Bernard Picot v. Dean Weston

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BERNARD PICOT, No. 12-17098

Plaintiff-Appellant,

DC No.

and 5:12 cv-01939

EJD

PAUL DAVID MANOS,

Plaintiff,

OPINION

v.

DEAN D. WESTON,

Defendant-Appellee.

Appeal from the United States District Court

for the Northern District of California

Edward J. Davila, District Judge, Presiding

Argued and Submitted

December 9, 2014—San Francisco, California

Filed March 19, 2015

Before: A. Wallace Tashima and Richard A. Paez, Circuit

Judges, and Gordon J. Quist, Senior District Judge.*

Opinion by Judge Tashima

*

The Honorable Gordon J. Quist, Senior United States District Judge for

the Western District of Michigan, sitting by designation.

2 PICOT V. WESTON

SUMMARY**

Personal Jurisdiction

The panel affirmed the district court’s dismissal for lack

of personal jurisdiction of a diversity action alleging tort and

contract claims.

The plaintiff, a resident of California, brought the action

against the defendant, a resident of Michigan, seeking a

declaration that no oral agreement was made, and seeking

damages for intentional interference with the parties’ sales

contract.

The panel held that the defendant neither purposefully

availed himself of the privilege of conducting activities in

California nor expressly aimed his conduct at California. The

panel concluded, therefore, that the district court did not err

in dismissing for lack of specific personal jurisdiction.

COUNSEL

Thomas M. Boehm (argued), Law Offices of Thomas M.

Boehm, Los Gatos, California, for Plaintiff-Appellant.

David H. Schwartz (argued), Angeline Elizabeth O’Donnell,

Law Offices of David H. Schwartz, San Francisco, California,

for Defendant-Appellee.

**

This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

PICOT V. WESTON 3

OPINION

TASHIMA, Circuit Judge:

Plaintiff Bernard Picot, a resident of California, appeals

the district court’s dismissal of his action against Defendant

Dean Weston, a resident of Michigan, for lack of personal

jurisdiction. From 2010 to 2012, Picot and Weston worked

together with a third man, Paul David Manos, to develop and

market an electrolyte for use in hydrogen fuel cells. After

Picot and Manos sold the electrolyte technology without

telling Weston, Weston claimed that he was entitled to a one-

third share of the proceeds under an oral agreement. In

response, Picot and Manos sued Weston in California seeking

a declaration that no oral agreement was made, and for

damages for intentional interference with their sales contract.

The district court dismissed the suit for lack of personal

jurisdiction. We affirm.

I.

Weston is a resident of Waterford, Michigan.1 He has

made a career of developing technologies for use in

Michigan’s automotive industry through his corporation,

Engineering Interests, Inc., which is incorporated in Michigan

and headquartered in Sterling Heights, Michigan. Outside the

1

Because the district court resolved this case without an evidentiary

hearing, we take all uncontroverted allegations in the complaint as true

and resolve all factual disputes in the Picot’s favor. Schwarzenegger v.

Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004). “We may not

assume the truth of allegations in a pleading which are contradicted by

affidavit.” Mavrix Photo, Inc. v. Brand Tech., Inc., 647 F.3d 1218, 1223

(9th Cir. 2011) (alteration and internal quotation marks omitted). The

relevant jurisdictional facts are not in dispute.

4 PICOT V. WESTON

events involved in this suit, neither Weston nor Engineering

Interests has ever conducted business in California. Picot is

a resident of Santa Clara County, California.

Weston and Picot met each other through Manos, a

mutual business associate and a resident of Nevada. Weston

and Manos have known each other since 2005. In 2009,

Manos and Picot were looking to get involved with a

hydrogen technology being developed in Texas. Manos

asked Weston if he could help by traveling to Texas to assess

the technology, which Weston did. Eventually, the three men

determined that the technology being developed in Texas was

unworkable, and began efforts to develop and sell their own

electrolyte formula for use in hydrogen fuel cells.

Exactly how the three men decided to work together is

hotly disputed. Weston claims that in 2009, he and Manos

met in Michigan and reached an oral agreement under which

Weston would help develop, test, fund, and market the

technology. In exchange, Weston would receive $20,000 per

month and a one-third share of any profits from the sale of the

technology. Weston states that Manos claimed to have

authority to enter into the agreement on behalf of Picot, as

well as himself. On February 1, 2010, Manos, Picot, and

Weston met at a restaurant in Howell, Michigan. Weston

claims that at this meeting, Picot confirmed his agreement to

the oral profit-sharing deal. Picot and Manos acknowledge

the meeting, but deny the existence of any oral agreement.

Weston spent twenty to seventy hours per week working

to develop and market the technology at his office in Sterling

Heights, Michigan. Picot and Manos occasionally worked

out of his office as well. Weston’s marketing efforts focused

largely on soliciting investors or purchasers in the Michigan

PICOT V. WESTON 5

automotive industry including General Motors, Chrysler,

Hummer, and Penske Automotive. He also procured a

$450,000 investment from a Michigan resident, and

contracted with the University of Michigan for technological

help.

On two occasions, Weston left his Michigan office to

travel to California. First, in January 2010, Weston traveled

to southern California for approximately two weeks to help

Manos set up a demonstration for a potential client Picot had

contacted. Second, in June 2010, Weston went to Sacramento

at Manos’ and Picot’s request to help with another

demonstration. On both occasions, Manos and Picot

compensated Weston for his work and related expenses.

On three occasions, Weston met with Tracy Coats, a

resident of Cleveland, Ohio, at the University of Michigan.

Coats is the majority owner of HMR Hydrogen Master

Rights, Ltd. (“HMR”), a Delaware corporation with offices

in Ohio. At one of these meetings, Coats and Weston

videotaped a demonstration of the technology. At another,

Weston and Coats conducted a Skype presentation for a

potential customer in China.

In 2011, Manos and Picot began negotiating with Coats

and another part-owner of HMR, Carl Le Souef, a resident of

Australia, for HMR to purchase the technology. The

negotiations were successful, and Manos and Picot agreed to

sell the technology to HMR for $35 million. They agreed that

the money would be paid into two pass-through trusts, one in

Wyoming and one in Australia. The contract was executed in

Los Angeles, California, and became effective December 12,

2011. This agreement was followed by a series of emails and

phone calls between Weston and Manos. On February 8,

6 PICOT V. WESTON

2012, Weston sent Manos an email referencing earlier

conversations and asking about his share of the proceeds from

the sale to HMR. Immediately after that email Weston called

Manos and demanded $250,000 or he would “do everything

in his power to destroy” Manos and Picot.

In March 2012, Coats told Weston about the $35 million

sale price, and informed him that Manos and Picot had each

already received $1.1 million. On March 20, 2012, Weston’s

lawyer sent Manos and Picot an email threatening to sue if

they did not pay Weston his share of the proceeds pursuant to

their oral agreement. As a result of the threatened litigation

and other unspecified statements by Weston, HMR stopped

making payments to Manos and Picot.

Three days after the threatening email, Picot and Manos

filed suit against Weston in California Superior Court for the

County of Santa Clara seeking: (1) a declaration that no oral

agreement existed between them and Weston; and

(2) damages for intentional interference with the HMR sales

contract. Weston removed the action to the United States

District Court for the Northern District of California on the

basis of diversity jurisdiction. Weston then moved to dismiss

the complaint for lack of personal jurisdiction and improper

venue and, in the alternative, to transfer venue to the Eastern

District of Michigan. The district court concluded that it

lacked personal jurisdiction over Weston on either of the two

claims, granted the motion to dismiss, and denied the motion

to transfer as moot. Picot, but not Manos, timely appealed.

II.

We review de novo a district court’s dismissal for lack of

personal jurisdiction. Wash. Shoe Co. v. A-Z Sporting Goods

PICOT V. WESTON 7

Inc., 704 F.3d 668, 671 (9th Cir. 2012). “[T]he plaintiff bears

the burden of demonstrating that jurisdiction is appropriate.”

Schwarzenegger, 374 F.3d at 800. Where, as here, a

defendant’s motion to dismiss is based on a written record

and no evidentiary hearing is held, “the plaintiff need only

make a prima facie showing of jurisdictional facts.” Id.

(quoting Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir.

1990)).

III.

“Federal courts ordinarily follow state law in determining

the bounds of their jurisdiction over persons.” Daimler AG

v. Bauman, 134 S. Ct. 746, 753 (2014). Because “California’s

long-arm statute allows the exercise of personal jurisdiction

to the full extent permissible under the U.S. Constitution,”

our inquiry centers on whether exercising jurisdiction

comports with due process. Id.; see Cal. Code Civ. Proc.

§ 410.10 (“A court of this state may exercise jurisdiction on

any basis not inconsistent with the Constitution of this state

or of the United States.”). Due process requires that the

defendant “have certain minimum contacts” with the forum

state “such that the maintenance of the suit does not offend

‘traditional notions of fair play and substantial justice.’” Int’l

Shoe Co. v. Wash., 326 U.S. 310, 316 (1945) (quoting

Milliken v. Meyer, 311 U.S. 457, 463 (1940)).

Depending on the strength of those contacts, there are two

forms that personal jurisdiction may take: general and

specific. Boschetto v. Hansing, 539 F.3d 1011, 1016 (9th Cir.

2008). Picot does not contend that Weston is subject to

general jurisdiction in California; instead, he argues that

specific jurisdiction exists. When a plaintiff relies on specific

jurisdiction, he must establish that jurisdiction is proper for

8 PICOT V. WESTON

“each claim asserted against a defendant.” Action

Embroidery Corp. v. Atl. Embroidery, Inc., 368 F.3d 1174,

1180 (9th Cir. 2004). If personal jurisdiction exists over one

claim, but not others, the district court may exercise pendent

personal jurisdiction over any remaining claims that arise out

of the same “common nucleus of operative facts” as the claim

for which jurisdiction exists. Id. at 1181.

We employ a three-part test to assess whether a defendant

has sufficient contacts with the forum state to be subject to

specific personal jurisdiction:

(1) The non-resident defendant must

purposefully direct his activities or

consummate some transaction with the forum

or resident thereof; or perform some act by

which he purposefully avails himself of the

privilege of conducting activities in the forum,

thereby invoking the benefits and protections

of its laws;

(2) the claim must be one which arises out of

or relates to the defendant’s forum-related

activities; and

(3) the exercise of jurisdiction must comport

with fair play and substantial justice, i.e. it

must be reasonable.

Schwarzenegger, 374 F.3d at 802. The plaintiff has the

burden of proving the first two prongs. CollegeSource, Inc.

v. AcademyOne, Inc., 653 F.3d 1066, 1076 (9th Cir. 2011).

If he does so, the burden shifts to the defendant to “set forth

a ‘compelling case’ that the exercise of jurisdiction would not

PICOT V. WESTON 9

be reasonable.” Id. (quoting Burger King Corp. v. Rudzewicz,

471 U.S. 462, 477 (1985)).

The exact form of our jurisdictional inquiry depends on

the nature of the claim at issue. For claims sounding in

contract, we generally apply a “purposeful availment”

analysis and ask whether a defendant has “purposefully

avail[ed] [himself] of the privilege of conducting activities

within the forum State, thus invoking the benefits and

protections of its laws.” Schwarzenegger, 374 F.3d at 802

(quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)). For

claims sounding in tort, we instead apply a “purposeful

direction” test and look to evidence that the defendant has

directed his actions at the forum state, even if those actions

took place elsewhere. Id. at 802–03. Because Picot asserts

both a contract and a tort claim, both tests are at issue here.

A.

A claim for declaratory judgment as to the existence of a

contract is an action sounding in contract. See Stanford

Ranch, Inc. v. Md. Cas. Co., 89 F.3d 618, 625 (9th Cir. 1996)

(“[A] claim dependent on the existence of an underlying

contract sounds in contract, as opposed to tort.”). Therefore,

our minimum contacts inquiry for Picot’s declaratory

judgment claim focuses on whether Weston purposefully

availed himself of the privilege of conducting business within

California through the purported oral contract.

“[A] contract alone does not automatically establish

minimum contacts in the plaintiff’s home forum.” Boschetto,

539 F.3d at 1017. Rather, there must be “actions by the

defendant himself that create a ‘substantial connection’ with

the forum State.” Burger King, 471 U.S. at 475 (1985)

10 PICOT V. WESTON

(quoting McGee v. Int’l Life Ins. Co., 355 U.S. 220, 223

(1957)). Merely “random, fortuitous, or attenuated” contacts

are not sufficient. Id. (internal quotation marks omitted). A

defendant must have “performed some type of affirmative

conduct which allows or promotes the transaction of business

within the forum state.” Sher, 911 F.2d at 1362 (quoting

Sinatra v. Nat’l Enquirer, Inc., 854 F.2d 1191, 1195 (9th

Cir.1988)). In determining whether such contacts exist, we

consider “prior negotiations and contemplated future

consequences, along with the terms of the contract and the

parties’ actual course of dealing.” Burger King, 471 U.S. at

479.

Applying this standard, we conclude that Picot has not

demonstrated that Weston had sufficient minimum contacts

with California to subject him to specific personal jurisdiction

there. Under the disputed oral agreement, Weston was

obligated to develop the technology, arrange for its testing,

and assist in fund-raising and marketing. In exchange,

Weston would receive a one-third interest in any profits from

the sale of the technology, $20,000 per month, and

reimbursement of his expenses to develop and adapt the

technology. The agreement was formed in Michigan, where

Weston lived, where it was understood Weston would

perform the majority of his work, and where Weston did

indeed discharge most of his contractual duties.

Despite Weston’s lack of ties to California, Picot makes

two arguments in favor of the exercise of jurisdiction. We

find neither persuasive. First, he contends that the oral

agreement created a substantial connection between Weston

and California because Picot, a co-party to the agreement,

fulfilled his obligations under the agreement by seeking out

investors and buyers in California. This argument would

PICOT V. WESTON 11

mistakenly “allow[] a plaintiff’s contacts with the defendant

and forum to drive the jurisdictional analysis.” Walden v.

Fiore, 134 S. Ct. 1115, 1125 (2014). But our inquiry is

limited to examining contacts that “proximately result from

actions by the defendant himself.” Burger King, 471 U.S. at

475. Therefore, the fact that a contract envisions one party

discharging his obligations in the forum state cannot, standing

alone, justify the exercise of jurisdiction over another party to

the contract.

Second, Picot argues that the requisite contacts were

created by “the parties’ actual course of dealing.” Burger

King, 471 U.S. at 479. Specifically, he contends that

Weston’s two trips to California are sufficient to subject him

to the state’s jurisdiction. While “physical entry into the

State . . . is certainly a relevant contact,” Walden, 134 S. Ct.

at 1122, a defendant’s transitory presence will support

jurisdiction only if it was meaningful enough to “create a

‘substantial connection’ with the forum State,” Burger King,

471 U.S. at 475 (quoting McGee, 355 U.S. at 223).

Here, given “the limited nature of the transaction at

issue,” Boschetto, 539 F.3d at 1017, that substantial

connection is lacking. Neither trip was envisioned in the

initial oral agreement; rather, both grew incidentally out of

broader efforts to develop and market the technology. In both

cases, Weston traveled to California at Manos’ and Picot’s

request and expense to assist in presentations Manos and

Picot had planned for clients that Manos and Picot had

identified. Weston’s role in the presentations was relatively

small: he primarily prepared prototypes and demonstrations.

His first visit lasted only two weeks. The exact length of his

second visit is unclear, but appears to have been about the

same.

12 PICOT V. WESTON

Moreover, Weston’s two trips to California hold no

special place in his performance under the agreement as a

whole. In addition to the two trips to California, he also

traveled to Mexico for a presentation and spoke over the

Internet with potential customers in China. The bulk of his

efforts in developing and marketing the technology were

centered in Michigan. He worked out of his office in Sterling

Heights, Michigan, contracted with the University of

Michigan, and met with possible purchasers in Michigan and

Ohio. Manos, Picot, and Coats all traveled to Michigan to

meet with Weston. At most, Weston’s contacts with

California were merely “random, fortuitous, or attenuated.”

Burger King, 471 U.S. at 475 (internal quotation marks

omitted). Accordingly, we hold that the oral agreement and

Weston’s two trips to California did not create sufficient

minimum contacts to subject him to personal jurisdiction

there.2

B.

Picot’s second cause of action alleges that Weston

tortiously interfered with Picot’s contract to sell the

technology to HMR. In analyzing whether a court has

specific personal jurisdiction over a tort claim, we apply our

three-part “effects” test derived from Calder v. Jones,

465 U.S. 783 (1984). See Schwarzenegger, 374 F.3d at 803.

Under this test, a defendant purposefully directed his

activities at the forum if he: “(1) committed an intentional

act, (2) expressly aimed at the forum state, (3) causing harm

2

Because Picot has failed to establish that Weston purposefully availed

himself of the privilege of conducting activities in California, we need not

address whether the suit arises out of Weston’s forum-related activities,

or whether the exercise of jurisdiction would be reasonable.

PICOT V. WESTON 13

that the defendant knows is likely to be suffered in the forum

state.” Id. (quoting Dole Food Co. v. Watts, 303 F.3d 1104,

1111 (9th Cir. 2002)). In applying this test, we must “look[]

to the defendant’s contacts with the forum State itself, not the

defendant’s contacts with persons who reside there.” Walden,

134 S. Ct. at 1122. Thus, a “mere injury to a forum resident

is not a sufficient connection to the forum.” Id. at 1125.

Rather, “an injury is jurisdictionally relevant only insofar as

it shows that the defendant has formed a contact with the

forum State.” Id.

1.

The meaning of the term “intentional act” in our

jurisdictional analysis is essentially the same as in the context

of intentional torts; namely, the defendant must act with the

“intent to perform an actual, physical act in the real world.”

Schwarzenegger, 374 F.3d at 806. Here, Weston committed

an intentional act when he spoke with Coats about the

technology. Thus, the first prong is easily satisfied.

2.

The second prong of our test, “express aiming,” asks

whether the defendant’s allegedly tortious action was

“expressly aimed at the forum.” Brayton Purcell LLP v.

Recordon & Recordon, 606 F.3d 1124, 1129 (9th Cir. 2010).

The exact form of our analysis varies from case to case and

“depends, to a significant degree, on the specific type of tort

or other wrongful conduct at issue.” Schwarzenegger,

374 F.3d at 807. In this case, Picot alleges intentional

interference with a contract, so we must ask whether Weston

expressly aimed such interference at California. Picot argues

14 PICOT V. WESTON

that this requirement is met because Weston targeted Picot, a

California resident. See Wash. Shoe Co., 704 F.3d at 675.

In assessing Picot’s arguments, we are guided by the

Supreme Court’s recent decision in Walden. There, the Court

reinforced the traditional understanding that our personal

jurisdiction analysis must focus on the defendant’s contacts

with the forum state, not the defendant’s contacts with a

resident of the forum. In Walden, a Georgia police officer,

working with DEA agents, seized money belonging to two

professional gamblers in a Georgia airport and later helped

draft a false affidavit to show probable cause for the seizure.

134 S. Ct. at 1119–20. The gamblers, residents of California

and Nevada, filed suit against the police officer in Nevada,

alleging violations of their Fourth Amendment rights. Id. at

1120. The Supreme Court held that the officer lacked

sufficient contacts with Nevada to subject him to jurisdiction

there. Id. at 1126. The proper analysis in tort cases as well

as contract cases, the Court reiterated, “looks to the

defendant’s contacts with the forum State itself, not the

defendant’s contacts with persons who reside there.” Id. at

1122. “[T]he plaintiff cannot be the only link between the

defendant and the forum.” Id. Turning to the specific injury

alleged, the Court noted that the gamblers’ lack of access to

their seized funds had no meaningful connection to Nevada

because they “would have experienced this same lack of

access in California, Mississippi, or wherever else they might

have traveled and found themselves wanting more money

than they had.” Id. at 1125. Because the plaintiffs’ injury

was not “tethered to Nevada in any meaningful way,” the

Court concluded that it did not create a jurisdictionally

sufficient contact. Id.

PICOT V. WESTON 15

Applying the principles of Walden, we conclude that

Weston’s actions did not connect him with California in a

way sufficient to support the assertion of personal jurisdiction

over him. Weston’s allegedly tortious conduct consists of

making statements to Coats (an Ohio resident) that caused

HMR (a Delaware corporation with offices in Ohio) to cease

making payments into two trusts (in Wyoming and Australia).

Weston did all this from his residence in Michigan, without

entering California, contacting any person in California, or

otherwise reaching out to California. In short, “none of

[Weston’s] challenged conduct had anything to do with

[California] itself.”3 Id. Moreover, as in Walden, Picot’s

injury, an inability to access out-of-state funds, is not tethered

to California in any meaningful way. Rather, his injury is

entirely personal to him and would follow him wherever he

might choose to live or travel. The effects of Weston’s

actions are therefore “not connected to the forum State in a

way that makes those effects a proper basis for jurisdiction.”

3

Picot also contends that the “express aiming” requirement is met

because, shortly before the alleged tortious interference, Weston called

Manos and threatened to “destroy” Manos and Picot unless they paid him

immediately. These threats, Picot argues, amount to extortion expressly

targeted at California. However, Picot did not assert an extortion claim in

his complaint. We therefore do not address the alleged extortion other

than to say that it has no bearing on the jurisdictional issues before us.

Our specific jurisdiction inquiry is limited to “the defendant’s suit-related

conduct.” Walden, 134 S. Ct. at 1121. A plaintiff may not create personal

jurisdiction over one claim by arguing that jurisdiction might be proper

over a different, hypothetical claim not before the court. Cf. Action

Embroidery, 368 F.3d at 1180 (“Personal jurisdiction must exist for each

claim asserted against a defendant.”).

16 PICOT V. WESTON

Id.4 Accordingly, Picot has failed to make a prima facie

showing of specific personal jurisdiction over Weston on his

intentional interference claim.

IV.

Weston neither purposefully availed himself of the

privilege of conducting activities in California nor expressly

aimed his conduct at California. The district court, therefore,

did not err in dismissing this action for lack of personal

jurisdiction. The judgment of the district court is

AFFIRMED.

4

Because Picot has not established the second prong of our purposeful

direction test, we need not address the third prong. See Schwarzenegger,

374 F.3d at 807 n.1.