Judge: Michael E. Whitaker, Case: 21SMCV01618, Date: 2024-10-03 Tentative Ruling

Case Number: 21SMCV01618    Hearing Date: October 3, 2024    Dept: 207

TENTATIVE RULING

BACKGROUND

This case arises from a business dispute.  Plaintiff PacTec Holdings, LLC (“Plaintiff”) alleges Individual Defendants James Zhu (“Zhu”) and Gary Ge (aka Yongchang Geng) (“Ge”), while employed by Plaintiff, through their companies Defendants Fanli, Inc.; Shanghai Zhongyan Information Technology Co., Ltd.; Shanghai Xiangrui Enterprise Management Consulting Firm Co., Ltd. (collectively, “Defendants”) surreptitiously competed with Plaintiff and stole business opportunities from Plaintiff, in violation of their employment agreements and their fiduciary and ethical obligations to Plaintiff. 

On January 9, 2024, the Court granted Plaintiff’s Ex Parte Application for an Order to Serve Ge by Publication in the Los Angeles Daily Journal.

On February 14, 2024, Plaintiff filed a Proof of Publication, indicating the summons was published in the Los Angeles Daily Journal on January 23, January 30, February 6, and February 13.  Pursuant to Code of Civil Procedure section 415.50 and Government Code section 6064, service was complete twenty-eight days following the first day of publication, or February 20, 2024. 

On April 4, 2024, Ge filed the instant motion to quash service of the summons.  The hearing on the motion was delayed to allow the parties to conduct limited jurisdictional discovery.  Plaintiff now opposes the motion and Ge replies.

EVIDENTIARY OBJECTIONS

            The Court rules with respect to Ge’s evidentiary objections to the Steinberg Declaration as follows:

1.     Overruled

2.     Overruled

3.     Overruled

4.     Overruled

5.     Sustained

6.     Sustained

7.     Overruled

LEGAL STANDARDS

A.    SERVICE

For service on persons within California, generally, service of the summons and complaint must be done by personal service.  (Code Civ. Proc., § 415.10.)  However, “[i]f a copy of the summons and complaint cannot with reasonable diligence be personally delivered to the person to be served,” they may be served by leaving a copy of the summons and complaint at the person’s dwelling house, usual place of abode, usual place of business, or usual mailing address with a competent member of the household or person apparently in charge of the office, place of business, or usual mailing address, at least 18 years old, by informing them of the contents, and thereafter mailing a copy to the person at the place where the copy was left.  (Code Civ. Proc., § 425.20, subd. (b).)

Under California law, “[a] summons may be served on a business organization, form unknown, by leaving a copy of the summons and complaint during usual office hours with the person who is apparently in charge of the office of that business organization, and by thereafter mailing a copy of the summons and complaint by first-class mail, postage prepaid, to the person to be served at the place where a copy of the summons and complaint was left. Service of a summons in this manner is deemed complete on the 10th day after the mailing.”  (Code Civ. Proc., § 415.95.)

Further, “A summons may be served by publication if upon affidavit it appears to the satisfaction of the court in which the action is pending that the party to be served cannot with reasonable diligence be served in another manner specified in this article[....]”  (Code Civ. Proc., § 415.50, subd. (a).)

Under Code of Civil Procedure section 413.10, subdivision (c), a summons shall be served on a person “[o]utside the United States, as provided in this chapter or as directed by the court in which the action is pending, or, if the court before or after service finds that the service is reasonably calculated to give actual notice, as prescribed by the law of the place where the person is served or as directed by the foreign authority in response to a letter rogatory.  These rules are subject to the provisions of the Convention of the ‘Service Abroad of Judicial and Extrajudicial Documents’ in Civil or Commercial Matters (Hague Service Convention).”  (Code Civ. Proc., § 413.10, subd. (c).)  The methods enumerated in Section 413.10, subdivision (c) for serving defendants abroad all require transmission of documents abroad, and therefore are preempted by the Hague Service Convention as to defendants in signatory countries.  (Kott v. Superior Court (1996) 45 Cal.App.4th 1126, 1136.)

“The primary innovation of the Hague Service Convention — set out in Articles 2–7 — is that it requires each state to establish a central authority to receive requests for service of documents from other countries.”  (Water Splash, Inc. v. Menon (2017) 581 U.S. 271, 275 [cleaned up].)  “Submitting a request to a central authority is not, however, the only method of service approved by the Convention. For example, Article 8 permits service through diplomatic and consular agents; Article 11 provides that any two states can agree to methods of service not otherwise specified in the Convention; and Article 19 clarifies that the Convention does not preempt any internal laws of its signatories that permit service from abroad via methods not otherwise allowed by the Convention.”  (Ibid.)  Article 10 of the Convention provides:

Provided the State of destination does not object, the present Convention shall not interfere with—

(a)   the freedom to send judicial documents, by postal channels, directly to persons abroad,

(b)   the freedom of judicial officers, officials or other competent persons of the State of origin to effect service of judicial documents directly through the judicial officers, officials or other competent persons of the State of destination,

(c)   the freedom of any person interested in a judicial proceeding to effect service of judicial documents directly through the judicial officers, officials or other competent persons of the State of destination.”

(Ibid.) 

            A state may also exercise jurisdiction over an individual who consents to such jurisdiction.  (Nobel Farms, Inc. v. Pasero (2003) 106 Cal.App.4th 654, 658.)  “Express consent to a court's jurisdiction will occur by generally appearing in an action or by a valid forum-selection clause designating a particular forum for dispute resolution regardless of residence.”  (Ibid. [cleaned up].)  “Consent to a court's jurisdiction may also be implied by conduct.”  (Ibid.)  For example, a nonresident plaintiff who commences an action thereby submits to that “[c]ourt’s personal jurisdiction on any cross-complaint filed against him by the defendant.”  (Ibid.)  “Similarly, a nonresident plaintiff who has filed a suit in California against particular parties has consented to jurisdiction in California when these same parties later sue him in a related action.”  (Sea Foods Co., Ltd. v. O.M. Foods Co., Ltd. (2007) 150 Cal.App.4th 769, 786.)  “By choosing a particular forum, [the] plaintiff is considered to have voluntarily submitted to the court's jurisdiction ‘for all purposes for which justice to the defendant requires his presence.”  (Ibid.)

B.    PERSONAL JURISDICTION

“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.”  (Code Civ. Proc., § 418.10, subd. (a)(1).) 

“[W]hen jurisdiction is challenged by a nonresident defendant, the burden of proof is upon the plaintiff to demonstrate that ‘minimum contacts’ exist between the defendant and the forum state to justify imposition of personal jurisdiction.” (Mihlon v. Superior Court (1985) 169 Cal.App.3d 703, 710.)  It is thus upon the plaintiff to demonstrate by a preponderance of the evidence that all jurisdictional criteria are met. (Ziller Electronics Lab GmbH v. Superior Court (1988) 206 Cal.App.3d 1222, 1232.)  

Moreover, “on a challenge to personal jurisdiction by a motion to quash, the plaintiff has the burden of proving, by a preponderance of the evidence, the factual bases justifying the exercise of jurisdiction.”  (ViaView, Inc. v. Retzlaff (2016) 1 Cal.App.5th 198, 209–210 (hereafter ViaView).)  “The plaintiff must come forward with affidavits and other competent evidence to carry this burden and cannot simply rely on allegations in an unverified complaint.”  (Id. at p. 210.)  If plaintiff meets this burden, “it becomes the defendant’s burden to demonstrate that the existence of jurisdiction would be unreasonable.” (Buchanan v. Soto (2015) 241 Cal.App.4th 1353, 1362.)

California’s long-arm statute grants its courts the power to assert personal jurisdiction over out-of-state parties to the maximum extent that the state and federal constitutions allow. (Code Civ. Proc., § 410.10.) Under the due process clause of the Fourteenth Amendment to the United States Constitution, state courts may exercise personal jurisdiction over nonresidents who have “minimum contacts” with the forum state. (International Shoe Co. v. Washington (1945) 326 U.S. 310, 316.)  Minimum contacts exist when the relationship between the nonresident and the forum state is such that the exercise of jurisdiction does not offend “traditional notions of fair play and substantial justice.” (Ibid.) The primary focus of the personal jurisdiction inquiry is the relationship of the defendant to the forum state. (Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County (2017) 582 U.S. 255 (hereafter Bristol-Myers).)

“Minimum contacts exist where the defendant’s conduct in the forum state is such that he should reasonably anticipate being subject to suit there, and it is reasonable and fair to force him to do so.” (F. Hoffman-La Roche, Ltd. v. Superior Court (2005) 130 Cal.App.4th 782, 795, citing World–Wide Volkswagen Corp. v. Woodson (1980) 444 U.S. 286, 297 (hereafter Volkswagen); Kulko v. California Superior Court (1978) 436 U.S. 84, 92; Pavlovich v. Superior Court (2002) 29 Cal.4th 262, 269.)

Personal jurisdiction may be either general or specific. General (also called all-purpose) jurisdiction means that a defendant's contacts with a state are sufficiently extensive that the “defendant is ‘essentially at home,’ ” and the court may exercise jurisdiction over the defendant regardless of whether the claims relate to the forum state.  (Ford Motor Company v. Montana Eighth Judicial District Court (2021) 141 S.Ct. 1017, 1024; Goodyear Dunlop Tires Operations, S. A. v. Brown (2011) 564 U.S. 915, 919.)

Specific personal jurisdiction hinges on the “relationship among the defendant, the forum, and the litigation.” (Daimler AG v. Bauman (2014) 571 U.S.117, 133 [cleaned up]; accord Walden v. Fiore (2014) 571 U.S. 277, 284.)  Such jurisdiction requires “an affiliation between the forum and the underlying controversy, principally, an activity or an occurrence that takes place in the forum State and is therefore subject to the State’s regulation.” (Bristol-Myers, supra, 582 U.S. at p. 262 [cleaned up].) Consistent with the constraints of due process, “the defendant’s suit-related conduct must create a substantial connection with the forum State.” (Walden v. Fiore, supra, 571 U.S. at p. 284.)

Further, “a nonresident defendant may be subject to the court's specific jurisdiction if three requirements are met: (1) the defendant has purposefully availed itself of forum benefits with respect to the matter in controversy; (2) the controversy is related to or arises out of the defendant's contacts with the forum; and (3) the exercise of jurisdiction would be reasonable and comports with fair play and substantial justice.”  (ViaView, supra, 1 Cal.App.5th at p. 216.)

ANALYSIS

            Ge moves to quash service of the summons on the grounds that (1) this Court lacks personal jurisdiction over him; and (2) the service by publication was deficient.

A.    Service by Publication

Taking Ge’s second argument first, Ge contends the service by publication was deficient because (1) Plaintiff did not establish that it could not, with reasonable diligence, serve Ge another way; (2) Plaintiff did not provide an affidavit in support of its Ex Parte Application to serve Ge by publication; and (3) Plaintiff did not demonstrate that publication in the Los Angeles Daily Journal was the most likely to give actual notice of the lawsuit to Ge.

Contrary to Ge’s arguments, the Ex Parte application was supported by the Declaration of Wenfeng Su, which outlines Plaintiff’s repeated attempts to serve Ge and investigations into potential other avenues for service.  Further the Court disagrees with Ge’s contention that publication in the Los Angeles Daily Journal was not most likely to give actual notice of the lawsuit to Ge.  Plaintiff demonstrated that it had contacted Ge’s California-based counsel, Sam Hyde of Greenberg Traurig, about the lawsuit, but Ge refused to voluntarily waive his right to service.  (See Jan. 8, 2024 Declaration of Wenfeng Su in support of Plaintiff’s Ex Parte Application to Serve Ge by Publication at ¶ 15 and Ex. L.)  Under those circumstances, publication in the Los Angeles Daily Journal is best calculated to give Ge actual notice.

In any event, the Court has already held that service on Ge by publication in the Los Angeles Daily Journal is proper, and as such, the Court will not disturb that order.

B.    Personal Jurisdiction

The parties do not dispute that Ge is a citizen of The People’s Republic of China (“PRC”) who at all relevant times has resided and worked within the PRC, and as such, California lacks general jurisdiction over him.  (See Ge Decl. ¶¶ 3-7; see also Plaintiff’s Opposition [no arguments re general jurisdiction.])  Thus, the question of personal jurisdiction hinges on whether California has specific jurisdiction over Ge.

Ge argues he lacks the requisite minimum contacts with California because (1) the Court already determined, in connection with its ruling on Zhongyan’s motion to quash for lack of personal jurisdiction, that Ge’s contacts with California were insufficient to establish personal jurisdiction and therefore Plaintiff is collaterally estopped from relitigating the issue; (2) Ge lacks contacts with California because Ge’s direct employer was a PRC-based company that Plaintiff contends is a subsidiary of the California-based company OemTec; (3) Ge did not know his employer was affiliated with a California-based company; and (4) even if Ge had such knowledge, mere knowledge of Plaintiff’s contacts with California is insufficient to demonstrate Ge had sufficient contacts with California to establish personal jurisdiction.

Ge also argues this action does not arise out of any contacts Ge had with California, and subjecting Ge to jurisdiction “halfway around the world in a state he has no contacts with” does not comport with notions of fair play and substantial justice.

Regarding Ge’s first argument that the Court already determined Ge lacks the requisite minimum contacts with California, on June 2, 2023, in opposing Defendant Zhongyan’s motion to quash, Plaintiff relied on Micron Technology, Inc. v. United Microelectroncis Corp. (N.D. Cal. May 2, 2019) No. 17-CV-06932-MMC, 2019 WL 1959487 (hereafter Micron), which this Court pointed out is a non-binding unpublished federal district court case.  The Court further distinguished Micron as follows:

Plaintiff in Micron claimed two defendants had conspired to induce Plaintiff’s employees to misappropriate Plaintiff’s trade secrets relating to DRAM circuit technology and deliver them to defendants. (Id. at *1.) Part of this plan included attending a job fair in California to attempt to hire skilled DRAM engineers and place orders for DRAM manufacturing equipment. (Id. at *3.) The Court found this presence at the job fair had a sufficient nexus to Plaintiff’s allegations of misappropriation to satisfy the second prong of the jurisdictional analysis. (Id. at *4.) Plaintiff here cannot point to any similar actions taken by Defendant [Zhongyan], which did not exist as a legal entity until after Ge terminated his employment with PacTec Shanghai and after Ge and Wei are alleged to have misappropriated the idea for a cashback rebate website from OemTec. Plaintiff’s theory of jurisdiction tied to the alleged acts of misappropriation thus focuses on the actions and contacts taken by Ge and Wei as individuals, rather than acts of targeting or inducement by Defendant itself.

(Minute Order, Jun. 2, 2023, at pp. 7-8.)  Moreover, the Court found:

The question before the Court is not whether Ge or Defendant can be held liable for misappropriating the intellectual property of Plaintiff’s predecessor, the question is whether this California Court can adjudicate those claims as to Defendant [Zhongyan]. Ge’s employment contract with PacTec Shanghai contains a provision requiring disputes regarding his performance of the contract be resolved through mediation, arbitration, and litigation in Shanghai. (Ex. B to Ge Decl.) Plaintiff argues that Defendant cannot sue Ge under this agreement because the agreement was signed by Shanghai Foreign Service Co., Ltd, not Defendant. But the agreement pertains to Ge’s employment with Pac Tec Shanghai, and Plaintiff has not shown it would be unable to pursue its claims against Ge in Shanghai pursuant to this agreement. Moreover, has Plaintiff shown why equity requires Defendant or Ge to face Plaintiff’s claims in California.

(Id. at p. 10.)

The Court does not find that collateral estoppel precludes Plaintiff from litigating the issue of Ge’s minimum contacts with California especially where, as here, the parties have continued to engage in limited jurisdictional discovery.  The fact that Plaintiff did not, in June 2023, demonstrate Ge had sufficient minimum contacts to establish personal jurisdiction over the entity Zhongyan under a successor-in-interest theory, does not mean that in October 2024, after additional jurisdictional discovery, Plaintiff is collaterally estopped from arguing there are sufficient minimum contacts to establish personal jurisdiction over Defendant Ge.

However, Plaintiff must address/overcome the issues previously identified by the Court, including that Ge’s employment contract with PacTec Shanghai contains a provision requiring disputes regarding his performance of the contract be resolved through mediation, arbitration, and litigation in Shanghai.   Ge has provided a declaration which indicates:

8. I have never worked for a company that was incorporated in the United States, including in California.

9. I do not own any assets or property located in California nor have I ever.

10. I have never worked for PacTec Holdings LLC or OemTec LLC, including signing any agreements with them or performing services for those companies.

11. On or about February 20, 2006, I signed a contract with Shanghai Foreign Service Co., Ltd. for the purpose of working for a Shanghai company called Pactec Software (Shanghai) Co. Ltd., which is referred to hereafter as PacTec Shanghai. I signed the agreement in Shanghai, PRC. Attached hereto as Exhibit A is a true and correct copy of my employment agreement with Shanghai Foreign Service Co., Ltd. for the purpose of working for PacTec Shanghai. Attached as Exhibit B is what I understand to be an English translation of Exhibit A. To the best of my knowledge, this was the agreement that set forth the terms and conditions of my work for PacTec Shanghai.

12.  I was hired to perform work for PacTec Shanghai by an individual named James Zhu, who worked at PacTec Shanghai.  Zhu was my supervisor at PacTec Shanghai.  To my knowledge, Zhu resided in Shanghai, PRC during the entire time I performed work for PacTec Shanghai.

13.  I performed all of my work for PacTec Shanghai in Shanghai China.  I never traveled to the United States, including Los Angeles, California, to perform work for PacTec Shanghai.

14.  I do not speak or read English or Spanish.

(Ge Decl. ¶¶ 8-14.)

            In Opposition, Plaintiff has provided Ge’s responses to Request for Admission 18, where Ge admits that, while working for PacTec Shanghai, Ge met Josh Steinberg in person at PacTec Shanghai’s office.  (Ex. 18 to Su Decl.)  Plaintiff also provided Ge’s responses to Requests for Admissions 5, 6, 7, 8, 9, 11, 12, 13, and 27, where Ge denied knowing that Ge’s supervisor, Zhu, was simultaneously employed by the affiliated, California-based company OemTec, that OemTec had instructed Zhu to open a Shanghai office, that OemTec was affiliated with PacTec Shanghai, that Ge had collaborated with individuals he knew were in California.  (Ex. 19 to Su Decl.)  Plaintiff further provides Ge’s response to Special Interrogatory No. 2, where Ge indicates his first day working for PacTec Shanghai was February 20, 2006, and his last day was September 30, 2007.  (Ex. 20 to Su Decl.)  Ge also denies any knowledge that PacTec Shanghai worked on a project related to cashback websites.  (Ex. 21 to Su Decl.) 

            Plaintiff further provides the Declaration of Tienshiao Ma, a senior software engineer at OemTec’s Marina del Rey office from 2005 to 2008, which indicates:

8. At OemTec, I also worked with Josh Steinberg (“Steinberg”), who was a principal of the company.

9. In 2005, Zhu was sent to China to open an office for OemTec to support its research and development efforts.

10. The Chinese company that was set up as an affiliate of OemTec was PacTec Software (Shanghai) Ltd. Co. (“PacTec Shanghai”).

11. After PacTec Shanghai was formed, Zhu became heavily involved in managing that company.

12. Initially, Zhu travelled back and forth between Shanghai and California.

13. Eventually, Zhu spent more time in Shanghai than California.

14. PacTec Shanghai was considered OemTec’s Shanghai office.

15. PacTec Shanghai enabled OemTec to hire local employees in China.

16. PacTec Shanghai did not have its own independent projects besides the projects it worked on with OemTec and OemTec’s affiliated companies.

17. Because OemTec and PacTec Shanghai often worked together on the same projects, OemTec employees worked regularly and closely with PacTec Shanghai employees.

18. OemTec employees generally worked more closely and interacted more regularly with those PacTec Shanghai employees with similar roles.

19. For example, as a software engineer myself, I worked closely and regularly with software engineers of the Shanghai office. They were my counterparts at the Shanghai office.

20. Employees in the two offices used emails, instant messaging platforms, and telephone calls to communicate and work together.

21. Employees of OemTec, myself included, considered PacTec Shanghai employees as members of the same team.

22. Besides Zhu who spent most of his time in Shanghai, many other employees of OemTec also travelled to Shanghai on occasions to work at our Shanghai office.

23. I visited the Shanghai office on two separate work trips.

24. On those trips, I worked with employees of the Shanghai office in person.

25. Employees of the Shanghai office knew I was from California.

26. During the period from 2006 through 2007, OemTec planned, researched, strategized, and worked on developing comparison shopping and affiliate marketing websites.

27. The Shanghai office and its employees were involved in, and worked on, these projects.

28. Yongchang “Gary” Ge (“Ge”), a defendant in the above-entitled matter, was an employee of the Shanghai office in or about 2006 and 2007.

29. Ge was a front-end web designer and developer.

30. Ge and I interacted on occasion.

31. I met Ge in person on my two trips to the Shanghai office.

32. OemTec also had front-end web designers and developers at its Marina del Rey office. They were Ge’s counterparts at OemTec.

33. Based on my understanding of how the Shanghai office operated in general, i.e., all employees of the Shanghai office generally worked with their counterparts at OemTec, Ge would have worked closely with his counterparts at OemTec.

(Ma Decl. ¶¶ 8-33.)  Plaintiff also provides the Declaration of Josh Steinberg, which provides:

9. OemTec was a technology incubator with physical offices in Marina del Rey, California. It researched, developed, and produced software and internet products and services.

10. Almost all OemTec employees worked out of the Marina del Rey offices.

11. In or about 2005, OemTec decided to expand and open an office in China to support its research and development efforts. At that time, it was common practice for non-Chinese companies like OemTec to set up a local entity to access the Chinese labor market.

12. In or about 2005, OemTec sent its Head of Technology, Defendant James Min Zhu (“Zhu”), to China to help open an office there.

13. The Chinese company that Zhu helped set up was PacTec Shanghai.

14. OemTec put Zhu in charge of managing PacTec Shanghai after it was formed. Zhu reported directly to me.

15. As OemTec’s Shanghai office, since its formation through 2008, PacTec Shanghai’s sole function was to hire local employees in China and provide services to OemTec and its other affiliated companies. It had no other customers.

16. Other than Zhu and their internal communication, the only external contacts that PacTec Shanghai employees, including Ge, would have primarily interacted, interfaced, or worked with on a daily basis in performing their jobs were OemTec employees based in California.

17. This meant that PacTec Shanghai employees had to work closely with their counterparts at OemTec.

18. Indeed, one of PacTec Shanghai’s main selling points in attracting potential job candidates was the unique opportunity to work remotely, but closely, with a California tech company while remaining in Shanghai physically.

19. To work together, OemTec and PacTec Shanghai employees communicated using instant messaging platforms (such as Skype), emails, and conference calls.

20. Most OemTec employees, including myself, did not speak Chinese. Therefore, OemTec and PacTec Shanghai employees used English as the primary language when they worked together.

21. The time difference between California and Shanghai is either 15 hours (during daylight saving time) or 16 hours (during standard time). To account for this, calls between OemTec and PacTec Shanghai were typically scheduled for late afternoons and early evenings in California, which corresponded to morning hours in Shanghai.

22. In addition to collaborating remotely, many OemTec employees traveled to Shanghai on business trips to work at PacTec Shanghai’s offices.

23. Zhu travelled back and forth between Shanghai and California in connection with his dual roles as OemTec’s head of technology and the head of PacTec Shanghai.

24. In 2006 and 2007, I often travelled to Shanghai to work with PacTec Shanghai and its employees. While in Shanghai, I informed the PacTec Shanghai employees I worked with that OemTec and I were based in California.

25. Ge and non-party Yuanyuan “Yoyo” Wei (“Wei”) were employees of PacTec Shanghai in 2006 and 2007.

26. Ge’s role at PacTec Shanghai included, but were not limited to, front-end web developer and web designer. Wei had a similar role. They worked together on many projects. Zhu worked directly with them and was their supervisor.

27. Ge would have to work with his counterparts at OemTec using English.

28. I met Ge in person while visiting PacTec Shanghai. The PacTec Shanghai employees that I met in-person in Shanghai, including Ge, knew I was visiting from California.

29. Tienshiao Ma (“Ma”) was a senior software engineer at OemTec. Like Zhu and me, Ma also travelled to Shanghai on occasion to work with PacTec Shanghai employees.

30. Ma and Ge interacted on occasion. Ge should have known that Ma was based in California and was visiting Shanghai for work.

31. Just like Zhu, Ma, and me, some of the OemTec employees that Ge worked with also visited PacTec Shanghai on occasion.

32. In 2006 and 2007, OemTec planned, researched, strategized, and worked on developing comparison shopping and affiliate marketing websites, including websites that cater to the Chinese market. One of such websites was a cashback rebate site that directs shoppers to affiliated retailers and pay shoppers a percentage of the commission it receives from those affiliated retailers when the shoppers purchase goods and services from them.

33. PacTec Shanghai assisted OemTec on these projects. As part of the collaboration and to help PacTec Shanghai better perform its responsibilities, OemTec provided PacTec Shanghai with proprietary information, data, research, and studies related to the comparison shopping and affiliate marketing websites that OemTec was working on, including but not limited to the cashback rebate site.

34. Ge and Wei participated in the projects of developing comparison shopping and affiliate marketing websites, including the cashback rebate site. The proprietary information, data, research, and studies related to the comparison shopping and affiliate marketing websites that OemTec provided PacTec Shanghai included information and guidance that enables and facilitates front-end web developers and web designers to perform their jobs.

35. PacTec Shanghai required all of its employees to enter into a Supplement to Employment Agreement. A true and correct copy of the Supplement to Employment Agreement is attached hereto as Exhibit A.

(Steinberg Decl. ¶¶ 9-35.)

            At best, the Ma and Steinberg declarations demonstrates that others at OemTec and possibly PacTec Shanghai knew the Shanghai-based company was working with a California-based company.  But it does not refute Ge’s declaration and discovery responses indicating that Ge did not know his company and coworkers worked with a California-based company and employees.  Further, despite declaring that Ge “would have” communicated with his “counterpart” in English, via Skype and e-mail, Plaintiff has not identified who Ge’s California counterpart is or produced a single document or communication Ge made in English in the course of his employment.  In short, the Steinberg declaration does not disprove Ge’s declaration that Ge does not speak or read English and was unaware his company and some of his colleagues worked for a California company.

            Thus, Plaintiff has not established that Ge “worked closely with” a California company or otherwise purposefully availed himself of the laws and protections of the State of California – the subject forum.

            Further, the Supplement to Employment Agreement attached as Exhibit A to the Steinberg Declaration does not modify the provision in Ge’s employment agreement that disputes arising from Ge’s employment are to be resolved in Shanghai.  As such, Plaintiff has not provided sufficient additional evidence to counter the Court’s prior findings that Ge’s contacts with California are insufficient to establish personal jurisdiction over him with respect to a dispute arising from Ge’s alleged misappropriation of company secrets in connection with his employment.

CONCLUSION AND ORDER

            For the foregoing reasons, the Court finds that Plaintiff has not demonstrated sufficient minimum contacts to establish personal jurisdiction over Ge in California, and therefore grants Ge’s Motion to Quash for lack of personal jurisdiction.  Consequently, the Court orders the summons issued concerning Ge quashed. 

            The Clerk of the Court shall provide notice of the Court’s ruling.

DATED:  October 3, 2024                                                     ___________________________

                                                                                          Michael E. Whitaker

                                                                                          Judge of the Superior Court