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Moser v. Encore Capital Group

March 29, 2007

TIMOTHY W. MOSER, AN INDIVIDUAL,, PLAINTIFF,
v.
ENCORE CAPITAL GROUP, INC., A DELAWARE CORPORATION; CARL C. GREGORY, III, AN INDIVIDUAL; BARRY BARKLEY, AN INDIVIDUAL; BRANDON BLACK, AN INDIVIDUAL, ROBERT M. WHYTE, AN INDIVIDUAL; ALEXANDER LEMOND, AN INDIVIDUAL; ERIC D. KOGAN, AN INDIVIDUAL; BRIAN SCHORR, AN INDIVIDUAL, DEFENDANTS.



The opinion of the court was delivered by: Honorable Larry Alan Burns United States District Judge

ORDER DENYING MOTIONS BY DEFENDANTS LEMOND, KOGAN, AND SCHORRTO DISMISS FOR LACK OF PERSONAL JURISDICTION, AND FOR FAILURE TO STATE A CLAIM

[Dkt. Nos. 88, 91, 101, 119.]

Defendants Lemond, Kogan, and Schorr have filed motions to dismiss for lack of personal jurisdiction (Defendants Lemond, Kogan, and Schorr), and for failure to state a claim (Defendant Schorr only). Plaintiff has requested leave to conduct additional discovery to locate evidence this Court has personal jurisdiction over these Defendants.

Defendants Kogan and Lemond, directors of Defendant Encore Capital Group, Inc. ("Encore"), represented by the same counsel, contend their contacts with the forum state, California, give rise to neither general nor specific jurisdiction. Defendant Schorr, general counsel and a vice president of Triarc Companies, Inc. ("Triarc"),*fn1 moved separately to dismiss, both for lack of personal jurisdiction, and for failure to state a claim. Encore's principal place of business is in San Diego, California.

Plaintiff has filed an ex parte application for leave to conduct jurisdictional discovery. He has also filed an ex parte application for leave to file a sur-reply to the replies of Defendants Lemond, Kogan, and Schorr.

I. Defendant Schorr's Motion to Dismiss for Failure to State a Claim

Defendant Schorr contends Plaintiff has failed to state a claim against him. He points out he is general counsel and an officer of Triarc, and that Triarc is a shareholder in Encore; thus, his connections with Encore are more attenuated than the other Defendants'.Defendant Schorr contends the corporate structure of Triarc and Encore protects him from liability for actions taken in his official capacity unless he actively participated in or directed corporate wrongs. (Memo of P & A in Supp. of Defendant Schorr's Mot. ("Schorr Memo") at 10:10--11:2, 11:18--19.) He further contends the allegations against him are merely conclusory and unsupported by any specific factual allegations. (Id. at 11:3--17.)

Plaintiff alleges the Court has already decided this issue. (Opp'n to Mot. by Schorr to Dismiss, at 7:18--24 (citing Order of May 1, 2006, at 18:7--9).) However, the Court's previous order decided only the issue of whether Plaintiff had adequately pleaded his claim for defamation. (Order at 18:7--9.) The motion the Court was ruling on had contended the FAC's allegations of what Defendants published and how they communicated the information failed to put them on notice as to what was alleged against them. (Memo in Supp. of Mot. to Dismiss, filed Mar. 4, 2005, at 15:7--16:4.)

Here, Defendant Schorr asks the Court to review the adequacy of allegations against him. He points out that many allegations are against the Defendants generally, or a group of Defendants joined by the conjunction "and/or." (See, e.g., SAC at 6:11--15.) Plaintiff does, however, specifically allege Defendant Schorr was part of the conspiracy and took specific actions to interfere with Plaintiff's contractual relationships and to defame him. (Id. at 12:9--13:16.) Plaintiff has alleged Defendant Schorr took these actions for his own personal profit and not solely in his official capacity as an officer of Triarc. (SAC at 13:11--16.) Even in view of some ambiguities in the allegations, Plaintiff has adequately alleged Defendant Schorr's involvement in the wrongs giving rise to his claims.

II. Motion to Dismiss for Lack of Personal Jurisdiction

Because the motions of Defendant Schorr and of Defendants Lemond and Kogan are based on substantially the same authorities and arguments, the Court will consider both motions together. Defendants Lemond and Kogan contend they are residents of New York and have never been residents of California. They contend their connections with California arise primarily out of their service as outside directors of Encore. They point out that Plaintiff is a resident of Phoenix, Arizona. Defendant Schorr points out his connections with California are even less direct. He is a New York resident and an officer of Triarc, whose principal place of business is not in California.

Where a defendant moves to dismiss a complaint for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating that jurisdiction is appropriate. Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990). "At the motion to dismiss stage, a plaintiff is generally required only to make out a prima facie showing of personal jurisdiction to overcome a 12(b)(2) motion." Swartz v. KPMG LLP, 476 F.3d 756, 766 (9th Cir. 2007) (citing Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain Co., 284 F.3d 1114, 1119 (9th Cir. 2002)). "Even so, mere 'bare bones' assertions of minimum contacts with the forum or legal conclusions unsupported by specific factual allegations will not satisfy a plaintiff's pleading burden." Id. (citing Alperin v. Vatican Bank, 410 F.3d 532, 539 n.1 (9th Cir.2005); Butcher's Union Local No. 498, United Food and Commercial Workers v. SDC Inv., Inc., 788 F.2d 535, 540 (9th Cir. 1986)).

The Court looks to California law to determine Defendants' amenability to suit in this Court. Core-Vent Corp. v. Nobel Industries AB, 11 F.3d 1482, 1484 (9th Cir. 1993). California's long-arm statute permits courts to exercise jurisdiction to the extent permitted by the Due Process Clause of the U.S. Constitution. Id. "[D]ue process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945) (citations omitted).

Jurisdiction over a defendant may be either general or specific. Schwarzenegger v. Fred Martin Motor Co., 374 ...


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