PPE Supplies, LLC v. Khan Enterprises General Trading Company

UNITED STATES DISTRICT COURT FOR THE

NORTHERN DISTRICT OF OKLAHOMA

PPE SUPPLIES, LLC, )

)

Plaintiff, )

)

v. ) Case No. 21-CV-0144-CVE-SH

)

KHAN ENTERPRISES GENERAL )

TRADING COMPANY, )

NOAMAN KHAN, an individual, )

INNER RENEWABLE ENERGY )

(CAMBODIA) Co., Ltd., )

MEAS SETHVIPHOU a/k/a SAKHAI )

CHAKRATOK, an individual, )

KAIKANE USA, INC., )

TROY NISHIKAWA, an individual, and )

EJET SOURCING LIMITED, )

)

Defendants. )

OPINION AND ORDER

Before the Court are defendant KaiKane USA, Inc.’s motion for partial reconsideration (Dkt.

# 27) and plaintiff PPE Supplies, LLC’s response in opposition to defendant’s motion (Dkt. # 30).

On March 31, 2021, PPE Supplies, LLC (PPE Supplies) filed suit in this Court naming KaiKane

USA, Inc. (KaiKane) as a defendant. Dkt. # 2. PPE Supplies alleged five claims for relief: breach

of contract against Khan Enterprises General Trading Company (Khan Enterprises), Noaman Khan,

Kaikane, and Troy Nishikawa (count 1); breach of contract and breach of promissory note against

Inner Renewable Energy (Cambodia) Co., Ltd. (IREC) and Meas Sethviphou (count 2); fraud and

deceit against Khan and Sethviphou (count 3); unjust enrichment against Khan, Khan Enterprises,

IREC, Sethviphou, and Ejet Sourcing Limited (Ejet) (count 4); and chose in action against Khan

Enterprises, Khan, IREC, Sethviphou, and Ejet (count 5). Id. at 9-13. Defendants Nishikawa and

KaiKane moved to dismiss plaintiff’s claims, pursuant to Fed. R. Civ. P. 12(b)(2) and (b)(6), arguing

that defendants Nishikawa and KaiKane were not subject to personal jurisdiction in Oklahoma and,

in the alternative, that plaintiff failed to state a claim upon which relief may be granted.1 Dkt. ## 17,

18.

In its September 23, 2021 Opinion and Order (Dkt. # 26), this Court granted defendant

Nishikawa’s motion to dismiss (Dkt. # 18) for lack of personal jurisdiction. Dkt. # 26, at 21.

However, as to KaiKane’s motion to dismiss (Dkt. # 17), the Court denied in part as to lack of

personal jurisdiction, mooted in part as to failure to state a claim, and granted in part as to a Colorado

River stay pending the outcome of parallel state court proceedings. Id. Specifically, the Court found

that the exercise of general personal jurisdiction was appropriate because KaiKane’s continuous

business contacts with an Oklahoma-based business were such that “it could reasonably anticipate

being haled into court here[,]” and the exercise of personal jurisdiction did not offend “traditional

notions of fair play and substantial justice.” Id. at 11-14 (internal quotations omitted). Based on the

Court’s finding that the exercise of general personal jurisdiction over KaiKane was proper, the Court

proceeded to its Colorado River analysis-- finding that a stay pending the outcome of the state court

case was appropriate, and declining to address defendant KaiKane’s 12(b)(6) argument until

resolution of the state court suit. Id. at 21, n.7. Consequently, KaiKane filed a motion for partial

reconsideration of the Court’s September 23, 2021 Opinion and Order (Dkt. # 27); requesting the

Court to “reconsider its ruling that KaiKane is subject to general personal jurisdiction in Oklahoma

. . . because even continuous and systematic contacts are insufficient to create general [personal]

1 The Court will not restate the entire relevant factual background, which is detailed in its

September 23, 2021 Opinion and Order (Dkt. # 26).

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jurisdiction when a foreign corporation is not so domesticated in Oklahoma that it is essentially ‘at

home’ in the state.” Dkt. # 27, at 1, 3.

I.

Under Fed. R. Civ. P. 54(b), a non-final order “may be revised at any time before the entry

of a judgment adjudicating all the claims and all the parties’ rights and liabilities.” Fed. R. Civ. P.

54(b). The Supreme Court has found that “every order short of a final decree is subject to reopening

at the discretion of the district judge.” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460

U.S. 1, 12 (1983) (citing Fed. R. Civ. P. 54(b)); see also Price v. Philpot, 420 F.3d 1158, 1167 n.9

(10th Cir. 2005) (citing Moses H. Cone, 460 U.S. at 12, for the proposition that non-final orders are

subject to reopening at the district judge’s discretion).

II.

Defendant KaiKane argues that the Court should revisit its finding as to the exercise of

general personal jurisdiction over KaiKane in light of the Supreme Court’s and Tenth Circuit’s

general personal jurisdiction jurisprudence in recent years. Dkt. # 27, at 3. Plaintiff responds that

KaiKane’s motion (Dkt. # 27) falls “far short of warranting reconsideration, [because] KaiKane

supplies no new argument, authority, or facts to alter this Court’s” prior finding that the exercise of

general personal jurisdiction over KaiKane is proper. Dkt. # 30, at 1. The Court finds that

defendant’s motion for partial reconsideration of its September 23, 2021 Opinion and Order should

be granted.

The Court’s earlier Opinion and Order (Dkt. # 26) was not a final disposition of the case;

thus, it is a non-final order that, at the Court’s discretion, may be revised at any time before a final

judgment is entered. See Moses H. Cone, 460 U.S. at 12; see also Fed. R. Civ. P. 54(b). Given the

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Court’s general personal jurisdiction finding’s centrality to the case as to defendant KaiKane, the

Court chooses to exercise its discretion to review its general personal jurisdiction ruling de novo.

In its earlier Opinion and Order (Dkt. # 26), the Court outlined the applicable legal standard for

personal jurisdiction, relying on World Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297

(1980), for the proposition that due process requires that the nonresident “defendant’s conduct and

connection with the forum State are such that [the nonresident] should reasonably anticipate being

haled into court there.” Dkt. # 26, at 6. Further, the Court relied on Intercon, Inc. v. Bell Atl.

Internet Solutions, Inc., 205 F.3d 1244, 1247 (10th Cir. 2000) (citing Helicopteros Nacionales de

Colombia v. Hall, 466 U.S. 408, 414-16 & n.9 (1984)), for the proposition that“[w]hen a plaintiffs

cause of action does not arise directly from a defendant’s forum related activities, the court may

nonetheless maintain general personal jurisdiction over the defendant based on the defendant’s

business contacts with the forum state.” Id. at 7. However, upon de novo review, the Court finds

that the test for general personal jurisdiction has been further clarified since World Wide

Volkswagen and Intercon, warranting a reconsideration of the legal standard the Court applied in

analyzing the facts of this case.

Under International Shoe Co. v. Washington, 326 U.S. 310, 317 (1945), a court exercising

personal jurisdiction over a corporation, requiring it to “defend [a] particular suit... away from its

‘home’ or principal place of business[,]” must be reasonable. There, the Supreme Court found that

exercising personal jurisdiction over a corporation was reasonable where “the activities of the

corporation [in the forum state] have not only been continuous and systematic, but also give rise to

the liabilities sued on, even though no consent to be sued or authorization to an agent to accept

service of process has been given.” Id. In other words, a “court may exercise personal jurisdiction

over an out-of-state defendant who has certain minimum contacts with [the State] such that the

maintenance of the suit does not offend traditional notions of fair play and substantial justice.”

BNSF Ry. Co. v. Tyrrell, 137 8S. Ct. 1549, 1558 (2017) (citing International Shoe, 326 U.S. at 316)

(internal quotations omitted).

A. General Personal Jurisdiction

In subsequent cases, using International Shoe as its guide and starting point, the Supreme

Court “distinguished between specific or case-linked jurisdiction and general all-purpose

jurisdiction.” Id. (citing Daimler AG v. Bauman, 571 U.S. 117, 126-27 (2014); Goodyear Dunlop

Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011); Helicopteros, 466 U.S. at 414, nn. 8, 9).

“Goodyear and Daimler clarified that [a] court may assert general jurisdiction over foreign (sister-

state or foreign-country) corporations to hear any and all claims against them when their affiliations

with the State are so continuous and systematic as to render them essentially at home in the forum

state.” Id. (internal quotations omitted). The Supreme Court provided the paradigmatic examples

of a corporation’s place of incorporation or principal place of business as “forums in which a

corporate defendant is ‘at home,’” noting that the “exercise of general jurisdiction is not limited to

these forums; in an ‘exceptional case,’ a corporate defendant’s operations in another forum ‘may be

so substantial and of such a nature as to render the corporation at home in that state.’” Id. (quoting

Daimler, 571 U.S. at 139 n. 19). The Supreme Court noted that Perkins v, Benguet Consol. Mining

Co., 342 U.S. 437 (1952), exemplified the “exceptional case.” Id. There, the defendant

corporation’s owner temporarily relocated his enterprise from the Philippines to Ohio during

wartime, and the Court found that a court could exercise personal jurisdiction over the defendant

corporation in Ohio because “Ohio then became ‘the center of the corporation’s wartime activities.”

Id. (quoting Daimler, 571 U.S. 129 n. 8). Thus, the test for exercising general personal jurisdiction

requires more than sufficient minimum contacts such that a defendant corporation should reasonably

anticipate being haled into court in the forum state, as articulated in World-Wide Volkswagen, 444

U.S. at 297; in all but the rare, exceptional cases, exercising general personal jurisdiction is limited

to the forum where a defendant corporation is incorporated or where its principal place of business

is located.’

This “at home” standard has been recognized and affirmed in the Tenth Circuit. See, e.g.,

Am. Fid. Assurance Co. v. Bank of N.Y. Mellon, 810 F.3d 1234 (10th Cir. 2016); Monge v. RG

Petro-Machinery (Grp.) Co. Ltd., 701 F.3d 598 (10th Cir. 2012). In Monge, the Tenth Circuit held

that in order for the district court to exercise personal jurisdiction, the plaintiff “was required to

demonstrate by a preponderance of the evidence that [defendant] had ‘continuous and systematic

general business contacts’ with Oklahoma. 701 F.3d at 620 (quoting Benton v. Cameco Corp., 375

F.3d 1070, 1080 (10th Cir. 2004)). However, the Tenth Circuit analyzed defendant’s “continuous

and systematic general business contacts” using a “more stringent minimum contacts test,” adopting

the “at home” test first articulated in Goodyear. Id. (citing Goodyear, 564 U.S. at 919 and Benton,

375 F.3d at 1080). Consequently, the Tenth Circuit found that because the defendant corporation

1) did not have an Oklahoma place of business or phone listings; 2) its “website did not provide

> The Court respectfully notes, as Justice Sotomayor did in BNSF Ry. Co., 137S. Ct. at 1560

(Sotomayor, J., concurring in part and dissenting in part), that the Supreme Court’s “at

home” standard, which the majority asserts is governed by International Shoe, is in fact a

much more stringent and limiting test than the standard articulated in International Shoe.

Compare International Shoe, 326 U.S. at 317 (requiring a defendant to defend against

lawsuits in a forum other than its home or principal place of business must be reasonable),

with BNSF Ry. Co., 1375S. Ct. at 1558 (finding that exercising general personal jurisdiction

is appropriate if the forum state is where the defendant corporation is incorporated or has its

principal place of business, with a few narrow exceptions).

contacts that approximate physical presence”; 3) its representatives visited Oklahoma once for a few

hours; 4) there were a limited amount of email exchanges; and 5) a limited amount of sales to a

single Oklahoma resident, the district court properly denied general jurisdiction in Oklahoma. Id.

Here, for the Court to exercise general personal jurisdiction, plaintiff PPE Supplies had the

burden of showing by a preponderance of the evidence that defendant KaiKane’s general business

contacts in Oklahoma were “so ‘continuous and systematic’ as to render [it] essentially at home in

[Oklahoma].” Id. at 614 (quoting Goodyear, 564 U.S. at 919). Plaintiff stated in its complaint that

“KaiKane is a corporation incorporated under the laws of the State of Washington with its principal

place of business located in the state of Washington.” Dkt. # 2, at 2. Further, plaintiff submitted

PPE Supplies LLC member Michael Velasquez’s affidavit, detailing KaiKane’s business contacts

with Oklahoma since 2017. Dkt. # 23-1, at 1-3. In the affidavit, Velasquez states: he is a member

of PPE Supplies; he is also a member of Mike’s Pro Lids, LLC, a limited liability company

incorporated under the laws of Oklahoma; Velasquez has known Nishikawa (KaiKane’s executive

vice president) since 2017; Nishikawa has done business (on behalf of KaiKane) with Mike’s Pro

Lids since 2017; and Nishikawa has previously traveled to Oklahoma to meet with Velasquez and

his business partner. Id. at 1-2. Plaintiff further provides a 2017 email exchange between Baker and

Nishikawa (sent from the kaikaneusa.com email address), where Nishikawa states “you may think

that 75 [helmets] is not worth the trip to [Oklahoma], but this trip is for the future. . . . The #1 reason

to go all the way to [Oklahoma] is because we want to grow the business with you guys [.]” Id. at

5. In a later email exchange, Nishikawa (on the kaikaneusa.com email address) makes suggestions

for how Mike’s Pro Lids can ship their helmets less expensively. Id. at 6. Finally, plaintiff attached

as exhibits at least fourteen different Mike’s Pro Lids purchase orders billed to KaiKane between

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2017 and 2020 for over $30,000 in merchandise. Id. at 9-28. Based on plaintiff’s complaint and

submissions, the Court finds that plaintiff has not met its burden to show that KaiKane’s general

business contacts are so systematic and continuous as to render it essentially at home in Oklahoma.

First, Kaikane’s place of incorporation and principal place of business, the paradigmatic

indicators of being at home in a forum, are both in Washington state. Second, KaiKane’s general

business contacts with Oklahoma do not rise to the same level as the defendant corporation in

Perkins, which the Supreme Court used as the textbook example of the exceptional case where a

corporation is at home in a forum that is neither its place of incorporation nor principal place of

business. Compare Dkt. # 23-1, at 1-3, 5-6, 9-28, with Perkins, 342 U.S. at 447-48. By contrast,

PPE Supplies’ showing of KaiKane’s contacts in Oklahoma is far more analogous to the defendant

corporation’s contacts shown by the plaintiff in Monge, which the Tenth Circuit found was

insufficient for the proper exercise of general personal jurisdiction. Compare Dkt. # 23-1, at 1-3,

5-6, 9-28, with Monge, 701 F.3d at 620. Therefore, the Court finds that the exercise of general

personal jurisdiction over KaiKane should be denied, and the Court will next analyze whether

specific personal jurisdiction is proper in this case.

B. Specific Personal Jurisdiction

In its response in opposition to KaiKane’s motion to reconsider (Dkt. # 30), plaintiff directs

the Court to its response to KaiKane’s motion to dismiss (Dkt. # 23), in which plaintiff argues it has

shown that KaiKane’s sufficient minimum contacts with Oklahoma are such that this Court could

properly exercise specific personal jurisdiction over KaiKane. Dkt. # 30, at 4 n. 1. Like general

personal jurisdiction, the standard for specific personal jurisdiction stems from International Shoe’s

requirement that an out-of-state defendant have sufficient minimum contacts with the forum state

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such that requiring it to defend a suit in that state would “not offend traditional notions of fair play

and substantial justice.” International Shoe, 326 U.S. at 316 (internal quotations omitted); see also

BNSF Ry. Co., 137 S. Ct. at 1558. However, specific personal jurisdiction is “confined to

adjudication of issues deriving from, or connected with, the very controversy that establishes

jurisdiction.” Goodyear, 564 U.S. at 919 (internal quotations omitted). Thus, a court may exercise

specific personal jurisdiction where “the suit aris[es] out of or relate[s] to the defendant’s contacts

with the forum.” Daimler, 571 U.S. 127 (citing Helicopteros Nacionales de Colombia, 466 U.S. at

414 n.8 and Goodyear, 564 U.S. at 919) (internal quotations omitted). “Even though a defendant's

forum state contacts may not support general jurisdiction, they may still meet the less stringent

standard for specific jurisdiction if sufficiently related to the cause of action.” Old Republic Ins. Co.

v. Cont’| Motors, Inc., 877 F.3d 895, 904 (10th Cir. 2017). “Specific jurisdiction calls for a two-step

inquiry: (a) whether the plaintiff shown that the defendant has minimum contacts with the forum

state; and, if so, (b) whether the defendant has presented a ‘compelling case that the presence of

some other considerations would render jurisdiction unreasonable.’” Id.

The Supreme Court’s typical purposeful direction analysis’ examines the out-of-state

defendant’s “continuing relationships and obligations with citizens of [the forum state].” Burger

King Corp. v. Rudzewicz, 471 U.S. 462, 473 (1985) (internal quotations omitted); see also Old

Republic, 877 F.3d at 905 (applying the purposeful direction analysis articulated in Burger King).

“The Supreme Court has upheld the assertion of jurisdiction over defendants who have purposefully

reached out beyond their State and into another by, for example, entering a contractual relationship

that envisioned continuing and wide-reaching contacts in the forum state.” Old Republic, 877 F.3d

at 905 (citing Walden v. Fiore, 571 U.S. 277, 285 (2014) and Burger King, 471 U.S. 462, 473)

(internal quotations omitted). However, “an individual’s contract with an out-of-state party alone

can[not] automatically establish sufficient minimum contacts in the other party’s home forum[.]”

Burger King, 471 U.S. at 478 (emphasis in original). Instead, the Supreme Court emphasizes a

flexible and “highly realistic approach that recognizes that a contract is ordinarily but an intermediate

step.... It is these factors—prior negotiations and contemplated future consequences, along with

3 In Old Republic, the Tenth Circuit discussed two less common frameworks for analyzing

purposeful direction: 1) deliberate exploitation of the forum state market and 2) harmful

effects in the forum state. For the first alternative framework, the Supreme Court applied this

analysis in a situation where an out-of-state magazine publisher’s thousands of dollars in

monthly sales established purposeful direction. See Keeton v, Hustler Mag., 465 U.S. 770,

781 (1984). The second alternative framework applies “when an out-of-state defendant’s

intentional conduct targets and has substantial harmful effects in the forum state.” Old

Republic, 877 F.3d at 907 (citing Calder v. Jones, 465 U.S. 783, 790-91 (1984)). The Court

finds that neither of these frameworks is applicable to this case, because plaintiff did not

allege facts that suggest 1) defendant KaiKane deliberately exploited the Oklahoma market

by connecting PPE Supplies to Khan Enterprises in order to source N95 masks; or 2)

KaiKane’s role in connecting PPE Supplies to Khan Enterprises amounts to intentional

conduct that targets and has substantial harmful effects in Oklahoma. Therefore, the Court

will apply the typical purposeful direction analysis articulated in Burger King, the

circumstances of which, as here, involved a contractual relationship and determining whether

such a relationship is sufficient to establish purposeful direction.

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the terms of the contract and the parties’ actual course of dealing–that must be evaluated in

determining whether the defendant purposefully established minimum contacts with the forum. Id.

At 479.

Here, plaintiff alleges in its complaint that PPE Supplies, LLC member Michael Velasquez

reached out to KaiKane officer Nishikawa and inquired whether KaiKane could source N95

respirator masks, to which KaiKane indicated in the affirmative. Dkt. # 2, at 4. The complaint

alleges that KaiKane connected PPE Supplies with Khan Enterprises and shortly thereafter PPE

Supplies entered into multiple purchase order contracts with Khan Enterprises. Id. at 4, 5. Finally,

the purchase order contracts state “Bill to: KaiKane USA, Inc. Redmond WA 98052 USA[.]” Id.

As the Supreme Court found in Burger King, 471 U.S. at 478, KaiKane’s oral agreement to supply

N95 masks, or that KaiKane’s name appears on the purchase order contract, is not enough to

automatically establish sufficient minimum contacts. Moreover, plaintiff did not submit anything

further to establish purposeful direction, as between KaiKane and PPE Supplies, such as information

about prior negotiations, contemplated future consequences, contractual terms, or the parties’ actual

course of dealing. PPE Supplies did submit information about KaiKane’s connections to Oklahoma

and to PPE Supplies members stemming from KaiKane’s dealings with Mike’s Pro Lids, LLC, a

wholly different business entity. However, KaiKane’s prior negotiations, contemplated future

consequences, contractual terms, and course of dealing with Mike’s Pro Lids is the type of “random,

fortuitous, or attenuated” connection that the Supreme Court has held does not justify the exercise

of personal jurisdiction. Burger King, 471 U.S. at 480; World-Wide Volkswagen, 444 U.S. at 299.

In other words, this suit does not realistically arise from KaiKane’s contacts with Oklahoma as a

result of conducting business with Mike’s Pro Lids. Rather, this suit arises from PPE Supplies

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reaching out to a business contact in Washington (KaiKane) that some of the members knew from

prior dealings on behalf of another Oklahoma-based business (Mike’s Pro Lids); KaiKane connected

PPE Supplies with another business contact in Kuwait (Khan Enterprises); Khan Enterprises

executed a contract to supply a product from another intermediary in Cambodia (IREC); and IREC

dealt directly with a producer in China (Ejet). Somewhere along that chain, one of the intermediaries

was allegedly unjustly enriched by withholding PPE Supplies’ funds without providing to PPE

Supplies the masks it was promised. To exercise specific personal jurisdiction over KaiKane based

on its minimal role in this chain of events is the exact type of attenuated or random circumstance that

does not justify the exercise of specific personal jurisdiction, similar to the “fortuitous circumstance”

where a “single [] automobile, sold in New York to New York residents, happened to suffer an

accident while passing through Oklahoma.” World-Wide Volkswagen, 444 U.S. at 295. Therefore,

the Court finds that plaintiff did not establish sufficient minimum contacts for this Court to exercise

either general or specific personal jurisdiction over KaiKane. Thus, the Court finds that KaiKane’s

motion to dismiss (Dkt. # 17) for lack of personal jurisdiction should be granted.

IT IS THEREFORE ORDERED that KaiKane’s motion for partial reconsideration (Dkt.

# 27) is granted.

IT IS FURTHER ORDERED that the Court’s prior ruling (Dkt. # 26) denying in part

Kaikane’s motion to dismiss as to lack of personal jurisdiction, and granting in part KaiKane’s

motion to dismiss as to the Colorado River stay is vacated in part; and KaiKane’s motion to dismiss

(Dkt. # 17) is granted, and all claims against KaiKane are dismissed for lack of personal

jurisdiction. Defendant KaiKane is terminated as a party defendant.

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IT IS FURTHER ORDERED that plaintiff is directed to show cause, within 14 days, as

to why the remaining defendants in this case have not been served, and to show good cause as to why

the Court should not dismiss this case as to the remaining defendants.

DATED this 9th day of December, 2021.

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