Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_07-cv-01089/USCOURTS-caed-2_07-cv-01089-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1330 Breach of Contract

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

SHAWN HUBER,

NO. CIV. S-07-01089 FCD/CMK

Plaintiff,

v. MEMORANDUM AND ORDER

DAVE PRATT ENTERPRISES, LLC;

DAVE PRATT, individually; and

DOES 1-100,

Defendants.

----oo0oo----

This matter comes before the court on defendants Dave Pratt

Enterprises, LLC and Dave Pratt’s (“Pratt”) (collectively

“defendants”) motion to dismiss for lack of personal jurisdiction

and improper venue, or to transfer venue in the interest of

justice. Plaintiff Shawn Huber (“Huber”) opposes the motion,

asserting that this court has both general and specific

jurisdiction over defendants and that this is a proper forum for

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1 Because oral argument will not be of material

assistance, the court orders this matter submitted on the briefs.

E.D. Cal. Local Rule 78-230(h).

2

litigation. For the reasons set forth below,1 defendants’ motion

to dismiss for lack of personal jurisdiction is GRANTED.

BACKGROUND

Defendant Dave Pratt is currently a resident of Tucson,

Arizona, and is the managing member of Dave Pratt Enterprises,

LLC (“Enterprises”). (Decl. of Dave Pratt in Supp. of Mot. to

Dismiss (“Pratt Decl.”), filed June 14, 2007, ¶¶ 2, 4). 

Enterprises is a limited liability company organized under the

laws of the Sate of Arizona on July 10, 2003, and has its

principal and sole place of business in the State of Arizona. 

(Id. ¶ 3). The sole business of Enterprises is owning and

operating a restaurant known as Buffalo Wild Wings Grill and Bar

(the “Restaurant”), located in Tucson, Arizona. (Id. ¶ 5). 

Enterprises does not have any offices in California, does not own

or rent real property in California, has no operations or

employees in California, has not sought to provide any goods or

services in California, is not subject to taxation in California

does not advertise in California, and does not generate any

revenues in California. (Id. ¶¶ 6-12). Defendant Prat was a

resident of Sacramento County, California until August 15, 2003. 

(Id. ¶ 17). While living in California, Pratt formed and was the

managing member of a California limited liability company, also

titled Dave Pratt Enterprises, LLC. (Id. ¶ 26). However, Pratt

does not recollect that company conducting any business or having

ownership of any assets. (Id. ¶ 26). 

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3

Plaintiff Shawn Huber was employed by Enterprises from July

2004 to July 2005 to work at the Restaurant in Tucson, Arizona. 

(Id. ¶ 14). In 2003, Pratt approached Huber, while both lived in

California, and suggested that Huber work for him at a franchise

of Buffalo Wild Wings Grill and Bar. (Decl. of Shawn Huber in

Supp. of Opp’n to Mot. to Dismiss (“Huber Decl.”), filed July 10,

2007, ¶ 3). Shortly thereafter and while both Pratt and Huber

continued to live in California, they had various in-person and

telephone conversations regarding Pratt’s employment proposal. 

Pratt moved from California to Arizona in August 2003. At

that time, Huber and Pratt had not reached a final agreement on

the terms of his employment at the Restaurant in Tucson. (Decl.

of Dave Pratt in Reply to Opp’n to Mot. to Dismiss (“Pratt Reply

Decl.”), filed July 20, 2007, ¶ 5). They still had not reached

agreement on the terms of his employment when Huber moved to the

Tucson area in approximately January 2004. (Id. ¶ 5). Huber’s

employment agreement was executed in Arizona on June 11, 2004,

and he began working at the Restaurant the following month. (Id.

¶ 5). The terms of the agreement provided that upon completion

of six months employment at the Restaurant in Tucson, Arizona,

Huber would receive a 5% ownership interest in the Restaurant at

that location. (Huber Decl. ¶ 9). 

In March 2007, Huber filed a complaint in the Superior Court

of the State of California, County of Sacramento, alleging breach

of contract, fraud, general negligence, and conversion. 

Plaintiff asserts that defendant agreed to compensate plaintiff

with a 5% ownership interest in the Restaurant after six months

and that defendant has failed and refuses and continues to fail

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and refuse to make payments to plaintiff. On May 31, 2007, Pratt

executed an Amended and Restated Articles of Organization of Dave

Pratt Enterprises, LLC (the “Amended Articles”). (Pratt Reply

Decl. ¶ 6). A copy of the Amended Articles was filed with the

Arizona Corporation Commission on June 1, 2007. (Id.) The

Amended Articles reflect that Dave Pratt holds a 95% ownership

percentage and that Shawn Huber holds a 5% ownership percentage. 

(Ex. A to Pratt Reply Decl.). On June 7, 2007, defendants

removed the action to this court on the basis of diversity

jurisdiction. 

ANALYSIS

Under Rule 12(b)(2) of the Federal Rules of Civil Procedure,

a defendant may seek dismissal of an action for lack of personal

jurisdiction. “Where, as here, there is no applicable federal

statute governing personal jurisdiction, the law of the state in

which the district court sits applies.” Core-Vent Corp. v. Nobel

Indus. AB, 11 F.3d 1482, 1484 (9th Cir. 1993) (citation omitted). 

“California’s long-arm statute allows courts to exercise personal

jurisdiction over defendants to the extent permitted by the Due

Process Clause of the United States Constitution.” Id. at 1484

(citation omitted). Thus, only constitutional principles

constrain the jurisdiction of a federal court in California. 

Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990). “Due

process requires that in order to subject a defendant to a

judgment in personam, if he be not present within the territory

of the forum, he have certain minimum contacts with it such that

the maintenance of suit does not offend traditional notions of

fair play and substantial justice.” Harris Rutsky & Co. Ins.

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Servs., Inc. v. Bell & Clements Ltd., 328 F.3d 1122, 1129 (9th

Cir. 2003) (internal quotations omitted); see Burger King v.

Rudzewciz, 471 U.S. 462, 476 (1985).

Once a defendant challenges jurisdiction, the burden of

proof to show that jurisdiction is appropriate lies with the

plaintiff. Sher, 911 F.2d at 1361. When a defendant’s motion to

dismiss is to be decided on the pleadings, affidavits, and

discovery materials, the plaintiff need only make a prima facie

showing that personal jurisdiction exists in order for the action

to proceed. Id. 

A. General Jurisdiction 

A court may exercise either general or specific jurisdiction

over a non-resident defendant. “General jurisdiction exists when

a defendant is domiciled in the forum state or his activities

there are ‘substantial’ or ‘continuous and systematic.’”

Panavision Int’l, L.P. v. Toeppen, 141 F.3d 1316, 1320 (9th Cir.

1998) (quoting Helicopteros Nacionales de Columbia, S.A. v. Hall,

466 U.S. 408, 414-416 (1984)). When a defendant does not reside

in the forum state, the contacts must be such that the

“approximate physical presence in the forum state.” 

Schwarzenegger v. Fred Martin Co., 374 F.3d 797, 801 (9th Cir.

2004) (quoting Bancroft v. Masters, 223 F.3d 1082, 1086 (9th Cir.

2000)). “This is an exacting standard, as it should be, because

a finding of general jurisdiction permits a defendant to be haled

into court in the forum state to answer for any of its activities

anywhere in the world.” Id. (citing Brand v. Menlove Dodge, 796

F.2d 1070, 1073 (9th Cir. 1986) (collecting cases where general

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jurisdiction was denied despite defendants’ significant contacts

with forum)). 

Plaintiff asserts that defendants are subject to general

jurisdiction in California because Dave Pratt Enterprises LLC is

registered as an active business in California and because Dave

Pratt is listed as the agent for service of process with an

address located in Sacramento County, California. Defendant

Pratt concedes that he formed and was a managing member of a

limited liability company when he was a resident in California. 

However, defendants present uncontroverted evidence that this

California entity did not conduct any business or collect any

assets. (Pratt Decl. ¶ 26). Moreover, defendants present

undisputed evidence that the defendant entity in this suit, also

called Dave Pratt Enterprises, LLC, is a wholly separate and new

corporate entity, formed under Arizona law by Dave Pratt after he

ceased to reside in California. (Pratt Reply Decl. ¶ 7). It is

the Arizona entity, not the California entity, that holds the

franchise license and operates the Restaurant in Tucson. (Id.) 

Defendant Pratt also presents evidence that although he was

previously a resident of Sacramento County, he no longer owns or

rents real property in California, nor does he have any offices,

telephone listings, or mailing addresses in California. (Pratt

Decl. ¶¶ 17, 18, 21). 

Defendant Pratt’s formation of a business entity in

California while he was a resident of California, which neither

conducted any business or collected any assets, is an

insufficient basis for this court to assert general personal

jurisdiction over him. See Gates Learjet Corp. v. Jensen, 743

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F.2d 1325, 1330-31 (9th Cir. 1984) (finding no general

jurisdiction over defendants despite several visits and purchases

in forum, solicitation of contract in forum which included choice

of law provision in favor of forum, and extensive communication

in forum). Plaintiff has failed to set forth any basis for the

court’s exercise of general jurisdiction over defendant

Enterprises, an Arizona entity which happens to have the same

name as a California entity, but seemingly no other connection to

California. As such, plaintiff has failed to set forth a prima

facie showing that the court has general jurisdiction over either

defendant. 

B. Specific Jurisdiction

When general jurisdiction does not exist because a defendant

has not had sufficiently continuous and systematic contacts with

the state, the court may still determine whether the defendant

has had sufficient minimum contacts with the state as it relates

to the pending litigation against it in order to justify the

exercise of specific jurisdiction. In determining whether a

district court can exercise specific jurisdiction over a

defendant, the Ninth Circuit has articulated the following threepart test: 

(1) the nonresident defendant must purposefully direct

[its] activities or consummate some transaction

with the forum or resident thereof; or perform

some act by which [it] purposefully avails

[itself] 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 forum-related

activities; and

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(3) the exercise of jurisdiction must comport with

fair play and substantial justice, i.e. it must be

reasonable.

Core-Vent, 11 F.3d at 1485 (citation omitted).

All of plaintiff’s claims arise out of his contractual

relationship with the defendants. In such a case, the court must

look to “prior negotiations and future consequences, along with

the terms of the contract and the parties’ actual course of

dealing to determine if the defendant’s contacts are

“substantial” and not merely “random, fortuitous or attenuated.” 

Sher, 911 F.2d at 1362 (quoting Burger King, 471 U.S. at 478)

(emphasis in original).

Plaintiff argues that defendants purposely directed

activities at California by inducing a California resident to

enter a contract that is the subject of this litigation. The

purposeful availment prong requires a “qualitative evaluation of

the defendant’s contact with the forum state in order to

determine whether the defendant’s conduct and connection with the

forum state are such that he should reasonably anticipate being

haled into court there.” Harris, 328 F.3d at 1130 (citing WorldWide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980); Lake

v. Lake, 817 F.2d 1416, 1421 (9th Cir. 1987)) (internal

quotations omitted). “The purposeful availment requirement is

met if the defendant ‘performed some type of affirmative conduct

which allows or promotes the transaction of business within the

forum state.’” Id. (quoting Sher, 911 F.2d at 1362).

It is undisputed that defendant sought to employ plaintiff,

a California resident, at the Restaurant in Tucson, Arizona. At

least some discussions and negotiations took place while both

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plaintiff and defendant were residents in California and while

defendant Pratt was a resident of Arizona and plaintiff continued

to reside in California. However, these contacts, by themselves,

do not establish purposeful availment or demonstrate a

“substantial connection” with California. See Sher, 911 F.2d at

1362 (finding that an out of state law firm representing a

California client in a criminal proceeding in Florida did not

create a “substantial connection” with California through payment

from a California bank, phone calls to the client in California,

and letters to California). Nor does defendants’ alleged

communications with plaintiff constitute the promotion of

business within California; rather, defendants sought to promote

business within Arizona. See id. Moreover, the written contract

at issue in this litigation was executed in Arizona on June 11,

2004, and notarized by a Pima County, Arizona notary public. 

(Pratt Reply Decl. ¶ 5; Ex B. to Decl. of Stephen E. Paffrath in

Supp. of Mot. to Dismiss (“Paffrath Decl.”), filed June 14,

2007). In sum, defendants’ communications with plaintiff

regarding plaintiff’s employment in Arizona, which required

plaintiff to reside in Arizona, for an entity doing business

solely in Arizona does not constitute a “substantial connection”

with California for jurisdictional purposes.

Furthermore, the court’s exercise of jurisdiction over

defendants in this action would not comport with notions of “fair

play and substantial justice.” Burger King, 471 U.S. at 476

(citation omitted). In determining whether the exercise of

specific jurisdiction is reasonable, the court must weigh the

following seven factors:

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2 Neither of the parties raise any argument with regard

to sovereignty of the defendant‘s state. Plaintiff also fails to

address the importance of a California forum to his interest in

convenient and effective relief. 

3 Defendant moved to Arizona in August 2003. Plaintiff’s

employment contract was not executed until June 2004.

4 Defendants present evidence that plaintiff moved to

Arizona in January 2004, while the contract was not memorialized

until June 2004 and plaintiff’s employment did not begin until

July 2004. As such, it would appear that negotiations continued

while both plaintiff and defendant were present in Arizona.

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(1) the extent of the defendant[‘s] purposeful

interjection into the forum state’s affairs;

(2) the burden on the defendant of defending in the

forum;

(3) the extent of conflict with the sovereignty of the

defendant[‘s] state;

(4) the forum state’s interest in adjudicating the

dispute;

(5) the most efficient [forum for] judicial resolution

of the controversy;

(6) the importance of the forum to the plaintiff’s

interest in convenient and effective relief; and,

(7) the existence of an alternative forum.

Core-Vent, 11 F.3d at 1487-88 (citation omitted).2

In this case, as set forth above, defendants’ interjection

in California is relatively insignificant. At most, the parties 

engaged in early employment contract negotiations3

 while both

live in California and subsequently, when defendants resided in

Arizona and plaintiff resided in California.4 However, the

contract was executed and notarized in Arizona. Plaintiff moved

to and resided in Arizona for the performance of the contract. 

The entity that employed plaintiff was an Arizona corporation

with no demonstrable link to California. As such, defendants did

not seek to inject themselves into California’s affairs.

The uncontroverted evidence also demonstrates that neither

defendant has offices or employees located in California, and

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thus, the burden of defending a suit in California will be high. 

Moreover, based upon the parties’ representations, California

does not have a policy interest in adjudicating the dispute. The

contract at issue in this case was formally executed in Arizona

and performed in Arizona. Defendants subsequently filed Amended

Articles with the Arizona Corporate Commission, giving plaintiff

a 5% ownership interest in defendant Enterprises. As such, this

dispute more clearly implicates Arizona’s interests. 

Furthermore, neither party disputes that there exists an

alternative forum in either the United States District Court for

Arizona or an Arizona state court, which could resolve this

matter. Rather, defendants present evidence that a stipulation

to transfer this action to Arizona was contemplated by the

parties. (Decl. of Stephen E. Paffrath in Supp. of Reply

(“Paffrath Reply Decl.”), filed July 20, 2007, ¶¶ 4-6; Ex. C-E to

Paffrath Reply Decl.). As such, plaintiff is not prevented from

litigating this dispute in a forum to which defendants are

subject to jurisdiction.

For the foregoing reasons, the court finds that the exercise

of jurisdiction over defendants in this forum would violate due

process. Defendants have not purposely directed their activities

at California or purposely availed themselves of the benefits of

doing business in California. Moreover, the court’s exercise of

jurisdiction over defendants would not be reasonable. Therefore,

defendants’ motion to dismiss plaintiff’s complaint for lack of

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5 Because the court finds that it does not have personal

jurisdiction over defendants, it does not reach the merits of

defendants’ motion as it relates to venue.

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personal jurisdiction is GRANTED.5 The Clerk of the Court is

directed to close this file.

IT IS SO ORDERED.

DATED: July 25, 2007.

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