Wang v. Byun CA2/5 ( 2023 )

Filed 3/6/23 Wang v. Byun CA2/5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on
opinions not certified for publication or ordered published, except as specified by rule
8.1115(b). This opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
JACK WANG, B322774, B322790,
B322795
Plaintiff and Appellant,
(Santa Clara County
v. Super. Ct. No.
20CV367266)
STEVE BYUN et al.,
Defendants and Respondents.
APPEAL from orders of the Superior Court of Santa Clara
County, Thang Nguyen Barrett, Judge. Affirmed.
California Appellate Law Group and Jessica M. Weisel;
Balogh & Co. and Ethan A. Balogh for Plaintiff and Appellant.
Covington & Burling, Mark W. Mosier, Daniel G.
Randolph, W. Douglas Sprague, and Isaac D. Chaput for
Defendants and Respondents.
Plaintiff Jack Wang (plaintiff), a California resident, sued
his foreign employer and others for breach of contract, breach of
fiduciary duty, and tortious interference with contract. In our
review of the trial court’s orders granting the defendants’ motions
to quash for lack of personal jurisdiction, we consider whether
defendants “‘purposefully directed’ [their] activities at residents
of the forum, [citation], and the litigation result[ed] from alleged
injuries that ‘arise out of or relate to’ those activities [citation].”
(Burger King Corp. v. Rudzewicz (1985) 471 U.S. 462, 472 (Burger
King), italics added.)
I. BACKGROUND
A. Plaintiff’s Hiring, Termination, and Lawsuit
Plaintiff is an attorney and entrepreneur. He has known
defendant Steve Byun (Byun) since 1991. The two “grew up in
the same town in California and attended the same junior high
and high schools.” Plaintiff, Byun, and a third person who is not
a party to this litigation founded defendant Widus Partners (HK)
Limited (Widus Partners) in 2010. Widus Partners is a “cross-
border strategic advisory and investment firm.” It is wholly
owned by defendant Widus Holdings (HK) Limited (Widus
Holdings).1
Plaintiff left Widus Partners and relinquished his interest
in the company in 2012. Around the same time, he began
working in the cryptocurrency industry and founded a company
1
Byun, Widus Partners, and Widus Holdings submitted a
joint respondents’ brief. We refer to them collectively as
“defendants.” We also refer to Widus Partners and Widus
Holdings as the “entity defendants.”
2
that “developed various technology products relating to Bitcoin,
cryptocurrencies, and blockchain . . . .” Plaintiff provided Byun
“free[ ] . . . advice and guidance” regarding cryptocurrencies and,
in early 2018, Byun invited plaintiff to return to Widus Partners
“running a new practice dedicated to [initial coin offerings
(ICOs)], blockchain technology, and cryptocurrencies.” Byun
emphasized Widus Partners’ “growing traction and visibility in
the Korean market.”
As alleged in plaintiff’s complaint, plaintiff was “hesitant”
to re-join Widus Partners in part due to the firm’s “lack of
resources outside of South Korea.” Byun acknowledged plaintiff
“did not, at that time, have a business network within Korea,”
but emphasized it was not “necessary for [plaintiff] to
immediately develop a large book of business” and stressed that
Widus Partners “operated on . . . a ‘one-firm’ philosophy,”
meaning if any one partner’s business was slow they “could
contribute on projects within other practice groups.”
Plaintiff returned to Widus Partners part-time in 2018 “on
a good-faith basis, without a contractual agreement.” During this
period, he was allegedly “involved with introducing potential
clients to Widus Partners, signing new clients, and providing
services to existing clients . . . .”
Plaintiff soon decided to join Widus Partners on a full-time
basis, and he and Byun (on behalf of Widus Partners) executed
an employment agreement in October 2018. Plaintiff’s position
was “Partner/Head of ICO Advisory and Blockchain Business.”2
2
Plaintiff asks us to take judicial notice of a page on the
Securities and Exchange Commission’s (SEC’s) website for a
definition of “initial coin offering” to “help the Court understand
3
The term of the agreement was for one year, to be automatically
renewed unless terminated either by the company with cause at
any time or by either party without cause upon 60 days’ notice.
As set forth in the employment agreement, plaintiff was
entitled to a salary plus an “incentive bonus based on his
contribution to each of the projects he had marketed, sourced and
executed.” Plaintiff was also entitled to an equity profit share
based on his contractually-required purchase, for $400,000, of an
eight percent stake in Widus Holdings. Plaintiff and Byun (this
time on behalf of Widus Holdings) executed a separate
promissory note to finance his purchase of these shares. Plaintiff
and Byun (again on behalf of Widus Holdings) also executed a
shareholder agreement, which included a put option for plaintiff
(requiring Widus Holdings to buy out his shares) and a call
option for the company (requiring plaintiff to sell his shares to
Widus Holdings). All three contracts—the employment
agreement, the promissory note, and the shareholder
agreement—include a Hong Kong choice of law provision.
For reasons that are not pertinent to this appeal, Byun
notified plaintiff in October 2019 that his employment agreement
was being terminated and Widus Holdings was exercising its
option to buy plaintiff’s shares in the company. At that time,
the scope of [plaintiff’s] position at Widus.” We decline. The
term is adequately defined in caselaw: “An ICO is a fundraising
event where an entity offers participants a unique digital coin,
token, or digital asset in exchange for consideration, frequently in
the form of virtual currency, such as Bitcoin and Ether, or fiat
currency.” (Securities and Exchange Commission v. Blockvest,
LLC (S.D. Cal., Apr. 20, 2020, No. 18-cv-2287-GPC (MSB)), 2020
WL 1910355, *1, fn. 1.)
4
plaintiff had paid $200,000 of the $400,000 due under the
promissory note.
This litigation arises out of defendants’ alleged: failure to
pay any incentive bonus for 2019; refusal to provide audited
financial statements to verify the calculation of plaintiff’s equity
profit share; and refusal to pay the equity profit share,
unreimbursed business expenses, or $200,000 for plaintiff’s
shares in Widus Holdings without a release and indemnification.
Plaintiff alleged both entity defendants are alter egos of Byun.
Plaintiff asserted causes of action for breach of contract against
Widus Partners and Widus Holdings, breach of fiduciary duty
against Widus Partners and Byun, and tortious interference with
contract against Byun.3
3
Plaintiff also sought the appointment of a receiver or a
determination that this is a proper case for interpleader based on
plaintiff’s abortive self-help efforts. That is, when negotiations
regarding plaintiff’s departure became contentious, plaintiff
added a security key to certain crypto assets held by Widus
Partners to “prevent[ ] Widus Partners from unilaterally
transferring the . . . tokens to any other person or entity.”
Plaintiff relinquished the key to defendants in December 2020
and abandoned the receiver and interpleader claims. On appeal,
plaintiff asks us to take judicial notice of an eight-fold increase in
the value of these assets between October 2020 and the first half
of 2021. The request is denied. Plaintiff has not established that
the website from which he downloaded the price information
(coingecko.com) is a “source[ ] of reasonably indisputable
accuracy” (Evid. Code, § 452, subd. (h)), and the value of these
assets does not impact our analysis in any case.
5
B. Motions to Quash
Widus Partners and Widus Holdings filed a joint motion to
quash plaintiff’s summons for lack of personal jurisdiction in
August 2020. As we shall discuss, the trial court granted the
entity defendants’ motion by the time Byun, who was served later
than the entity defendants, filed a similar motion to quash in
December 2020. The entity defendants and Byun argued they
are not subject to general or specific personal jurisdiction in
California and, in the alternative, that California is an
inconvenient forum.
Both Widus Partners and Widus Holdings are
headquartered and incorporated in Hong Kong. Neither company
has ever been incorporated, qualified, or registered to do business
in California; had a registered agent in California; paid taxes in
California; held a bank account in California; or owned or leased
real or personal property in California. According to Widus
Partners’ chief operating officer, Jonathan Lee, plaintiff was the
company’s only employee residing in California during the term
of his employment. His recruitment and hiring was managed
entirely through email and phone calls.
Byun resides in South Korea. He has not lived in
California since 2003 and, since 2010, he has visited California
no more than once each year for no more than two weeks at a
time. According to Byun, plaintiff suggested that he work
remotely from California when he rejoined Widus Partners in
2018. Byun was “apprehensive” about this arrangement “because
the remainder of Widus Partners personnel worked from and
resided in Asia (specifically, Hong Kong, Seoul, and Singapore).”
Plaintiff was “never require[ed]” to work from California and
travelled frequently to Asia for work, “remaining for
6
approximately two to three weeks at a time.” Indeed, Widus
Partners and plaintiff eventually agreed “that he should reside in
Seoul on a semi-permanent basis, at least six months, returning
to the United States intermittently, as he needed,” but Widus
Partners terminated plaintiff “[b]efore that plan came to
fruition.”4
In opposition, plaintiff argued Byun and the entity
defendants are subject to both general and specific jurisdiction in
California and, in any event, the trial court should permit further
jurisdictional discovery. He contended Widus Partners is subject
to personal jurisdiction in California in its own right; Widus
Holdings in its own right and as an alter ego of Widus Partners;
and Byun in his own right and as an alter ego of the entity
defendants.
Plaintiff submitted a declaration stating that “Byun
recruited [him] to rejoin Widus Partners precisely because [he]
was a resident of California, so that Widus Partners could tap
into San Francisco’s and Silicon Valley’s tech communities. It
was to Widus Partners’ advantage to have a resident of
California—and specifically, a person who lives near the
technology companies in Northern California—be a partner in
Widus Partners.” Plaintiff claimed that Byun provided “express
4
Plaintiff alleged substantially the same facts in his
complaint: “During [a] trip [to South Korea in September 2019],
Byun told [plaintiff] that he believed that [plaintiff] should spend
more time in South Korea. While [plaintiff] did not want to move
to South Korea, and expressed the same to Byun, they agreed
that [plaintiff] would visit South Korea to pursue and execute on
Widus Partners’ business relationships for longer durations.”
7
oral assurances . . . that [he] could and should remain in
California while working for Widus Partners.”5
Plaintiff submitted various marketing materials purporting
to show, as plaintiff put it, that Widus Partners “touted the fact
that it had a ‘presence’ and an ‘office’ in California” based solely
on his affiliation with the firm. These included “pitch decks”
listing locations in (and including images of) various Asian cities
and San Francisco. The pitch decks name plaintiff as a contact
point for Widus Partners in San Francisco. Plaintiff also
submitted a sample email from Byun that includes a signature
block listing locations in Asian cities and San Francisco.
Archived versions of Widus Partners’ website mention the firm’s
“presence” in various Asian cities and Silicon Valley and include
plaintiff’s contact information in San Francisco. These references
to California were removed from Widus Partners’ website when
plaintiff was terminated.
Plaintiff declared he personally forwarded at least one of
the pitch decks mentioning San Francisco “to two individuals at a
San Francisco company . . . .” In 2018 and 2019, Widus Partners’
business in California included “contracts with several California
companies, for which [plaintiff] was at least partially
responsible.” At least one of these contracts included California
choice of law and forum selection provisions. Plaintiff further
noted that Byun visited and communicated with business
contacts in California, including during a three-day conference
5
By comparison, plaintiff alleged in his complaint that
Byun “assured [plaintiff] that [he] could remain in California
where he would be close to technology companies in [N]orthern
California” in order “[t]o entice [plaintiff]” to join Widus Partners.
(Emphasis added.)
8
that Byun attended with plaintiff in Lake Tahoe and two trips to
Los Angeles (apparently without plaintiff) to meet with
prospective clients.
Plaintiff asserted Widus Partners “contracted with [a] San
Francisco resident” to serve as its chief financial officer in 2018 or
2019 and “engaged” two California residents as “[v]enture
[p]artners” in 2019. Plaintiff did not state whether these
individuals remained California residents or performed their
work in California. He described the work of the venture
partners to include referring companies to Widus Partners and
providing leads on investors.
Plaintiff also complained in his oppositions to the motions
to quash that defendants refused to provide requested
jurisdictional discovery (and he separately moved to compel
further responses). Plaintiff had propounded document requests
and interrogatories seeking, among other things, information
relating to the entity defendants’ use of marketing materials
(e.g., the pitch decks discussed ante), whether Widus Partners
continued to tout its “presence” in California after plaintiff’s
termination, Widus Holdings’ status as an asserted alter ego of
Widus Partners, Byun’s contacts with California, and Byun’s
alleged alter ego relationship with the entity defendants.
C. The Trial Court’s Orders
1. The entity defendants
The trial court held a hearing on the entity defendants’
motion to quash in October 2020 and granted the motion.
Rejecting plaintiff’s contention that the entity defendants are
subject to general personal jurisdiction in California, the trial
court emphasized that marketing materials mentioning a
9
California presence, California employees, and contracts with
California businesses showed, “[a]t best, . . . that Widus Partners
operated in California,” but not to a degree “that it can be deemed
at home in the forum.” The fact that Widus Holdings entered
into two contracts with plaintiff was similarly insufficient to
subject it to general personal jurisdiction in California.
The trial court’s analysis of specific personal jurisdiction
focused on the entity defendants’ contracts with plaintiff.
Emphasizing the Hong Kong choice of law provisions, the absence
of evidence that negotiations over plaintiff’s return to Widus
Partners were conducted in California, “limited information”
about where plaintiff performed his work for Widus Partners, and
no indication that plaintiff was required to work in California
(“the employment contract . . . happened to be performed in
California because that is where [p]laintiff wanted to reside”), the
trial court found plaintiff did not meet his burden of proving the
entity defendants purposefully availed themselves of the
privilege of doing business in California. As a result, the trial
court did not analyze whether plaintiff’s claims arise out of or
relate to the entity defendants’ California-directed activities or
whether it would be reasonable to exercise jurisdiction over them.
Additionally, the trial court determined plaintiff did “not
adequately demonstrate [further jurisdictional] discovery [was]
likely to lead to the production of evidence of facts establishing
jurisdiction.”
After plaintiff noticed his appeal of the trial court’s order
granting the motion to quash, the court dismissed the entity
defendants without prejudice. Plaintiff moved to vacate the
dismissal on the grounds that the clerk of the court had authority
to perform only ministerial acts in entering the dismissal, the
10
court lacked authority to enter dismissal after plaintiff perfected
his appeal, and plaintiff was deprived of due process. The trial
court denied the motion to vacate, reasoning the dismissal was
based on the trial court’s ruling on the motion to quash—as to
which plaintiff was not denied an opportunity to be heard—and
the court had jurisdiction to enter dismissal while the appeal was
pending because it did not alter the status quo. Plaintiff noticed
a separate appeal from this order.
2. Byun
The trial court held a hearing on Byun’s motion to quash
months later (owing to the different time at which Byun was
served with a summons) and granted that motion too. The trial
court determined Byun was not subject to general jurisdiction in
California because plaintiff’s assertion that Byun did “‘a
substantial amount if business in Santa Clara County’” was
“vague and conclusory,” no authority supported his theory that
Byun’s United States citizenship was alone sufficient to establish
general jurisdiction, and plaintiff’s alter ego theory failed because
the entity defendants were not subject to general jurisdiction in
California.
As to specific jurisdiction, the trial court found Byun did
not personally “perform[ ] acts or transactions in California to
constitute purposeful availment” and specific jurisdiction
therefore depended on an alter ego theory. As to that theory, the
court largely reiterated its reasons for granting the entity
defendants’ motion to quash: the Hong Kong choice of law
provisions in plaintiff’s contracts and the lack of any evidence
that plaintiff was required to work from California. Finding no
purposeful availment, the trial court did not analyze whether
11
plaintiff’s claims arise out of or relate to Byun’s California-
directed activity or whether it would be reasonable to exercise
jurisdiction over him. As with the entity defendants, the trial
court found that plaintiff failed to demonstrate further
jurisdictional discovery was likely to lead to the production of
evidence establishing jurisdiction. Plaintiff noticed an appeal
from this order, as well.
D. Consolidation of Appeals
Plaintiff’s appeals from the orders granting the entity
defendants’ motion to quash (B322774), Byun’s motion to quash
(B322790), and dismissing the entity defendants (B322795) were
consolidated. Our Supreme Court ordered these matters
transferred from the Sixth Appellate District to this District in
August 2022.
II. DISCUSSION
Plaintiff has (appropriately) abandoned the argument made
below that defendants are subject to general personal jurisdiction
in California, and his arguments for specific jurisdiction lack
merit. The trial court correctly determined that defendants did
not purposefully avail themselves of the benefits of doing
business in California through contracts with plaintiff that were
governed by Hong Kong law and indifferent as to where plaintiff
would work, particularly in the absence of non-conclusory
evidence that plaintiff played any role in defendants’ business
with California-based clients during the contractual relationship.
Although the trial court’s purposeful availment analysis was
unnecessarily limited to defendants’ interactions with plaintiff,
the limitation is of no moment because plaintiff also has not
12
established his claims arise out of or relate to any of defendants’
activities that can be said to be directed at California.
Additionally, the trial court did not abuse its discretion in
determining that further jurisdictional discovery was not likely to
yield jurisdictionally relevant information.6
A. Principles of Personal Jurisdiction
California’s long-arm statute (Code Civ. Proc., § 410.10)
authorizes California courts to exercise jurisdiction on any basis
not inconsistent with the Constitution of the United States or the
Constitution of California. “The Due Process Clause of the
Fourteenth Amendment constrains a State’s authority to bind a
nonresident defendant to a judgment of its courts. [Citation.]
Although a nonresident’s physical presence within the territorial
jurisdiction of the court is not required, the nonresident generally
must have ‘certain minimum contacts . . . such that the
maintenance of the suit does not offend “traditional notions of
fair play and substantial justice.”’ [Citation.]” (Walden v. Fiore
(2014) 571 U.S. 277, 283 (Walden), quoting International Shoe
Co. v. Washington (1945) 326 U.S. 310, 316.)
Distilled to three commonly cited elements, “[a] court may
exercise specific jurisdiction over a nonresident defendant only if:
(1) ‘the defendant has purposefully availed himself or herself of
forum benefits’ [citation]; (2) ‘the “controversy is related to or
6
Plaintiff acknowledges his argument for vacating the trial
court’s order dismissing the entity defendants is contingent upon
our reversing the trial court’s order granting the entity
defendants’ motion to quash. Because we affirm the trial court’s
order granting the entity defendants’ motion to quash, the
dismissal order will stand.
13
‘arises out of’ [the] defendant’s contacts with the forum”’
[citations]; and (3) ‘“the assertion of personal jurisdiction would
comport with ‘fair play and substantial justice’”’ [citations].”
(Pavlovich v. Superior Court (2002) 29 Cal.4th 262, 269
(Pavlovich); accord Jayone Foods, Inc. v. Aekyung Industrial Co.
Ltd. (2019) 31 Cal.App.5th 543, 553 (Jayone).) Acts by the
defendant that are relied on to give rise to specific jurisdiction
“must be the defendant’s own choice and not ‘random, isolated, or
fortuitous,’” and they “must show that the defendant deliberately
‘reached out beyond’ its home—by, for example, ‘exploi[ting] a
market’ in the forum State or entering a contractual relationship
centered there.” (Ford Motor Co. v. Montana Eighth Judicial
Dist. Court (2021) ___ U.S. ___ [141 S.Ct. 1017, 1025] (Ford).)
The defendant’s contacts need not bear “a strict causal
relationship” to the litigation (Id. at ___ [141 S.Ct. at 1026]), but
“there must be ‘an affiliation between the forum and the
underlying controversy, principally, [an] activity or occurrence
that takes place in the forum State. [Citation.]” (Bristol-Myers
Squibb Co. v. Superior Court (2017) 582 U.S. 255, 264 (Bristol-
Myers).)
“‘“When a defendant moves to quash service of process” [on
jurisdictional grounds], “the plaintiff has the initial burden of
demonstrating facts justifying the exercise of jurisdiction.”’”
(Jayone, supra, 31 Cal.App.5th at 553.) The plaintiff must prove
jurisdictional facts by a preponderance of the evidence. (In re
Automobile Antitrust Cases I & II (2005) 135 Cal.App.4th 100,
110 (Automobile Antitrust Cases).)
Where there is no conflict in the evidence, “‘the question of
jurisdiction is purely one of law and the reviewing court engages
in an independent review of the record. [Citation.]’ [Citation.]”
14
(Jayone, supra, 31 Cal.App.5th at 553.) But where, as here, there
is conflicting evidence, we review the trial court’s factual
determinations for substantial evidence. (Ibid.) We review the
trial court’s ruling on a motion for a continuance for jurisdictional
discovery for abuse of discretion. (Automobile Antitrust Cases,
supra, 135 Cal.App.4th at 127.)
B. Defendants Did Not Purposefully Avail Themselves of
Forum Benefits Through Their Contracts with
Plaintiff or Tortious Activity Directed at the Forum
“Th[e] ‘purposeful availment’ requirement ensures that a
defendant will not be haled into a jurisdiction solely as a result of
‘random,’ ‘fortuitous,’ or ‘attenuated’ contacts . . . or of the
‘unilateral activity of another party or a third
person[.]’ . . . Jurisdiction is proper, however, where the contacts
proximately result from actions by the defendant himself that
create a ‘substantial connection’ with the forum State. . . .”
(Burger King, supra, 471 U.S. at 475, citations and footnotes
omitted.) In the context of a contract dispute, “an individual’s
contract with an out-of-state party alone . . . clearly . . . cannot”
establish sufficient minimum contacts to establish specific
jurisdiction. (Id. at 478.) Rather, we consider factors including
“prior negotiations and contemplated future
consequences, . . . the terms of the contract[,] and the parties’
actual course of dealing . . . .” (Id. at 479.)
The inquiry that specific jurisdiction precedent calls us to
undertake is highly fact-specific, and courts considering whether
a defendant employer has purposefully availed itself of forum
benefits by permitting an employee to work remotely in the
forum state have reached different conclusions under only
15
slightly varying circumstances. In King v. Prodea Systems, Inc.
(D. Mass. 2019) 433 F.Supp.3d 7, for instance, the district court
acknowledged the defendant employer “merely acquiesced to [the
plaintiff’s] request to work remotely from [the forum state] for
[the plaintiff’s own] benefit,” but concluded the defendant
“nonetheless purposefully and intentionally engaged with [the
plaintiff] in [the forum state] through, among other actions,
recruiting him, negotiating his employment contract, withholding
state income taxes from his salary and soliciting business with
his assistance in [the forum state] on at least two occasions.” (Id.
at 15.) By contrast, in Fields v. Sickle Cell Disease Association of
America, Inc. (E.D. N.C. 2018) 376 F.Supp.3d 647, the plaintiff
employee was hired by the defendant while a resident of the
forum state and worked remotely for the defendant in the forum
state, but the district court determined the defendant’s contacts
with the forum state were “properly characterized as unilateral
activity by the plaintiff,” because, among other things, the
relevant contracts did not require her to work in the forum state
and were governed by the laws of another state. (Id. at 652-653.)
Plaintiff contends the trial court disregarded “undisputed”
evidence as to the negotiation and contemplated future
consequences of his contracts with the entity defendants,
including that they recruited him “because he was a California
resident” and intended for him to work “primarily in California”
to help them “tap into San Francisco’s and Silicon Valley’s tech
communities.” But substantial evidence supports the trial court’s
contrary conclusion that Byun reached out to plaintiff, a
childhood acquaintance with whom he co-founded Widus
Partners less than a decade earlier, principally based on
16
plaintiff’s knowledge of the crypto industry and defendants were
indifferent as to where plaintiff resided.
Primarily, and contrary to plaintiff’s conclusory assertion
in opposition to the motions to quash that he was hired “precisely
because” he was a resident of San Francisco, plaintiff’s operative
complaint states Byun emphasized the firm’s success in South
Korea, reassured him about his lack of an established business
network in that country by explaining he could contribute to
other partners’ projects, and told him he could remain in
California to “entice” him to join Widus Partners. At best, these
statements demonstrate ambivalence regarding the location of
plaintiff’s residence. That ambivalence is further reinforced by
the employment agreement’s silence on the issue: there is no
provision that indicates plaintiff was being hired because of his
California location or to exploit the California market, and the
agreement includes an integration clause representing it is “the
entire agreement and understanding between the parties.”7 (See
Wright v. Zacky & Sons Poultry, LLC (M.D. N.C. 2015) 105
F.Supp.3d 531, 540 [no personal jurisdiction where the plaintiff
employee performed duties under his contract in the forum state,
but “neither [the defendant] nor the contract required him to be
in [the forum state] while performing those duties”].) Plaintiff’s
own complaint and the employment agreement’s silence are
7
Plaintiff’s suggestion in his reply brief that he and Byun
orally agreed that he “would remain in California”—with the
effect that he was required to do so under the employment
contract—has no basis in the record. Plaintiff stated in his own
declaration that Byun “assur[ed]” him he “could and should
remain in California while working for Widus Partners.”
(Emphasis added.)
17
enough to support the trial court’s ruling, but the record
additionally reveals Byun was “apprehensive” about plaintiff
working remotely from California.8 Under these circumstances,
the parties’ negotiations were directed toward California only to
the extent that plaintiff had discretion to remain in California
and do not establish defendants purposefully availed themselves
of California benefits in negotiating plaintiff’s return to the
company.
The affirmative terms of the employment agreement,
shareholder agreement, and promissory note provide further
support for a finding of no purposeful availment. The renewable
one-year employment agreement does not indicate defendants
contemplated a permanent outpost in California—it is a far cry
from the “carefully structured 20-year relationship” discussed in
Burger King. (Burger King, supra, 471 U.S. at 480.) In addition,
and although a choice of law provision is “not dispositive,” it “may
‘reinforce[ ]’ whether or not a foreign corporation has made such
‘a deliberate affiliation with the forum State’ as to support a
conclusion that it should have reasonably foreseen ‘possible
litigation there.’” (T.A.W. Performance, LLC v. Brembo, S.p.A.
(2020) 53 Cal.App.5th 632, 646, quoting Burger King, supra, at
482.) Here, the employment agreement, shareholder agreement,
and promissory note are all governed by Hong Kong law. This
8
Strictly speaking, Byun’s declaration that includes this
statement was submitted only in support of his own motion to
quash. In these consolidated appeals of personal jurisdiction
rulings involving related defendants, however, our consideration
of the admission need not be so limited. Moreover, as already
explained, the result as to the entity defendants would be the
same even without consideration of Byun’s declaration.
18
“reflects a deliberate affiliation with” the entity defendants’
headquarters and place of incorporation—not California.
(Halyard Health, Inc. v. Kimberly-Clark Corp. (2019) 43
Cal.App.5th 1062, 1076.)
Plaintiff nonetheless contends the parties’ actual course of
dealing demonstrates the contracts were directed toward
California. But there is no evidence defendants facilitated
plaintiff’s work from California—for instance, by providing office
space or equipment.9 As plaintiff emphasized in his declaration,
his “California home was Widus Partners’ California ‘office.’”
Plaintiff’s assertion that he was “at least partially responsible”
for Widus Partners’ contracts with California companies is
insufficient to establish the agreements between plaintiff and the
entity defendants were California-directed. (Strasner v.
Touchstone Wireless Repair & Logistics, LP (2016) 5 Cal.App.5th
215, 222 [a plaintiff cannot meet their burden in opposing a
motion to quash with “vague and conclusory assertions of
ultimate facts”].)
Indeed, plaintiff presented no evidence regarding the
nature of his role in defendants’ relationships with California
clients. He points to nothing in the appellate record suggesting
the services Widus Partners provided under these contracts
9
Several cases cite the provision of remote working
technology as a factor weighing in favor of purposeful availment.
(See, e.g., Kumar v. Opera Solutions OPCO, LLC (S.D. N.Y., Sept.
28, 2021, No. 1:20-cv-6824-GHW), 2021 WL 4442832, *8; Hall v.
Rag-O-Rama (E.D. Ky. 2019) 359 F.Supp.3d 499, 510.)
19
called for his specialized knowledge of the crypto industry.10
Moreover, there is no evidence as to where plaintiff performed
work related to these contracts or even whether his contributions
occurred during his contractual employment (as opposed to the
period during which he consulted for Widus Partners).11 In light
of evidence that Widus Partners contracted with California-based
“venture partners” and operated under a “one-firm” policy in
which plaintiff could contribute to others’ projects, we cannot
assume plaintiff’s residence in California was a material factor in
10
The only relationship between Widus Partners and a
California-based business that plaintiff discussed in any detail in
his declarations was Byun’s efforts to solicit business from a
company called “Entertainment Studios” in Los Angeles.
Plaintiff conspicuously failed to state, however, that he
accompanied Byun on trips to Los Angeles or played any other
role in these efforts. Plaintiff’s further statement, made “[o]n
information and belief,” that Widus Partners signed non-
disclosure agreements “and/or other agreements” with California
companies “to have access to deal information and to be
compensated if a deal . . . transpired” likewise did not suggest
personal involvement and was not competent evidence in any
case. (Baustert v. Superior Court (2005) 129 Cal.App.4th 1269,
1275, fn. 5.)
11
Plaintiff stated in a declaration that he sent one of the
pitch decks to “a San Francisco company” (not one of the
California firms with which Widus Partners ultimately
contracted) in March 2018, prior to his contractual relationship
with defendants. There is no evidence regarding plaintiff’s
contacts with California companies after his formal employment
commenced. Plaintiff stated he sent one of the pitch decks to a
venture capital firm in October 2019, but gave no indication that
the firm is based in California.
20
securing this business—and assumptions are all the record would
permit. In fact, the available evidence in the record points to a
contrary conclusion: the pressure plaintiff felt to spend more time
in South Korea toward the end of his tenure in order to, as he put
it in the complaint, “pursue and execute on Widus Partners’
business relationships for longer durations,” suggests his work
was substantially focused on Asian clients.
Plaintiff’s reliance on references to California in marketing
materials to establish the contracts were directed toward
California is similarly unavailing. In the absence of evidence
that defendants required or even requested that plaintiff reside
in California, references to his location in pitch decks, on Widus
Partners’ website, and in email signature blocks amount to little
more than the accurate reporting of a fact that was entirely
within plaintiff’s control. The fact that Widus Partners had no
California-based successor waiting in the wings and removed all
references to California from its marketing materials following
plaintiff’s departure underscores that the object of defendants’
relationship with plaintiff was to avail itself of his crypto
expertise—not his location. The litany of non-California cases
plaintiff cites discussing scenarios in which foreign defendants
expressly hired personnel to establish a foothold in the relevant
forum states are accordingly factually inapposite.12
12
In Berdux v. Project Time & Cost, Inc. (N.D. Cal. 2009) 669
F.Supp.2d 1094, the defendants “approached [the plaintiff] with
an offer to serve as [their] first Regional Manager-Western
Region, and to open [their] first Western regional office in San
Francisco, California.” (Id. at 1098.) The district court
determined the defendants were subject to personal jurisdiction
in California because “the unambiguous purpose of the[ir]
21
Plaintiff’s citation of Swenberg v. Dmarcian, Inc. (2021) 68
Cal.App.5th 280 (Swenberg) to argue that “claiming affiliation
with a California business subjects a non-resident to jurisdiction[
means] the same must be true when the non-resident claims it is
operating directly in California” rests on a misreading of that
case. In Swenberg, the Court of Appeal held that a citizen of the
Netherlands who held himself out as a leader of a company
headquartered in California (including on the company’s website)
purposefully availed himself of forum benefits and was subject to
personal jurisdiction in California. (Id. at 296, 298.) But the
contract [with the plaintiff] was to initiate and engage in
business in the state of California.” (Id. at 1101.) In Unlimited
Prepaid, Inc. v. Airvoice Wireless Express, LLC (C.D. Cal., May
10, 2017, No. CV 17-01409 SJO (JPRx)) 2017 WL 8230848, the
district court held a Michigan defendant purposefully availed
itself of the benefits of doing business in California by entering
into a contract for which the undisputed purpose “was to enroll
California residents in [a phone program]” and in which
California was listed as the “sole ‘Authorized Carrier
Area(s)/Locations.’” (Id. at *8.) In Cannon v. Communication
Components, Inc. (W.D. Wash., Jan. 28, 2020, No. C19-804RSM)
2020 WL 433351, the district court emphasized that the
defendant hired the plaintiff “in part to enter the regional market
[that included the forum state] after prior attempts were
unsuccessful.” (Id. at *4.) In Embark, LLC v. 1105 Media, Inc.
(N.C. Ct. App. 2014) 753 S.E.2d 166, the defendant employer paid
rent for the plaintiff employee’s office in the forum state and its
“actions were not merely an accommodation to [the plaintiff’s]
choice of residence, but rather a result of [its] own initiative to
create an operating division and office in [the forum].” (Id. at
174.)
22
defendant did not only appear on the California company’s
website: Among other things, he ran a European enterprise
whose web address “automatically route[d] to [the California
company’s] Web site, administered in California, and receiv[ed]
prospective customers directed to [the European entity] by
a[n] . . . employee [of the California company] in California.” (Id.
at 298.) By contrast, plaintiff presented no evidence that his
presence in California actually attracted California-based clients.
Our conclusion is the same under the “effects test” derived
from Calder v. Jones (1984) 465 U.S. 783. Courts apply this test
to determine purposeful availment in cases involving intentional
torts—such as plaintiff’s claim against Byun for tortious
interference with contract. (Pavlovich, supra, 29 Cal.4th at 269.)
The plaintiff must demonstrate that the defendant committed an
intentional act, expressly aimed at or targeting the forum state,
with the knowledge that the act would cause harm in the forum
state. (Id. at 271.) The focus of this analysis is the defendant’s
contacts with the forum as opposed to their contacts with the
plaintiff. (Walden, supra, 571 U.S. at 290 [“The proper question
is not where the plaintiff experienced a particular injury or effect
but whether the defendant’s conduct connects him to the forum in
a meaningful way”].)
Here, plaintiff alleged Byun interfered with the
shareholder agreement by inducing Widus Holdings to decline to
timely re-purchase plaintiff’s shares without conditions. None of
the relevant acts occurred in California, and their only connection
to the forum is plaintiff’s decision to reside here. These
circumstances are analogous to those in Walden, in which the
high court explained that a police officer’s seizure of the Nevada
plaintiffs’ cash in Georgia did not support personal jurisdiction in
23
Nevada: “[The plaintiffs] lacked access to their funds in Nevada
not because anything independently occurred there, but because
Nevada is where respondents chose to be at a time when they
desired to use the funds seized by [the defendant].” (Walden,
supra, 571 U.S. at 290.)
C. Plaintiff’s Claims Do Not Arise Out of or Relate to
Defendants’ Forum-Directed Activities
Our conclusion that defendants’ dealings with plaintiff
were not California-directed should not be understood as a
holding that they may not have purposefully availed themselves
of forum benefits in other ways. We shall accordingly consider, to
the extent the record permits, defendants’ other contacts with
California as well.13 But in doing so, we must evaluate the
“connection between the forum and the specific claims at issue”
(Bristol-Myers, supra, ___ U.S. at ___ [137 S.Ct. at 1781]), and on
13
Defendants do not dispute plaintiff’s assertion that, “in
2018 through 2019, Widus Partners entered into contracts with
several California companies,” one of which included California
choice of law and forum selection provisions. Despite the lack of
detail regarding where Widus Partners and its counterparties
were to perform under these contracts, we will assume for the
sake of argument that these contacts were sufficient to establish
defendants purposefully availed themselves of forum benefits.
We do not, however, assume defendants purposefully
availed themselves of forum benefits through their engagement of
venture partners or a chief financial officer based in California.
There is no evidence that defendants required these individuals
to remain in or direct their work toward California. In any case,
plaintiff does not argue that his claims arise out of or relate to
defendants’ relationships with these individuals.
24
this score, plaintiff’s personal jurisdiction showing still falls
short.
“In order for a state court to exercise specific jurisdiction,
‘the suit’ must ‘aris[e] out of or relat[e] to the defendant’s contacts
with the forum.’ [Citations.]” (Bristol-Myers, supra, ___ U.S. at
___ [137 S.Ct. at 1780].) Although the first part of the “arise out
of or relate to” formulation “asks about causation,” the “back half,
after the ‘or,’ contemplates that some relationships will support
jurisdiction without a causal showing.” (Ford, supra, ___ U.S. at
___ [141 S.Ct. at 1026].) But “[t]hat does not mean anything
goes.” (Ibid.) The “‘essential foundation’ of specific jurisdiction”
is a “‘relationship among the defendant, the forum, and the
litigation.’” (Id. at ___ [141 S.Ct. at 1028].)
Plaintiff’s claims arise out of his contractual relationships
with the entity defendants and Byun’s alleged meddling in those
relationships. As we have already discussed, plaintiff failed to
demonstrate a connection between his contractual relationships
with defendants and defendants’ relationships with California
clients. Notwithstanding plaintiff’s assertion that he was “at
least partially responsible” for Widus Partners’ contracts with
California companies, there is no indication as to the nature or
timing of his involvement. Plaintiff does not contend that Widus
Partners’ relationships with California companies had any
bearing on the entity defendants’ alleged breach of their
obligations to him. Assuming defendants may be subject to
jurisdiction in California in a dispute concerning its services to
California clients, that is not the dispute this case presents. The
“arising out of or relate to” element of specific personal
jurisdiction is accordingly unsatisfied even taking a broader view
of the purposeful availment inquiry.
25
D. Plaintiff Was Not Entitled to Further Jurisdictional
Discovery
Plaintiff contends the trial court abused its discretion in
failing to continue the hearing on the entity defendants’ motion
to quash until he had an opportunity to conduct additional
jurisdictional discovery for two reasons: (1) the court mistakenly
believed plaintiff had not sought to compel further responses at
the time of the hearing and (2) the court erroneously concluded
further discovery was unlikely to lead to evidence supporting
personal jurisdiction. We need only address the second ground
for the trial court’s ruling, which was independently sufficient to
deny plaintiff’s request.
In its order granting the entity defendants’ motion to
quash, the trial court reasoned in part as follows: “[I]t appears
the discovery is aimed at establishing that Widus Partners and
Widus Holdings represented in marketing materials that they
had a presence or office in California during the relevant time
period. However, . . . the purported fact that the entities had an
office in the forum is not dispositive as the relevant inquiry with
respect to general jurisdiction is whether they were at home in
California.” We do not construe this passage to mean, as plaintiff
suggests, the trial court “ignore[d] [plaintiff’s] argument that the
presence in California supported the exercise of specific
jurisdiction.” The trial court addressed plaintiff’s contention that
“Widus Partners . . . represented in marketing materials that it
had a ‘presence’ and ‘office’ in San Francisco based on [plaintiff’s]
employment” in its analysis of specific jurisdiction and correctly
concluded these contacts were not jurisdictionally relevant
because they were within plaintiff’s control. The trial court was
26
not required to state that additional irrelevant evidence would
not change its analysis.
Plaintiff’s alternative contention that “[d]iscovery of the
names of all companies in California with which Widus
[Partners] entered into business relationships” and “agreements
in which Widus [Partners] agreed to be subject to California
jurisdiction . . . plainly relate to the question of specific personal
jurisdiction” also lacks merit. Preliminarily, plaintiff did not
expressly mention these issues in his opposition to the entity
defendants’ motion to quash. As summarized in an attorney
declaration, the discovery was “aimed at establishing facts
relating to Widus Partners’ and Widus Holdings’ contacts with
California, including their use of [certain marketing
presentations],” “establishing the fact that [d]efendants ceased
stating that they have a ‘presence’ or ‘office’ in California at such
time as their dispute with plaintiff . . . arose,” and “establishing
facts supporting alter ego as a basis for personal jurisdiction over
Widus Holdings.” In any case, such evidence would not support
personal jurisdiction for reasons we have already discussed.
Plaintiff could not plausibly contend that defendants hired him to
secure or perform work related to contracts of which he is not
aware, and his claims do not arise out of or relate to contracts to
which he was not a party.
27
DISPOSITION
The trial court’s orders are affirmed. Defendants shall
recover their costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
BAKER, J.
I concur:
KIM, J.
28
Wang v. Byun, B322774
RUBIN, P. J. – Concurring
I concur in the judgment but write separately for a narrow
reason.
I find instructive a case cited in the majority opinion, King
v. Prodea Systems, Inc. (D.Mass. 2019) 433 F.Supp.3d 7. There,
United States District Judge Gorton wrote: “The Corporate
Defendants emphasize that they merely acquiesced to King’s
request to work remotely from Massachusetts for King’s benefit.
Although that may be true, the Corporate Defendants
nonetheless purposefully and intentionally engaged with King in
Massachusetts through, among other actions, recruiting him,
negotiating his employment contract, withholding state income
taxes from his salary and soliciting business with his assistance
in Massachusetts on at least two occasions. Such conduct cannot
reasonably be described as involuntary or unilateral. See Nowak
v. Tak How Invs., Ltd., 94 F.3d 708, 713 (1st Cir. 1996).
Consequently, the Corporate Defendants purposefully availed
themselves of the privilege of conducting business in
Massachusetts.” (King v. Prodea Systems, Inc., supra, at p. 15.)
Much of Judge Gorton’s description is evocative of the
evidence before the trial court in the current appeal. But Judge
Gorton was making factual findings, much like I might have done
if I had been the trial judge here. But I was not and, considering
the facts and the inferences from those facts before the trial court
in this case, I cannot say that substantial evidence does not
support the trial court’s ruling. Thus, I concur in the judgment.
RUBIN, P. J.