Kilian v. The American Society of Mechanical Engineers ( 2022 )

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 EASTERN DISTRICT OF CALIFORNIA 9 10 DENNIS KILIAN, No. 2:21-cv-01740-JAM-DB 11 Plaintiff, 12 v. ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS 13 THE AMERICAN SOCIETY OF ENGINEERS, a New York 14 corporation, et al., 15 Defendants. 16 17 Before the Court is the American Society of Mechanical 18 Engineers (“ASME”), the International Society of 19 Interdisciplinary Engineers LLC (“ISIE”), and Global Knowledge 20 Solutions LLC’s (“GKS”) (collectively “Defendants”) motion to 21 dismiss under Rule 12(b)(2) for lack of personal jurisdiction. 22 See Mot., ECF No. 9-1. Dennis Kilian (“Plaintiff”) filed an 23 opposition, see Opp’n, ECF No. 12, to which Defendants replied, 24 see Reply, ECF No. 14. For the reasons below, the Court GRANTS 25 Defendants’ Motion.1 26 27 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was 28 scheduled for December 7, 2021. 1 I. BACKGROUND 2 On December 16, 2020, Plaintiff entered into an Employment 3 Agreement (“the Agreement”) with ISIE, acting on behalf of its 4 subsidiary GKS, to serve as GKS’s President for a five-year term. 5 Compl ¶ 41, Ex. A to Not. of Removal, ECF No. 1. Plaintiff 6 resided and worked in New Jersey until March 2021 when he moved 7 to California. Mot. at 2; Opp’n at 7. Shortly thereafter 8 Plaintiff was removed as GKS’s President. Compl ¶ 78. 9 Subsequently, on April 20, 2021, Plaintiff’s employment with GKS 10 was terminated for cause. Mot. at 3; Opp’n at 7. 11 In response, Plaintiff initiated the present breach of 12 contract action in Placer County Superior Court. See generally 13 Compl. The complaint asserts six claims against Defendants for: 14 (1) Breach of Contract; (2) Failure to Pay Wages Owed in 15 Violation of Labor Code Section 200 et seq.; (3) Violation of 16 Business and Professions Code Section 17200 et seq.; (4) Breach 17 of the Implied Covenant of Good Faith and Fair Dealing; 18 (5) Intentional Interference with Contract; and (6) Declaratory 19 Judgment under California Code of Civil Procedure Section 1060 20 and Labor Code Section 925. Id. 21 Defendants removed the case, see Not. of Removal, and now 22 move to dismiss for lack of personal jurisdiction, see Mot. 23 24 II. OPINION 25 A. Legal Standard 26 Rule 12(b)(2) of the Federal Rules of Civil Procedure 27 authorizes a defendant to seek dismissal of an action for a lack 28 of personal jurisdiction. Fed. R. Civ. P. 12(b)(2). Plaintiff 1 bears the burden of showing that jurisdiction is proper. 2 Morrill v. Scott Fin. Corp., 873 F.3d 1136, 1141 (9th Cir. 3 2017). Because no evidentiary hearing occurred in this action, 4 “the plaintiff need only make a prima facie showing of 5 jurisdictional facts.” Id. (citing to Schwarzenegger v. Fred 6 Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004)). 7 “For a court to exercise personal jurisdiction over a 8 nonresident defendant [in accordance with due process], that 9 defendant must have at least ‘minimum contacts’ with the 10 relevant forum such that the exercise of jurisdiction ‘does not 11 offend traditional notions of fair play and substantial 12 justice.’” Schwarzenegger, 374 F.3d at 801 (quoting 13 International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). 14 There are two kinds of personal jurisdiction a forum state may 15 exercise over a defendant: general jurisdiction and specific 16 jurisdiction. Morrill, 873 F.3d at 1142. 17 B. Analysis 18 1. General Jurisdiction 19 The first type of personal jurisdiction, general 20 jurisdiction, exists only “if the defendant has ‘continuous and 21 systematic general business contacts’ with a forum state” so as 22 to render them essentially at home in the forum state. Morrill, 23 873 F.3d at 1142 (internal citations omitted). For a 24 corporation, the paradigm forum for the exercise of general 25 jurisdiction is its place of incorporation and principal place 26 of business. Daimler AG v. Bauman, 571 U.S. 117, 137 (2014). 27 Only in an “exceptional” case will a “corporation’s operations 28 in a forum other than its formal place of incorporation or 1 principal place of business [. . .] be so substantial and of 2 such a nature as to render the corporation at home in that 3 State.” Id. at 139 n. 19. 4 Here, as the complaint itself states, none of the three 5 Defendants is incorporated in California nor do any have their 6 principal place of business in the state. Compl. ¶ 2 (“ASME is 7 a New York not-for-profit corporation with its principal place 8 of business located at Two Park Avenue, New York, New York, 9 10016”), Compl. ¶ 8 (“ISIE is a Delaware limited liability 10 company with its principal place of [business] located at Two 11 Park Avenue, New York, New York, 10016”), Compl. ¶ 14 (“GKS is a 12 Delaware limited liability company with its principal place of 13 [business] located at 3025 Boardwalk, Ann Arbor, Michigan 14 48108”). Plaintiff nevertheless maintains GKS’s principal place 15 of business is California, or at least that California is where 16 GKS intended to set up its headquarters. Opp’n at 5, 11-12. 17 But as Defendants point out, that argument is contradicted by 18 his own allegation that GKS’s principal place of business is Ann 19 Arbor, Michigan. Compl. ¶ 14. Plaintiff’s next argument that 20 GKS intended to relocate its headquarters to California and that 21 certain executives were located there, see Opp’n at 11-12, fares 22 no better as it is unsupported by the objective facts before the 23 Court and further because that relocation never actually 24 occurred. Reply at 1-2. 25 There is nothing exceptional about this case indicating 26 general jurisdiction should extend beyond the states where 27 Defendants are incorporated and have their principal places of 28 business. See Daimler, 571 U.S. at 139 n.19. California is not 1 one of those states. Accordingly, the Court finds general 2 jurisdiction does not exist over Defendants. 3 2. Specific Jurisdiction 4 The second type of jurisdiction, specific jurisdiction, 5 permits a court to exercise jurisdiction when the suit arises 6 out of or relates to the defendant’s contacts with the forum. 7 Bristol-Myers Squibb Co. v. Superior Ct. of California, San 8 Francisco Cty., 137 S. Ct. 1773, 1780 (2017). In the Ninth 9 Circuit, specific jurisdiction is appropriate if: (1) a non- 10 resident defendant purposefully directs their activities towards 11 the forum or performs some act by which they purposefully avail 12 themselves of the privilege of conducting activities in the 13 forum, thereby invoking the benefits and protections of its 14 laws; (2) the claim arises out of or relates to the defendant’s 15 forum-related activities; and (3) the exercise of jurisdiction 16 comports with fair play and substantial justice, i.e. it must be 17 reasonable. Schwarzenegger, 374 F.3d at 802. The plaintiff 18 bears the burden of satisfying the first two prongs of the test. 19 Id. If the plaintiff fails to satisfy either of these prongs, 20 personal jurisdiction is not established in the forum state. 21 Id. If the plaintiff does satisfy the first two prongs, the 22 burden then shifts to the defendant to present a compelling case 23 that the exercise of jurisdiction would not be reasonable. Id. 24 (internal citation omitted). 25 Plaintiff contends specific jurisdiction exists over each 26 Defendant. Opp’n at 12-20. Beginning with GKS, Plaintiff argues 27 the first two prongs of the Ninth Circuit test are satisfied by 28 GKS’s business activities in California and Plaintiff’s own 1 contacts with California. See Opp’n at 12-16 (setting forth 2 GKS’s contacts and Plaintiff’s contacts with the state). As to 3 GKS’s alleged contacts with California, the Court agrees with 4 Defendants that they are unconnected to Plaintiff’s claims which 5 arise solely out of the alleged breach of the Agreement. Reply 6 at 2-3. Yet specific jurisdiction requires “a connection between 7 the forum and the specific claims at issue,” and “[w]hen there is 8 no such connection, specific jurisdiction is lacking regardless 9 of the extent of a defendant’s unconnected activities in the 10 State.” Bristol-Myers Squibb Co., 137 S. Ct. at 1781. In the 11 Bristol-Meyers case, the Supreme Court found no specific 12 jurisdiction existed even though defendant had five California 13 facilities employing 160 people, 250 California sales 14 representatives, and sold $900 million in Plavix pills in 15 California — far more contacts than GKS is alleged to have here – 16 because those contacts were unrelated to the plaintiff’s claims. 17 Id. at 1778. So too here. GKS’s contacts with California are 18 unrelated to Plaintiff’s breach of contract claims and thus do 19 not establish specific jurisdiction. 20 Next, Plaintiff attempts to use his own contacts with 21 California to establish specific jurisdiction over GKS. Opp’n at 22 13-16. But, as Defendants argue, this turns the jurisdictional 23 analysis on its head. Reply at 3. Specific jurisdiction exists 24 only where the claims “arise out of contacts that the defendant 25 himself creates with the forum State,” and the Supreme Court has 26 “consistently rejected attempts to satisfy the defendant-focused 27 ‘minimum contacts’ inquiry by demonstrating contacts between the 28 plaintiff (or third parties) and the forum State.” Walden v. 1 Fiore, 571 U.S. 277, 284 (2014)(emphasis in original); see also 2 Joseph Saveri Law Firm, Inc. v. Criden, 696 Fed. Appx. 189, 192 3 (9th Cir. 2017) (“[Plaintiff]’s own activities in California 4 cannot establish personal jurisdiction over [Defendant] . . . 5 Otherwise, a plaintiff could establish jurisdiction over a 6 defendant through the plaintiff’s own contractual performance 7 within a forum state.”)(emphasis in original). Additionally, 8 Defendants brought forward a number of cases supporting their 9 contention that “when a person . . . makes a unilateral decision 10 to move after being hired, an employer’s mere acquiescence or 11 indifference to the employee’s decision does not constitute 12 purposeful availment.” Mot. at 11-12 n.9; Reply at 4. Plaintiff 13 failed to address these cases in opposition. See generally 14 Opp’n. This constitutes waiver. See Resnick v. Hyundai Motor 15 America, Inc., Case No. CV 16-00593-BRO (PJWx), 2017 WL 1531192, 16 at *22, (C.D. Cal. Apr. 13, 2017) (“Failure to oppose an argument 17 raised in a motion to dismiss constitutes waiver of that 18 argument.”). Moreover, this Court agrees with the reasoning in 19 Defendants’ cited authority, see Mot. at 11-12 n.9 (collecting 20 cases), that Plaintiff’s choice of residence cannot serve as the 21 basis for personal jurisdiction, otherwise defendants would be 22 subject to personal jurisdiction in any state to which Plaintiff 23 happens to relocate. For these reasons, Plaintiff’s own contacts 24 with California do not establish specific jurisdiction over GKS 25 either. 26 As to the remaining Defendants, ASME and ISIE, Plaintiff 27 attempts to piggyback jurisdiction over these Defendants as 28 “joint employers” based on the Court’s purported jurisdiction nnn en nee enn nn nnn nnn on nnn nn nn oO OS EE ED EE 1 over GKS. Opp’n at 17-19. Because no jurisdiction over GKS 2 exists, however, this attempt fails. Nor does the Agreement or 3 the complaint reference any “joint employment.” Accordingly, the 4 Court finds specific jurisdiction does not exist over ASME and 5 ISIE. 6 Because Plaintiff did not carry his burden on the first two 7 prongs, the inguiry properly ends there. Schwarzenegger, 374 8 | F.3d at 802. 9 10 Til. ORDER 11 For the reasons set forth above, Defendants’ 12(b) (2) Motion 12 to Dismiss for lack of personal jurisdiction is GRANTED. 13 IT IS SO ORDERED. 14 Dated: January 20, 2022 15 kA 16 teiren staves odermacr 7008 17 18 19 20 21 22 23 24 25 26 27 28