“[A] 11 contract alone does not create minimum contacts with the 12 plaintiff’s forum.”
How later courts described this case
- “[A] 11 contract alone does not create minimum contacts with the 12 plaintiff’s forum.”
- “[There must be] actions by 14 the defendant . . . that create a substantial connection 15 with the forum [s]tate [to establish personal 16 jurisdiction].”
- “The Central District of California’s local rules do not 19 require dismissal of appellee’s motions for failure to satisfy the meet-and-confer requirements.”
- electing to 27 consider a motion’s merits despite a violation of Local Rule 7- 28 3
Written by the judges who cited it.
The opinion
Case 2:22-cv-02523-RSWL-PVC Document 32 Filed 11/17/22 Page 1 of 13 Page ID #:167
'O'
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8 UNITED STATES DISTRICT COURT
9 CENTRAL DISTRICT OF CALIFORNIA
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CV 20-02523-RSWL-PVCx
12 ALCON 3PL, INC. a
California corporation,
ORDER re: MOTION TO
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DISMISS [23]
Plaintiff,
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v.
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16 SUN GROUP PARTNERS LLC, a
California limited
17 liability company; GLENN
SANDS, an individual;
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BRENT SANDS, an
19 individual; DOES 1 THROUGH
10, INCLUSIVE
20
Defendants.
21
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23 Plaintiff Alcon 3PL, Inc. (“Plaintiff”) brought the
24 instant Action against Defendants Sun Group Partners,
25 LLC (“Defendant Sun Group”), Glenn Sands, and Brent
26 Sands (“Individual Defendants”), alleging breach of
27 contract, open book account, account stated, and quantum
28 meruit. Currently before the Court is Defendants’
1
Case 2:22-cv-02523-RSWL-PVC Document 32 Filed 11/17/22 Page 2 of 13 Page ID #:168
1 Motion to Dismiss for Lack of Personal Jurisdiction
2 [23].1
3 Having reviewed all papers submitted pertaining to
4 this Motion, the Court NOW FINDS AND RULES AS FOLLOWS:
5 the Court GRANTS Defendants’ Motion to Dismiss.
6 I. BACKGROUND
7 A. Factual & Procedural Background
8 Plaintiff alleges the following in its Complaint:
9 Plaintiff is a corporation with its principal place
10 of business in Los Angeles, California. Compl. ¶ 2, ECF
11
1 Local Rule 7-3 provides that “counsel contemplating the
12 filing of any motion shall first contact opposing counsel to
discuss thoroughly, preferably in person, the substance of the
13 contemplated motion and any potential resolution. The conference
shall take place at least seven (7) days prior to the filing of
14
the motion.” C.D. Cal. Local Civ. R. 7-3. “Failure to comply
15 with the Local Rules does not automatically require the denial of
a party’s motion, however, particularly where the non-moving
16 party has suffered no apparent prejudice as a result of the
failure to comply.” CarMax Auto Superstores Cal. LLC v.
17 Hernandez, 94 F. Supp. 3d 1078, 1088 (C.D. Cal. 2015); see also
ECASH Techs., Inc. v. Guagliardo, 35 F. App’x 498, 500 (9th Cir.
18
2002) (“The Central District of California’s local rules do not
19 require dismissal of appellee’s motions for failure to satisfy
the meet-and-confer requirements.”). Here, the parties are in
20 violation of Local Rule 7-3 because there is no indication the
parties met and conferred. Nevertheless, Plaintiff does not seem
21 to have been prejudiced by the violation because, although it did
not file an opposition, it did file a stipulation to continue the
22 hearing date for this Motion, showing that Plaintiff was aware of
the Motion and its opportunity to oppose. See generally Pl.’s
23
Stipulation to Continue Hr’g Date on Defs.’ Mot. to Dismiss, ECF
24 No. 27. Moreover, Plaintiff had sufficient time to oppose since
the Court granted Plaintiff’s stipulation. See generally Order
25 Granting Pl.’s Stipulation to Continue Hr’g Date on Defs.’ Mot.
to Dismiss, ECF No. 28. Thus, the Court should exercise its
26 discretion to consider the Motion’s merits. See CarMax Auto
Superstores Cal. LLC, 94 F. Supp. 3d at 1088 (electing to
27
consider a motion’s merits despite a violation of Local Rule 7-
28 3).
2
Case 2:22-cv-02523-RSWL-PVC Document 32 Filed 11/17/22 Page 3 of 13 Page ID #:169
1 No. 1. Defendant Sun Group is a limited liability
2 company with its principal place of business in Palm
3 Beach Gardens, Florida. Id. ¶ 3. Individual Defendants
4 are citizens of Florida. Id.
5 Individual Defendants are “members and/or managers,
6 and/or officers[,] and/or directors” of Defendant Sun
7 Group. Moreover, “[Defendant] Sun Group is, and at all
8 relevant times was, a mere shell, instrumentality, and
9 conduit through which Individual Defendants carried on
10 business in the name of [Defendant] Sun Group.” Id.
11 ¶ 12. Specifically, Individual Defendants “controlled,
12 dominated, and operated [Defendant] Sun Group in that
13 the activities and business of [Defendant] Sun Group
14 were carried out without holding annual meetings, and
15 without keeping records or minutes of any proceedings,
16 or maintaining written resolutions.” Id. Therefore,
17 Defendant Sun Group is the alter ego of the Individual
18 Defendants, and the Individual Defendants cannot use
19 their company to shield themselves from personal
20 liability. Id. at ¶¶ 12-13.
21 In or about late 2020 and early 2021, Plaintiff
22 entered into an agreement with Defendant Sun Group
23 through the Individual Defendants for warehouse personal
24 protective equipment. Id. ¶ 14. On or about May 4,
25 2021, however, Defendants stopped paying the monthly
26 sum. Id. ¶ 15. In addition, from May 4, 2021, to March
27 25, 2022, Defendants failed to make any payments for
28 business transactions conducted between Defendants and
3
Case 2:22-cv-02523-RSWL-PVC Document 32 Filed 11/17/22 Page 4 of 13 Page ID #:170
1 Plaintiff. Id.
2 Plaintiff filed its Complaint [1] on April 14,
3 2022. Defendant filed the instant Motion [23] on
4 September 1, 2022.
5 II. DISCUSSION
6 A. Legal Standard
7 Federal Rule of Civil Procedure 12(b)(2) authorizes
8 dismissal of an action for lack of personal
9 jurisdiction. Fed. R. Civ. P. 12(b)(2). Once a
10 defendant moves to dismiss for lack of personal
11 jurisdiction, the plaintiff bears the burden of
12 demonstrating that jurisdiction is appropriate.
13 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797,
14 800 (9th Cir. 2004).
15 Where the motion is “based on written materials
16 rather than an evidentiary hearing, the plaintiff need
17 only make a prima facie showing of jurisdictional facts”
18 to survive dismissal. Id. (internal quotation marks
19 omitted). Absent an evidentiary hearing this court
20 “only inquire[s] into whether [the plaintiff’s]
21 pleadings ands affidavits make a prima facie showing of
22 personal jurisdiction.” Caruth v. Int’l
23 Psychoanalytical Ass’n, 59 F.3d 126, 127-28 (9th Cir.
24 1995); Boschetto v. Hansing, 539 F.3d 1011 (9th Cir.
25 2008). To make a prima facie showing, the plaintiff
26 must allege facts that, if true, would support a finding
27 of jurisdiction. Ballard v. Savage, 65 F.3d 1495, 1498
28 (9th Cir. 1995). Although the plaintiff cannot rely on
4
Case 2:22-cv-02523-RSWL-PVC Document 32 Filed 11/17/22 Page 5 of 13 Page ID #:171
1 the bare allegations of the complaint, uncontroverted
2 allegations in the complaint must be taken as true and
3 conflicts between statements contained in the parties’
4 affidavits must be resolved in the plaintiff’s favor.
5 Schwarzenegger, 374 F.3d at 800.
6 B. Discussion
7 1. Personal Jurisdiction
8 Whether a federal court can exercise personal
9 jurisdiction over a non-resident defendant turns on two
10 independent considerations: whether an applicable state
11 rule or statute permits service of process on the
12 defendant, and whether the assertion of personal
13 jurisdiction comports with constitutional due process
14 principles. See Pac. Atl. Trading Co. v. M/V Main
15 Express, 758 F.2d 1325, 1327 (9th Cir. 1985). District
16 courts in California may exercise specific personal
17 jurisdiction over a nonresident defendant to the extent
18 permitted by the Due Process Clause of the United States
19 Constitution. Cal. Civ. Prov. Code § 410.10. The Due
20 Process Clause permits courts to exercise personal
21 jurisdiction over any defendant who has sufficient
22 “minimum contacts” with the forum state such that the
23 “maintenance of the suit [would] not offend traditional
24 notions of fair play and substantial justice.” Int’l
25 Shoe Co. v. Washington, 326 U.S. 310, 316 (1945).
26 There are two recognized bases for personal
27
28
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Case 2:22-cv-02523-RSWL-PVC Document 32 Filed 11/17/22 Page 6 of 13 Page ID #:172
1 jurisdiction over non-resident2 defendants: (1) “general
2 jurisdiction,” which arises where the defendant's
3 activities in the forum state are sufficiently
4 “substantial” or “continuous and systematic” to justify
5 the exercise of jurisdiction over him in all matters;
6 and (2) “specific jurisdiction,” which arises when a
7 defendant’s specific contacts with the forum have given
8 rise to the claim in question. See Helicopteros
9 Nacionales de Columbia S.A. v. Hall, 466 U.S. 408, 414–
10 16 (1984); Doe v. Am. Nat’l Red Cross, 112 F.3d 1048,
11 1050–51 (9th Cir. 1997). To survive a 12(b)(2) motion,
12 a plaintiff must show the court has personal
13 jurisdiction over the defendants. See Schwarzenegger,
14 374 F.3d at 800.
15 Plaintiff has not satisfied its burden to show that
16 the Court has personal jurisdiction over Individual
17 Defendants. Plaintiff alleges in its Complaint that the
18 three Defendants3 are citizens of Florida and entered
19 into a contract with Plaintiff, a California
20 corporation, to “warehouse” Defendants’ goods. Compl.
21
2 Plaintiff stated in its Complaint that Individual
22 Defendants are citizens of Florida and Defendant Sun Group is
organized under Florida laws and has its principal place of
23 business in Florida. Compl. ¶¶ 3-5. Therefore, with no
allegations that any Defendant resides in California, all
24
Defendants are nonresidents.
25 3 Plaintiff asserts that Defendant Sun Group is the alter
ego of Individual Defendants. See Compl. ¶¶ 12-13. The Court
26 declines to assess whether this theory is viable at this stage of
litigation, and instead centers its analysis on whether Plaintiff
27
has met its burden of showing that the Court has personal
28 jurisdiction over Individual Defendants.
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1 ¶¶ 2-5, 14-15. Plaintiff fails to provide the location
2 of this warehouse or any other facts that could
3 conceivably support the notion that Defendants had
4 minimum contacts with California. See generally id.
5 Plaintiff merely states that Defendants entered into a
6 contract with a California corporation for warehousing
7 services when it is well established that a contract
8 alone does not automatically establish minimum contacts
9 with a plaintiff’s home forum. See Boschetto v.
10 Hansing, 539 F.3d 1011, 1017 (9th Cir. 2008) (“[A]
11 contract alone does not create minimum contacts with the
12 plaintiff’s forum.”); Burger King Corp. v. Rudzewicz,
13 471 U.S. 462, 475 (1985) (“[There must be] actions by
14 the defendant . . . that create a substantial connection
15 with the forum [s]tate [to establish personal
16 jurisdiction].”) (internal quotation marks omitted).
17 Moreover, Plaintiff did not file an opposition or
18 affidavits alleging that the Court has personal
19 jurisdiction over Individual Defendants. And even if
20 Plaintiff’s allegations in its Complaint did support
21 finding that Individual Defendants had minimum contacts
22 with California, Defendants dispute that contention by
23 arguing that “there exists no minimum contacts with the
24 forum state.” See Schwarzenegger, 374 F.3d at 800
25 (holding that only uncontroverted allegations in the
26 complaint must be taken as true for the purposes of
27 ascertaining whether a plaintiff has met its burden of
28 showing personal jurisdiction). Therefore, Plaintiff
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Case 2:22-cv-02523-RSWL-PVC Document 32 Filed 11/17/22 Page 8 of 13 Page ID #:174
1 has failed to provide adequate information to establish
2 a prima facie case for exercising personal jurisdiction
3 over Individual Defendants.
4 2. Local Rule 7-12
5 Local Rule 7-12 reinforces the conclusion that
6 Plaintiff has not sufficiently alleged personal
7 jurisdiction. Local Rule 7-12 states in pertinent part:
8 “failure to file any required document, or the failure
9 to file it within the deadline, may be deemed consent to
10 the granting or denial of the motion.” C.D. Cal. Local
11 Civ. R. 7-12. In assessing whether this rule applies
12 and a court should grant an unopposed motion, the Ninth
13 Circuit considers the following five factors: (1) the
14 public’s interest in expeditious resolution in
15 litigation; (2) the court’s need to manage its docket;
16 (3) the risk of prejudice to the defendants; (4) the
17 public policy favoring disposition of cases of their
18 merits; and (5) the availability of less drastic
19 sanctions. Pagtalunan v. Galaza, 291 F.3d 639, 642 (9th
20 Cir. 2002). This test for dismissal is “a disjunctive
21 balancing test, so not all five factors must support
22 dismissal.” Sowinski v. Cal. Air Res. Board, No. SACV
23 15-2123-JLS (JCGx), 2016 WL 5886902 (C.D. Cal. Aug. 18,
24 2016) (citing Valley Eng’rs Inc. v. Elec. Eng’g Co., 158
25 F.3d 1051, 1057 (9th Cir. 1998)).
26 ///
27 ///
28 ///
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Case 2:22-cv-02523-RSWL-PVC Document 32 Filed 11/17/22 Page 9 of 13 Page ID #:175
1 a. The Public’s Interest in Expeditious
2 Resolution of Litigation
3 Here, as to the first factor, the public’s interest
4 in expeditious resolution of litigation always favors
5 dismissal. Yourish v. Cal. Amplifier, 191 F.3d 983, 990
6 (9th Cir. 1999). Thus, this factor weighs in favor of
7 dismissal.
8 b. The Court’s Need to Manage Its Docket
9 Second, the Court’s need to manage its docket
10 depends on whether the delay in a particular case
11 interferes with docket management and the public
12 interest. Pagtalunan, 291 F.3d at 642. Here,
13 Plaintiff’s failure to file a response or request an
14 extension indicates that the Plaintiff does not intend
15 to prosecute the action against the Individual
16 Defendants. See Balsin v. Equable Ascent Fin., LLC, CV
17 11-01113 MMM (FMOx), 2011 WL 13218018 at *2 (C.D. Cal.
18 May 12, 2011) (finding in favor of dismissal where
19 plaintiff’s inattention and nonresponsive behavior
20 suggests further litigation would waste the court’s
21 valuable resources). Thus, this factor weighs in favor
22 of dismissal.
23 c. The Risk of Prejudice to the Defendants
24 Next, to prove risk of prejudice, a defendant must
25 establish that a plaintiff’s actions impaired a
26 defendant’s ability to proceed to trial or threatened to
27 interfere with the rightful decision of the case.
28 Pagtalunan, 291 F.3d at 642 (citing Malone v. U.S.
9
Case 2:22-cv-02523-RSWL-PVC Document 32 Filed 11/17/22 Page 10 of 13 Page ID #:176
1 Postal Serv., 833 F.2d 129, 131 (9th Cir. 1987)). Here,
2 Plaintiff neither provides an explanation for its
3 failure to file an opposition nor requests an extension
4 to do so. See, e.g., Foster v. Jacquez, No. CV 09-01406
5 JFW, 2009 WL 1559586, *3 (C.D. Cal. May 28, 2009)
6 (“Where a party offers a poor excuse for failing to
7 comply with a court's order, the prejudice to the
8 opposing party is sufficient to favor dismissal.”);
9 Grubb v. Hernandez, No. ED CV 06-00807SJOAJW, 2009 WL
10 1357411 at *2 (C.D. Cal. May 1, 2009) (“In the absence
11 of a showing to the contrary, prejudice to defendants or
12 respondents is presumed from unreasonable delay [for the
13 purpose of Local Rule 7-12].”). Therefore, this factor
14 weighs in favor of dismissal.
15 d. The Public Policy Favoring Disposition of
16 Cases on Their Merits
17 Fourth, public policy favors disposition of cases
18 on the merits, and therefore, this factor generally
19 weighs against dismissal. Hernandez v. City of El
20 Monte, 138 F.3d 393, 399 (9th Cir. 1998). This
21 presumes, however, that the plaintiff “has manifested a
22 diligent desire to prosecute his or her claims.” Ewing
23 v. Ruano, No. CV 09-08471 VAP, 2012 WL 2138159 at *2
24 (C.D. Cal. June 12, 2012). Here, Plaintiff has neither
25 filed a timely opposition nor applied for an extension
26 to file an opposition. See id. (finding this factor
27 favored dismissal where plaintiff failed to file a
28
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Case 2:22-cv-02523-RSWL-PVC Document 32 Filed 11/17/22 Page 11 of 13 Page ID #:177
1 timely opposition or apply for an extension). Thus,
2 this factor weighs in favor of dismissal.
3 e. The Availability of Less Drastic Sanctions
4 Finally, this factor “ordinarily counsels against
5 dismissal” unless the court gave plaintiff an
6 opportunity to avoid dismissal, in which case no lesser
7 sanctions are available. Sperow v. Ponce, No. CV 19-
8 10525-KS, 2020 WL 3100645 at *2 (C.D. Cal. June 11,
9 2020). Here, the Court did not offer Plaintiff an
10 opportunity to avoid dismissal, nor did it find it
11 necessary to consider the availability of other less
12 drastic alternatives. See Pagtalunan, 291 F.3d at 643
13 (finding this factor weighed against dismissal because
14 the court did not consider the lesser alternative of
15 imposing sanctions). Therefore, this factor weighs
16 against dismissal.
17 Of the five factors, four factors weigh in favor of
18 dismissal. Thus, the Court dismisses the Complaint
19 against the Individual Defendants pursuant to Local Rule
20 7-12.
21 3. Leave to Amend
22 “Where a motion to dismiss is granted, a district
23 court must decide whether to grant leave to amend.”
24 Winebarger v. Pennsylvania Higher Educ. Assistance
25 Agency, 411 F. Supp. 3d 1070, 1082 (C.D. Cal. 2019).
26 “The court should give leave [to amend] freely when
27 justice so requires.” Fed. R. Civ. P. 15(a)(2). In the
28 Ninth Circuit, “Rule 15’s policy of favoring amendments
11
Case 2:22-cv-02523-RSWL-PVC Document 32 Filed 11/17/22 Page 12 of 13 Page ID #:178
1 to pleadings should be applied with ‘extreme
2 liberality.’” United States v. Webb, 655 F.2d 977, 979
3 (9th Cir. 1981). Against this extremely liberal
4 standard, the Court may consider “the presence of any of
5 four factors: bad faith, undue delay, prejudice to the
6 opposing party, and/or futility.” Owens v. Kaiser
7 Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir.
8 2001).
9 Here, leave to amend Plaintiff’s claims is
10 appropriate because Plaintiff can cure its failure to
11 meet its burden by pleading facts that support
12 exercising personal jurisdiction over the Individual
13 Defendants. Thus, leave to amend would not be futile.
14 Moreover, there is no evidence of bad faith by
15 Plaintiff. While Plaintiff’s failure to file an
16 opposition could weigh toward finding undue delay or
17 prejudice; ultimately, “[t]he purpose of the litigation
18 process is to vindicate meritorious claims. Refusing,
19 solely because of delay, to permit an amendment to a
20 pleading in order to state a potentially valid claim
21 would hinder this purpose without promoting any other
22 sound judicial policy.” Howey v. U.S., 481, F.2d 1187,
23 1191 (9th Cir. 1973). The Court therefore GRANTS
24 Defendants’ Motion to Dismiss Plaintiff’s claims with
25 leave to amend.
26 III. CONCLUSION
27 In sum, Plaintiff has not sufficiently alleged that
28 the Court has personal jurisdiction over the Individual
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1 Defendants. Based on the foregoing, the Court GRANTS
2 Defendant’s Motion to Dismiss with leave to amend.
3 IT IS SO ORDERED.
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5 DATED: November 17, 2022 _ _ _ _ _ _ _ _/S_/ _R_O_N_AL_D_ S_._W_. _LE_W_ ________
HONORABLE RONALD S.W. LEW
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Senior U.S. District Judge
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