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Legalzoom. Com, Inc. v. MacEy Bankruptcy Law, P.C.

United States District Court, C.D. California

February 28, 2014

LEGALZOOM.COM, INC., Plaintiff,
v.
MACEY BANKRUPTCY LAW, P.C.; MACEY BANKRUPTCY LAW HOLDINGS, P.C.; JACOBY & MEYERS BANKRUPTCY, LLP; and DOES 1-10 inclusive, Defendants.

ORDER DENYING DEFENDANT MACEY BANKRUPTCY LAW HOLDINGS, P.C.'S RULE 12(b)(2) MOTION TO DISMISS [37]

OTIS D. WRIGHT, II, District Judge.

I. INTRODUCTION

Before the Court is Defendant Macey Bankruptcy Law Holdings, P.C.'s ("MBLH") Rule 12(b)(2) Motion to Dismiss for Lack of Personal Jurisdiction. (ECF No. 37.) The underlying action is based in contract. Plaintiff LegalZoom.com Inc. alleges that Defendants-including MBLH-failed to pay LegalZoom for the bankruptcy-case leads it provided under the contract. For the reasons discussed below, the Court DENIES Defendant MBLH's Motion to Dismiss.[1]

II. FACTUAL BACKGROUND

LegalZoom initiated this action on November 21, 2013, against Defendants Macey Bankruptcy Law, P.C. ("MBL"); Jacoby & Meyers Bankruptcy, LLP ("Jacoby"); and MBLH. (ECF Nos. 1, 25.) LegalZoom's claims are for breach of contract, open book account, and account stated. All of the claims relate to a contract between MBL and LegalZoom under which LegalZoom provided leads in bankruptcy cases to MBL. MBL is allegedly a wholly owned subsidiary of MBLH. Jacoby allegedly entered the picture when MBL and Jacoby merged, with MBLH becoming a majority owner and managing partner in Jacoby.

MBL and Jacoby answered the Complaint on December 13, 2013. (ECF Nos. 35, 36.) On December 18, 2013, the Magistrate Judge assigned to this action granted LegalZoom's request for a writ of attachment against MBL, but denied issuing a writ against Jacoby without prejudice. (ECF Nos. 42, 43.) LegalZoom did not seek a writ of attachment against MBLH.

On December 13, 2013, MBLH filed the present Motion to Dismiss for Lack of Personal Jurisdiction. (ECF No. 37.) The Motion was fully briefed by the parties as of January 13, 2014. (ECF No. 66.) Subsequently, with the Court's permission, counsel for MBLH withdrew from his representation of MBLH and the other two Defendants. (ECF No. 85.) MBLH has not retained new counsel. While business entities like MBLH cannot be unrepresented in federal court, the instant Motion was fully briefed while MBLH had counsel. The Court finds that a ruling on the Motion's merits is appropriate and therefore took the matter under submission.

III. LEGAL STANDARD

A defendant may move to dismiss a case for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). The plaintiff bears the burden of demonstrating that jurisdiction exists. Love v. Assoc. Newspapers Ltd. , 611 F.3d 601, 608 (9th Cir. 2010). But when a district court acts on a defendant's motion to dismiss without holding an evidentiary hearing, the plaintiff must only make a prima facie showing of jurisdictional facts to withstand the motion to dismiss. Unocal Corp. , 348 F.3d at 922. Moreover, the plaintiff's version of facts is taken as true and conflicts between the facts must be resolved in plaintiff's favor. Id.

District courts have the power to exercise personal jurisdiction to the extent of the law of the state in which they sit. Fed.R.Civ.P. 4(k)(1)(A); Panavision Int'l, L.P. v. Toeppen , 141 F.3d 1316, 1320 (9th Cir. 1988). California's long-arm jurisdictional statute is coextensive with federal due-process requirements. Cal. Civ. Proc. Code ยง 410.10; Roth v. Garcia Marquez , 942 F.2d 617, 620 (9th Cir. 1991). The Due Process Clauses of the Fifth and Fourteenth Amendments require that a defendant "have certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Wash., Office of Unemployment Comp. & Placement , 326 U.S. 310, 316 (1945).

Using the "minimum contacts" analysis, a court may obtain either general jurisdiction or specific jurisdiction over a non-resident defendant. Doe v. Unocal Corp. , 248 F.3d 915, 923 (9th Cir. 2001). A court has general jurisdiction when the defendant engages in "continuous and systematic general business contacts... that approximate physical presence in the forum state." Schwarzenegger v. Fred Martin Motor Co. , 374 F.3d 797, 801 (9th Cir. 2004) (internal quotations marks omitted). For specific jurisdiction, the Ninth Circuit has expounded a three-part test: (1) the defendant must purposefully avail himself of the benefits and protections of the forum state; (2) the claim must arise out of, or be related to, the defendant's forum-based activity; and (3) exercise of jurisdiction must comport with fair play and substantial justice. Schwarzenegger , 374 F.3d at 802; see also Burger King Corp. v. Rudzewicz , 471 U.S. 462, 472 (1985).

IV. DISCUSSION

MBLH argues that the exercise of personal jurisdiction over MBLH is improper in this Court because MBLH has had absolutely no contact with California and the other Defendants' contacts with California cannot be imputed to it. (Mot. 5-6.) In contrast, LegalZoom contends that MBLH satisfies the "minimum contacts" requirement for personal jurisdiction. The parties agree that the Court does not have general jurisdiction over MBLH, so ...


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