Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_19-cv-02700/USCOURTS-cand-5_19-cv-02700-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 18:1836(a) - Injunction against Misappropriation of Trade Secrets

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

POWER INTEGRATIONS, INC.,

Plaintiff,

v.

THE PENBROTHERS INTERNATIONAL 

INC., et al.,

Defendants.

Case No. 19-cv-02700-SVK 

ORDER ON SPECIALLY APPEARING 

DEFENDANT THE PENBROTHERS 

INTERNATIONAL INC.'S MOTION TO 

DISMISS

Re: Dkt. No. 26

Plaintiff Power Integrations, Inc. (“PI”) claims that several of its former employees were 

recruited by Defendant The Penbrothers International Inc. (“Penbrothers”) to work for Silanna 

Semiconductor North America, Inc. (“Silanna”), a competitor of PI.1 PI is headquartered in San 

Jose, California. Silanna is headquartered in San Diego, California. Defendant Penbrothers is 

located in the Philippines. Defendants Edison D. De Lara, Charles Reyes Evangelista, Ian 

Barrameda, and Alex F. Mariano (collectively, the “Individual Defendants”) are all citizens of the 

Philippines who formerly worked for PI in the Philippines and now work for Silanna.2

Now before the Court is Penbrothers’ motion to dismiss the First Amended Complaint 

(“FAC”). Dkt. 26. The parties have consented to the jurisdiction of a magistrate judge. Dkt. 10, 

25, 28. The Court held a hearing on October 29, 2019. Based on review of the parties’ 

submissions, arguments at the hearing, the case file, and applicable law, the Court hereby 

GRANTS Penbrothers’ motion to dismiss under Rule 12(b)(2) for lack of personal jurisdiction. 

Because the Court finds it does not have personal jurisdiction over Penbrothers, it does not reach 

 

1 Silanna was originally named as a Defendant in this action, but PI voluntarily dismissed it. Dkt. 

18.

2 The Court ruled Individual Defendants’ motion to dismiss (Dkt. 30) in a separate order. See Dkt. 

48.

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Penbrothers’ alternative arguments that the case should be dismissed under Rule 12(b)(3) for 

improper venue and under Rule 12(b)(6) for failure to state a claim.

I. BACKGROUND

PI and Silanna compete in the market for power conversion technology. Dkt. 12 (FAC) 

¶¶ 14, 15. The Individual Defendants each worked for PI until 2018 or 2019. Id. ¶ 18 (alleging 

that De Lara was employed by PI from approximately March 22, 2016 through May 11, 2019); 

¶ 27 (alleging that Evangelista was employed by PI from approximately September 19, 2017 

through May 16, 2019); ¶ 41 (alleging that Barrameda was employed by PI from approximately 

April 7, 2015 through March 2, 2019); ¶ 50 (alleging that Mariano was employed by PI from 

approximately October 1, 2008 through January 27, 2018). According to PI, the Individual 

Defendants’ employment contracts with PI contained confidentiality, non-compete, and nonsolicitation provisions. Id. ¶¶ 19-21; 28-30; 42-44; 51.

Individual Defendants De Lara, Evangelista, and Barrameda are all citizens of the 

Philippines, worked for PI in the Philippines, and resided in the Philippines throughout their 

employment with PI. Dkt. 30-2 (De Lara Decl.) ¶¶ 2, 4; Dkt. 30-3 (Evangelista Decl.) ¶¶ 2, 4; 

Dkt. 30-5 (Barrameda Decl.) ¶ 2. Individual Defendant Mariano was engaged to provide services 

for PI in the Southeast Asia region, but he states that he is also a citizen of the Philippines who 

resided there throughout his employment with PI. Dkt. 30-6 (Mariano Decl.) ¶¶ 2, 3.

Plaintiff alleges on information and belief that Silanna, either directly or in conspiracy with 

Penbrothers, intentionally targeted, approached, recruited, or attempted to recruit PI’s current or 

recently separated key engineering employees who had knowledge and information about PI’s 

trade secrets. Dkt. 12 (FAC) ¶ 57. Penbrothers describes itself as “a co-working space, backoffice processing provider” located in the Philippines. Dkt. 26-2 (Reyes Decl.) ¶ 2. It appears that 

Penbrothers is also a recruiter. See Dkt 26-3 (Ex. 1 to Reyes Decl.) at 3 (signature block 

describing Penbrothers employee as “Recruitment Specialist”); see also Dkt. 12 (FAC) ¶ 16 

(alleging on information and belief that Penbrothers is a “staffing and office solution provider”). 

According to Penbrothers, in April 2019, it sent offer letters to Individual Defendants De Lara and 

Evangelista, but it withdrew the offers after receiving a cease and desist letter from PI’s lawyers. 

Dkt. 26-2 (Reyes Decl.) ¶¶ 4-5. The job offers refer to Silanna but state that De Lara and 

Evangelista will be employed in the Philippines. Dkt. 26-3 (Ex. 1 to Reyes Decl.) at 2, 8 (offer to 

Case 5:19-cv-02700-SVK Document 49 Filed 11/18/19 Page 2 of 8
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De Lara); Dkt. 26-3 (Ex. 2 to Reyes Decl.) at 15, 22 (offer to Evangelista). Penbrothers states that 

none of the Individual Defendants ever began work for or through Penbrothers. Dkt. 26-2 (Reyes 

Decl.) ¶ 5.

In connection with their motion to dismiss, the Individual Defendants submitted 

declarations stating that they are now employed by Silanna and claiming they have never worked 

for or through Penbrothers. Dkt. 30-2 (De Lara Decl.) ¶ 4; Dkt. 30-3 (Evangelista Decl.) ¶¶ 4-5; 

Dkt. 30-5 (Barrameda Decl.) ¶ 3; Dkt. 30-6 (Mariano Decl.) ¶¶ 4-5. De Lara and Mariano state 

that they are “employed with Silanna Semiconductor North America, Inc., in San Diego, 

California.” Dkt. 30-2 ¶ 5; Dkt. 30-6 ¶5. Evangelista and Barrameda state that they work for 

“Silanna in San Diego.” Dkt. 30-3 ¶ 4; Dkt. 30-5 ¶ 3.

II. DISCUSSION

Penbrothers moves to dismiss the FAC for lack of personal jurisdiction under Rule 

12(b)(2), improper venue under Rule 12(b)(3), and failure to state a claim under Rule 12(b)(6). As 

discussed below, the Court concludes that it does not have personal jurisdiction over Penbrothers 

and therefore does not reach Penbrothers’ other arguments for dismissal.

A. Personal Jurisdiction

1. Legal Standard 

A party may challenge the Court’s personal jurisdiction over it by bringing a motion under 

Federal Rule of Civil Procedure 12(b)(2). 3 A Rule 12(b)(2) motion “must be made before 

pleading if a responsive pleading is allowed.” Fed. R. Civ. P. 12(b). 

When a defendant raises a challenge to personal jurisdiction, the plaintiff bears the burden 

of establishing that jurisdiction is proper. Ranza v. Nike, Inc., 793 F.3d 1059, 1068 (9th Cir. 

2015). The plaintiff may meet this burden by submitting evidence such as affidavits and 

discovery materials. Id. Where the defendant’s motion is based on written materials rather than 

an evidentiary hearing, “the plaintiff need only make a prima facie showing of jurisdictional facts 

to withstand the motion to dismiss.” Id. (internal quotation marks and citation omitted). Although 

“the plaintiff cannot simply rest on the bare allegations of its complaint,” in evaluating the 

 

3

“Under federal practice a special appearance need not be filed in order to challenge jurisdiction.” 

Hays v. United Fireworks Mfg. Co., 420 F.2d 836, 844 n.10 (9th Cir. 1969).

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plaintiff’s showing, the court must accept uncontroverted allegations in the complaint as true and 

resolve factual disputes created by conflicting affidavits in the plaintiff’s favor.” Schwarzenegger 

v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004) (internal quotation marks and 

citation omitted).

Where no applicable federal statute governs personal jurisdiction, “the law of the state in 

which the district court sits applies.” Harris Rutsky & Co. Ins. Servs., Inc. v. Bell & Clements 

Ltd., 328 F.3d 1122, 1129 (9th Cir. 2003). California’s long arm statute, which applies in this 

case, “allows courts to exercise personal jurisdiction to the extent permitted by the Due Process 

Clause of the United States Constitution” and thus the defendant must have certain “minimum

contacts” with the forum state, “such that the maintenance of the suit does not offend traditional 

notions of fair play and substantial justice.” Ranza, 793 F. 3d at 1068 (quoting Int’l Shoe Co. v. 

Washington, 326 U.S. 310, 316 (1945) (internal quotation marks and citation omitted)). 

A federal district court may exercise either general or specific personal jurisdiction over a 

defendant. Daimler AG v. Bauman, 571 U.S. 117, 127-28 (2014). General jurisdiction exists 

when the defendant’s contacts “are so continuous and systematic as to render [it] essentially at 

home in the forum State.” Id. at 139 (internal quotation marks and citation omitted). “With 

respect to a corporation, the place of incorporation and principal place of business are paradigm 

bases for general jurisdiction.” Id. at 137 (internal quotation marks, citation, and alteration 

omitted). In contrast, specific jurisdiction exists when the defendant has more limited contact with 

the forum state, but the plaintiff’s claims arise out of or relate to those contacts. Id. at 128.

The Ninth Circuit has established a three-prong test for whether a court can exercise 

specific personal jurisdiction: (1) the defendant must have “either purposefully availed itself of 

the privilege of conducting activities in California, or purposefully directed its activities toward 

California,” thereby “invoking the benefits and protections of its laws”; (2) the claim must arise 

out of or relate to the defendant’s forum-related activities; and (3) the exercise of jurisdiction must 

be reasonable, i.e., it must comport with fair plan and substantial justice. Schwarzenegger, 374 

F.3d at 802. The plaintiff bears the burden on the first two prongs, and if it fails to satisfy either 

one “personal jurisdiction is not established in the forum state.” Id. “If the plaintiff succeeds in 

establishing both of the first two prongs, the burden then shifts to the defendant to present a 

compelling case that the exercise of jurisdiction would not be reasonable.” Id. (internal quotation 

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marks and citation omitted).

2. Analysis

Penbrothers argues that PI cannot establish that it is subject to either general or specific 

jurisdiction in California. Dkt. 26-1 at 6-7. PI does not assert that the Court has general 

jurisdiction over Penbrothers. Dkt. 33 at 5 n.1. Instead, PI argues that the Court has specific 

jurisdiction over Penbrothers. Id. at 5. PI has not submitted affidavits concerning Penbrothers’ 

contacts with California but instead relies on the allegations of the FAC. Id. at 5-7. Accordingly, 

the Court must determine whether PI has made a prima facie showing that California has specific 

jurisdiction over Penbrothers under the legal standards discussed above. 

On the first prong of the specific jurisdiction analysis, which considers whether 

Penbrothers purposefully availed itself of or purposefully directed its activities towards California, 

PI argues that “Penbrothers purposefully directed its activities at residents of this state by entering 

into an agreement and conspiring with Silanna, a California-based company, to raid the employees 

of Power Integrations, also a California-based company.” Dkt. 33 at 5 (citing FAC ¶¶ 1, 2, 57, 59, 

61, 95). According to PI, this conduct by Penbrothers “caus[ed] Power Integrations to lose its key 

engineering employees to, and subjecting Power Integrations’ trade secrets to misappropriation by, 

a competitor. Id. In making this argument, PI cites the “effects test” articulated by the Supreme 

Court in Calder v. Jones, under which personal jurisdiction may attach if a defendant committed 

an intentional action expressly aimed at the forum state, knowing that the brunt of the expected 

injury would be felt by the plaintiff in the forum state. 465 U.S. 783, 789-90 (1984). 

Penbrothers argues that it has not done any business or engaged in any California-related 

activities. Dkt. 26-1 at 7-8; Dkt. 26-2 (Reyes Decl.) at ¶¶ 2-11. Penbrothers characterizes PI’s 

claim as an allegation that “Silanna entered into an agreement with Penbrothers in the Philippines 

to recruit and hire PI’s Philippine-based engineers to work for Silanna.” Dkt. 37 at 2 (citing FAC 

¶¶ 56-61). Penbrothers argues that PI’s jurisdictional argument conflicts with the principles 

recently set forth by the Supreme Court in Walden v. Fiore, in which the Court emphasized that 

“[i]t is the defendant, not the plaintiff or third parties, who must create contacts with the forum 

State.” 571 U.S. 277, 283 (2014). According to Penbrothers, specific jurisdiction over it cannot 

be premised on the mere fact that it might have foreseen an effect on PI in California. See Dkt. 37 

at 5-8. 

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The parties have presented Calder and Walden as being in tension. However, one court in 

this district has reconciled those cases. See Way.com, Inc. v. Singh, No. 3:18-cv-04819-WHO, 

2018 WL 6704464, at *7-8 (N.D. Cal. Dec. 20, 2018). As explained in Way.com, in Calder the 

Supreme Court held there was specific jurisdiction in California over an out-of-state reporter and 

editor because the effects of their actions in Florida were felt in California, where the subject of 

the allegedly libelous story lived and worked. Id. at *8 (citing Calder, 465 U.S. at 788-89). By 

contrast, in Walden, the Supreme Court concluded that a search of a Nevada resident in a Georgia 

airport did not give rise to personal jurisdiction over the defendant in Nevada because the 

jurisdictional analysis required the court to inquire about whether the defendant’s actions 

connected him to the forum, not merely to residents of the forum. Way.com, 2018 WL 6704464, at 

*8 (citing Walden, 571 U.S. at 285, 289) (emphasis added). As the court in Way.com explained, 

“[b]y contrast with Calder, where the forum state was the focal point of the defendants’ activities, 

in Walden the defendant ‘never traveled to, conducted activities within, contacted anyone in, or 

sent anything or anyone to Nevada.’” Way.com, 2018 WL 6704464, at *8.

Accepting uncontroverted allegations in the FAC as true, PI has not made a prima facie 

showing that Penbrothers purposefully directed its activities toward California. The FAC is silent 

as to where most of the activities that give rise to this case occurred. The claims in this case arise 

from the fact that Individual Defendants, who previously worked for PI, were recruited to and now 

work for Silanna, a competitor of PI. PI hired the Individual Defendants to work in the 

Philippines, and they were recruited by Penbrothers and/or Silanna while living in the Philippines. 

None of the Individual Defendants were targeted, recruited, or hired in California. The FAC 

contains allegations about Penbrothers acting in concert with Silanna, but it is noticeably silent as

to where those activities occurred. In other words, there are no allegations that Penbrothers knew 

that the effect of recruiting the PI engineers in the Philippines would be felt in California. To the 

extent there is evidence before the Court regarding the recruiting activities, it demonstrates that 

they took place in the Philippines. See generally Dkt. 26-2 (Reyes Decl.). There is simply no 

evidence of contacts between Penbrothers itself and California.

The Supreme Court has made clear that relationship between the defendant and the forum 

state must arise out of contacts that the “defendant himself” created. Walden, 571 U.S. at 284 

(emphasis in original). “[T]he plaintiff cannot be the only link between the defendant and the 

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forum. Rather, it is the defendant’s conduct that must form the necessary connection with the 

forum state that is the basis for its jurisdiction over him.” Id. at 285. Here, PI has failed to make a 

prima facie case of specific personal jurisdiction because it has not shown contacts between 

Penbrothers and California. 

3. Conclusion on Personal Jurisdiction

Because PI has failed to establish that Penbrothers purposely availed itself of or directed its 

activities to California, it has not shown that the first prong of the Ninth Circuit’s test for specific 

personal jurisdiction is satisfied, and therefore the Court need not reach the second and third 

prongs. For the reasons discussed above, Penbrothers’ motion to dismiss the case for lack of 

personal jurisdiction is GRANTED. 

At the hearing, PI argued that it should be given the opportunity to conduct jurisdictional 

discovery if the Court was inclined to rule against it, arguing that it is not believable that 

Penbrothers could have recruited the Individual Defendants without some contacts with Silanna in 

California. The Court has “broad discretion” to permit or deny discovery to aid in determining 

whether it has personal jurisdiction. Los Gatos Mercantile, Inc. v. E.I. DuPont De Nemours & 

Co., No. 13-CV-01180-BLF, 2015 WL 4755335, at *11 (N.D. Cal. Aug. 11, 2015) (citations 

omitted). Denial of discovery is not an abuse of discretion when it is clear that further discovery 

would not demonstrate facts sufficient to constitute a basis for jurisdiction, or when the request for 

discovery is based on little more than a hunch that it might yield facts relevant to jurisdiction. Id.; 

see also Boschetto v. Hansing, 539 F.3d 1011, 1020 (9th Cir. 2008) (holding that district court did 

not abuse its discretion by denying jurisdictional discovery into whether defendant automobile 

dealership conducted additional sales in California because the request for discovery “was based 

on little more than a hunch that it might yield jurisdictionally relevant facts”). 

PI’s argument in favor of jurisdictional discovery is little more than a hunch that some of 

Penbrothers’ communications with Silanna may have been sent to or from California; even if this 

is true, it would not provide a sufficient basis for jurisdiction. “[O]rdinarily use of the mails, 

telephone, or other international communications simply do not qualify as purposeful activity 

invoking the benefits and protections of the forum state.” Hudnall v. Payne, No. 13-cv-04728-

WHO, 2014 WL 524079, at *3 (N.D. Cal. Feb. 6, 2014) (quoting Peterson v. Kennedy, 771 F.2d 

1244, 1262 (9th Cir. 1985)). Accordingly, PI’s request for jurisdictional discovery is denied, and 

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the dismissal of the FAC as to Penbrothers is WITHOUT LEAVE TO AMEND. See Gordon v. 

APM Terminals N. Am., Inc., No. 17-CV-03970-MEJ, 2017 WL 3838092, at *7 (N.D. Cal. Sept. 

1, 2017) (granting motion to dismiss pursuant to Rule 12(b)(2) without leave to amend where 

“nothing in the record indicates Plaintiff might be able to allege or prove additional facts 

establishing personal jurisdiction over [defendant] that he was unable to allege in the Complaint or 

identify in his Opposition”).

B. Other Grounds for Motion to Dismiss

Personal jurisdiction is a “threshold question” that must be decided before the court can 

make merits determinations. See Sinochem Int’l Co. Ltd. v. Malaysia Int’l Shipping Corp., 549 

U.S. 422, 433 (2007); see also Leroy v. Great Western United Corp., 443 U.S. 173, 180 (1979) 

(question of personal jurisdiction is typically decided in advance of venue). Because the Court 

concludes that it does not have personal jurisdiction over Penbrothers, it does not reach 

Penbrothers’ venue challenge and its argument that PI has failed to state a claim.

III. CONCLUSION

For the reasons discussed above, the Court GRANTS Penbrothers’ Rule 12(b)(2) motion 

and the FAC is DISMISSED WITHOUT LEAVE TO AMEND as to Penbrothers for lack of 

personal jurisdiction.

SO ORDERED.

Dated: November 18, 2019

SUSAN VAN KEULEN

United States Magistrate Judge

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