Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_09-cv-01142/USCOURTS-casd-3_09-cv-01142-0/pdf.json

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

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 The FAC corrected the spelling of the last name of Defendant Jeff Fischer.

Otherwise, the allegations of the original Complaint and the FAC are identical.

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

D&P DESIGN, LLC,

Plaintiff,

CASE NO. 09cv1142 WQH (BLM)

ORDER

vs.

MED-1 PARTNERS, LLC,

Defendant.

HAYES, Judge:

The matters before the Court are the Motion to Transfer (Doc. # 6) and the Motion to

Dismiss (Doc. # 9, 20).

I. Background

On May 27, 2009, Plaintiff D&P Design, LLC (“D&P”) initiated this action by filing

a Complaint against Defendants Med-1 Partners, LLC (“Med-1”), Jeff Fisher and Luther

Schriefer. (Doc. # 1). On June 2, 2009, D&P filed a First Amended Complaint (“FAC”)

against Defendants Med-1, Jeff Fischer and Luther Schriefer.1

 (Doc. # 3).

A. Allegations of the FAC

On February 5, 2009, D&P (a California corporation with its principal place of business

in San Diego County, California) and MED-1 (a Delaware corporation with its principal place

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of business in Bethesda, Maryland) “entered into a written agreement (the ‘Agreement’)

providing, among other things, that D&P would be the exclusive distributor for MED-1 in

India ... for the sale of MED-1’s Mobile Medical Facilities (‘MMFs’). The Agreement was

signed by Fischer as Managing Director of MED-1. The Agreement provided that the MMFs

would include mobile emergency departments, mobile cardiac facilities, mobile diagnostic

facilities and mobile medical clinics.” (FAC, Doc. # 3, ¶¶ 1-2, 9). “The parties agreed that the

Agreement would be for two years and D&P would be paid 10% of the gross sales price from

the sale of MMFs in India.” (Id. ¶ 10). “The parties further agreed that they would enter into

an agreement whereby MED-1 would pay D&P 10% of the gross sales price from the sale of

MMFs to parties ... introduced to MED-1 by D&P.” (Id. ¶ 13).

“Based on the Agreement, MED-1 caused business cards to be made for three

representatives of D&P identifying them as MED-1’s Lead Country Advisors in India. The

business cards listed MED-1’s business address and phone number in Bethesda, Maryland, and

listed separate e-mail addresses on MED-1’s domain address. MED-1 also set up e-mail

accounts at MED-1 with passwords for D&P representatives. MED-1’s representatives

introduced D&P representatives as MED-1’s Lead Country Advisors for India.” (Id. ¶ 14).

“In reliance on MED-1’s promises, and the Agreement,” representatives of D&P

traveled to India and introduced Med-1 representatives to a potential buyer of Med-1’s MMFs.

(Id. ¶¶ 15-16). Representatives of D&P also introduced Med-1 representatives “to two

potential agents for the sale of MMFs in Jordan and Iraq.” (Id. ¶ 17).

“On March 31, 2009, MED-1 sent D&P a draft ‘Representative Agreement’ that was

inconsistent with the terms of the Agreement. By way of example only, it proposed a one year

term, not two years, and it proposed an unspecified percentage of the net sales price, not 10%

of the gross sales price as agreed in the Agreement. The draft ‘Representative Agreement’ also

did not include any provisions regarding payments to D&P from the sales of MMFs to parties

outside India introduced to MED-1 by D&P.” (Id. ¶¶ 20-21). 

On April 8, 2009, “Schriefer on behalf of MED-1 denied that D&P were MED-1’s Lead

Country Advisors for India at that time, and demanded that D&P cease holding itself out as

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 The Motion to Dismiss, filed on June 19, 2009, referenced only the initial Complaint.

(Doc. # 9). On July 28, 2009, Med-1 refiled the Motion to Dismiss to reference the FAC.

(Doc. # 20). On August 13, 2009, the Court granted Med-1’s “Ex Parte Motion for an Order

Deeming Its Pending Motion to Dismiss Responsive to Plaintiff’s First Amended Complaint,”

and ordered that “[a]ll briefs and other materials submitted by the parties in support of, and in

opposition to, the Motion to Dismiss the original Complaint (Doc. # 9) will be deemed

applicable to the Motion to Dismiss the First Amended Complaint (Doc. # 20).” (Doc. # 26

at 1). The Court also provided D&P an opportunity to supplement its opposition to the Motion

to Dismiss. (Doc. # 26 at 1).

3

 D&P does not challenge the authenticity of the Agreement submitted by Defendants.

(Opp’n to Mot. to Dismiss, Doc. # 16, at 14-15 (citing to “Defendant’s Ex. 1” as the

Agreement)). The Court takes judicial notice of the Agreement, Doc. # 7-2, Ex. 1. See No.

84 Employer-Teamster Joint Council Pension Trust Fund v. Am. W. Holding Corp., 320 F.3d

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such.” (Id. ¶ 24). “On April 29, 2009, Schriefer on behalf of MED-1 sent D&P a letter

unilaterally terminating the Agreement, and demanding that D&P cease holding itself out as

MED-1’s Lead Country Advisor in India or elsewhere.” (Id. ¶ 28).

The FAC alleges claims for (1) breach of contract, (2) breach of the covenant of good

faith and fair dealing, (3) intentional misrepresentation, (4) false promise, and (5) negligent

misrepresentation. With respect to the first two causes of action, D&P alleges that “D&P has

suffered damages in an amount to be proven at the time of trial, but not less than $75,000.”

(Id. ¶¶ 33, 39). D&P seeks compensatory and punitive damages. (Id. at 7-10).

B. Motion to Dismiss and Motion to Transfer

On June 19, 2009, Defendants filed the Motion to Dismiss on the following grounds:

(1) the Court lacks subject-matter jurisdiction; (2) the Court lacks personal jurisdiction over

the Defendants; (3) the venue is improper; (4) the FAC fails to state a claim upon which relief

can be granted.2

 (Doc. # 9). On June 19, 2009, Defendants filed the Motion to Transfer,

moving the Court to transfer this action pursuant to 28 U.S.C. § 1404(a) to the United States

District Court for the District of Columbia or to the United States District Court for the District

of Maryland, Greenbelt Division. (Doc. # 6).

In support of the Motion to Transfer and the Motion to Dismiss, Defendants attached

a Declaration from Jeff Fischer, Director of Business and Government Affairs for Med-1, a

Declaration from Luther Schriefer, Managing Director for Med-1, and a copy of the

“Agreement” referenced in the FAC.3

 (Fischer Decl., Doc. # 7-3, ¶ 3; Schriefer Decl., Doc.

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28 920, 925 n.2 (9th Cir. 2003) (“Under the incorporation by reference doctrine, [a district court]

also consider[s] documents submitted by Defendants that were referenced in the complaint and

whose authenticity has not been questioned.”).

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# 7-4, ¶ 3).

On July 7, 2009, D&P voluntarily dismissed Defendants Jeff Fischer and Luther

Schriefer without prejudice pursuant to Federal Rule of Civil Procedure 41(a). (Doc. # 11).

On July 13, 2009, D&P filed an opposition to the Motion to Dismiss and Motion to

Transfer, including a Declaration from Darya Nasr, co-owner of D&P, and a Declaration from

Mukesh Assomull, the husband of Priya Waney Assomull, co-owner of D&P. (Nasr Decl.,

Doc. # 15-3, ¶ 1; Assomull Decl., Doc. # 15-8, ¶ 1).

C. Evidence Submitted by the Parties

Med-1 is not a citizen of California, does not have any offices in California, is not

authorized to do business in California, and “does not regularly do or solicit business, engage

in any other persistent course of conduct in California or derive substantial revenue from

goods, food, services, or manufactured products used or consumed in California.” (Fischer

Decl., Doc. # 7-3, ¶¶ 5-8). Both Fischer and Schriefer live in the Washington D.C. area and

work at Med-1’s offices in Bethesda, Maryland, approximately two miles from the District of

Columbia. (Fischer Decl., Doc. # 7-3, ¶¶ 1, 25; Schriefer Decl., Doc. # 7-4, ¶¶ 27-28).

D&P is a California limited liability company with its primary place of business in the

home of co-owner Assomull in La Jolla, California. (Nasr Decl., Doc. # 15-3, ¶ 2). In July

2008, Nasr, D&P’s co-owner, moved to Potomac, Maryland, where she currently lives. (Nasr

Decl., Doc. # 15-3, ¶ 3).

In September 2008, Nasr, co-owner of D&P, and Schriefer, Managing Director for

Med-1, met for the first time during a flight from San Diego to Washington, D.C. (Nasr Decl.,

Doc. # 15-3, ¶ 5). On this flight, Schriefer told Nasr about Med-1’s MMFs, said that Med-1

was “looking for agents in countries outside the United States,” and gave Nasr his business

card. (Nasr Decl., Doc. # 15-3, ¶ 5).

On November 6, 2008, Schriefer met with Nasr, the Assomulls, and Sahel Assar, Nasr’s

sister, in Bethesda, Maryland. (Schriefer Decl., Doc. # 7-4, ¶ 14; Assomull Decl., Doc. # 15-8,

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¶ 3). “The purpose of this meeting was for introductions and to consider doing business in

India.” (Schriefer Decl., Doc. # 7-4, ¶ 14). On November 7, 2008, Fischer and Schriefer met

with the Assomulls and Nasr in Washington, D.C. (Schriefer Decl., Doc. # 7-4, ¶ 18). “The

purpose of the meeting was to introduce ... Fischer to those three individuals and to discuss

how they might play a role in Med-1’s efforts to sell mobile medical facilities in India.”

(Schriefer Decl., Doc. # 7-4, ¶ 18). On January 23, 2009, Schriefer met with the Assomulls

and Nasr in Washington, D.C. (Schriefer Decl., Doc. # 7-4, ¶ 19). “The purpose of the

meeting was to discuss with Mr. Assomull his concept of developing India as a market for

Med-1.” (Schriefer Decl., Doc. # 7-4, ¶ 19). On February 5, 2009, Fischer and Nasr executed

the Agreement between Med-1 and D&P at Med-1’s office in Bethesda, Maryland. (Fischer

Decl., Doc. # 7-3, ¶ 15).

The Agreement is in the form of a letter addressed to Nasr at D&P’s La Jolla address,

signed by Defendant Jeff Fischer on behalf of Med-1. Below Fischer’s signature is written,

“Agreed and accepted on this 5th day of February, 2009 by D&P,” followed by Nasr’s

signature. (Id. at 2). The Agreement provides that “Med-1 grants to D&P ... the exclusive

distribution rights for MMFs to parties within India....” (Defs.’ Ex. 1, Doc. # 7-2, at 1). The

Agreement continues: “The exclusivity arrangements ... are intended to be a legally binding

obligation of the parties. However, the other details of the distribution arrangements set forth

herein are not intended to be legally binding and are subject to the completion, to the mutual

satisfaction of the parties, of the [master distributor agreement] between the parties containing

normal terms and conditions of an agreement of that type.” (Id.) The Agreement also provides

that the “master distributor agreement” “shall be interpreted and construed in accordance with

the law of the State of Delaware.” (Id.)

On March 26 and 27, 2009, Schriefer met with the Assomulls in Charlotte, North

Carolina. (Schriefer Decl., Doc. # 7-4, ¶ 20; Assomull Decl., Doc. # 15-8, ¶¶ 17-18). “The

purpose of this meeting was to tour the Med-1 facility located in Concord, North Carolina.”

(Schriefer Decl., Doc. # 7-4, ¶ 20).

According to Fischer and Schriefer:

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Subsequent to the signing of the February 5, 2009 [Agreement], Med-1

ultimately decided to break off its discussions with D&P because of grave

concerns that we had developed regarding the business practices of D&P,

including Mr. Assomull’s confession to [Fischer and Schriefer] that he had

previously been convicted of a felony, and our subsequent determination that

Mr. Assomull had served approximately five years in prison for money

laundering. It was also the opinion of Med-1 that some of D&P’s proposed

business practices did not comport with the Foreign Corrupt Practices Act.

(Fischer Decl., Doc. # 7-3, ¶ 21; Schriefer Decl., Doc. # 7-4, ¶ 26). On April 24, 2009, MED1’s counsel called D&P’s counsel “about ... information Med-1 wanted to assure compliance

with the Foreign Corrupt Practices Act.” (Swan Decl., Doc. # 15-2, ¶ 2). On April 29, 2009,

Schriefer e-mailed D&P a letter, addressed to Nasr and Priya Waney Assomull at D&P’s La

Jolla address, terminating the Agreement. (Nasr Decl., Doc. # 15-3, Ex. 1 at 272-73). The

letter, signed by Schriefer, states that Med-1 is “not confident at this time that engaging D&P

... would permit us satisfactorily to achieve [Med-1’s] goals of transparency and compliance

[with U.S. and foreign laws, including the Foreign Corrupt Practices Act].” (Nasr Decl., Doc.

# 15-3, Ex. 1 at 273). The letter concludes: “At this time, Med-1 ... does not anticipate

conducting business or marketing its mobile medical units to private entities in India or to any

parties introduced to us by D&P. As a result, we are hereby terminating the Letter Agreement

dated February 5, 2009 and request that you, Mr. Mukesh Assomull and D&P cease to hold

yourselves out as Med-1’s ... agents or representatives in India or elsewhere.” (Nasr Decl.,

Doc. # 15-3, Ex. 1 at 273).

According to Med-1’s evidence: “No meetings relating to the [Agreement] dated

February 5, 2009 or any potential distribution agreement between Med-1 and D&P ever took

place in the State of California.” (Fischer Decl., Doc. # 7-3, ¶ 16; Schriefer Decl., Doc. # 7-4,

¶ 21). Both Fischer and Schriefer state: “All of the telephone and e-mail communications that

I had with representatives of D&P after our meeting in Washington, D.C. regarding the

potential relationship between Med-1 and D&P were made from Washington, D.C. or the

surrounding metropolitan area.” (Fischer Decl., Doc. # 7-3, ¶ 17; Schriefer Decl., Doc. # 7-4,

¶ 22). Both Fischer and Schriefer state that Dr. Gerald W. Fischer, residing in Bethesda,

Maryland, is an individual “with knowledge relating to the relationship between Med-1 and

D&P.” (Fischer Decl., Doc. # 7-3, ¶ 27; Schriefer Decl., Doc. # 7-4, ¶ 30). Both Fischer and

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Schriefer state that they possess documents related to the “potential relationship between Med1 and D&P” in Washington D.C. and Bethesda. (Fischer Decl., Doc. # 7-3, ¶ 26; Schriefer

Decl., Doc. # 7-4, ¶ 29). Both Med-1 representatives state that “it would pose a great burden

for me to travel to California in connection with defending against Plaintiff’s lawsuit.”

(Fischer Decl., Doc. # 7-3, ¶ 28; Schriefer Decl., Doc. # 7-4, ¶ 31).

According to D&P’s evidence, “[d]uring the nearly eight month relationship, Med-1 and

D&P, either through their representatives or lawyers, sent dozens of e-mails, documents, drafts

and final agreements to or from San Diego, and participated in numerous telephone calls to or

from San Diego. The two principals of D&P [i.e., Nasr and Priya Waney Assomull] met on

numerous occasions in San Diego to discuss D&P’s relationship with Med-1.” (Assomull

Decl., Doc. # 15-8, ¶ 17; see also Nasr Decl., Doc. # 15-3, ¶¶ 6, 9, 11-15.) Med-1 created

business cards identifying the Assomulls and Nasr as Med-1’s “Lead Count[r]y Advisors for

India.” (Assomull Decl., Doc. # 15-8, ¶ 11). These cards, as well as a “Med-1 specification

book,” were mailed to D&P in San Diego. (Assomull Decl., Doc. # 15-8, ¶¶ 11, 15).

In addition to the trips to Maryland, Washington D.C. and North Carolina described

above, the Assomulls traveled to India in December 2008, where they “explored business

opportunities for Med-1.” (Assomull Decl., Doc. # 15-8, ¶ 5.) On February 6, 2009, Mukesh

Assomull again traveled to India, where he “introduced ... Med-1 representatives to interested

buyers in India and helped market Med-1’s MMFs.” (Assomull Decl., Doc. # 15-8, ¶ 12.)

According to Mukesh Assomull, “[t]he out-of-pocket costs for these five trips, the legal costs

related to D&P’s work with Med-1, and other related miscellaneous expenses, along with the

value of the time spent by the D&P representatives on their work for Med-1 exceed $100,000.”

(Assomull Decl., Doc. # 15-8, ¶ 19.)

II. Subject-Matter Jurisdiction

Med-1 moves to dismiss this action for lack of subject matter jurisdiction pursuant to

Federal Rule of Civil Procedure 12(b)(1). A federal court has subject matter jurisdiction over

an action that either arises under federal law, or when there is complete diversity of citizenship

between the parties and the amount in controversy exceeds $75,000. See 28 U.S.C. §§ 1331,

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 Section 1332(a) provides that “[t]he district courts shall have original jurisdiction of

all civil actions where the matter in controversy exceeds the sum or value of $75,000,

exclusive of interest and costs, and is between ... citizens of different States.” 28 U.S.C. §

1332(a)(1).

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1332(a). “When subject matter jurisdiction is challenged under Federal Rule of Procedure

12(b)(1), the plaintiff has the burden of proving jurisdiction in order to survive the motion.”

Tosco Corp. v. Communities for a Better Env’t, 236 F.3d 495, 499 (9th Cir. 2001) (citation

omitted). “Rule 12(b)(1) jurisdictional attacks can be either facial or factual.” White v. Lee,

227 F.3d 1214, 1242 (9th Cir. 2000) (citation omitted); see also 5B Wright and Miller, Federal

Practice and Procedure: Civil 3d § 1350 (2004) (“Wright and Miller”). Facial attacks

challenge the sufficiency of the pleading pursuant to Federal Rule of Civil Procedure 8(a)(1),

“which means that the allegations in the complaint are insufficient to show that the federal

court has jurisdiction over the subject matter of the case as [Rule 8] requires.” Wright and

Miller § 1350. A factual attack, on the other hand, permits the movant to challenge the

substance of the jurisdictional allegations and “the district court is not restricted to the face of

the pleadings, but may review any evidence, such as affidavits and testimony, to resolve

factual disputes concerning the existence of jurisdiction.” McCarthy v. United States, 850 F.2d

558, 560 (9th Cir. 1988); see also Thornhill Pub. Co. v. Gen. Tel. & Elecs. Corp., 594 F.2d

730, 733 (9th Cir. 1979).

Plaintiff filed this action based upon federal diversity jurisdiction pursuant to 28 U.S.C.

§ 1332(a).4

 D&P is a California limited liability company with its principal place of business

in California. (FAC, Doc. # 3, ¶ 1; Nasr Decl., Doc. # 15-3, ¶ 2). Med-1 is a Delaware limited

liability company with its principal place of business in Maryland. (FAC, Doc. # 3, ¶ 2;

Fischer Decl., Doc. # 7-3, ¶ 4). The FAC alleges an amount in controversy in excess of

$75,000. (FAC, Doc. # 3, ¶¶ 8, 33, 39, 48, 58.) D&P seeks compensatory damages for its

breach of contract and misrepresentation claims. (FAC, Doc. # 3, at 9-10). Under Delaware

law, “compensatory damages are measured by the plaintiff’s ‘out-of-pocket’ actual loss.”

Strassburger v. Earley, 752 A.2d 557, 579 (Del. Ch. 2000); see also Chase Manhattan

Mortgage Corp. v. Advanta Corp., No. Civ. A. 01-507 KAJ, 2005 WL 2234608, at *22 (D.

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 The parties agree that the Agreement is to be construed in accordance with Delaware

law. (Pl.’s Opp’n Mot. Dismiss, Doc. # 16, at 15 n.16; Defs.’ Corrected Mem. Supp. Mot.

Dismiss, Doc. # 9-2, at 14 n.10; Defs.’ Ex. 1, Doc. # 7-2, at 1).

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Del., Sept. 8, 2005) (applying rule to breach of contract damages).5 D&P submitted evidence

indicating that D&P representatives have incurred over $100,000 in travel and other expenses

“in reliance on Med-1’s promises, and the Agreement.” (FAC, Doc. # 3, ¶ 16; Assomull Decl.,

Doc. # 15-8, ¶¶ 5, 12, 19.) D&P has satisfied its burden of establishing that there is complete

diversity of citizenship between the parties and the amount in controversy exceeds $75,000.

See 28 U.S.C. § 1332(a). The Motion to Dismiss for lack of subject-matter jurisdiction is

denied.

III. Personal Jurisdiction

Med-1 moves to dismiss this action for lack of personal jurisdiction pursuant to Federal

Rule of Civil Procedure 12(b)(2). “In opposition to a defendant’s motion to dismiss for lack

of personal jurisdiction, the plaintiff bears the burden of establishing that jurisdiction is

proper.” Boschetto v. Hansing, 539 F.3d 1011, 1015 (9th Cir. 2008) (citation omitted). In the

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

jurisdictional facts.” Id. (quotation omitted). “Uncontroverted allegations in the plaintiff’s

complaint must be taken as true. Conflicts between the parties over statements contained in

affidavits must be resolved in the plaintiff’s favor.” Id. (quotation omitted). 

The exercise of personal jurisdiction over a nonresident defendant must be authorized

under the state’s long-arm statute and must satisfy the due process clause of the United States

Constitution. See Pac. Atl. Trading Co. v. M/V Main Express, 758 F.2d 1325, 1327 (9th Cir.

1985). “California’s long-arm statute is co-extensive with federal standards, so a federal court

may exercise personal jurisdiction if doing so comports with federal constitutional due

process.” Boschetto, 539 F.3d at 1015; see also Cal. Civ. Pro. Code § 410.10. Due process

requires that a defendant have such “minimum contacts” with the forum state that the exercise

of jurisdiction over the defendant does not offend “traditional notions of fair play and

substantial justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1954). Under due

process analysis, a defendant may be subject to either general or specific personal jurisdiction.

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 A court can also exercise general personal jurisdiction if the defendant’s contact with

the forum is “substantial, continuous and systematic.” Helicopteros Nacionales, 466 U.S. at

414-15. D&P does not contend that the Court has general personal jurisdiction over Med-1

or that Med-1 has contacts with California are “substantial, continuous and systematic.” See

id.

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See Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 414 (1984).

A court exercises specific personal jurisdiction6

 over a defendant where “the cause of

action arises out of or has a substantial connection to the defendant’s contacts with the forum.”

Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain Co., 284 F.3d 1114, 1123 (9th Cir.

2002) (citation omitted). The Ninth Circuit analyzes specific jurisdiction according to a threeprong test:

(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 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 forumrelated activities; and

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

justice, i.e. it must be reasonable.

Boschetto, 539 F.3d at 1016 (quotation omitted). “The plaintiff bears the burden on the first

two prongs. If the plaintiff establishes both prongs one and two, the defendant must come

forward with a compelling case that the exercise of jurisdiction would not be reasonable. But

if the plaintiff fails at the first step, the jurisdictional inquiry ends and the case must be

dismissed.” Id. (quotation omitted).

For part one of the three-part test, the Ninth Circuit has “analyzed cases that sound

primarily in contract ... under a purposeful availment standard.” Id. (quotation omitted). “A

showing that a defendant purposefully availed himself of the privilege of doing business in a

forum state typically consists of evidence of the defendant’s actions in the forum, such as

executing or performing a contract there. By taking such actions, a defendant purposefully

avails itself of the privilege of conducting activities within the forum State, thus invoking the

benefits and protections of its laws. In return for these benefits and protections, a defendant

must–as a quid pro quo–submit to the burdens of litigation in that forum.” Schwarzenegger

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v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004) (quotations omitted). “Our

evaluation of the jurisdictional significance of a defendant’s contract or other business in the

forum is not rigid and formalistic, but rather practical and pragmatic.” Boschetto, 539 F.3d at

1016 (quotation omitted). “In doing so, [courts] are guided by the Supreme Court’s

admonition that the formation of a contract with a nonresident defendant is not, standing alone,

sufficient to create jurisdiction.” Id. (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462,

478 (1985) (“If the question is whether an individual’s contract with an out-of-state party alone

can automatically establish sufficient minimum contacts in the other party’s home forum, we

believe the answer clearly is that it cannot.”) (emphasis in original)).

In Burger King Corp., the Supreme Court held that a Michigan franchisee had

purposely availed himself of the privilege of conducting activities in Florida when the

franchisee “entered into a carefully structured 20-year relationship that envisioned continuing

and wide-reaching contacts with Burger King in Florida.” Burger King Corp., 471 U.S. at 480.

The franchise agreement required the franchisee’s “voluntary acceptance of the long-term and

exacting regulation of his business from Burger King’s Miami headquarters.” Id.

Additionally, in explaining why the court of appeals erred in holding that the Florida court did

not have personal jurisdiction over the franchisee, the Supreme Court stated: “we believe the

Court of Appeals gave insufficient weight to provisions in the various franchise documents

providing that all disputes would be governed by Florida law.” Id. at 481.

In Roth v. Garcia Marquez, 942 F.2d 617 (9th Cir. 1991), a film-maker filed a breach

of contract action against a Mexican author and his agent. The court noted that during the

contract negotiations, while the defendants met once with plaintiff in California, plaintiff made

the “predominant efforts” to “reach[] out to effect the contract” by traveling to Mexico,

Havana, and Barcelona to meet with defendants. Id. at 621 (quotation omitted). However, the

Ninth Circuit “concluded, albeit narrowly, that [the Mexican author and his agent] purposefully

availed themselves of the privilege of conducting activities in California.” Id. at 623. The

decisive factor was that “most of the future of the contract would have centered on the forum”

because “the contract concerned a film, most of the work for which would have been

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performed in California.” Id. at 622 (“In looking at the economic reality, it seems that the

contract’s subject would have continuing and extensive involvement with the forum.”)

(quotation omitted).

In Thomas P. Gonzalez Corp. v. Consejo Nacional de Produccion de Costa Rica, 614

F.2d 1247 (9th Cir. 1980), plaintiff was an international grain trader based in California who

sold 15 shipments of grain to the defendant, a Costa Rican interest, and who purchased two

shipments of grain from the defendant, all over a four-year period. See id. at 1249. All

contracts specified delivery in Costa Rica and none of the shipments were delivered to or

originated from California. See id. The court found that plaintiff’s California residency, the

fact that plaintiff would suffer financial impacts in California, and the parties’ use of the mails

and telephone between California and Costa Rica were insufficient to establish the purposeful

availment prong for California jurisdiction. See id. at 1253-54.

D&P and Med-1 exchanged numerous telephone calls, e-mails and mailings during the

course of their negotiations and business relationship. (Assomull Decl., Doc. # 15-8, ¶ 17;

Nasr Decl., Doc. # 15-3, ¶ 15; Fischer Decl., Doc. # 7-3, ¶ 17; Schriefer Decl., Doc. # 7-4, ¶

22). This is insufficient to establish that Med-1 purposely availed itself of the of the privilege

of conducting activities in California. See Thomas P. Gonzalez Corp., 614 F.2d at 1254 (“The

[defendant] validly argues that use of the mails, telephone, or other international

communications simply do not qualify as purposeful activity invoking the benefits and

protection of the state.”) (citation omitted); see also Roth, 942 F.2d at 622 (same); McGlinchy

v. Shell Chem. Co., 845 F.2d 802, 816 (9th Cir. 1988) (“[N]o authorized agents of [defendant]

were alleged to have performed or executed any portion of the contract in California. The

parties conducted contract execution and termination by international mail. Such contacts are

insufficient to constitute an act purposefully availing [defendant] of California laws.”) (citation

omitted). All of the face-to-face meetings between the parties in this case took place outside

of California, and the Agreement was executed by both parties in Maryland. (Fischer Decl.,

Doc. # 7-3, ¶¶ 15-16; Schriefer Decl., Doc. # 7-4, ¶¶ 14, 18-21; Assomull Decl., Doc. # 15-8,

¶¶ 3, 17-18). Nasr and Schriefer initially met on a flight from San Diego to Washington, D.C.

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(Nasr Decl., Doc. # 15-3, ¶ 5). To the extent this qualifies as a relevant “contact[] with the

forum” by Med-1, Glencore Grain Rotterdam B.V., 284 F.3d at 1123, it constitutes the type

of “minimal physical presence in the forum” which “work[ed] in [defendant]’s favor” in Roth.

Roth, 942 F.2d at 622 (referencing a single meeting in the forum: “[Defendants] were in Los

Angeles for other purposes when each met individually with [plaintiff]. While we concede that

negotiations did take place at that time, it should be borne in mind that temporary physical

presence in the forum does not suffice to confer personal jurisdiction.”) (quotation omitted).

Unlike the facts in Burger King Corp., the Agreement did not require “the long-term

and exacting regulation of [Med-1’s] business from [D&P]’s [La Jolla] headquarters,” and the

Agreement provides that it is to be interpreted in accordance with the law of Delaware–not

California. Burger King Corp., 471 U.S. at 480-81; Defs.’ Ex. 1, Doc. # 7-2, at 1. Unlike in

Roth, where “the contract’s subject [i.e., the production of a film] would have continuing and

extensive involvement with the forum [i.e., California],” the subject of the Agreement was

focused on the sale of MMFs in India. Roth, 942 F.2d at 622; Defs.’ Ex. 1, Doc. # 7-2, at 1;

FAC, Doc. # 3, ¶¶ 9-11, 14). There are additional allegations that D&P introduced Med-1

representatives “to two potential agents for the sale of MMFs in Jordan and Iraq.” (FAC, Doc.

# 3, ¶ 17; see also id., ¶¶ 18-19). There is no allegation or evidence that Med-1 sought to sell

MMFs to California buyers or that Med-1 requested D&P to seek out potential buyers in

California.

The fact that “[t]he two principals of D&P met on numerous occasions in San Diego to

discuss D&P’s relationship with Med-1” (Assomull Decl., Doc. # 15-8, ¶ 17), represents only

D&P’s internal and unilateral activity, and is insufficient to confer personal jurisdiction on

Med-1. See McGlinchy, 845 F.2d at 816 (“[Plaintiffs]’ statement that they performed 90% of

their activities in the Bay Area, even if accurate, describes only unilateral activity.... [S]uch

activity fails to create personal jurisdiction over [defendant].”). The fact that D&P is a

California resident and that Med-1’s termination of the Agreement allegedly caused a

California resident injury is likewise insufficient to confer personal jurisdiction. See Thomas

P. Gonzalez Corp., 614 F.2d at 1253 (“The [defendant] correctly notes that only its activities

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in California, and not [plaintiff]’s, can supply the basis for jurisdiction. It is not sufficient that

the plaintiff is a California resident, or that an act outside California imposes an economic

burden on a California resident.”) (citations omitted); see also Gray & Co. v. Firstenberg

Machinery Co., Inc., 913 F.2d 758, 760-61 (9th Cir. 1990) (“The foreseeability of causing

injury in another state is not a sufficient basis on which to exercise jurisdiction.”) (citing

Burger King Corp., 471 U.S. at 474).

The Court concludes that D&P has failed to satisfy its burden of showing that Med-1

purposefully availed itself of the privilege of doing business in California. D&P has failed to

satisfy its burden of establishing the first prong of the Ninth Circuit’s three-prong specific

jurisdiction test. See Boschetto, 539 F.3d at 1016. Therefore, “the jurisdictional inquiry ends.”

Id. (“[I]f the plaintiff fails at the first step, the jurisdictional inquiry ends....”) (quotation

omitted).

IV. Dismiss or Transfer the Action

Having concluded that the Court lacks personal jurisdiction over Med-1, the Court must

determine whether to dismiss this action pursuant to the Federal Rule of Civil Procedure

12(b)(2) or transfer this action to another court pursuant to 28 U.S.C. § 1631. See Pamplona

ex rel. Pamplona v. Hernandez, No. 08cv2205, 2009 WL 578578, at *3 (S.D. Cal., Mar. 5,

2009) (after concluding that the court did not have personal jurisdiction over two defendants,

“[t]he Court must determine whether transfer [pursuant to § 1631] is more appropriate than

dismissal”). “The transfer of civil actions among federal courts to cure jurisdictional defects

is governed by 28 U.S.C. § 1631.” Cruz-Aguilera v. INS, 245 F.3d 1070, 1074 (9th Cir. 2001).

Section 1631 provides: “Whenever a civil action is filed in a court ... and that court finds that

there is a want of jurisdiction, the court shall, if it is in the interest of justice, transfer such

action ... to any other such court in which the action ... could have been brought at the time it

was filed....” 28 U.S.C. § 1631. A § 1631 transfer is appropriate if “(1) the transferring court

lacks jurisdiction; (2) the transferee court could have exercised jurisdiction at the time the

action was filed; and (3) the transfer is in the interest of justice.” Cruz-Aguilera, 245 F.3d at

1074.

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As discussed above, this Court lacks jurisdiction over Med-1. Med-1 filed a Motion to

Transfer simultaneously with the Motion to Dismiss, moving the Court to transfer this action

to the United States District Court for the District of Columbia or, alternatively, to the United

States District Court for the District of Maryland, Greenbelt Division. (Doc. # 6). As Med-1’s

principal place of business is in Bethesda, Maryland (Fischer Decl., Doc. # 7-3, ¶ 4), and the

Agreement was negotiated in part and executed in Bethesda (id., ¶ 15; Schriefer Decl., Doc.

# 7-4, ¶ 14; Assomull Decl., Doc. # 15-8, ¶ 3), the United States District Court for the District

of Maryland “could have exercised jurisdiction at the time the action was filed.”

Cruz-Aguilera, 245 F.3d at 1074; see 28 U.S.C. 1391(a) (“A civil action wherein jurisdiction

is founded only on diversity of citizenship may ... be brought only in (1) a judicial district

where any defendant resides, if all defendants reside in the same State, [or] (2) a judicial

district in which a substantial part of the events or omissions giving rise to the claim

occurred....”). The sole remaining issue is whether transfer is “in the interest of justice.”

Cruz-Aguilera, 245 F.3d at 1074.

“When determining whether transfer is in the interest of justice, courts have considered

whether the failure to transfer would prejudice the litigant, whether the litigant filed the

original action in good faith, and other equitable factors.” Id. (citation omitted). “Normally

transfer will be in the interest of justice because normally dismissal of an action that could be

brought elsewhere is ‘time-consuming and justice-defeating.’” Miller v. Hambrick, 905 F.2d

259, 262 (9th Cir. 1990) (quoting Goldlawr, Inc. v. Heiman, 369 U.S. 463, 467 (1962)).

There is no indication from the record that D&P filed the action in this Court in bad

faith. In response to the Motion to Dismiss for improper venue, D&P requested that the Court

transfer, rather than dismiss, the action. (Doc. # 16 at 13 n.14). The Court finds that

dismissing this action would be “time-consuming and justice-defeating.” Goldlawr, Inc., 369

U.S. at 467. In the interest of justice, this action shall be transferred to the United States

District Court for the District of Maryland, Greenbelt Division pursuant to 28 U.S.C. § 1631.

//

//

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V. Conclusion

IT IS HEREBY ORDERED that the Clerk of the Court shall TRANSFER this action

to the United States District Court for the District of Maryland, Greenbelt Division pursuant

to 28 U.S.C. § 1631. The Motion to Transfer pursuant to 28 U.S.C. § 1404(a) is DENIED as

moot. (Doc. # 6). The Motion to Dismiss is DENIED without prejudice to refile before the

transferee court. (Doc. # 9, 20).

DATED: October 7, 2009

WILLIAM Q. HAYES

United States District Judge

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