Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-01377/USCOURTS-caed-2_05-cv-01377-2/pdf.json

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

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1

 Although defendant British American Tobacco has not responded to the amended

complaint, it appears that this defendant has not been timely served with summons. The proof of

service for this defendant, filed September 30, 2005, does not demonstrate compliance with

Federal Rule of Civil Procedure 4(h). As discussed below, the amended complaint fails to state a

claim for breach of contract or conspiracy to defraud against defendants Brown and Williamson, 

R.J. Reynolds Tobacco Holdings, Inc., Reynolds American, Inc., and Philip Morris. For the

reasons stated herein, the amended complaint should be dismissed against defendant British

American Tobacco as well. 

2

 Because the court finds these defendants must be dismissed for lack of personal

jurisdiction, the court declines to reach the arguments raised by these defendants with respect to

Rule 12(b)(6).

1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

MICHAEL FRYE,

Plaintiff, No. CIV S-05-1377 LKK KJM PS

vs.

PHILIP MORRIS, USA, et al.,

FINDINGS AND RECOMMENDATIONS

Defendants.

 /

Pending before the court are motions to dismiss brought by all defendants except

for defendant British American Tobacco.1 Defendants Jenner, Gallaher Group Plc, and Gallaher

Limited (the “Gallaher defendants”) contend this court has no personal jurisdiction over them.2

Defendants Brown and Williamson, R.J. Reynolds Tobacco Holdings, Inc., Reynolds American,

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2

Inc. and defendant Philip Morris do not dispute personal jurisdiction but contend plaintiff has

failed to state a claim.

This action arises out of plaintiff’s claim that his idea for a shortened cigarette

was misappropriated by defendant Gallaher and that the other named defendants conspired with

defendant Gallaher to defraud plaintiff. The Gallaher defendants’ motions under Federal Rule of

Civil Procedure 12(b)(2) are well taken. Under California’s long-arm statute, personal

jurisdiction may be exercised to the extent permitted by due process. Cal. Code Civ. Proc. 

§ 410.10; see Data Disc, Inc. v. Sys. Technology Assocs., Inc., 557 F.2d 1280, 1286 (9th

Cir. 1977). As such, nonresidents must have certain minimum contacts with the state. 

Defendant Jenner, Gallaher’s Managing Director for the United Kingdom, is a citizen of the

United Kingdom. Gallaher Group Plc is organized under the laws of England and Wales with its

principal place of business in Surrey, England. See Affidavit of Thomas Keevil. Defendant

Gallaher Limited is a subsidiary of Gallaher Group Plc. The only allegation of any contact these

defendants had with plaintiff was that defendant Jenner responded to a letter from a colleague of

plaintiff by suggesting a confidentiality agreement was appropriate before plaintiff disclosed his

idea. See First Amended Complaint, Ex. B. This limited contact is insufficient to support

personal jurisdiction. Cf. VCS Samoa Packing Co. v. Blue Continent Prods. (PTY) Ltd., 83

F. Supp. 2d 1151, 1153-54 (S.D. Cal. 1998), aff’d, 202 F.3d 280 (9th Cir. 1999). 

Defendants Brown and Williamson, R.J. Reynolds Tobacco Holdings, Inc.,

Reynolds American, Inc., and Philip Morris (the “non-Gallaher defendants”) also correctly

contend the amended complaint states no cognizable claim for breach of contract or fraud. There

are no allegations of a contract between these defendants and plaintiff. The exhibits attached to

plaintiff’s complaint demonstrate, at most, an agreement between plaintiff and defendant Jenner

on behalf of defendant Gallaher Limited. With respect to the conspiracy to defraud claim, the

conclusory allegations of collusion between the non-Gallaher defendants and the Gallaher

defendants fall woefully short of the particularity in pleading requirements of Federal Rule of

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Civil Procedure 9(b). See Schreiber Distributing Co. v. Serv-Well Furniture Co., Inc., 806 F.2d

1393, 1400-01 (9th Cir. 1986). 

Plaintiff amended his complaint once as a matter of right in response to motions

to dismiss noticed by defendants Gallaher and Philip Morris. Plaintiff confirmed in open court at

the hearing on the pending motions to dismiss that he has nothing further to submit in connection

with his claims. It appears further amendment would be futile. The court therefore will

recommend the motions to dismiss be granted without leave to amend.

Accordingly, IT IS HEREBY RECOMMENDED that:

1. Defendants’ motions to dismiss be granted; and

2. This action be dismissed.

These findings and recommendations are submitted to the United States District

Judge assigned to the case, as provided by Title 28 U.S.C. § 636(b)(l). Within ten days after

being served with these findings and recommendations, any party may file written objections

with the court and serve a copy on all parties. Such a document should be captioned "Objections

to Magistrate Judge's Findings and Recommendations." Any reply to the objections shall be

served and filed within ten days after service of the objections. The parties are advised that

failure to file objections within the specified time may waive the right to appeal the District

Court's order. Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991).

DATED: December 29, 2005.

______________________________________

UNITED STATES MAGISTRATE JUDGE

006

frye.57

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