Judge: Bradley S. Phillips, Case: 24STCV20114, Date: 2025-02-27 Tentative Ruling
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Case Number: 24STCV20114 Hearing Date: February 27, 2025 Dept: 26
SUPERIOR COURT OF CALIFORNIA, COUNTY OF LOS ANGELES Civil Division Central District, Stanley Mosk
Courthouse, Department 26
TENTATIVE RULING
24STCV20114 Hearing Date: February 27, 2025
PALACIOS V. THE HABERDASH GROUP, INC.
On October 17, 2024, Defendant filed the
instant motion to quash. Plaintiff filed an opposition and Defendant filed a
reply.
The Court CONTINUES Defendant’s motion to quash
and GRANTS Plaintiff’s request for limited jurisdictional discovery.
RELEVANT BACKGROUND
Defendant The Haberdash Group Inc.
(“Defendant”) is a New York based Delaware corporation that sells menswear
online. Plaintiff Marielita Palacios (“Plaintiff”) is a resident of California
who allegedly visited Defendant’s website, www.twillory.com (the “Website”) (Compl.
Introduction, ¶ 4.) Plaintiff does not allege that she made a purchase on the
Website. (Id.) Rather, Plaintiff alleges that she visited the Website at some
point within the last year. (Id.)
Plaintiff brings a single claim against
Defendant for its purported violation of the California Invasion of Privacy Act
(“CIPA”). (Compl. ¶¶ 68-78.) Plaintiff was in California when Defendant
allegedly accessed Plaintiff's device. (Compl. ¶ 1.) Plaintiff alleges that “Defendant has
secretly deployed spyware … that accesses visitors’ devices and installs
tracking spyware prior to any efforts to obtain consent to do so, and then
monitors and reports visitors’ devices’ online habits after they leave the Website.”
(Compl. at 2:2-4)
Defendant has no officers, directors, or
employees in California and has no real property or bank accounts in California.
(Blumstein Decl. ¶¶ 6-7.) Defendant has no mailing address, offices, or
facilities in California. (Id. ¶ 7.) Defendant does not target California
through advertising, or any other efforts directed, specifically, at California
residents, nor through publications directed at California residents. (Id. ¶ 8.)
Plaintiff has not presented any evidence regarding Defendant’s sales to
residents of California.
REQUEST FOR JUDICIAL NOTICE
The Court grants Plaintiff’s requests for
judicial notice but considers the Superior Court decisions for their persuasive
value only. California Rule of Court 8.1115, cited by Defendant, does not apply
to trial court decisions.
DISCUSSION
A. Motion to Quash
Code of Civil Procedure section 418.10 provides
in part: “A defendant, on or before the last day of his or her time to plead or
within any further time that the court may for good cause allow, may serve and
file a notice of motion … (1) To quash service of summons on the ground of lack
of jurisdiction of the court over him or her.” (Code Civ. Proc., § 418.10,
subd. (a).)
“When a motion to quash is properly brought,
the burden of proof is placed upon the plaintiff to establish the facts of
jurisdiction by a preponderance of the evidence.” (Aquila, Inc. v. Superior
Court (2007) 148 Cal.App.4th 556, 568.) “This may be done through
presentation of declarations, with opposing declarations received in response.” (Ibid.)
If a plaintiff has satisfied their burden on a motion to quash for lack of
personal jurisdiction, the burden shifts to the moving party to demonstrate
that the exercise of jurisdiction would be unreasonable. (Burger King Corp.
v. Rudzewicz (1985) 471 U.S. 462, 476-478.)
B. Jurisdiction
“California courts may exercise jurisdiction on
any basis that is not inconsistent with the state and federal Constitutions. Thus,
the inquiry in California is whether the assertion of personal jurisdiction
comports with the limits imposed by federal due process.” (Young v. Daimler
AG (2014) 228 Cal.App.4th 855, [internal quotations and citations
omitted].) Due process permits courts to exercise personal jurisdiction over
nonresidents who have “minimum contact” with the forum state such that the
exercise of jurisdiction does not offend “traditional notions of fair play and
substantial justice.” (Int’l Shoe Co. v. Wash. (1945) 326 U.S. 310,
316.) “Personal jurisdiction may be either general or specific.” (Vons
Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 445.) “If
general jurisdiction is not established, a nonresident defendant may still be
subject to California’s specific jurisdiction if a three-prong test is met.” (Gilmore
Bank v. AsiaTrust New Zealand Ltd. (2014) 223 Cal.App.4th 1558, 1568
[internal emphasis omitted].)
“Specific jurisdiction will be found over an
out-of-state defendant only when (1) the [out-of-state] defendant has
purposefully availed himself or herself of forum benefits, (2) the controversy
[giving rise to the present lawsuit] is related to or arises out of [the]
defendant’s contacts with the forum, and (3) the assertion of personal
jurisdiction would comport with fair play and substantial justice. The
plaintiff asking the forum state to exert jurisdiction over the out-of-state
defendant bears the initial burden of establishing the first two elements by a
preponderance of the evidence, and if the plaintiff does so, the out-of-state
defendant then bears the burden of convincing the court why the exertion of
personal jurisdiction would not comport with fair play and substantial justice.”
(Jacqueline B. v. Rawls Law Group, P.C. (2021) 68 Cal.App.5th 243, 253.)
1. Purposeful
Availment
“In assessing whether an out-of-state
defendant's operation of a website constitutes purposeful availment, [the
court] examine[s] (1) whether the website targets California residents…and, if
it does not, (2) where the website falls on a ‘sliding scale’ of ‘interactivity’
with Internet users, with websites allowing the out-of-state defendant to
conduct business with California residents at one end of the scale and websites
that passively make information available at the other end.” (Jacqueline B.
v. Rawls Law Group, P.C. (2021) 68 Cal.App.5th 243, 255.)
For example, in Jacqueline B., a law
firm did not target California residents through its website even though it
boasted that the firm had a nationwide practice because the website included
examples from all around the country; the website was accessible from anywhere;
there was minimal interactivity since the plaintiff had to reach out to the
firm directly; and the law firm did not purposefully derive any benefit from California
other than the potential contingency fee promised in the retainer agreement. (Ibid.)
In the context of internet activity for
jurisdictional purposes, the California Supreme Court adopted the “sliding
scale” test set forth as follows:
At one end of the spectrum are situations where a defendant clearly does
business over the Internet. If the defendant enters into contracts with
residents of a foreign jurisdiction that involve the knowing and repeated
transmission of computer files over the Internet, personal jurisdiction is
proper. [Citation.] At the opposite end are situations where a defendant has
simply posted information on an Internet Web site which is accessible to users
in foreign jurisdictions. A passive Web site that does little more than make
information available to those who are interested in it is not grounds for the
exercise [of] personal jurisdiction. [Citation.] The middle ground is occupied
by interactive Web sites where a user can exchange information with the host
computer. In these cases, the exercise of jurisdiction is determined by
examining the level of interactivity and commercial nature of the exchange of
information that occurs on the Web site.
(Pavlovich v. Superior Court (2002) 29
Cal.4th 262, 274, quoting Zippo Manufacturing Co. v. Zippo Dot Com, Inc.
(W.D.Pa. 1997) 952 F.Supp. 1119, 1124.)
In Snowney v. Harrah's Entertainment, Inc. (2005)
35 Cal.4th 1054, the Supreme Court of California found that Nevada hotels
purposefully availed themselves of the privilege of doing business in
California through their websites. (Id. at p. 1070.) By touting the
proximity of their hotels to California and providing driving directions from
California to their hotels, defendants' Web site specifically targeted
residents of California. (Id. at p. 1065.) The hotels also conceded
that many of their patrons come from California and that some of these patrons
undoubtedly made reservations using their Web site, such that they purposefully
derived a benefit from their Internet activities in California. (Ibid.)
In Thurston v. Fairfield Collectibles of
Georgia, LLC (2020) 53 Cal.App.5th 1231, the court emphasized that the
level of interactivity and commercial nature of the website's activities are significant
in determining personal jurisdiction. (Id. at p. 1238.) In Thurston,
California residents brought a class action against a retail seller alleging
that the website was not fully accessible by the blind and visually impaired in
violation of the Unruh Civil Rights Act. (Id. at p. 1234-1235.) The court
held that the seller purposefully availed itself of the privilege of doing
business in California and the controversy was connected to seller's contacts
with California. (Id. at p. 1239-1242.) Purposeful availment was shown
by evidence that the company made substantial sales in California through its
website from which the parties' dispute arose, and the online sales were the
equivalent of a physical store in California. (Id. at p. 1241.)
The court in Thurston highlighted that “the sales must be
substantial; they are not enough if they are only ‘random, isolated, or
fortuitous ....’ [citation]…Fairfield made eight percent of its sales to
residents of California. These sales totaled some $320,000 to $375,000 a year.
That is the equivalent of having a brick-and-mortar store in California — a ‘virtual
store.’” (Ibid.) “To
summarize, then, under California case law, making a substantial number of
sales of goods or services to California residents via one's own website
constitutes purposeful availment.” (Id. at p. 1240.) “Finally, even
assuming that there must be some evidence that, in addition to making
substantial website sales to Californians, a defendant has “targeted”
Californians, there was such evidence here. Fairfield sells not only online,
but also through catalogs… Fairfield sent a substantial number of
catalogs to residents of California.” (Id. at p. 1241.)
i.
Whether the Website Targets California
Residents
Here, Defendant is a New York
based Delaware corporation. (Cederbaum Decl. ¶ 5.) Defendant has no officers,
directors, or employees who reside in California. (Id. ¶ 6.) Defendant does not
own any bank accounts or real property in California and has no mailing
address, office, or facilities in California. (Id. ¶ 7.) Defendant does not
specifically target California through advertising or any other efforts
directed specifically at California residents, nor through publications directed
specifically at California residents. (Id. ¶ 8.)
The Complaint alleges: “Plaintiff is informed and believes and thereon
alleges that Defendant generates a minimum of eight percent of revenues from
its Website based upon interactions with Californians.” (Compl. ¶ 2.) However, Plaintiff
does not provide any evidentiary support for this statement in the Complaint,
opposition, or declarations. Notably, although the Complaint alleges that
Plaintiff is informed and believes that Defendant generates eight percent of
its revenue from California, Plaintiff’s declaration does not attest to this.
(See Palacios Decl.) Neither does the declaration of Plaintiff’s counsel. (See
Ferrell Decl.)
Also, Plaintiff does not challenge any of the
assertions made by Defendant that it does not conduct any advertising directed
at California. Nor does Plaintiff provide any evidence to demonstrate that
Defendant specifically targets California in any way. Plaintiff does not show
that the Defendant has a substantial number of sales into California through
its website or through other means, such as catalogs. In fact, Plaintiff has
not established that Defendant has made any sales to California
residents. Plaintiff did not purchase anything from Defendant’s Website. The
Defendant’s website targets a national audience, not specifically California. Thus,
Plaintiff has not established that Defendant has made substantial sales to
California residents or targeted California.
ii.
Interactivity of Website
Plaintiff argues that the Website is
interactive because it is an online store that facilitates online transactions
and users can ask questions by submitting their email or using the chat
feature. (Ferrell Decl. ¶ 3-5.) (See, e.g., Snowney v. Harrah's Entertainment, Inc. (2005) 35
Cal.App.4th 1054, 1063 [hotels' websites quoted room rates and
permitted visitors to make online reservations].)
Plaintiff relies heavily on Herbal Brands,
Inc. v. Photoplaza, Inc. (9th Cir. 2023) 72 F.4th 1085, 1093. Unlike
in Herbal Brands and Snowney, here there is no evidence that
Defendant regularly sells to California residents through its Website.
The court in Herbal Brands held: “[I]f a
defendant, in its regular course of business, sells a physical product via an
interactive website and causes that product to be delivered to the forum, the
defendant has purposefully directed its conduct at the forum such that the
exercise of personal jurisdiction may be appropriate.” (Herbal Brands, Inc.
v. Photoplaza, Inc. (9th Cir. 2023) 72 F.4th 1085, 1087.) However, “operation
of an interactive website does not, by itself, establish express aiming. Otherwise,
every time a seller offered a product for sale through an interactive website,
the seller would be subjecting itself to specific jurisdiction in every forum
in which the website was visible, whether or not the seller actually
consummated a sale. That result would be too broad to comport with due process”
(Id. at p. 1091.) Rather, “operating a website in conjunction with
‘something more’—conduct directly targeting the forum—is sufficient to satisfy
the express aiming prong.” (Id. at p. 1092.)
Regarding the “something more” analysis, the
court in Herbal Brands explains:
In some cases, the operators of a website “can be said to have ‘expressly
aimed’ at a forum where a website ‘with national viewership and scope appeals
to, and profits from, an audience in a particular state.’ ” AMA
Multimedia, LLC v. Wanat, 970 F.3d 1201, 1210 (9th Cir.
2020) (quoting Mavrix, 647 F.3d at 1231). When the website
itself is the only jurisdictional contact, our analysis turns
on whether the site had a forum-specific focus or the defendant exhibited an
intent to cultivate an audience in the forum. See, e.g., Mavrix,
647 F.3d at 1222, 1229–31 (holding that the defendant expressly aimed the
content of “celebrity-gossip.net” at California because the site had a specific
focus on the California-centric entertainment industry); AMA, 970
F.3d at 1210 (concluding that the defendant's website “lack[ed] a
forum-specific focus” because “the market for adult content is global”); Will
Co., 47 F.4th at 924–26 (ruling that the defendant's website hosting
and legal compliance documents showed that the defendant intentionally “appealed
to and profited from” a specific forum).
(Ibid.)
Here, Plaintiff has not presented any evidence
of Defendant’s sales in California from the Website. Also, the alleged
interactions with the Website such as the chat feature are arguably unilateral
and are not targeted at Californians. Nor are there any allegations that
Plaintiff used these features. There is
no evidence that Defendant’s contact with California goes beyond merely
creating a website that is accessible nationwide, including California.
The present case is distinguishable from Snowney
and the cases referenced in Herbal Brands. For example, unlike Mavrix
Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011), where
“celebrity-gossip.net” was directed at the California-centric entertainment
industry, there is no evidence that Defendant’s menswear website is similarly
aimed at California residents.
Whether website interactivity by itself establishes purposeful availment
is presently unclear. (See Snowney v. Harrah's Entertainment, Inc. (2005)
35 Cal.App.4th 1054, 1063-1064 [“[C]ourts have been less than consistent… [w]e need not, however, decide on a particular approach here.”].) The Snowney
court did not decide on a particular approach because there the defendants'
website, by any standard, established purposeful availment. (Ibid.) The
court noted, however, that, according to some courts, “Website interactivity is
important only insofar as it reflects commercial activity, and then only
insofar as that commercial activity demonstrates purposeful targeting of
residents of the forum state or purposeful availment of the benefits or
privileges of the forum state.” (Ibid.)
Plaintiff has not established that Defendant
has made substantial sales to California residents or specifically targeted
California in any way. There is no evidence that Defendant regularly sells to
Californians through its Website equivalent to a brick-and-mortar store. To satisfy her burden, Plaintiff
cannot rely on mere allegations contained in the Complaint.
Accordingly, the Court finds that Plaintiff has failed, at this juncture.
to meet her burden to demonstrate purposeful availment by a preponderance of
the evidence.
2.
Nature of the Controversy
“A claim need not arise directly from the defendant's forum contacts in
order to be sufficiently related to the contact to warrant the exercise of
specific jurisdiction. Rather, as long as the claim bears a substantial
connection to the nonresident's forum contacts, the exercise of specific
jurisdiction is appropriate. The due process clause is concerned with
protecting nonresident defendants from being brought unfairly into court in the
forum, on the basis of random contacts.” (Vons Companies, Inc. v. Seabest
Foods, Inc. (1996) 14 Cal. 4th 434, 452.)
For a suit to “relate to” a nonresident defendant's contacts with the
forum States, for purposes of due process limits on specific personal
jurisdiction, the phrase “relate to” incorporates real limits, as it must to
adequately protect defendants who are foreign to a forum, but the specific
jurisdiction inquiry does not always require proof of causation, i.e., proof
that the plaintiff's claim came about because of the defendant's in-state
conduct. (Ford Motor Co. v. Montana Eighth Judicial Dist. Court (2021)
592 U.S. 351, 362.)
Here, Plaintiff asserts that the action arises out of or relates to
Defendant’s forum related activities. The Complaint alleges that “Defendant has
secretly deployed spyware … that accesses visitors’ devices and installs
tracking spyware prior to any efforts to obtain consent to do so, and then
monitors and reports visitors’ devices’ online habits after they leave the Website.”
(Compl. 2:2-4) Plaintiff argues that, “[i]f Defendant had not engaged in the
alleged wrongdoing at issue herein via its Website made available to California
residents, Plaintiff’s claims would not have arisen. Thus, a ‘substantial
connection’ exists between Plaintiff’s claims and Defendant’s forum contacts
via its Website.” (Opp. 19:11-14.) The Court agrees.
Defendant’s Website is accessible to California residents who are able to
make purchases on the Website. Although it is unclear how many sales Defendant
makes to California residents, it is unlikely that the number of sales is zero.
Further, the alleged wrongdoing at issue here supposedly took place through the
Website. Without the Website, the California resident Plaintiff would not have
been connected to the Defendants, and Plaintiff’s claim would not have arisen.
Accordingly, the Court finds that the nature of the claim (installing
spyware through the Website) is sufficiently related to Defendant’s contact
with California (Defendant’s Website that is accessible to California residents
who are able to make purchases).
3.
Reasonableness
If a plaintiff has satisfied their burden on a
motion to quash for lack of personal jurisdiction, the burden shifts to the
moving party to demonstrate that the exercise of jurisdiction would be
unreasonable. (Burger King Corp. v. Rudzewicz (1985) 471 U.S. 462,
476-78.) The moving party must show that litigating the case in a foreign state
would be “so gravely difficult and inconvenient that it would put him at a
severe disadvantage in comparison to his opponent.” (Doe v. Damron
(2021) 70 Cal.App.5th 684, 693.) Mere inconvenience is insufficient to defeat
jurisdiction. (Ibid.)
Here, Plaintiff has not, at this juncture, met
her burden of showing by a preponderance of the evidence that the exercise of
jurisdiction is proper. Since Plaintiff has not met her burden, the burden does
not shift to Defendant to establish that the exercise of jurisdiction would be
unreasonable.
C. Plaintiff’s Request for Jurisdictional
Discovery
“A plaintiff attempting to assert jurisdiction
over a nonresident defendant is entitled to an opportunity to conduct discovery
of the jurisdictional facts necessary to sustain its burden of proof. [citation].
In order to prevail on a motion for a continuance for jurisdictional discovery,
the plaintiff should demonstrate that discovery is likely to lead to the
production of evidence of facts establishing jurisdiction.” (In re
Automobile Antitrust Cases I & II (2005) 135 Cal.App.4th 100, 127.)
“A trial court has discretion to continue the
hearing on a motion to quash service of summons for lack of personal
jurisdiction to allow the plaintiff to conduct discovery on jurisdictional
issues… [a]ny discovery must be limited to the issue of specific personal
jurisdiction based on the required minimum contacts we have identified in this
opinion as relevant to the jurisdictional analysis.” (Burdick v. Superior
Court (2015) 233 Cal.App.4th 8, 30.)
“A plaintiff is generally entitled to conduct
discovery with regard to a jurisdictional issue before a court rules on a
motion to quash.” (Goehring v. Superior Court (Bernier) (1998) 62
Cal.App.4th 894, 911.) The granting of a discovery request “lies in the
discretion of the trial court, whose ruling will not be disturbed in the
absence of manifest abuse.” (Ibid., quoting Beckman v. Thompson (1992)
4 Cal.App.4th 481, 487.)
Here, Defendant argues that Plaintiff has not shown
that discovery is likely to lead to evidence supporting jurisdiction and that
the request is based on speculative claims rather than factual necessity. Defendant also argues that no amount of discovery would change the Court’s
analysis. The Court disagrees.
The central issues to be determined are whether Defendant made substantial
online sales to California residents equivalent to having a brick-and-mortar
store in California and whether Defendant targeted California in any way. The Court finds that limited discovery is
appropriate with respect to both issues. Information relevant to these issues
should be readily accessible to Defendant and could likely show that Defendant
makes substantial sales to California residents or targets California residents
through its Website. Such information could demonstrate purposeful availment
and therefore that the exercise of jurisdiction might be proper.
The Court GRANTS Plaintiff’s request for
limited discovery related only to the jurisdictional issues identified in this
order. All other discovery is stayed
pending further order of the Court.
The Court CONTINUES Defendant’s motion to quash
to June 27, 2025, at 8:30 a.m.. Any
supplemental briefing or evidence from Plaintiff must be filed and served on or
before June 6, 2025; and any further briefing or evidence from Defendant must
be filed and served on or before June 20, 2025.