Judge: Maurice A. Leiter, Case: 22STCV21305, Date: 2023-01-05 Tentative Ruling

Case Number: 22STCV21305    Hearing Date: January 5, 2023    Dept: 54

Hearing Date: January 5, 2023

Department 54, Judge Maurice A. Leiter

Motion to Quash Service of Summons

Moving Party: Defendants Yeung Chin Li and Yeung’s Trading Corp

Responding Party: Plaintiff Pacific American Fish Co., Inc.

T/R:     DEFENDANTS’ MOTION TO QUASH IS DENIED.

            DEFENDANTS TO NOTICE.

If the parties wish to submit on the tentative, please email the courtroom at¿SMCdept54@lacourt.org¿with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing. 

The Court considers the moving papers, opposition, reply and supplemental briefing.

“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 for one or more of the following purposes: (1) To quash service of summons on the ground of lack of jurisdiction of the court over him or her.”  (CCP § 418.10(a)(1).)  “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. Sup. Ct. (2007) 148 Cal.App.4th 556, 568.)  

A non-resident defendant may be subject to general jurisdiction or specific jurisdiction.  A defendant is subject to general jurisdiction when the defendant is domiciled in the forum state, or his activities there are substantial, continuous, and systematic.  (F. Hoffman-La Roche, Ltd. v. Superior Court (2005) 130 Cal.App.4th 782, 796.) 

“Where general jurisdiction cannot be established, a court may assume specific jurisdiction over a defendant in a particular case if the plaintiff shows the defendant has purposefully availed himself or herself of forum benefits; [ie.] the nonresident purposefully directed its activities at forum residents or purposefully availed itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of local law. (Hanson v. Denckla (1958) 357 U.S. 235.) 

California courts adopt the three-part test set forth in Boschetto v. Hansing (9th Cir. Cal. 2008) 539 F.3d 1011,1016: (1) The nonresident defendant must do some act or consummate some transaction within the forum 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 results from the defendant's forum-related activities; and (3) exercise of jurisdiction must be reasonable.” Panavision International, L.P. v. Toeppen (9th Cir. 1998) 141 F.3d 1316, 1320 [applying California law].).” (Jewish Defense Organization, Inc. v. Sup. Ct. of Los Angeles County (Rambam) (1999) 72 Cal.App.4th 1045, 1054.) 

            Defendants move to quash service of summons on the ground that the Court does not have personal jurisdiction over Defendants. Defendants are New York residents. Defendants assert that Plaintiff has not alleged that they purposefully availed themselves of conducting business in California and the allegations do not arise from Defendants’ activities in California.

            Plaintiff, a seafood distributor and California resident, alleges that its former employee, Defendant Tam, and Defendants fraudulently redirected to themselves shipments from Plaintiff’s warehouse in California intended for New York customers. Plaintiff also alleges Defendants fraudulently released products from cold storage to themselves. In opposition, Plaintiff presents evidence showing Defendants purchased several hundred thousand dollars’ worth of products from Plaintiff over the years and argues that the action arises from Defendants’ activities with goods from a California company that were shipped from California.

            Rocklin De Mexico, S.A. v. Superior Court (1984) 157 Cal.App.3d 91 is instructive. In Rocklin, the defendant manufactured wooden crates in Mexico with wood purchased from a California lumber yard. The lumber yard sued the defendant after defendant failed to pay for a shipment of lumber. The defendant challenged personal jurisdiction as a resident of Mexico. The Court found that defendant had purposefully conducted activity in California by consistently purchasing large quantities of lumber from a California company. (Rocklin, supra 157 Cal.3d at 97-98.) The Court emphasized that the defendant initiated the contact by purchasing products from a California company and that the lumber sales occurred in California (even if Defendant made the orders by phone from Mexico.) (Id.)

Plaintiff has presented analogous evidence. The complaint arise from Defendants’ alleged misappropriation of products ordered from California. The evidence shows that Defendants had purposefully conducted activity with Tam, a California resident who was employed by Plaintiff, a California company. Plaintiff also alleges and shows that Defendant Yeung is the alter ego of the entity Defendant; Defendants do not present evidence to the contrary. And there has been no showing that litigating in California would be “so gravely difficult and inconvenient that it would put [the defendant] at a severe disadvantage in comparison to his opponent.” (Doe v. Damron (2021) 70 Cal.App.5th 684, 693.)

Plaintiff argues that its allegations of conspiracy between Tam and moving Defendants serve as an additional basis for personal jurisdiction. At oral argument on December 1, 2022 the Court ordered supplemental briefing on the issue.

As discussed in the parties’ respective briefs, California courts have held that allegations of a co-conspirator’s contacts or actions in California, by themselves, are insufficient to confer personal jurisdiction over another co-conspirator with no contacts or actions in California. (See Taylor-Rush v. Multitech Corp. (1990) 217 Cal.App.3d 103, 114 [“Although the acts of a coconspirator within California may give rise to jurisdiction over a coconspirator in another state, the bland allegation of conspiracy without a prima facie showing of its existence is insufficient to establish personal jurisdiction.”] Mansoor v. Superior Court (1995) 38 Cal.App.4th 1750, 1759-61 [Co-conspirator’s individual acts must be considered for personal jurisdiction.])

Plaintiff presents prima facie evidence of a conspiracy between Tam, a California resident working for Plaintiff, a California company, and Defendants.  Defendants allegedly conspired with Tam to redirect and release products obtained from California. Plaintiff has shown the allegations arise from moving Defendants’ contacts with California.

Plaintiff has satisfied the elements of Boschetto and established specific personal jurisdiction over Defendants.

            Defendants’ motion is DENIED.