Judge: Peter A. Hernandez, Case: 24STCV07290, Date: 2024-10-23 Tentative Ruling

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Case Number: 24STCV07290    Hearing Date: October 23, 2024    Dept: 34

Specially-Appearing Defendant Dreambuilder Toy, LLC’s Motion to Quash Service of Summons for Lack of Personal Jurisdiction is GRANTED. The motion is DENIED as to all else.

I.                Background

On March 22, 2024, Plaintiff Laltitude, LLC (“Plaintiff”) filed its complaint against Defendant Dreambuilder Toy, LLC on a cause of action for declaratory relief.

On May 7, 2024, Plaintiff filed Judicial Council Form POS-010, Proof of Service of Summons (“First Proof of Service”).

On May 22, 2024, Specially-Appearing Defendant Dreambuilder Toy, LLC (“Defendant”) filed its Motion to Quash Service of Summons (“First Motion to Quash”).

On June 10, 2024, Plaintiff filed Judicial Council Form POS-020, Proof of Personal Service—Civil (“Second Proof of Service”).

On July 3, 2024, Defendant filed its Second Motion to Quash Service of Summons (“Second Motion to Quash”).

On August 20, 2024, the court granted Defendant’s First and Second Motion to Quash on the grounds that Plaintiff did not comply with the service statutes. The court denied Defendant's motions as to all else.

On September 11, 2024, Plaintiff filed Judicial Council Form POS-010, Proof of Service of Summons (“Third Proof of Service”).

On September 23, 2024, Defendant filed this Motion to Quash Service for lack of personal jurisdiction, and in the alternative, Motion to Dismiss or Stay this action for forum non conveniens. On October 10, 2024, Plaintiff filed an opposition to Defendant’s motion. As of October 15, 2024, no reply has been filed.

II.             Legal Standard

            “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: To quash service of summons on the ground of lack of jurisdiction of the court over him or her.”¿ (Code Civ. Proc., (CCP) § 418.10, subd. (a)(1).)¿¿¿ 

¿¿¿¿ 

            The plaintiff has the initial burden of demonstrating facts justifying the exercise of jurisdiction. (Burdick v. Superior Court (2015) 233 Cal.App.4th 8, 17 (Burdick); Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 449 (Vons).) ¿By¿statute, the courts of this state may exercise personal jurisdiction over nonresident defendants to the extent permitted by the United States Constitution.¿ (Code Civ. Proc., § 410.10.)¿ Under the Constitution, due process requires that a nonresident defendant have¿“certain minimum contacts” with a forum such that the court’s exercise of personal jurisdiction does not offend traditional notions of fair play and substantial justice.¿ (Int’l Shoe Co. v. Wash.¿(1945) 326 U.S. 310, 316.)¿¿ 

A.        Jurisdiction

            Defendant moves the court to quash the Third Proof of Service filed in this matter for lack of personal jurisdiction, or in the alternative, dismiss or stay Plaintiff’s claims against Defendant based on forum non conveniens. (Motion, at p. 4.)

California courts have personal jurisdiction over an out-of-state defendant only if (1) jurisdiction is available under California’s long arm statute and (2) the exercise of jurisdiction over the defendant does not offend principles of due process. (Buchanan v. Soto (2015) 241 Cal.App.4th 1353, 1361-1362; see also Pavlovich v. Superior Court (2002) 29 Cal.4th 262, 268.) Where, as here, a state has construed its long-arm statute to provide jurisdiction to the constitutional limits of due process under the Fourteenth Amendment, the focus is solely on whether the exercise of jurisdiction would comport with due process. (See In re Automobile Antitrust Cases I & II (2005) 135 Cal.App.4th 100, 107-108 (2005); Pavlovich, supra, 29 Cal.4th at p. 268.) Due process requires that a nonresident defendant have certain minimum contacts with the forum state “such that the exercise of jurisdiction does not offend ‘traditional notions of fair play and substantial justice.’” (Buchanan, supra, 241 Cal.App.4th at p. 1362 (quoting Int’l Shoe Co. v. Wash. (1945) 326 U.S. 310, 316).)¿ 

It is the plaintiff who has the burden of proving personal jurisdiction by showing that the defendant had the requisite “minimum contacts” with California, under either a general jurisdiction or a specific jurisdiction theory. (Floveyor International, Ltd. v. Superior Court (1997) 59 Cal.App.4th 789, 797.) “Although the defendant is the moving party and must present some admissible evidence (declarations or affidavits) to place the issue [of personal jurisdiction] before the court (by showing the absence of¿minimum contacts with the state), the burden of proof is on the plaintiff to establish, by a preponderance of the evidence, a basis for jurisdiction (minimum contacts between the defendant and the forum state) and valid service of process in conformance with our service statutes.”¿(School Dist. Of Okaloosa County v. Superior Court¿(1997) 58 Cal.App.4th 1126,¿1131.)

Defendant argues exercising personal jurisdiction over Defendant would be improper under California’s long-arm statute since Plaintiff cannot meet its burden to establish California’s general or specific personal jurisdiction over Defendant.¿(Motion, at pp. 4-5.) 

1.               General Personal Jurisdiction

A defendant is subject to a state’s general jurisdiction if its contacts “are so continuance and systematic as to render [it] essentially at home in the forum State.”¿ (Daimler AG v. Bauman (2014) 571 U.S. 117, 127.)¿ A corporation is typically subject to general jurisdiction where it is incorporated and where it has its principal place of business. (Ford Motor Co. v. Montana Eighth Judicial District Court (2021) 592 U.S. 351, 359.)

Defendant contends that it is not subject to California’s general personal jurisdiction as Defendant maintains no presence in California. (Id., at p. 6.)

In opposition, Plaintiff does not seem to dispute that California holds no general personal jurisdiction over Defendant.

Here, there is insufficient evidence supporting general personal jurisdiction over Defendant. Notably, Defendant is an Ohio limited liability company with a principal place of business in Ohio. (Compl., ¶ 2.)

Accordingly, the court does not have general jurisdiction over Defendant.

2.               Specific Personal Jurisdiction

“When determining whether specific jurisdiction exists, courts consider the ‘relationship among the defendant, the forum, and the litigation.’” (Halyard Health, Inc. v. Kimberly-Clark Corp. (2019) 43 Cal.App.5th 1062, 1070.) There are three requirements for specific jurisdiction: “(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 comport with fair play and substantial justice.” (Ibid.) To determine whether the exercise of specific jurisdiction is proper in a given case, courts consider the relationship among the defendant, the forum, and the litigation.¿ (Pavlovich v. Superior Court¿(2002) 29 Cal.4th 262, 269.)¿¿“[I]t is the defendant’s conduct that must form the necessary connection with the forum State that is the basis for its jurisdiction over him.”¿ (Walden v. Fiore¿(2014) 571 U.S. 277, 285 (Walden).)¿ “[A]¿defendant’s contacts with the¿forum¿State may be intertwined with his transactions or interactions with the plaintiff or other parties.¿¿But a defendant’s relationship with a plaintiff or third party, standing alone, is an insufficient basis for¿jurisdiction.”¿ (Id.,¿at p. 286.)¿¿It is the plaintiff’s burden to demonstrate that the defendant’s conduct giving rise to the pleaded causes of action amounts to constitutionally cognizable “minimum contacts.”¿ (Elkman,¿supra,¿173 Cal.App.4th at p. 1313.)¿¿ 

Defendant contends that it is not subject to specific personal jurisdiction as Plaintiff cannot meet its burden to show that Defendant has sufficient minimum contacts in California. (Motion, at pp. 6-7.)

a.                Purposeful Availment¿and Relatedness

A nonresident defendant may be subject to the specific jurisdiction of the forum “if the defendant has purposefully availed himself or herself of forum benefits [citation], and the ‘controversy is related to or “arises out of” a defendant’s contacts with the forum.’¿ [Citations.]”¿ (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 446.)¿ This test does not require a “causal relationship between the defendant’s in-state activity and the litigation.”¿ (Ford Motor Co., supra, 592 U.S. at p. 361.)¿ The “arise out” of standard “asks about causation,” but “relate to” does not.¿ (Ibid.)¿ “[W]hen a corporation has ‘continuously and deliberately exploited [a State’s] market, it must reasonably anticipate being haled into [that State’s] court[s]’ to defendant actions ‘based on’ products causing injury there.”¿ (Id., at p. 364.)¿¿¿ 

“[P]urposeful¿availment¿occurs where a nonresident defendant purposefully directs¿its activities at residents of the forum [citation],¿purposefully derives¿benefit¿from’ its activities in the forum [citation],¿creates a substantial connection with the forum [citation],¿deliberately has engaged in significant activities within’ the forum [citation],¿or has created continuing obligations between itself¿and residents of the forum.” (Anglo Irish Bank Corp. v. Superior Court¿(2008) 165 Cal.App.4th 969, 978, internal quotation marks and citations omitted.)¿¿ 

            On December 1, 2021, Plaintiff initiated patent infringement claims against Defendant in the Central District Court of California. (Compl., ¶ 4.) Defendant then succeeded in transferring the case to the Southern District of Ohio, where Defendant resides, on July 23, 2022. (Id., ¶ 5.) Subsequently, Plaintiff  and Defendant engaged settlement discussions which created two versions of a settlement agreement. (Id., ¶ 7-10.) Plaintiff then filed this action for declaratory relief to determine which version of the agreement controls and for its enforcement. (Id., ¶ 14.)

            Defendant notes that Plaintiff failed to make any jurisdictional allegations in its complaint. (Motion, at p. 7.) Additionally, Defendant contends that the Central District Court of California has already found that Defendant does not reside in this district for the purposes of Plaintiff’s patent infringement action. (Id., at p. 7, Exh. A.) As such, Defendant argues that any contacts with Plaintiff were made in furtherance of the Ohio litigation, and were therefore not purposefully directed toward California residents. (Id., at p. 7.)

            In opposition, Plaintiff argues that Defendant has actively engaged in substantial commercial activity within California, including direct sales and product distribution, demonstrating purposeful availment of California’s market. (Opp., at p. 5.) Additionally, Plaintiff argues that Defendant entered into specific contractual negotiations with Plaintiff, which is a California based limited liability company, including discussion related to the settlement agreement for the Ohio action. (Ibid.) Plaintiff also argues that this current case directly arises from Defendant’s contractual relationship with Plaintiff. (Ibid.)

The court finds that Plaintiff has not met its burden of establishing minimum contacts to justify personal jurisdiction over Defendant.

“A contract with an out-of-state party does not automatically establish purposeful availment in the other party's home forum. [Citations.]” (Stone v. Tex. (1999) 76 Cal.App.4th 1043, 1048.) In determining if defendants purposefully established minimum contacts, courts have considered parties’ “prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing… [Citation.]" (Malone v. Equitas Reinsurance (2000) 84 Cal.App.4th 1430, 1440.) California courts have “declined to find jurisdiction against out-of-state buyers except in rare instances where extensive business was done here. [Citations.]” (Futuresat Indus., Inc. v. Superior Ct. (1992) 3 Cal. App. 4th 155, 159.) “Jurisdiction over an out-of-state buyer must be premised on a substantial basis such as an ongoing relationship or course of dealings with the plaintiff. The test is not physical presence, which is not essential, but rather the totality of the jurisdictional contacts as relevant to whether the assumption of jurisdiction is fair. Continuous and substantial buying activity within the state can constitute sufficient contacts to warrant the exercise of jurisdiction.” (Ibid.)

Here, Plaintiff simply claims that Defendant is subject to personal jurisdiction in California since Defendant participates in California’s market and because the current action involves Defendant’s settlement with Plaintiff in the Ohio action. It is insufficient to claim that the settlement contract between the parties establishes Defendant’s purposeful availment simply because Plaintiff is a California company.

Accordingly, the court does not find that Defendant purposefully availed itself of California’s forum.

b.               Fair Play and Substantial Justice

When analyzing whether the exercise of jurisdiction would comport with fair play and substantial justice, courts may consider the following: “¿“the burden on the defendant,” “the forum State's interest in adjudicating the dispute,” “the plaintiff's interest in obtaining convenient and effective relief,” “the interstate judicial system's interest in obtaining the most efficient resolution of controversies,” and the “shared interest of the several States in furthering fundamental substantive social policies.”” (Burger King Corp. v. Rudzewicz¿(1985) 471 U.S. 462, 477.)

Defendant did not brief this issue extensively. Defendant merely argues that Defendant’s contacts are so attenuated with California that it would be unfair to exercise personal jurisdiction under these circumstances. (Motion, at p. 7.)

            In opposition, Plaintiff argues that exercising jurisdiction over Defendant in California align with the traditional notions of fair play and substantial justice since Defendant’s contacts are deliberate and substantial, California has a strong interest in protecting the contractual rights of its residents and in providing a forum for resolving disputes involving California-based businesses. (Opp., at p. 5.)

Here, the court declines to analyze this issue since Defendant did not purposefully availed itself of California as a forum.

Accordingly, the court does not have specific jurisdiction over Defendant.

The court grants Defendant’s Motion to Quash Service of Summons for lack of personal jurisdiction.

B.        Forum Non Conveniens

            As the court has granted Defendant’s Motion to Quash, the court finds that Defendant’s alternative Motion to Dismiss or Stay the Action for Forum Non Conveniens is moot.

III.           Conclusion

Specially-Appearing Defendant Dreambuilder Toy, LLC’s Motion to Quash Service of Summons for Lack of Personal Jurisdiction is GRANTED. The motion is DENIED as to all else.