Alcom 3PL, Inc. v. Sun Group Partners LLC et al

Filing 32

ORDER RE MOTION TO DISMISS by Judge Ronald S.W. Lew: Plaintiff has not sufficiently alleged that the Court has personal jurisdiction over the Individual Defendants. The Court GRANTS Defendant's Motion to Dismiss 23 with leave to amend. (gk)

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'O' 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 13 14 15 16 17 18 19 20 CV 20-02523-RSWL-PVCx ALCON 3PL, INC. a California corporation, ORDER re: MOTION TO DISMISS [23] Plaintiff, v. SUN GROUP PARTNERS LLC, a California limited liability company; GLENN SANDS, an individual; BRENT SANDS, an individual; DOES 1 THROUGH 10, INCLUSIVE Defendants. 21 22 23 Plaintiff Alcon 3PL, Inc. (“Plaintiff”) brought the 24 instant Action against Defendants Sun Group Partners, 25 LLC (“Defendant Sun Group”), Glenn Sands, and Brent 26 Sands (“Individual Defendants”), alleging breach of 27 contract, open book account, account stated, and quantum 28 meruit. Currently before the Court is Defendants’ 1 1 Motion to Dismiss for Lack of Personal Jurisdiction 2 [23]. 1 3 Having reviewed all papers submitted pertaining to 4 this Motion, the Court NOW FINDS AND RULES AS FOLLOWS: 5 the Court GRANTS Defendants’ Motion to Dismiss. I. 6 BACKGROUND 7 A. 8 Plaintiff alleges the following in its Complaint: 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Factual & Procedural Background Plaintiff is a corporation with its principal place of business in Los Angeles, California. Compl. ¶ 2, ECF Local Rule 7-3 provides that “counsel contemplating the filing of any motion shall first contact opposing counsel to discuss thoroughly, preferably in person, the substance of the contemplated motion and any potential resolution. The conference shall take place at least seven (7) days prior to the filing of the motion.” C.D. Cal. Local Civ. R. 7-3. “Failure to comply with the Local Rules does not automatically require the denial of a party’s motion, however, particularly where the non-moving party has suffered no apparent prejudice as a result of the failure to comply.” CarMax Auto Superstores Cal. LLC v. Hernandez, 94 F. Supp. 3d 1078, 1088 (C.D. Cal. 2015); see also ECASH Techs., Inc. v. Guagliardo, 35 F. App’x 498, 500 (9th Cir. 2002) (“The Central District of California’s local rules do not require dismissal of appellee’s motions for failure to satisfy the meet-and-confer requirements.”). Here, the parties are in violation of Local Rule 7-3 because there is no indication the parties met and conferred. Nevertheless, Plaintiff does not seem to have been prejudiced by the violation because, although it did not file an opposition, it did file a stipulation to continue the hearing date for this Motion, showing that Plaintiff was aware of the Motion and its opportunity to oppose. See generally Pl.’s Stipulation to Continue Hr’g Date on Defs.’ Mot. to Dismiss, ECF No. 27. Moreover, Plaintiff had sufficient time to oppose since the Court granted Plaintiff’s stipulation. See generally Order Granting Pl.’s Stipulation to Continue Hr’g Date on Defs.’ Mot. to Dismiss, ECF No. 28. Thus, the Court should exercise its discretion to consider the Motion’s merits. See CarMax Auto Superstores Cal. LLC, 94 F. Supp. 3d at 1088 (electing to consider a motion’s merits despite a violation of Local Rule 73). 1 2 1 No. 1. Defendant Sun Group is a limited liability 2 company with its principal place of business in Palm 3 Beach Gardens, Florida. 4 are citizens of Florida. Id. ¶ 3. Individual Defendants Id. Individual Defendants are “members and/or managers, 5 6 and/or officers[,] and/or directors” of Defendant Sun 7 Group. 8 relevant times was, a mere shell, instrumentality, and 9 conduit through which Individual Defendants carried on Moreover, “[Defendant] Sun Group is, and at all 10 business in the name of [Defendant] Sun Group.” Id. 11 ¶ 12. 12 dominated, and operated [Defendant] Sun Group in that 13 the activities and business of [Defendant] Sun Group 14 were carried out without holding annual meetings, and 15 without keeping records or minutes of any proceedings, 16 or maintaining written resolutions.” 17 Defendant Sun Group is the alter ego of the Individual 18 Defendants, and the Individual Defendants cannot use 19 their company to shield themselves from personal 20 liability. Specifically, Individual Defendants “controlled, Id. Therefore, Id. at ¶¶ 12-13. In or about late 2020 and early 2021, Plaintiff 21 22 entered into an agreement with Defendant Sun Group 23 through the Individual Defendants for warehouse personal 24 protective equipment. 25 2021, however, Defendants stopped paying the monthly 26 sum. 27 25, 2022, Defendants failed to make any payments for 28 business transactions conducted between Defendants and Id. ¶ 15. Id. ¶ 14. On or about May 4, In addition, from May 4, 2021, to March 3 1 Plaintiff. Id. Plaintiff filed its Complaint [1] on April 14, 2 3 2022. Defendant filed the instant Motion [23] on 4 September 1, 2022. II. 5 6 7 A. DISCUSSION Legal Standard Federal Rule of Civil Procedure 12(b)(2) authorizes 8 dismissal of an action for lack of personal 9 jurisdiction. Fed. R. Civ. P. 12(b)(2). Once a 10 defendant moves to dismiss for lack of personal 11 jurisdiction, the plaintiff bears the burden of 12 demonstrating that jurisdiction is appropriate. 13 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 14 800 (9th Cir. 2004). 15 Where the motion is “based on written materials 16 rather than an evidentiary hearing, the plaintiff need 17 only make a prima facie showing of jurisdictional facts” 18 to survive dismissal. 19 omitted). 20 “only inquire[s] into whether [the plaintiff’s] 21 pleadings ands affidavits make a prima facie showing of 22 personal jurisdiction.” 23 Psychoanalytical Ass’n, 59 F.3d 126, 127-28 (9th Cir. 24 1995); Boschetto v. Hansing, 539 F.3d 1011 (9th Cir. 25 2008). 26 must allege facts that, if true, would support a finding 27 of jurisdiction. Ballard v. Savage, 65 F.3d 1495, 1498 28 (9th Cir. 1995). Although the plaintiff cannot rely on Id. (internal quotation marks Absent an evidentiary hearing this court Caruth v. Int’l To make a prima facie showing, the plaintiff 4 1 the bare allegations of the complaint, uncontroverted 2 allegations in the complaint must be taken as true and 3 conflicts between statements contained in the parties’ 4 affidavits must be resolved in the plaintiff’s favor. 5 Schwarzenegger, 374 F.3d at 800. 6 B. Discussion 7 1. Personal Jurisdiction 8 Whether a federal court can exercise personal 9 jurisdiction over a non-resident defendant turns on two 10 independent considerations: whether an applicable state 11 rule or statute permits service of process on the 12 defendant, and whether the assertion of personal 13 jurisdiction comports with constitutional due process 14 principles. 15 Express, 758 F.2d 1325, 1327 (9th Cir. 1985). 16 courts in California may exercise specific personal 17 jurisdiction over a nonresident defendant to the extent 18 permitted by the Due Process Clause of the United States 19 Constitution. 20 Process Clause permits courts to exercise personal 21 jurisdiction over any defendant who has sufficient 22 “minimum contacts” with the forum state such that the 23 “maintenance of the suit [would] not offend traditional 24 notions of fair play and substantial justice.” Int’l 25 Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). 26 See Pac. Atl. Trading Co. v. M/V Main Cal. Civ. Prov. Code § 410.10. District The Due There are two recognized bases for personal 27 28 5 1 jurisdiction over non-resident 2 defendants: (1) “general 2 jurisdiction,” which arises where the defendant's 3 activities in the forum state are sufficiently 4 “substantial” or “continuous and systematic” to justify 5 the exercise of jurisdiction over him in all matters; 6 and (2) “specific jurisdiction,” which arises when a 7 defendant’s specific contacts with the forum have given 8 rise to the claim in question. 9 Nacionales de Columbia S.A. v. Hall, 466 U.S. 408, 414– See Helicopteros 10 16 (1984); Doe v. Am. Nat’l Red Cross, 112 F.3d 1048, 11 1050–51 (9th Cir. 1997). 12 a plaintiff must show the court has personal 13 jurisdiction over the defendants. 14 374 F.3d at 800. 15 To survive a 12(b)(2) motion, See Schwarzenegger, Plaintiff has not satisfied its burden to show that 16 the Court has personal jurisdiction over Individual 17 Defendants. 18 three Defendants 3 are citizens of Florida and entered 19 into a contract with Plaintiff, a California 20 corporation, to “warehouse” Defendants’ goods. 21 22 23 24 25 26 27 28 Plaintiff alleges in its Complaint that the Compl. Plaintiff stated in its Complaint that Individual Defendants are citizens of Florida and Defendant Sun Group is organized under Florida laws and has its principal place of business in Florida. Compl. ¶¶ 3-5. Therefore, with no allegations that any Defendant resides in California, all Defendants are nonresidents. 2 Plaintiff asserts that Defendant Sun Group is the alter ego of Individual Defendants. See Compl. ¶¶ 12-13. The Court declines to assess whether this theory is viable at this stage of litigation, and instead centers its analysis on whether Plaintiff has met its burden of showing that the Court has personal jurisdiction over Individual Defendants. 3 6 1 ¶¶ 2-5, 14-15. Plaintiff fails to provide the location 2 of this warehouse or any other facts that could 3 conceivably support the notion that Defendants had 4 minimum contacts with California. 5 Plaintiff merely states that Defendants entered into a 6 contract with a California corporation for warehousing 7 services when it is well established that a contract 8 alone does not automatically establish minimum contacts 9 with a plaintiff’s home forum. See generally id. See Boschetto v. 10 Hansing, 539 F.3d 1011, 1017 (9th Cir. 2008) (“[A] 11 contract alone does not create minimum contacts with the 12 plaintiff’s forum.”); Burger King Corp. v. Rudzewicz, 13 471 U.S. 462, 475 (1985) (“[There must be] actions by 14 the defendant . . . that create a substantial connection 15 with the forum [s]tate [to establish personal 16 jurisdiction].”) (internal quotation marks omitted). 17 Moreover, Plaintiff did not file an opposition or 18 affidavits alleging that the Court has personal 19 jurisdiction over Individual Defendants. 20 Plaintiff’s allegations in its Complaint did support 21 finding that Individual Defendants had minimum contacts 22 with California, Defendants dispute that contention by 23 arguing that “there exists no minimum contacts with the 24 forum state.” 25 (holding that only uncontroverted allegations in the 26 complaint must be taken as true for the purposes of 27 ascertaining whether a plaintiff has met its burden of 28 showing personal jurisdiction). And even if See Schwarzenegger, 374 F.3d at 800 7 Therefore, Plaintiff 1 has failed to provide adequate information to establish 2 a prima facie case for exercising personal jurisdiction 3 over Individual Defendants. 4 2. Local Rule 7-12 5 Local Rule 7-12 reinforces the conclusion that 6 Plaintiff has not sufficiently alleged personal 7 jurisdiction. 8 “failure to file any required document, or the failure 9 to file it within the deadline, may be deemed consent to Local Rule 7-12 states in pertinent part: 10 the granting or denial of the motion.” C.D. Cal. Local 11 Civ. R. 7-12. 12 and a court should grant an unopposed motion, the Ninth 13 Circuit considers the following five factors: (1) the 14 public’s interest in expeditious resolution in 15 litigation; (2) the court’s need to manage its docket; 16 (3) the risk of prejudice to the defendants; (4) the 17 public policy favoring disposition of cases of their 18 merits; and (5) the availability of less drastic 19 sanctions. 20 Cir. 2002). 21 balancing test, so not all five factors must support 22 dismissal.” 23 15-2123-JLS (JCGx), 2016 WL 5886902 (C.D. Cal. Aug. 18, 24 2016) (citing Valley Eng’rs Inc. v. Elec. Eng’g Co., 158 25 F.3d 1051, 1057 (9th Cir. 1998)). 26 /// 27 /// 28 /// In assessing whether this rule applies Pagtalunan v. Galaza, 291 F.3d 639, 642 (9th This test for dismissal is “a disjunctive Sowinski v. Cal. Air Res. Board, No. SACV 8 1 a. The Public’s Interest in Expeditious Resolution of Litigation 2 3 Here, as to the first factor, the public’s interest 4 in expeditious resolution of litigation always favors 5 dismissal. 6 (9th Cir. 1999). 7 dismissal. 8 Yourish v. Cal. Amplifier, 191 F.3d 983, 990 b. Thus, this factor weighs in favor of The Court’s Need to Manage Its Docket 9 Second, the Court’s need to manage its docket 10 depends on whether the delay in a particular case 11 interferes with docket management and the public 12 interest. 13 Plaintiff’s failure to file a response or request an 14 extension indicates that the Plaintiff does not intend 15 to prosecute the action against the Individual 16 Defendants. 17 11-01113 MMM (FMOx), 2011 WL 13218018 at *2 (C.D. Cal. 18 May 12, 2011) (finding in favor of dismissal where 19 plaintiff’s inattention and nonresponsive behavior 20 suggests further litigation would waste the court’s 21 valuable resources). 22 of dismissal. 23 24 c. Pagtalunan, 291 F.3d at 642. Here, See Balsin v. Equable Ascent Fin., LLC, CV Thus, this factor weighs in favor The Risk of Prejudice to the Defendants Next, to prove risk of prejudice, a defendant must 25 establish that a plaintiff’s actions impaired a 26 defendant’s ability to proceed to trial or threatened to 27 interfere with the rightful decision of the case. 28 Pagtalunan, 291 F.3d at 642 (citing Malone v. U.S. 9 1 Postal Serv., 833 F.2d 129, 131 (9th Cir. 1987)). 2 Plaintiff neither provides an explanation for its 3 failure to file an opposition nor requests an extension 4 to do so. 5 JFW, 2009 WL 1559586, *3 (C.D. Cal. May 28, 2009) 6 (“Where a party offers a poor excuse for failing to 7 comply with a court's order, the prejudice to the 8 opposing party is sufficient to favor dismissal.”); 9 Grubb v. Hernandez, No. ED CV 06-00807SJOAJW, 2009 WL 10 1357411 at *2 (C.D. Cal. May 1, 2009) (“In the absence 11 of a showing to the contrary, prejudice to defendants or 12 respondents is presumed from unreasonable delay [for the 13 purpose of Local Rule 7-12].”). 14 weighs in favor of dismissal. 15 16 17 d. Here, See, e.g., Foster v. Jacquez, No. CV 09-01406 Therefore, this factor The Public Policy Favoring Disposition of Cases on Their Merits Fourth, public policy favors disposition of cases 18 on the merits, and therefore, this factor generally 19 weighs against dismissal. 20 Monte, 138 F.3d 393, 399 (9th Cir. 1998). 21 presumes, however, that the plaintiff “has manifested a 22 diligent desire to prosecute his or her claims.” 23 v. Ruano, No. CV 09-08471 VAP, 2012 WL 2138159 at *2 24 (C.D. Cal. June 12, 2012). 25 filed a timely opposition nor applied for an extension 26 to file an opposition. 27 favored dismissal where plaintiff failed to file a Hernandez v. City of El This Ewing Here, Plaintiff has neither See id. (finding this factor 28 10 1 timely opposition or apply for an extension). 2 this factor weighs in favor of dismissal. e. 3 4 Thus, The Availability of Less Drastic Sanctions Finally, this factor “ordinarily counsels against 5 dismissal” unless the court gave plaintiff an 6 opportunity to avoid dismissal, in which case no lesser 7 sanctions are available. 8 10525-KS, 2020 WL 3100645 at *2 (C.D. Cal. June 11, 9 2020). Sperow v. Ponce, No. CV 19- Here, the Court did not offer Plaintiff an 10 opportunity to avoid dismissal, nor did it find it 11 necessary to consider the availability of other less 12 drastic alternatives. 13 (finding this factor weighed against dismissal because 14 the court did not consider the lesser alternative of 15 imposing sanctions). 16 against dismissal. 17 See Pagtalunan, 291 F.3d at 643 Therefore, this factor weighs Of the five factors, four factors weigh in favor of 18 dismissal. Thus, the Court dismisses the Complaint 19 against the Individual Defendants pursuant to Local Rule 20 7-12. 21 3. Leave to Amend 22 “Where a motion to dismiss is granted, a district 23 court must decide whether to grant leave to amend.” 24 Winebarger v. Pennsylvania Higher Educ. Assistance 25 Agency, 411 F. Supp. 3d 1070, 1082 (C.D. Cal. 2019). 26 “The court should give leave [to amend] freely when 27 justice so requires.” 28 Ninth Circuit, “Rule 15’s policy of favoring amendments Fed. R. Civ. P. 15(a)(2). 11 In the 1 to pleadings should be applied with ‘extreme 2 liberality.’” 3 (9th Cir. 1981). 4 standard, the Court may consider “the presence of any of 5 four factors: bad faith, undue delay, prejudice to the 6 opposing party, and/or futility.” 7 Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 8 2001). 9 United States v. Webb, 655 F.2d 977, 979 Against this extremely liberal Owens v. Kaiser Here, leave to amend Plaintiff’s claims is 10 appropriate because Plaintiff can cure its failure to 11 meet its burden by pleading facts that support 12 exercising personal jurisdiction over the Individual 13 Defendants. 14 Moreover, there is no evidence of bad faith by 15 Plaintiff. 16 opposition could weigh toward finding undue delay or 17 prejudice; ultimately, “[t]he purpose of the litigation 18 process is to vindicate meritorious claims. 19 solely because of delay, to permit an amendment to a 20 pleading in order to state a potentially valid claim 21 would hinder this purpose without promoting any other 22 sound judicial policy.” 23 1191 (9th Cir. 1973). 24 Defendants’ Motion to Dismiss Plaintiff’s claims with 25 leave to amend. 26 Thus, leave to amend would not be futile. While Plaintiff’s failure to file an Refusing, Howey v. U.S., 481, F.2d 1187, The Court therefore GRANTS III. CONCLUSION 27 In sum, Plaintiff has not sufficiently alleged that 28 the Court has personal jurisdiction over the Individual 12 1 Defendants. Based on the foregoing, the Court GRANTS 2 Defendant’s Motion to Dismiss with leave to amend. 3 IT IS SO ORDERED. 4 5 6 DATED: November 17, 2022 /S/ RONALD S.W. LEW _____________________________ HONORABLE RONALD S.W. LEW Senior U.S. District Judge 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13

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