Mach 1 Global Services Incorporated v. Tramar Global LLC ( 2021 )

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Mach 1 Global Services Incorporated, No. CV-20-02018-PHX-JJT 10 Plaintiff, ORDER 11 v. 12 Tramar Global LLC, et al., 13 Defendants. 14 15 At issue is Defendant Tramar Global LLC’s Motion to Dismiss for Lack of Personal 16 Jurisdiction and Improper Venue,1 (Doc. 10, Mot.), to which Plaintiff Mach 1 Global 17 Services Incorporated filed a Response, (Doc. 15, Resp.), and Defendant filed a Reply, 18 (Doc. 16, Reply). The Court has reviewed the parties’ briefs and finds these matters 19 appropriate for decision without oral argument. See LRCiv 7.2(f). For the reasons set forth 20 below, the Court grants Defendant’s Motion to Dismiss, denies as moot Defendant’s 21 request for alternative relief, and denies Plaintiff’s request for summary judgment 22 incorporated into its Response. 23 I. BACKGROUND 24 Plaintiff Mach 1 is an Arizona corporation headquartered in Tempe, Arizona. (Doc. 25 1–3 at 11–17, Complaint at 1.) It is an interstate and international forwarder and carrier of 26 property under C.F.R. § 365.101(a) and is registered with the U.S. Department of 27 1 Despite the caption of Defendant’s Motion, Defendant’s brief fails to argue for dismissal 28 based on improper venue. The Court consequently declines to consider propriety of venue here. 1 Transportation, Federal Motor Carrier Safety Administration as a motor carrier and freight 2 forwarder. (Compl. ¶ 2.) Defendant Tramar is a North Carolina Limited Liability Company 3 that imports bedding and linens that it sells to retail customers around the country who then 4 resell the products under their own brands. (Compl. ¶ 4.) Tramar sells its products 5 nationwide, including in Arizona. (Mot. Ex. 1 ¶ 2.) However, it has no offices or employees 6 located in Arizona and pays no taxes there. (Mot. Ex. 1 ¶ 2.) 7 On August 7, 2019, Tramar and Mach 1 executed an agreement titled “Invoicing 8 Profile,” which provided a contact address for Mach 1 in Downey, California. (Compl. 9 Ex. C at 1–2.) No representative of Tramar traveled to Arizona to conduct any negotiations, 10 and no “real negotiations” preceded the execution of this agreement. (Mot. Ex. 1 ¶¶ 5–6.) 11 Tramar understood that all communications between Mach 1 and Tramar leading up to 12 execution of the agreement were conducted by phone or electronic communication between 13 Tramar in North Carolina and Mach 1’s representative in California, (Mot. Ex. 1 ¶ 7), 14 although Mach 1 asserts that at least some of the “contract negotiations” were conducted 15 with Mach 1 personnel located in Arizona. (Resp. at 6.) On January 7, 2020, Tramar 16 executed a power of attorney authorizing Mach 1 to act on behalf of Tramar in customs 17 procedures. (Compl. Ex. B.) 18 Mach 1 claims to have performed several cargo transports for Tramar in or about 19 2019 and 2020 pursuant to their agreement. (Compl. ¶¶ 1, 6, 12–14; Resp. Ex. 2.) None of 20 these shipments were alleged to have been made from or to Arizona, and none of the 21 provided evidence indicates any Arizona origin or destination. (Mot. Ex. 1 ¶ 9; Compl. 22 Ex. A; Resp. Ex. 2.) Mach 1 sent Tramar invoices for those cargo deliveries, (Compl. ¶ 15), 23 a consolidated invoice dated August 5, 2020, (Compl. ¶ 15; Ex. A at 2), and a statement of 24 account dated September 15, 2020, (Compl. ¶ 15; Ex. A at 1). The consolidated invoice 25 lists a Mach 1 address in Downey, California, (Compl. Ex. A at 2), and the statement of 26 account lists a Mach 1 address in Tempe, Arizona, (Compl. Ex. A at 1). Both documents 27 request that payment be mailed to a Tempe address. (Compl. Ex. A at 1–2.) Over a period 28 of about six months, Tramar sent several payments to that Tempe address. (Resp. Ex. 5.) 1 Tramar’s alleged failure to pay for all the services listed on these documents forms the 2 basis of Mach 1’s Complaint. (Compl. ¶ 16.) 3 II. LEGAL STANDARD 4 For a federal court to adjudicate a matter, it must have jurisdiction over the parties. 5 Ins. Corp. of Ir. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 701 (1982). The party 6 bringing the action has the burden of establishing that personal jurisdiction exists. 7 Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (citing McNutt v. 8 Gen. Motors Acceptance Corp., 298 U.S. 178, 182–83 (1936)); Data Disc, Inc. v. Sys. Tech. 9 Assocs., Inc., 557 F.2d 1280, 1285 (9th Cir. 1977). When a defendant moves, prior to trial, 10 to dismiss a complaint for lack of personal jurisdiction, the plaintiff must “‘come forward 11 with facts, by affidavit or otherwise, supporting personal jurisdiction.’” Scott v. Breeland, 12 792 F.2d 925, 927 (9th Cir. 1986) (quoting Amba Mktg. Sys., Inc. v. Jobar Int’l, Inc., 551 13 F.2d 784, 787 (9th Cir. 1977)). 14 Because there is no statutory method for resolving the question of personal 15 jurisdiction, “the mode of determination is left to the trial court.” Data Disc, 557 F.2d at 16 1285 (citing Gibbs v. Buck, 307 U.S. 66, 71–72 (1939)). Where, as here, a court resolves 17 the question of personal jurisdiction upon motions and supporting documents, the plaintiff 18 “must make only a prima facie showing of jurisdictional facts through the submitted 19 materials in order to avoid a defendant’s motion to dismiss.” Id. In determining whether 20 the plaintiff has met that burden, the “uncontroverted allegations in [the plaintiff’s] 21 complaint must be taken as true, and conflicts between the facts contained in the parties’ 22 affidavits must be resolved in [the plaintiff’s] favor.” Rio Props., Inc. v. Rio Int’l Interlink, 23 284 F.3d 1007, 1019 (9th Cir. 2002) (citation omitted). 24 To establish personal jurisdiction over a nonresident defendant, a plaintiff must 25 show that the forum state’s long-arm statute confers jurisdiction over the defendant and 26 that the exercise of jurisdiction comports with constitutional principles of due process. Id.; 27 Omeluk v. Langsten Slip & Batbyggeri A/S, 52 F.3d 267, 269 (9th Cir. 1995). Arizona’s 28 long-arm statute allows the exercise of personal jurisdiction to the same extent as the 1 United States Constitution. See Ariz. R. Civ. Proc. 4.2(a); Cybersell v. Cybersell, 130 F.3d 2 414, 416 (9th Cir. 1997); A. Uberti & C. v. Leonardo, 892 P.2d 1354, 1358 (Ariz. 1995) 3 (stating that under Rule 4.2(a), “Arizona will exert personal jurisdiction over a nonresident 4 litigant to the maximum extent allowed by the federal constitution”). Thus, a court in 5 Arizona may exercise personal jurisdiction over a nonresident defendant so long as doing 6 so accords with constitutional principles of due process. Cybersell, 130 F.3d at 416. 7 Due process requires that a nonresident defendant have sufficient minimum contacts 8 with the forum state so that “maintenance of the suit does not offend ‘traditional notions of 9 fair play and substantial justice.’” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) 10 (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)); see also Data Disc, 557 F.2d at 11 1287. Courts recognize two bases for personal jurisdiction within the confines of due 12 process: “(1) ‘general jurisdiction’ which arises when a defendant’s contacts with the 13 forum state are so pervasive as to justify the exercise of jurisdiction over the defendant in 14 all matters; and (2) ‘specific jurisdiction’ which arises out of the defendant’s contacts with 15 the forum state giving rise to the subject litigation.” Birder v. Jockey’s Guild, Inc., 444 F. 16 Supp. 2d 1005, 1008 (C.D. Cal. 2006). 17 III. ANALYSIS 18 A. General Jurisdiction 19 In its Complaint, Mach 1 asserts that an Arizona court has personal jurisdiction over 20 Tramar because Tramar sells and delivers products to customers who operate in Arizona, 21 customers of Tramar resell its products in Arizona, and Mach 1—headquartered in 22 Arizona—arranged deliveries for Tramar. (Compl. ¶¶ 4–7.) 23 Tramar argues that it is not subject to general personal jurisdiction in Arizona. (Mot. 24 at 3–5.) It notes that the Arizona Court of Appeals recently held that Wal-Mart, despite a 25 major physical presence and employment of tens of thousands in Arizona, was not within 26 the general jurisdiction of Arizona courts in Wal-Mart Stores, Inc. v. LeMaire, 395 P.3d 27 1116 (Ariz. Ct. App. 2017), and contends that there is nothing exceptional about its sales 28 operations in Arizona that bring it under Arizona courts’ general jurisdiction. (Mot. at 4-5.) 1 In its Response, Mach 1 begins its jurisdictional argument by immediately 2 addressing specific jurisdiction, (Resp. at 4 (“When a defendant’s activities in the forum 3 state are not so pervasive as to subject it to general jurisdiction, the court may still find 4 specific jurisdiction…”)), and fails to respond to Tramar’s argument against the Court’s 5 general jurisdiction over it. The Court takes from this omission that Mach 1 concedes that 6 Tramar is not within this Court’s general jurisdiction. 7 B. Specific Jurisdiction 8 Tramar next asserts that it is not subject to specific jurisdiction in Arizona. (Mot. at 9 6–14.) It argues that its actions meet none of the elements of the standard that determines 10 whether personal jurisdiction arises over it in this case: that 1) its contract with a resident 11 of the forum state alone is not a deliberate availment of the privilege of conducting 12 activities in the forum, 2) Mach 1’s claim does not arise out of or result from Tramar’s 13 forum-related activities, and 3) exercise of jurisdiction here would be unreasonable. (Mot. 14 at 6–14.) In its Response, Mach 1 contends that the Court has specific jurisdiction over 15 Tramar in this case because Tramar “directed” its “business relations” to Arizona- 16 headquartered Mach 1 by electronically communicating with it, directing physical 17 payments to its Arizona address, and discussing and finalizing various business 18 arrangements with Mach 1 personnel located in Arizona. (Resp. at 3–6.) Mach 1 further 19 claims for the first time in its Response that Tramar “acquiesce[d]” to certain “Terms and 20 Conditions” that included a waiver of a personal-jurisdiction defense in any lawsuit 21 brought by Mach 1. (Resp. at 7; see also Ex. 7 at 2 ¶ 13.) Mach 1 further asserts that this 22 Court’s exercise of personal jurisdiction here would be reasonable for the same reasons it 23 gives to argue for personal jurisdiction. (Resp. at 6.) 24 Whether a court may exercise specific jurisdiction in a particular case turns on the 25 extent of the defendant’s contact with the forum and the degree to which the plaintiff’s suit 26 is related to the defendant’s contacts. Yahoo! Inc. v. La Ligue Contre Le Racisme et 27 L’Antisemitisme, 433 F.3d 1199, 1210 (9th Cir. 2006). The Ninth Circuit uses the following 28 approach to determine whether a court may exercise specific jurisdiction over a nonresident 1 defendant: (1) the nonresident defendant must do some act in or consummate some 2 transaction with the forum, or perform some act by which it purposefully avails itself of 3 the privilege of conducting activities in the forum, thereby invoking the benefits and 4 protections of its laws;2 (2) the claim must be one which arises out of or results from the 5 defendant’s forum-related activities; and (3) the exercise of jurisdiction must be 6 reasonable. Data Disc, 557 F.2d at 1287. 7 The plaintiff bears the burden of establishing the first two requirements of the test. 8 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004). If the 9 plaintiff establishes the first two requirements, the burden shifts to the defendant to 10 establish that the third requirement is not met. Mavrix Photo, Inc. v. Brand Techs., Inc., 11 647 F.3d 1218, 1228 (9th Cir. 2011) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 12 476–78 (1985)). All three requirements must be met for the exercise of jurisdiction to 13 comport with constitutional principles of due process. Omeluk, 52 F.3d at 270. 14 To meet the first element—that the defendant purposefully directed activities at the 15 forum state—the plaintiff must show the defendant “either (1) ‘purposefully availed’ 16 himself of the privilege of conducting activities in the forum, or (2) ‘purposefully directed’ 17 his activities towards the forum.” Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1155 (9th 18 Cir. 2006) (quoting Schwarzenegger, 374 F.3d at 802). The purposeful availment analysis 19 is generally applied to claims sounding in contract. Global Commodities Trading Group, 20 Inc. v. Beneficio de Arroz Choloma, S.A., 972 F.3d 1101, 1107 (9th Cir. 2020). Because 21 Mach 1 claims breach of contract and no tortious conduct on the part of Tramar, purposeful 22 availment is the proper analytical framework. Id. 23 24 2 Mach 1 appears to be confusing the purpose of this element as helping to determine the defendant’s contacts with the plaintiff itself rather than the defendant’s contacts with the 25 plaintiff’s chosen forum when it alleges that “Tramar purposefully and freely availed itself of the services and privilege of conducting business with Mach 1 in Arizona.” (Resp. at 6.) 26 In fact, the United States Supreme Court has “consistently rejected attempts to satisfy the defendant-focused ‘minimum contacts’ inquiry by demonstrating contacts between the 27 plaintiff . . . and the forum State.” Walden v. Fiore, 571 U.S. 277, 284 (2014). Mach 1’s own contacts with Arizona are not dispositive in determining whether Tramar’s due 28 process rights would be violated by this Court’s exercise of specific jurisdiction over Tramar in this case. See id. at 285. 1 “Purposeful availment requires that the defendant engage in some form of 2 affirmative conduct allowing or promoting the transaction of business within the forum 3 state.” Shute v. Carnival Cruise Lines, 897 F.2d 377, 386 (9th Cir. 1990), rev’d on other 4 grounds, 499 U.S. 585 (1991). A defendant’s contract with a forum entity cannot alone 5 automatically establish sufficient contacts to give rise to specific jurisdiction over the 6 defendant. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478 (1985). When determining 7 whether a contract establishes the contacts necessary for personal jurisdiction, courts must 8 evaluate negotiations prior to the contract, contemplated future consequences of the 9 contract, the terms of the contract, and the parties’ actual course of dealing. Gray & Co. v. 10 Firstenberg Machinery Co. Inc., 913 F.2d 758, 760 (9th Cir. 1990) (quoting Burger King, 11 471 U.S. at 479). 12 Tramar’s contacts with Arizona as alleged by Mach 1 are insufficient to establish 13 that Tramar purposefully availed itself of the privilege of conducting activities in Arizona. 14 In the Ninth Circuit, “ordinarily ‘use of the mails, telephone, or other international 15 communications simply do not qualify as purposeful activity invoking the benefits and 16 protection of the [forum] state.’” Peterson v. Kennedy, 771 F.2d 1244, 1262 (9th Cir. 1985) 17 (quoting Thos. P. Gonzalez Corp. v. Consejo Nacional de Produccion de Costa Rica, 614 18 F.2d 1247, 1254 (9th Cir. 1980)). This standard has been applied to email and other forms 19 of electronic communication in the years since Peterson. See, e.g., Mesa Air Group, Inc. v. 20 Aps Capital Corp., No. 2:07-cv-00920-HRH, 2007 WL 9724582, at *4 (D. Ariz. 2007 Sept. 21 18, 2007) (noting that phone calls and emails culminating in a contract for a one-time sale 22 of a bankruptcy claim with no “obvious nexus” to Arizona was too attenuated to establish 23 purposeful availment); TriWest Healthcare Alliance Corp. v. Geneva Woods Pharmacy 24 LLC, No. CV-19-02052-PHX-SMB, 2020 WL 248286, at *5 (D. Ariz. Jan. 16, 2020) 25 (holding that email, phone calls, and letters by the defendant to the plaintiff in Arizona did 26 not qualify as purposeful activity invoking the protection of the state of Arizona). This 27 Court accordingly finds that Tramar’s telephonic, electronic, and written communications 28 to Mach 1 in Arizona are attenuated contacts that do not establish purposeful availment. 1 This includes the payments addressed and sent to Mach 1 in Arizona because payment sent 2 specifically to an Arizona address was a result, unforeseeable to Tramar, of compliance 3 with the terms of the original contract negotiated between North Carolina and California, 4 rather than a specific consequence of the contract that Tramar affirmatively sought. 5 The contract entered into by Mach 1 and Tramar out of which this action arose did 6 not establish the contacts necessary for an Arizona court to have specific jurisdiction over 7 Tramar. Both parties agree that all communications leading up to contract execution were 8 conducted electronically and telephonically and that Tramar did not send any 9 representative to Arizona to engage in those communications. None of the evidence 10 provided by either party indicates that Tramar contemplated any Arizona-related 11 consequences to the contract. Indeed, leading up to the contract’s execution, Tramar 12 believed it was communicating with Mach 1 in California. The terms of the contract 13 indicate no nexus with Arizona. Finally, the parties’ actual course of dealing involved no 14 deliveries made by Mach 1 for Tramar that either originated or terminated in Arizona. 15 Tramar did make payments to Mach 1 at its Tempe, Arizona, address, but, again, such 16 contact is too attenuated to establish purposeful availment. 17 To the extent Mach 1 argues Tramar has sufficient contacts with Arizona because 18 Mach 1 is located in Arizona and was allegedly injured by Tramar’s alleged breach of 19 contract, that contact is insufficient to confer personal jurisdiction over Defendant. Walden, 20 571 U.S. 277 at 290 (noting that mere injury to a forum-resident plaintiff is not a sufficient 21 connection to establish personal jurisdiction over a non-resident defendant). 22 Because Mach 1 has failed to meet its burden to demonstrate that the Court has 23 personal jurisdiction over Tramar, the Court must dismiss this action. See In re W. States 24 Wholesale Natural Gas Antitrust Litig., 715 F.3d 716, 742 (9th Cir. 2013) (“If any of the 25 three requirements is not satisfied, jurisdiction in the forum would deprive the defendant 26 of due process of law”). 27 28 1 C. Waiver of Personal Jurisdiction Defense 2 Mach 1 claims in its Response that Tramar “acquiesce[d]” to certain “Terms and 3 Conditions” that included a waiver of a personal-jurisdiction defense in any lawsuit 4 brought by Mach 1. (Resp. at 7; see also Ex. 7 at 2 ¶ 13.) To the extent Mach 1 attempted 5 to provide evidence to support this claim, Mach 1 simply attached Exhibit 7 to its Response 6 without an affidavit, declaration, or any foundation. Nothing on the face of the Exhibit 7 indicates that Tramar agreed to or even knew of those terms, and Mach 1 provided no 8 evidence or explanation to show Tramar’s knowledge of or agreement to them. 9 Mr. Fletcher states in his affidavit that Mr. Crooke “signed, acknowledged and 10 agreed to the Terms and Conditions in the Mach 1 Conditions of Contract” agreeing to 11 jurisdiction in Arizona and waiving the right to raise lack of personal jurisdiction as a 12 defense in any lawsuit commenced by Mach 1. (Resp. Ex. 8 at 3.) Neither his affidavit nor 13 any other submission from Mach 1 links the terms on Exhibit 7 to the terms that 14 Mr. Fletcher asserts that Mr. Crooke of Tramar “signed, acknowledged and agreed to.” 15 Indeed, Tramar denies knowledge of the existence of any such “signed, acknowledged and 16 agreed to” terms. (Reply at 6.) 17 Given the lack of foundation for Mach 1’s Exhibit 7 to its Response, the limits of 18 what the Exhibit directly shows, and Tramar’s denial of knowledge that it had “signed, 19 acknowledged and agreed to” such terms, the Court does not find the Exhibit to be reliable 20 evidence of Mach 1’s claim that Tramar waived its right to a jurisdictional defense against 21 Mach 1’s Complaint. 22 D. Mach 1’s Request for Summary Judgment 23 In its Response, Mach 1 also requests that the Court “deny the Motion [to Dismiss] 24 and treat the matter as one subject to summary judgment based on the submissions of 25 Mach 1 in unequivocal contradiction to the position and purported evidence of Defendant 26 Tramar Global….” (Resp. at 1.) Mach 1 claims that the Exhibits it attached to its Response 27 “clearly show that there is no genuine issue as to any material question of fact to be 28 scrutinized in discovery and trial” and that with them “Mach 1 shows it is entitled to 1 || judgment as a matter of law.” (Resp. at 8.) Mach 1 supports this request by citing two 2|| WWIl-era cases from outside the Ninth Circuit. (Resp. at 8.) The Court denies this 3 || inappropriate and unsupported request. 4 First, Mach 1 has not met its burden to show that the Court has personal jurisdiction 5 || over Tramar, and the Court will dismiss this action accordingly. Second, Federal Rule of 6|| Civil Procedure 12(d) allows the Court to convert a motion to dismiss under Rule 12(b)(6) or 12(c) into one for summary judgment when considering matters outside the pleadings. 8 || However, the Motion to Dismiss before the Court is made pursuant to Rule 12(b)(2) and 9|| so is not affected by Rule 12(d). In short, Mach 1’s request lacks any merit, and the cases 10 || it cites are inapposite. The Court thus denies Mach 1’s unsupported request for summary 11 |} judgment. 12 E. Transfer as Alternative Relief 13 Since the Court grants Tramar’s Motion to Dismiss, it denies as moot Tramar’s request for transfer of venue as alternative relief. IV. CONCLUSION 16 Plaintiff Mach 1 Global Services Incorporated has not met its burden to show that 17 || Defendant Tramar Global LLC either has substantial, continuous, systematic activities in 18 || Arizona or that it purposefully availed itself of the privilege of conducting activities in || Arizona, and the Court must therefore dismiss this action for lack of personal jurisdiction. 20 IT IS THEREFORE ORDERED granting Defendant’s Motion to Dismiss for 21 || Lack of Personal Jurisdiction and Improper Venue (Doc. 10). 22 IT IS FURTHER ORDERED directing the Clerk of the Court to enter judgment 23 || accordingly and close this case. 24 Dated this 19th day of May, 2021. CN 26 wef holee— Unifga State#District Judge 27 28 -10-