Court Opinion

ID: 9555323
Source: CourtListenerOpinion
Date Created: 2023-08-11 17:01:25.164369+00
Date Added: 2024-06-11T15:42:18.972055
License: Public Domain

FOR PUBLICATION

      UNITED STATES COURT OF APPEALS
           FOR THE NINTH CIRCUIT

GLOBAL MASTER                            No. 21-55809
INTERNATIONAL GROUP, INC.;
GLOBAL MASTER                               D.C. No.
CORPORATION,                             2:19-cv-10360-
                                           RGK-PLA
             Plaintiffs-Appellants,
 v.
                                           OPINION
ESMOND NATURAL, INC.; PAUL
CHIA-YIN WEI,

             Defendants-Appellees.

      Appeal from the United States District Court
         for the Central District of California
      R. Gary Klausner, District Judge, Presiding

        Argued and Submitted August 30, 2022
       Submission Withdrawn January 18, 2023
            Resubmitted August 7, 2023
                Pasadena, California

                 Filed August 11, 2023
2     GLOBAL MASTER INT’L GROUP, INC. V. ESMOND NATURAL, INC.

     Before: Milan D. Smith, Jr. and Ryan D. Nelson, Circuit
        Judges, and Gershwin A. Drain, * District Judge.

                  Opinion by Judge R. Nelson

                          SUMMARY **

                               RICO

   The panel reversed in part the district court’s summary
judgment, based on a lack of statutory standing, in an action
brought by Global Master Corporation, a Chinese company,
seeking relief under the Racketeer Influenced and Corrupt
Organizations Act for allegedly defective products
purchased from California-based Esmond Natural, Inc.
    Global Master Corporation and its sister company
Global Master International Group, Inc., located and
headquartered in California (collectively, Global Master)
imported nutritional supplements from the United States and
marketed them to consumers in China. Global Master
alleged that Esmond Natural used lower strength or entirely
different supplements to fill orders. The district court held
that Global Master failed to satisfy statutory standing
because it lacked a domestic injury as its alleged harm was

*
 The Honorable Gershwin A. Drain, United States District Judge for the
Eastern District of Michigan, sitting by designation.
**
  This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
   GLOBAL MASTER INT’L GROUP, INC. V. ESMOND NATURAL, INC.   3

felt in China, and civil claims brought under RICO do not
allow recovery for foreign injuries.
    The panel held that under Yegiazaryan v. Smagin, 143 S.
Ct. 1900 (2023), the district court applied the wrong legal
standard. Yegiazaryan clarified that a “plaintiff alleges a
domestic injury for purposes of [18 U.S.C.] § 1964(c) when
the circumstances surrounding the injury indicate it arose in
the United States.” Yegiazaryan held that “courts should
look to the circumstances surrounding the alleged injury to
assess whether it arose in the United States,” including “the
nature of the alleged injury, the racketeering activity that
directly caused it, and the injurious aims and effects of that
activity.” The panel held that, under this test, Global Master
suffered a domestic injury because, pursuant to the parties’
contracts, Global Master took all deliveries of the
supplements in Los Angeles. Thus, Esmond Natural’s fraud
injured Global Master’s property in California.
    The panel remanded to the district court for further
proceedings. In a concurrently filed memorandum
disposition, the panel affirmed on other issues.

                        COUNSEL

Richard A. De Liberty (argued) and Kavon Adli, The
Internet Law Group, Beverly Hills, California, for Plaintiffs-
Appellants.
Andres F. Quintana (argued), Quintana Law Group APC,
Agoura Hills, California, for Defendants-Appellees.
4   GLOBAL MASTER INT’L GROUP, INC. V. ESMOND NATURAL, INC.

                            OPINION

R. NELSON, Circuit Judge:

    Global Master Corporation, a Chinese company, seeks
relief under the Racketeer Influenced and Corrupt
Organizations Act for allegedly defective products
purchased from California-based Esmond Natural, Inc. The
district court held that Global Master Corporation failed to
satisfy statutory standing because it lacked a domestic injury
as its alleged harm was felt in China. Under the Supreme
Court’s decision in Yegiazaryan v. Smagin, 599 U.S. ---, 143
S. Ct. 1900 (2023), the district court applied the wrong legal
standard. Applying Yegiazaryan, we reverse and remand. 1
                                  I
                                 A
    Plaintiffs-Appellants Global Master Corporation (GMC)
and Global Master International Group, Inc. (GMIG)
(collectively, Global Master) import nutritional supplements
from the United States and market them to consumers in
China. GMC is located and headquartered in China. GMIG
is GMC’s sister company located and headquartered in
California. From 2006 to 2017, Esmond Natural, Inc., a
California company, was GMC’s chief supplier of private-
label, U.S.-made supplements.        Around 2017, GMC
allegedly grew dissatisfied with Esmond Natural’s products
because of production delays and product defects. GMC
began to terminate its business relationship with Esmond

1
  We address the Appellants’ remaining challenges in a concurrently
filed Memorandum Disposition which affirms the district court on those
issues.
   GLOBAL MASTER INT’L GROUP, INC. V. ESMOND NATURAL, INC.    5

Natural, and GMIG was established to supply supplements.
GMIG then hired a former Esmond Natural employee,
Anson Hsu, to build relationships with new suppliers,
including some that had manufactured supplements used by
Esmond Natural and sold to GMC.
   GMC claims that after Hsu started working at GMIG, he
uncovered a systematic scheme of fraud in which Esmond
Natural allegedly used lower strength or entirely different
supplements to fill GMC’s orders. GMC sued Esmond
Natural under the Racketeer Influenced and Corrupt
Organizations Act (RICO), alleging predicate acts of mail
and wire fraud.
                               B
    The district court granted summary judgment for the
defendants, finding that GMC had not suffered a domestic
injury because its alleged injury was mainly felt in China.
Noting, at that time, that neither the Supreme Court nor the
Ninth Circuit had defined the meaning of “domestic injury,”
the district court pointed to two definitions used by courts:
(1) where the plaintiff suffered the injury (“injury-felt test”)
or (2) where the conduct that caused the injury occurred
(“injury-causing test”).      Compare City of Almaty v.
Ablyazov, 226 F. Supp. 3d 272, 282 (S.D.N.Y. 2016) (“[T]he
appropriate subject of the inquiry required by RJR Nabisco
is not the location of the Crossclaim Defendants’ purportedly
injurious conduct but the location where the injury itself
arose.”), with Tatung Co. v. Shu Tze Hsu, 217 F. Supp. 3d
1138, 1156 (C.D. Cal. 2016) (“[T]he defendants specifically
targeted their conduct at California with the aim of thwarting
Tatung’s rights in California. It would be absurd to find that
such activity did not result in a domestic injury to Plaintiff.”
(citation & internal quotation marks omitted)). The district
6   GLOBAL MASTER INT’L GROUP, INC. V. ESMOND NATURAL, INC.

court applied the “injury-felt test,” concluding that most
courts have adopted the first line of reasoning: where the
plaintiff suffered, or felt, the injury controls whether the
injury is “domestic.” The district court noted that GMC’s
inferior products (which it sold in China), and loss of
goodwill (in the Chinese market) demonstrated harm felt in
China. This timely appeal followed. We stayed this appeal
pending the Supreme Court’s decision in Yegiazaryan v.
Smagin, 599 U.S. ---, 143 S. Ct. 1900 (2023) and now
address the merits.
                              II
    We review the grant of summary judgment on GMC’s
RICO claim de novo. Ikuno v. Yip, 912 F.2d 306, 308 (9th
Cir. 1990). “[V]iewing the evidence in the light most
favorable to the nonmoving party,” we determine whether
“there are any genuine issues of material fact and whether
the district court correctly applied the relevant substantive
law.” Lopez v. Smith, 203 F.3d 1122, 1131 (9th Cir. 2000)
(en banc).
                              III
    We first review RICO’s statutory framework and
relevant precedent to define domestic injury.
                              A
    RICO, codified at 18 U.S.C. §§ 1961–1968, extends civil
and criminal penalties for acts performed as part of an
ongoing criminal organization or enterprise, known as
“prohibited activities.” H.J. Inc. v. Nw. Bell Tel. Co., 492
U.S. 229, 232 (1989). A party violates RICO by engaging
in a “pattern of racketeering activity—a series of related
predicates that together demonstrate the existence or threat
of continued criminal activity” to “infiltrate, control, or
   GLOBAL MASTER INT’L GROUP, INC. V. ESMOND NATURAL, INC.   7

operate an enterprise which is engaged in, or the activities of
which affect, interstate or foreign commerce.” RJR Nabisco,
Inc. v. Eur. Cmty., 579 U.S. 325, 330 (2016) (citations &
internal quotation marks omitted).
    18 U.S.C. § 1964(c) allows for a private civil action to
be brought by “[a]ny person injured in his business or
property by reason of” a RICO violation. The required
elements of a RICO private civil action are: “(1) conduct (2)
of an enterprise (3) through a pattern (4) of racketeering
activity (known as ‘predicate acts’) (5) causing injury to
plaintiff’s business or property.” United Brotherhood of
Carpenters & Joiners of Am. v. Bldg. & Constr. Trades
Dep’t, 770 F.3d 834, 837 (9th Cir. 2014) (quoting Living
Designs, Inc. v. E.I. Dupont de Nemours & Co., 431 F.3d
353, 361 (9th Cir. 2005)).
    Parties suing under RICO must also satisfy its statutory
standing requirement. See Canyon County v. Syngenta
Seeds, Inc., 519 F.3d 969, 975 (9th Cir. 2008). “A civil
RICO ‘plaintiff only has standing if, and can only recover to
the extent that, he has been injured in his business or
property by the conduct constituting the violation.”’ Id.
(quoting Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496
(1985)). Thus, to establish statutory standing, a civil RICO
plaintiff must show: “(1) that his alleged harm qualifies as
injury to his business or property; and (2) that his harm was
by reason of the RICO violation, which requires the plaintiff
to establish proximate causation.” Just Film, Inc. v. Buono,
847 F.3d 1108, 1118–19 (9th Cir. 2017) (quoting Canyon
County, 519 F.3d at 972). The injury to the business or
property, however, must be “domestic,” as civil claims
brought under RICO do not allow recovery for foreign
injuries. RJR Nabisco, 579 U.S. at 354.
8   GLOBAL MASTER INT’L GROUP, INC. V. ESMOND NATURAL, INC.

    The Supreme Court has applied a presumption against
extraterritorial application for private civil RICO claims.
“Absent clearly expressed congressional intent to the
contrary, federal laws will be construed to have only
domestic application.” Id. at 335. Thus, “[w]hen a statute
gives no clear indication of an extraterritorial application, it
has none.” Id. (quoting Morrison v. Nat’l Austl. Bank Ltd.,
561 U.S. 247, 255 (2010)). The presumption “serves to
avoid the international discord that can result when U.S. law
is applied to conduct in foreign countries.” Id. at 335. This
said, § 1964(c)’s domestic injury requirement “does not
mean that foreign plaintiffs may not sue under RICO.” Id.
at 353 n.12. As the Supreme Court explained, “[t]he
application of [the domestic injury] rule in any given case
will not always be self-evident, as disputes may arise as to
whether a particular alleged injury is ‘foreign’ or
‘domestic.’” Id. at 354.
                               B
    The Supreme Court recently defined domestic injury
under § 1964(c). Yegiazaryan, 143 S. Ct. at 1912.
Yegiazaryan clarified that a “plaintiff alleges a domestic
injury for purposes of §1964(c) when the circumstances
surrounding the injury indicate it arose in the United States.”
Id. In so doing, the Court affirmed our opinion below and
agreed that the domestic injury requirement is context
specific and turns on the facts alleged in the complaint. Id.
at 1909. As such, “courts should look to the circumstances
surrounding the alleged injury to assess whether it arose in
the United States,” including “the nature of the alleged
injury, the racketeering activity that directly caused it, and
the injurious aims and effects of that activity.” Id.
   GLOBAL MASTER INT’L GROUP, INC. V. ESMOND NATURAL, INC.    9

    Yegiazaryan concerned a Russian citizen residing in
Russia (Smagin), who filed a civil RICO suit against another
Russian citizen living in California (Yegiazaryan). See 37
F.4th 562, 564 (9th Cir. 2022). Smagin secured a foreign
arbitration award against Yegiazaryan and subsequently
obtained a federal district court judgment confirming the
award, giving him a right to execute it in California. Id. In
his RICO suit, Smagin alleged that Yegiazaryan engaged in
fraudulent conduct to prevent him from executing the
California judgment. Id. at 565.
     We held that the judgment existed as intangible property
in California because “that is where Plaintiff desires to
exercise the rights conferred by the California Judgment.”
Id. at 567. The California Judgment was not property in
Russia because the judgment granted Smagin no rights in
Russia.      Id.    Thus, because Smagin claimed that
Yegiazaryan’s illegal conduct was designed to subvert
Smagin’s right to execute California property, we concluded
that the alleged harm constituted a domestic injury. Id. at
567–68. We emphasized that “[t]he key question, then, is
where the California Judgment exists as property.” Id. at
567. This, we noted, followed RJR Nabisco’s statement that
“it is the location of the injury that is relevant to standing.”
Id. at 568. Our approach also aligned with the Second and
Third Circuits after RJR Nabisco. Id. at 568, 570 (citing
Humphrey v. GlaxoSmithKline PLC, 905 F.3d 694, 702, 706
(3d Cir. 2018); Bascuñán v. Elsaca, 874 F.3d 806, 820–21
(2d Cir. 2017)).
   The Supreme Court agreed.

       So understood, §1964(c)’s focus is on the
       injury, not in isolation, but as the product of
       racketeering activity. Thus, in assessing
10 GLOBAL MASTER INT’L GROUP, INC. V. ESMOND NATURAL, INC.

        whether there is a domestic injury, courts
        should engage in a case-specific analysis that
        looks to the circumstances surrounding the
        injury. If those circumstances sufficiently
        ground the injury in the United States, such
        that it is clear the injury arose domestically,
        then the plaintiff has alleged a domestic
        injury.

Yegiazaryan, 143 S. Ct. at 1910. The Court also noted that
“[b]ecause of the contextual nature of the inquiry, no set of
factors can capture the relevant considerations for all cases.”
Id. Therefore, “what is relevant in one case to assessing
where the injury arose may not be pertinent in another.” Id.
    The Court’s opinion also approved the contextual
approaches taken by the Second and Third Circuits and
invalidated the Seventh Circuit’s residency requirement. Id.
at 1907. The Second Circuit first applied an “injury-
occurred” test for tangible property in Bascuñán,874 F.3d at
820–21. The court held that “absent some extraordinary
circumstance, the injury [to tangible property] is domestic if
the plaintiff’s property was located in the United States when
it was stolen or harmed, even if the plaintiff himself resides
abroad.” Id. Under this standard, the court concluded that
the misappropriation of funds held in the plaintiff’s New
York bank accounts constituted a domestic injury even
though both parties were citizens and residents of Chile. See
id. at 820–24. “[T]he location of the property and not the
residency of the plaintiff is the dispositive factor.” Id. at 824.
Because the money and bearer shares were in New York
when stolen, the plaintiff sufficiently alleged a domestic
injury. See id. at 810–11.
   GLOBAL MASTER INT’L GROUP, INC. V. ESMOND NATURAL, INC. 11

    The Second Circuit reasoned that plaintiffs who suffer
injury as a result of harm to their domestically located
tangible property are entitled to relief under RICO for two
reasons: (1) such litigants would expect that United States
law would protect their property interests in the event of
damage and (2) a foreign resident’s property located in the
United States is otherwise subject to all the regulations
imposed on private property by state and federal law. Id. at
821.
    Also recognizing the need to avoid expanding RICO
extraterritorially, the Bascuñán court did not hold that “a
plaintiff’s place of residence is never relevant to the
domestic injury inquiry required by RJR Nabisco.” Id. at
824. Nor did the court hold that any contact with the United
States suffices to make an injury domestic. See id. But the
injuries must have a sufficient relationship to the United
States to qualify as “domestic” under the circumstances. Id.
    The Third Circuit also rejected a residency requirement
for claims related to intangible property. Humphrey, 905
F.3d at 702, 706. Instead, the court applied a multi-factor
test that examined:

       (1) where the injury itself arose; (2) the
       location of the plaintiff's residence or
       principal place of business; (3) where any
       alleged services were provided; (4) where the
       plaintiff received or expected to receive the
       benefits associated with providing such
       services; (5) where any relevant business
       agreements were entered into and the laws
       binding such agreements; and (6) the location
12 GLOBAL MASTER INT’L GROUP, INC. V. ESMOND NATURAL, INC.

       of the activities giving rise to the underlying
       dispute.

Id. at 707 (numbering added). The Humphrey court
concluded that the plaintiff had not alleged a domestic injury
because all the factors pointed to China as the site of injury.
Id. at 707–08. Indeed, the “[p]laintiffs ha[d] not alleged that
they possess offices, assets, or any other property in the
United States.” Id. at 708.
    Both the Second and Third Circuit tests differ from the
now abrogated Seventh Circuit test, which imposed a bright-
line “injury-felt” test for intangible property that looked only
to where the plaintiff felt the effects of the alleged injury.
See Armada (Sing.) PTE Ltd. v. Amcol Int’l Corp., 885 F.3d
1090, 1094–95 (7th Cir. 2018), abrogated by Yegiazaryan,
143 S. Ct. 1900. The Armada court distinguished Bascuñán,
noting that it faced a question involving intangible property
rather than tangible property. Id. at 1094. The court held
that the plaintiff “experiences or sustains injuries to its
intangible property at its residence.” Id. There, a
Singaporean carrier that contracted with an Indian mining
company whose largest shareholder was an Illinois
corporation, filed suit under RICO alleging that the Illinois
owner had divested the Indian company’s assets to thwart
their attempt to recover damages for breached contracts. See
id. at 1091. The court concluded that, because the plaintiff
was a foreign corporation, any injury to its intangible
property, even if it were a judgment issued by a U.S. district
court, was not a domestic injury. Id. at 1094–95. The
Supreme Court rejected the “injury-felt” residency test in
Yegiazaryan. 143 S. Ct. at 1909.
   GLOBAL MASTER INT’L GROUP, INC. V. ESMOND NATURAL, INC. 13

                             C
    We, along with our sister circuits, previously analyzed
the domestic injury inquiry by considering whether the
property involved was tangible or intangible. See, e.g.,
Armada, 885 F.3d at 1094–95; Bascuñán, 874 F.3d at 820–
21. The Supreme Court’s opinion in Yegiazaryan, however,
does not make such a distinction. We therefore read its
holding and definition of “domestic injury” to apply
uniformly.
    We now consider whether the circumstances of GMC’s
alleged injury show it arose in the United States. We find
that GMC suffered a domestic injury.
                             1
    But first, we must determine whether GMC showed (1)
a cognizable injury to property (2) “by reason of” a RICO
violation. See Just Film, Inc., 847 F.3d at 1118–19. First,
the injury analysis. Here, a plaintiff must demonstrate (1)
harm to a specific property interest cognizable under state
law, Diaz v. Gates, 420 F.3d 897, 900 (9th Cir. 2005) (en
banc) (per curiam), and (2) that the injury resulted in
“concrete financial loss,” Canyon County, 519 F.3d at 975
(citation omitted).
    The crux of GMC’s claim is that it received fraudulently
non-conforming supplements from Esmond Natural. Thus,
the claim is for an injury to a cognizable property interest—
the supplements. See Reiter v. Sonotone Corp., 442 U.S.
330, 338 (1979) (“[T]he word ‘property’ . . . comprehends
anything of material value owned or possessed.”). Esmond
Natural, however, contends that GMC only alleged financial
harm. It points mostly to a single interrogatory asking GMC
to “Describe the alleged injury to GMC’s business or
14 GLOBAL MASTER INT’L GROUP, INC. V. ESMOND NATURAL, INC.

property as a result of ESMOND NATURAL’s pattern of
racketeering activity,” and GMC’s response that “GMC
alleges that the value of the inferior supplements that it
received from Esmond was less that the value of the
supplements that it ordered.” But this interrogatory response
is not determinative because the interrogatory asked GMC
to describe the injury, not state the object of its injury.
GMC’s interrogatory response directly addresses the
tangible property interest that cause GMC’s financial
losses—the inferior supplements. GMC asserts that Esmond
Natural delivered nonconforming goods to GMC in
California, and that Esmond Natural’s fraud injured GMC’s
tangible property there.
    A civil RICO injury also requires “proof of concrete
financial loss,” not “mere injury to a valuable intangible
property interest.” Chaset v. Fleer/Skybox Int’l, LP, 300
F.3d 1083, 1087 (9th Cir. 2002). Our caselaw has
established a low threshold for plaintiffs to show a concrete
RICO injury. We have found that allegations of “a legal
entitlement to business relations unhampered by schemes
prohibited by the RICO predicate statutes” and loss of a
future employment opportunity constitute RICO injuries to
“property.” Mendoza v. Zirkle Fruit Co., 301 F.3d 1163,
1168 n.4 (9th Cir. 2002); see also Diaz, 420 F.3d at 900.
Courts have also found that the overpayment of money is a
tangible injury. See Canyon County, 519 F.3d at 976.
Looking to the same interrogatory response that Esmond
Natural highlights, GMC has alleged concrete financial loss.
As such, GMC meets the cognizable injury to property
requirement.
   GMC also meets the “by reason of” requirement for
RICO standing. See Just Film, Inc., 847 F.3d at 1118–19.
An injury is “by reason of” a RICO violation if “a RICO
   GLOBAL MASTER INT’L GROUP, INC. V. ESMOND NATURAL, INC. 15

predicate offense ‘not only was a “but for” cause of [the]
injury, but was the proximate cause as well.’” Hemi Grp.,
LLC v. City of New York, 559 U.S. 1, 9 (2010) (quoting
Holmes v. Sec. Inv’r Prot. Corp., 503 U.S. 258, 268 (1992)).
Under the but-for standard, “a plaintiff must demonstrate
that, but for the defendant’s unlawful conduct, [his or her]
alleged injury would not have occurred.” Richards v.
County of San Bernardino, 39 F.4th 562, 572 (9th Cir. 2022)
(citation omitted).      And when a court evaluates
proximate causation, “the central question it must ask is
whether the alleged violation led directly to the plaintiff’s
injuries.” Anza v. Ideal Steel Supply Corp., 547 U.S. 451,
461 (2006).
    GMC satisfies this requirement. It contends that Esmond
Natural fraudulently manufactured and delivered
nonconforming supplements which caused its financial
harm. Put differently, GMC contends that but for Esmond
Natural’s fraudulent filling and distribution of the
supplements, GMC would not have sustained financial
harm, thus Esmond Natural’s U.S. based conduct
proximately led to its injury. See Painters & Allied Trades
Dist. Council 82 Health Care Fund v. Takeda Pharms. Co.,
943 F.3d 1243, 1260 (9th Cir. 2019) (finding allegations
that someone in the chain of causation relied on defendants’
alleged misrepresentations and omissions sufficient to allege
proximate cause). In so doing, GMC proffers evidence of
supplement orders that support its claim of disparities
between what was ordered and what was received. GMC
has met the “injury to property” and “by reason of”
requirements for RICO standing.
16 GLOBAL MASTER INT’L GROUP, INC. V. ESMOND NATURAL, INC.

                                    2
    Having determined that this case involves harm to a
cognizable property interest, we lastly conclude that GMC’s
asserted injury is domestic. The circumstances of GMC’s
alleged injury indicate that it arose in the United States. See
Yegiazaryan, 143 S. Ct. at 1909.
    GMC contends its injury is domestic because Esmond
Natural’s fraud injured GMC’s property in California. It
asserts that Esmond Natural delivered its nonconforming
supplements to Los Angeles, evidenced by proffered
purchase orders specifying “F.O.B., Los Angeles.” 2 We
agree. Based on the applicable law governing the F.O.B.
clause, GMC’s property injury arose in the United States.
    “F.O.B.,” or “free on board,” generally presumes that the
property passes from seller to buyer at the point specified.
See Free on Board, BLACK’S LAW DICTIONARY (11th ed.
2019); CAL. COM. CODE § 2319(1)(a). Esmond Natural
counters that the F.O.B. term was used solely as a basis to
determine the base cost to assess a shipping price and to
lower freight costs. Esmond Natural also asserts that GMC
never owned the supplements in the United States because
they were placed in shipping containers and shipped directly
to China.
    This argument, however, fails because “when the terms
of a contract are clear, the intent of the parties must be
ascertained from the contract itself.” Klamath Water Users
Protective Ass’n v. Patterson, 204 F.3d 1206, 1210 (9th Cir.
2000); see Hartford Cas. Ins. Co. v. Swift Distrib., Inc., 59

2
  Esmond Natural disputes the evidence that the contracts contained the
F.O.B., Los Angeles clause. But the evidence creates at least a genuine
dispute about the presence of the clause. That is sufficient at this stage.
   GLOBAL MASTER INT’L GROUP, INC. V. ESMOND NATURAL, INC. 17

Cal. 4th 277, 288 (2014) (“The rules governing policy
interpretation require us to look first to the language of the
contract in order to ascertain its plain meaning or the
meaning a layperson would ordinarily attach to it.”) (cleaned
up). Under California law, “[u]nless otherwise explicitly
agreed[,] title passes to the buyer at the time and place at
which the seller completes his performance with reference
to the physical delivery of the goods . . . .” CAL. COM. CODE
§ 2401(2). Additionally, as courts have noted, “[w]hen a
delivery term is F.O.B., the ‘goods are delivered at a
designated location, usually a transportation depot, at which
legal title and thus the risk of loss passes from seller to
buyer.’” Pulse Elecs., Inc. v. U.D. Elec. Corp., 530 F. Supp.
3d 988, 1013 (S.D. Cal. 2021) (citation omitted), aff’d, No.
2021-1856, 2022 WL 1436146 (Fed. Cir. May 6, 2022).
     Here the supplements were delivered to a transportation
depot in Los Angeles before being shipped to China. The
purchase orders between GMC and Esmond were “F.O.B.,
Los Angeles U.S.A.” There is no other evidence of a
contrary agreement between the parties other than Esmond
Natural’s legally irrelevant statement that it understood the
clause to assess shipping price. We thus conclude that GMC
legally took all deliveries in California and, because legal
title and risk of loss passed to GMC in Los Angeles, it owned
the injured property in the United States.
    Even though the supplements were ultimately shipped to
China, this is not dispositive. Such a finding would be
contrary to the Supreme Court’s abrogation of the Seventh
Circuit’s residency requirement test set forth in Armada. See
Yegiazaryan, 143 S. Ct. at 1909. That GMC owned its
injured property in the United States establishes that its
injury was domestic.
18 GLOBAL MASTER INT’L GROUP, INC. V. ESMOND NATURAL, INC.

    Esmond Natural counters that finding the F.O.B. clause
determinative of domestic property ownership would
amount to an unprecedented expansion of RICO. It relies on
Diamond Crystal Brands, Inc. v. Food Movers International,
Inc., for the proposition that in the personal jurisdiction
context, “when the goods are shipped outside of the forum,
an F.O.B. delivery term may not be a sufficient indicator of
the defendant’s purposeful availment of the forum’s laws.”
593 F.3d 1249, 1273 (11th Cir. 2010). Moreover, according
to Esmond Natural, delivery terms (negotiated outside the
forum state) specifying reasonable shipping points along an
international route seem to be the sort of random and
attenuated contacts with which the Due Process Clause is
concerned. See id. at 1268.
    But Diamond Crystal Brands is not on point. That case
concerned personal jurisdiction in a removed diversity
action in which the Eleventh Circuit held that the Georgia
state long-arm statute required the nonresident defendant to
prove that it transacted business in the state. Id. at 1264.
Here, we are not dealing with a question of minimum
contacts. There is no question that Esmond Natural, a
California company, has availed itself of U.S. law. For our
analysis, the relevant fact is that it is undisputed that GMC
transacted business in California by ordering the allegedly
nonconforming supplements. This supports our holding that
GMC has suffered a domestic injury because the
circumstances of its alleged harm concern domestically
purchased goods.
    Other factors also indicate that GMC’s injury was
domestic. GMC alleges that Esmond Natural sourced the
materials from and made the nonconforming supplements in
the United States before delivering them and before GMC
took title of them there. And GMC claims that their injury
   GLOBAL MASTER INT’L GROUP, INC. V. ESMOND NATURAL, INC. 19

stems from a pattern of unlawful domestic racketeering
activity—mail and wire fraud from knowingly producing
and delivering nonconforming supplements in the United
States. Therefore, the alleged racketeering activity “largely
occurred in or was directed from and targeted at” the United
States. Yegiazaryan, 143 S. Ct. at 1912. This along with the
factors outlined above supports our conclusion that GMC
asserts a domestic injury.
                             V
    Under the Supreme Court’s decision in Yegiazaryan, the
district court applied the wrong legal standard in analyzing
whether GMC had suffered a domestic injury under RICO.
We conclude that the circumstances of GMCs alleged injury
indicate that it arose in the United States. We therefore
reverse and remand to the district court for proceedings
consistent with this opinion.
   REVERSED AND REMANDED in part.