Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_12-cv-01078/USCOURTS-casd-3_12-cv-01078-2/pdf.json

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

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

EDU-SCIENCE (USA), INC.,

Plaintiff,

Case No. 12cv01078 BTM (WMC)

ORDER DENYING EDU-HK’S

v. MOTION TO DISMISS

INTUBRITE, LLC,

Defendant.

INTUBRITE, LLC,

Counterclaimant,

v.

EDU-SCIENCE (USA), INC.; and

EDU-SCIENCE (HK) LTD.,

Counterdefendants.

In its answer to the Complaint, Defendant IntuBrite, LLC (“IntuBrite”) brought

counterclaims against Plaintiff Edu-Science (USA), Inc. (“EDU-USA”) and third party

Edu-Science (HK) Ltd. (“EDU-HK”). On November 23, 2012, EDU-HK filed a

motion to dismiss IntuBrite’s counterclaims against it on the grounds of lack of

personal jurisdiction and forum non conveniens (ECF No. 34). For the reasons below,

EDU-HK’s motion to dismiss is DENIED.

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I. BACKGROUND

On February 16, 2012, EDU-USA filed suit against IntuBrite for breach of

contract. In its answer, IntuBrite brought counterclaims against EDU-USA and

EDU-HK for: 1) breach of contract; 2) breach of the implied warranty of

merchantability; 3) negligence; 4)intentional interference with prospective advantage;

5) intentional misrepresentation of fact; and 6) negligent misrepresentation of fact.

This case arises out of a contract dispute for the supply of medical equipment,

specifically stylettes and laryngoscopes with pouches. Plaintiff EDU-USA claims that

IntuBrite breached its contracts by, inter alia, failing to pay for the goods it had

ordered. IntuBrite, in turn, claims that the goods were defective and/or otherwise failed

to conform to what had been ordered.

IntuBrite, a California limited liability company with its principal place of

business in California, brings its counterclaims both against the plaintiff, EDU-USA,

and a third party, EDU-HK. The reason for this appearsto be that both price quotations

– the one for the stylettes and the one for the laryngoscopes with pouches – state

toward the bottom, “For and on behalf of Edu-Science (H.K.) Ltd.” See Compl., Ex.

A & D. IntuBrite has not otherwise made any allegations as to EDU-HK’s

involvement. According to EDU-USA, it is not affiliated with EDU-HK, but rather

“Edu-Science (HK) LTD. is simply a supplier to EDU-USA who is simply a

purchaser.” See EDU-USA Answer (ECF No. 21), ¶5. However, EDU-HK

acknowledges that Patrick Ng, with whom IntuBrite communicated regarding the

medical equipment, is vice president of both EDU-USA and EDU-HK. According to

Mr. Ng’s declaration, however, he is a vice president of EDU-HK “in name only.” See

EDU-HK’s Reply (ECF No. 37), Decl. of Patrick Ng ¶3. EDU-HK otherwise denies

any affiliation with EDU-USA.

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II. DISCUSSION

Counterdefendant EDU-HK movesto dismiss IntuBrite’s claims against it on the

grounds of lack of personal jurisdiction and forum non conveniens. Each will be

discussed in turn.

A. Personal Jurisdiction

First, EDU-HK argues that this court does not have personal jurisdiction over it. 

“When a defendant moves to dismiss for lack of personal jurisdiction, the plaintiff

bears the burden of demonstrating that the court has jurisdiction.” In re W. States

Wholesale Natural Gas Antitrust Litig., 715 F.3d 716 (9th Cir. 2013) (citing Harris

Rutsky & Co. Ins. Servs., Inc. v. Bell & Clements Ltd., 328 F.3d 1122, 1128-29 (9th

Cir. 2003)). However, the plaintiff need only make a prima facie showing of

jurisdiction, with all disputed facts resolved in favor of the plaintiff. Id. 

In general, personal jurisdiction over a defendant is proper if permitted by the

state’s long-arm statute and if the exercise of that jurisdiction does not violate federal

due process. Data Disc, Inc. v. Sys. Tech. Associates, Inc., 557 F.2d 1280, 1286 (9th

Cir. 1977). California’s long-arm statute allows courts to exercise jurisdiction to the

full extent permitted under the Constitution. Id.

To exercise personal jurisdiction over a nonresident defendant consistent with

federal due process, “that defendant must have at least minimum contacts with the

relevant forum such that the exercise of jurisdiction does not offend traditional notions

of fair play and substantial justice.” Boschetto v. Hansing, 539 F.3d 1011, 1015-16

(9th Cir. 2008) (internal quotations omitted).

There are two kinds of personal jurisdiction, general and specific. TheCourt has

general jurisdiction over a nonresident defendant where the defendant has “substantial”

or “continuous and systematic” contacts with the state, such that it may be haled into

court in that state for any action without violating due process. However, “[t]he

standard for establishing general jurisdiction is ‘fairly high,’ and requires that the

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defendant’s contacts be of the sort that approximate physical presence.” Bancroft &

Masters, Inc. v. Augusta Nat. Inc., 223 F.3d 1082, 1086 (9th Cir. 2000) (citation

omitted).

Alternatively, specific jurisdiction exists where: (1) the non-resident defendant

has performed some act or consummated some transaction within the forum or

otherwise purposefully availed himself of the privileges of conducting activities in the

forum, (2) the claim arises out of or results from the defendant’s forum-related

activities, and (3) the exercise of jurisdiction is reasonable. Id. at 1086.

Neither party has alleged any facts supporting general jurisdiction. Therefore,

the question is whether the Court’s exercise ofjurisdiction over EDU-HK isreasonable

based on EDU-HK’s contacts with thisforum in connection with the contracts at issue. 

EDU-HK relies heavily on Boschetto v. Hansing, 539 F.3d 1011 (9th Cir. 2008),

in which the Ninth Circuit held that “the lone transaction for the sale of one item,” a

car, did not suffice to establish personal jurisdiction over the nonresident defendants. 

However, the transaction at issue inBoschetto “did not create any ongoing obligations”

with the plaintiff in California, nor did the contract “require the Defendants to engage

in any substantial business in California.” Id. at 1017. In contrast, EDU-HK had a

continuing obligation to ship the stylettes and laryngoscopes to IntuBrite in California

under the contracts. Moreover, EDU-HK invited the CEO of IntuBrite, via letters

mailed to an address in California, to visit its factory in Hong Kong on at least two

occasions to discuss EDU-HK’s supply of the medical equipment to IntuBrite. 

See IntuBrite’s Opp. (ECF No. 36), Decl. of John R. Hicks ¶¶4 & 14; see also id., Ex.

2 & 15. It is well-established that “due process permits the exercise of personal

jurisdiction over a defendant who purposefully directs his activities at residents of a

forum, even in the absence of physical contacts with the forum.” Schwarzenegger v.

Fred Martin Motor Co., 374 F.3d 797, 803 (9th Cir. 2004) (internal quotations and

alteration omitted). While the “degree of interjection” also plays a role in determining

the reasonableness of exercising jurisdiction, Harris Rutsky, 328 F.2d at 1132, EDU4 12cv01078 BTM (WMC)

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HK’s contacts with California are sufficiently extensive so as to make reasonable the

exercise of jurisdiction. Compare id. at 1131-32 (exercise of personal jurisdiction was

reasonable where nonresident defendant purposefully sought out a business

relationship with a California corporation, had ongoing contacts with the state over a

five-year period, and drafted the agreement at issue). Therefore, the first two prongs

are met.

As to the final prong, whether the exercise of jurisdiction is reasonable depends

on whether it comports with “fair play and substantial justice.” Bancroft, 223 F.3d at

1088 (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476 (1985)). There are

seven factors to be considered: (1) the extent of the defendant’s purposeful interjection

into the forum state, (2) the burden on the defendant in defending in the forum, (3) the

extent of the conflict with the sovereignty of the defendant’s state, (4) the forum state’s

interest in adjudicating the dispute, (5) the most efficient judicial resolution of the

controversy, (6) the importance ofthe forumto the plaintiff’s interest in convenient and

effective relief, and (7) the existence of an alternative forum. Id.

Most of the factors clearly weigh in favor of exercising jurisdiction over EDUHK. EDU-HK has purposefully interjected itself into the forum state by shipping the

medical equipment to California and otherwise communicating with IntuBrite, a

company EDU-HK knew was located in California, regarding the goods. California

has a strong interest in adjudicating the dispute because IntuBrite alleges that the

medical equipment EDU-HK sent to IntuBrite in California contained defects,

including contamination and mislabeling. Moreover, it would be more efficient for

IntuBrite’s counterclaims to be heard here, since they are closely related to the claims

in the main action brought by EDU-USA. Finally, because IntuBrite, its witnesses, and

the allegedly defective goods are located in California, having its claims heard here is

extremely significant to its interest in obtaining convenient and effective relief.

That said, the fact that EDU-HK is located in Hong Kong weighs against the

exercise of jurisdiction. See Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102,

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114 (1987) (“The unique burdens placed upon one who must defend oneself in a

foreign legal system should have significant weight in assessing the reasonableness of

stretching the long armof personal jurisdiction over national borders.”). However, this

factoris not dispositive, especially since modern technology has “significantly reduced

the burden of litigating in another country.” Dole Food Co., Inc. v. Watts, 303 F.3d

1104, 1115 (9th Cir. 2002) (internal quotations omitted).

The Court is mindful that, according to the declaration of Max Choi,

“[e]mployees who work in the People’s Republic of China are not permitted to travel

to the United States without the written permission of the government of the People’s

Republic of China, which would be difficult to obtain in a civil case in the United

States.” (ECF No. 39, ¶5.) Nonetheless, the Court must balance that against the

difficulty that IntuBrite would face it in obtaining relief for its claims were it forced to

bring suit in Hong Kong.

As to the remaining factor, conflict with the sovereignty of Hong Kong, this

factor “entails an examination of the competing sovereign interests in regulating [the

defendant’s] behavior.” Dole, 303 F.3d at 1115. California has a strong interest in

protecting its businesses, and certainly in protecting its citizens from faulty medical

equipment. Moreover, while Hong Kong may have an interest in regulating its

businesses, the goods in this case were intended solely for use in the United States. 

Regardless of whether EDU-HK is affiliated with EDU-USA or not, EDU-HK appears

to do a significant amount of business with EDU-USA, which is an American company

supplying medical equipment to other American companies. Thus, this factor weighs

in favor of retaining jurisdiction.

In sum, while the Court appreciates that it may be difficult for EDU-HK to

litigate in this district, the factors overall favor IntuBrite. Therefore, the Court holds

that it has personal jurisdiction over EDU-HK. 

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B. Forum Non Conveniens

EDU-HK’s second argument is that the claims against itshould be dismissed on

the grounds of forum non conveniens. A district court may decline to exercise

jurisdiction where a foreign forum would be more convenient. Lueck v. Sundstrand

Corp., 236 F.3d 1137, 1142 (9th Cir. 2001). “In dismissing an action on forum non

conveniens grounds the court must examine:(1) whether an adequate alternative forum

exists, and (2) whether the balance of private and public interest factors favors

dismissal.” Id.

1. Adequate Alternative Forum

“The defendant bears the burden of proving the existence of an adequate

alternative forum.” Cheng v. Boeing Co., 708 F.2d 1406, 1411 (9th Cir.1983). An

alternative forum generally exists when “the defendant is amenable to service of

process in the foreign forum.” Lueck v. Sundstrand Corp., 236 F.3d 1137, 1143 (9th

Cir. 2001). Here, EDU-HK has indicated that it would be amenable to service of

process in Hong Kong, where it is located. Therefore, this prong is met.

2. Private and Public Interest Factors

The private interest factors to be considered are:

(1) the residence of the parties and the witnesses;

(2) the forum’s convenience to the litigants;

(3) access to physical evidence and other sources of proof;

(4) whether unwilling witnesses can be compelled to testify;

(5) the cost of bringing witnesses to trial;

(6) the enforceability of the judgment; and

(7) “all other practical problems that make trial of a case easy,

expeditious and inexpensive.”

Lueck, 236 F.3d at 1145. These factors cut both ways, for whatever would be easier

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for EDU-HK would be harder for IntuBrite, and vice versa. For instance, IntuBrite is

likely to have witnesses and physical evidence in California, while EDU-HK is likely

to have witnesses and physical evidence in Hong Kong. But as IntuBrite points out,

“unlessthe balance isstrongly in favor of the defendant, the plaintiff’s choice of forum

should rarely be disturbed.” Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947).

The public interest factors to be considered are:

(1) local interest of lawsuit;

(2) the court’s familiarity with governing law;

(3) burden on local courts and juries;

(4) congestion in the court; and

(5) the costs of resolving a dispute unrelated to this forum.

Lueck, 236 F.3d at 1147. As noted above, California has a strong interest in this case,

and the dispute is certainly not unrelated to this forum. Moreover, it is more

expeditious to hear IntuBrite’s claims here, since the related case brought by EDUUSA will move forward in this district. Therefore, these factors weigh in favor of

keeping the case in this district.

Overall, the public and private interest factors weigh against dismissing the case

on forum non conveniens grounds, and the mere fact that an alternative forum exists

does not outweigh the presumption in favor of the plaintiff’s choice of forum. The

Court therefore DENIES EDU-HK’s motion to dismiss on forum non conveniens

grounds.

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III. CONCLUSION

For the reasons above, EDU-HK’s motion to dismiss (ECF No. 34) is hereby

DENIED. 

IT IS SO ORDERED.

DATED: July 15, 2013

BARRY TED MOSKOWITZ, Chief Judge

United States District Court

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