Ringcentral, Inc. v. Quimby et al

Filing 98

ORDER DENYING MOTION TO DISMISS FIRST AMENDED COMPLAINT. Further Case Management Conference set for 3/1/2012 10:00 AM in Courtroom 3, 17th Floor, San Francisco. Signed by Judge Richard Seeborg on 2/1/12. (cl, COURT STAFF) (Filed on 2/1/2012)

**E-filed 2/1/12**

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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SAN FRANCISCO DIVISION

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For the Northern District of California

United States District Court

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RINGCENTRAL, INC.,
Plaintiff,
v.

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ORDER DENYING MOTION TO
DISMISS FIRST AMENDED
COMPLAINT

BILL QUIMBY, et al.,

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No. C 09-2693 RS

Defendants.
____________________________________/

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This motion to dismiss brought by defendants TollFreeNumbers.Com, Inc. and its principal,

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Bill Quimby, challenges two basic aspects of plaintiff RingCentral, Inc.’s First Amended

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Complaint. First, defendants contend that the amendments RingCentral has made to its previously-

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dismissed claims arising from allegations that defendants engaged in a “targeted campaign” of

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disparagement remain insufficient. Second, defendants argue that they are not subject to personal

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jurisdiction for claims RingCentral has added to this action that were previously dismissed without

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prejudice in a related case, Case No. 11-1835 RS, (“RingCentral II”). Pursuant to Civil Local Rule

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7-1(b), the motion was submitted without oral argument. For the following reasons, it will be

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denied.

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A. Claims imported from RingCentral II

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The order dismissing RingCentral II concluded that there was no basis to assert personal

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jurisdiction over defendants in that independent action, particularly in the light of the Ninth Circuit’s

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holding in Casualty Assurance Risk Ins. Brokerage Co. v. Dillon, 976 F.2d 596, 601 (9th Cir. 1992).

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See RingCentral II, Order filed August 26, 2011. The Order provided, however, that the dismissal

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was without prejudice to RingCentral’s reassertion of those claims in this action, while reserving to

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defendants the right to challenge such joinder as improper on any grounds. Although defendants do

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not contend there is anything improper with the joinder of the former RingCentral II claims in this

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action per se, they now argue that the joinder does not create a basis for personal jurisdiction over

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For the Northern District of California

United States District Court

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those claims where it otherwise would not exist.
In opposing dismissal for lack of jurisdiction, RingCentral primarily relies on arguments that

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were rejected in RingCentral II, and it has not shown there is a basis to revisit them now. If

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jurisdiction existed for the reasons RingCentral advances, these claims could have gone forward in

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RingCentral II.

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Nevertheless, as defendants acknowledge, the Ninth Circuit recognizes the doctrine of

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pendent personal jurisdiction. See Action Embroidery Corp. v. Atlantic Embroidery, Inc., 368 F.3d

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1174, 1181 (9th Cir. 2004). Under that doctrine, “a court may assert . . . jurisdiction over a

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defendant with respect to a claim for which there is no independent basis of personal jurisdiction so

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long as it arises out of a common nucleus of operative facts with a claim in the same suit over which

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the court does have personal jurisdiction.” Id. at 1180. Additionally, “[t]he facts underlying a

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particular claim need not exactly track the facts underlying the claims for which there is personal

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jurisdiction, so long as the core facts are the same.” Fiore v. Walden, 657 F.3d 838, 858 (9th Cir.

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2011). Indeed, only a “loose factual connection between the claims” is necessary to support the

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exercise of pendent personal jurisdiction. Id. at n. 22; see also CE Distribution, LLC v. New Sensor

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Corp., 380 F.3d 1107, 1113-14 (9th Cir. 2004).

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In resisting application of pendent personal jurisdiction here, defendants assert that there is

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simply no relationship between the claims imported from RingCentral II (which arise from an

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allegedly defamatory email they sent to a third party in Texas), and the claims originally brought in

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this action. As to the trademark infringement and cybersquatting claims alleged in the original

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complaint here, perhaps a tenable argument could be made that there is not even a “loose factual

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connection” sufficient to support pendent jurisdiction over the claims arising from the Texas email.

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The original complaint in this action, however, also alleged that defendants had made a variety of

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false and misleading statements about RingCentral. As discussed below, the amended complaint

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has added detail regarding that alleged “targeted campaign to disparage RingCentral’s products and

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services.” While it may be true that the original allegations of disparagement focused on materials

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posted on defendant’s website, the email to the third party in Texas can fairly be characterized as

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part and parcel of the same alleged course of conduct.
As explained in Action Embroidery, the availability of pendent personal jurisdiction serves

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For the Northern District of California

United States District Court

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“judicial economy, avoidance of piecemeal litigation, and overall convenience of the parties.” 368

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F.3d at 1181. “When a defendant must appear in a forum to defend against one claim, it is often

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reasonable to compel that defendant to answer other claims in the same suit arising out of a common

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nucleus of operative facts.” Id. Here, there would be no compelling reason to require or permit

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these parties to litigate claims arising from the same overall course of alleged disparagement in two

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separate forums, depending on whether the offending statements were made on a website or in an

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email. Accordingly, the motion to dismiss for lack of jurisdiction is denied.

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B. Claims arising from allegations of disparagement

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The prior order of dismissal in this action concluded that all of the claims based on

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allegations that defendants published false and misleading statements regarding RingCentral’s

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products and services were inadequately pleaded. The order observed that the allegedly offending

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statements were described only in the most general and conclusory terms and, as such, were no more

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than the kind of “unadorned, the-defendant-unlawfully-harmed-me accusation” disapproved in

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Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). The First Amended Complaint adequately

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addresses the prior deficiency by describing the specific statements RingCentral contends were false

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and disparaging.1 The degree of specificity that defendants contend is still lacking goes beyond

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The relevant claims for relief are also further supported in the First Amended Complaint by the
inclusion of allegations regarding the Texas email.
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what is required under Rule 8 of the Federal Rules of Civil Procedure and Iqbal. See Iqbal, 129 S.

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Ct. at 1949 (quoting Bell Atlantic Corp. v. Twombly, 550 US 544, 555, 570 (2007) (“the pleading

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standard Rule 8 announces does not require ‘detailed factual allegations” . . . . a complaint must

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contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its

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face.’”). The motion to dismiss for failure to state a claim is therefore denied.

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Defendants shall file an answer to the First Amended Complaint within 20 days of the date

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of this order. The parties shall appear for a further Case Management Conference on March 1, 2012

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at 10:00 a.m., with a joint Case Management Conference Statement to be filed one week in advance.

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IT IS SO ORDERED.

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For the Northern District of California

United States District Court

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Dated: 2/1/12
RICHARD SEEBORG
UNITED STATES DISTRICT JUDGE

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