Ajinomoto North America, Inc. v. Pine Valley, Inc.
Filing
25
Opinion and Order: The Court GRANTS Defendants Motion 7 to Dismiss for Lack of Jurisdiction and Improper Venue or, Alternatively, to Transfer Venue and DISMISSES this matter without prejudice for lack of personal jurisdiction. Signed on 07/08/2014 by Judge Anna J. Brown. See attached 16 page Opinion and Order for full text. (bb)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
AJINOMOTO NORTH AMERICA,
INC.,
Plaintiff,
v.
PINE VALLEY, INC.,
Defendant.
WILLIAM E. GAAR
Buckley Law, P.C.
5300 Meadows Road
Suite 200
Lake Oswego, OR 97035
(503) 620-8900
Attorneys for Plaintiffs
JEFF S. PITZER
Pitzer Law
101 S.W. Main Street
Suite 805
Portland, OR 97204
(503) 227-1477
BRYAN S. GEON
Bryan Geon, Attorney at Law
2705 S.W. Sunset Blvd.
Portland, OR 97239
(503) 380-7016
Attorneys for Defendant
1 - OPINION AND ORDER
3:14-cv-00293-BR
OPINION AND ORDER
BROWN, Judge.
This matter comes before the Court on Defendant Pine Valley,
Inc.’s Motion (#7) to Dismiss or, Alternatively, to Transfer
Venue.
For the reasons that follow, the Court GRANTS Defendant’s
Motion and DISMISSES this matter without prejudice for lack of
personal jurisdiction.
BACKGROUND
On February 19, 2014, Plaintiff filed its Complaint
asserting a claim against Defendant for breach of contract and,
in the alternative, for unjust enrichment.
Plaintiff alleges it
sold certain frozen foods (the Product) to Defendant for resale
to a third party, Trader Joe’s,1 pursuant to ten invoices dated
between August 2013 and September 2013 totaling $405,317.65.
Plaintiff contends each invoice indicated the Product was being
shipped from Plaintiff’s location in Portland, Oregon, to various
locations as directed by Defendant.
Plaintiff asserts Defendant
accepted and resold the Product, but Defendant failed to pay
Plaintiff for the Product in a timely fashion.
Plaintiff contends in its Complaint that this Court has
jurisdiction over this matter on the basis of diversity pursuant
1
Trader Joe’s is not a party to this lawsuit.
2 - OPINION AND ORDER
to 28 U.S.C. § 1332.
Plaintiff also contends this Court has
personal jurisdiction over Defendant pursuant to Oregon Rule of
Civil Procedure 4(A)(4) because Defendant has “engaged in
substantial and not isolated activities with the State of
Oregon.”
Compl. at ¶ 3.
Plaintiff also contends venue is proper
pursuant to 28 U.S.C. § 1391 because Plaintiff’s claims arise
within this judicial district.
On April 4, 2014, Defendant filed its Motion (#7) to Dismiss
for lack of personal jurisdiction and improper venue or, in the
alternative, to transfer venue to the Central District of
California.
STANDARDS
When “a defendant moves to dismiss a complaint for lack of
personal jurisdiction, the plaintiff bears the burden of
demonstrating that jurisdiction is appropriate.”
Schwarzenegger
v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004).
“The court may consider evidence presented in affidavits to
assist it in its determination and may order discovery on the
jurisdictional issues.”
Doe v. Unocal Corp., 248 F.3d 915, 922
(9th Cir. 2001)(citing Data Disc, Inc. v. Sys. Tech. Assoc.,
Inc., 557 F.2d 1280, 1285 (9th Cir. 1977)).
If the court makes a jurisdictional decision based on the
pleadings and affidavits submitted by the parties and does not
3 - OPINION AND ORDER
conduct an evidentiary hearing, “the plaintiff need make only a
prima facie showing of jurisdictional facts to withstand the
motion to dismiss.”
Id. (quoting Ballard v. Savage, 65 F.3d
1495, 1498 (9th Cir. 1995)).
When determining whether the
plaintiff has made a prima facie showing, the court must assume
the truth of the uncontroverted allegations in the complaint.
Ochoa v. J.B. Martin and Sons Farms, Inc., 287 F.3d 1182, 1187
(9th Cir. 2002).
When a court rules on a defendant's motion to
dismiss for lack of personal jurisdiction without holding an
evidentiary hearing, the court must resolve factual conflicts in
the parties' affidavits in favor of the plaintiff.
Harris Rutsky
& Co. Ins. Serv., Inc. v. Bell & Clements LTD, 328 F.3d 1122,
1129 (9th Cir. 2003).
When there is not a federal statute that governs personal
jurisdiction, the district court applies the law of the forum
state.
Boschetto v. Hansing, 539 F.3d 1011, 1015 (9th Cir.
2008)(citing Panavision Int'l L.P. v. Toeppen, 141 F.3d 1316,
1320 (9th Cir. 1998)). “Oregon's long-arm statute confers
jurisdiction to the extent permitted by due process.”
Gray & Co.
v. Firstenberg Mach. Co., 913 F.2d 758, 760 (9th Cir.
1990)(citing Oregon Rule of Civil Procedure 4L).
Accordingly,
“[f]or a court to exercise personal jurisdiction over a
nonresident defendant, that defendant must have at least minimum
contacts with the relevant forum such that the exercise of
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jurisdiction does not offend traditional notions of fair play and
substantial justice.”
Boschetto, 539 F.3d at 1015-16 (citations
and quotations omitted).
A court's personal jurisdiction over a particular defendant
is proper either as “general” or “specific” personal
jurisdiction.
A district court has general jurisdiction over the
defendant if the plaintiff shows the defendant has “substantial”
or “continuous and systematic” contacts with the forum state.
Tuazon v. R.J. Reynolds Tobacco Co., 433 F.3d 1163, 1171 (9th
Cir. 2006)(quoting Helicopteros Nacionales de Colombia, S.A. v.
Hall, 466 U.S. 408, 415 (1984)).
This standard is “fairly high”
and requires the contacts to be the kind that approximate
physical presence within the state.
Gator.Com Corp. v. L.L.
Bean, Inc., 341 F.3d 1072, 1076 (9th Cir. 2003)(internal
citations omitted).
Pertinent factors are whether the defendant
“makes sales, solicits or engages in business, serves the state’s
markets, designates an agent for service of process, holds a
license, has employees, or is incorporated [in the state].”
Id.
at 1076-77 (quotation omitted).
Even if the district court does not have general
jurisdiction over the defendant, the court may have specific
jurisdiction “if the controversy [was] sufficiently related to or
arose out of the defendants’ contacts with the forum.”
Omeluk v.
Langsten Slip & Batbyggeri A/S, 52 F.3d 267, 270 (9th Cir. 1995).
5 - OPINION AND ORDER
See also Beverage Mgmt. Sys., Inc. v. Ott, No. 3:12–CV–2126–SI,
2013 WL 1296083, at *3 (D. Or. 2013).
The Ninth Circuit applies
the following three-part test to determine whether a district
court constitutionally may exercise specific jurisdiction over a
nonresident defendant:
(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.
Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124, 1128
(9th Cir. 2010)(quoting Schwarzenegger, 374 F.3d at 802).
DISCUSSION
Defendant moves this Court to dismiss Plaintiff’s claims on
the ground that the Court lacks personal jurisdiction over
Defendant.
Although Defendant specifically asserted the Court
does not have general jurisdiction because Defendant has not
maintained continuous and systematic contacts with Oregon,
Plaintiff does not argue jurisdiction on that basis.
Instead
Plaintiff asserts specific jurisdiction over Defendant, and
6 - OPINION AND ORDER
Defendant seeks to dismiss on the basis that Defendant has not
had sufficient contacts with Oregon to provide a basis for
specific jurisdiction.
Defendant also argues the Court should
dismiss this action because venue in Oregon is improper.
In the
alternative, Defendant moves the Court to transfer this matter to
the Central District of California.
I.
Personal Jurisdiction
In support of its Motion, Defendant offers the Declarations
of Bryan S. Geon, Tami Sheeler, and Michael Payton.
In support
of its Opposition to Defendant’s Motion, Plaintiff offers the
Declaration of Jeff Sakamoto.
A.
Jurisdictional Facts
As noted, Plaintiff alleges in its Complaint that the Court
has personal jurisdiction over Defendant pursuant to Oregon Rule
of Civil Procedure 4(A)(4) because Defendant has “engaged in
substantial and not isolated activities with the State of
Oregon.”
Compl. at ¶ 3.
Specifically, Plaintiff alleges it
shipped the Product “from Plaintiff’s location in Portland,
Oregon to Defendant’s location or other location dictated by
Defendant.”
Compl. at ¶ 8.
Michael Payton is the President of Pine Valley, Inc.
In his
Declaration he testifies (1) Defendant is incorporated in
California with its principal place of business in Granada Hills,
7 - OPINION AND ORDER
California, in Los Angeles County2 and does not have any other
offices or places of business or any subsidiaries; (2) Defendant
is not authorized or licensed to transact business in Oregon;
(3) Defendant does not have an agent in Oregon for service of
process, does not own or rent any real estate in Oregon, does not
have any Oregon-based facilities, does not have an Oregon bank
account, and does not have any employees or sales agents in
Oregon; and (5) Defendant’s only customer during the last six
years has been Trader Joe’s, which is headquartered in Monrovia,
California.
Payton also testifies Pine Valley previously worked
with an Oregon company named Granpac Incorporated that was
acquired by Ajinomoto Frozen Foods U.S.A., Inc. (AFU) in
approximately 2000.
Payton states when AFU acquired the Oregon
facility, he understood the Product would be produced in plants
across the United States.
Tami Sheeler was the Chief Financial Officer for Pine
Valley, Inc., from 2008 through 2013.
In her Declaration she
testifies the typical process for taking and delivering orders to
Trader Joe’s involved the following steps:
(1) Defendant would
receive a purchase agreement from Trader Joe’s in California
specifying the product, quantity, and preferred delivery point;
(2) Defendant would send a purchase order via email to Plaintiff
2
Defendant’s prior place of business was Reseda,
California.
8 - OPINION AND ORDER
in Palatine, Illinois, for the desired product, quality, and
delivery location; and (3) Plaintiff would respond with an
invoice confirming the information in the purchase order and
directing payment to be sent to Plaintiff in Palatine, Illinois.
Attached to Sheeler’s Declaration are copies of the ten
invoices from Plaintiff to Defendant that are at issue in this
matter.
Each of the invoices has an “AJINOMOTO” logo in large,
bold letters in the upper left-hand corner.
in all capital letters the invoices state:
to:
Underneath the logo
“Remit your payment
Dept. CH 10983, Palatine, IL 60055-0983.”
“Ajinomoto North
America, Inc.” appears on the invoices in the upper right-hand
corner in bold, capital letters, and the following address is
listed in non-bold capital letters:
“7124 N. Marine Dr.,
Portland, OR 97203, Tel: (503) 286-6548, Fax: (310) 540-2456.”
The “ship-to” addresses on the invoices vary from invoice to
invoice, but they are either addresses in Pennsylvania,
California, or Illinois.
At the bottom of each invoice is a list
of seven of Plaintiff’s offices located in Illinois, Oregon, New
Jersey, California, Hawaii, North Carolina, and Iowa.
Defendant also points out that between August and September
2013 (the period relevant to this matter) Plaintiff’s primary
place of business was in New Jersey.
In fact, Plaintiff amended
its Oregon business registration to show a primary place of
business in Oregon merely four days before it filed this lawsuit.
9 - OPINION AND ORDER
See Geon Decl., Exs. C, D.
Jeff Sakamoto is the Vice President and Marketing at AFU,
which Sakomoto characterizes in his Declaration as “a subsidiary
entity affiliated with Plaintiff.”
Sakamoto Decl. at ¶ 5.
Sakomoto testifies in his Declaration that:
1.
Plaintiff was at all relevant times a Delaware
corporation with offices doing business in Oregon, and
Plaintiff’s principal place of business is currently
Portland, Oregon.
2.
In 2000 AFU acquired Plaintiff’s Portland, Oregon,
facility from Granpac Foods Incorporated. Between
approximately 1994 and 2000 Granpac sold the Product to
Trader Joe’s by and through Defendant.
3.
At all relevant times the Product was produced at and
shipped from the Oregon facility. Plaintiff and AFU
have never produced or shipped the Product from any
other location other than the Oregon facility.
4.
In April 2013 all sales functions of AFU were
transferred to Plaintiff. Since that time the Product
has continued to be produced by AFU even though all
sales are made by Plaintiff.
5.
In his capacity as President of Pine Valley, Inc.,
Payton visited the Oregon facility in approximately
2006 to meet with AFU and a representative from Trader
Joe’s.
B.
Specific Jurisdiction
As noted, Plaintiff does not contend the Court has general
jurisdiction over Defendant.
Plaintiff instead alleges
Defendant’s contacts with Oregon are sufficient to establish that
the Court has specific jurisdiction over Defendant.
Defendant,
in turn, contends Plaintiff has not made a sufficient prima facie
showing to satisfy the test for specific jurisdiction.
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The Court
agrees.
As noted, for purposes of determining whether a court has
specific jurisdiction over a defendant, the court must consider
three factors: “(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 be reasonable.”
Brayton, 606 F.3d at 1128.
1.
Purposeful Availment of the Forum.
In the context of contract disputes, the initial
“purposeful availment” prong requires that “the defendant
engage[d] in some form of affirmative conduct allowing or
promoting the transaction of business within the forum state.
The focus upon the affirmative conduct of the defendant is
designed to ensure the defendant is not haled into court as the
result of random, fortuitous or attenuated conduct.”
King, 471 U.S. at 475.
Burger
See also Boschetto, 539 F.3d at 1017.
A
court has specific jurisdiction over a defendant if he
“deliberately engaged in significant activities within a State or
has created continuing obligations between himself and residents
11- OPINION AND ORDER
of the forum.”
Burger King, 471 U.S. at 475-76 (internal
quotations omitted).
See also Boschetto, 539 F.3d at 1017.
The
unilateral actions of a third party in the forum state do not
constitute a defendant’s purposeful availment.
Id.
An individual’s contract with an out-of-state party
alone does not automatically establish sufficient minimum
contacts in the other party’s home forum.
1017 (citing Burger King, 471 U.S. at 478).
Boschetto, 539 F.3d at
“Parties to an
interstate contract who ‘reach out beyond one state and create
continuing relationships and obligations with citizens of another
state are subject to regulation and sanctions in the other State
for the consequences of their activities.’”
Beverage Mgmt., 2013
WL 1296083, at *4 (quoting Burger King, 471 U.S. at 473).
The factors to be considered when determining whether a
contract with a citizen of the forum state is sufficient to
confer personal jurisdiction include prior negotiations,
contemplated future performance, terms of the contract, and the
parties’ course of dealing.
*5.
Beverage Mgmt., 2013 WL 1296083, at
See also Burger King, 471 U.S. at 479 (“[W]e have emphasized
the need for a highly realistic approach that recognizes that a
contract is ordinarily but an intermediate step serving to tie up
prior business negotiations with future consequences which
themselves are the real object of the business
transaction.”)(internal quotation omitted).
12- OPINION AND ORDER
As Judge Simon
observed in Beverage Management:
A defendant whose interstate contract contemplates
significant future consequences in another state has
the requisite continuing relationship with the parties
to the contract in that state. Similarly, a defendant
who created continuing obligations to residents of
another state has satisfied the “purposeful availment”
requirement. Conversely, a continuing relationship is
not established by a one-time contract for the sale of
a good that involved the forum state only because that
is where the purchaser happened to reside, but
otherwise created no substantial connection or ongoing
obligations there.
2013 WL 1296083, at *4 (citations and quotations omitted).
Defendant contends it has not had sufficient contacts
with the forum to meet the first prong of the specificjurisdiction test for purposeful availment because Defendant did
not have a presence in Oregon and did not undertake activities
directed to Oregon.
Defendant argues it was dealing with
Plaintiff, a multinational corporation, and Defendant did not
know, nor did Plaintiff point out, at any time during that course
of dealing that Defendant was actually directing its activities
toward Oregon.
As noted, this case arises out of disputes
related to ten invoices sent from Plaintiff to Defendant.
Defendant argues the fact that these invoices include an address
in Portland, Oregon, is not of any consequence because the
invoice also displays seven different addresses in seven
different states and the invoices directed Defendant to remit
payment to Plaintiff to an address in Illinois.
According to Plaintiff, however, it is sufficient for
13- OPINION AND ORDER
purposes of the purposeful-availment prong that Defendant knew or
should have known that the Product was shipped to a third party
from the Oregon facility.
Plaintiff also argues the Illinois
address to which the invoices indicate payment is to be remitted
is “little more then [sic] a ‘lock box’ that Plaintiff uses to
process payments from its customers.”
Pl.’s Resp. at 4.
As
Defendant points out, however, that fact is not apparent on the
face of the invoices nor can Plaintiff fairly expect its
customers to guess which address listed on the invoice might
subject the buyer to personal jurisdiction in another state.
Moreover, the fact that the Product was produced at an
Oregon facility, which, in fact, is operated by an entity related
to Plaintiff rather than by Plaintiff itself, is not a sufficient
basis to conclude that Defendant “engage[d] in some form of
affirmative conduct allowing or promoting the transaction of
business” within Oregon.
It is undisputed that the transactions
at issue occurred at a time when Plaintiff had its principal
place of business in New Jersey and Defendant’s communications
with Plaintiff were directed to Plaintiff’s offices in Illinois.
The fact that Defendant’s president met with an AFU
representative at the Oregon facility in 2006 is also
insufficient to establish that Defendant purposefully availed
itself of the privilege of conducting activities in Oregon
through the transactions that occurred in 2013.
14- OPINION AND ORDER
Accordingly, the
Court concludes the record of Defendant’s conduct is insufficient
to constitute purposeful availment of this forum.
2.
Arising out of or Relating to Defendant’s Forum
Contacts.
The Ninth Circuit has adopted the “but for” test to
determine the “arising out of” requirement.
Gray & Co., 913 F.2d
at 761 (citing Shute v. Carnival Cruise Lines, 897 F.2d 377, 38586 (9th Cir. 1990)).
The Court notes Plaintiff does not identify
any activity of Defendant in Oregon that gave rise to Plaintiff’s
alleged injury.
Accordingly, the Court concludes on this record that
Plaintiff’s claims against Defendant do not arise out of nor are
they related to any activity between Plaintiff and Defendant in
Oregon.
C.
Reasonable and Fair to Assert Jurisdiction.
Because the Court concludes Plaintiff has not met its burden
to satisfy the first two factors required to establish specific
jurisdiction over Defendant in Oregon, the Court need not address
the third factor.
II.
See Boschetto, 539 F.3d at 1016.
Venue
In light of the fact that the Court concludes it lacks
personal jurisdiction over Defendant, it follows that the Court
does not have the authority to address Defendant’s requests to
dismiss or transfer venue of this case dismissed on the grounds
15- OPINION AND ORDER
that venue in Oregon is improper.
CONCLUSION
For these reasons, the Court GRANTS Defendant’s Motion (#7)
to Dismiss for Lack of Jurisdiction and Improper Venue or,
Alternatively, to Transfer Venue and DISMISSES this matter
without prejudice for lack of personal jurisdiction.
IT IS SO ORDERED.
DATED this 8th day of July, 2014.
/s/ Anna J. Brown
____________________________
ANNA J. BROWN
United States District Judge
16- OPINION AND ORDER
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