The opinion of the court was delivered by: PHYLLIS HAMILTON, District Judge
ORDER GRANTING MOTION TO DISMISS FOR LACK OF PERSONAL
The motion of defendant Forward Electronics Co., Ltd., to
dismiss for lack of personal jurisdiction or for improper venue
came on for hearing before this court on November 30, 2005.
Plaintiff appeared by its counsel Brian C. Rocca, and defendant
appeared by its counsel Joseph S. Wu and Craig Pinedo. Having
read the parties' papers and carefully considered their arguments
and the relevant legal authority, and good cause appearing, the
court hereby GRANTS the motion as follows and for the reasons
stated at the hearing.
This is an action alleging breach of warranty and seeking
indemnity and declaratory relief. Plaintiff BenQ America
Corporation ("BenQ" America) is a California corporation.
Defendant Forward Electronics Co., Ltd. ("Forward") is a
Taiwanese corporation, with its principal place of business in
Taiwan. BenQ America's parent corporation, BenQ Corporation ("BenQ Corp." not a party to this action), is also
a Taiwanese corporation. BenQ Corp. purchased electronic
components (the "tuners") from Forward in Taiwan. Those
components, which contain integrated circuit chips, were
incorporated into products such as televisions and color monitors
that were then imported into the United States for sale by BenQ
America. On February 24, 2005, Thomson Licensing S.A. ("Thomson")
filed a complaint with the U.S. International Trade Commission
("ITC") against BenQ,*fn1 alleging that BenQ had infringed
five of Thompson's patents. One of those patents involves the
integrated circuit chips that Forward incorporated into its
On March 9, 2005, Thomson filed a patent infringement suit in
this district against BenQ Corp., BenQ America, BenQ Optronics
(Suzhou) Co. Ltd, and Au Optronics Corporation (case No.
C-05-1005 (JSW)). The patent infringement suit was reportedly
based on the same allegations and patents as the ITC
investigation action. The parties requested a stay of the
infringement action pursuant to 28 U.S.C. § 1659(a) (civil action
involving parties that are also parties to proceeding before ITC
may be stayed), and the request was granted on May 4, 2005. The
parties apparently reached an agreement to settle the dispute
before the ITC, and on December 8, 2005, they filed a stipulated
notice of dismissal of the patent infringement suit.
Meanwhile, on June 4, 2005, BenQ America filed the present
action. In the complaint, BenQ America alleges that in a June 10,
2003, contract, BenQ Corp. and Forward agreed that Forward would
defend BenQ Corp. against any claims of infringement connected
with products furnished by Forward, and would indemnify BenQ
Corp. for any damages and costs awarded in any litigation
resulting from any such claim, provided that BenQ Corp. notified
Forward in writing within 30 days of the pendency of any such
claim. BenQ America alleges (on information and belief) that
Forward was aware that BenQ America is a wholly owned subsidiary
to BenQ Corp.; that BenQ Corp. sells its products through BenQ
America in California; that the June 10, 2003, contract
indemnifies BenQ, which includes BenQ corporation and its subsidiaries, including BenQ America; and
that BenQ America was an intended beneficiary of the
BenQ America asserts that BenQ Corp. notified Forward of the
pendency of the Thomson action on March 8, 2005, and that Forward
notified BenQ Corp. on March 23, 2005, that it would not defend
or indemnify BenQ Corp. or BenQ America in connection with the
civil action or the ITC proceedings brought by Thomson. On May
30, 2005, BenQ America advised Forward that Forward was in breach
of the indemnification agreement.
BenQ America then filed the present action, alleging causes of
action for express contractual indemnity, equitable or implied
indemnity, breach of warranty against infringement (UCC § 2-312),
and declaratory relief. Forward now seeks an order dismissing the
complaint for lack of personal jurisdiction. In the alternative,
Forward contends that the parties agreed in a November 12, 2003,
contract that any disputes arising from the sale of Forward's
tuners would be resolved by the Taipei District Court, in Taipei,
Taiwan, and that the complaint should be dismissed for improper
The court should generally decide issues relating to personal
jurisdiction before examining venue. "The question of personal
jurisdiction, which goes to the court's power to exercise control
over the parties, is typically decided in advance of venue, which
is primarily a matter of choosing a convenient forum." Leroy v.
Great Western United Corp., 443 U.S. 173, 180 (1979).
1. Dismissal for lack of personal jurisdiction.
Federal courts sitting in California may exercise personal
jurisdiction over any nonresident to the extent permitted by due
process. Harris Rutsky & Co. Ins. Serv., Inc. v. Bell &
Clements, Ltd., 328 F.3d 1122, 1129 (9th Cir. 2003) (citing Cal.
Civ. P. Code § 410.10). Absent one of the traditional bases for
personal jurisdiction (presence, domicile, or consent), due
process requires that the defendant have sufficient minimum
contacts with the forum state, and that maintenance of the suit
not "offend traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Washington, 326 U.S. 310, 316
The extent to which a federal court can exercise personal
jurisdiction will depend on the nature and quality of presence,
or the nature and quality of the defendant's contacts with the
forum state. Perkins v. Benguet Consolidated Mining Co.,
342 U.S. 437, 444-45 & n. 5 (1952). If a defendant is domiciled in
the forum state, or if its activities there are "substantial,
continuous, and systematic," a federal court can (if permitted by
the state's "long-arm" statute) exercise jurisdiction as to any
cause of action, even if unrelated to the defendant's activities
within the state. Id. at 445. This is termed "general
If, however, a non-resident's contacts with the forum state are
not sufficiently "continuous and systematic" for general
jurisdiction, that defendant may still be subject to "specific
jurisdiction" on claims related to its activities or contacts in
the forum. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473-76
(1985). This "limited" or "specific" personal jurisdiction
analysis involves an evaluation of the defendant's contact with
the forum state, "to determine whether the `defendant's conduct
and connection with the forum state are such that he should
reasonably anticipate being haled into court there.'" Core-Vent
Corp. v. Nobel Indus. AB, 11 F.3d 1482, 1485 (9th Cir. 1993)
(quoting Worldwide Volkswagen Corp. v. Woodson, 444 U.S. 286,
297 (1980)); see also Hanson v. Denckla, 357 U.S. 235, 253-54
(1958); Ballard v. Savage, 65 F.3d 1495, 1500 (9th Cir. 1995).
When a defendant moves to dismiss a complaint for lack of
personal jurisdiction, the plaintiff bears the burden of
demonstrating that jurisdiction is proper. Rio Properties, Inc.
v. Rio Int'l Interlink, 284 F.3d 1007, 1019 (9th Cir. 2002).
Where the motion is based on written materials rather than on an
evidentiary hearing, the plaintiff need only make a prima facie
showing of jurisdictional facts. Schwarzenegger v. Fred Martin
Motor Co., 374 F.3d 797, 800 (9th Cir. 2004). In such cases, the
court need only inquire into whether the plaintiff's pleadings
and affidavits make the required prima facie showing. Id.
Although the plaintiff cannot rest on the bare allegations of the
complaint, uncontroverted allegations in the complaint must be
taken as true. Id. Conflicts between the parties over
statements contained in affidavits must be resolved in the
plaintiff's favor. Id. 2. Dismissals for improper venue
Parties may by contract designate a forum in which any
litigation is to take place. Litigation commenced elsewhere may
be subject to dismissal for improper venue. Carnival Cruise
Lines, Inc. v. Shute, 499 U.S. 585, 595 (1991); see also
Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 324 (9th Cir.
1996) (forum-selection clause provides basis for Rule 12(b)(3)
motion to dismiss for improper venue)
Under Rule 12(b)(3), a court can consider facts outside the
pleadings and need not take the pleadings as true. Thus, the
court can consider reasons for denying enforcement of a
forum-selection clause e.g., fraud, undue influence,
imbalance in bargaining power, or serious inconvenience in
litigating in selected forum. See Argueta, 87 F.3d at 324.
The court must draw all reasonable inferences and resolve all
factual conflicts in favor of the party seeking to avoid
enforcement of the ...