Christman v. BE'S Refreshments Inc

Filing 18

ORDER granting #7 Motion to Dismiss and Alternatively Motion to Transfer Venue. The Clerk shall transfer this case to the United States District Court for the Eastern District of Wisconsin as soon as practicable and close this matter. Signed by Judge John J Tuchi on 3/4/25. (DXD) [Transferred from azd on 3/5/2025.]

1

WO

2
3
4
5
6

IN THE UNITED STATES DISTRICT COURT

7

FOR THE DISTRICT OF ARIZONA

8
9

Richard R. Christman,

10

Plaintiff,

11

v.

12

BE’s Refreshments,

13

No. CV-24-03189-PHX-JJT
ORDER

Defendant.

14
15

At issue is Defendant BE’s Refreshments’ Motion to Dismiss and Alternatively

16

Motion to Transfer Venue (Doc. 7, Mot.), to which Plaintiff Richard R. Christman filed a

17

Response (Doc. 15, Resp.), and Defendant filed a Reply (Doc. 17, Reply). The Court has

18

reviewed the parties’ briefs and finds these matters appropriate for decision without oral

19

argument. See LRCiv 7.2(f).

20

Plaintiff is an Arizona resident and business acquisition consultant. (Doc. 1 at 9–22,

21

Compl. at 1.) Defendant is a Wisconsin-based corporation that provides refreshment and

22

coffee services throughout the Northeast Wisconsin area. (Doc. 17-1, Eggener Decl. at 1.)

23

In his Complaint, Plaintiff raises claims of Breach of Contract; Breach of the Implied

24

Covenant of Good Faith and Fair Dealing; Fraud – Promise without Intent to Perform;

25

Declaratory

26

Misrepresentation. (Compl. at 3–11.) Defendant has moved to dismiss for lack of personal

27

jurisdiction and improper venue pursuant to Federal Rules of Civil Procedure 12(b)(2) and

28

12(b)(3), respectively. (Mot. at 1.) In the alternative, Defendant has requested that the

Relief;

Unjust

Enrichment;

Promissory

Estoppel;

and

Negligent

1

Court transfer this action to the United States District Court for the Eastern District of

2

Wisconsin pursuant to 28 U.S.C. § 1404 or § 1406. (Mot. at 1.)

3

I.

LEGAL STANDARD

4

A.

5

For a federal court to adjudicate a matter, it must have jurisdiction over the parties.

6

Ins. Corp. of Ir. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 701 (1982). The party

7

bringing the action has the burden of establishing that personal jurisdiction exists.

8

Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); Data Disc, Inc. v.

9

Sys. Tech. Assocs., Inc., 557 F.2d 1280, 1285 (9th Cir. 1977). When a defendant moves,

10

prior to trial, to dismiss a complaint for lack of personal jurisdiction, the plaintiff must

11

“‘come forward with facts, by affidavit or otherwise, supporting personal jurisdiction.’”

12

Scott v. Breeland, 792 F.2d 925, 927 (9th Cir. 1986) (quoting Amba Mktg. Sys., Inc. v.

13

Jobar Int’l, Inc., 551 F.2d 784, 787 (9th Cir. 1977)).

Personal Jurisdiction

14

Because there is no statutory method for resolving the question of personal

15

jurisdiction, “the mode of determination is left to the trial court.” Data Disc, 557 F.2d at

16

1285. Where, as here, a court resolves the question of personal jurisdiction upon motions

17

and supporting documents, the plaintiff “must make only a prima facie showing of

18

jurisdictional facts through the submitted materials in order to avoid a defendant’s motion

19

to dismiss.” Id. In determining whether the plaintiff has met that burden, the

20

“uncontroverted allegations in [the plaintiff’s] complaint must be taken as true, and

21

conflicts between the facts contained in the parties’ affidavits must be resolved in [the

22

plaintiff’s] favor.” Rio Props., Inc. v. Rio Int’l Interlink, 284 F.3d 1007, 1019 (9th Cir.

23

2002).

24

To establish personal jurisdiction over a nonresident defendant, a plaintiff must

25

show that the forum state’s long-arm statute confers jurisdiction over the defendant and

26

that the exercise of jurisdiction comports with constitutional principles of due process.

27

Omeluk v. Langsten Slip & Batbyggeri A/S, 52 F.3d 267, 269 (9th Cir. 1995). Arizona’s

28

long-arm statute allows the exercise of personal jurisdiction to the same extent as the

-2-

1

United States Constitution. See Ariz. R. Civ. P. 4.2(a); Cybersell v. Cybersell, 130 F.3d

2

414, 416 (9th Cir. 1997); A. Uberti & C. v. Leonardo, 892 P.2d 1354, 1358 (Ariz. 1995)

3

(stating that under Rule 4.2(a), “Arizona will exert personal jurisdiction over a nonresident

4

litigant to the maximum extent allowed by the federal constitution”). Thus, a court in

5

Arizona may exercise personal jurisdiction over a nonresident defendant so long as doing

6

so accords with constitutional principles of due process. Cybersell, 130 F.3d at 416.

7

Due process requires that a nonresident defendant have sufficient minimum contacts

8

with the forum state so that “maintenance of the suit does not offend ‘traditional notions of

9

fair play and substantial justice.’” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)

10

(quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)); see also Data Disc, 557 F.2d at

11

1287. Courts recognize two bases for personal jurisdiction within the confines of due

12

process: “(1) ‘general jurisdiction’ which arises when a defendant’s contacts with the

13

forum state are so pervasive as to justify the exercise of jurisdiction over the defendant in

14

all matters; and (2) ‘specific jurisdiction’ which arises out of the defendant’s contacts with

15

the forum state giving rise to the subject litigation.” Birder v. Jockey’s Guild, Inc., 444 F.

16

Supp. 2d 1005, 1008 (C.D. Cal. 2006).

17

B.

Venue

18

Under 28 U.S.C. § 1391, except as otherwise provided by law, venue is proper in

19

“(1) a judicial district in which any defendant resides, if all defendants are residents of the

20

State in which the district is located, (2) a judicial district in which a substantial part of the

21

events or omissions giving rise to the claim occurred, or a substantial part of property that

22

is the subject of the action is situated, or (3) if there is no district in which an action may

23

otherwise be brought as provided in this section, any judicial district in which any

24

defendant is subject to the court’s personal jurisdiction with respect to such action.”

25

28 U.S.C. § 1391(a)–(b). When venue is improper, the court shall dismiss the action or, in

26

the interests of justice, may transfer such case to any district or division in which it could

27

have been brought. 28 U.S.C. § 1406(a).

28

-3-

1

C.

2

A party may amend a pleading once as a matter of course within 21 days after

3

serving it, or within 21 days of service of, among others, a Rule 12(b)(2) motion. Fed. R.

4

Civ. P. 15(a). In all other circumstances, absent the opposing party’s written consent, a

5

party must seek leave to amend from the court. Fed. R. Civ. P. 15(a)(2). Although the

6

decision whether to grant or deny a motion to amend is within the trial court’s discretion,

7

“Rule 15(a) declares that leave to amend shall be freely given when justice so requires.”

8

Foman v. Davis, 371 U.S. 178, 182 (1962) (citation and internal quotation marks omitted).

9

However, the policy in favor of allowing amendments is subject to limitations. After

10

a defendant files a responsive pleading, leave to amend is not appropriate if the

11

“amendment would cause prejudice to the opposing party, is sought in bad faith, is futile,

12

or creates undue delay.” Madeja v. Olympic Packers, 310 F.3d 628, 636 (9th Cir. 2002)

13

(citation and internal quotation marks omitted). “A district court does not err in denying

14

leave to amend . . . where the amended complaint would be subject to dismissal.” Saul v.

15

United States, 928 F.2d 829, 843 (9th Cir. 1991). Such futility can, by itself, justify denial

16

of a motion for leave to amend. Nunes v. Ashcroft, 375 F.3d 805, 808 (9th Cir. 2003).

17

II.

Fed. R. Civ. P. 15

ANALYSIS

18

A.

19

Defendant first argues that it is not subject to general personal jurisdiction in

20

Arizona. (Mot. at 4–5.) Defendant contends that “Plaintiff has not alleged any . . .

21

continuous and systematic activities in Arizona” to meet general jurisdiction standards and

22

that it “does not conduct any business in Arizona.” (Mot. at 4–5.) It asserts that the

23

Complaint contains no allegations of such activity, and any claims made in Plaintiff’s

24

Response lack affidavit support. (Reply at 3.) Conversely, Plaintiff alleges that “BE’s

25

operates nationwide and . . . does business with Arizona-based customers” such that

26

Defendant is rendered “essentially at home” in Arizona. (Resp. at 2, 4.)

General Jurisdiction

27

General jurisdiction exists where a defendant’s activities within a state are “so

28

substantial” or “continuous and systematic” that they essentially “render the corporation at

-4-

1

home in that State.” Daimler AG v. Bauman, 571 U.S. 117, 139 n.20 (2014). However, the

2

inquiry is not based “solely on the magnitude of the defendant’s in-state contacts.” Id.

3

Instead, general jurisdiction “calls for an appraisal of a corporation’s activities in their

4

entirety.” Id. Ultimately, “a corporation that operates in many places can scarcely be

5

deemed at home in all of them.” Id.

6

Plaintiff’s assertions regarding Defendant’s activities in Arizona are conclusory and

7

unsupported by the facts. The Complaint contains no specific allegations of Defendant’s

8

continuous and systematic activities in Arizona, and Plaintiff has failed to submit any

9

affidavits or other evidence to substantiate his claims of Defendant’s contacts when

10

challenged by Defendant. For its part, Defendant has submitted a sworn Declaration from

11

its owner, Joe Eggener, establishing that BE’s is a Wisconsin corporation that conducts no

12

business in Arizona, maintains no physical presence in Arizona, and has no employees or

13

property in the State. (Eggener Decl. at 1–2.) Eggener further affirms that BE’s’ franchise

14

agreement restricts its operations to Wisconsin and Upper Michigan. (Eggener Decl. at 1–

15

2.)

16

Moreover, Plaintiff’s bare allegations that BE’s conducts business with Arizona-

17

headquartered Republic, PetSmart, and Carvana (see Resp. at 2, 4) cannot satisfy general

18

jurisdiction’s exacting standard. Even if true, such limited business relationships would not

19

render BE’s “essentially at home” in Arizona. The paradigmatic locations where general

20

jurisdiction is appropriate over a corporation are its place of incorporation and its principal

21

place of business. Daimler, 571 U.S. at 137. “Only in an ‘exceptional case’ will general

22

jurisdiction be available anywhere else.” Martinez v. Aero Caribbean, 764 F.3d 1062, 1070

23

(9th Cir. 2014).

24

Here, BE’s is incorporated in Wisconsin with its principal place of business in Green

25

Bay, Wisconsin. (Mot. at 8.) Plaintiff has failed to demonstrate that this is an “exceptional

26

case” warranting the exercise of general jurisdiction beyond the paradigmatic forums. The

27

record before the Court falls far short of establishing the substantial, continuous, and

28

-5-

1

systematic contacts necessary to render BE’s “at home” in Arizona. Therefore, the Court

2

lacks general jurisdiction over Defendant.

3

B.

4

Defendant also asserts that it is not subject to specific jurisdiction in Arizona. (Mot.

5

at 5–8.) Defendant contends that its only alleged contact with Arizona related to this case

6

was a single phone call with Plaintiff, (Mot. at 6), and that BE’s was unaware at the time

7

that Plaintiff was located in Arizona. (Reply at 5.) In response, Plaintiff contends that BE’s

8

purposefully availed itself of the privilege of conducting activities in Arizona by knowingly

9

reaching out to Plaintiff in Arizona to solicit his consulting services. (Resp. at 6–7.)

10

Plaintiff also states that his claims do, in fact, arise from BE’s forum-related activities

11

because BE’s knew Plaintiff would perform the work from Arizona and communicated

12

with him there throughout the engagement. (Resp. at 7–8.)

Specific Jurisdiction

13

Whether a court may exercise specific jurisdiction in a given case turns on the extent

14

of the defendant’s contact with the forum and the degree to which the plaintiff’s suit is

15

related to the defendant’s contacts. Yahoo! Inc. v. La Ligue Contre Le Racisme et

16

L’Antisemitisme, 433 F.3d 1199, 1210 (9th Cir. 2006). The Ninth Circuit uses the following

17

approach to determine whether a court may exercise specific jurisdiction over a nonresident

18

defendant: (1) the nonresident defendant must do some act in or consummate some

19

transaction with the forum, or perform some act by which it purposefully avails itself of

20

the privilege of conducting activities in the forum; (2) the claim must be one which arises

21

out of or results from the defendant’s forum-related activities; and (3) the exercise of

22

jurisdiction must be reasonable. Data Disc, 557 F.2d at 1287.

23

The plaintiff bears the burden of establishing the first two requirements of the test.

24

Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004). If the

25

plaintiff establishes the first two requirements, the burden shifts to the defendant to

26

establish that the third requirement is not met. Mavrix Photo, Inc. v. Brand Techs., Inc.,

27

647 F.3d 1218, 1228 (9th Cir. 2011). All three requirements must be met for the exercise

28

of jurisdiction to comport with principles of due process. Omeluk, 52 F.3d at 270.

-6-

1

To meet the first element—that the defendant purposefully directed activities at the

2

forum state—the plaintiff must show the defendant “either (1) ‘purposefully availed’

3

himself of the privilege of conducting activities in the forum, or (2) ‘purposefully directed’

4

his activities towards the forum.” Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1155 (9th

5

Cir. 2006) (quoting Schwarzenegger, 374 F.3d at 802). The purposeful availment analysis

6

is most commonly applied in suits arising from contract. Schwarzenegger, 374 F.3d at 802.

7

Because this case involves claims arising from an alleged oral consulting agreement

8

between the parties, purposeful availment is the appropriate analytical framework. Id.

9

A showing that a defendant purposefully availed himself of the privilege of doing

10

business in a forum state typically involves evidence of the defendant’s actions in the

11

forum, such as executing or performing a contract there. By taking such actions, a

12

defendant “purposefully avails itself of the privilege of conducting activities within the

13

forum State, thus invoking the benefits and protections of its laws.” Hanson v. Denckla,

14

357 U.S. 235, 253 (1958). In return for these “benefits and protections,” a defendant

15

must—as a quid pro quo— “submit to the burdens of litigation in that forum.” Burger King

16

v. Rudzewicz, 471 U.S. 462, 476 (1985).

17

In support of his arguments, Plaintiff cites Planning Group of Scottsdale, LLC v.

18

Lake Mathews Mineral Properties, Ltd., 246 P.3d 343 (Ariz. 2011). (See Resp. at 6–8.) But

19

Plaintiff fails to recognize the crucial distinctions between that case and the present

20

circumstances. In Planning Group, the Supreme Court of Arizona rejected the Ninth

21

Circuit’s bifurcated purposeful availment–purposeful direction framework that is binding

22

upon this Court. Plan. Grp. of Scottsdale, 246 P.3d at 348. Although the court determined

23

that the defendants’ contacts amounted to both purposeful direction and purposeful

24

availment, id. at 351, the factual scenario in that case was substantially different from the

25

one before this Court. There, the defendants directed extensive communications to Arizona

26

residents through phone calls, emails, faxes, and letters specifically aimed at persuading

27

Arizona investors to provide funds for the defendants’ California mining project. Id. at 349.

28

-7-

1

The defendants knew they were dealing with Arizona residents and deliberately targeted

2

them to obtain investment capital from Arizona. Id.

3

In contrast, the record demonstrates that BE’s made only minimal affirmative

4

contacts with a person who happened to be located in Arizona—two emails and a phone

5

call. (Compl. at 2; Reply Ex. 3.) Moreover, according to the uncontroverted Eggener

6

Declaration, BE’s was unaware that Plaintiff even resided in Arizona during these

7

interactions, particularly because Plaintiff’s phone number displayed a California area

8

code. (Compl. at 1; Eggener Decl. at 3.) Furthermore, unlike in Planning Group, where the

9

defendants actively sought funds from Arizona investors that formed the basis for that

10

court’s finding of purposeful availment, the subject matter of the alleged consulting

11

agreement here concerned the acquisition of one Wisconsin company by another

12

Wisconsin company. (Mot. at 7.) The agreement had no substantive connection to Arizona

13

beyond the mere coincidence of Plaintiff’s residence.

14

Accordingly, Plaintiff has failed to establish that Defendant purposefully availed

15

itself of the privilege of conducting activities in Arizona. The United States Supreme Court

16

has made clear that “the plaintiff cannot be the only link between the defendant and the

17

forum.” Walden v. Fiore, 571 U.S. 277, 285 (2014). Rather, courts must look to “the

18

defendant’s contacts with the forum State itself, not the defendant’s contacts with persons

19

who reside there.” Id. This case presents precisely the situation Walden cautions against.

20

The relevant transaction was centered in Wisconsin, and Plaintiff’s unilateral decision to

21

perform services from Arizona cannot create the necessary minimum contacts for personal

22

jurisdiction. See Burger King, 471 U.S. at 478 (“If the question is whether an individual’s

23

contract with an out-of-state party alone can automatically establish sufficient minimum

24

contacts in the other party’s home forum, we believe the answer clearly is that it cannot.”

25

(emphasis in original)).

26

Furthermore, even if Plaintiff could satisfy the first prong of the Ninth Circuit’s

27

specific jurisdiction test, the claims do not arise out of or relate to any forum-related

28

activities by BE’s. The alleged breach—failure to pay the agreed commission—occurred

-8-

1

in Wisconsin, not Arizona. The fact that Plaintiff felt the economic impact of this alleged

2

breach in Arizona is insufficient to establish specific jurisdiction. See Picot v. Weston, 780

3

F.3d 1206, 1215 (9th Cir. 2015) (noting that where the plaintiff’s alleged injury would

4

follow him “wherever he might choose to live or travel,” the effects are “not connected to

5

the forum State in a way that makes those effects a proper basis for jurisdiction” (citation

6

and internal quotation marks omitted)).

7

Thus, Plaintiff has failed to meet his burden to demonstrate that the Court has

8

personal jurisdiction over Defendant. See In re W. States Wholesale Nat. Gas Antitrust

9

Litig., 715 F.3d 716, 742 (9th Cir. 2013) (“If any of the three requirements is not satisfied,

10

jurisdiction in the forum would deprive the defendant of due process of law.” (quoting

11

Omeluk, 52 F.3d at 270 (9th Cir.1995))). As such, the Court declines to address the other

12

basis for dismissal in Defendant’s Motion.

13

C.

14

As an alternative to dismissal, Defendant asks to transfer this case to the Eastern

15

District of Wisconsin. (Mot. at 1, 8.) Because the Court lacks personal jurisdiction over

16

Defendant but this case could have been brought in the Eastern District of Wisconsin, the

17

Court will transfer this case to the Eastern District of Wisconsin in the interests of justice

18

pursuant to 28 U.S.C. § 1406(a).

Venue

19

D.

20

As an alternative to dismissal, Plaintiff requests leave to amend his Complaint to

21

add factual allegations in support of this Court’s personal jurisdiction over Defendant.

22

(Resp. at 6.) Here, amendment would be futile because Plaintiff already had the opportunity

23

to provide additional factual support for his jurisdictional claims in his Response brief—as

24

was his burden—and failed to do so. At this point, the Court must presume that the relevant

25

facts and evidence necessary to determine personal jurisdiction are already before it, and

26

Plaintiff has not identified any new material facts that would change the Court’s analysis.

27

In short, the fundamental basis for the Court’s ruling—a lack of sufficient contacts

28

between Defendant and Arizona—is not a defect that can be remedied through additional

Leave to Amend

-9-

1

pleading. The jurisdictional analysis hinges on Defendant’s actual business activities and

2

connections to Arizona, not merely Plaintiff’s preference to litigate in this forum. Because

3

Plaintiff has failed to show that Defendant is subject to personal jurisdiction in Arizona,

4

any amendment attempting to revive jurisdiction would be futile. Accordingly, the Court

5

will deny Plaintiff’s request for leave to amend.

6
7

IT IS THEREFORE ORDERED granting Defendant BE’s Refreshments’ Motion
to Dismiss and Alternatively Motion to Transfer Venue (Doc. 7).

8

IT IS FURTHER ORDERED directing the Clerk of Court to transfer this case to

9

the United States District Court for the Eastern District of Wisconsin as soon as practicable

10

and close this matter.

11

Dated this 4th day of March, 2025.

12
13

Honorable John J. Tuchi
United States District Judge

14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

- 10 -