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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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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GEMINI BIOPRODUCTS, INC., a
California Corporation,

No.

2:17-cv-01551-JAM-KJN

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Plaintiff,
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ORDER GRANTING SERUM SOURCE
INTERNATIONAL, INC.’S
MOTION TO DISMISS

v.
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SERUM SOURCE INTERNATIONAL, Inc.,
a North Carolina corporation; and
DOES 1-50, Inclusive,

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Defendants.
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Plaintiff, Gemini Bioproducts, Inc. (“Gemini”) claims that

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it bought a bad shipment of Fetal Bovine Serum (“FBS”) for

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$209,912.95 from Defendant Serum Source, International (“SSI”).

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Compl., ECF No. 1-1, ¶ 9.

SSI rejected Gemini’s request for a

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refund.

As a result, Gemini filed this action

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against SSI.

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jurisdiction.

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below, the Court grants Defendant’s motion with leave to amend. 1

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///

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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.
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I.

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FACTUAL AND PROCEDURAL BACKGROUND

Gemini is a California corporation headquartered in West

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Sacramento.

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(“Polan Decl.”), ECF No. 9-2, ¶ 3.

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cell culture sera like FBS.

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corporation with its headquarters in Charlotte.

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Jonathan Jacobs In Support of Mot’n, ECF No. 6-3, ¶ 2.

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done business with Gemini and at least four other businesses in

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California that are not parties to this litigation.

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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.

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Since 2006, Gemini has purchased 46 lots of FBS from SSI.

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Compl. ¶ 36.

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from SSI for $209,912.95.

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couple of weeks later.

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bottles to its customers, they complained about cells dying or

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growing very slowly in the FBS.

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years of being in business, this was the first time Gemini did

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not have a 100% rate of acceptance of FBS.

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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

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bought in February was not of the quality that SSI represented or

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that was standard for the industry.

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Gemini it was trying to resolve the problem but also reminded

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Gemini that it knew the quality of the FBS it was buying.

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id. ¶ 14.

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the following claims: breach of contract; breach of the implied

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covenant of good faith and fair dealing; open book account; and

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unfair competition.

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///

See id. ¶ 12.

SSI told

See

Gemini now demands a full refund and has sued SSI on

See generally Compl.

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Gemini filed suit in the Superior Court of California,

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County of Yolo, on June 19, 2017, and served SSI a week later.

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Notice of Removal, ECF No. 1.

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court a month after SSI received the Complaint, on the basis of

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diversity jurisdiction and the amount in controversy being more

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than $75,000.

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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.

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II.

OPINION

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A.

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When a defendant moves to dismiss for lack of personal

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jurisdiction, the plaintiff must make a prima facie showing that

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the court has jurisdiction over the defendant.

Pebble Beach Co.

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v. Caddy, 453 F.3d 1151, 1154 (9th Cir. 2006).

Still, a

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plaintiff cannot simply rest on the bare allegations of the

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complaint.

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2015).

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offer affidavits that the Court can choose to consider.

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Disc, Inc. v. Sys. Tech. Assocs., 557 F.2d 1280, 1285 (9th Cir.

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1977).

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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

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specific.

Goodyear Dunlop Tires Operations, S.A. v. Brown, 564

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U.S. 915, 919-20 (2011) (internal citation omitted).

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jurisdiction lies where a foreign corporation’s affiliations

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with the forum state are sufficiently continuous and systematic

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to render them at home in the forum state.

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at 919-20.

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defendant even when the claims at issue are distinct from the

General

Goodyear, 564 U.S.

A court may have general jurisdiction over a

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defendant’s activities in that forum.

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jurisdiction lies where the defendant has established minimum

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contacts with the forum state and the dispute arises from those

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contacting activities with the forum state.

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Ligue Contre Le Racisme Et L’Antisemitisme, 433 F.3d 1199, 1204-

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05 (9th Cir. 2006).

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B.

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Specific

Yahoo! Inc. v. La

Discussion
1.

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Id.

General Jurisdiction

Gemini argues this Court has general jurisdiction over SSI

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because of a continual and longstanding course of conduct and

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business between Gemini and SSI.

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See Opp’n at 6-7.

Not so.

General jurisdiction requires Gemini to show that SSI’s own

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affiliations with California are sufficiently “continuous and

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systematic” and that California basically operates as a home to

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SSI.

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(internal citation and quotation marks omitted).

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exacting standard, as it should be, because a finding of general

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jurisdiction permits a defendant to be hauled into court in the

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forum state to answer for any of its activities anywhere in the

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world.”

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801 (9th Cir. 2004).

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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

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organized and existing under the laws of that state.

Opp’n at

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6.

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SSI since 2006 constitute the continuous and systematic contacts

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required for general jurisdiction.

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relationship that Gemini has with SSI does not mean SSI has a

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systematic and continuous relationship with California.

But Gemini contends that its purchase of 46 lots of FBS from

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See id.

This specific

General

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jurisdiction deals with a corporation’s general contacts with a

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state and not its case-specific contacts.

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U.S. at 919.

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2.

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See Goodyear, 564

General jurisdiction does not lie here.
Specific Jurisdiction

Gemini argues specific jurisdiction lies over SSI because:

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(1) SSI purposefully availed itself of California’s laws by

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entering into a contract with Gemini through electronic

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communication and marketing its products in California;

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(2) Gemini’s claim arises out of SSI’s conduct within California;

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and (3) the exercise of personal jurisdiction over SSI is

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reasonable.

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See Opp’n at 9-10.

To decide whether specific jurisdiction lies, the Court

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applies a three-part test.

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must either: (1) purposefully direct their activities or

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consummate some transaction with the forum or resident thereof;

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or (2) perform an act by which they purposefully avail themselves

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of the privilege of conducting activities in the forum, thereby

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invoking the benefits and protections of its laws.

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Schwarzenegger, 374 F.3d at 802 (internal citations and quotation

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marks omitted).

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the defendant’s forum-related activities.

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exercise of jurisdiction must comport with fair play and

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substantial justice, i.e. be reasonable.

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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

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v. Hansing, 539 F.3d 1011, 1016 (9th Cir. 2008).

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meet that burden, the jurisdictional inquiry ends and the case

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must be dismissed.

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burden, Defendant must then present a compelling case that

Id.

If it fails to

But if Plaintiff succeeds in meeting the

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exercising jurisdiction would be unreasonable.

Id.

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The first prong in the test for specific jurisdiction

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requires the Court to conduct a purposeful availment inquiry to

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determine if the contract claims justify exercising specific

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jurisdiction.

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prong, Gemini must allege that SSI affirmatively acted to promote

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the transaction of business within California.

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911 F.3d 1357, 1362 (9th Cir. 1990).

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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

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jurisdiction.

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contract establishes minimum contacts, the Court considers the

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following facts: (1) previous negotiations; (2) contemplated

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future consequences; and (3) the terms of the contract and the

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parties’ actual course of dealing.

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Co., 913 F.3d 758, 760 (9th Cir. 1990) (internal citations and

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quotation marks omitted).

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Boschetto, 539 F.3d at 1017.

To decide whether a

Gray & Co. Firstenberg Mach.

Here, Gemini argues it meets the standard for purposeful

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availment because SSI sold 46 previous lots to Gemini over the

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past ten years and marketed its products to Gemini while knowing

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Gemini was a California business.

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general allegations about facts not related to the specific

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transaction at issue are insufficient to justify specific

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jurisdiction.

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those 46 prior transactions and how any negotiations,

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contemplations, or terms of those transactions affected the

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purchase giving rise to this action.

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///

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///

See Opp’n at 10-12.

But these

Gemini has not pleaded anything specific about

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Gemini also argues that SSI has purposefully availed itself

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of California’s laws by conducting business with at least four

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other businesses in California.

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Decl. ¶¶ 7-8.

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outside this litigation are not relevant to this Court’s specific

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jurisdiction analysis.

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adjudication of issues deriving from, or connected with, the very

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controversy that establishes jurisdiction.”

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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

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quotation marks omitted).

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actions for the Court’s specific jurisdiction analysis are

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Gemini’s January and February 2016 communications with Gemini

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over buying FBS in 2016, entry into the purchase transaction, and

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SSI’s shipment of the FBS on February 19, 2016.

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9.

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As they are alleged, the relevant

See Compl. ¶¶ 7-

These actions do not establish purposeful availment.

Gemini

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has not alleged that the parties engaged in significant

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negotiations in California or that the invoice between the

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parties established a continuing commitment on either side.

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in Boschetto, once the FBS was delivered, the parties could go

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their separate ways.

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did not create any ongoing obligations with Boschetto in

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California; once the car was sold the parties were to go their

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separate ways.”); see also Gray, 913 F.2d at 761 (“There is no

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evidence the sale contemplated a continuing relationship between

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Gray and the defendants.”).

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type of negotiations in California which would support a

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purposeful availment finding and there are no continuing

As

Boschetto, 539 F.3d at 1017 (“[Plaintiff]

The parties did not engage in the

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obligations between the parties.

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meet the burden for purposeful availment.

Gemini’s allegations do not

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Since Gemini cannot meet its burden on the first prong of

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the three-part specific jurisdiction test, the Court’s inquiry

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ends.

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Fed. R. Civ. P. 12(b)(6) arguments.

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Plaintiff might still be able to plead sufficient facts to

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maintain its claim against Defendant and therefore grants this

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motion to dismiss with leave to amend.

The Court also does not and need not reach Defendant’s
The Court finds that

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III.

SANCTIONS

The Court issued its Order re Filing Requirements (“Order”)

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on July 27, 2017.

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support of and in opposition to motions to dismiss to fifteen

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pages and reply memoranda in support of motions to dismiss to

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five pages.

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the page limits must pay monetary sanctions of $50.00 per page

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and that the Court will not consider any arguments made past the

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page limit.

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limit by five pages.

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made after page fifteen of the opposition brief.

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ORDERS Gemini’s counsel to pay $250.00 in sanctions.

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shall be paid to the Clerk of the Court within five days of the

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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

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IV.

ORDER

The Court GRANTS WITH LEAVE TO AMEND SSI’s motion to
dismiss.

If Genesis amends its complaint, it shall file a First
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Amended Complaint within twenty days of this Order.

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responsive pleading is due twenty days thereafter.

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IT IS SO ORDERED.
Dated: November 9, 2017

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Defendant’s