Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_14-cv-01047/USCOURTS-azd-2_14-cv-01047-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1441 Petition for Removal- Breach of Contract

---

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

PRN Medical Services LLC,

Plaintiff, 

v. 

Michael Neilson, et al., 

Defendants.

No. CV-14-01047-PHX-GMS

ORDER 

 Pending before the Court is Defendant Wilmington Medical Supply, Inc.’s Motion 

to Dismiss for Lack of Personal Jurisdiction. (Doc. 49.) For the following reasons, the 

Motion is denied. 

BACKGROUND 

 PRN Medical Services LLC (“PRN”) brings suit against several of its former 

employees alleging unfair competition. PRN also brings an unjust enrichment claim 

against Defendant Wilmington Medical Supply, Inc. (“Wilmington”), the company for 

whom these former employees currently work. 

 Specific to the current Motion, PRN alleges that Defendant John Pearce, while still 

an employee of PRN, sent an email to a director at Wilmington containing personal 

health information of PRN customers. This personal information originated from and is 

archived at PRN’s Phoenix headquarters. PRN also alleges that, immediately prior to 

their departure to work for Wilmington three of its former employees illegally 

downloaded confidential information of thousands of PRN’s customers, including more 

than 1,500 of PRN’s Arizona customers, from PRN’s Arizona computer servers. 

Case 2:14-cv-01047-GMS Document 74 Filed 12/15/14 Page 1 of 7
- 2 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

Wilmington has a sales representative in Arizona, who began employment with 

Wilmington on February 24, 2014, approximately the same time as the five defendants 

left their PRN employ to work for Wilmington. Wilmington asserts that this Court has no 

jurisdiction over PRN’s claims against it. 

DISCUSSION 

I. Legal Standard 

Because the Court is resolving this Motion without holding an evidentiary hearing, 

PRN “need make only a prima facie showing of jurisdictional facts to withstand the 

motion.” Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir. 1995); see Brainerd v. 

Governors of the Univ. of Alberta, 873 F.2d 1257, 1258 (9th Cir. 1989). The burden 

under the prima facie case is minimal: plaintiffs “need only demonstrate facts that if true 

would support jurisdiction over the defendant.” Ballard, 65 F.3d at 1498. In addition, 

“[c]onflicts between parties over statements contained in affidavits must be resolved in 

the plaintiff’s favor.” Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th 

Cir. 2004) (citing A T & T v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir. 

1996)). 

 To establish the prima facie case for personal jurisdiction, the plaintiff has the 

burden of showing that: (1) the forum state’s long-arm statute confers jurisdiction over 

the nonresident defendant; and (2) the exercise of jurisdiction comports with principles of 

due process. Omeluk v. Langsten Slip & Batbyggeri A/S, 52 F.3d 267, 269 (9th Cir. 

1995). Arizona’s long-arm statute confers jurisdiction to the maximum extent allowed by 

the Due Process Clause of the United States Constitution. Ariz. R. Civ. P. 4.2(a); Doe v. 

American Nat’l Red Cross, 112 F.3d 1048, 1050 (9th Cir. 1997). Due process requires a 

nonresident defendant to have “certain minimum contacts with [the forum] such that the 

maintenance of the suit does not offend traditional notions of fair play and substantial 

justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal citation 

omitted). There are two types of personal jurisdiction, general and specific. Burger King 

Corp. v. Rudzewicz, 471 U.S. 462, 473 n.5 (1985). PRN does not allege that the Court 

Case 2:14-cv-01047-GMS Document 74 Filed 12/15/14 Page 2 of 7
- 3 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

possesses general personal jurisdiction over Wilmington; it claims only that specific 

personal jurisdiction exists. 

A. Specific Personal Jurisdiction

 Specific jurisdiction exists if (1) the defendant purposefully directed tortious 

activities at the forum or a resident thereof or performed some act by which he 

purposefully availed himself of the privileges of conducting activities in the forum, (2) 

the claims arise out of or result from the defendant’s forum-related activities, and (3) the 

exercise of jurisdiction is reasonable. See Bancroft & Masters, Inc. v. Augusta Nat’l Inc.,

223 F.3d 1082, 1086 (9th Cir. 2000); Brainerd, 873 F.2d at 1259. 

 1. Purposeful Direction

 A court has specific jurisdiction over a defendant where the intended effects of the 

defendant’s non-forum conduct were purposely directed at and caused harm in the forum 

state. Calder v. Jones, 465 U.S. 783, 788–90 (1984); see also Pebble Beach Co. v. Caddy, 

453 F.3d 1151, 1155–56 (9th Cir. 2006) (noting that purposeful direction analysis is 

appropriate when “all of [the defendant’s] action identified by [the plaintiff] is action 

taking place outside the forum”); Sinatra v. Nat’l Enquirer, Inc., 854 F.2d 1191, 1195 

(9th Cir. 1988) (“[T]he decisions of this court have interpreted the holdings of Calder and 

Burger King as modifying the purposeful availment rubric to allow ‘the exercise of 

jurisdiction over a defendant whose only “contact” with the forum is the “purposeful 

direction” of a foreign act having effect in the forum state.’”) (quoting Haisten v. Grass 

Valley Med. Reimbursement Fund, 784 F.2d 1392, 1397 (9th Cir. 1986)). 

 Courts evaluate purposeful direction using the Calder “effects test.” See Brayton 

Purcell LLP v. Recordon & Recordon, 606 F.3d 1124, 1128 (9th Cir. 2010). Under the 

“effects test,” the defendant must allegedly have: “(1) committed an intentional act, (2) 

expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to 

be suffered in the forum state.” Dole Food Co., Inc. v. Watts, 303 F.3d 1104, 1111 (9th 

Cir. 2002). All three elements of the test must be satisfied. Schwarzenegger v. Fred 

Martin Motor Co., 374 F.3d 797, 805 (9th Cir. 2004). “A finding of ‘express aiming’ . . . 

Case 2:14-cv-01047-GMS Document 74 Filed 12/15/14 Page 3 of 7
- 4 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

does not mean ‘that a foreign act with foreseeable effects in the forum states always gives 

rise to specific jurisdiction.’” Dole, 303 F.3d at 1112 (quoting Bancroft, 223 F.3d at 

1087). 

 The “intentional” requirement is not a high bar, requiring only “an intent to 

perform an actual, physical act in the real world.” See Schwarzenegger, 374 F.3d at 806. 

The express aiming requirement is another way of saying that there must be “something 

more” than the foreseeability of an effect in the forum state. Brayton Purcell, 606 F.3d at 

1129. Under the causing harm requirement, the Ninth Circuit has made it clear that any 

intentional conduct must be “targeted at a plaintiff whom the defendant knows to be a 

resident of the forum state.” Bancroft, 223 F.3d at 1087. 

 Here, PRN demonstrates facts sufficient to show purposeful direction. PRN 

alleges that Wilmington conspired with several of PRN’s former employees to 

appropriate confidential information from PRN’s servers located in Arizona. Similarly, 

PRN alleges that one of Wilmington’s directors accepted confidential information in an 

email sent from one of PRN’s former employees, which originated, and is archived, in 

Arizona. These were intentional actions, expressly aimed at information housed in 

Arizona, and targeted at PRN, an Arizona corporation. In a similar case, Aerotech 

Holdings, Inc. v. Alliance Aerospace Eng’g, LLC, a non-resident company was found to 

have purposefully directed its activities at Texas, the forum state, by “using confidential 

information that belong[ed] to a Texas company to target customers that are based in 

Texas.” 650 F. Supp.2d 594, 600–01 (N.D. Tex. 2009). Just as in Aerotech, in the present 

case PRN alleges that Wilmington used confidential information gathered by former 

employees of PRN to target PRN’s customers’ confidential information. See also

Panavision Int’l, L.P. v. Toeppen, 141 F.3d 1316, 1321 (9th Cir. 1998) (holding that acts 

directed at limited partnership whose principal place of business in California constituted 

purposeful direction at California). Because many of these customers were residents of 

Arizona, and more importantly, because PRN alleges Wilmington knew its activities 

would cause harm to PRN, an Arizona corporation, Wilmington purposefully directed its 

Case 2:14-cv-01047-GMS Document 74 Filed 12/15/14 Page 4 of 7
- 5 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

activities at Arizona. 

 In sum, PRN sufficiently alleges Wilmington “(1) committed an intentional act, 

(2) expressly aimed at the forum state, (3) causing harm that the defendant knows is 

likely to be suffered in the forum state.” Dole, 303 F.3d at 1111. Thus, Wilmington 

purposely directed its actions at Arizona. 

 2. “Arising out of” Requirement 

 The Ninth Circuit has adopted a “but for” test for determining whether a plaintiff’s 

cause of action arises out of a defendant’s forum-related activities. See Omeluk, 52 F.3d 

at 271. The “arising out of” requirement is met if, but for the contacts between the 

defendant and the forum state, the cause of action would not have arisen. See Terracom v. 

Valley Nat. Bank, 49 F.3d 555, 561 (9th Cir. 1995). 

 As noted above, PRN has alleged that Wilmington acted in concert with several of 

PRN’s former employees to access confidential information of PRN customers. Further, 

PRN alleges that Wilmington was unjustly enriched because of the actions of PRN’s 

former employees. The “arising out of” requirement is satisfied here because but for 

Wilmington’s actions in concert with PRN’s former employees, it would not have been 

unjustly enriched. 

 3. Reasonableness Requirement 

 An unreasonable exercise of jurisdiction violates the Due Process Clause even if 

the “purposeful availment” and “arising out of” requirements of the specific jurisdiction 

test are satisfied. See Int’l Shoe Co. v. State of Wash., Office of Unemployment Comp. & 

Placement, 326 U.S. 310, 316 (1945); Ziegler v. Indian River Cnty., 64 F.3d 470, 474–75 

(9th Cir. 1995). A district court presumes, however, that its exercise of jurisdiction over 

a defendant is reasonable if the first two requirements of the specific jurisdiction test are 

met. See Ballard, 65 F.3d at 1500. If the first two requirements are satisfied, then the 

burden of proof shifts and the defendant must “‘present a compelling case that the 

presence of some other considerations would render jurisdiction unreasonable.’” Id.

(quoting Burger King, 471 U.S. at 477). 

Case 2:14-cv-01047-GMS Document 74 Filed 12/15/14 Page 5 of 7
- 6 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 The Ninth Circuit considers the following seven factors to determine whether the 

exercise of specific jurisdiction over a defendant is reasonable: (1) the extent of the 

defendant’s purposeful interjection into the forum state; (2) the burden on the defendant 

of litigating in the forum; (3) the extent of conflict with the sovereignty of the 

defendant’s state; (4) the forum state’s interest in adjudicating the dispute; (5) the most 

efficient judicial resolution of the dispute; (6) the importance of the forum to the 

plaintiff’s interest in convenient and effective relief; and (7) the existence of an 

alternative forum. See Ziegler, 64 F.3d at 475 (citing Terracom, 49 F.3d at 561); World–

Wide Volkswagen, 444 U.S. at 292 (listing several of the seven factors). 

 These factors do not suggest that litigation in Arizona is unreasonable or unfair. 

Wilmington targeted its activities at PRN, an Arizona company, and by so doing 

interjected itself into Arizona. Wilmington is based in North Carolina, and while 

traveling to Phoenix would create a burden on Wilmington, the burden is not 

unreasonable. There is no conflict with North Carolina’s sovereignty in litigating the case 

in Arizona, and Arizona has an interest in enforcing laws in its geographic boundaries. 

The most efficient judicial resolution of the dispute is a neutral factor because either 

forum would provide for efficient judicial resolution of this matter. PRN has an interest 

in obtaining relief in Arizona, but North Carolina is an alternative forum. No factor 

weighs substantially in favor of litigating the case in North Carolina, and considered as a 

whole these factors do not suggest that litigating in Arizona presents a “severe 

disadvantage” to Wilmington. Burger King, 471 U.S. at 477 (quoting Bremen v. Zapata 

Off-Shore Co., 407 U.S. 1, 18 (1972). 

CONCLUSION 

 Construing the pleadings and affidavits in favor of PRN, it has met the prima facie 

burden of showing that this Court may exercise personal jurisdiction over Wilmington. 

Wilmington has failed to show that this exercise of jurisdiction would be unreasonable or 

unfair. 

/ / / 

Case 2:14-cv-01047-GMS Document 74 Filed 12/15/14 Page 6 of 7
- 7 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

IT IS THEREFORE ORDERED that Defendant Wilmington Medical Supply, 

Inc.’s Motion to Dismiss for Lack of Personal Jurisdiction (Doc. 49) is DENIED. 

 Dated this 15th day of December, 2014. 

Case 2:14-cv-01047-GMS Document 74 Filed 12/15/14 Page 7 of 7