# Kalter v. Keyfactor, Inc.

> District Court, S.D. California · March 4, 2022

URL: https://www.frixlaw.com/law-library/cases/10085356

## Case

- **Court:** District Court, S.D. California
- **Decided:** March 4, 2022
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

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6 UNITED STATES DISTRICT COURT
7 SOUTHERN DISTRICT OF CALIFORNIA
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9 JACQUELINE KALTER, Case No.: 3:21-cv-1707-L-JLB

10 Plaintiff,

11 v.
ORDER ON MOTION TO DISMISS
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KEYFACTOR, INC., et al.,
13 Defendants.
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15 Pending before the Court is Defendants Insight Venture Management, LLC and Insight
Venture Management, Inc.’s (collectively, “Insight”) motion to dismiss. Plaintiff opposed, and
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Insight responded. The Court decides the matter on the papers submitted without oral argument.
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See Civ. L. R. 7.1. For the reasons stated below, the Court GRANTS the motion.
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BACKGROUND
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In March 2019, Plaintiff was hired at Keyfactor, Inc. as a district sales director. (Compl.
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at ¶ 25). Plaintiff’s responsibilities included marketing and selling Keyfactor’s products
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throughout the Midwest. Id.
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Sometime in early 2019, Insight, a venture capital firm, invested approximately 77
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million dollars in Keyfactor. (Id. at ¶ 28). Through that transaction, at least three Insight
24 executives or officers obtained seats on Keyfactor’s Board of Directors. (Id. at ¶ 15). Insight
25 also received power to hire and appoint executives at Keyfactor and gained management,
26 oversight, input, or control over its operations. (Id. at ¶ 16)
27 In May 2019, Insight appointed Keyfactor’s new chief executive officer. (Id. at ¶ 29). In
28 August 2019, Keyfactor, with Insight’s approval, hired a new vice president of sales. (Id. at ¶
1 31). After that, “various members of leadership at Keyfactor made comments reflecting the
2 corporate preference for hiring younger employees.” (Id. at ¶ 33).
3 In late 2019, Keyfactor reassigned several of Plaintiff’s accounts and sales territory to a
younger sales manager. (Id. at ¶ 37). Plaintiff was then terminated in early 2020. (Id. at ¶ 38).
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Plaintiff alleges “Keyfactor management took additional steps to overhaul its sales team
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and remake [it] as a vibrant young company,” including systematic terminations of other sales
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directors. (Id. at ¶ 43).
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Plaintiff asserts several claims, including age discrimination, against Defendants Insight
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and Keyfactor. Plaintiff generally alleges Insight “compelled, coerced, aided, or abetted the
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discrimination.” (Id. at ¶ 13).
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Insight removed this action from state court and filed the pending motion to dismiss.
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(ECFs 1 and 11). Keyfactor filed its answer. (ECF 3).
12 DISCUSSION
13 Insight argues: (1) the Court lacks personal jurisdiction over it, and (2) Plaintiff failed to
14 state a claim against it. The Court will address the jurisdictional argument first.
15 Plaintiff bears the burden to establish the Court has personal jurisdiction over Insight.
16 Plaintiff must make a “prima facie showing of jurisdictional facts to withstand the motion to
dismiss.” Wash. Shoe Co. v. A-Z Sporting Goods, Inc., 704 F.3d 668, 671-672 (9th Cir. 2012).
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“Uncontroverted allegations in the complaint must be taken as true . . . and [any] conflicts
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between parties over statements contained in affidavits must be resolved in the plaintiff’s favor.”
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Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004).
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“Where . . . there is no applicable federal statute governing personal jurisdiction, the
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district court applies the law of the state in which the district court sits.” Id.; Daimler AG v.
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Bauman, 571 U.S. 117, 125 (2014) (“federal courts ordinarily follow state law in determining
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the bounds of their jurisdiction over persons.”) California’s long-arm statute extends jurisdiction
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over a defendant to the full extent permitted under the federal constitution. Cal. Civ. Proc. Code
25 § 410.10. The “jurisdictional analyses under [California] law and federal due process are
26 [therefore] the same.” Schwarzenegger, 374 F.3d at 800-01.
27 “For a court to exercise personal jurisdiction over a nonresident defendant, that defendant
28 must have at least ‘minimum contacts’ with the relevant forum such that the exercise of
1 jurisdiction ‘does not offend traditional notions of fair play and substantial justice.’” Id. at 801
2 (internal citation omitted).
3 Under the minimum contacts test, jurisdiction is either general or specific. General
jurisdiction exists where the defendant’s “affiliations with the state are so ‘continuous and
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systematic’ as to render them essentially at home in the forum state.” Daimler AG, 571 U.S. at
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127 (internal citation omitted). For specific jurisdiction, there are three requirements: “(1) the
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defendant must either purposefully direct [their] activities toward the forum or purposefully
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avail [themselves] of the privileges of conducting activities in the forum,” (2) the claims must
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relate to those activities, “and (3) the exercise of jurisdiction must comport with fair play and
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substantial justice, i.e., it must be reasonable.” Axiom Foods, Inc. v. Acerchem Int'l, Inc., 874
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F.3d 1064, 1068 (9th Cir. 2017); Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct., 141 S. Ct. 1017,
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1026 (2021). If a plaintiff establishes the first two prongs, the burden shifts to the defendant to
12 put forth a “compelling case” that the exercise of jurisdiction would be unreasonable.
13 CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1076 (9th Cir. 2011).
14 Here, Plaintiff does not make any argument as to general jurisdiction.1 The issue is
15 therefore whether the Court has specific jurisdiction over Insight.
16 Plaintiff relies on the Cadler v. Jones, 465 U.S. 783 (1984), “effects” test that is used to
determine “the purposeful direction” prong. Schwarzenegger, 374 F.3d at 803.2 Plaintiff must
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allege Insight: “(1) committed an intentional act, (2) expressly aimed at the forum state, (3)
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causing harm that the defendant knows is likely to be suffered in the forum state.” Dole Food
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Co. v. Watts, 303 F.3d 1104, 1111 (9th Cir. 2002); Schwarzenegger, 374 F.3d at 803; Axiom
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Foods, Inc., 874 F.3d at 1069. “Express aiming requires more than the defendant’s awareness
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1 “The paradigmatic locations where general jurisdiction is appropriate over a corporation are its place
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of incorporation and its principal place of business.” Ranza v. Nike, Inc., 793 F.3d 1059, 1069 (9th Cir.
25 2015). Insight has its principal place of business in New York and is a Delaware corporation/company.
(Compl. at ¶¶ 9-10).
26 2 The “analysis under the ‘purposeful availment or direction’ prong of the specific jurisdiction test turns
on the nature of the underlying claims. [Courts] generally focus [their] inquiry on purposeful availment
27 when the underlying claims sound in contract and on purposeful direction when they arise from alleged
tortious conduct committed outside the forum.” Ayla, Ltd. Liab. Co. v. Alya Skin Pty. Ltd., 11 F.4th 972,
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1 that the plaintiff it is alleged to have harmed resides in or has strong ties to the forum, because
2 the plaintiff cannot be the only link between the defendant and the forum. Something more—
3 conduct directly targeting the forum—is required to confer personal jurisdiction.” Ayla, Ltd.
Liab. Co., 11 F.4th at 980 (internal citations, quotation marks, and brackets omitted).
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Plaintiff argues personal jurisdiction over Insight exists because it “directly engaged in
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intentional discrimination or aided and abetted Keyfactor’s intentional discrimination aimed in
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California.” (Opposition at 6 and 9). There are no factual allegations in the Complaint to support
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that assertion. The paragraphs Plaintiff cites are all conclusory. For instance, the only paragraph
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about Insight’s alleged aiding and abetting is: “[Insight] compelled, coerced, aided, and/or
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abetted the discrimination.” (Compl. at ¶ 13). That conclusory assertion mirrors the statute
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Plaintiff relies on to support liability against Insight. Cal. Gov. Code § 12940(i) (it is an
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unlawful practice for “any person to aid, abet, incite, compel, or coerce the doing of any of the
12 actions forbidden under this part.”)3
13 The Court cannot exercise personal jurisdiction over Insight based on labels or
14 conclusions.4 Schwarzenegger, 374 F.3d at 800 (“plaintiff cannot simply rest on the bare
15 allegations of its complaint.”); see also Ranza, 793 F.3d at 1070 (“the existence of a parent-
16 subsidiary relationship is insufficient, on its own, to justify imputing one entity’s contacts with a
forum state to another for the purpose of establishing personal jurisdiction.”) Because the
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Complaint lacks factual allegations as to Insight’s conduct aimed at California, the Court
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22 3 Plaintiff raises arguments about the joint employer doctrine and the ability to hold third parties liable
for aiding and abetting an employer’s discrimination. (Opposition at 6-7). But liability and personal
23 jurisdiction are distinct issues. Sher v. Johnson, 911 F.2d 1357, 1365 (9th Cir. 1990) (“liability and
jurisdiction are independent. Liability depends on the relationship between the plaintiff and the
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defendants and between the individual defendants; jurisdiction depends only upon each defendant’s
25 relationship with the forum. Regardless of their joint liability, jurisdiction over each defendant must be
established individually.”) (internal citation omitted); AT&T v. Compagnie Bruxelles Lambert, 94 F.3d
26 586, 590-91 (9th Cir. 1996) (“even if [a defendant] would be liable [under a particular law], [plaintiff]
may not use liability as a substitute for personal jurisdiction . . . liability is not to be conflated with
27 amenability to suit in a particular forum.”)
4 Plaintiff also cannot plead new factual allegations in an opposition. See, e.g., Schneider v. Cal. Dep't of
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1 || GRANTS their motion.° Plaintiff must plead factual allegations to support personal jurisdiction
2 || over Insight.
3 Plaintiff might cure the above deficiencies if given leave to amend. The Court therefore
4 || GRANTS Plaintiff leave to amend. Fed. R. Civ. P. 15.
5 CONCLUSION
6 For the reasons stated above, the Court GRANTS Insight’s motion to dismiss with
LEAVE TO AMEND. Plaintiff has until March 21, 2022, to file an amended complaint.
’ IT IS SO ORDERED.
8 Dated: March 4, 2022
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10 Wy James flee
11 United States District Judge
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27 || —————__—_—_-
28 The Court therefore will not address Insight’s arguments as to Plaintiff’s failure to state a claim.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10085356. Public record. Not legal advice.