Habbaba v. Gorilla Mind, LLC

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8 UNITED STATES DISTRICT COURT

9 SOUTHERN DISTRICT OF CALIFORNIA

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11 ALPHONSO HABBABA, Case No.: 24-CV-921 JLS (AHG)

12 Plaintiff,

ORDER:

13 v.

(1) GRANTING DEFENDANT

14 GORILLA MIND, LLC; NUTRACAP

NUTRACAP LABS, LLC’S MOTION

HOLDINGS, LLC; NUTRACAP LABS,

15 TO DIMISS FOR LACK OF

LLC; AND DOES 1–500,

JURISDICTION AND

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Defendants.

17 (2) DENYING DEFENDANT

NUTRACAP HOLDINGS, LLC’S

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MOTION TO DISMISS FOR LACK

19 OF JURISDICTION WITHOUT

PREJUDICE IN LIGHT OF

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AUTOMATIC BANKRUPTCY STAY

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(ECF Nos. 28, 29)

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23 Presently before the Court are Defendant Nutracap Labs, LLC’s (“Labs”) Motion to

24 Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(2) (“Labs Mot.,” ECF No. 29)

25 and Memorandum of Points and Authorities in Support Thereof (“Labs Mem.,” ECF

26 No. 29-1). Also before the Court are Plaintiff Alphonso Habbaba’s (“Plaintiff”)

27 Opposition (“Opp’n,” ECF No. 33) and Labs’ Reply thereto (“Reply,” ECF No. 40).

28 Defendant Nutracap Holdings, LLC’s (“Holdings”) also filed a Motion to Dismiss

1 Pursuant to Federal Rule of Civil Procedure 12(b)(2), which Plaintiff opposed. See ECF

2 Nos. 28, 32. Subsequently, the Court received a Notification of Bankruptcy Filing and

3 Automatic Stay as to Nutracap Holdings, LLC (“Bankr. Notice,” ECF No. 39).

4 The Court took the matters under submission without oral argument pursuant to Civil

5 Local Rule 7.1(d)(1). See ECF No. 38. Having carefully reviewed Plaintiff’s First

6 Amended Complaint (“FAC,” ECF No. 17), the Parties’ arguments, and the law, the Court

7 rules as follows.

8 BACKGROUND

9 I. Procedural Background

10 Plaintiff initiated the present matter by filing his original Complaint on March 11,

11 2024, in the Superior Court of California, County of San Diego, against Defendants Gorilla

12 Mind, LLC (“Gorilla”) and Does 1–500. See ECF No. 1, Exhibit A. Gorilla removed the

13 action to this Court on May 24, 2024. See ECF No. 1. On October 14, 2024, the Court

14 received a Joint Motion to Amend/Correct to Add Parties which the Court subsequently

15 granted. See ECF No. 15. On October 28, 2024, Plaintiff filed his FAC, which added

16 Holdings and Labs as Defendants. See FAC. In the FAC, Plaintiff raises claims of

17 negligence, strict products liability, and breach of implied warranties against Holdings and

18 Labs.1 See generally id.

19 On November 15, 2024, Defendant Gorilla filed an Answer to the Amended

20 Complaint. See ECF No. 22. On December 11, 2024, Labs and Holdings filed the instant

21 Motions to Dismiss.

22 II. Factual Background

23 Plaintiff—a resident of Spring Valley, California—alleges he relied on Defendants

24 Gorilla, Holdings, and Labs’ (collectively, “Defendants”) representations and warranties

25 in making his decisions to purchase purported nutritional/dietary supplements (“Gorilla

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1 Plaintiff also raises a claim of breach of express warranties, but this claim is only as to Defendants Gorilla

1 Products”), “believing they would be safe and effective for their advertised use and relying

2 on the expertise of the [Defendants].” FAC ¶¶ 1, 14. He alleges Defendants marketed

3 Gorilla Products as safe despite the fact that they contained a known hepatotoxin and “a

4 synthetic hepatotoxin at astronomical levels never before seen in other recalled

5 supplements causing liver injury.” Id. ¶ 30. Plaintiff alleges he began using Gorilla

6 Products in August 2022, and in September 2023, he experienced drug-induced liver failure

7 that was most likely caused by his use of Defendants’ products. Id. ¶¶ 15–16.

8 Plaintiff groups Labs and Holdings together in his FAC as “Nutracap” and alleges

9 “Nutracap” was contracted to assist in the manufacture, formulation, packaging, labeling,

10 distribution, and sale of Gorilla Products to Gorilla. Id. ¶ 9. He alleges Gorilla then sold

11 Gorilla Products directly to Plaintiff, through its website, and mailed Gorilla Products to

12 Plaintiff, who was located in and consumed said products in California. Id. ¶ 4.

13 Defendant Labs is incorporated in Georgia and has its principal place of business in

14 Norcross, Georgia. Id. ¶ 6. Defendant Holdings is incorporated in Delaware and also has

15 its principal place of business in Norcross, Georgia. Id. ¶ 7.

16 Labs, in support of its Motion, attached a Declaration of John Wesley Houser, IV

17 (“Mr. Houser”) (“Houser Decl.,” ECF No. 29-2). And Plaintiff, in support of his

18 Opposition, attached a Declaration of his counsel, Roy BenDavid (“Mr. BenDavid”).

19 (“BenDavid Decl.,” ECF No. 33-1). With its Reply, Labs attached a Second Declaration

20 of Mr. Houser (“Second Houser Decl.,” ECF No. 40-1).

21 DEFENDANT LABS’ MOTION TO DISMISS

22 In its Motion, Labs seeks to dismiss Plaintiff’s claims against it for lack of personal

23 jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(2). See Labs Mot. at 1.

24 I. Legal Standard

25 Federal Rule of Civil Procedure 12(b)(2) allows for a responding party to move for

26 an action to be dismissed due to a lack of personal jurisdiction. “A court’s power to

27 exercise jurisdiction over a party is limited by both statutory and constitutional

28 considerations.” In re Packaged Seafood Prods. Antitrust Litig., 338 F. Supp. 3d 1118,

1 1135 (S.D. Cal. 2018). In this case, those considerations are one and the same. See

2 Daimler AG v. Bauman, 571 U.S. 117, 125 (2014) (“California’s long-arm statute allows

3 the exercise of personal jurisdiction to the full extent permissible under the

4 U.S. Constitution.”).

5 The Due Process Clause of the Fourteenth Amendment of the U.S. Constitution

6 requires that a defendant “have certain minimum contacts with [a forum state] such that

7 the maintenance of the suit does not offend ‘traditional notions of fair play and substantial

8 justice.’” Int’l Shoe Co. v. Washington, Off. of Unemployment Comp. & Placement,

9 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). Courts

10 have personal jurisdiction over a party where they have either general or specific

11 jurisdiction. See Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919

12 (2011).

13 “A court may assert general jurisdiction over foreign (sister-state or foreign-country)

14 corporations to hear any and all claims against them when their affiliations with the State

15 are so ‘continuous and systematic’ as to render them essentially at home in the forum

16 State.” Goodyear, 564 U.S. at 919 (citing Int’l Shoe, 326 U.S. at 317). Specific jurisdiction

17 relies on an “‘affiliatio[n] between the forum and the underlying controversy,’ principally,

18 activity or an occurrence that takes place in the forum State and is therefore subject to the

19 State’s regulation.” Id. (citations omitted). Furthermore, specific jurisdiction is more

20 limited than general jurisdiction as it “is confined to adjudication of ‘issues deriving from,

21 or connected with, the very controversy that establishes jurisdiction.’” Id. (internal

22 quotation omitted).

23 Plaintiff has the burden of establishing that jurisdiction is proper. CollegeSource,

24 Inc. v. AcademyOne Inc., 653 F.3d 1066, 1073 (9th Cir. 2011). “Where . . . the defendant’s

25 motion is based on written materials rather than an evidentiary hearing, the plaintiff need

26 only make a prima facie showing of jurisdictional facts to withstand the motion to dismiss.”

27 Yamashita v. LG Chem, Ltd., 62 F.4th 496, 502 (9th Cir. 2023) (quoting CollegeSource,

28 653 F.3d at 1073)). Furthermore, “[u]ncontroverted allegations in the complaint are taken

1 as true, but in the face of a contradictory affidavit, the ‘plaintiff cannot simply rest on the

2 bare allegations of its complaint.’” Id. (quoting Mavrix Photo Inc. v. Brand Techs., Inc.,

3 647 F.3d 1218, 1223 (9th Cir. 2011)). “Conflicts between parties over statements

4 contained in affidavits must be resolved in the plaintiff’s favor.” Dole Food Co. v. Watts,

5 303 F.3d 1104, 1108 (9th Cir. 2002).

6 II. Analysis

7 The Court must make a finding as to whether Plaintiff has made a prima facie

8 showing of jurisdictional facts to withstand Labs’ Motion. Thus, the Court first considers

9 whether a showing has been made as to either general or specific jurisdiction.

10 A. General Jurisdiction

11 The Court preliminarily disposes of the issue of whether it may exercise general

12 jurisdiction over Labs. To determine this, the Court turns to the question of whether Labs

13 is “at home” in California. Daimler AG, 571 U.S. at 122 (citation omitted). The paradigm

14 forums in which a corporation is found to be “at home” are the forums where a corporation

15 is incorporated and where it has its principal place of business. Id. at 137 (citing Goodyear

16 564 U.S. at 924). Labs is incorporated and has its principal place of business in Georgia.

17 FAC ¶ 6. This indicates that it is not “at home” in California.

18 Courts may also find that a defendant is “at home” in a forum other than the place

19 of incorporation and principal place of business, where a defendant is “so heavily engaged

20 in activity [in the forum] ‘as to render [it] essentially at home’ in that State.” BNSF Ry.

21 Co. v. Tyrrell, 581 U.S. 402, 414 (2017) (citation omitted). Plaintiff does not appear to

22 argue, much less demonstrate that Labs is “so heavily engaged in activity” in California.

23 Therefore, the Court finds Plaintiff has not shown general jurisdiction exists over Labs.

24 B. Specific Jurisdiction

25 In order to determine whether specific jurisdiction may be exercised over a non-

26 resident defendant, courts in the Ninth Circuit turn to the following three prong test:

27 (1) The non-resident defendant must purposefully direct his

activities or consummate some transaction with the forum or

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forum, thereby invoking the benefits and protections of its laws;

3 (2) the claim must be one which arises out of or relates to the

defendant’s forum-related-activities; and (3) the exercise of

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jurisdiction must comport with fair play and substantial justice,

5 i.e. it must be reasonable.

6 Dole Food Co., 303 F.3d at 1111 (citations omitted). The burden of satisfying the first two

7 prongs belongs to Plaintiff, and “if the plaintiff fails to satisfy either of these prongs,

8 personal jurisdiction is not established in the forum State.” Schwarzenegger v. Fred Martin

9 Motor Co., 374 F.3d 797, 802 (9th Cir. 2004) (citation omitted) (cleaned up). “If the

10 plaintiff succeeds in satisfying both of the first two prongs, the burden then shifts to the

11 defendant to ‘present a compelling case’ that the exercise of jurisdiction would not be

12 reasonable.” Id. (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476–78 (2006)).

13 1. Purposeful Direction or Purposeful Availment

14 “Purposeful direction” and “purposeful availment” encompass two distinct concepts.

15 Herbal Brands, Inc. v. Photoplaza, Inc., 72 F.4th 1085, 1090 (9th Cir. 2023) (citing Glob.

16 Commodities Trading Grp., Inc. v. Beneficio de Arroz Choloma, S.A., 972 F.3d 1101, 1107

17 (9th Cir. 2020)). Courts generally use the purposeful availment analysis “for unintentional

18 tort claims” or for “suits sounding in contract.” Id. (citations omitted). In contrast, a

19 purposeful direction analysis is generally used in suits where “claims require[] an

20 intentional tortious or ‘tort-like’ act.” Id. (citing Ayla, LLC v. Alya Skin Pty. Ltd., 11 F.4th

21 972, 979 (9th Cir. 2021)). While these two tests are distinct, the Ninth Circuit has provided

22 that, “when considering specific jurisdiction, courts should comprehensively evaluate the

23 extent of the defendant’s contacts with the forum state and those contacts’ relationship to

24 the plaintiff’s claims—which may mean looking at both purposeful availment and

25 purposeful direction.” Davis v. Cranfield Aerospace Sols., Ltd., 71 F.4th 1154, 1162 (9th

26 Cir. 2023).

27 Given that the present lawsuit involves unintentional tort claims, see generally FAC,

28 the Court first conducts a purposeful availment analysis.

1 a. Purposeful Availment

2 For a party to have purposefully availed themselves of the laws of a forum state,

3 “they must have ‘deliberately reached out beyond [their] home[s]—by, for example,

4 exploiting a market in the forum State or entering a contractual relationship centered

5 there.’” Yamashita, 62 F.4th at 503 (quoting Ford Motor Co. v. Mont. Eighth Jud. Dist.

6 Ct., 592 U.S. 351, 359 (2021)). Courts in the Ninth Circuit employ the “stream-of-

7 commerce-plus test” which provides that “‘[t]he placement of a product into the stream of

8 commerce, without more, is not an act purposefully directed toward a forum state,’ even if

9 the defendant is ‘aware[] that the stream of commerce may or will sweep the product into

10 the forum state.’” Id. (citations omitted).

11 Labs argues that it has not purposefully availed itself of the privilege of conducting

12 business in California. In furtherance of its argument, Labs states that it “did not conduct

13 relevant contractual activities within California and did not, thereby, invoke the privilege

14 or protection of California law.” Labs Mem. at 9. In Labs’ attached Declaration,

15 Mr. Houser attests that Labs “did not sell or ship the Gorilla Products to Plaintiff in

16 California or otherwise ship or sell Gorilla Products to California at all.” Houser Decl. ¶ 8.

17 Moreover, Labs “did not sell any products manufactured for Gorilla direct to consumers,

18 as any and all products manufactured by [Labs] for Gorilla were sold solely to Gorilla and

19 shipped directly to Gorilla in Idaho.” Id. ¶ 9. Mr. Houser attests that any and all of Labs’

20 business activities were performed in Georgia and Labs neither “advertise[d] products

21 manufactured for Gorilla in California or elsewhere and did not provide any customer

22 support for Gorilla product consumers in California or elsewhere.” Id. ¶¶ 10, 11. Further,

23 Mr. Houser asserts Labs “had no control over Gorilla’s sale or distribution of the products

24 it sold to Gorilla.” Id. ¶ 12. Accordingly, Labs argues that it “simply placed products in

25 the stream of commerce which, without more, is insufficient to establish purposeful

26 availment.” Labs Mem. at 9.

27 In response, Plaintiff first argues that purposeful availment exists here based on

28 Labs’ relationship with Gorilla. Opp’n at 11. Plaintiff contends that Labs “purposefully

1 availed itself of doing business in California when it agreed to manufacture and supply

2 Green Tea Supplements to [Gorilla] who Labs knew to be a nationwide retailer of

3 supplements.” Id. Additionally, Plaintiff argues that “Labs is not simply a manufacturer

4 with no control over the ultimate distribution of the product,” because “Labs had control

5 over the distribution of the Green Tea Supplements when it agreed to sell their products to

6 a nationwide distributor, and did not limit the territorial reach of where [Gorilla] could sell

7 Green Tea Supplements by contract or otherwise.” Id. at 14.

8 The Court is not persuaded that Labs entering into an agreement with Gorilla, a

9 nationwide distributor, demonstrates anything more than the placement of a product into

10 the stream of commerce, with the knowledge that it could potentially enter the forum state.

11 And “for the placement of a product into the stream of commerce to count as purposeful

12 availment, there needs to be some indication that [Defendant] made a deliberate effort to

13 target the forum state.” Huntington v. Smoke City for Less LLC, No. 4:22-CV-05014-

14 MKD, 2023 WL 2996729, at *7 (E.D. Wash. Apr. 18, 2023) (citing Yamashita, 62 F.4th

15 at 503). Plaintiff’s argument that it did not limit the territorial reach of Gorilla is

16 insufficient to demonstrate it made a “deliberate effort” to target California. Huntington,

17 2023 WL 2996729, at *7 (finding plaintiff failed to show more than “bare stream of

18 commerce” where the plaintiff proffered no evidence that defendant sold consumer

19 products directly to the forum state’s residents or that it targeted the state when it sold its

20 products to third parties). Rather, the Court finds merit in Labs’ contention that “[t]he fact

21 that Labs did not impose any distribution requirements or limitations evidences Labs’ lack

22 of control over Gorilla’s distribution.” Reply at 6 (emphasis in original).

23 The Court notes that Plaintiff also suggests Labs had control over Gorilla because it

24 “provided marketing services to Gorilla,” which allowed Labs to “influence[] the final

25 destination of their products.” Opp’n at 13. However, Plaintiff cites no support for this

26 contention. Assuming Plaintiff is referring to his proffered evidence that Gorilla stated in

27 discovery responses that Labs was responsible for marketing Green Tea Supplements, see

28 Opp’n at 7 (citing Defendant Gorilla Mind LLC’s Response to Plaintiff’s Special

1 Interrogatories, Set One, Exhibit A, ECF No. 33-2), Plaintiff has not explained, much less

2 provided evidence demonstrating, how such marketing services “influenced” the

3 destination of Gorilla’s products. Accordingly, Plaintiff’s allegations are insufficient to

4 overcome Mr. Houser’s Declaration that Labs “had no control over Gorilla’s sale or

5 distribution of the products it sold Gorilla.” Houser Decl. ¶ 12; see also Second Houser

6 Decl. ¶ 5 (“Labs did not have any input, influence, or control over how or where Gorilla

7 distributed products [Labs] sold to Gorilla.”); Yamashita, 62 F.4th at 502 (“[I]n the face of

8 a contradictory affidavit, the plaintiff cannot simply rest on the bare allegations of its

9 complaint.” (internal quotation marks and citation omitted)).

10 Next, Plaintiff claims that “Labs had clear notice of [its] exposure to suits arising

11 from California, which is why it signed an indemnity agreement with Gorilla . . . .” Opp’n

12 at 14. Plaintiff argues that by entering into the indemnity agreement, “Labs contemplated

13 the future consequences of supplying [Gorilla] with Green Tea Supplements” and “the fact

14 that there would be end users of Green Tea Supplements who could potentially bring

15 lawsuits related to Labs’ products . . . .” Id.; see also Indemnification Agreement, ECF

16 No. 33-2, Exhibit E. However, the referenced indemnification agreement is not

17 geographic-specific and does not mention or discuss California. The Court is not

18 persuaded that such a general agreement shows Labs “deliberately ‘reached out beyond’

19 its home—by, for example, ‘exploiting a market’ in the forum State or entering a

20 contractual relationship centered there.” See Ford, 592 U.S. at 359 (citing Walden v. Fiore,

21 571 U.S. 277, 285 (2014) (alterations omitted)).

22 Plaintiff also argues that purposeful availment is met based on Labs’ California

23 contacts. First, Plaintiff argues that Labs “admits at least 5% of its business—which

24 operates worldwide—came from the state of California,” citing to “Declaration of Marcos

25 Lima ¶ 6.” Opp’n at 15 (emphasis in original). However, no such declaration is attached

26 to Labs’ Motion or Plaintiff’s Opposition; rather Plaintiff appears to be referencing the

27 Declaration by Marcos Lima in Support of Holdings’ Motion, where Mr. Lima attests that

28 “[b]etween and including 2021 and 2024 to date, only 5.36% of Nutracap Holdings’ total

1 sales came from the State of California.” See Declaration of Maros Lima in Support of

2 Nutracap Holdings, LLC’s Motion to Dismiss Pursuant to FRCP 12(B)(2), ECF No. 28-2

3 ¶ 6 (emphasis added).

4 But plaintiff must make a prima facie showing that “each entity defendant

5 purposefully availed itself of the benefit of doing business in the forum.” NuCal Foods,

6 Inc. v. Quality Egg LLC, 887 F. Supp. 2d 977, 990 (E.D. Cal. 2012). As enunciated by the

7 Ninth Circuit:

8 Purposeful availment analysis examines whether the

defendant’s contacts with the forum are attributable to his own

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actions or are solely the actions of the plaintiff. In order to have

10 purposefully availed oneself of conducting activities in the

forum, the defendant must have performed some type of

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affirmative conduct which allows or promotes the transaction of

12 business within the forum state.

13 Sinatra v. National Enquirer, 854 F.2d 1191, 1195 (9th Cir. 1988) (citations omitted). It

14 goes unchallenged that Holdings and Labs are distinct entities. Houser Decl. ¶ 2.

15 Plaintiff’s allegations with respect to Holdings, thus, are insufficient to demonstrate

16 affirmative conduct by Labs that allows or promotes the transaction of business within

17 California.2

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20 2 The Court recognizes in some instances contacts by one entity may be imputed to another for the

purposes of personal jurisdiction, such as under “alter ego” or “agency” theories of liability. See Wehlage

21 v. EmpRes Healthcare, Inc., 791 F. Supp. 2d 774, 782 (N.D. Cal. 2011) (citation omitted) (holding to avail

themself of the alter ego doctrine, a plaintiff must allege two elements: “First, there must be such a unity

22 of interest and ownership between the corporation and its equitable owner that the separate personalities

of the corporation and the shareholder do not in reality exist. Second, there must be an inequitable result

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if the acts in question are treated as those of the corporation alone.” (citation omitted)); see also Williams

24 v. Yamaha Motor Co., 851 F.3d 1015, 1023 (9th Cir. 2017) (noting that while the Supreme Court “voided

[the Ninth Circuit's] agency approach for imputing contacts for the purpose of general jurisdiction, it left

25 open the question of whether an agency relationship might justify the exercise of specific jurisdiction”).

However, Plaintiff does not raise any such theory, nor argue actions by Holdings should be imputed to

26 Labs. Accordingly, the Court will not consider any purported contacts of Holdings to be imputed to Labs

for the purposes of this Order. See Calvert v. Huckins, 875 F. Supp. 674, 678 (E.D. Cal. 1995)

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(“Disregarding the corporate entity is recognized as an extreme remedy, and ‘[c]ourts will pierce the

28 corporate veil only in exceptional circumstances.’” (citation omitted)).

1 Similarly, Plaintiff then asserts that “through Holdings, Labs itself has directly sold

2 supplements and products to the residents of California through the brand MyoBlox.” Id.

3 at 15. And Plaintiff represents that, “[t]hrough Holdings, Labs is subject to a consent

4 judgment that requires the company to take specific actions related to products known to

5 be specifically targeted to California.” Id. at 15–16.

6 However, Plaintiff’s supporting Declaration does not demonstrate involvement by

7 Labs. Rather his counsel avers only that Holdings sells products directly to California

8 consumers through brands such as MyoBlox, and that Holdings entered into a consent

9 agreement on August 24, 2024, in the California Superior Court of Alameda County.

10 BenDavid Decl. ¶¶ 7–9. Such allegations are thus likewise insufficient to make a prima

11 facie showing of purposeful availment as to Labs, a distinct entity defendant. NuCal

12 Foods, Inc, 887 F. Supp. 2d at 990.

13 Plaintiff also states that “[i]ndirectly, Labs has sold products to California by

14 entering into contracts with companies such as DBD [DTA Corporation] that have directly

15 targeted California consumers.” Opp’n at 16. And one of these brands, GenOne, Plaintiff

16 represents in his Opposition, is owned by DBD and “manufactured by Labs,” and is

17 “actively marketed on Amazon with labels specifically designed to conform to California

18 law under Proposition 65.” Id. However, Plaintiff’s supporting Declaration from his

19 counsel appears to contradict these assertions, as Mr. BenDavid attests that Marcos Lima,

20 Chief Operating Officer for Holdings owns DBD DTA Corporation (“DBD”), and that

21 DBD has five brands, four of which promote supplements manufactured by Holdings.

22 BenDavid Decl. ¶¶ 10–11. Similarly, Plaintiff references two recalls voluntarily issued by

23 Holdings—not Labs—for products in California in November 2021, see Opp’n at 16, but

24 provides no evidence as to why these demonstrate contacts by Labs, a distinct entity that

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That said, the Court does not make any findings with respect to the existence of personal jurisdiction or

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lack thereof as to Holdings in this Order, in light of the automatic stay of this action against Holdings.

28 And nothing in this Order should be construed as suggestive of the Court’s thoughts as to whether Plaintiff

1 had ceased to operate as a manufacturing, distributing, and selling entity at such time.

2 Again, these allegations are insufficient to establish Labs made deliberate efforts to

3 avail itself of the privilege of doing business in California. See Helicopteros Nacionales

4 de Colombia, S.A. v. Hall, 466 U.S. 408, 417 (1984) (“[U]nilateral activity of another party

5 or a third person is not an appropriate consideration when determining whether a defendant

6 has sufficient contacts with a forum State to justify an assertion of jurisdiction.”); see also

7 Ford, 592 U.S. at 359 (The “contacts must be the defendant’s own choice and not ‘random,

8 isolated, or fortuitous.’” (citation omitted)).

9 And in any event, the Court is persuaded by Labs that Plaintiff’s argument “merely

10 shows an ‘awareness that the stream of commerce may or will sweep the product into the

11 forum State,’” Reply at 7 (quoting Asahi Metal Indus. Co., Ltd. v. Superior Ct. of Ca.,

12 Solano Cnty., 480 U.S. 102, 112 (1987)), which is insufficient to establish the requisite

13 targeting. Furthermore, Plaintiff has not demonstrated any additional conduct by Labs,

14 such as it “designing the product for the market in the forum State, advertising in the forum

15 State, establishing channels for providing regular advice to customers in the forum State,

16 or marketing the product through a distributor who has agreed to serve as the sales agent

17 in the forum State.” Asahi, 480 U.S. at 112. Plaintiff’s stance is merely that Labs indirectly

18 sold the products. Thus, purposeful availment is not met.

19 Based on the Parties’ arguments, the Court finds that Labs did not purposefully avail

20 itself of the privilege of doing business in California. Therefore, Plaintiff has not met his

21 burden of proving the first prong of the test for specific jurisdiction, based on the purposeful

22 availment test. Although this case fits within those that are typically considered through a

23 purposeful availment analysis, the Court also considers purposeful direction to

24 “comprehensively evaluate” the extent of Labs’ contacts with the forum state. See Davis,

25 71 F.4th at 1162.

26 b. Purposeful Direction

27 A showing “that a defendant [purposefully] directed [its] conduct toward a forum

28 state . . . usually consists of evidence of the defendant’s actions outside the forum state that

1 are directed at the forum, such as the distribution in the forum state of goods originating

2 elsewhere.” Schwarzenegger, 374 F.3d at 803(emphasis added). When conducting a

3 purposeful direction analysis, courts take into consideration the Calder “effects” test which

4 requires a plaintiff to establish that the defendant:

5 (1) committed an intentional act, (2) expressly aimed at the

forum state, (3) causing harm the defendant knows is likely to be

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suffered in the forum state.

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8 Id. (citing Dole Food Co., 303 F.3d at 1111).

9 In its Motion, Labs contends that any claim of personal jurisdiction based on

10 purposeful direction must fail because it “simply placed Gorilla products into the stream

11 of commerce with no direct sale to Plaintiff or any other California resident.” Labs Mem.

12 at 9 (citing Houser Decl. ¶¶ 8–9). Labs also asserts that it “exercised no control over where

13 Gorilla sold or distributed the product.” Id. (citing Houser Decl. ¶ 12).

14 In his Opposition, Plaintiff appears to set forth a purposeful direction analysis as a

15 means of furthering his purposeful availment analysis. Plaintiff turns to Herbal Brands,

16 where the court held that “if a defendant, in its regular course of business, sells a physical

17 product via an interactive website and causes that product to be delivered to the forum, the

18 defendant has purposefully directed its conduct at the forum such that the exercise of

19 personal jurisdiction may be appropriate.” 72 F.4th at 1088. When conducting a

20 purposeful direction analysis in this specific context, the test set forth by the court in Herbal

21 Brands asks whether (1) the sale was part of the defendant’s regular course of business

22 instead of being random and isolated and (2) the defendant exercised some level of control

23 over the ultimate distribution of its product. Id. at 1094.

24 Plaintiff’s position is that “the sale of products manufactured by Labs in California

25 was part of Labs’ normal course of business.” Opp’n at 12. In support of this, Plaintiff

26 states that “Labs is a supplement manufacturer that advertises itself as a wholesale supplier

27 of supplements and offers an interactive website where retailers can exchange information

28 with Labs.” Id. at 13. Plaintiff also states that “Labs supplied [Gorilla] with at least 65,000

1 bottles of Green Tea Supplements as part of the normal course of their business selling

2 supplements at a wholesale price . . . .” Id. Further, Plaintiff contends that “Labs

3 manufactured these products with the clear knowledge and understanding that the products

4 would be sold nationally” because “this is not a volume that can be reasonably anticipated

5 to be sold in just a single state.” Id.

6 There are several problems with this argument. First, the website referred to appears

7 to be that of Holdings, not Labs. See BenDavid Decl. ¶ 4. Next, it was Gorilla, not Labs,

8 that sold Gorilla Products to consumers and caused the products to be delivered to the

9 forum. See Houser Decl. ¶¶ 8–9 (“Labs did not sell or ship Gorilla Products to Plaintiff in

10 California or otherwise ship or sell Gorilla Products to California at all . . . it did not sell

11 any products manufactured for Gorilla direct to consumers, as any and all products

12 manufactured by [Labs] for Gorilla were sold solely to Gorilla and shipped directly to

13 Gorilla in Idaho.”). Finally, as explained above, the Court is not persuaded that Labs

14 exercised some level of control over the ultimate distribution of Gorilla Products because

15 it “did not limit the territorial reach” of Gorilla’s sales and signed general and non-

16 geographic specific indemnity agreements with Gorilla. See Opp’n at 14. Nor is the Court

17 swayed by Plaintiff’s unsupported contention that Labs “provided marketing services to

18 [Gorilla] which allowed Labs to exercise control over marketing decisions and further

19 influenced the final destination of their products,” id. at 13, in light of Labs’ sworn

20 Declaration to the contrary, see Second Houser Decl. ¶¶ 2–5 (“Labs did not control the

21 marketing decisions of Gorilla. . . . Labs did not have any input, influence, or control over

22 how or where Gorilla distributed products Nutracap Labs sold to Gorilla.”). Rather, as

23 explained above, Plaintiff has only demonstrated Labs placed products into the stream of

24 commerce, which is insufficient to establish purposeful direction. Herbal Brands, 72 F.4th

25 at 1094.

26 Accordingly, Plaintiff has not established purposeful direction as an independent

27 analysis, nor as Plaintiff frames it as supporting that Labs purposefully availed itself of the

28 privilege of conducting business in California. Therefore, Plaintiff has not met his burden

1 of demonstrating that the first prong for specific jurisdiction has been met.

2 2. Relatedness

3 Plaintiff has neither shown that Labs purposefully availed itself of the privileges of

4 conducting business in California, nor that it purposefully directed its activities to the

5 forum state. Nonetheless, the Court addresses Plaintiff’s argument that “a strong showing

6 on the relatedness prong allows for a lesser showing on the availment prong and vice

7 versa.” Opp’n at 16–17 (citing Yahoo! Inc. v. La Ligue Contre La Racisme Et

8 L’Antisemitisme, 433 F.3d 1199, 1210 (9th Cir. 2006)). In Yahoo!, the Ninth Circuit stated

9 that, “[a] single forum state contact can support jurisdiction if the cause of action arises out

10 of that particular purposeful contact of the defendant with the forum state.” Yahoo!, 433

11 F.3d at 1210 (internal quotations and citations omitted) (cleaned up).

12 Here, Plaintiff has not demonstrated any particular purposeful contact by Labs with

13 California. Rather, as explained above, Plaintiff has only alleged actions by Labs that

14 constitute a bare stream of commerce. Accordingly, as Plaintiff failed to satisfy the first

15 prong, personal jurisdiction is not established in the forum state. Schwarzenegger,

16 374 F.3d at 802.

17 3. Fair Play and Substantial Justice

18 The burden of proving that the third prong of the test for specific jurisdiction, or that

19 exercise of jurisdiction would not be reasonable, shifts to a defendant, after a plaintiff has

20 met their burden of demonstrating the first two prongs. Id. Given that Plaintiff has not

21 met his burden here, the issue of whether Labs is subject to this Court’s personal

22 jurisdiction can be disposed of based on the first two prongs.

23 For the above reasons, Labs is not subject to personal jurisdiction in California.

24 Consequently, the Court GRANTS Labs’ Motion to Dismiss (ECF No. 29).

25 4. Plaintiff’s Request for Jurisdictional Discovery

26 In the alternative, Plaintiff requests that the Court grant him jurisdictional discovery.

27 Jurisdictional discovery “should ordinarily be granted where pertinent facts bearing on the

28 question of jurisdiction are controverted or where a more satisfactory showing of the facts

1 is necessary.” Butcher’s Union Loc. No. 498 v. SDC Invest., Inc., 788 F.2d 535, 540 (9th

2 Cir. 1986) (citations and internal quotation marks omitted). A mere “hunch that

3 [discovery] might yield jurisdictionally relevant facts,” or “bare allegations in the face of

4 specific denials” are insufficient reasons for a court to grant jurisdictional discovery. LNS

5 Enters. LLC v. Cont’l Motors, Inc., 22 F.4th 852, 865 (9th Cir. 2022) (internal citations

6 omitted).

7 Plaintiff argues jurisdictional discovery is appropriate as he has controverted facts

8 stated by Labs “by more than mere allegations.” Opp’n at 21. First, Plaintiff indicates that

9 Mr. Houser’s statements that “Labs does not direct any advertising towards citizens of

10 California,” is controverted by Plaintiff’s counsel’s Declaration that Plaintiff’s counsel, in

11 California, viewed a Holdings advertisement on Youtube.com after “spending a short

12 amount of time Googling and researching Nutracap.” Id.; see also BenDavid Decl. ¶ 5.

13 The Court is not persuaded that Plaintiff’s counsel’s receipt of an advertisement by

14 Holdings, a distinct entity, controverts Mr. Houser’s denials that Labs directs advertising

15 towards the citizens of California.

16 Next, Plaintiff argues Mr. Houser’s statements that Labs “did not advertise products

17 manufactured for Gorilla in California or elsewhere[,]” and later that Labs “had no control

18 over Gorilla’s sale or distribution of the products it sold to Gorilla[,]” are “directly

19 contradicted by statements of [Gorilla] in verified discovery responses, as well as the

20 agreements produced by [Gorilla] between Labs and Gorilla.” Opp’n at 21. Plaintiff does

21 not cite to what statements he refers, and the Court is unable to identify the purported

22 contradiction. For instance, nothing in the sales agreement between Gorilla and Labs

23 addresses Gorilla’s sale or distribution of products manufactured for it, much less give Labs

24 control thereof. See Gorilla Mind & Nutracap Supplier Agreement, Exhibit B, ECF

25 No. 33-2 at 6–9.3 And notably, Gorilla’s Response to Plaintiff’s Interrogatory No. 3 asserts

26

27

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3 Pin citations to this docket entry refer to the CM/ECF page numbers stamped across the top margin of

1 that Gorilla has no common ownership or control with Labs. See Defendant Gorilla Mind

2 LLC’s Response to Plaintiff’s Special Interrogatories, Set One, Exhibit A, ECF No. 33-2

3 at 2. While the discovery responses from Gorilla indicate that Labs provided marketing

4 services for Gorilla, id., the Court does not find this controverts Mr. Houser’s statement or

5 any pertinent fact, as Mr. Houser attests that Labs did not control the marketing decisions

6 of Gorilla and none of the advertisements with which Labs was involved targeted

7 California, see Second Houser Decl. ¶¶ 3–4 (“The marketing services provided by [Labs]

8 to Gorilla involved Gorilla’s Facebook advertisements and Gorilla made the final decision

9 as to and controlled what was ultimately posted on Facebook . . . [and] [n]one of the

10 Facebook advertisements with which [Labs] was involved targeted California.”).

11 Finally, Plaintiff contends he is entitled to discovery of evidence of Labs’ marketing

12 and sales to entities unknown to Plaintiff like MyoBlox, or “indirectly through retailers like

13 DBD or any of the other 60 brands from the list of products recalled in California by Labs,

14 and whether or not any of those products contain green tea or EGCG.” Opp’n at 22.

15 However, this argument fails, as explained above, because as stated by Plaintiff’s counsel

16 in his sworn Declaration, it was in fact Holdings that issued recalls, see BenDavid Decl.

17 ¶¶ 13–14, Holdings that does business as MyoBlox, see id. ¶¶ 7–9, and Holdings that

18 manufactures supplements promoted by DBD’s five brands, see id. ¶ 11.

19 Plaintiff has not provided evidence of any deliberate efforts by Labs to target

20 California and has failed to controvert Labs’ supporting Declarations that Labs ceased its

21 manufacturing, distributing, and selling operations in November 2020, id. ¶ 3, performed

22 no business activity as to Gorilla Products in California, id. ¶ 10, had no control over

23 Gorilla’s sale or distribution of the products it sold Gorilla, id. ¶ 12, had no contracts with

24 supplement retailers or providers involving the targeting of California consumers, Second

25 Houser Decl. ¶ 7, and its sales and marketing did not target California, id. ¶ 9. Accordingly,

26 the Court finds Plaintiff has not demonstrated that any “pertinent facts bearing on the

27 question of jurisdiction are controverted.” Butcher’s Union, 788 F.2d at 540. Thus, the

28 Court DENIES Plaintiff’s request for jurisdictional discovery.

1 III. Conclusion

2 For the reasons stated above, the Court GRANTS Defendant’s Motion (ECF No. 29)

3 and DISMISSES WITHOUT PREJUDICE Plaintiff’s claims against Labs.

4 Additionally, the Court DENIES Plaintiff’s request for jurisdictional discovery.

5 HOLDINGS’ MOTION TO DISMISS

6 On January 15, 2025, Holdings filed a Notice of Bankruptcy Filing and Automatic

7 Stay as to Nutracap Holdings (ECF No. 39), notifying the Court that Holdings had “filed a

8 Chapter 11 bankruptcy petition seeking relief under Title 11, United States Code to the

9 United States Bankruptcy Court for the Northern District of Georgia,” under case number

10 25-50430. Bankr. Notice ¶¶ 1–2. Because Holdings filed a Chapter 11 bankruptcy, the

11 action against Holdings is stayed pursuant to 11 U.S.C. § 362. See In re Tuscon Ests., Inc.,

12 912 F.2d 1162, 1166 (9th Cir. 1990) (“A bankruptcy filing imposes an automatic stay of

13 all litigation against the debtor.” (citing 11 U.S.C. § 362(a)). As for Holdings’

14 codefendants in this action, as a general rule, “section 362(a) does not stay actions

15 against . . . non-debtor parties liable on the debts of the debtor.” In re Chugach Forrest

16 Prods., Inc., 23 F.3d 241, 246 (9th Cir. 1994).

17 Because this action as to Holdings is now stayed, Holdings’ pending motions cannot

18 proceed unless and until the automatic stay is lifted. See e.g., McCarley v. Stout Ins. Co.,

19 LLC, No. 2:24-cv-001697-CDS-MDC, 2024 WL 4956583, at *1 (D. Nev. Dec. 3, 2024).

20 Consequently, Holdings’ Motion to Dismiss for Lack of Jurisdiction (ECF No. 28) is

21 DENIED WITHOUT PREJUDICE.

22 CONCLUSION

23 In light of the foregoing, the Court ORDERS as follows:

24 1. Labs’ Motion to Dismiss for Lack of Jurisdiction (ECF No. 29) is

25 GRANTED. Plaintiff’s request for jurisdictional discovery is DENIED.

26 2. Plaintiff’s claims against Labs are DISMISSED WITHOUT PREJUDICE.

27 3. This action as to Holdings is STAYED pursuant to 11 U.S.C. § 362.

28 / / /

1 Therefore, Holdings’ Motion to Dismiss for Lack of Jurisdiction (ECF No. 28) is

2 || DENIED WITHOUT PREJUDICE.

3 IT IS SO ORDERED.

4 || Dated: April 29, 2025 psi L. Lo meeaitie-

5 on. Janis L. Sammartino

6 United States District Judge

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