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Nugen v. Floyd

October 19, 2009

NUGEN ET AL.
v.
JAMES I FLOYD ET AL.



The opinion of the court was delivered by: The Honorable Andrew J. Guilford

CIVIL MINUTES - GENERAL

Proceedings: ORDER GRANTING MOTION OF DEFENDANTS JEFFREY A. KENNEDY; LMK PROPERTIES, LLC,; KENNEDY BROTHERS CONTRACTING, INC.; RODERIC G. STEAKLEY; WANDA F. FLOYD; LINDA W. STEAKLEY; PHARMACEUTICAL MEDICAL SUPPLY INC.; AND DIRECT PHARMACEUTICAL, INC. TO DISMISS FOR LACK OF PERSONAL JURISDICTION

This case involves claims based on fraud, conversion, and breach of contract, as well as Federal RICO claims. Defendants Jeffrey A. Kennedy ("Defendant Jeffrey Kennedy"), LMK Properties, LLC ("Defendant LMK"), Kennedy Brothers Contracting, Inc. ("Defendant KBC"), Roderic G. Steakley ("Defendant Roderic Steakley"), Wanda F. Floyd ("Defendant Wanda Floyd"), Linda W. Steakley ("Defendant Linda Steakley"), Pharmaceutical Medical Supply Inc. ("Defendant PMSI"), and Direct Pharmaceutical, Inc. ("Defendant Direct") brought Motions to Dismiss for lack of personal jurisdiction ("Motions"). (Docket Nos. 34, 39, 42, and 46.) Plaintiffs did not file any papers in opposition to these Motions. After considering the arguments submitted, the Motions are GRANTED.

BACKGROUND

The following facts are taken from the Complaint and admissible evidence submitted in supporting declarations and affidavits.

Plaintiff NuGen International Incorporated ("Plaintiff NuGen") is a Nevada Corporation, and Plaintiff Advanced Pharmaceutical Services, Inc. ("Plaintiff APS") is a California Corporation. (Compl. Introduction.)

Plaintiffs allege twelve claims that arise out of three underlying transactions: (1) invoices for pharmaceutical goods; (2) investments in a Post-Katrina real estate project (the "New Orleans Project"); and (3) loans made by Plaintiffs to some Defendants to enable them to buy stock in PMSI. (Compl. ¶ 23, 24, 29.)

The first underlying transaction relates to the purchase of pharmaceuticals from Plaintiff APS by Defendants PMSI and Direct. (Compl. ¶ 23.) Plaintiffs allege that Defendant James I. Floyd ("Defendant James Floyd"), Defendant PMSI, and Defendant Direct owe for goods delivered. (Compl. ¶ 23.) The Sixth, Seventh, and Eighth Claims for breach of contract, account stated, and "goods sold and delivered" are based on this transaction. (Compl. ¶¶ 21, 74, 79, 86.)

The second underlying transaction relates to a loan Plaintiff NuGen allegedly made to Defendants Jeffrey Kennedy and Defendant KBC. (Compl. ¶ 24.) The First, Second, Third, Fifth, Ninth, Eleventh, and Twelfth Claims for fraud, conspiracy to defraud, Federal Civil RICO violation, conversion, money lent, and unjust enrichment are based in part on this transaction. (Compl. ¶¶ 33, 40, 46, 69, 90, 104, 108.)

Finally, the third transaction is based on a loan from Plaintiffs to Defendant Donald Kennedy ("Defendant Donald Kennedy"), so that Defendant Donald Kennedy could buy shares in Defendant PMSI. (Compl. ¶ 29.) The First, Tenth, Eleventh, and Twelfth Claims for fraud, breach of contract, money lent, and unjust enrichment are based in part on this transaction. (Compl. ¶¶ 33, 97, 104, 108.)

On September 28, 2009, Defendant James Floyd moved to dismiss for lack of personal jurisdiction, and Plaintiffs opposed that motion. The Court granted Defendant James Floyd's motion, and he was dismissed from this case. Now, Defendants Jeffrey Kennedy, LMK, KBC, Roderic Steakley, Wanda Floyd, Linda Steakley, PMSI, and Direct all move to dismiss for lack of personal jurisdiction. Plaintiffs did not file any oppositions to any of these Motions. Under Local Rule 7-12, Plaintiff's failure to file an opposition may be deemed consent to the Court granting the Motions. Nonetheless, the Court has carefully considered the Defendants' Motions and finds that it cannot exercise personal jurisdiction over any of the moving Defendants.

LEGAL STANDARD

Under Federal Rule of Civil Procedure 12(b)(2), a defendant may bring a motion to dismiss for lack of personal jurisdiction. Although the defendant is the moving party, the plaintiff bears the burden of making a prima facie showing of facts establishing personal jurisdiction by a preponderance of the evidence. Rio Properties, Inc. v. Rio Int'l Interlink, 284 F.3d 1007, 1019 (9th Cir. 2002). "[U]ncontroverted allegations in the Complaint must be taken as true," and "[c]onflicts between parties over statements contained in affidavits must be resolved in the plaintiff's favor." Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004).

"The Due Process Clause protects an individual's liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful 'contacts, ties, or relations.'" Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-72 (1985) (citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 319 (1945)). Lawful exercise of jurisdiction over a nonresident defendant must comport with "traditional notions of fair play and substantial justice." Int'l Shoe, 326 U.S. at 316. Concerns for fairness require that a court exercise jurisdiction only if the defendant's actions in ...


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