Global Commodities Trading Group, Inc. et al v. Beneficio De Arroz Choloma, S.A. et al

Filing 99

ORDER signed by District Judge Troy L. Nunley on 12/28/2016 ORDERING that defendants' 94 Request for Reconsideration is DENIED AS MOOT. (Zignago, K.)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 12 13 GLOBAL COMMODITIES TRADING GROUP, INC., and THE INSURANCE COMPANY FOR THE STATE OF PENNSYLVANIA, PHILADELPHIA, Plaintiffs, 14 17 18 ORDER DENYING REQUEST FOR RECONSIDERATION v. 15 16 No. 2:16-cv-01045-TLN-CKD BENEFICIO DE ARROZ CHOLOMA, S.A., a Honduran Company, SADY FARID ANDONIE REYES, an Individual, JOYCE MARY JARUFE DOX, aka JOYCE JARUFE DE ANDONIE, an Individual, and DOES 1 TO 50, inclusive, 19 Defendants. 20 Plaintiffs Global Commodities Trading Group, Inc., and the Insurance Company for the 21 22 State of Pennsylvania, Philadelphia (jointly “Plaintiffs”) filed the instant action on September 25, 23 2014, in the Superior Court of the State of California, County of Placer. (ECF No. 1-1.) On May 24 17, 2016, Defendants Beneficio De Arroz Choloma1, Sady Farid Andonie Reyes (“Andonie”), 25 and Joyce Mary Jarufe Dox’s (“Jarufe”) (jointly “Defendants”) removed the action to this Court. 26 (ECF No. 1.) On November 17, 2016, Magistrate Judge Carolyn K. Delaney issued an Order 27 1 28 Defendant Beneficio De Arroz Choloma does not join in the instant request for reconsideration. All further references to “Defendants” refer to Sady Farid Andonie Reyes and Joyce Mary Jarufe Dox. 1 1 (ECF No. 92) granting in part and denying in part Defendants’ motion for a protective order 2 staying merits discovery. Defendants subsequently filed a Request for Reconsideration of the 3 Magistrate Judge’s Order (ECF No. 94). Plaintiffs filed an opposition. (ECF No. 97.) On 4 December 19, 2016, Defendants filed a notice that they had complied with Magistrate Judge 5 Delaney’s November 17 Order. However, neither Plaintiffs nor Defendants moved to strike the 6 motion or request that the Court not rule on the merits of said motion. For that reason, the Court 7 turns to the merits of the motion. 8 Federal Rule of Civil Procedure 72(a) permits a party to file a request for reconsideration 9 to a magistrate judge’s non-dispositive order within 14 days of being served with a copy of the 10 order. “A district judge in the case must consider timely objections and modify or set aside any 11 part of the order that is clearly erroneous or contrary to law.” Fed. R. Civ. P. 72(a). The “clearly 12 erroneous” standard applies to the magistrate judge’s factual findings and requires the district 13 court to overturn the magistrate judge’s ruling when the court is “left with the definite and firm 14 conviction that a mistake has been committed.” Concrete Pipe & Prods. of Cal., Inc., v. Constrs. 15 Laborers Pension Trust, 508 U.S. 602, 622 (1993). In contrast, a “contrary to law” standard is 16 applied to the magistrate judge’s legal conclusions and amounts to a de novo review. United 17 States v. McConney, 728 F. 2d 1195, 1200–01 (9th Cir. 1984) (en banc) abrogated on other 18 grounds by Pierce v. Underwood, 487 U.S. 552 (1988). 19 Defendants contend that Magistrate Judge Delaney erred in finding that Plaintiffs made a 20 colorable showing of personal jurisdiction over Defendants such that they are subject to discovery 21 proceedings. (ECF No. 94 at 10–12.) With respect to Defendant Andonie, Defendants assert that 22 Magistrate Judge Delaney’s finding was based on the new claims in Plaintiffs’ proposed first 23 amended complaint and that those claims cannot be a basis for jurisdiction because they are not 24 yet at issue. (ECF No. 94 at 10–11.) Plaintiffs argue that Defendants’ cited authority is not 25 conclusive. (ECF No. 97 at 3.) Plaintiffs further assert that even if the case law supported 26 Defendants’ view, personal jurisdiction arises out of the claims in Plaintiffs’ Original Complaint. 27 (ECF No. 97 at 3.) Plaintiffs allege that the Original Complaint asserts breach of contract claims 28 against Andonie. A review of the evidence demonstrates that Plaintiffs proffered information 2 1 showing that Andonie came to California on multiple occasions to pursue business between the 2 companies, specifically in January 2012 to discuss the contracts at issue in the case. (ECF No. 66 3 ¶¶ 8, 12.) Based on this information, Magistrate Judge Delaney’s ruling could rely on the 4 Original Complaint as a means of finding that a colorable showing of personal jurisdiction exists. 5 Based on the foregoing, the Court cannot say that Magistrate Judge Delaney’s ruling was clearly 6 erroneous as the Court is not left “with the definite and firm conviction” that she is mistaken. 7 As to Defendant Jarufe, Defendants argue that Plaintiffs disavowed the testimony which 8 demonstrated a colorable showing of personal jurisdiction over Jarufe. (ECF No. 94 at 11.) 9 Defendants claim that a new declaration contradicts a previous declaration by the same individual 10 and thus the Court should not rely on the declarations to determine if Plaintiffs make a colorable 11 showing of personal jurisdiction over Jarufe. (ECF No. 94 at 12.) Plaintiffs contend that the 12 declarations presented are not contradictory, but rather explain that Jarufe’s signature appears on 13 a contract at issue in the case, but no one witnessed her sign it. (ECF No. 97 at 4–5.) Plaintiffs 14 further argue that they did not learn that Jarufe’s signature may be a forgery until Defendants 15 raised the issue in support of their motion to dismiss. (ECF No. 97 at 5.) The Ninth Circuit has 16 held that “discovery should ordinarily be granted where pertinent facts bearing on the question of 17 jurisdiction are controverted or where a more satisfactory showing of the facts is necessary.” 18 Laub v. U.S. Dep’t of the Interior, 342 F. 3d 1080, 1093 (9th Cir. 2003). However, jurisdictional 19 discovery is not appropriate “when it is clear that further discovery would not demonstrate facts 20 sufficient to constitute a basis for jurisdiction,” Am. W. Airlines, Inc. v. GPA Group, Ltd., 877 21 F.2d 793, 801 (9th Cir. 1989), or where the request for discovery is “based on little more than a 22 hunch that it might yield jurisdictionally relevant facts.” Boschetto v. Hansing, 539 F. 3d 1011, 23 1020 (9th Cir. 2008). Plaintiffs are correct that Defendants called into question the validity of 24 Jarufe’s signature and in doing so raised the issue of whether personal jurisdiction exists. As 25 such, the Court finds that Magistrate Judge Delaney’s order is not clearly erroneous since 26 Plaintiffs are entitled to discovery to demonstrate whether personal jurisdiction exists with regard 27 to Jarufe. 28 Lastly, Defendants argue that permitting merit discovery on Request For Production 3 1 (“RFP”) 8 and Interrogatories 12 and 13 is contrary to law. Defendants assert they have met this 2 Court’s two-step analysis to determine when to issue a protective order if there are outstanding 3 dispositive motions. This Court required that “the pending motion must be potentially dispositive 4 of the entire case, or at least dispositive on the issue at which discovery is aimed. [Then], the 5 court must determine whether the pending, potentially dispositive motion can be decided absent 6 additional discovery. If the moving party satisfies these two prongs, the court may issue a 7 protective order.” Mlejnecky v. Olympus Imaging America, Inc., No. 2:10–cv–02630 JAM KJN, 8 2011 WL 489743, at *6 (E.D. Cal. Feb. 7, 2011). Defendants assert that Mlejnecky also finds that 9 “[f]or the second prong, the Court is not to analyze whether the discovery is merely relevant to 10 the potentially dispositive motion, but rather whether that motion can be decided absent 11 discovery.” (ECF No. 94 at 13.) The Court does not agree with Defendants’ reading of 12 Mlejnecky and cautions Defendants on what appears to be a misrepresentation before this Court. 13 The court in Mlejnecky observed that the parties did not dispute that a protective order should not 14 issue if the pending dispositive motion cannot be decided without the discovery at issue. 15 Mlejnecky, 2011 WL 489743, at *6. However, the court went on to observe that the Ninth Circuit 16 has found that a district court abuses its discretion when it prevents a party from conducting 17 discovery that is relevant to the basis for the pending dispositive motion. Id. (citing Alaska Cargo 18 Transport, Inc. v. Alaska R.R. Corp., 5 F. 3d 378, 383 (9th Cir. 1993)). Mlejnecky requires this 19 Court to permit discovery that is relevant to an outstanding motion, even if the motion could be 20 decided without it, because preventing discovery on information relevant to the potentially 21 dispositive motion would be an abuse of this Court’s discretion. 22 Defendants assert that Magistrate Judge Delany necessarily found that Defendants met the 23 test because she denied all other merit-based discovery. (ECF No. 94 at 13.) However, the Court 24 notes that Magistrate Judge Delaney could have determined — as this Court does — that the three 25 discovery requests at issue are relevant to Defendants’ pending motion to dismiss. Because the 26 Ninth Circuit in essence requires discovery where the information is relevant to a potentially 27 dispositive motion, the Court cannot find that Magistrate Judge Delaney’s ruling to permit 28 discovery on RFP 8 and Interrogatories 12 and 13 is contrary to law. Based on the foregoing 4 1 2 analysis, Defendants’ request for reconsideration is denied on the merits. As the Court previously stated, on December 19, 2016, Defendants filed a notice that they 3 had complied with Magistrate Judge Delaney’s November 17 Order. Thus, Defendants have 4 complied with the discovery order at issue in the request for reconsideration. In light of this, the 5 also Court hereby DENIES Defendants’ Motion for Reconsideration (ECF No. 94) as moot. 6 IT IS SO ORDERED. 7 8 Dated: December 28, 2016 9 Troy L. Nunley United States District Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5

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