a ratification theory. 25 The Court recognizes Plaintiff’s inartful and at times nebulous agency allegations; 26 however, Plaintiff’s FAC alleges two uncontroverted facts that, if true, properly allege an 27 agency theory of ratification liability against Mr. Cohen. 28 - 10 20cv1748 Case 3:20-cv-01748-BAS-WVG Document 33 Filed 08/02/21 PageID.393 Page 11 of 13 1 b. Alter Ego Liability 2 Personal jurisdiction may also be established through alter ego liability. Ranza, 793 3 F.3d at 1073. “In determining whether alter ego liability applies, [courts] apply the law 4 of the forum state.” In re Schwarzkopf, 626 F.3d 1032, 1037 (9th Cir. 2010). The Ninth 5 Circuit explains that: 6 9 California recognizes alter ego liability where two conditions are met: First, ‘where there is such a unity of interest and ownership that the individuality, or separateness, of the said person and corporation has ceased;’ and, second, where ‘adherence to the fiction of the separate existence of the corporation would . . . sanction a fraud or promote injustice.’ 10 Id. at 1038 (quoting Wood v. Elling Corp., 20 Cal.3d 353, 365 n. 9 (1977)). “The ‘unity 11 of interest and ownership’ prong requires ‘a showing that the parent controls the subsidiary 12 to such a degree as to render the latter the mere instrumentality of the former.’” In re 13 Boon Glob. Ltd., 923 F.3d 643, 653 (9th Cir. 2019) (quoting Ranza, 793 F.3d at 1073). If 14 the first prong is not met, the Court does not need to analyze the “fraud or injustice” prong. 15 Ranza, 793 F.3d at 1075 n.9. 7 8 16 Here, Plaintiff alleges that BFA is the alter ego of Mr. Cohen. (FAC ¶ 4.) Plaintiff 17 does not allege any facts to support a showing of control to such a degree needed to 18 establish that BFA is the alter ego of Mr. Cohen. The FAC merely states that Mr. Cohen 19 is the sole owner and officer of BFA, which does not amount to an alter ego. (Id. ¶¶ 26– 20 27.) See Katzir’s Floor & Home Design, Inc. v. M-MLS.com, 394 F.3d 1143, 1149 (9th 21 Cir. 2004) (“The mere fact of sole ownership and control does not eviscerate the separate 22 corporate identity.”) 23 ownership and control in his Declaration, where he asserts that he is a manager but does 24 not own any interest in BFA and is not an owner of BFA. (Cohen Decl. ¶¶ 3, 6.) Because 25 Plaintiff has not sufficiently alleged facts supporting an alter ego theory of liability, the 26 Court finds BFA not to be the alter ego of Mr. Cohen. Additionally, Mr. Cohen contradicts Plaintiff’s allegations of 27 28 - 11 20cv1748 Case 3:20-cv-01748-BAS-WVG Document 33 Filed 08/02/21 PageID.394 Page 12 of 13 1 B. 2 To assess satisfaction of the second specific jurisdiction prong (that the plaintiff’s 3 claim arises out of the defendant’s forum-related conduct), the Ninth Circuit looks to 4 whether the plaintiff “would not have suffered an injury ‘but for’ [defendant’s] forum 5 related conduct.” Myers v. Bennet Law Offices, 238 F.3d 1068, 1075 (9th Cir. 2001). 6 Here, but for Defendants’ alleged contact with Plaintiff in violation of the TCPA, Plaintiff 7 would not have a TCPA claim against Defendants. See Sasin v. Enter. Fin. Grp., Inc., No. 8 CV 17-4022-CBM-RAO, 2017 WL 10574367, at *4 (C.D. Cal. Nov. 21, 2017) (finding 9 an out-of-state defendant’s contacts with the forum state in violation of the TCPA to be 10 sufficient for the “but for” test); Heidorn v. BDD Mktg. & Mgmt. Co, LLC, No. C-13- 11 00229 JCS, 2013 WL 6571629, at *8 (N.D. Cal. Aug. 19, 2013) (same); j2 Glob. 12 Commc’ns, Inc. v. Blue Jay, Inc., No. C 08-4254 PJH, 2009 WL 29905, at *10 (N.D. Cal. 13 Jan. 5, 2009) (same). Prong Two: Arising Out Of or Relating to Defendants’ Conduct 14 C. 15 When the first two inquiries in the personal jurisdiction analysis have been satisfied, 16 the burden shifts to defendants to show that jurisdiction would be unreasonable. 17 Schwarzenegger, 374 F.3d at 802. Defendants bear a “heavy burden” of overcoming this 18 presumption. Ballard, 65 F.3d at 1500. To determine the reasonableness of litigating in 19 the forum state, courts consider the following factors: 20 21 22 23 24 Prong Three: Reasonableness [1] the extent of the purposeful interjection into the forum state, [2] the burden on the defendant of defending in the forum, [3] the extent of conflict with the sovereignty of defendant’s state, [4] the forum state’s interest in adjudicating the dispute, [5] the most efficient judicial resolution of the controversy, [6] the importance of the forum to plaintiff’s interest in convenient and effective relief, and [7] the existence of an alternative forum. 25 Ins. Co. of N. Am. v. Marina Salina Cruz, 649 F.2d 1266, 1270 (9th Cir. 1981) (citations 26 omitted). 27 Here, Defendants assert that “it is inherently unreasonable to require Defendants to 28 travel to California to defend themselves when there is no evidence supporting its [sic] - 12 20cv1748 Case 3:20-cv-01748-BAS-WVG Document 33 Filed 08/02/21 PageID.395 Page 13 of 13 1 involvement with the phone calls at issue in this case.” (Mem. of P. & A. at 7:9–12.) As 2 already established, Defendants’ alleged conduct amounts to purposeful direction of their 3 activities into California. Even if it is more burdensome for Defendants to litigate in 4 California given that Mr. Cohen’s residence and BFA’s principal place of business are in 5 New York, “with the advances in transportation and telecommunications and the 6 increasing interstate practice of law, any burden is substantially less than in days past.” 7 See CE Distrib., LLC v. New Sensor Corp., 380 F.3d 1107, 1112 (9th Cir. 2004). 8 Additionally, California has a strong interest in providing an effective forum to litigate 9 harms caused by unlawful violations of the TCPA. Although New York is a viable 10 alternative forum and there may be witnesses with knowledge of Defendants’ conduct in 11 New York, there also may be witnesses to the same in California. Additionally, Plaintiff 12 has an interest in litigating in California. Id. (“Litigating in one’s home forum is obviously 13 most convenient[,] . . . however, . . . this factor is ‘not of paramount importance.’”) 14 (quoting Harris Rutsky & Co. Ins. Servs., Inc. v. Bell & Clements Ltd., 328 F.3d 1122, 15 1133 (9th Cir. 2003)). 16 Because Defendants have not overcome their high burden to show 17 unreasonableness, the Schwarzenegger factors weigh in favor of California as a reasonable 18 forum to litigate the alleged TCPA violations. See j2 Global, 2009 WL 29905, at *10 19 (finding that specific jurisdiction over out-of-state defendant’s alleged TCPA violation in 20 California was not unreasonable); see Heidorn, 2013 WL 6571629, at *8 (same). 21 IV. CONCLUSION 22 Because Plaintiff has pled uncontroverted facts that, if true, would establish agency 23 liability sufficient to establish specific jurisdiction over both named Defendants, the Court 24 DENIES Defendants’ Motion to Dismiss for Lack of Personal Jurisdiction. Defendants 25 must file an answer to Plaintiff’s First Amended Complaint no later than August 16, 2021. 26 IT IS SO ORDERED. 27 28 DATED: August 2, 2021 - 13 20cv1748
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