The opinion of the court was delivered by: Honorable Janis L. SammartinoUnited States District Judge
ORDER GRANTING DEFENDANT'S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION
Presently before the Court is Defendant Drew Mouton's motion to dismiss for lack of personal jurisdiction. (Mot. to Dismiss, ECF No. 16.) Also before the Court is Plaintiff's opposition. (O'ppn, ECF No. 18.) After consideration, the Court GRANTS Mouton's motion.
Plaintiff Tangiers Investors, L.P. is a limited partnership organized under Delaware law and with a principal place of business in California. (FAC ¶ 2, ECF No. 7.) In March 2008 Plaintiff entered into a contract with Americhip. (Id. ¶ 8.) Plaintiff agreed to loan Americhip $75,000 for two years. (Id.) In return, Americhip agreed that Plaintiff could convert up to 100 percent of the loan principal into shares of Americhip stock at any point during the term of the contract. (Id.) Plaintiff alleges Americhip breached the contract by refusing to timely honor Plaintiff's several attempts to convert principal into stock. (Id. ¶ 10.) From this conduct, Plaintiff asserts four causes of action. Three of the four apply to Drew Mouton, a former CEO and former board member of Americhip: fraud and deceit, securities fraud, and unfair business practices. (Id.)
Federal Rule of Civil Procedure12(b)(2) allows district courts to dismiss an action for lack of personal jurisdiction. "Where defendants move to dismiss a complaint for lack of personal jurisdiction, plaintiffs bear the burden of demonstrating that jurisdiction is appropriate." Dole Food Co. Inc. v. Watts, 303 F.3d 1104, 1108 (9th Cir. 2002). "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). "When a district court acts on the defendant's motion to dismiss without holding an evidentiary hearing, the plaintiff need make only a prima facie showing of jurisdictional facts to withstand a motion to dismiss." Id. (citing Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir. 1995)).
"Unless directly contravened, [Plaintiff's] version of the facts is taken as true, and 'conflicts between the facts contained in the parties' affidavits must be resolved in [Plaintiff's] favor for purposes of deciding whether a prima facie case for personal jurisdiction exists.'" Harris Rutsky & Co. Ins. Services, Inc. v. Bell & Clements Ltd, 328 F.3d 1122, 1129 (9th Cir. 2003) (citing Doe, 248 F.3d at 922); see also Bancroft & Masters, Inc. v. Augusta Nat'l, Inc., 223 F.3d 1082, 1087 (9th Cir. 2000) ("Because the prima facie jurisdictional analysis requires us to accept the plaintiff's allegations as true, we must adopt [plaintiff]'s version of events for purposes of this appeal."). However, a court "may not assume the truth of allegations in a pleading which are contradicted by affidavit." Alexander v. Circus Enters., Inc., 972 F.2d 261, 262 (9th Cir. 1992) (internal quotations omitted).
Mouton's motion to dismiss for lack of personal jurisdiction argues that jurisdiction over his person would be improper because he lacks any contact with the state of California. Plaintiff's opposition asserts that this Court has specific personal jurisdiction over Mouton. (Opp'n 5.)
"Specific jurisdiction exists where the cause of action arises out of or has substantial connection to the defendant's contact with the forum." ChemRisk, LLC v. Chappel, 2011 WL 1807436, at *3 (N.D. Cal. May 12, 2011) (internal quotations and citations omitted). Because Mouton is a corporate employee of Americhip, the Court's analysis is informed by the fiduciary shield doctrine. Under the fiduciary shield doctrine, this Court's jurisdiction over Americhip, the corporation, does not directly translate into jurisdiction over Mouton, Americhip's one-time CEO and board member. See Davis v. Metro Prods., Inc., 885 F.2d 515, 520 (9th Cir. 1989) ("[A] person's mere association with a corporation that causes injury in the forum state is not sufficient in itself to permit that forum to assert jurisdiction over the person.").
The corporate structure does not provide absolute protection, however. For instance, a court may assert personal jurisdiction over an individual based upon "the individual's control of, and direct participation in the alleged activities" of the corporation. Wolf Designs, Inc. v. DHR & Co., 322 F. Supp.2d 1065 (C.D. Cal. 2004). This is known as the "guiding spirit" theory. See Davis, 885 F.2d at 523, n.10. The fiduciary shield doctrine also does not apply when the corporation is the alter ego of the individual defendant. Flynt Distrib. Co., Inc. v. Harvey, 734 F.2d 1389, 1393 (9th Cir. 1984). There is no basis for the alter ego theory here, so the Court focuses on the guiding spirit theory.
Under the guiding spirit theory, this Court may assert personal jurisdiction over Mouton if he was "a primary participant or guiding spirit in the alleged wrongdoing intentionally directed at California." Wolf Designs, 322 F. Supp. 2d at 1072. The injurious activities center around Americhip and the individual defendants' allegedly fraudulent representations that Plaintiff could convert the money Plaintiff loaned to Americhip into shares of Americhip stock.
The question then becomes whether Mouton was the primary participant or the guiding spirit behind the fraudulent representations. Plaintiff alleges that in March 2008, the Americhip CEO, with Mouton's knowledge and support, fraudulently promised Plaintiff that Americhip would allow Plaintiff to convert the money Plaintiff loaned to Americhip into shares of Americhip stock. (FAC ¶ 13.) Then in early ...