Overhill Farms Inc v. West Liberty Foods LLC

Filing 21

ORDER re: DEFENDANT'S MOTION TO DISMISS OR IN THE ALTERNATIVE TO TRANSFER TO THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF IOWA 13 by Judge Ronald S.W. Lew: This Court GRANTSwithout prejudice Defendant's Motion to Dismis spursuant to Fed. R. Civ. P. 12(b)(2). As such, theCourt DENIES as moot Defendant's Motion to Dismiss pursuant to Fed. R. Civ. P. 12(b)(3) and DENIES as moot Defendant's Motion to Transfer. The Clerk shall close this case. (MD JS-6. Case Terminated) (jre)

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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11 Overhill Farms Inc.,
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Plaintiff,
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v.
14
West Liberty Foods LLC,
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16

Defendant.

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CV 14-03533-RSWL (PLAx)
ORDER re: DEFENDANT’S
MOTION TO DISMISS OR IN
THE ALTERNATIVE TO
TRANSFER TO THE UNITED
STATES DISTRICT COURT
FOR THE SOUTHERN
DISTRICT OF IOWA [13]

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19

Currently before the Court is Defendant West

20 Liberty Foods LLC’s (“Defendant”) Motion to Dismiss or
21 in the Alternative to Transfer to the United States
22 District Court for the Southern District of Iowa [13].
23 The Court, having reviewed all papers submitted
24 pertaining to this Motion, NOW FINDS AND RULES AS
25 FOLLOWS:
26

The Court hereby GRANTS Defendant’s Motion to

27 Dismiss pursuant to 12(b)(2), DENIES as moot
28 Defendant’s Motion to Dismiss pursuant to 12(b)(3), and
1

1 DENIES as moot Defendant’s Motion to Transfer.
2

I. BACKGROUND

3

Plaintiff Overhill Farms Inc. (“Plaintiff”) is a

4 corporation incorporated under the laws of the State of
5 Nevada and has its principal place of business in
6 Vernon, California.

Compl. ¶ 3.

Plaintiff is a

7 manufacturer of food products, including frozen
8 prepared meals, for companies that sell prepared meals
9 and other food products.

Id. at ¶ 7.

Plaintiff

10 manufactures prepared meals that include ground turkey
11 for “one of Plaintiff’s most important . . .
12 customers,” which then resells the prepared meals to
13 the ultimate consumers of the meals.
14

Id. at ¶ 8.

Defendant is a limited liability company organized

15 under the state of Iowa.

Id. at ¶ 4.

Plaintiff

16 alleges that since early 2004, it sourced ground turkey
17 from Defendant pursuant to quality specifications,
18 purchase orders, invoices, emails, and related
19 communications.

Id. at ¶ 9.

Plaintiff also alleges

20 that starting in January 2004, the Parties entered into
21 numerous contracts for Defendant to manufacture, sell,
22 and deliver ground turkey to Plaintiff at its facility
23 in Vernon, California.

Id. at ¶ 10.

Plaintiff

24 provided its ingredient specifications to Defendant,
25 which require (a) the product to meet all standards for
26 human consumption and to conform to laws and
27 regulations, (b) the product to be manually deboned to
28 eliminate bones and cartilage, and (c) for a bone
2

1 collector to be used.

Id. at ¶ 11.

Since 2004,

2 Plaintiff has purchased over 5 million pounds of ground
3 turkey from Defendant.
4

Id. at ¶ 6.

On November 3, 2011, Defendant provided Plaintiff a

5 Continuing Guaranty, Warranty, and Indemnity Agreement
6 (“Guaranty”).

Id. at ¶ 13.

On or about October 12,

7 2012, Plaintiff submitted Purchase Order 193375 to
8 Defendant for 27,500 pounds of ground turkey.
9 14.

Id. at ¶

Upon receipt of the ground turkey, Plaintiff used

10 it to create turkey patties for turkey burger
11 sandwiches for one of its customers.

Id. at ¶ 18.

12 Plaintiff shipped the turkey burger to its customer,
13 which distributed the burger to its end-user customers.
14 Id. at ¶ 20.

On or about February 5, 2013, Plaintiff

15 received notice from its customer that consumers of the
16 turkey burger sandwiches using Defendant’s ground
17 turkey reported finding pieces of bone and bone chips
18 in the turkey patties.
19

Id. at ¶ 21.

As a result of Defendant’s actions, Plaintiff

20 asserts claims for (1) breach of sales contract, (2)
21 breach of guaranty, warranty, and indemnity agreement,
22 (3) breach of the implied covenant of good faith and
23 fair dealing, (4) breach of express warranty, (5)
24 breach of the implied warranty of merchantability, (6)
25 breach of the implied warranty of fitness for a
26 particular purpose, and (7) negligence.

To date,

27 Plaintiff has incurred no less than $340,041.27 in
28 damages, and also seeks to recover lost profits and
3

1 other damages caused by interference with or loss of
2 customer relationship.
3

Id. at ¶ 40.

Plaintiff filed its Complaint on May 7, 2014 [1].

4 Defendant filed the instant Motion on July 10, 2014
5 [13].

Plaintiff filed an Opposition on July 30, 2014

6 [16] and Defendant filed its Reply on August 6, 2014
7 [19].

This matter was set for hearing on August 20,

8 2014 and was taken under submission on August 15, 2014.
9

II. LEGAL STANDARD

10 A.

Motion to Dismiss Pursuant to Fed. R. Civ. P.

11

12(b)(2)

12

Pursuant to Federal Rule of Civil Procedure

13 12(b)(2), a district court cannot proceed against a
14 defendant over which it lacks personal jurisdiction
15 unless that defendant has waived the requirement.

See

16 Ins. Corp. of Ireland, Ltd. v. Compagnie des Bauxites
17 de Guinee, 456 U.S. 694, 702–03 (1982).

Because no

18 applicable federal statute governs jurisdiction in this
19 case, California personal jurisdiction law applies.
20 See Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316,
21 1320 (9th Cir. 1998).

The exercise of personal

22 jurisdiction over a nonresident defendant requires the
23 presence of two factors: (1) California’s laws must
24 provide a basis for exercising personal jurisdiction,
25 and (2) the assertion of personal jurisdiction must
26 comport with due process.

Hirsch v. Blue Cross, Blue

27 Shield of Kansas City, 800 F.2d 1474, 1477 (9th Cir.
28 1986).

California’s long arm statute permits the
4

1 exercise of personal jurisdiction to the fullest extent
2 permitted by due process.

See Cal. Civ. Proc. Code §

3 410.10; Panavision, 141 F.3d at 1320.

“Because

4 California's long-arm jurisdictional statute is
5 coextensive with federal due process requirements, the
6 jurisdictional analyses under state law and federal due
7 process are the same.”

Schwarzenegger v. Fred Martin

8 Motor Co., 374 F.3d 797, 800–01 (9th Cir. 2004).

Thus,

9 only a due process analysis is required here.
10

Due process requires that a defendant have “certain

11 minimum contacts with [the forum state] such that the
12 maintenance of the suit does not offend traditional
13 notions of fair play and substantial justice.”

Int’l

14 Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)
15 (internal quotation marks omitted).

The plaintiff

16 bears the burden of proving that each defendant has
17 sufficient minimum contacts with the forum state that
18 warrant the court’s exercise of personal jurisdiction.
19 Harris Rutsky & Co. Ins. Servs., Inc. v. Bell &
20 Clements Ltd., 328 F.3d 1122, 1130 (9th Cir. 2003)
21 (“Personal jurisdiction over each defendant must be
22 analyzed separately.”); Rio Props., Inc. v. Rio Int’l
23 Interlink, 284 F.3d 1007, 1019 (9th Cir. 2002).
24 Depending on the nature and scope of the defendant’s
25 contacts with the forum, jurisdiction may be general or
26 specific to a cause of action.

Roth v. Garcia Marquez,

27 942 F.2d 617, 620 (9th Cir. 1991).
28

When a defendant’s contacts with the forum state
5

1 are “substantial” or “continuous and systematic,”
2 general jurisdiction may be exercised over that
3 defendant for any cause of action, even if it is
4 unrelated to the defendant’s activities within the
5 forum state.

Schwarzenegger, 374 F.3d at 801-02; Data

6 Disc, Inc. v. Sys. Tech. Assocs., 557 F.2d 1280, 1287
7 (9th Cir. 1977).

In cases where a defendant’s contacts

8 are insufficient to support an exercise of general
9 jurisdiction, more limited specific jurisdiction may be
10 found where a cause of action arises out of or is
11 related to the defendant’s activities in the forum
12 state.

Burger King Corp. v. Rudzewicz, 471 U.S. 462,

13 472–73 (1985); Ballard v. Savage, 65 F.3d 1495, 1498
14 (9th Cir. 1995).

“Specific jurisdiction may be

15 exercised with a lesser showing of minimum contacts
16 than is required for the exercise of general
17 jurisdiction.”

ACORN v. Household Int'l, Inc., 211 F.

18 Supp. 2d 1160, 1164 (C.D. Cal. 2002).

The Ninth

19 Circuit uses a three-part test to determine whether
20 there is specific jurisdiction over a defendant: (1)
21 the defendant either purposefully directed its
22 activities at the forum or purposefully availed itself
23 of the privilege of conducting activities in the forum;
24 (2) the plaintiff’s claim arises out of or results from
25 the defendant’s forum-related activities; and (3) the
26 court’s exercise of personal jurisdiction over the
27 defendant is reasonable.

Boschetto v. Hansing, 539

28 F.3d 1011, 1016 (9th Cir. 2008).
6

1

“When a district court acts on a defendant’s motion

2 to dismiss under Rule 12(b)(2) without holding an
3 evidentiary hearing, the plaintiff need make only a
4 prima facie showing of jurisdictional facts to
5 withstand the motion to dismiss.”
6 1498.

Ballard, 65 F.3d at

In order to make a prima facie showing, the

7 plaintiff must produce admissible evidence, which, if
8 believed, would be sufficient to establish the Court’s
9 personal jurisdiction.

Enriquez v. Interstate Grp.,

10 LLC, No. 11-CV-05155 YGR, 2012 WL 3800801, at *3 (N.D.
11 Cal. Aug. 31, 2012).

Accordingly, a district court is

12 to take uncontroverted allegations in the complaint as
13 true.

AT&T Co. v. Compagnie Bruxelles Lambert, 94 F.3d

14 586, 588 (9th Cir. 1996).

However, “mere allegations

15 of the complaint, when contradicted by affidavits, are
16 [not] enough to confer personal jurisdiction of a
17 nonresident defendant.

In such a case, facts, not mere

18 allegations, must be the touchstone.”

Taylor v.

19 Portland Paramount Corp., 383 F.2d 634, 639 (9th Cir.
20 1967).

See also Chem Lab Prods., Inc. v. Stepanek, 554

21 F.2d 371, 372 (9th Cir. 1977); Cummings v. W. Trial
22 Lawyers Ass'n, 133 F. Supp. 2d 1144, 1154 (D. Ariz.
23 2001).

Parties may go beyond the pleadings and support

24 their positions with discovery materials, affidavits,
25 or declarations.

Am. Inst. of Intradermal Cosmetics,

26 Inc. v. Soc’y of Permanent Cosmetic Prof’s, No. CV 1227 06887 GAF JCGX, 2013 WL 1685558, at *4 (C.D. Cal. Apr.
28 16, 2013).

“[C]onflicts between the facts contained in
7

1 the parties’ affidavits must be resolved in [the
2 plaintiff’s] favor for purposes of deciding whether a
3 prima facie case for personal jurisdiction exists.”
4 AT&T, 94 F.3d at 588.

“At the same time, however, the

5 plaintiff must submit admissible evidence in support of
6 its prima facie case.”
7

Id. (emphasis added).

III. ANALYSIS

8 A.

Evidentiary Objections

9

The Parties have each filed objections to certain

10 declarations.

See Dkt. ## 17-19.

To the extent the

11 Court relies upon the objected to evidence in reaching
12 its conclusions, the Court addresses those objections
13 below.

However, to the extent the Court has not relied

14 on the objected to evidence, it need not rule on those
15 evidentiary objections and deems those objections as
16 MOOT.
17 B.

Defendant’s Motion to Dismiss Pursuant to Fed. R.

18

Civ. P. 12(b)(2)

19

1.

20

“A defendant whose contacts with a state are

General Jurisdiction

21 ‘substantial’ or ‘continuous and systematic’ can be
22 haled into court in that state in any action, even if
23 the action is unrelated to those contacts.”

Bancroft &

24 Masters, Inc. v. Augusta Nat’l, Inc., 223 F.3d 1082,
25 1086 (9th Cir. 2000) (citing Helicopteros Nacionales de
26 Colombia, S.A. v. Hall, 466 U.S. 408, 415 (1984)).
27 “This is known as general jurisdiction.”

Id.

“The

28 standard for general jurisdiction ‘is an exacting
8

1 standard, as it should be, because a finding of general
2 jurisdiction permits a defendant to be haled into court
3 in the forum state to answer for any of its activities
4 anywhere in the world.’”

Mavrix Photo, Inc. v. Brand

5 Techs., Inc., 647 F.3d 1218, 1224 (9th Cir. 2011)
6 (quoting Schwarzenegger, 374 F.3d at 801).
7

“To determine if a defendant’s activities within

8 the forum are ‘continuous and systematic’ or
9 ‘substantial,’ the court must examine all of its
10 activities impacting the state.”

Barantsevich v. VTB

11 Bank, 954 F. Supp. 2d 972, 983 (C.D. Cal. 2013) (citing
12 Helicopteros, 466 U.S. at 411).

“Factors to be taken

13 into consideration are whether the defendant makes
14 sales, solicits or engages in business in the state,
15 serves the state’s markets, designates an agent for
16 service of process, holds a license, or is incorporated
17 there.”

Bancroft, 223 F.3d at 1086 (citing Hirsch, 800

18 F.2d at 1478).
19

“[D]etermining whether a corporate defendant’s

20 contacts in a particular case are substantial and
21 continuous turns on the ‘economic reality of the
22 defendants’ activities rather than a mechanical
23 checklist.’”

Tuazon v. R.J. Reynolds Tobacco Co., 433

24 F.3d 1163, 1173 (9th Cir. 2006) (citing Gates Learjet
25 Corp. v. Jensen, 743 F.2d 1325, 1331 (9th Cir. 1984)).
26

Here, Defendant argues that the Court lacks general

27 jurisdiction over it because it is an Iowa limited
28 liability company and its headquarters and two of its
9

1 processing plants are located in Iowa.

Defendant

2 further asserts that it has no facilities, offices,
3 operations, employees, real estate, or bank accounts in
4 California.
5

Mot. 6:25-28.

Plaintiff argues that Defendant is subject to

6 general jurisdiction in California because Defendant is
7 registered to do business in California, has designated
8 an agent for service of process in California, solicits
9 business from California residents, and makes
10 substantial sales from delivering products to
11 California residents.
12

Opp’n 6:20-9:3.

On balance, the Court finds that Plaintiff has

13 failed to meet its burden of establishing a prima facie
14 showing for general jurisdiction as it has failed to
15 demonstrate that Defendant has engaged in “continuous
16 and systematic general business contacts,” that
17 “approximate physical presence” in the forum state.
18 See Mavrix, 647 F.3d at 1224.
19

The Court acknowledges that, while it is relevant

20 that Defendant may be registered to do business and has
21 designated an agent for service of process in
22 California, these acts alone are insufficient to
23 support a finding of general jurisdiction over
24 Defendant.

See Flame S.A. v. Pasha Fin., Inc., No. CV

25 10-5245-GW (MANx), 2010 WL 2902774, at *3 (C.D. Cal.
26 July 26, 2010); See Beijing Automotive Indus. Import
27 and Export Corp. v. Indian Indus., Inc., 2013 WL
28 4040072, at *2 n.1 (C.D. Cal. Aug. 7, 2013); Gray Line
10

1 Tours v. Reynolds Elec. & Eng’g Co., 193 Cal. App. 3d
2 190, 193-95 (1987) (holding that designation of an
3 agent for service of process and qualification to do
4 business in California alone did not constitute grounds
5 for general jurisdiction); see also DVI, Inc. v.
6 Superior Court, 104 Cal. App. 4th 1080, 1095 (2002)
7 (holding that personal jurisdiction did not exist even
8 though the defendant company registered to do business
9 in California, had a California agent for service of
10 process, and had two officers residing in California).
11

The Court thus turns to Plaintiff’s allegation that

12 Defendant received millions of dollars from sales of
13 products to California residents.

Plaintiff alleges

14 that Defendant delivered more than 5 million pounds of
15 ground turkey to Vernon, California, which totaled more
16 than $6.7 million sold to Plaintiff.

Devore Decl. ¶ 5.

17 Plaintiff submits that Defendant has seventy-five
18 California customers.

Id.

Plaintiff further submits

19 that, based upon Defendant’s assertion that California
20 customers were responsible for 3.8% of its overall
21 revenue for the limited time frame of eight years,
22 Defendant’s overall revenue from California during the
23 2005-2013 time period was over $25 million.

Opp’n 8:2-

24 7 (citing Devore Decl. ¶ 5).
25

Defendant, on the other hand, provides evidence

26 that the 5 million pounds of ground turkey that were
27 processed and shipped to Plaintiff during the period
28 referred to in the Complaint represented only
11

1 approximately .11% of the overall pounds of meat that
2 Defendant processed during that time period.

Hansen

3 Decl. ¶ 4.
4

The percentage of a company’s sales in a given

5 state is generally irrelevant.

Lakin v. Prudential

6 Sec., Inc., 348 F.3d 704, 709 (8th Cir. 2003).
7 Instead, the focus is on whether a defendant’s activity
8 in the forum state is “continuous and systematic.”
9 (citing Helicopteros, 466 U.S. at 414).

Id.

“Many

10 companies conduct millions of dollars in sales
11 worldwide yet only do a small percentage of their sales
12 in any one state.”

Id. (citing Gator.Com Corp. v. L.L.

13 Bean, Inc., 341 F.3d 1072, 1074 (9th Cir. 2003)).

The

14 relevant inquiry is “not whether a percentage of the
15 company’s contacts is substantial for that company;
16 rather, the inquiry focuses on whether the company’s
17 contacts are substantial for the forum.”
18

Id.

Thus, the fact that Defendant’s sales to California

19 customers may have constituted only 3.8% of its overall
20 revenue over an eight year period is irrelevant.
21 Nonetheless, the Court finds that it lacks general
22 jurisdiction over Plaintiff.
23

As an initial matter, engaging in commerce with

24 residents of the forum state is not in and of itself
25 the kind of activity that approximates physical
26 presence within the state’s borders.

Glencore Grain,

27 284 F.3d at 1125 (citing Bancroft, 223 F.3d at 1086).
28 And, while Plaintiff alleges that Defendant sold $25
12

1 million in ground turkey sales to all of its California
2 customers, Plaintiff provides no argument or support
3 that $25 million is substantial for California.

In

4 fact, other courts have found that, even where a
5 nonresident defendant sells millions of dollars worth
6 of products to the forum, this activity can still be
7 insufficient to support a finding of general
8 jurisdiction where the contracts at issue were
9 negotiated outside of the forum.

See Bearry v. Beech

10 Aircraft Corp., 818 F.2d 370, 375-76 (5th Cir. 1987)
11 (no general jurisdiction where nonresident corporation
12 selling millions of dollars of products to the forum
13 when such sales were negotiated, executed, and
14 performed outside the forum).

Here, though not

15 explicitly stated in either Party’s papers, the Parties
16 appear to have negotiated the relevant Purchase Orders
17 via phone, email, or other interstate communication
18 given that they were located in different states for
19 the duration of the negotiations.
20 5-6.

See Porter Decl. ¶¶

Thus, while Defendant may have made $25 million

21 in ground turkey sales to California residents, this
22 assertion alone is insufficient to confer general
23 jurisdiction over Defendant.
24

Plaintiff cites to LSI Indus. v. Hubbel Lighting,

25 Inc., 232 F.3d 1369, 1375 (Fed. Cir. 2000) to support
26 the proposition that general jurisdiction exists where
27 the defendant generated several millions of dollars in
28 annual sales in the forum state.
13

However, the

1 defendant in that case had a “broad distributorship
2 network in [the forum state].”

Id.

Defendant here has

3 no facilities, offices, operations, employees, real
4 estate, or bank accounts in California (Hansen Decl. ¶
5 3), nor does it appear that Defendant maintains a
6 network of distribution in California.

See Glencore

7 Grain Rotterdam B.V. v. Shivnath Rai Harnarain Co., 284
8 F.3d 1114, 1124–25 (9th Cir. 2002) (holding that the
9 presence of a sales agent in California, sales through
10 California, and shipments through California ports did
11 not confer general jurisdiction, when “[t]here is no
12 evidence that [the defendant] owns property, keeps bank
13 accounts, has employees, solicits business, or has
14 designated an agent for service of process in
15 California”)).

And, while Plaintiff argues that

16 Defendant’s solicitation of business from California
17 residents supports a finding of general jurisdiction,
18 Plaintiff only cites to evidence supporting that
19 Defendant may have solicited business from Plaintiff.
20 See Opp’n 7:8-17.

Plaintiff fails to show that

21 Defendant solicited business from other California
22 businesses.

As such, the Court disregards Plaintiff’s

23 argument on this point.
24

The standard for general jurisdiction is stringent.

25 Bancroft, 223 F.3d at 1086.

Here, in examining all of

26 Defendant’s activities impacting the forum state, the
27 Court finds that Plaintiff has failed to meet the high
28 standard of showing that Defendant’s contacts
14

1 approximate physical presence in the forum.

The Court

2 thus finds that it lacks general jurisdiction over
3 Defendant.
4

2.

Specific Jurisdiction

5

To determine whether to exercise specific

6 jurisdiction over a nonresident defendant, this Court
7 must consider the test adopted by the Ninth Circuit to
8 ensure that the exercise of specific jurisdiction
9 satisfies the requirements of due process.

Cubbage v.

10 Merchent, 744 F.2d 665, 668 (9th Cir. 1984).

Specific

11 jurisdiction is proper only when (1) the defendant has
12 performed some act by which he purposefully avails
13 himself of the privilege of conducting activities in
14 the forum, thereby invoking the benefits and
15 protections of its laws; (2) the claim arises out of,
16 or results from, the defendant’s forum-related
17 activities; and (3) the exercise of jurisdiction is
18 “reasonable.”

Terracom v. Valley Nat’l Bank, 49 F.3d

19 555, 560 (9th Cir. 1995) (citing Shute v. Carnival
20 Cruise Lines, 897 F.2d 377, 381 (9th Cir. 1990)).
21

The plaintiff bears the burden of satisfying the

22 first two prongs of the test.

Schwarzenegger, 374 F.3d

23 at 802 (citing Sher v. Johnson, 911 F.2d 1357, 1361
24 (9th Cir. 1990)).

If the plaintiff fails to satisfy

25 either of these prongs, personal jurisdiction is not
26 established in the forum state.

Id.

If the plaintiff

27 succeeds in satisfying both of the first two prongs,
28 the burden then shifts to the defendant to “present a
15

1 compelling case” that the exercise of jurisdiction
2 would not be reasonable.
3
4

a.

Id.

Purposeful Availment

The plaintiff may satisfy the first prong by

5 demonstrating that the defendant either purposefully
6 availed itself of the privilege of conducting
7 activities in the forum, or purposefully directed its
8 activities at the forum.

Wash. Shoe Co. v. A-Z

9 Sporting Goods Inc., 704 F.3d 668, 672 (9th Cir. 2012).
10 The Ninth Circuit has explained that although courts
11 have sometimes used these two terms in shorthand
12 fashion as a single concept, they “are, in fact, two
13 distinct concepts.”
14 F.3d at 802).

Id. (citing Schwarzenegger, 374

A purposeful availment analysis is most

15 often used in suits sounding in contract.

A purposeful

16 direction analysis, on the other hand, is most often
17 used in suits sounding in tort.

Schwarzenegger, 374

18 F.3d at 802.
19

Plaintiff’s Complaint alleges that Defendant

20 breached certain contracts by delivering ground turkey
21 that contained bone pieces and chips that failed to
22 conform to the Parties’ contracts and course of
23 dealing.

See, e.g., Compl. ¶¶ 41-92.

Plaintiff also

24 relies on Purchases Orders and the Guaranty between the
25 Parties as the basis for many of its claims.
26 at ¶¶ 42, 54, 76, 85.

See id.

As Plaintiff’s Complaint is

27 grounded upon a breach of sales contracts between the
28
16

1 Parties1, the Court finds that this case “sounds in
2 contract” and thus, a purposeful availment analysis is
3 appropriate here.
4

In the contract context, the fact that the

5 defendant entered into a contract with a forum resident
6 is not sufficient, standing alone, to establish
7 purposeful availment.

Amini Innovation Corp. v. JS

8 Imports, Inc., 497 F. Supp. 2d 1093, 1103 (C.D. Cal.
9 2007) (citing Burger King, 471 U.S. at 478).

Rather,

10 the Court must utilize “a ‘highly realistic’ approach
11 that recognizes that a ‘contract’ is ‘ordinarily but an
12 intermediate step serving to tie up prior business
13 negotiations with future consequences which themselves
14 are the real object of the business transaction.’”
15 (citing Burger King, 471 U.S. at 479).

Id.

Thus, the Court

16 should evaluate “prior negotiations and contemplated
17 future consequences, along with the terms of the
18 contract and the parties’ actual course of dealing” in
19 determining “whether the defendant purposefully
20 established minimum contacts within the forum.”

Id.

21
22
23
24
25
26
27
28

1

The Court notes that Plaintiff asserts one claim of
negligence against Defendant, alleging that Defendant owed a duty
of care to Plaintiff to use reasonable care in the manufacture of
the ground turkey, and that Defendant breached this duty by
manufacturing ground turkey containing bone fragments and chips.
Compl. ¶¶ 93-93. These allegations, however, arise out of the
contractual relationship between the Parties, and as such, a
purposeful availment analysis is appropriate here. See Repwest
Ins. Co. v. Praetorian Ins. Co., 890 F. Supp. 2d 1168, 1188 (D.
Ariz. 2012) (“In cases arising out of contractual relationships,
including those involving related tort claims, the Ninth Circuit
applies the ‘purposeful availment’ test”).
17

1 (citing Burger King, 471 U.S. at 479).
2

Here, the Court finds that Plaintiff has failed to

3 show that Defendant has purposefully availed itself of
4 the privilege of conducting activities in the forum.2
5 In looking at the Parties’ actual course of dealing, it
6 appears that the Plaintiff would make orders for raw
7 ground turkey products via written Purchase Orders
8 Defendant received at its offices in Iowa or Utah.
9 Porter Decl. ¶ 5.

Defendant would then deliver those

10 turkey products to Plaintiff’s facility in Vernon,
11 California.

See Devore Decl. ¶ 10.

As noted above,

12 the Parties appear to have negotiated the Purchase
13 Orders via phone, email, or other interstate
14 communication given that they were located in different
15 states for the duration of the negotiations.

Defendant

16 also claims that the business between the Parties was
17 almost exclusively done through Purchase Orders.3
18
19
20
21
22
23
24

2

In its Opposition, Plaintiff cites to New Tech Stainless
Steel Prods. Co. v. Sun Mfg. Corp., No. CV04-1181RGK(FMOX), 2004
WL 1773416, at *3 (C.D. Cal. July 20, 2004) for the proposition
that “when a nonresident manufacturer sells goods or services in
the forum state the requisite standard connection will always be
found.” Opp’n 10:15-18. However, the plaintiff’s claims in that
case were for patent infringement, California unfair competition,
and federal unfair competition. Thus, New Tech is not on point
for a purposeful availment argument, because New Tech applies the
purposeful direction analysis or the effects test in the context
of an action sounding in tort.

25
3

Plaintiff objects to paragraph 7, lines 19-21 of the

26 declaration of Rick Porter in which he declares “The business
27 that [Defendant] did with Plaintiff was almost exclusively done
28

through purchase orders” on the grounds that Mr. Porter lacks
personal knowledge. However, the Court OVERRULES this objection
because Mr. Porter statements contain sufficient foundation as he
18

1 Porter Decl. ¶ 7.

Plaintiff makes no showing that the

2 negotiations regarding the Purchase Orders took place
3 in California, that the Parties anticipated that the
4 Purchase Orders would impact California, or that during
5 the course of the Parties’ nine-year relationship, they
6 have ever met to conduct business in California.

See

7 Beijing, 2013 WL 4040072, at *2; Porter Decl. ¶ 64.
8

Plaintiff alleges that Defendant solicited business

9 from Plaintiff by promoting its products and prices
10 through sales calls and regular communications to
11 Plaintiff’s employees and provides a declaration from
12 its Senior Vice President, Aleen Devore.5

However, Ms.

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14 has personal knowledge based upon his position as Defendant’s
15 Director of Commodity Sales.
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4

Plaintiff objects to paragraph 6, lines 6-8 of the
declaration of Rick Porter in which he declares “No other
[Defendant] employee ever met any representative of Plaintiff in
California or elsewhere as far as I am aware” on the grounds that
Mr. Porter lacks personal knowledge and the statement is
irrelevant. The Court OVERRULES this objection because (1) Mr.
Porter’s statements contain sufficient foundation as he has
personal knowledge based upon his position as Defendant’s
Director of Commodity Sales, and (2) the statement is relevant
because it is probative of a material fact, in that it tends to
make the fact that Defendant never physically came to California
to negotiate contracts more likely.
5

Defendant objects to paragraph 4, lines 21-26 and
paragraph 5, lines 2-4 of the declaration of Aleen Devore in
which she declares that Defendant initiated the relationship
between the Parties and that Defendant has continually solicited
business from Plaintiff by promoting its product through sales
calls and regular communications on the grounds that the
statements are hearsay, lack foundation, and Ms. Devore lacks
personal knowledge. The Court OVERRULES these objections,
because (1) Ms. Devore’s statements contain sufficient foundation
as she has personal knowledge based upon her position as
Plaintiff’s Senior Vice President of Manufacturing and Quality,
19

1 Devore does not attach any evidence of written
2 communications or solicitations directed to Plaintiff
3 by Defendant, nor does Ms. Devore identify which of
4 Defendant’s employees solicited Plaintiff.

Because

5 Plaintiff only makes a bare allegation that Defendant
6 continually solicited business from Plaintiff, the
7 Court is hard pressed to conclude that those
8 communications warrant a finding of specific
9 jurisdiction over Defendant.

See Thomas P. Gonzalez

10 Corp. v. Consejo Nacional De Produccion De Costa Rica,
11 614 F.2d 1247, 1254 (9th Cir. 1980) (“[Defendant]
12 validly argues that use of the mails, telephone, or
13 other international communications simply do not
14 qualify as purposeful activity invoking the benefits
15 and protection of the state.”).

Moreover, Defendant

16 appears to clarify that it only periodically made sales
17 calls to Plaintiff to advise it about changes or
18 updates in the price of Defendant’s products.
19 Decl. ¶ 6.

Porter

In looking at the Parties’ course of

20 dealing as a whole, the Court reiterates that the
21 business between the Parties was almost exclusively
22 done through Purchase Orders and that Defendant never
23 signed any agreement or met with Plaintiff’s
24 representatives in California or elsewhere.
25

Plaintiff alleges that the Guaranty specifically

26 mentions that all products delivered are to conform to
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and (2) the statements are not inadmissible hearsay.
20

1 California standards.

Opp’n 12:2-4.

However,

2 Plaintiff fails to cite a single case suggesting that
3 such facts, without more, would confer specific
4 jurisdiction over Defendant.

Indeed, the Guaranty was

5 signed by Defendant in Iowa (Porter Decl. ¶ 7), and
6 Plaintiff provides no evidence that the Guaranty or the
7 Purchase Orders are governed by California law.
8

Accordingly, because Plaintiff fails to provide

9 evidence supporting that negotiations regarding the
10 Purchase Orders took place in California, that the
11 Parties anticipated that the Purchase Orders would
12 impact California, or that they have ever met to
13 conduct business here in California, the Court finds
14 that it lacks specific jurisdiction over Defendant.
15

Because Plaintiff has not met its burden of proving

16 that personal jurisdiction over Defendants exists, the
17 Court GRANTS Defendant’s Motion to Dismiss for lack of
18 personal jurisdiction.

Because the Court GRANTS

19 Defendant’s Motion to Dismiss for lack of personal
20 jurisdiction, the Court DENIES as moot Defendant’s
21 Motion to Dismiss pursuant to Fed. R. Civ. P. 12(b)(3)
22 and DENIES as moot Defendant’s Motion to Transfer.
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IV. CONCLUSION
For the reasons set forth above, this Court GRANTS

25 without prejudice Defendant’s Motion to Dismiss
26 pursuant to Fed. R. Civ. P. 12(b)(2).

As such, the

27 Court DENIES as moot Defendant’s Motion to Dismiss
28 //
21

1 //
2 //
3 pursuant to Fed. R. Civ. P. 12(b)(3) and DENIES as moot
4 Defendant’s Motion to Transfer.The Clerk shall close this case.
5 IT IS SO ORDERED.
6 DATED: August 21, 2014
7

HONORABLE RONALD S.W. LEW
Senior U.S. District Judge

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