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

Filing 21

ORDER signed by District Judge John A. Mendez on 3/30/2018 GRANTING 16 Motion to Dismiss with prejudice. CASE CLOSED. (York, M)

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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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In this action, Plaintiff, Gemini Bioproducts, Inc.

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(“Gemini” or “Plaintiff”) claims it bought a bad shipment of

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Fetal Bovine Serum (“FBS”) for $209,912.95 from Defendant Serum

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Source, International (“SSI” or “Defendant”).

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Compl. (“FAC”), ECF No. 13, ¶¶ 13-15.

SSI rejected Gemini’s

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request for a refund.

As a result, Gemini filed

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its Complaint against Defendant.

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2017, this Court granted Defendant’s previous motion to dismiss,

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without prejudice, for lack of personal jurisdiction.

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No. 12.

FAC, ¶¶ 16-20.

First Amended

See generally FAC.

In November

Order, ECF

Plaintiff filed its FAC in December and Defendant again
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moves to dismiss for lack of personal jurisdiction.

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16; Mem., ECF No. 16-1.

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For the reasons explained below, the Court grants Defendant’s

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motion—this time with prejudice. 1

Plaintiff opposes.

Mot, ECF No.

Opp., ECF No. 17.

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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.

Decl. of Bertram J. Polan In Support of Opp. (“Polan

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Decl.”), ECF No. 9-2, ¶ 3.

It manufactures and sells cell

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culture sera like FBS.

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corporation with its headquarters in Charlotte.

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Jonathan Jacobs In Support of Mot., 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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¶¶ 7-8.

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Id., ¶ 4.

SSI is a North Carolina
Decl. of
SSI has

Polan Decl.,

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

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FAC, ¶ 10.

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from SSI for $209,912.95.

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consummating this transaction includes an attorneys’ fees

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provision and a return policy and warranty by SSI.

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22.

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In February 2016, Gemini bought 967 bottles of FBS
See id., ¶ 13.

The invoice

Id., ¶¶ 16,

Gemini received the bottles of FBS a couple of weeks later.

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See id.

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they complained about cells dying or growing very slowly in the

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FBS.

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But when Gemini marketed the bottles to its customers,

See id., ¶¶ 14-15.

In over 30 years of being in business,

This motion was determined to be suitable for decision without
oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled
for Feb. 13, 2018. In deciding this motion, the Court takes as
true all well-pleaded facts in the FAC.
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this was the first time Gemini did not have a 100% rate of

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acceptance of FBS.

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Id., ¶ 14.

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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it was trying to resolve the problem with the manufacturer but

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also reminded Gemini that it knew the quality of the FBS it was

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buying.

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sued SSI on the following claims: (1) breach of contract;

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(2) breach of the implied covenant of good faith and fair

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dealing; (3) open book account; and (4) unfair competition.

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generally FAC.

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See id., ¶ 19.

FAC, ¶ 17.

SSI told Gemini

Now Gemini wants a full refund and has

See

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.

The case was removed to federal

See Notice of Removal at 2-3.

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II.

OPINION

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A.

Personal Jurisdiction

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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).

Ranza v. Nike, Inc., 793 F.3d 1059, 1068 (9th Cir.

In making its prima facie showing, the plaintiff can
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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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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.

General

Goodyear, 564 U.S.

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at 919-20.

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defendant even when the claims at issue are distinct from the

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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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A court may have general jurisdiction over a

Specific

Yahoo! Inc. v. La

Discussion
1.

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Id.

General Jurisdiction

Gemini argues that its allegations in the FAC are

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sufficient for this Court to find that it has general

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jurisdiction over SSI because of (1) SSI’s systematic and

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continuous promotion, marketing, and sale of products to

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Plaintiff and other similarly situated businesses in the

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California cell culture industry and (2) a continual and

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longstanding course of conduct and business between Gemini and

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SSI.

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See Opp. at 5-6.

The Court disagrees.

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 essentially operates as SSI’s

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home.

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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) (internal citation omitted).

Goodyear Dunlop Tires Operations, S.A., 564 U.S. at 919
“This is an

Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797,
Gemini must

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prove that SSI’s contacts with California are of the type that

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“approximate physical presence.”

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Augusta Nat’l Inc., 223 F.3d 1082, 1086 (9th Cir. 2000)

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(internal citation omitted), holding modified by Yahoo! Inc.,

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433 F.3d 1199.

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effectively render a corporate defendant at home in the forum

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state will result in general jurisdiction lying over that

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defendant.

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Bancroft & Masters, Inc. v.

Only a limited set of affiliations that

Daimler AG v. Bauman, 134 S. Ct. 746, 760 (2014).

Here, Gemini concedes SSI is a North Carolina corporation

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organized and existing under the laws of that state.

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But Gemini contends that SSI’s continuous business activity and

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marketing in California combined with Gemini’s purchase of 46

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lots of FBS from SSI since 2006 constitute the continuous and

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systematic contacts required for general jurisdiction.

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Gemini’s allegations that SSI conducts continuous business

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activity in California do not suggest, however, that SSI is

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effectively at home in California.

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customers in California is not the kind of unique relationship

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with California, like incorporation or establishment of a
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Opp. at 5.

See id.

Defendant selling FBS to

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headquarters, that would justify maintaining general

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jurisdiction over Defendant.

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As Defendant points out, concluding otherwise would effectively

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subject it to general jurisdiction in any state where it has

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customers.

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Ct. at 760). Accordingly, this Court again finds that it does

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not have general jurisdiction over SSI in this case.

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Daimler AG, 134 S. Ct. at 760-61.

Reply, ECF No. 19, at 1-2 (citing Daimler AG, 134 S.

2.

Specific Jurisdiction

Gemini next argues in response to SSI’s motion that it has

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sufficiently alleged that specific jurisdiction lies over SSI

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

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by 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. at 8-12.

The Court finds otherwise.

To decide whether specific jurisdiction lies, the Court

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applies a three-part test.

First, the non-resident defendant

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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 or

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

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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.

Second, the claim must arise from or relate to

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Id.

Id.

Finally, the

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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

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exercising jurisdiction would be unreasonable.

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Id.

If it fails to

But if Plaintiff succeeds in meeting the

Id.

For the first prong in the test for specific jurisdiction,

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the Court conducts a purposeful availment inquiry, rather than a

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purposeful direction inquiry (used in tort cases), to determine

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if the contract claims justify exercising specific jurisdiction.

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See Schwarzenegger, 374 F.3d at 802; Picot v. Weston, 780 F.3d

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1206, 1212 (9th Cir. 2015).

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action taking place in the forum that invokes the benefits and

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protections of the laws in that forum.

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1155.

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action taking place outside the forum that is directed at the

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forum.

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Evidence of availment is shown by

Pebble Beach, 453 F.3d at

Evidence of direction, on the other hand, consists of

Id.

Since this is a contract case, to satisfy the first prong,

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Gemini must allege that SSI affirmatively acted to promote the

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transaction of business within California.

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911 F.3d 1357, 1362 (9th Cir. 1990); Picot, 780 F.3d at 1212

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(defendant must take actions that create a substantial connection

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with the forum state) (internal citation omitted).

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a contract with a nonresident defendant by itself is not enough

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to create jurisdiction.

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whether a contract establishes minimum contacts, the Court

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considers the following facts: (1) previous negotiations;

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(2) contemplated future consequences; and (3) the terms of the

See Sher v. Johnson,

Formation of

Boschetto, 539 F.3d at 1017.

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To decide

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contract and the parties’ actual course of dealing.

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Firstenberg Mach. Co., 913 F.2d 758, 760 (9th Cir. 1990)

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(internal citations and quotation marks omitted).

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Gray & Co.

Gemini also seeks to apply the Zippo Mfg. Co. v. Zippo Dot

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Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997) sliding scale

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internet effects test, as it was applied by the Ninth Circuit in

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Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1227

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(9th Cir. 2011), to this case.

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Circuit applied the Zippo test to “copyright infringement, a

Opp. at 7-8.

But the Ninth

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tort-like cause of action” and not to contract claims, like those

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at issue here.

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Inc. v. NeatO, LLC, 61 F. Supp. 2d 1074, 1078-79 (C.D. Cal. 1999)

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case that Gemini cites in support of its argument does not apply

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here.

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Zippo test in a case involving patent infringement claims and not

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contract claims.

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unavailing.

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Mavrix, 647 F.3d at 1228.

Similarly, the Stomp,

In that case, the Central District of California used the

Id.

Gemini’s reliance on these cases is

Here, Gemini argues that SSI had a continuing commitment to

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Gemini because of SSI’s return policy and warranty and the

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parties’ inclusion of an attorney’s fees provision in their

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invoice.

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standard for purposeful availment because SSI and Gemini had a

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prior course of dealing over the 46 lots that Gemini bought and

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led it to transact with SSI for the most recent sale.

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See Opp. at 9.

Gemini also contends it meets the

See id.

As Defendant points out, premising personal jurisdiction on

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SSI’s warranty of the quality of FBS would convert the purposeful

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availment analysis into something like the purposeful direction

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test used in tort cases, where the defendant is responsible for
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the effects of its conduct in the forum state.

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(citing Panavision Int’l, L.P. v. Toeppen, 141 F.3d 1316, 1321

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(9th Cir. 1998).

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Reply at 3

Instead, the purposeful availment test involves the

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affirmative conduct of the defendant and not the ultimate effects

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of the defendant’s conduct.

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exercise of its warranty right and use of Defendant’s return

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policy is not an affirmative action by Defendant.

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“foreseeability of causing injury in another state is not a

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Gray, 913 F.2d at 760.

Gemini’s

In addition,

sufficient basis on which to exercise jurisdiction.”

Id.

Further, the attorney’s fees provision does not satisfy the

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purposeful availment test because it creates a contingent right

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and addresses Defendant’s potential failure to perform; the

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attorney’s fees provision does not represent Defendant

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affirmatively doing something to avail itself of the benefits and

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protections of California’s laws.

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While Gemini notes that California Civil Code § 1717 transforms

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attorney’s fee provisions into mutual obligations, this does not

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mean a non-California company’s use of an attorney’s fees

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provision in a contract with a California party constitutes

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purposeful availment.

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allow state legislatures to circumscribe the constitutional

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limits on the exercise of personal jurisdiction that are provided

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by the Fourteenth Amendment.

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1115, 1121 (2014) (“to determine whether the Federal District

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Court in this case was authorized to exercise jurisdiction over

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petitioner, we ask whether the exercise of jurisdiction comports

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with the limits imposed by federal due process on the [forum

See Gray, 913 F.2d at 760.

See FAC, ¶ 22.

Finding otherwise would

See Walden v. Fiore, 134 S. Ct.

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state]”) (internal quotation marks and citation omitted).
Finally, Gemini’s allegations of the parties’ 46 prior

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transactions and concomitant course of dealing also do not

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satisfy its burden of showing that Defendant purposefully availed

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itself of the benefits and protections of California’s laws for

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the transaction giving rise to this lawsuit.

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that those prior sales motivated Gemini to purchase FBS from

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Defendant in the most recent transaction.

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does not allege that those prior sales actually created a mutual

Gemini only alleges

Opp. at 9.

Gemini

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contemplation of future consequences between the transacting

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parties, as required by Gray.

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Gemini has also failed to provide any authority to support a

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finding that Defendant purposefully availed itself of the

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benefits and protections of California’s laws based on the

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parties’ prior transactions, the warranty and return policy, and

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the attorney’s fees provision.

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See id.; Gray, 913 F.2d at 760.

Gemini contends that Gray and Boschetto should not apply to

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this case.

Opp. at 9-10.

Gemini notes that in Gray, the invoice

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stated the sale was “as is, where is,” indicating the defendant’s

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desire to not be responsible for the product after delivery.

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at 9 (citing Gray, 913 F.3d at 761).

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without a difference.

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is absent from this case.

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sale here did not “contemplate[] a continuing relationship”

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between Gemini and Defendant.

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Defendant delivered the FBS to Gemini, the parties were free to

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go their separate ways unless something went wrong, which is

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insufficient to find purposeful availment.

Id.

This is a distinction

The invoice’s note on finality from Gray
But, similar to the sale in Gray, the

Gray, 913 F.3d at 761.

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See id.

After

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Gemini’s attempt to distinguish Boschetto also fails.

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Gemini emphasizes that in Boschetto, the eBay seller did not know

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who the winning bidder was until the auction ended, unlike here

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where Defendant marketed and solicited customers in California.

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Opp. at 9-10 (citing 539 F.3d at 1019).

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Boschetto also noted that “the consummation of the sale via eBay

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here is a distraction from the core issue: [t]his was a one-time

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contract for the sale of a good” and that “[plaintiff] did not

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create any ongoing obligations with Boschetto in California; once

But the court in

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the car was sold the parties were to go their separate ways[.]”

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539 F.3d at 1017, 1019.

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46 prior sales, these were separate stand-alone transactions and

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not an ongoing transaction.

While Gemini and Defendant consummated

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Since Gemini still cannot meet its burden on the first prong

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

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ends and the case must be dismissed.

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need not reach Defendant’s Federal Rule of Civil Procedure

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12(b)(6) arguments.

The Court also does not and

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C.

Leave to Amend

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Gemini requests further leave to amend if the Court grants

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Defendant’s motion to dismiss.

See Opp. at 15.

But the Court

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need not grant leave to amend where amendment would be futile.

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Deveraturda v. Globe Aviation Sec. Servs., 454 F.3d 1043, 1049

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(9th Cir. 2006).

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satisfy its burden of showing that maintaining general

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jurisdiction over Defendant is appropriate.

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specific jurisdiction is also not appropriate because Gemini has

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failed to satisfy its burden of showing that Defendant

As explained above, Gemini has again failed to

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Maintaining

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purposefully availed itself of the benefits and protections of

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California’s laws.

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amendment could rectify its failures.

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Plaintiff’s request.

Gemini has pointed to no facts suggesting
The Court denies

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III.

ORDER

For the reasons above, the Court GRANTS Defendant’s motion
to dismiss with prejudice.
IT IS SO ORDERED.
Dated: March 30, 2018

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