Grant v. Kamehameha Schools/Bernice Pauahi Bishop Estate et al

Filing 36

REPLY by Plaintiff to KSBE Defendants' Opposition to Doe Defendants' Motion for Preliminary Injunction (Attachments: # 1 Declaration of Eric Grant)(Grant, Eric) Modified on 4/16/2008 (Benson, A).

Grant v. Kamehameha Schools/Bernice Pauahi Bishop Estate et al

Doc. 36

1 Eric Grant (Bar No. 151064) Attorney at Law 2 8001 Folsom Boulevard, Suite 100 Sacramento, California 95826 3 Telephone: [phone] Facsimile: [phone] 4 E-Mail: [e-mail] 5 James J. Banks (Bar No. 119525) Banks & Watson 6 Hall of Justice Building 813 6th Street, Suite 400 7 Sacramento, California 95814 Telephone: [phone] Facsimile: [phone] E-Mail: [e-mail] 9 Counsel for Plaintiff and 10 Counter-Defendant ERIC GRANT

ERIC GRANT, ATTORNEY AT LAW

11 12 13 14 ERIC GRANT, UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA No. 2:08-cv-00672-FCD-KJM
PLAINTIFF AND COUNTER-DEFENDANT ERIC GRANT'S REPLY TO KSBE DEFENDANTS' OPPOSITION TO DOE DEFENDANTS' MOTION FOR PRELIMINARY INJUNCTION

8001 Folsom Boulevard, Suite 100 Sacramento, California 95826 Telephone: [phone]

) ) 15 Plaintiff, ) ) 16 v. ) ) 17 KAMEHAMEHA SCHOOLS/BERNICE ) PAUAHI BISHOP ESTATE; J. DOUGLAS ) 18 ING, NAINOA THOMPSON, DIANE J. ) PLOTTS, ROBERT K.U. KIHUNE, and ) 19 CORBETT A.K KALAMA, in their ) capacities as Trustees of the Kamehameha ) 20 Schools/Bernice Pauahi Bishop Estate; ) JOHN DOE; and JANE DOE, ) 21 ) Defendants. ) 22 ) ) 23 JOHN DOE and JANE DOE, ) ) 24 Counter-Claimants, ) ) 25 v. ) ) 26 KAMEHAMEHA SCHOOLS/BERNICE ) PAUAHI BISHOP ESTATE, et al., ) 27 ) Counter-Defendants. ) 28 )

Hearing Date: Time: Courtroom: Judge:

April 17, 2008 4:00 p.m. 2 Hon. Frank C. Damrell, Jr.

Plaintiff's Reply to KSBE Defendants' Opposition to Doe Defendants' Motion for Preliminary Injunction

Dockets.Justia.com

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TABLE OF CONTENTS

Page

3 TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii 4 INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 5 STATEMENT OF RELEVANT FACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 6 ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 7 8 9 10 II. I. The Pending Motion Does Not Call for a Definitive Decision on the Personal Jurisdiction Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 In Any Event, this Court Does Indeed Have Personal Jurisdiction over KSBE as to Grant's Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 A. B. C. KSBE Consummated the Doe-KSBE Settlement in California and Took Deliberate Action Within this State . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 The Controversy Between Grant and KSBE Arises out of, and Relates to, KSBE's California-Related Activities . . . . . . . . . . . . . . . . . . . . . . . . . 8 Exercising Jurisdiction over KSBE in this Litigation Would Be Reasonable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

ERIC GRANT, ATTORNEY AT LAW

11 12 13 14

8001 Folsom Boulevard, Suite 100 Sacramento, California 95826 Telephone: [phone]

15 CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 16 17 18 19 20 21 22 23 24 25 26 27 28
i Plaintiff's Reply to KSBE Defendants' Opposition to Doe Defendants' Motion for Preliminary Injunction

1 2 3

TABLE OF AUTHORITIES

Page Cases

4 Brunson v. Kalil & Co., 404 F. Supp. 2d 221 (D.D.C. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 5 Burger King Corp. v. Rudzewicz, 6 471 U.S. 462 (1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 7 Burgert v. Lokelani Bernice Pauahi Bishop Trust, 200 F.3d 661 (9th Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 8 CE Distribution, LLC v. New Sensor Corp., 9 380 F.3d 1107 (9th Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 9-10 10 Doe v. Unocal Corp., 248 F.3d 915 (9th Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-8 11 Helicopteros Nacionales de Colombia, S.A. v. Hall, 12 466 U.S. 408 (1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 13 Mattel, Inc. v. Greiner & Hausser GmbH, 354 F.3d 857 (9th Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 14 Menken v. Emm, 15 503 F.3d 1050 (9th Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 16 Minnesota Mining & Manufacturing Co. v. Nippon Carbide Industries Co., 63 F.3d 694 (8th Cir. 1995), cert. denied, 516 U.S. 1184 (1996) . . . . . . . . . . . . . . . . . 7-8 17 Orchid Biosciences, Inc. v. St. Louis University, 18 198 F.R.D. 670 (C.D. Cal. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 19 Ranchers Cattlemen Action Legal Fund United Stockgrowers of America v. U.S. Department of Agriculture, 499 F.3d 1108 (9th Cir. 2007) . . . . . . . . . . . . . . . . . . 3 20 Rodin Properties-Shore Mall, N.V. v. Cushman & Wakefield of 21 Pennsylvania, Inc., 49 F. Supp. 2d 709 (D.N.J. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . 7-8 22 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797 (9th Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 8-9 23 Sydow v. Acheson & Co., 24 81 F. Supp. 2d 758 (S.D. Tex. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 25 University of Texas v. Camenisch, 451 U.S. 390 (1981) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 26 27 Statute

ERIC GRANT, ATTORNEY AT LAW

8001 Folsom Boulevard, Suite 100 Sacramento, California 95826 Telephone: [phone]

28 42 U.S.C. § 1981 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ii Plaintiff's Reply to KSBE Defendants' Opposition to Doe Defendants' Motion for Preliminary Injunction

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INTRODUCTION

Plaintiff and Counter-Defendant Eric Grant ("Grant") brought this action against KSBE1

3 and against John and Jane Doe ("the Does"), seeking a declaration that he is not liable in any man4 ner to any of those parties for an alleged breach of a settlement agreement between the Does and 5 KSBE resulting from alleged disclosures of confidential information by non-party John Goemans. 6 The Does have asserted cross-claims against KSBE (doc. 13, filed Apr. 3, 2008) and have moved 7 for a preliminary injunction against KSBE (doc. 15, filed Apr. 3, 2008). KSBE has filed an oppo8 sition to the Does' motion ("KSBE Opp.," doc. 28, filed Apr. 14, 2008). Among other points, that 9 opposition contends that "there is no reasonable probability of personal jurisdiction over [KSBE] 10 because it lacks minimum contacts with California." KSBE Opp. 8:1-2 (capitalization altered).

ERIC GRANT, ATTORNEY AT LAW

11

Although Grant takes no position on the Does' motion for preliminary injunction, he files

8001 Folsom Boulevard, Suite 100 Sacramento, California 95826 Telephone: [phone]

12 this reply to KSBE's opposition in order to address its arguments concerning personal jurisdiction. 13 As explained below, the pending motion does not call for a definitive decision on the issue of per14 sonal jurisdiction; however, it seems beyond peradventure that this Court has personal jurisdiction 15 over KSBE as to Grant's claim. 16 17
STATEMENT OF RELEVANT FACTS

KSBE is a "charitable testamentary trust established [in 1884] by the last direct descendent

18 of King Kamehameha I, Princess Bernice Pauahi Bishop, who left her property in trust for a school 19 dedicated to the education and upbringing of Native Hawaiians." Burgert v. Lokelani Bernice Pau20 ahi Bishop Trust, 200 F.3d 661, 663 (9th Cir. 2000). By its own description, KSBE is "the largest 21 private landowner in the state of Hawaii." Declaration of Eric Grant ("Grant Decl.") ¶ 19, at 3 22 (attached hereto). By KSBE's own report, "the fair value of [its] total endowment grew by $1.39 23 billion during fiscal year 2007, increasing the overall endowment fair value to $9.06 billion as of 24 year end." Id. ¶ 20, at 3. 25 /// 26 "KSBE" here stands for Defendant and Counter-Defendant Kamehameha Schools/Bernice Pauahi 27 Bishop Estate, along with Defendants and Counter-Defendants J. Douglas Ing, Nainoa Thompson, Diane J. Plotts, Robert K.U. Kihune, and Corbett A.K. Kalama, in their capacities as Trustees of 28 the Kamehameha Schools/Bernice Pauahi Bishop Estate.
1 Plaintiff's Reply to KSBE Defendants' Opposition to Doe Defendants' Motion for Preliminary Injunction
1

1

Grant represented the Does in a federal civil rights lawsuit against KSBE, which lawsuit

2 attacked KSBE's "Hawaiians only" admissions policy at its K-12 schools as discrimination on the 3 basis of race in violation of 42 U.S.C. § 1981. That lawsuit was filed in June of 2003 in the United 4 States District Court for the District of Hawaii; it was styled Doe v. Kamehameha Schools/Bernice 5 Pauahi Bishop Estate, et al., No. 1:03-cv-00316-ACK-LEK ("the Underlying Litigation"). Grant 6 Decl. ¶ 5, at 1. While the Underlying Litigation was pending in the district court, KSBE was rep7 resented by California counsel working from California, namely, Kathleen M. Sullivan, then dean 8 of Stanford Law School; she alone argued for KSBE at the one and only hearing before the district 9 court on November 17, 2003. See id. ¶ 6, at 1. 10 After the district court ruled in favor of KSBE and dismissed the Does' action with preju-

ERIC GRANT, ATTORNEY AT LAW

11 dice, Grant appealed on the Does' behalf to the Ninth Circuit in San Francisco, and the Underlying 12 Litigation was pending in that court from December 30, 2003 through December 5, 2006. Grant 13 Decl. ¶ 7, at 1. In that appeal, KSBE was again represented by California counsel working from 14 California, again Ms. Sullivan; she alone argued for KSBE at the panel oral argument on Novem15 ber 4, 2004 (in which the Does prevailed) and the en banc oral argument on June 20, 2006 in San 16 Francisco. See id. ¶ 8, at 2. After the 15-judge en banc court ruled 8-7 in favor of KSBE and af17 firmed the district court's dismissal of the Does' action, Grant filed on the Does' behalf a petition 18 for certiorari in the U.S. Supreme Court. See id. ¶ 9, at 2. In that phase of the litigation, KSBE was 19 again represented by California counsel working from California, again Ms. Sullivan and the law 20 firm Quinn Emanuel Urquhart Oliver & Hedges, LLP in Redwood Shores, California; Ms. Sullivan 21 was designated "Counsel of Record" (i.e., lead counsel) for KSBE on its brief in opposition to the 22 Does' petition. See id. ¶ 10, at 2. 23 While the Does' petition was under consideration by the Supreme Court, Ms. Sullivan on

8001 Folsom Boulevard, Suite 100 Sacramento, California 95826 Telephone: [phone]

24 May 3, 2007 contacted Grant at his office in Sacramento County and proposed to continue settle25 ment negotiations. See Grant Decl. ¶ 11, at 2. On May 8, 2007, Ms. Sullivan and Grant met at a 26 restaurant in Pleasanton, California, where they conducted settlement negotiations over a lengthy 27 lunch. See id. Over the course of the following three days, Ms. Sullivan and Grant continued to 28 negotiate by telephone and electronic mail from their respective offices in California; they spoke
2 Plaintiff's Reply to KSBE Defendants' Opposition to Doe Defendants' Motion for Preliminary Injunction

1 approximately a dozen times and exchanged at least thirty e-mail messages in that period. See id. 2 ¶ 12, at 2. On May 11, 2007, the parties' negotiations consummated in a written settlement agree3 ment. See id. ¶ 13, at 2. On a separate page of the agreement entitled "Approval as to Form," Ms. 4 Sullivan and Grant executed a provision stating: "On behalf of our respective clients, we approve 5 the foregoing Settlement Agreement and General Release as to form." Id. At KSBE's specific de6 mand, Grant executed a separate declaration confirming that the signatures of both "John Doe" and 7 "Jane Doe" were genuine; these executions were accomplished from counsel's respective offices 8 in California. See id. 9 The essence of the settlement was an exchange by which the Does received monetary com-

10 pensation from KSBE for dismissing their pending petition for certiorari. To effect that dismissal,

ERIC GRANT, ATTORNEY AT LAW

11 Grant initiated (and Ms. Sullivan joined) a telephone call to the Clerk of the U.S. Supreme Court. 12 See Grant Decl. ¶ 14, at 2. Based on the Clerk's instructions, Ms. Sullivan and Grant executed an 13 "Agreed Stipulation to Dismiss" the petition, which Grant filed with the Clerk by facsimile; based 14 on the stipulation, the Clerk entered an order dismissing the Does' petition. See id. Subsequently, 15 KSBE discharged its financial obligation under the settlement agreement by making payments to 16 Grant's client trust account at Grant's bank in Sacramento; the logistics of such payments were co17 ordinated by Ms. Sullivan and Grant. See id. ¶ 15, at 3. 18 19 20 21 I.
ARGUMENT

8001 Folsom Boulevard, Suite 100 Sacramento, California 95826 Telephone: [phone]

The Pending Motion Does Not Call for a Definitive Decision on the Personal Jurisdiction Issue KSBE concedes that the pending motion "does not require the Court to decide definitively

22 whether it has [personal] jurisdiction, nor does [KSBE] ask the Court to do so." KSBE Opp. 8 n.3. 23 This concession is well-taken in light of the well-established principle that a court's "ruling on [a] 24 motion for a preliminary injunction leaves open the final determination of the merits of the case." 25 Ranchers Cattlemen Action Legal Fund United Stockgrowers of America v. U.S. Department of 26 Agriculture, 499 F.3d 1108, 1114 (9th Cir. 2007) (internal quotation marks omitted). Therefore, a 27 party "is not required to prove his case in full at a preliminary-injunction hearing, and the findings 28 of fact and conclusions of law made by a court granting a preliminary injunction are not binding
3 Plaintiff's Reply to KSBE Defendants' Opposition to Doe Defendants' Motion for Preliminary Injunction

1 at trial on the merits." University of Texas v. Camenisch, 451 U.S. 390, 395 (1981) (citation omit2 ted). In this context, the "merits" include the issue of personal jurisdiction. See, e.g., Mattel, Inc. 3 v. Greiner & Hausser GmbH, 354 F.3d 857, 866 (9th Cir. 2003) (opining that "at this stage of the 4 case [i.e., the preliminary injunction stage], we do not decide whether Mattel will ultimately pre5 vail, but only whether it has presented a prima facie case for personal jurisdiction"). 6 KSBE has stated that it "will file a noticed motion to dismiss the complaint and cross-claim

7 shortly." KSBE Opp. 8 n.3. That motion will provide the appropriate opportunity for the Court to 8 determine "definitively" whether it has personal jurisdiction over KSBE as to Grant's claim. 9 10 II. In Any Event, this Court Does Indeed Have Personal Jurisdiction over KSBE as to Grant's Claim KSBE asserts that Grant has "contrived" this action against it, KSBE Opp. 1:15, and that,

ERIC GRANT, ATTORNEY AT LAW

11

8001 Folsom Boulevard, Suite 100 Sacramento, California 95826 Telephone: [phone]

12 "[a]s a matter of law, . . . Grant and the Does cannot establish a reasonable probability of specific 13 jurisdiction over [KSBE]," id. at 2:6-16. These assertions are preposterous: to the contrary, the in14 disputable facts establish that KSBE has deliberately engaged in sufficient activities in California 15 to render the exercise of personal jurisdiction both just and reasonable. 16 When a defendant challenges a district court's personal jurisdiction, the plaintiff "bears the

17 burden of demonstrating that jurisdiction is appropriate." Schwarzenegger v. Fred Martin Motor 18 Co., 374 F.3d 797, 800 (9th Cir. 2004). Unless and until an evidentiary hearing is held on the jur19 isdictional dispute, a "plaintiff need only make a prima facie showing of jurisdictional facts"; that 20 is, courts "only inquire into whether [the plaintiff's] pleadings and affidavits make a prima facie 21 showing of personal jurisdiction." Id. Crucially, any "[c]onflicts between parties over statements 22 contained in affidavits must be resolved in the plaintiff's favor." Id. (emphasis added). 23 24 25 26 27 28 This brings us to the substance of the governing standard: Where, as here, there is no applicable federal statute governing personal jurisdiction, the district court applies the law of the state in which the district court sits. Because California's long-arm jurisdictional statute is coextensive with federal due process requirements, the jurisdictional analyses under state law and federal due process are the same. For a court to exercise personal jurisdiction over a nonresident defendant, that defendant must have at least "minimum contacts" with the relevant forum such that the exercise of jurisdiction does not offend traditional notions of fair play and substantial justice.
4 Plaintiff's Reply to KSBE Defendants' Opposition to Doe Defendants' Motion for Preliminary Injunction

1 Id. at 800-01 (citations omitted). 2 Minimum contacts are typically analyzed under the two headings of "general jurisdiction"

3 and "specific jurisdiction." Regarding general jurisdiction, a defendant's contacts with the forum 4 must be of a "continuous and systematic" nature. Helicopteros Nacionales de Colombia, S.A. v. 5 Hall, 466 U.S. 408, 416 (1984). KSBE's arguments on this point address no more than the "con6 tacts alleged in the complaint." KSBE Opp. 9:16. That is, despite being "regularly represent[ed]" 7 by California real estate lawyers, Grant Decl. ¶ 23, at 4, KSBE does not even address how much of 8 its $9.1 billion in assets are invested in California. Moreover, despite having retained at least two 9 other California law firms before the present litigation, see id. ¶¶ 17-18, at 3, KSBE does not even 10 address whether it conducts other business in California.2 In these circumstances, general jurisdic-

ERIC GRANT, ATTORNEY AT LAW

11 tion cannot be ruled out before Grant has a reasonable opportunity to conduct discovery regarding 12 the jurisdictional issues. See, e.g., Orchid Biosciences, Inc. v. St. Louis University, 198 F.R.D. 670, 13 674 (C.D. Cal. 2001) ("Plaintiff should be allowed [to] explore the quality, quantity and nature of 14 all of Defendant's contacts with this forum and draw its own conclusions and proffer its own arg15 uments as to whether Defendant should be subject to personal jurisdiction in this Court."). 16 But even without any discovery, it is readily apparent that this Court has specific jurisdic-

8001 Folsom Boulevard, Suite 100 Sacramento, California 95826 Telephone: [phone]

17 tion over KSBE. The Ninth Circuit has set out a three-pronged test for such jurisdiction: 18 19 20 21 22 23 24 /// 25 KSBE asserts that it does not "solicit students from California." KSBE Opp. 9:9-20. A cursory 26 search of KSBE's website discloses that the Ke Ali`i Pauahi Foundation--whose directors are "the five sitting trustees of [KSBE]"--offered the "Kamehameha Schools Alumni Association-Northern 27 California Scholarship" to provide scholarship assistance to "students whose permanent residence is in Northern California (State of California addresses north of and including the city of San Luis 28 Obispo) and are of Hawaiian ancestry." Grant Decl. ¶¶ 26-27, at 5.
5 Plaintiff's Reply to KSBE Defendants' Opposition to Doe Defendants' Motion for Preliminary Injunction
2

(1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim must be one which arises out of or relates to the defendant's forum-related activities; and (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable.

1 Id. at 802. The plaintiff "bears the burden of satisfying the first two prongs of the test"; if he does, 2 "the burden then shifts to the defendant to `present a compelling case' that the exercise of jurisdic3 tion would not be reasonable." Id. We consider the three prongs in turn. 4 5 6 A. KSBE Consummated the Doe-KSBE Settlement in California and Took Deliberate Action Within this State

Just last year, the Ninth Circuit opined that "in contract cases, we typically inquire whether

7 a defendant `purposefully avails itself of the privilege of conducting activities' or `consummates a 8 transaction' in the forum, focusing on activities such as delivering goods or executing a contract." 9 Menken v. Emm, 503 F.3d 1050, 1057 (9th Cir. 2007). Moreover, in an action alleging breach of 10 contract, "the `purposeful availment' requirement is satisfied if the defendant has taken deliberate

ERIC GRANT, ATTORNEY AT LAW

11 action within the forum state." CE Distribution, LLC v. New Sensor Corp., 380 F.3d 1107, 1113 12 (9th Cir. 2004). In the present action, KSBE consummated a transaction in California and other13 wise took deliberate action within this state. 14 KSBE's California counsel working from California contacted Grant at his office in Sacra-

8001 Folsom Boulevard, Suite 100 Sacramento, California 95826 Telephone: [phone]

15 mento County and proposed to resume settlement negotiations on behalf of their respective clients. 16 See Grant Decl. ¶ 11, at 2. The two lawyers met face-to-face in Northern California, see id., after 17 which they engaged in three days of intensive negotiations by telephone and electronic mail from 18 their respective offices in California. See id. ¶ 12, at 2. The negotiations consummated in the Doe19 KSBE settlement agreement on May 11, 2007. See id. ¶ 13, at 2. Both Grant and KSBE's counsel 20 executed a provision by which they approved the agreement "as to form" on behalf of their respec21 tive clients; at KSBE's specific demand, Grant executed a separate declaration confirming that the 22 signatures of "John Doe" and "Jane Doe" were genuine. See id. All of these executions occurred 23 in California, see id., as KSBE had to have known they would. 24 The Doe-KSBE settlement agreement was also performed in California. KSBE bargained

25 for a dismissal of the Does' pending petition for certiorari. See Grant Decl. ¶ 14, at 2. That dis26 missal was put in motion by a telephone call, initiated by Grant and joined by KSBE's California 27 counsel working from California, to the Clerk of the Supreme Court; it was substantially complete 28 when both counsel executed in California an "Agreed Stipulation to Dismiss" the petition; and it
6 Plaintiff's Reply to KSBE Defendants' Opposition to Doe Defendants' Motion for Preliminary Injunction

1 was finally accomplished (as far the parties' own actions) by Grant's facsimile filing of that stipu2 lation with the Clerk. See id. For their part, the Does bargained for monetary compensation from 3 KSBE. See id. That bargain was performed when KSBE subsequently made payments to Grant's 4 client trust account at his bank in Sacramento. See id. ¶ 15, at 3. 5 Finally, it is fair to say that the Doe-KSBE settlement agreement "relate[d] to" litigation in

6 California. Doe v. Unocal Corp., 248 F.3d 915, 924 (9th Cir. 2001). To be sure, the Underlying 7 Litigation began in Hawaii, but it moved on to California, pending nearly three years in the Ninth 8 Circuit in San Francisco, where Grant and KSBE's California counsel argued before the en banc 9 court on June 20, 2006. See Grant Decl. ¶¶ 7-8 at 1. Moreover, preserving the Ninth Circuit's 10 favorable judgment was KSBE's principal object in settling the litigation, as the KSBE's trustees

ERIC GRANT, ATTORNEY AT LAW

11 themselves emphasized in announcing the settlement: "This means that the Circuit Court ruling 12 stands . . . . The ruling from the 9th Circuit Court is a pono one for Kamehameha Schools and for 13 kanaka maoli." Id. ¶ 21, at 4. 14 The federal courts have routinely sustained the exercise of personal jurisdiction in similar

8001 Folsom Boulevard, Suite 100 Sacramento, California 95826 Telephone: [phone]

15 circumstances. In Minnesota Mining & Manufacturing Co. v. Nippon Carbide Industries Co., 63 16 F.3d 694 (8th Cir. 1995), cert. denied, 516 U.S. 1184 (1996), the parties "entered into extensive 17 negotiations to discuss a way to settle the[ir] dispute." Id. at 697. "Part of those negotiations took 18 place in Minnesota," and the parties eventually "came to an agreement, which was finally executed 19 in Minnesota." Id. On these facts, the court of appeals found that the defendant "came voluntarily 20 to Minnesota with the business purpose of terminating on-going litigation"; in other words, "the 21 defendant's activities in Minnesota were directed toward the consummation of the contract in dis22 pute." Id. at 697, 698. Given these findings, the court concluded that the defendant had minimum 23 contacts with the forum state: "By coming into the State of Minnesota and by negotiating a con24 tract which could be enforced under the laws of Minnesota, [the defendant] purposefully availed 25 itself of the laws of the State." Id. at 698; see also, e.g., Sydow v. Acheson & Co., 81 F. Supp. 2d 26 758, 767 (S.D. Tex. 2000) (concluding that "because the alleged contracts envisioned Texas per27 formance, . . . Defendants availed themselves of the privilege of conducting business in Texas and 28 invoked the protections of Texas law"); Rodin Properties-Shore Mall, N.V. v. Cushman & Wake7 Plaintiff's Reply to KSBE Defendants' Opposition to Doe Defendants' Motion for Preliminary Injunction

1 field of Pennsylvania, Inc., 49 F. Supp. 2d 709, 718 (D.N.J. 1999) ("By hiring local counsel, Reid 2 purposefully availed itself of the privilege of conducting activities in New Jersey and invoked the 3 benefits and protections of New Jersey law.").3 4 As the Ninth Circuit has explained, the "requirement of purposeful availment `ensures that

5 a defendant will not be haled into a jurisdiction solely as a result of random, fortuitous, or attenu6 ated contacts or of the unilateral activity of another party of a third person." Doe v. Unocal Corp., 7 248 F.3d at 924 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985)). As set out 8 above, KSBE had contacts with California--consisting of KSBE's own deliberate actions--that 9 far exceed such threshold. The first prong of specific jurisdiction is satisfied. 10 B. The Controversy Between Grant and KSBE Arises out of, and Relates to, KSBE's California-Related Activities

ERIC GRANT, ATTORNEY AT LAW

11 12

8001 Folsom Boulevard, Suite 100 Sacramento, California 95826 Telephone: [phone]

Next, a plaintiff must show that his claim "arises out of or relates to the defendant's forum-

13 related activities." Fred Martin Motor Co., 374 F.3d at 802. The Ninth Circuit has said that "[t]o 14 determine whether a claim arises out of forum-related activities, courts apply a `but for' test," that 15 is, asking whether Grant's "claims would have arisen but for [KSBE's] contacts with California." 16 Doe v. Unocal Corp., 248 F.3d at 924. In the present case, that question is trivial: but for consum17 mating the Doe-KSBE settlement agreement in California, KSBE would not be threatening to sue 18 Grant for an alleged breach of that agreement, and Grant would not be seeking a declaratory judg19 ment in response to such threat. 20 KSBE disputes this obvious truth, asserting that the "causes of action here also do not arise

21 out of [KSBE's] having negotiated the settlement of the previous suit in California and wired the 22 KSBE argues that "contacts with Grant cannot create the contacts needed for personal jurisdiction 23 because those contacts were compelled when the Does sued [KSBE] and retained Grant." KSBE Opp. 12:23-25 (emphasis added). But KSBE was not "compelled" to initiate settlement negotia24 tions at all, and it certainly was not compelled to conduct them wholly in California using its own California lawyer to consummate a contract that was to be performed wholly in this state as well. 25 Thus, while it may be that mere "settlement negotiations with plaintiff's lawyer in forum" do not support specific jurisdiction, id. at 13:8 (citing Brunson v. Kalil & Co., 404 F. Supp. 2d 221, 234 26 (D.D.C. 2005)), Minnesota Mining made clear that the calculus changes "[o]nce the parties resolve their dispute, and embody that resolution in a contract with each other, and that contract is executed 27 in [the forum]." 63 F.3d at 698. In that event, the defendant "has made a contract in that forum" and thus "has purposefully availed itself of the privilege of conducting activities within the forum." 28 Id. (distinguishing cases that "involved negotiations which did not result in a completed contract").
8 Plaintiff's Reply to KSBE Defendants' Opposition to Doe Defendants' Motion for Preliminary Injunction
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1 money to the Does' California counsel, Grant"; rather, "[t]hey arise out of Goemans' disclosure of 2 a confidential settlement term and Kamehameha Schools' response in Hawaii to that disclosure." 3 KSBE Opp. 12:12-14. This is a massive non sequitur: although it was Goemans' disclosure that 4 precipitated the present dispute among the parties, the basis of KSBE's putative claims against the 5 Does and Grant is that there has been an "actual breach of the Settlement Agreement" for which 6 the latter are legally responsible. Id. at 3:28-4:1. Such a claim for breach of contract--and a con7 comitant claim seeking a declaration that there is no liability for breach of contract--necessarily 8 "arises out of" the contract itself. As described above, the relevant contract here was the result of 9 KSBE's California-related activities. The second prong of specific jurisdiction is also satisfied. 10 C. Exercising Jurisdiction over KSBE in this Litigation Would Be Reasonable

ERIC GRANT, ATTORNEY AT LAW

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8001 Folsom Boulevard, Suite 100 Sacramento, California 95826 Telephone: [phone]

Grant having satisfied the first two prongs, "the burden then shifts to [KSBE] to `present

13 a compelling case' that the exercise of jurisdiction would not be reasonable." Fred Martin Motor 14 Co., 374 F.3d at 802. KSBE cannot present that compelling case. Consider the seven factors that 15 the Ninth Circuit has identified as relevant to the reasonableness analysis: 16 17 18 19 (1) the extent of the defendants' purposeful interjection into the forum state's affairs; (2) the burden on the defendant of defending in the forum; (3) the extent of conflict with the sovereignty of the defendants' state; (4) the forum state's interest in adjudicating the dispute; (5) the most efficient judicial resolution of the controversy; (6) the importance of the forum to the plaintiff's interest in convenient and effective relief; and (7) the existence of an alternative forum.

20 CE Distribution, 380 F.3d at 1112. As set out below, a majority of these factors weigh in favor of 21 the exercise of jurisdiction. 22 23 24 25 26 27 28 · · · Factor (1) is at best neutral for KSBE: Although KSBE purposefully interjected itself into California in connection with the Underlying Litigation and its settlement, we do not yet know whether KSBE otherwise has extensive contacts with the state. Factor (2) weighs in favor of exercising jurisdiction: As an entity that has $9.1 billion in assets, see Grant Decl. ¶ 20, at 3, and that was already represented by no fewer than three California law firms before this action was filed, see id. ¶¶ 17-18, at 3; id. ¶¶ 22-23, at 4, KSBE will suffer little burden in defending itself here. Factor (3) likewise weighs in favor of exercising jurisdiction: Because this dispute arose out of litigation in the federal courts involving a federal claim, the sovereignty of the State of Hawaii is not implicated.
9 Plaintiff's Reply to KSBE Defendants' Opposition to Doe Defendants' Motion for Preliminary Injunction

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Factor (4) as well: California "has a substantial interest in adjudicating the dispute of one of its residents who alleges injury due to the tortious conduct of another." CE Distribution, 380 F.3d at 1112. The tortious conduct here is KSBE's legally and factually groundless threat to sue Grant for breach of the Doe-KSBE settlement agreement. Factor (5) as well: The controversy can most efficiently be resolved here. Key witnesses --certainly Grant and apparently KSBE's California counsel and John Goemans--are all residents of California. See Grant Decl. ¶ 3, at 1; id. ¶¶ 24-25, at 4. The Does have agreed to this forum. See Answer to Complaint for Declaratory Relief ¶ 1, at 1:24 (doc. 12, filed Apr. 3, 2008) (admitting, inter alia, that venue is proper in this Court). Factor (6) favors jurisdiction here: Grant is a solo practitioner who resides and practices law in Sacramento County, and he is a member of the Bar of this Court. See Grant Decl. ¶¶ 2-3, at 1. Litigating this dispute in Hawaii state court, where he is not admitted to practice and must therefore hire counsel, would be inconvenient and expensive. Factor (7) alone weighs against exercising jurisdiction: Hawaii is an alternative forum, if an inconvenient one for Grant. Accordingly, KSBE cannot present a case, let alone a compelling case, that the exercise of

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ERIC GRANT, ATTORNEY AT LAW

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8001 Folsom Boulevard, Suite 100 Sacramento, California 95826 Telephone: [phone]

12 jurisdiction over it would not be reasonable. For that reason, and because the first two prongs of 13 specific jurisdiction are satisfied as well, this Court has specific personal jurisdiction over KSBE 14 as to Grant's claim. 15 16
CONCLUSION

At its core, this litigation concerns a settlement agreement that was negotiated over a period

17 of days in California by California attorneys and that concerned litigation which had been pending 18 in California for a number of years. The settlement agreement was performed in California, and 19 it likely will be interpreted according to California law. It is therefore beyond peradventure that 20 this Court may exercise specific jurisdiction to adjudicate KSBE's claim that Mr. Grant (and the 21 Does) have breached a provision of that agreement. At a minimum, Mr. Grant (and the Does) have 22 made a prima facie showing of personal jurisdiction sufficient to overcome KSBE's jurisdictional 23 arguments at this stage of the litigation. 24 25 26 27 28 Dated: April 15, 2008. Respectfully submitted, /s/ Eric Grant ERIC GRANT Counsel for Plaintiff and Counter-Defendant ERIC GRANT
10 Plaintiff's Reply to KSBE Defendants' Opposition to Doe Defendants' Motion for Preliminary Injunction