LG Electronics Mobile Comm U.S.A., Inc. et al v. Xiaowen et al

Filing 146

ORDER (1) Granting 129 Motion to Dismiss; (2) Severing Case; And (3) Transferring Case to District of New Jersey. It is ordered that the Court grants Defendant N&K's Motion to Dismiss for Lack of Personal Jurisdiction (ECF No. 129). Addi tionally, the Court severs N&K from the instant case and orders this severed case transferred to the United States District Court for the District of New Jersey for further proceedings between LG and N&K. Signed by Judge Janis L. Sammartino on 6/8/2017. (Certified copy of Order, Docket and Complaint sent to the District of New Jersey via email: [e-mail]) (dxj)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

SOUTHERN DISTRICT OF CALIFORNIA

10
11

LG CORPORATION, et al.,

Case No.: 16-CV-1162 JLS (NLS)
Plaintiffs,

12
13

v.

14

ORDER (1) GRANTING MOTION
TO DISMISS; (2) SEVERING CASE;
AND (3) TRANSFERING CASE TO
DISTRICT OF NEW JERSEY

HUANG XIAOWEN DBA TOPUUSHOP, et al.,

15

(ECF No. 129)

Defendants.

16
17

Presently before the Court is Defendant N&K Trading, Inc.’s (“N&K”) Motion to

18

Dismiss for Lack of Personal Jurisdiction. (“MTD,” ECF No. 129.) Also before the Court

19

are Plaintiffs LG Electronics MobileComm U.S.A., Inc., LG Corporation, and LG

20

Electronics, Inc.’s (collectively, “Plaintiffs” or “LG”) Response in Opposition to,

21

(“Opp’n,” ECF No. 137), and Defendant’s Reply in Support of, (“Reply,” ECF No. 141),

22

Defendant’s MTD. The Court vacated the hearing on the motion and took it under

23

submission pursuant to Civil Local Rule 7.1(d)(1). (ECF No. 140.) After considering the

24

parties’ arguments and the law, the Court GRANTS N&K’s MTD, SEVERS N&K from

25

the instant case, and TRANSFERS its case to the United States District Court for the

26

District of New Jersey.

27

///

28

///
1
16-CV-1162 JLS (NLS)

1
2
3

BACKGROUND
LG is the owner of various registered Federal Trademarks. (See Compl. ¶ 34, ECF
No. 1.) The following LG marks are at issue in this case:

4
5
6

Mark

Relevant

Reg. No. Reg. Date

Owner

3661175 07/28/2009

LG Corp.

Goods/Services

7
Earphone for

8

Mobile Phone

9
10
11

Headphones;
HBS

12

LG

Wireless

4894207 02/02/2016

Headphones

Electronics,
Inc.

13
Headphones;

14
15

HBS-730

16

HBS-740

Electronics,
Inc.

Headphones;

18

LG

Wireless

4894212 02/02/2016

Electronics,

Headphones

21
HBS-750

23

Inc.

Headphones;

20

22

4894209 02/02/2016

Wireless
Headphones

17

19

LG

Earphones;

LG

Wireless

4894211 02/02/2016

Electronics,

Headphones

Inc.

Headphones;

LG

24
25
26
27

HBS-760

Wireless

4894210 02/02/2016

Headphones

Electronics,
Inc.

28
2
16-CV-1162 JLS (NLS)

1
2

Mark

Relevant

Reg. No. Reg. Date

Owner

Goods/Services

3
Headphones;

4
5

HBS-800

Wireless

4894206 02/02/2016

Electronics,

Headphones

7
HBS-900

Inc.

Headphones;

6

8

LG

LG

Wireless

4894208 02/02/2016

Headphones

9

Inc.

10
11

LG

Earphones;

12

Electronics,

Headphones

4694125 03/03/2015

Electronics,
Inc.

13
LG

14
Headphones

15

4925092 03/29/2016

Electronics,
Inc.

16
17

LG

Headphones;

18

4820986 9/29/2015

Earphones

19

Electronics,
Inc.

20
21
22

TONE PRO

LG

Head Sets;

4734180 5/12/2015

Earphones

Inc.

23
Wireless Cellular

24
25
26

TONE INFINIM

Electronics,

Phone Headsets;
Earphones

LG
4780031 7/28/2015

Electronics,
Inc.

27
28
3
16-CV-1162 JLS (NLS)

1
2

Mark

Relevant

Reg. No. Reg. Date

Owner

Goods/Services

3
Headphones;

4
5

NECKBEHIND

6

8

Inc.

Wireless

10

13

Electronics,

Software For

9

12

4630809 11/4/2014

Headsets for
Mobile Phones

7

11

LG

Earphones;

TONE&TALK

Communication
Between Mobile

LG
4900181 2/16/2016

Phone And

Electronics,
Inc.

Earphones

14
15
16

(Id. (collectively, the “LG Trademarks”).)

17

LG filed suit against various Defendants on May 16, 2016. (ECF No. 1.) LG moved

18

for default judgment against several Defendants on December 13, 2016, (ECF No. 111),

19

which the Court granted on February 6, 2017, (ECF Nos. 125–28). Defendant N&K was

20

not among those affected by the default judgment, and now seeks to dismiss the case

21

against it due to lack of personal jurisdiction.

22

LEGAL STANDARD

23

A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2) challenges

24

the Court’s personal jurisdiction over a party. The plaintiff bears the burden of establishing

25

that jurisdiction is proper. Boschetto v. Hansing, 539 F.3d 1011, 1015 (9th Cir. 2008)

26

(citing Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990)). The Court may decide the

27

motion without an evidentiary hearing, and thus “‘the plaintiff need only make a prima

28

facie showing of the jurisdictional facts.’” Id. (quoting Caruth v. Int’l Psychoanalytical
4
16-CV-1162 JLS (NLS)

1

Ass’n, 59 F.3d 126, 127–28 (9th Cir. 1995)). “Uncontroverted allegations in the plaintiff’s

2

complaint must be taken as true,” id., and “‘[c]onflicts between the parties over statements

3

contained in affidavits must be resolved in the plaintiff’s favor,’” id. (quoting

4

Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004)).

5

“Where, as here, there is no applicable federal statute governing personal

6

jurisdiction, the district court applies the law of the state in which the district court sits.”

7

Schwarzenegger, 374 F.3d at 800. “Because California’s long-arm jurisdictional statute is

8

coextensive with federal due process requirements, the jurisdictional analyses under state

9

law and federal due process are the same.” Id. at 800–01; Harris Rutsky & Co. Ins. Servs.

10

v. Bell & Clements Ltd., 328 F.3d 1122, 1129 (9th Cir. 2003) (California’s long-arm statute

11

“allows courts to exercise personal jurisdiction over defendants to the extent permitted by

12

the Due Process Clause of the United States Constitution”). Thus, “[f]or a court to exercise

13

personal jurisdiction over a nonresident defendant, that defendant must have at least

14

‘minimum contacts’ with the relevant forum such that the exercise of jurisdiction ‘does not

15

offend traditional notions of fair play and substantial justice.’” Schwarzenegger, 374 F.3d

16

at 801 (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). “There are two

17

forms of personal jurisdiction that a forum state may exercise over a nonresident

18

defendant—general jurisdiction and specific jurisdiction.” Boschetto, 539 F.3d at 1016.

19

ANALYSIS

20

N&K argues that the Court lacks both general and specific jurisdiction over it. (See

21

generally MTD.) LG concedes the Court lacks general jurisdiction over N&K, (Opp’n 121

22

n.3), but argues that N&K waived its objection to personal jurisdiction and, even if it did

23

not, the Court has specific jurisdiction over N&K, (see generally Opp’n). The Court

24

considers each argument in turn.

25

///

26
27
28

1

Pin citations to docketed material refer to the CM/ECF numbers electronically stamped at the top of each
page.
5
16-CV-1162 JLS (NLS)

1

I.

Waiver of Personal Jurisdiction

2

A defense of lack of personal jurisdiction may be waived “as a result of the course

3

of conduct pursued by a party during litigation.” Peterson v. Highland Music, Inc., 140

4

F.3d 1313, 1318 (9th Cir. 1998), as amended on denial of reh’g and reh’g en banc (June

5

15, 1998).

6

LG argues that N&K waived the defense of lack of personal jurisdiction before it

7

raised it as an affirmative defense in its Answer. (Opp’n 8.) Specifically, LG argues that

8

N&K waived the defense when it: (1) sought additional time to respond to LG’s motion

9

for a temporary restraining order (“TRO”); (2) appeared at the order to show cause hearing

10

and consented to convert the TRO to a preliminary injunction (“PI”); and (3) stipulated to

11

a PI and submitted a joint motion for its entry. (Id. at 8–9.)

12

The Court disagrees. As an initial matter, the Court is inclined to agree with the

13

general proposition that consenting to a TRO or PI, without raising objection or reserving

14

rights, weighs in favor—if it is not dispositive—of a finding that a defendant has waived

15

its defense of a lack of personal jurisdiction. See, e.g., Aeration Sols., Inc. v. Dickman, 85

16

F. App’x 772, 775 (Fed. Cir. 2004) (“[F]ew actions [can] more clearly signal an acceptance

17

of a court’s jurisdiction than signing a stipulated injunction order.”); Wright v. Interbank

18

Capital, Inc., No. C 99-0091 MMC(ARB), 1999 WL 354516, at *2 (N.D. Cal. May 19,

19

1999) (finding waiver where defendants, among other things, entered into stipulations

20

regarding plaintiffs’ TRO request and filed an application to appear pro hac vice without

21

first raising the defense). But that is not what happened in this case. Rather, as to the

22

consented PI order (“Consent Order”), N&K “agreed to the order to avoid unnecessary

23

motion practice at a time when it had not yet even been validly served.” (Reply 8 (citing

24

Reply Declaration of Samuel Butt (“Butt Reply Decl.”) ¶¶ 2–4, ECF No. 143).) In addition,

25

in the Consent Order, (ECF No. 45), N&K expressly stated that it reserved all of its

26

defenses. (See, e.g., Butt Reply Decl. ¶ 4, Ex. 2 (“In consenting to this Order, N&K Trading

27

shall not be deemed or construed to have made any admissions, including without

28

limitation, and admission of liability or responsibility, of any kind.”); see also Consent
6
16-CV-1162 JLS (NLS)

1

Order ¶ 4); see also Aeration Sols, 85 Fed. App’x at 775 (clarifying that signing a stipulated

2

injunction order “without reservation” indicates a party’s willingness to submit itself to

3

powers of the court). Additionally, while N&K certainly participated in this case through

4

some discovery and procedural motion practice, (Opp’n 10 (listing activity)), this is N&K’s

5

first contested motion, and discovery has not progressed past interrogatories and document

6

requests (and has been stayed with LG’s consent in conjunction with this motion), (Reply

7

7). And N&K repeatedly made clear to LG that it would contest personal jurisdiction. (Id.

8

at 6 (stating defense in its Answer, the parties’ Joint Case Management Order, and at a

9

settlement conference, among others)). This limited activity coupled with N&K’s repeated

10

statements of its intention to raise this defense in a motion do not amount to “deliberate,

11

strategic behavior” or “sandbagging” under Peterson. See, e.g., Lions Gate Entm’t, Inc. v.

12

Yagoozon Inc., No. CV1210653JFWFFMX, 2013 WL 12119724, at *4 n.2 (C.D. Cal. Oct.

13

31, 2013) (finding no waiver of personal jurisdiction where defendants raised defense in

14

answer and Rule 26 Joint Report but litigated case on merits until moving for summary

15

judgment for lack of personal jurisdiction); Freeney v. Bank of Am. Corp., No.

16

CV1502376MMMPJWX, 2015 WL 4366439, at *20 (C.D. Cal. July 16, 2015) (finding

17

same based on similar facts and collecting cases). Accordingly, the Court finds that N&K

18

has not waived its defense of lack of personal jurisdiction.

19

II.

Specific Jurisdiction

20

“In order for a court to have specific jurisdiction over a defendant, ‘the defendant’s

21

suit-related conduct must create a substantial connection with the forum State.’” Williams

22

v. Yamaha Motor Co., 851 F.3d 1015, 1022–23 (9th Cir. 2017) (quoting Walden v. Fiore,

23

134 S. Ct. 1115, 1121 (2014)). “The relationship between the defendant and the forum state

24

must arise out of contacts that the defendant [itself] creates with the forum State.” Id.

25

(internal quotation marks omitted). “Additionally, the requisite ‘minimum contacts’ must

26

be ‘with the forum State itself, not . . . with persons who reside there.’” Id. (quoting Walden,

27

134 S. Ct. at 1122).

28

///
7
16-CV-1162 JLS (NLS)

1
2
3
4
5
6
7

The Ninth Circuit has established a three-prong test for analyzing a claim of specific
personal jurisdiction:
(1) The non-resident defendant must purposefully direct his activities or
consummate some transaction with the forum or resident thereof; or perform
some act by which he purposefully avails himself of the privilege of
conducting activities in the forum, thereby invoking the benefits and
protections of its laws; (2) the claim must be one which arises out of or relates
to the defendant’s forum-related activities; and (3) the exercise of jurisdiction
must comport with fair play and substantial justice, i.e. it must be reasonable.

8
9

Schwarzenegger, 374 F.3d at 802; see also Williams, 851 F.3d at 1023. The plaintiff bears

10

the burden of establishing the first two prongs. See Mavrix Photo, Inc. v. Brand Techs.,

11

Inc., 647 F.3d 1218, 1228 (9th Cir. 2011). If the plaintiff does so, the burden shifts to the

12

defendant to argue that exercise of jurisdiction would be unreasonable. Id.

13

“In [trademark] infringement actions, the Ninth Circuit typically employs a

14

purposeful direction analysis.” Lindora, LLC v. Isagenix Int’l, LLC, 198 F. Supp. 3d 1127,

15

1138 (S.D. Cal. 2016) (citing Mavrix Photo, 647 F.3d at 1228). “This analysis, in turn,

16

involves application of an ‘effects’ test that ‘focuses on the forum in which the defendant’s

17

actions were felt, whether or not the actions themselves occurred within the forum.’” Id.

18

(quoting Yahoo! Inc. v. La Ligue Contre Le Racisme, 433 F.3d 1199, 1206 (9th Cir. 2006)

19

(en banc)). “The ‘effects’ test, which derives from the Supreme Court’s decision in Calder

20

v. Jones, 465 U.S. 783 [(1984),] . . . requires that the defendant allegedly must have (1)

21

committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that

22

the defendant knows is likely to be suffered in the forum state.” CollegeSource, Inc. v.

23

AcademyOne, Inc., 653 F.3d 1066, 1077 (9th Cir. 2011) (internal quotation marks omitted).

24

The Court address each requirement in turn.

25

LG must first sufficiently allege that N&K committed an intentional act, which is

26

“an external manifestation of the actor’s intent to perform an actual, physical act in the real

27

world, not including any of its actual or intended results.” Washington Shoe Co. v. A–Z

28

Sporting Goods Inc., 704 F.3d 668, 674 (9th Cir. 2012); see also Schwarzenegger, 374
8
16-CV-1162 JLS (NLS)

1

F.3d at 806. LG alleges that N&K “is a counterfeiter who is knowingly and willfully

2

manufacturing, importing, distributing, offering for sale, and/or selling wireless headsets

3

bearing [a] counterfeit version of the LG Trademarks . . . as shown on the company’s virtual

4

store front (‘hi-pc’) on ebay.com.” (Compl. ¶ 115; see also id. ¶¶ 116–17 (alleging that

5

N&K “is directly engaging in the sale of counterfeit LG wireless headsets” and providing

6

examples of products purchased from N&K).) This is sufficient to allege an intentional act

7

under Calder’s effects test. See, e.g., Adobe, 2015 WL 5834135, at *3 (finding same based

8

on similar allegations); see also Lindora, 198 F. Supp. 3d at 1139 (same and collecting

9

authority).

10

The Court must next determine whether N&K expressly aimed its conduct at

11

California. “The Ninth Circuit has emphasized that express aiming requires ‘something

12

more’ than ‘a foreign act with foreseeable effects in the forum state.’” Lindora, 198 F.

13

Supp. 3d at 1139 (quoting Washington Shoe, 704 F.3d at 675). “In assessing whether a

14

defendant has done ‘something more,’ courts consider several factors, including ‘the

15

interactivity of the defendant’s website, the geographic scope of the defendant’s

16

commercial ambitions, and whether the defendant ‘individually targeted’ a plaintiff known

17

to be a forum resident.” Id. (quoting Mavrix Photo, 647 F.3d at 1229 (citation omitted)).

18

“Express aiming can be shown where a corporation ‘continuously and deliberately’

19

exploits the forum state’s market for its own commercial gain.” Id. (quoting Mavrix Photo,

20

647 F.3d at 1229–30).

21

Here, the Court finds that N&K has not expressly aimed its activities at California.

22

Rather, N&K is simply a fulfillment company that facilitates shipments of products to

23

states depending on where the purchaser resides. (See Declaration of Hang Feng (Nick)

24

Wu (“Wu Decl.”) ¶ 3, ECF No. 129-2.) As N&K explains:

25
26
27
28

When a consumer orders a product on a website operated by the seller, who
is typically located outside the United States, the seller processes the order
and sends N&K an electronic communication directing N&K to ship the
product to the purchaser. An N&K employee picks up the product, already in
9
16-CV-1162 JLS (NLS)

the seller’s or manufacturer’s packaging, from its location in the warehouse,
delivers it to an employee charged with putting products for shipment into the
proper shipping packaging, such as a Federal Express box, and then the
packaged product is delivered to an employee charged with putting shipping
labels on the packaged products. Once the shipping label is affixed, the
package is ready to be delivered to or picked up by the carrier, be it the U.S.
Postal Service, Federal Express, or another carrier.

1
2
3
4
5
6
7

(Id.) Of course, N&K fulfills shipments to California. (Id. ¶¶ 21–22.) But these shipments

8

are consistent only with N&K committing “foreign act[s] with foreseeable effects in the

9

forum state.” Lindora, 198 F. Supp. 3d at 1139.

10

Nor has LG demonstrated that N&K does “something more” that would otherwise

11

subject it to specific jurisdiction in California. For one, N&K does not operate any website,

12

let alone an interactive one. To be sure, LG claims that N&K operates a website offering

13

for-sale products bearing the LG Trademarks. (See Declaration of Morgan Smith (“Smith

14

Decl.”) ¶¶ 2–4 (listing N&K’s LinkedIn and Facebook pages that advertise

15

www.tmart.com as N&K’s website).) But N&K counters that it does not own or maintain

16

any website, let alone www.tmart.com. (Reply Declaration of Nick Wu (“Wu Reply

17

Decl.”) ¶4, ECF No. 142.) Furthermore, N&K neither created nor has access to edit the

18

LinkedIn and Facebook pages that purport to be owned and operated by N&K. (Id. ¶¶ 2–

19

3.) Because Ms. Smith’s personal knowledge of these sites is limited to what they purport

20

to establish, and thus she does not claim to have personal knowledge of N&K’s actual

21

ownership or control of these websites, her evidence of N&K’s alleged websites do not

22

overcome N&K’s specific denial of creation, ownership, and operation over those same

23

sites. See, e.g., Fed. R. Evid. 901.2

24

Furthermore, LG has provided no evidence that N&K “‘individually targeted’ a

25

plaintiff known to be a forum resident.” Lindora, 198 F. Supp. 3d at 1139. Nor has it

26
27
28

For this reason LG’s cited cases relying on the relative interactivity of a party’s website are inapposite.
(See Opp’n 15 (collecting cases).)
2

10
16-CV-1162 JLS (NLS)

1

controverted N&K’s declaration that it “did not make any independent decision to ship the

2

allegedly counterfeit headsets to any buyer in California” and “only shipped headsets to

3

individuals in California if (a) the buyer of the headset listed a shipping address in

4

California, and (b) the seller of the headset sent N&K a communication directing it to ship

5

a headset to a California address.” (Wu Decl. ¶ 6.) Nor has LG argued that the geographic

6

scope of N&K’s commercial ambitions counsels a finding of specific jurisdiction one way

7

or another.

8

Instead, LG relies on two arguments. First, LG argues that “even shipments

9

‘initiated’ by a customer can be purposefully directed at the customer’s forum of

10

residence.” (Opp’n 15 (citing Kraft Foods Grp. Brands LLC v. TC Heartland, LLC, No.

11

14-28-LPS, 2015 WL 4778828, at *5 (D. Del. Aug. 13, 2015), overruled on other grounds

12

by TC Heartland LLC v. Kraft Foods Grp. Brands LLC, ––– S. Ct. –––, No. 16-341, 2017

13

WL 2216934, at *5 (U.S. May 22, 2017), and Metro-Goldwyn-Mayer Studios Inc. v.

14

Grokster, Ltd., 243 F. Supp. 2d 1073, 1086–87 (C.D. Cal. 2003)).) Neither case is

15

persuasive to establish such a proposition as applied to N&K. Unlike the defendants in TC

16

Heartland, which shipped approximately 2% of the accused products from their Indiana

17

manufacturing facility to two of their customers’ distribution facilities in Delaware at their

18

customers’ request, 2015 WL 4778828, at *4, N&K does not ship products to any of its

19

own customers because it does not have any; as discussed, N&K simply fulfills shipments

20

for customers of other companies. To be sure, the TC Heartland Court cited other Delaware

21

district court cases for the proposition that shipments initiated by a customer (and not by

22

the defendant) may demonstrate purposeful availment. Id. at *3–5. So, broadly speaking,

23

these cases lend some force to LG’s argument. But LG has cited no authority in this Circuit

24

aligned with the Delaware approach.3 Nor can the Court find any. To the contrary, courts

25
26
27
28

3

Grokster is inapposite. In that case, personal jurisdiction was found where, among other things, the
defendant made a program that offered peer-to-peer file sharing available through its website, had roughly
two million California users, generated advertising on its site fueled by its user base, and entered into
licensing agreements with every user authorizing and limiting use of the software. 243 F. Supp. 2d at
1087, 1092.
11
16-CV-1162 JLS (NLS)

1

in this Circuit have declined to exercise personal jurisdiction in similar circumstances. See,

2

e.g., Imageline, Inc. v. Hendricks, No. CV 09-1870 DSF AGRX, 2009 WL 10286181, at

3

*4 (C.D. Cal. Aug. 12, 2009) (“While the Defendants did commit intentional acts by selling

4

products through eBay and shipping them to the purchasers, including California residents,

5

the Defendants fail to satisfy elements 2 and 3 of the effects test. The Defendants’ sales to

6

California residents were not specifically directed contacts, but instead occurred only

7

because the purchasers of Defendants’ goods happened to reside in California. There was

8

no ‘indivdual[ized] targeting’ of California.”). Indeed, “[t]he Ninth Circuit has held that a

9

sale into the forum is not a substantial contact where it ‘involved the forum state only

10

because that is where the purchaser happened to reside.’” Adobe Sys. Inc. v. Cardinal

11

Camera & Video Ctr., Inc., No. 15-CV-02991-JST, 2015 WL 5834135, at *5 (N.D. Cal.

12

Oct. 7, 2015) (quoting Boschetto, 539 F.3d at 1019); see also id. (collecting district court

13

cases extending this principle to cases involving multiple sales entering the forum simply

14

because the purchasers happened to live there). N&K’s contacts with the forum state are

15

even more attenuated than the sales in these cases, since N&K’s uncontroverted evidence

16

demonstrates that it does not operate a website or otherwise market or sell any products to

17

California consumers; it merely fulfills shipments to different states based on consumer

18

purchases from other websites.

19

Second, LG argues that “N&K has further aimed its intentional acts at California by

20

engaging PayPal, a California company, to process its payments.” (Opp’n 16 (collecting

21

cases for the proposition that maintenance of a bank in the forum state can support a claim

22

of personal jurisdiction).) The Court is inclined to agree with the proposition that a party’s

23

“use of third-party California companies to process payments on its site lends further

24

support to the claim that it has purposefully availed itself of the forum.” Craigslist, Inc. v.

25

Kerbel, No. C-11-3309 EMC, 2012 WL 3166798, at *5 (N.D. Cal. Aug. 2, 2012). But N&K

26

does not have a website, much less a website that uses California-based PayPal to directly

27
28
12
16-CV-1162 JLS (NLS)

1

facilitate payments. Rather, N&K (1) collects the customers’ payments on behalf of other

2

sellers through use of PayPal accounts on those sellers’ websites and (2) remits those

3

payments to those sellers, less a fixed fee for N&K’s collection services. (Wu Decl. ¶ 7.)

4

And even if N&K’s use of PayPal accounts in this fashion weighs in favor of holding N&K

5

accountable in California, it does not alone outweigh the contrary evidence demonstrating

6

that N&K has not targeted California or its consumers. In sum, the Court finds that N&K’s

7

fulfillment and shipment business is not expressly aimed at California.4 Because LG has

8

failed to establish that N&K expressly aimed its conduct at California, the Court GRANTS

9

N&K’s Motion to Dismiss for Lack of Personal Jurisdiction.5

10

III.

Sever and Transfer

11

Now that the Court has concluded it lacks personal jurisdiction over N&K, LG

12

argues that the Court should sever N&K from this case and transfer its case to the District

13

of New Jersey. Thus the Court must determine whether to dismiss the action against N&K

14

pursuant to Federal Rule of Civil Procedure 12(b)(2) or transfer this action to another court

15

pursuant to 28 U.S.C. § 1631. See, e.g., Linthicum v. Shenkman, No. 13CV1099 WQH

16

DHB, 2013 WL 4875024, at *7 (S.D. Cal. Sept. 10, 2013).

17

“The transfer of civil actions among federal courts to cure jurisdictional defects is

18

governed by 28 U.S.C. § 1631.” Cruz–Aguilera v. INS, 245 F.3d 1070, 1074 (9th Cir.

19

2001). Section 1631 provides: “Whenever a civil action is filed in a court . . . and that court

20

finds that there is a want of jurisdiction, the court shall, if it is in the interest of justice,

21

transfer such action . . . to any other such court in which the action . . . could have been

22

brought at the time it was filed . . . .” 28 U.S.C. § 1631. A transfer under § 1631 is

23

appropriate if “(1) the transferring court lacks jurisdiction; (2) the transferee court could

24

have exercised jurisdiction at the time the action was filed; and (3) the transfer is in the

25
26
27
28

4

For this reason the Court does not assess whether N&K knows the harm is likely to be suffered in the
forum state.
5

For this reason the Court does not reach the remaining elements to determine whether the Court lacks
specific jurisdiction over N&K. See, e.g., Schwarzenegger, 374 F.3d at 807 n.1.
13
16-CV-1162 JLS (NLS)

1

interest of justice.” Cruz–Aguilera, 245 F.3d at 1074. “When determining whether transfer

2

is in the interest of justice, courts have considered whether the failure to transfer would

3

prejudice the litigant, whether the litigant filed the original action in good faith, and other

4

equitable factors.” Id.

5

The Court concludes that a transfer to the District of New Jersey is appropriate. First,

6

as discussed, supra Part II, the Court lacks personal jurisdiction over N&K. Second, the

7

District of New Jersey could have exercised jurisdiction over N&K at the time LG filed

8

this action because N&K is a New Jersey corporation with its principal place of business

9

in New Jersey. (See, e.g., N&K’s Answer to Compl. (“N&K Answer”) ¶ 27, ECF No. 88

10

(admitting that it is a New Jersey corporation with its principal place of business at 1980

11

US Highway 1, Building 3, North Brunswick, NJ 08902).) Finally, a transfer of this case,

12

rather than its dismissal, is in the interest of justice. This case has been pending for just

13

over a year. During that time N&K has participated in the merits of the case, including

14

consenting to a PI, conducting discovery on the merits, and participating in early settlement

15

attempts. While the Court found that this activity, in conjunction with its reservation of

16

defenses, did not constitute waiver of its defense of lack of personal jurisdiction, that same

17

activity demonstrates its participation in this case and, more importantly, the efforts LG

18

has thus far undertaken to develop its case against N&K. Dismissing the case at this stage

19

would be unfairly prejudicial to LG and would not be in the interest of justice.

20

Furthermore, the Court can properly sever the claims against N&K pursuant to

21

Federal Rule of Civil Procedure 21, which provides that “the court may sever any claim

22

against a party.” Courts have broad discretion to sever a claim pursuant to Rule 21. See,

23

e.g., Lindora, 198 F. Supp. 3d at 1149; Pamplona ex rel. Pamplona v. Hernandez, No.

24

08CV2205-IEGBLM, 2009 WL 578578, at *3 (S.D. Cal. Mar. 5, 2009). The same

25

reasoning supporting the Court’s decision to transfer this case supports the Court’s decision

26

to sever N&K from this action in order to effect the transfer. Moreover, the case is now

27

entirely resolved with respect to the twenty-one other defendants, and all that remains is an

28

assessment of LG’s attorneys’ fees as they relate to those defendants. Thus, neither N&K
14
16-CV-1162 JLS (NLS)

1

nor any other defendant would suffer unfair prejudice as a result of this severance.

2

Accordingly, the Court SEVERS N&K from this action and ORDERS this severed case

3

transferred to the United States District Court for the District of New Jersey.

4

CONCLUSION

5

For the reasons stated above, the Court GRANTS Defendant N&K’s Motion to

6

Dismiss for Lack of Personal Jurisdiction (ECF No. 129). Additionally, the Court SEVERS

7

N&K from the instant case and ORDERS this severed case transferred to the United States

8

District Court for the District of New Jersey for further proceedings between LG and N&K.

9
10

IT IS SO ORDERED.
Dated: June 8, 2017

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
15
16-CV-1162 JLS (NLS)