Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_14-cv-04371/USCOURTS-cand-3_14-cv-04371-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Petition for Removal

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United States District Court

For the Northern District of California

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

PELICAN COMMUNICATIONS, INC.,

Plaintiff,

v.

MARTY SCHNEIDER, et al.,

Defendants.

___________________________________/

No. C-14-4371 EMC

ORDER GRANTING DEFENDANT’S

MOTION TO DISMISS FOR LACK OF

PERSONAL JURISDICTION

(Docket No. 19)

Currently pending before the Court is Defendant Marty Schneider’s motion to dismiss for

lack of personal jurisdiction. Although Plaintiff Pelican Communications, Inc. filed an opposition to

the motion, it failed to make an appearance at the hearing. Having considered the parties’ briefs and

accompanying submissions, as well as all other evidence of record, the Court hereby GRANTS Mr.

Schneider’s motion. 

I. DISCUSSION

A. Legal Standard

Under Federal Rule of Civil Procedure 12(b)(2), a defendant may move to dismiss for lack of

personal jurisdiction. In the instant case, Pelican does not dispute that general jurisdiction over Mr.

Schneider is lacking. Rather, the dispute between the parties is whether there is specific jurisdiction

over Mr. Schneider. 

Under Ninth Circuit law, there is a three-prong test for specific jurisdiction.

(1) The 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

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United States District Court

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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.

Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1227-28 (9th Cir. 2011).

The plaintiff bears the burden of satisfying the first two prongs of the

test. If the plaintiff fails to satisfy either of these prongs, personal

jurisdiction is not established in the forum state. If the plaintiff

succeeds in satisfying 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.

Scwharzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004).

Where a defendant’s motion is based on written materials only (i.e., there is no evidentiary

hearing), then a “plaintiff need only make a prima facie showing of jurisdictional facts to withstand

[a] motion to dismiss.” Mavrix, 647 F.3d at 1223. In evaluating whether a prima facie showing has

been made, a court must take any uncontroverted allegations in the complaint as true, but it “‘may

not assume the truth of allegations in a pleading which are contradicted by affidavit.’” Id. Thus, the

Ninth Circuit has cautioned that “[t]he plaintiff cannot ‘simply rest on the bare allegations of its

complaint.’” Id. If there are factual disputes based on competing affidavits submitted by the parties,

then those disputes are resolved in the plaintiff’s favor. See id.; see also AT&T v. Compagnie

Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir. 1996) (stating that “uncontroverted allegations in

[plaintiff’s] complaint must be taken as true, and ‘conflicts between the facts contained in the

parties’ affidavits must be resolved in [plaintiff’s] favor for purposes of deciding whether a prima

facie case for personal jurisdiction exists’”).

B. Breach of Contract

Whether there is personal jurisdiction over Mr. Schneider with respect to the claim for

breach of contract has two components: (1) whether Pelican has made a prima facie showing that

there is personal jurisdiction over TCE and (2) whether Pelican has made a prima facie showing that

TCE is Mr. Schneider’s alter ego. See, e.g., United States v. Swiss Am. Bank, Ltd., 274 F.3d 610,

627 (1st Cir. 2001) (taking note of government’s concession that “personal jurisdiction extends to

IMB only if (1) the government makes a prima facie case for jurisdiction over SAB” first and then

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(2) the government can establish that IMB is SAB’s alter ego); Goldman v. Seawind Group

Holdings Pty Ltd., No. CV 13-01759 SI, 2013 U.S. Dist. LEXIS 124052, at *8-9 (N.D. Cal. Aug. 29,

2013) (stating that, “if plaintiffs have made a prima facie showing that Ward is the alter ego of

Seawind or the Corsair companies [over which personal jurisdiction was undisputed], then this

Court has personal jurisdiction over him”).

In his papers, Mr. Schneider focuses on the second component only. Mr. Schneider points

out that he has provided evidence that TCE was not his alter ego. More specifically, in his affidavit,

he states: “TCE was a functioning Georgia limited liability company and was not in any way, shape,

or form my ‘alter ego,’ as alleged in the Complaint.” Schneider Aff. ¶ 9. While this is a bare bones

claim not fleshed out in any detail, it is still some evidence – and Pelican has made no attempt to

counter Mr. Schneider’s affidavit with any evidence of its own. Had Pelican simply provided its

own affidavit or declaration disputing Mr. Schneider’s affidavit, then the Court would be presented

with a factual dispute which it would have to resolve (at this stage in the proceedings) in Pelican’s

favor. Pelican’s failure to provide any evidence, though, is its undoing. Without any

counter-evidence at all, the Court cannot conclude that Pelican has made a prima facie showing of

any kind regarding alter ego liability. Pelican cannot simply rest on the allegations in its complaint

where some evidence has been supplied by Mr. Schneider (albeit weak evidence).

C. Intentional Misrepresentation

As to whether there is personal jurisdiction over any of the tort claims, the Court can focus

on the intentional misrepresentation claim as a representative claim.

Pelican alleges as follows with respect to its intentional misrepresentation claim: 

Defendants promised plaintiff that as per the Agreement, Defendants

as a sub-licensee acting on behalf of Pelican would manage the

collection, segregation and accounting of gross revenues from the

locations for payment of commissions to PELICAN. At the time these

Defendants made these promises, they did not intend to perform them

and knew that the representations were false.

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 There is nothing in Mr. Schneider’s affidavit that contradicts this inference arising from the

FAC. In his affidavit, Mr. Schneider does state: “I have not made any representations to Plaintiff

that I would personally pay for any obligations that [TCE] may have owed to Plaintiff.” Schneider

Aff. ¶ 8 (emphasis added). However, this does not mean that Mr. Schneider did not make a promise

that TCE would pay.

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FAC ¶ 33. If the Court were to liberally construe the above allegation, it could infer that Mr.

Schneider promised Pelican that TCE would pay commissions to Pelican even though he knew at the

time that TCE would not.1 

The issue thus becomes whether the above uncontroverted allegation in the FAC is enough to

give rise to specific jurisdiction over Mr. Schneider under the three-prong test described above. The

first prong of the specific jurisdiction test is the critical one – i.e., whether Mr. Schneider engaged in

purposeful direction or purposeful availment with respect to the forum. Given that the claim for

intentional misrepresentation is a tort claim, a purposeful direction analysis is more appropriate. See

Wash. Shoe Co. v. A-Z Sporting Goods Inc., 704 F.3d 668, 672-73 (9th Cir. 2012) (stating that,

“’[i]n tort cases, we typically inquire whether a defendant “purposefully direct[s] his activities” at

the forum state, applying an “effects” test that focuses on the forum in which the defendant’s actions

were felt, whether or not the actions themselves occurred within the forum’”). “[Under] Calder, the

‘effects’ test [for purposeful direction] requires that the defendant 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.” Schwarzenegger, 374 F.3d at 803.

Here, the Calder effects test is not met, particularly based on the record before the Court and

Supreme Court’s 2014 opinion, Walden v. Fiore, 134 S. Ct. 1115 (2014). In Walden, the Supreme

Court emphasized that “our ‘minimum contacts’ analysis looks to the defendant’s contacts with the

forum State itself, not the defendant’s contacts with persons who reside there.” Id. at 1122. The

Court also underscored that “mere injury to a forum resident is not a sufficient connection to the

forum. . . . The proper question is not where the plaintiff experienced a particular injury or effect but

whether the defendant’s conduct connects him to the forum in a meaningful way.” Id. at 1125. 

After Walden, it is not enough simply to claim the defendant injured the plaintiff who happens to

reside in the forum state and thus anticipated ultimate injury would be felt in the forum state. 

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In the instant case, Pelican’s argument in support of personal jurisdiction is counter to the

Supreme Court’s reasoning in Walden; it boils down to the contention that Mr. Schneider

intentionally targeted Pelican, a known resident of California, for imposition of an injury to be

suffered by Pelican while residing in California. See id. at 1124 n.8. Based on the record before the

Court, Mr. Schneider’s contact with California appears to be random or fortuitous – i.e., resulting

simply because Pelican happens to be a California resident. Cf. Premier Funding Group LLC v.

Aviva Life & Annuity Co., No. CV-14-01633-PHX-DGC, 2014 U.S. Dist. LEXIS 169335, at *14-15

(D. Ariz. Dec. 8, 2014) (stating that plaintiff “must show that [defendant] expressly aimed his

tortious conduct at Arizona, not simply at [plaintiff]”). Nothing in the complaint establishes the kind

of contact with California (as opposed to mere contact with a California resident) required by

Walden. 

II. CONCLUSION

Because Pelican has failed to make out a prima facie showing of personal jurisdiction on

either the contract claim or the tort claims, the Court grants Mr. Schneider’s motion to dismiss for

lack of personal jurisdiction. Furthermore, because Pelican failed to appear at the hearing, the Court

was not presented with any argument as to how Pelican might be able to allege or prove additional

facts establishing personal jurisdiction. Accordingly, the Court grants the motion to dismiss without

leave to amend.

This order disposes of Docket No. 19.

IT IS SO ORDERED.

Dated: February 6, 2015

_________________________

EDWARD M. CHEN

United States District Judge

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