Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_14-cv-03236/USCOURTS-cand-3_14-cv-03236-12/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 28:1441 Petition for Removal- Fraud

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ORDER DENYING MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

CISCO SYSTEMS INC,

Plaintiff,

v.

STMICROELECTRONICS INC, et al.,

Defendants.

Case No. 5:14-cv-03236-RMW

ORDER DENYING DEFENDANT 

STMICROELECTRONICS S.R.L’S 

MOTION TO DISMISS FOR LACK OF 

PERSONAL JURISDICTION

Re: Dkt. No. 99

Plaintiff Cisco Systems Inc.’s (“Cisco”) third amended complaint (“TAC”) alleges claims 

of negligence, negligent and intentional misrepresentations, negligent and intentional interference 

with prospective economic advantage, and intentional interference with existing contractual 

relations against defendants STMicroelectronics, Inc. (“ST Micro-US”) and STMicroelectronics, 

S.r.l. (“ST Micro-Italy”). Dkt. No. 73 (TAC). ST Micro-Italy filed a motion to dismiss for lack of 

personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). Dkt. No. 99 (MTD). For the 

reasons stated below, the court DENIES ST Micro-Italy’s motion to dismiss.

I. BACKGROUND

This dispute centers on the unusually high failure rates of cable set-top boxes sold by Cisco 

to cable companies in India. Cisco is a California corporation with its principal place of business 

in San Jose, California. TAC ¶ 10. Cisco also has personnel in other U.S. states, as well as 

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countries outside the United States. MTD at 20. Cisco is a major supplier of set-top boxes in India. 

TAC ¶ 24. Cisco used the Viper17LN chip (“Viper chip”) in the power supply units of its set-top 

boxes. TAC ¶ 2. 

The Viper chip was manufactured in Europe and Asia by subsidiaries of 

STMicroelectronics, N.V. Defendant ST Micro-Italy is one subsidiary of ST Microelectronics, 

N.V. but is not the manufacturer of the Viper chip.1ST Micro-Italy is an Italian corporation with a 

principal place of business in Cantania, Italy. TAC ¶ 13. Cisco has not alleged that ST Micro-Italy 

has any business operations physically inside the United States.

The Viper chips experienced excessive leakage of current which in turn led to overheating 

of the chip and shut-down of the set-top box. TAC ¶ 30. In May 2013, one of Cisco’s set-top box 

manufacturers observed failures with the Viper chip. TAC ¶ 34. Cisco reported the potential 

problem to ST Micro.

Through further communications involving employees of ST Micro, Cisco reported that 

Viper chips continued to fail. On June 10 and 12, 2013, Cisco communicated to ST Micro-US a 

preliminary analysis indicating that ST Micro’s chip was defective and causing set-top failures, 

and sought ST Micro’s assistance with addressing and remedying the set-top failures. TAC ¶¶ 51, 

52. ST Micro promised to provide Cisco its full assistance, including complete and accurate 

information regarding the Viper chip and the measures ST Micro was taking to identify and solve 

the leakage issue. TAC ¶ 4. ST Micro-US provided Cisco with a list of employees from different 

ST Micro offices or subsidiaries, including ST Micro-Italy. TAC ¶ 42. ST Micro represented to 

Cisco that these employees were knowledgeable about the Viper chip defect and could help 

analyze the set-top box failures. TAC ¶¶ 42, 54. Cisco frequently communicated with this “core 

group” from ST Micro while ST Micro investigated the issue. TAC ¶ 54.

 

1

The court refers to the parent together with its various subsidiaries collectively as “ST Micro,” 

except as otherwise specified.

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Throughout the period relevant to this complaint (from June 10, 2013 to approximately 

December 2013), Cisco also alleges that a group of employees from ST Micro subsidiaries

(including ST Micro-Italy), collectively called “Participating Officers,” acted in a civil conspiracy 

to deny, conceal information, and defraud Cisco regarding the nature, scope, and extent of the 

Viper chip issue. TAC ¶¶ 145-155.

Cisco alleges that ST Micro-Italy personnel knew and intended for their misconduct to 

cause economic harm to Cisco and knew and intended that the harm would adversely affect Cisco 

in California. TAC ¶ 20. Cisco further alleges that ST Micro-Italy personnel knew and intended to 

interfere with business relationships developed and maintained by personnel of Cisco in 

California. Id.

2

II. ANALYSIS

A. Standard for Motion to Dismiss for Lack of Personal Jurisdiction

Where, as here, the motion to dismiss is based on written materials rather than an 

evidentiary hearing, plaintiff need only make a prima facie showing to demonstrate that the 

Northern District of California has personal jurisdiction over defendant. Schwarzenegger v. Fred 

Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004). “[U]ncontroverted allegations in the 

complaint must be taken as true,” and conflicts between facts contained within the declarations or 

affidavits submitted by the parties are resolved in the plaintiff’s favor. Id.

“There are two forms that personal jurisdiction may take: general and specific.” Picot v. 

Weston, 780 F.3d 1206, 1211 (2015). Plaintiff does not contend that ST Micro-Italy is subject to 

general jurisdiction in California, so this order considers only specific jurisdiction. 

The Ninth Circuit has articulated the following three-prong test for analyzing a claim of 

specific jurisdiction:

(1) The non-resident defendant must purposefully direct his 

 

2 Cisco’s complaint contains additional allegations under the heading of “Venue and Jurisdiction,” 

but Cisco declined to rely on those allegations in opposition to ST Micro-Italy’s motion. Dkt. No. 

106 at 10.

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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

(3) the exercise of jurisdiction must comport with fair play and 

substantial justice, i.e. it must be reasonable.

Id. The plaintiff must prove the first two prongs, at which point, “the burden shifts to the 

defendant to set forth a compelling case that the exercise of jurisdiction would not be reasonable.’” 

Id. at 1211-1212 (quotation omitted). The “purposeful availment” analysis is generally used for 

contract claims. Id. at 1212. For tort claims, the Ninth Circuit applies a “purposeful direction” test 

that examines “evidence that the defendant has directed his actions at the forum state, even if those 

actions took place elsewhere.”

3

Id.

B. Purposeful Direction

In analyzing purposeful direction, courts apply the Supreme Court’s “effects” test from 

Calder v. Jones, 465 U.S. 783 (1983). Under Calder, the defendant must have (1) committed an 

intentional act, which was (2) expressly aimed at the forum state, and (3) caused harm, the brunt of 

which is suffered and which the defendant knows is likely to be suffered in the forum state. Picot, 

780 F.3d at 1213. ST Micro-Italy does not dispute that it engaged in some intentional acts, Dkt. 

No. 106 at 11, so the court turns to the remaining prongs of the Calder test.

Under the second prong of the effects test, “[t]he exact form of [a court’s] analysis varies 

from case to case and ‘depends, to a significant degree, on the specific type of tort or other 

wrongful conduct at issue.’” Picot, 780 F.3d at 1214 (quoting Schwarzenegger, 374 F.3d at 807). 

“[I]t is the defendant’s conduct that must form the necessary connection with the forum State that 

is the basis for its jurisdiction over him.” Walden v. Fiore, 134 S. Ct. 1115, 1122 (2014). In cases 

 

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ST Micro-Italy suggests that the purposeful availment test applies to negligence claims as well as 

contract claims, while the purposeful direction test applies to intentional torts. MTD at 2 n.1. 

Because Cisco relies only on purposeful direction in its opposition, Dkt. No. 106 at 25, this order 

does not address purposeful availment.

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involving harmful communications, courts have held that “the ‘express aiming’ requirement of the 

effects test remains ‘satisfied when the defendant is alleged to have engaged in wrongful conduct 

targeted at a plaintiff whom the defendant knows to be a resident of the forum state.’” Leibman v. 

Prupes, No. 2:14–cv–09003–CAS(VBKx), 2015 WL 898454, at *9 (C.D. Cal. Mar. 2, 2015)

(finding personal jurisdiction based on emails sent to a California resident threatening blackmail) 

(quoting Dole Food Co., Inc. v. Watts, 303 F.3d 1104, 1111 (9th Cir. 2002)); Rinky Dink Inc. v. 

Elec. Merch. Sys. Inc., C13-1347-JCC, No. 2014 WL 5880170, at *2-3 (W.D. Wash. Sept. 30, 

2014) (finding jurisdiction over California company that placed pre-recorded phone calls to 

Washington businesses without consent).

ST Micro-Italy argues that the authority Cisco relies upon to support jurisdiction is 

inconsistent with the Supreme Court’s 2014 Walden decision and the Ninth Circuit’s decision 

earlier this year in Picot. Dkt. No. 114 at 8-11. Defendant argues that under these precedents, “it is 

not enough to commit an intentional act directed at a person known to have substantial 

connections to the forum” Id. at 9. In Walden, the Supreme Court found no personal jurisdiction 

when a Georgia DEA agent prepared a false affidavit to support a forfeiture action while aware of 

the plaintiffs’ residency in Nevada and the likely impact of his fraud on the plaintiffs. 134 S. Ct. 

1115 (2014). The plaintiff did not allege that Walden had contacted anyone in the forum state, let 

alone that such contact harmed the plaintiff. Id. at 1124 (noting that Walden “never traveled to, 

conducted activities within, contacted anyone in, or sent anything or anyone to Nevada.”).

The Picot court applied Walden to the case of a Michigan technology developer, Weston, 

who was sued in California where Picot resided for breach of contract and intentional interference 

with a sales agreement. 780 F.3d at 1209. Weston’s “allegedly tortious conduct” consisted of 

making statements to an Ohio resident, which caused a Delaware corporation “to cease making 

payments into two trusts (in Wyoming and Australia).” Id. at 1215. Outside of his work with 

Picot, Weston had never conducted business in California. Id. at 1209. Because he performed the 

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majority of his work in Michigan4, the court found no personal jurisdiction. Id. at 1212-13. 

The court notes that even after Picot, at least one district court in the Ninth Circuit has 

found that communications with a plaintiff may provide a basis for personal jurisdiction. See 

Microsoft Corp. v. Mountain West Computers, Inc., No. C14–1772RSM, 2015 WL 4479490 

(W.D. Wash. July 22, 2015) (distinguishing Picot and finding personal jurisdiction in part because 

Utah-based defendant “affirmatively contacted Microsoft” in Washington “through internet 

contact with its servers and by telephone”).

The present case is also distinguishable from Walden and Picot because in neither of those 

cases did communications with someone in the forum state form the basis of the plaintiff’s 

allegations.5 Here, Cisco alleges that ST Micro-Italy’s oral and written communications with 

Cisco’s California personnel contained false and misleading statements regarding defects in the 

Viper chips. Cisco alleges that ST Micro-Italy personnel sent numerous emails and reports to 

California-based Cisco employees regarding the Viper chips. See, e.g., TAC ¶¶ 20, 63, 67, 76-77; 

Dkt. No. 106 at 7-8. Moreover, Cisco alleges that ST Micro-Italy personnel had regular telephone 

calls with Cisco’s California employees regarding the chips. See, e.g., TAC ¶¶ 20, 65, 71, 78; Dkt. 

No. 106 at 6-7. Cisco further alleges that ST Micro-Italy personnel were aware at the time that at 

least some of the Cisco employees with whom they were communicating were based in California.

Dkt. No. 106 at 15. ST Micro-Italy’s briefs do not dispute this knowledge. Accordingly, ST 

Micro-Italy’s communications with Cisco’s California personnel are sufficient to satisfy the 

“express aiming” prong of the effects test.

The third prong of the effects test requires the plaintiff to show that harm is suffered in the 

forum state. “[A] corporation incurs economic loss, for jurisdictional purposes, in the forum of its 

 

4 While Weston had traveled to California in the past, id. at 1210, that travel was not part of 

Picot’s claim. 

5

The Supreme Court explicitly noted that electronic contacts with the forum were not at issue in 

Walden: “[T]his case does not present the very different questions whether and how a defendant’s 

virtual ‘presence’ and conduct translate into ‘contacts’ with a particular State.” 134 S. Ct. at 1125 

n.9.

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principal place of business.” CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1079 (9th 

Cir. 2011). Cisco alleges that the aftermath of ST Micro-Italy’s misleading communications 

injured Cisco in California—despite the fact that Cisco’s set-top boxes at issues were only sold in 

India—because Cisco’s principal place of business is in California. Dkt. No. 106 at 16; see also

TAC ¶ 84. Such a loss is sufficient to satisfy the third prong of the effects test. See United Tactical

Systems LLC v. Real Action Paintball, Inc., Nos. 14–cv–04050–MEJ, 14–cv–02435–MEJ, 2015 

WL 2228166, at *10 (N.D. Cal. May 11, 2015) (finding loss of profits for California corporation 

sufficient to satisfy effects test).

C. Arising Out Of

The test for specific jurisdiction requires that the claim against the defendant be one that

arises out of or relates to the defendant’s forum-related activities. The court “must determine if the 

plaintiff . . . would not have been injured ‘but for’ the defendant’s . . . conduct directed toward 

[plaintiff] in [the forum].” Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316, 1322 (9th Cir. 1998). 

Here, but for ST Micro-Italy’s alleged misleading communications with Cisco’s California6

employees, plaintiff’s claim would not have arisen. Among other examples, Cisco described how 

it was unable to inform its customers of a potential systemic problem with the Viper chip because 

Cisco relied on a report approved by ST Micro-Italy employees. See TAC ¶¶ 67, 71, 74. 

ST Micro-Italy’s alleged conduct satisfies the second prong.

D. Fair Play and Substantial Justice

Finally, the third prong of the test for specific jurisdiction provides that the exercise of 

personal jurisdiction must comport with fair play and substantial justice. The court considers the 

following seven factors:

(1) the extent of the defendants’ purposeful interjection into the 

forum state’s affairs; (2) the burden on the defendant of defending in 

 

6

The fact that ST Micro-Italy interacted with Cisco employees outside California as well does not 

change this conclusion. “If a jurisdictionally sufficient amount of harm is suffered in the forum 

state, it does not matter that even more harm might have been suffered in another state.” Yahoo! 

Inc. v. La Ligue Contre Le Racisme Et L'Antisemitisme, 433 F.3d 1199, 1207 (9th Cir. 2006).

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

defendants’ 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 the plaintiff’s interest in 

convenient and effective relief; and (7) the existence of an 

alternative forum. None of the factors is dispositive in itself; instead, 

[the court] must balance all seven.

Core–Vent Corp. v. Nobel Industries, 11 F.3d 1482, 1487–88 (9th Cir. 1993). Jurisdiction is 

presumed to be reasonable once the first two prongs of the specific jurisdiction test have been met. 

See Schwarzenegger, 374 F.3d at 802. ST Micro-Italy argues that exercise of personal jurisdiction 

by this court would be unreasonable. The court disagrees.

The degree of interjection is extensive here. ST Micro-Italy personnel engaged in dozens 

of oral and written exchanges with Cisco’s California employees over a period of time. ST MicroItaly has not offered any specific evidence that defending a suit in California would impose a 

significant burden. Courts routinely reject claims by foreign defendants that it would be too 

burdensome for them to defend themselves outside their home country, particularly when those 

companies “use technology and transportation to carry on the business relationship at issue.”

Pandigital, Inc. v. DistriPartners B.V., No. C 12-01588-CW, 2012 WL 6553998, at *4 (N.D. Cal. 

Dec. 14, 2012). ST Micro-Italy has not argued that jurisdiction in California would conflict with 

any Italian law and thus interfere Italian sovereignty. Moreover, California has a strong interest in 

providing its residents a convenient forum for redressing injuries caused by out-of-state 

defendants. See, e.g., Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473 (1985) (recognizing that 

States have a “manifest interest” in providing a convenient forum for residents). ST Micro-Italy 

has not shown that another jurisdiction would be more efficient for resolving this dispute. While it 

appears true that some potential witnesses are located outside California, the fact that litigation 

against ST Micro-US is proceeding in California would make litigation in another forum 

duplicative. Because Cisco’s allegations against ST Micro-US and ST Micro-Italy are intertwined, 

it would be unreasonable to expect Cisco to file separate lawsuits to give each defendant the 

privilege of defending this litigation in its own forum. See Tamburo v. Dworkin, 601 F.3d 693, 

709 (7th Cir. 2010). ST Micro-Italy’s counsel noted at oral argument that Italy might be an 

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alternative forum for this dispute, but the defendant has not explained why the option of litigating 

in Italy renders this Court’s exercise of personal jurisdiction unreasonable in light of all of the 

other factors.

III. ORDER

For the reasons explained above, the court DENIES defendant’s motion to dismiss for lack 

of personal jurisdiction. 

IT IS SO ORDERED.

Dated: September 1, 2015

______________________________________

Ronald M. Whyte

United States District Judge

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