Gemini Bioproducts, Inc. v. Serum Source International, Inc.

Filing 12

ORDER signed by District Judge John A. Mendez on 11/9/17 ORDERING that SSI's Motion to Dismiss 6 is GRANTED with leave to amend. If Genesis amends its complaint, it shall file a First Amended Complaint within twenty days of this Order. Defendant's responsive pleading is due twenty days thereafter. (Mena-Sanchez, L)

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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 EASTERN DISTRICT OF CALIFORNIA 9 10 GEMINI BIOPRODUCTS, INC., a California Corporation, No. 2:17-cv-01551-JAM-KJN 11 Plaintiff, 12 ORDER GRANTING SERUM SOURCE INTERNATIONAL, INC.’S MOTION TO DISMISS v. 13 14 SERUM SOURCE INTERNATIONAL, Inc., a North Carolina corporation; and DOES 1-50, Inclusive, 15 Defendants. 16 Plaintiff, Gemini Bioproducts, Inc. (“Gemini”) claims that 17 18 it bought a bad shipment of Fetal Bovine Serum (“FBS”) for 19 $209,912.95 from Defendant Serum Source, International (“SSI”). 20 Compl., ECF No. 1-1, ¶ 9. SSI rejected Gemini’s request for a 21 refund. As a result, Gemini filed this action 22 against SSI. 23 jurisdiction. 24 below, the Court grants Defendant’s motion with leave to amend. 1 25 /// 26 1 27 28 Compl. ¶¶ 11-16. SSI moves to dismiss for lack of personal Mem., ECF No. 6-1. For the reasons explained This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled for Oct. 17, 2017. In deciding this motion, the Court takes as true all well-pleaded facts in the operative complaint. 1 1 I. 2 FACTUAL AND PROCEDURAL BACKGROUND Gemini is a California corporation headquartered in West 3 Sacramento. 4 (“Polan Decl.”), ECF No. 9-2, ¶ 3. 5 cell culture sera like FBS. 6 corporation with its headquarters in Charlotte. 7 Jonathan Jacobs In Support of Mot’n, ECF No. 6-3, ¶ 2. 8 done business with Gemini and at least four other businesses in 9 California that are not parties to this litigation. 10 Decl. of Bertram J. Polan In Support of Opp’n It manufactures and sells Id. ¶ 4. SSI is a North Carolina Decl. of SSI has Polan Decl. ¶¶ 7-8. 11 Since 2006, Gemini has purchased 46 lots of FBS from SSI. 12 Compl. ¶ 36. 13 from SSI for $209,912.95. 14 couple of weeks later. 15 bottles to its customers, they complained about cells dying or 16 growing very slowly in the FBS. 17 years of being in business, this was the first time Gemini did 18 not have a 100% rate of acceptance of FBS. 19 In February 2016, Gemini bought 967 bottles of FBS See Compl. ¶ 9. See id. The bottles arrived a But when Gemini marketed the See id. ¶¶ 10-11. In over 30 Id. ¶ 10. In September 2016, Gemini complained to SSI that the FBS it 20 bought in February was not of the quality that SSI represented or 21 that was standard for the industry. 22 Gemini it was trying to resolve the problem but also reminded 23 Gemini that it knew the quality of the FBS it was buying. 24 id. ¶ 14. 25 the following claims: breach of contract; breach of the implied 26 covenant of good faith and fair dealing; open book account; and 27 unfair competition. 28 /// See id. ¶ 12. SSI told See Gemini now demands a full refund and has sued SSI on See generally Compl. 2 1 Gemini filed suit in the Superior Court of California, 2 County of Yolo, on June 19, 2017, and served SSI a week later. 3 Notice of Removal, ECF No. 1. 4 court a month after SSI received the Complaint, on the basis of 5 diversity jurisdiction and the amount in controversy being more 6 than $75,000. 7 dismiss for lack of personal jurisdiction. The case was removed to federal See Notice of Removal at 2-3. SSI has moved to See generally Mem. 8 9 II. OPINION 10 A. 11 When a defendant moves to dismiss for lack of personal 12 jurisdiction, the plaintiff must make a prima facie showing that 13 the court has jurisdiction over the defendant. Pebble Beach Co. 14 v. Caddy, 453 F.3d 1151, 1154 (9th Cir. 2006). Still, a 15 plaintiff cannot simply rest on the bare allegations of the 16 complaint. 17 2015). 18 offer affidavits that the Court can choose to consider. 19 Disc, Inc. v. Sys. Tech. Assocs., 557 F.2d 1280, 1285 (9th Cir. 20 1977). 21 Personal Jurisdiction Ranza v. Nike, Inc., 793 F.3d 1059, 1068 (9th Cir. In making its prima facie showing, the plaintiff can Data There are two types of personal jurisdiction: general and 22 specific. Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 23 U.S. 915, 919-20 (2011) (internal citation omitted). 24 jurisdiction lies where a foreign corporation’s affiliations 25 with the forum state are sufficiently continuous and systematic 26 to render them at home in the forum state. 27 at 919-20. 28 defendant even when the claims at issue are distinct from the General Goodyear, 564 U.S. A court may have general jurisdiction over a 3 1 defendant’s activities in that forum. 2 jurisdiction lies where the defendant has established minimum 3 contacts with the forum state and the dispute arises from those 4 contacting activities with the forum state. 5 Ligue Contre Le Racisme Et L’Antisemitisme, 433 F.3d 1199, 1204- 6 05 (9th Cir. 2006). 7 B. 8 Specific Yahoo! Inc. v. La Discussion 1. 9 Id. General Jurisdiction Gemini argues this Court has general jurisdiction over SSI 10 because of a continual and longstanding course of conduct and 11 business between Gemini and SSI. 12 See Opp’n at 6-7. Not so. General jurisdiction requires Gemini to show that SSI’s own 13 affiliations with California are sufficiently “continuous and 14 systematic” and that California basically operates as a home to 15 SSI. 16 (internal citation and quotation marks omitted). 17 exacting standard, as it should be, because a finding of general 18 jurisdiction permits a defendant to be hauled into court in the 19 forum state to answer for any of its activities anywhere in the 20 world.” 21 801 (9th Cir. 2004). 22 Goodyear Dunlop Tires Operations, S.A., 564 U.S. at 919 “This is an Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, Here, Gemini concedes SSI is a North Carolina Corporation 23 organized and existing under the laws of that state. Opp’n at 24 6. 25 SSI since 2006 constitute the continuous and systematic contacts 26 required for general jurisdiction. 27 relationship that Gemini has with SSI does not mean SSI has a 28 systematic and continuous relationship with California. But Gemini contends that its purchase of 46 lots of FBS from 4 See id. This specific General 1 jurisdiction deals with a corporation’s general contacts with a 2 state and not its case-specific contacts. 3 U.S. at 919. 4 2. 5 See Goodyear, 564 General jurisdiction does not lie here. Specific Jurisdiction Gemini argues specific jurisdiction lies over SSI because: 6 (1) SSI purposefully availed itself of California’s laws by 7 entering into a contract with Gemini through electronic 8 communication and marketing its products in California; 9 (2) Gemini’s claim arises out of SSI’s conduct within California; 10 and (3) the exercise of personal jurisdiction over SSI is 11 reasonable. 12 See Opp’n at 9-10. To decide whether specific jurisdiction lies, the Court 13 applies a three-part test. 14 must either: (1) purposefully direct their activities or 15 consummate some transaction with the forum or resident thereof; 16 or (2) perform an act by which they purposefully avail themselves 17 of the privilege of conducting activities in the forum, thereby 18 invoking the benefits and protections of its laws. 19 Schwarzenegger, 374 F.3d at 802 (internal citations and quotation 20 marks omitted). 21 the defendant’s forum-related activities. 22 exercise of jurisdiction must comport with fair play and 23 substantial justice, i.e. be reasonable. 24 First, the non-resident defendant Second, the claim must arise from or relate to Id. Finally, the Id. Plaintiff has the burden on the first two prongs. Boschetto 25 v. Hansing, 539 F.3d 1011, 1016 (9th Cir. 2008). 26 meet that burden, the jurisdictional inquiry ends and the case 27 must be dismissed. 28 burden, Defendant must then present a compelling case that Id. If it fails to But if Plaintiff succeeds in meeting the 5 1 exercising jurisdiction would be unreasonable. Id. 2 The first prong in the test for specific jurisdiction 3 requires the Court to conduct a purposeful availment inquiry to 4 determine if the contract claims justify exercising specific 5 jurisdiction. 6 prong, Gemini must allege that SSI affirmatively acted to promote 7 the transaction of business within California. 8 911 F.3d 1357, 1362 (9th Cir. 1990). 9 with a nonresident defendant by itself is not enough to create Schwarzenegger, 374 F.3d at 802. To satisfy this Sher v. Johnson, Formation of a contract 10 jurisdiction. 11 contract establishes minimum contacts, the Court considers the 12 following facts: (1) previous negotiations; (2) contemplated 13 future consequences; and (3) the terms of the contract and the 14 parties’ actual course of dealing. 15 Co., 913 F.3d 758, 760 (9th Cir. 1990) (internal citations and 16 quotation marks omitted). 17 Boschetto, 539 F.3d at 1017. To decide whether a Gray & Co. Firstenberg Mach. Here, Gemini argues it meets the standard for purposeful 18 availment because SSI sold 46 previous lots to Gemini over the 19 past ten years and marketed its products to Gemini while knowing 20 Gemini was a California business. 21 general allegations about facts not related to the specific 22 transaction at issue are insufficient to justify specific 23 jurisdiction. 24 those 46 prior transactions and how any negotiations, 25 contemplations, or terms of those transactions affected the 26 purchase giving rise to this action. 27 /// 28 /// See Opp’n at 10-12. But these Gemini has not pleaded anything specific about 6 1 Gemini also argues that SSI has purposefully availed itself 2 of California’s laws by conducting business with at least four 3 other businesses in California. 4 Decl. ¶¶ 7-8. 5 outside this litigation are not relevant to this Court’s specific 6 jurisdiction analysis. 7 adjudication of issues deriving from, or connected with, the very 8 controversy that establishes jurisdiction.” 9 Tires Operations, 564 U.S. at 919 (internal citation and See Opp’n at 12; see also Polan SSI’s business transactions with third-parties “Specific jurisdiction is confined to Goodyear Dunlop 10 quotation marks omitted). 11 actions for the Court’s specific jurisdiction analysis are 12 Gemini’s January and February 2016 communications with Gemini 13 over buying FBS in 2016, entry into the purchase transaction, and 14 SSI’s shipment of the FBS on February 19, 2016. 15 9. 16 As they are alleged, the relevant See Compl. ¶¶ 7- These actions do not establish purposeful availment. Gemini 17 has not alleged that the parties engaged in significant 18 negotiations in California or that the invoice between the 19 parties established a continuing commitment on either side. 20 in Boschetto, once the FBS was delivered, the parties could go 21 their separate ways. 22 did not create any ongoing obligations with Boschetto in 23 California; once the car was sold the parties were to go their 24 separate ways.”); see also Gray, 913 F.2d at 761 (“There is no 25 evidence the sale contemplated a continuing relationship between 26 Gray and the defendants.”). 27 type of negotiations in California which would support a 28 purposeful availment finding and there are no continuing As Boschetto, 539 F.3d at 1017 (“[Plaintiff] The parties did not engage in the 7 1 obligations between the parties. 2 meet the burden for purposeful availment. Gemini’s allegations do not 3 Since Gemini cannot meet its burden on the first prong of 4 the three-part specific jurisdiction test, the Court’s inquiry 5 ends. 6 Fed. R. Civ. P. 12(b)(6) arguments. 7 Plaintiff might still be able to plead sufficient facts to 8 maintain its claim against Defendant and therefore grants this 9 motion to dismiss with leave to amend. The Court also does not and need not reach Defendant’s The Court finds that 10 11 12 III. SANCTIONS The Court issued its Order re Filing Requirements (“Order”) 13 on July 27, 2017. 14 support of and in opposition to motions to dismiss to fifteen 15 pages and reply memoranda in support of motions to dismiss to 16 five pages. 17 the page limits must pay monetary sanctions of $50.00 per page 18 and that the Court will not consider any arguments made past the 19 page limit. 20 limit by five pages. 21 made after page fifteen of the opposition brief. 22 ORDERS Gemini’s counsel to pay $250.00 in sanctions. 23 shall be paid to the Clerk of the Court within five days of the 24 date of this Order. ECF No. 2-2. The Order limits memoranda in The Order also states that an attorney who exceeds Gemini’s opposition memorandum exceeds the page The Court has not considered any arguments The Court Sanctions 25 26 27 28 IV. ORDER The Court GRANTS WITH LEAVE TO AMEND SSI’s motion to dismiss. If Genesis amends its complaint, it shall file a First 8 1 Amended Complaint within twenty days of this Order. 2 responsive pleading is due twenty days thereafter. 3 4 IT IS SO ORDERED. Dated: November 9, 2017 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 Defendant’s

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