Oil Pad Solutions, LLC et al v. Parsons
Filing
20
OPINION & ORDER: Defendants' motion to dismiss 9 is GRANTED. See 7-page opinion & order attached. Signed on 5/8/2013 by Judge Marco A. Hernandez. (mr)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
PORTLAND DIVISION
OIL PAD SOLUTIONS, LLC and
SHAIN PEARSE,
No. 03:12-cv-01917-HZ
Plaintiffs,
OPINION & ORDER
v.
RICK PARSONS and RON BREITIGAM,
Defendants.
Christopher J. Kemper
3481 NW Thurman St.
Portland, OR 97210
Attorney for Plaintiffs
Paul R.J. Connolly
2731 12th St. SE
P.O. Box 3095
Salem, OR 97302
Attorney for Defendants
1 - OPINION & ORDER
HERNANDEZ, District Judge:
Plaintiffs Oil Pad Solutions, LLC (“OPS”), a North Dakota company, and Shain Pearse,
member and manager of OPS, market products and services to oil industry companies in North
Dakota. Defendants Rick Parsons and Ron Breitigam worked in North Dakota with OPS.
Plaintiffs allege that Defendants hired or contracted with third parties to compete with OPS and
continue to operate a competing business. Defendants move to dismiss Plaintiffs’ suit for lack of
personal jurisdiction and improper venue, or in the alternative, to transfer the case to the District
of North Dakota. Neither of the Defendants is a resident of Oregon, does business in Oregon, or
maintains business connections to Oregon. None of the events giving rise to the claims occurred
in Oregon. Therefore, I grant Defendants’ motion to dismiss for lack of personal jurisdiction.
BACKGROUND
This case involves a business dispute between former work colleagues. Plaintiffs filed
suit to prevent Defendants’ use of OPS’s confidential and proprietary information to further their
competing business. Defendant Breitigam is a resident of Missouri. Decl. of Ron Breitigam in
Supp. Mot. Dismiss ¶ 3. Defendant Parsons is a resident of Richland, Washington. Decl. of
Herbert F. “Rick” Parsons in Supp. Mot. Dismiss Reply (“Parsons Decl.”) ¶ 3.
Plaintiff OPS is a North Dakota limited liability company. Compl. ¶ 2. Plaintiff Pearse is
a resident of Oregon and a member and manager of OPS. Decl. of Shain Pearse in Supp. Pls.’
Resp. (“Pearse Decl.”) ¶ 2. Pearse states that the primary actions giving rise to the allegations in
the complaint relate to “Parsons’ interference with OPS’[s] suppliers in Nevada, and interference
with OPS’[s] customers and potential customers with headquarters located outside the state of
North Dakota.” Pearse Decl. ¶ 6. Pearse further states that Defendants’ activities regarding the
dispute occurred substantially after they had left OPS and North Dakota. Pearse Decl. ¶ 7.
2 - OPINION & ORDER
Additionally, Pearse stated that Defendants’ actionable activities had taken place in several
states, including Nevada, California, Utah, and Montana. Pearse Decl. ¶ 8.
STANDARD
Under Federal Rule of Civil Procedure 12(b)(2), a defendant may move for dismissal on
the grounds that the court lacks personal jurisdiction. Plaintiff has the burden of showing
personal jurisdiction. Boschetto v. Hansing, 539 F.3d 1011, 1015 (9th Cir. 2008). When the
district court decides a motion without an evidentiary hearing, “the plaintiff need only make a
prima facie showing of the jurisdictional facts” based on the plaintiff’s pleadings and affidavits.
Id. “Uncontroverted allegations in the plaintiff's complaint must be taken as true” and
“[c]onflicts between the parties over statements contained in affidavits must be resolved in the
plaintiff's favor.” Id.
As a general rule, personal jurisdiction is proper if it is permitted by a long-arm statute
and if the exercise of that jurisdiction does not violate federal due process. Pebble Beach Co. v.
Caddy, 453 F.3d 1151, 1154 (9th Cir. 2006). Because Oregon’s long-arm statute confers
jurisdiction to the extent permitted by due process, Gray & Co. v. Firstenberg Machinery Co.,
913 F.2d 758, 760 (9th Cir. 1990), the court proceeds directly to the federal due process analysis.
See Harris Rutsky & Co. Ins. Servs., Inc. v. Bell & Clements Ltd., 328 F.3d 1122, 1129 (9th Cir.
2003) (when a state long-arm statute reaches as far as the Due Process Clause, the court need
only analyze whether the exercise of jurisdiction complies with due process).
The forum state may exercise either general or specific jurisdiction over a nonresident
defendant. Boschetto, 539 F.3d at 1016. If the contacts are insufficient for a court to invoke
general jurisdiction, the court then applies the relevant test to determine whether specific
jurisdiction exists. In re Tuli, 172 F.3d 707, 713 n.5 (9th Cir. 1999).
3 - OPINION & ORDER
DISCUSSION
Plaintiffs have the burden of showing that personal jurisdiction over the Defendants is
proper. As an initial matter, Plaintiffs concede that Defendant Breitigam is not a resident of
Oregon. Pls.’ Resp. 2. Furthermore, Plaintiffs do not present any evidence of Breitigam’s
activities in Oregon to establish general or specific jurisdiction. Therefore, the motion to dismiss
with respect to Defendant Breitigam is granted.
I.
Jurisdiction Over Residents
Plaintiffs concede that Defendant Parsons is not resident of Oregon. Pls.’ Resp. 2. Yet,
Plaintiffs argue that this court has personal jurisdiction because he is domiciled in Oregon. Id. 3.
Plaintiffs rely on Oregon Rule of Civil Procedure 4(a)(2) to argue that this Court has personal
jurisdiction over a claim when it has subject matter jurisdiction and the defendant is domiciled in
Oregon. To be domiciled in Oregon for the purposes of Oregon Rule of Civil Procedure 4(a)(2),
the person must reside and intend to remain permanently in the state, to the exclusion of a
domicile elsewhere. N. Pac. Ins. Co. v. Switzler, 924 P.2d 839, 846 (Or. App. 1996).
Plaintiffs allege no facts to support the conclusion that Parsons is domiciled in Oregon.
Parsons has never maintained an address or owned real property in Oregon and does not plan to
reside in Oregon in the future. Parsons Decl. ¶ 3. Additionally, Parsons does not maintain a bank
account in Oregon, hold any professional licenses in Oregon, or conduct business in Oregon.
Parsons Decl. ¶ 4.
Ironically, if Plaintiffs were correct that Parsons is domiciled in Oregon, this Court would
not have subject matter jurisdiction in this case. This court’s jurisdiction is based on diversity,
which would be destroyed if Plaintiffs and Defendant Parsons were from Oregon.
///
4 - OPINION & ORDER
II.
Jurisdiction Over Nonresidents
Because Defendant Parsons is a nonresident, I must determine whether this Court has
general or specific jurisdiction over Parsons.
A.
General Jurisdiction
General jurisdiction is found where the defendant's contacts with the forum are so
substantial or continuous and systematic that the defendant can expect to be haled into court,
even if the action is unrelated to its contacts. Bancroft & Masters, Inc. v. Augusta Nat’l, Inc., 223
F.3d 1082, 1086 (9th Cir. 2000) (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466
U.S. 408, 415 (1984)). To determine whether a nonresident defendant's contacts are sufficiently
substantial or continuous and systematic, a court considers the “[l]ongevity, continuity, volume,
economic impact, physical presence, and integration into the state's regulatory or economic
markets.” Tuazon v. R.J. Reynolds Tobacco Co., 433 F.3d 1163, 1172 (9th Cir. 2006).
Plaintiffs argue that Parsons’ residence in Oregon supports general jurisdiction over
Defendants. This argument is unpersuasive for two reasons. First, Parsons is not a resident of
Oregon. Plaintiffs’ complaint states Parsons is a resident of Washington. Second, general
jurisdiction is proper when a nonresident defendant has substantial or continuous and systematic
contacts with the forum state. Plaintiffs have not met their burden to show there is general
jurisdiction over Defendants.
B.
Specific Jurisdiction
The Ninth Circuit uses a three-part test to determine if a party has sufficient minimum
contacts to be subject to specific jurisdiction. First, the non-resident defendant must have acted
within or purposefully availed itself of the privileges of the forum. Brayton Purcell LLP v.
Recordon & Recordon, 575 F.3d 981, 985 (9th Cir. 2009). Second, the claim must arise from or
5 - OPINION & ORDER
relate to defendant’s forum-related activities. Id. Third, the exercise of the jurisdiction must be
reasonable. Id. Plaintiff bears the burden on the first two parts of the test. Boschetto, 539 F.3d at
1016. “If the plaintiff establishes both prongs one and two, the defendant must come forward
with a ‘compelling case’ that the exercise of jurisdiction would not be reasonable.” Id. (quoting
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985)). If plaintiff fails at the first step,
“the jurisdictional inquiry ends and the case must be dismissed.” Id.
To satisfy the first prong of the specific jurisdiction test the defendant must have (1)
committed an intentional act (2) expressly aimed at the forum state, and (3) caused harm which
the defendant knows is likely to be suffered in the forum state. Yahoo! Inc. v. La Ligue Contre
Le Racisme, 433 F.3d 1199, 1206 (9th Cir. 2006). This test requires “something more” than mere
foreseeability. Bancroft & Masters, Inc., 223 F.3d at 1087.
The phrase “purposeful availment” is often used as shorthand to include both purposeful
availment and purposeful direction. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797,
802 (9th Cir. 2004). However, “purposeful direction” is more often used in tort cases, and
purposeful availment, in contract cases. Id. “A showing that a defendant purposefully directed
his conduct toward a forum state . . . usually consists of evidence of the defendant’s actions
outside the forum state that are directed at the forum.” Id. at 803; see, e.g., Mattel, Inc. v. MCA
Records, Inc., 296 F.3d 894, 899 (9th Cir. 2002) (finding purposeful direction where defendant
distributed albums from Europe in the forum state).
Here, Plaintiffs’ complaint alleges claims arising from tort law, so purposeful direction is
the appropriate test. Plaintiffs argue that Defendants purposefully availed 1 themselves of the
privileges of the forum, because (1) Parsons resided in Oregon on a continuous basis during all
1
Plaintiffs improperly rely on the purposeful availment test and not the proper purposeful
direction test.
6 - OPINION & ORDER
times relevant to the dispute and (2) OPS was managed in Oregon and had its administrative
activities conducted in the State.
These facts are insufficient to demonstrate purposeful direction. Defendants have not
purposefully directed conduct toward the forum state, because none of Defendants’ actions were
expressly aimed at Oregon. Rather, Plaintiffs’ allegations regarding Defendants’ actions relate to
OPS’s work in North Dakota. Plaintiffs have failed to establish the first prong of specific
personal jurisdiction test.
Because Plaintiffs failed to establish that the first prong of the specific jurisdiction test, I
need not reach the second or third prongs. This Court does not have personal jurisdiction over
the Defendants in this case.
CONCLUSION
Based on the reasons above, Defendants’ motion to dismiss [#9] is GRANTED.
IT IS SO ORDERED.
Dated this _________ day of May, 2013.
______________________________
MARCO HERNANDEZ
United States District Judge
7 - OPINION & ORDER
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?