Judge Teresa A. Beaudet, Case Number: 24STCV15037, Date: 2024-12-09 Tentative Ruling

Plaintiff Guillermo Ortiz (“Plaintiff”) filed this action on June 17, 2024 against Defendants Areas USA LAX, LLC and Carlos Bernal (jointly, “Defendants”).

On August 23, 2024, Plaintiff filed the operative First Amended Individual and Representative Complaint for Damages (“FAC”) in this action. The FAC alleges causes of action for (1) failure to pay all minimum wages earned, (2) failure to pay all overtime wages earned,

(3) failure to provide meal periods, (4) failure to provide rest periods, (5) failure to pay all wages upon discharge, (6) failure to furnish accurate wage statements, (7) failure to keep accurate payroll records, (8) failure to provide employment records, (9) unlawful business practices,

(10) harassment, (11) retaliation, (12) failure to prevent discrimination, harassment or retaliation, and (13) civil penalties under PAGA.[1]

On July 1, 2024, Plaintiff filed a proof of service indicating that the Summons and Complaint were served on Carlos Bernal by substituted service on June 28, 2024.

Carlos Bernal, specially appearing (“Bernal”) now moves to quash the summons on the grounds that the Court lacks personal jurisdiction over him. Plaintiff opposes.

The Court rules on Bernal’s evidentiary objections to the Declaration of Kasey Diba as follows:

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.” ((Id., § 418.10, subd. (a).)

“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, 865 [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.) “A defendant that has substantial, continuous, and systematic contacts with the forum state is subject to general jurisdiction in the state, meaning jurisdiction on any cause of action.” ((HealthMarkets, Inc. v. Superior Court (2009) 171 Cal.App.4th 1160, 1167.) “General jurisdiction, as its name implies, extends to any and all claims brought against a defendant. Those claims need not relate to the forum State or the defendant’s activity there; they may concern events and conduct anywhere in the world. But that breadth imposes a correlative limit: Only a select set of affiliations with a forum will expose a defendant to such sweeping jurisdiction. In what [the Supreme Court] ha[s] called the paradigm case, an individual is subject to general jurisdiction in her place of domicile. And the equivalent forums for a corporation are its place of incorporation and principal place of business.” (Preciado v. Freightliner Custom Chassis Corp. (2023) 87 Cal.App.5th 964, 976 [internal quotations and references to [Citation.] omitted].)

A nonresident may be subject to specific jurisdiction if a three-prong test is met. “First, the defendant must have purposefully availed itself of the state’s benefits. Second, the controversy must be related to or arise out of the defendant’s contacts with the state. Third, considering the defendant’s contacts with the state and other factors, California’s exercise of jurisdiction over the defendant must comport with fair play and substantial justice.” ((Gilmore Bank v. AsiaTrust New Zealand Ltd. (2014) 223 Cal.App.4th 1558, 1568 [internal citations and emphasis omitted].) “When a defendant moves to quash service of process on jurisdictional grounds, the plaintiff has the initial burden of demonstrating facts justifying the exercise of jurisdiction. Once facts showing minimum contacts with the forum state are established, however, it becomes the defendant’s burden to demonstrate that the exercise of jurisdiction would be unreasonable.” (Vons Companies, Inc. v. Seabest Foods, Inc., supra, 14 Cal.4th at p. 449 [internal citations omitted].)

First, Bernal asserts that he is not subject to general jurisdiction in California. In his supporting declaration, Bernal states that he is the CEO of Areas USA LAX, Inc., and that Areas USA LAX, LLC is a wholly-owned subsidiary of Areas USA, Inc. (Bernal Decl., ¶¶ 2-3.) In his declaration, Bernal states that “I am a citizen and resident of Florida. I am also registered to vote in Florida and hold a Florida driver’s license. I do not maintain a residence or own any property in California, and I do not intend to reside in California. I primarily work out of Areas USA LAX, LLC’s headquarters in Miami, Florida.” (Bernal Decl., ¶ 4.) Bernal asserts that accordingly, his “contacts with California are nearly non-existent and cannot meet the high burden of establishing general jurisdiction.” (Mot. at p. 11:25-26.)

Plaintiff does not appear to dispute that Bernal is not subject to general jurisdiction in California. Rather, Plaintiff argues that Bernal is “subject to the Court’s jurisdiction pursuant to Labor Code [sections 558 and 558.1] as the owner and/or managing member of the entity defendant.” (Opp’n at p. 4:18-19.) These Code sections are discussed below.

Labor Code section 558, subdivision (a) provides that “[a]ny employer or other person acting on behalf of an employer who violates, or causes to be violated, a section of this chapter or any provision regulating hours and days of work in any order of the Industrial Welfare Commission shall be subject to a civil penalty…” In addition, Labor Code section 558.1, subdivision (a) provides that “[a]ny employer or other person acting on behalf of an employer, who violates, or causes to be violated, any provision regulating minimum wages or hours and days of work in any order of the Industrial Welfare Commission, or violates, or causes to be violated, Sections 203, 226, 226.7, 1193.6, 1194, or 2802, may be held liable as the employer for such violation.”

Plaintiff argues that “Bernal is subject to individual liability as the member manager of AREAS, under the unambiguous language of Labor law statute [sic], for causing, authorizing, or committing any labor law violations of AREAS against its employees including Plaintiff, as alleged.” (Opp’n at p. 5:8-11.)[2] But as noted by Bernal, Plaintiff appears to conflate the issues of liability and personal jurisdiction. As Bernal notes, “for a court to hold a defendant liable under Section 558.1, the Court must first have jurisdiction over them. These are separate inquiries.” (Mot. at pp. 14:26-15:1.) Further, Bernal points out that Plaintiff “offers no legal citations or authority…for the proposition that the potential liability of a defendant on the plaintiff’s claims establishes or otherwise supports the exercise of personal jurisdiction over that defendant.” (Reply at pp. 5:21-6:1 [emphasis omitted].)

As set forth above, a nonresident may be subject to specific jurisdiction if a three-prong test is met. “First, the defendant must have purposefully availed itself of the state’s benefits. Second, the controversy must be related to or arise out of the defendant’s contacts with the state. Third, considering the defendant’s contacts with the state and other factors, California’s exercise of jurisdiction over the defendant must comport with fair play and substantial justice.” ((Ibid. [internal citations and emphasis omitted].)

Bernal asserts that he is not subject to specific jurisdiction in California. As to the first prong, Bernal asserts that “Plaintiff makes no allegations in the FAC, nor can he provide any

evidentiary support” to establish purposeful availment. (Mot. at p. 12:19-20.) As set forth above, Bernal states in his supporting declaration that he is a “citizen and resident of Florida” and that he is “registered to vote in Florida and hold[s] a Florida driver’s license.” (Bernal Decl., ¶ 4.) Bernal also states that he does “not maintain a residence or own any property in California, and [does] not intend to reside in California.” (Bernal Decl., ¶ 4.) Bernal “primarily work[s] out of Areas USA LAX, LLC’s headquarters in Miami, Florida.” (Bernal Decl., ¶ 4.)

As to the second prong, Bernal asserts that “Plaintiff’s purported causes of action do not ‘arise out of’ the (negligible) contacts of Mr. Bernal. Put differently, Mr. Bernal’s contacts with California are not the ‘but-for cause’ leading to Plaintiff’s alleged Labor Code violations.” (Mot. at p. 13:18-20.) In his supporting declaration, Bernal states that “I do not supervise any California employees, and Areas USA LAX, LLC’s operations are directly overseen on a day-to-day basis by company employees other than myself. I did not develop or implement employee policies or practices related to the payment of wages, the provision of meal and rest periods, the timing of wage payments upon termination, wage statement formats, or any other wage and hour requirements.” (Bernal Decl., ¶ 5.) Bernal also states that “I have never met Guillermo Ortiz, the plaintiff in the above-captioned action. I did not, or have any reason to, supervise Mr. Ortiz’s employment – a former server at one of Areas USA LAX, LLC’s many restaurants. I did not hire Mr. Ortiz, or have any control over his wages, hours, and/or working conditions.” (Bernal Decl., ¶ 6.)

In the opposition, Plaintiff asserts that Bernal is subject to the Court’s specific jurisdiction. Plaintiff contends that “Bernal purposefully and intentionally established contacts with California by establishing no less than six different corporate entities in the State of California for profit, with none other than Bernal serving as the member-manager of the businesses, inclusive of AREAS.” (Opp’n at p. 8:23-25.) As set forth above, Exhibit “B” to Plaintiff’s RJN includes a Statement of Information for Areas USA LAX, LLC, filed on September 27, 2024 with California Office of the Secretary of State. This Statement of Information lists “Carlos Bernal” below “Manager or Member Name.” (Plaintiff’s RJN, Ex. B.) Plaintiff’s request for judicial notice also attaches Statements of Information filed with the California Secretary of State for the entities Areas USA LAX II, LLC; Areas USA SNA, LLC; Areas USA SAN, LLC; Areas USA OAK, LLC; and Areas USA SFO, LLC; which list “Carlos Bernal” below “Manager or Member Name” and “Manager(s) or Member(s).” (Plaintiff’s RJN, Exs. G, I, K, M, O.)[3]

Plaintiff contends that his causes of action “arise out of” or are “related to” these purported contacts with California. Plaintiff contends that “Bernal reached out to California to avail himself of the benefits and privileges of doing business here by managing six different corporate entities, five of which are currently active, one of which is Defendant AREAS. While working for AREAS, Plaintiff was subjected to various Labor Code violations which are now the subject of the instant lawsuit.” (Opp’n at p. 10:3-6.) But the Court does not see how Plaintiff’s causes of action in this case are related to or arise out of Bernal’s purported contacts with California. In the reply, Bernal asserts that “Plaintiff alleges violations of the California Labor Code, Fair Employment and Housing Act, and Unfair Competition Law, and, as against Mr. Bernal individually, solely alleges violations of the California Labor Code…these claims do not arise out of or relate to Areas’ Statement of Information filing, nor has Plaintiff submitted any competent evidence to the contrary.” (Reply at p. 9:17-21.) The Court agrees.

In addition, Bernal notes that “[i]t is the defendant’s intentional conduct…directed at the forum that creates the necessary contacts to assert jurisdiction, not the mere fact that an officer of the foreign corporation also exercised director duties in-forum. Personal jurisdiction must be based on forum-related acts that were personally committed by each nonresident defendant.” ((Rivelli v. Hemm (2021) 67 Cal.App.5th 380, 395-396 [internal quotations, citations, and emphasis omitted].) As noted by Bernal, “[h]ere, Plaintiff does not…allege Mr. Bernal committed any intentional torts, nor does he provide any competent evidence that any were committed or directed at Plaintiff and/or California.” (Reply at p. 8:21-23.)

Lastly, Plaintiff asserts that “in the event the Court does not find specific jurisdiction over Bernal, Plaintiff requests a continuance of the hearing on Bernal’s motion to quash to engage in discovery to gather evidence supporting jurisdiction.” (Opp’n at p. 11:17-19.)

“¿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.¿” (Burdick v. Superior Court (2015) 233 Cal.App.4th 8, 30¿; ¿see also Magnecomp Corp. v. Athene Co. (1989) 209 Cal.App.3d 526, 533¿, “¿[When] jurisdiction is challenged by a nonresident defendant, the burden of proof is upon the plaintiff to demonstrate that minimum contacts exist between defendant and the forum state to justify imposition of personal jurisdiction. The plaintiff has the right to conduct discovery with regard to the issue of jurisdiction to develop the facts necessary to sustain this burden.”¿ [internal quotations and citations omitted].)

Plaintiff asserts that “[i]f a continuance is granted to conduct discovery, Plaintiff intends to inquire into, inter alia, Bernal’s job duties, fiduciary duties owed to AREAS, the organization chart of AREAS, Bernal’s points of contact regarding AREAS business operations, and reporting obligations to Bernal, to determine the Bernal’s [sic] involvement as the sole managing and operating member of AREAS.” (Opp’n at p. 12:2-5.) Plaintiff states that he “will notice the remote deposition of Bernal, propound written discovery seeking admissions and explanations, identification of how AREAS operates on a corporate level, request a copy of AREAS’ operating agreement, etc…” (Opp’n at p. 12:5-8.)

In the reply, Bernal asserts that the Court should deny Plaintiff’s request for a continuance to conduct jurisdictional discovery. Bernal cites to In re Automobile Antitrust Cases I & II (2005) 135 Cal.App.4th 100, 127, where the Court of Appeal noted that “[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. 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.” (Internal citation omitted.) Bernal asserts that “[h]ere, Plaintiff offered no evidence or argument whatsoever that discovery could even potentially lead to evidence supporting personal jurisdiction over Mr. Bernal, much less that it would ‘likely’ lead to any such evidence.” (Reply at p. 11:11-13.)

However, the Court notes that “¿[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.¿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, supra, 135 Cal.App.4th at p. 127 [internal citation omitted, emphasis added]¿.) In the FAC in this case, Plaintiff alleges that “CARLOS BERNAL…is an individual and at all times material herein owns and operates AREAS, a commercial enterprise in the City of Los Angeles, in the County of Los Angeles, California and was at all times Plaintiff’s employer in control of Plaintiff’s wages, hours, and/or working conditions as the Managing Member of AREAS, and an alter ego of AREAS.” (FAC, ¶ 3.) Plaintiff should have an opportunity to conduct discovery on such allegations that may affect the question of personal jurisdiction over Bernal.

Bernal also cites to Preciado v. Freightliner Custom Chassis Corp., supra, 87 Cal.App.5th at pages 972-973, where the Court of Appeal noted that “there were 85 days between the April 1, 2021 filing of FCCC’s motion to quash and the June 25, 2021 filing of Plaintiffs’ opposition to that motion, and 99 days between the filing of the motion and the hearing date. However, Plaintiffs did not use that time period to propound any discovery targeted to the issue of personal jurisdiction. On the contrary, on June 10, 2021, Plaintiffs propounded lengthy discovery requests on FCCC, but Plaintiffs did not design that discovery to lead to evidence relevant to issues of personal jurisdiction.” (Internal emphasis omitted.) Bernal’s counsel submitted a supplemental declaration with the reply indicating that “[s]ince Plaintiff initiated this action on June 17, 2024, and since the filing of Mr. Bernal’s Motion to Quash on September 24, 2024, Plaintiff has not propounded any discovery relating to personal jurisdiction over Mr. Bernal.” (Suppl. Peralta Decl., ¶ 2.) However, as this evidence was submitted with the reply, Plaintiff has not had the opportunity to address it. The Court notes that “¿[t]he general rule of motion practice…is that new evidence is not permitted with reply papers.¿” (¿Jay v. Mahaffey¿(2013) 218 Cal.App.4th 1522, 1537¿.) In addition, as discussed, “[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.” (In re Automobile Antitrust Cases I & II, supra, 135 Cal.App.4th at p. 127.)

In light of the foregoing, the Court will continue the hearing on the instant motion to allow Plaintiff to conduct discovery on jurisdictional issues.

Based on the foregoing, the Court continues the hearing on Bernal’s motion to quash to ________________, 2025 at 2:00 p.m.

Plaintiff may conduct discovery on jurisdictional issues only. Plaintiff may file and serve a supplemental opposition to the instant motion and Bernal may file and serve a supplemental reply. Any supplemental opposition and reply papers must be filed and served pursuant to ¿Code of Civil Procedure section 1005, subdivision (b)¿ based on the new hearing date.

[1]The first, second, third, fourth, fifth, sixth, seventh, eighth, and thirteenth causes of action are alleged against both Defendants. The ninth, tenth, eleventh, and twelfth causes of action are alleged against Areas USA LAX, LLC only.

[2]Exhibit “B” to Plaintiff’s RJN includes a Statement of Information for Areas USA LAX, LLC, filed on September 27, 2024 with the State of California Office of the Secretary of State. This Statement of Information lists “Carlos Bernal” below “Manager or Member Name.” (Plaintiff’s RJN, Ex. B.)

[3]The Court notes that these entities are not named as defendants in the instant action.

GUILLERMO ORTIZ, Plaintiff, vs. AREAS USA LAX, LLC, et al. Defendants.	Case No.:	24STCV15037
	Hearing Date:	December 9, 2024
	Hearing Time:	2:00 a.m.
	[TENTATIVE] ORDER RE: DEFENDANT CARLOS BERNAL’S MOTION TO QUASH SERVICE OF SUMMONS FOR LACK OF JURISDICTION

Superior Court of California

County of Los Angeles

Department 50