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Dynamic Software Services v. Cyberbest Technology, Inc

United States District Court, N.D. California

July 9, 2014

DYNAMIC SOFTWARE SERVICES, Plaintiff,
v.
CYBERBEST TECHNOLOGY, INC, Defendant.

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS [DOCKET NO. 28]

DONNA M. RYU, Magistrate Judge.

Defendant Cyberbest Technology, Inc. ("Defendant") moves to dismiss the claims brought by Dynamic Software Services ("Plaintiff") pursuant to Federal Rule of Civil Procedure 12(b)(2) on the ground that the court lacks personal jurisdiction over Defendant. [Docket No. 28 (Def.'s Mot.).] The court conducted a hearing on June 26, 2014. For the reasons stated below, the motion is granted.

I. BACKGROUND

A. Procedural History

On September 12, 2013, Plaintiff initiated this litigation, bringing three causes of action against Defendant: (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; and (3) intentional interference with contractual relations. See generally Compl. [Docket No. 1].

On November 26, 2013, Defendant moved to dismiss for lack of personal jurisdiction. The court denied that motion without prejudice on December 11, 2013, ordering the parties to meet and confer regarding jurisdictional discovery. Following discovery, Defendant brought the instant motion.

B. Factual Allegations

The facts below are taken from the Complaint as well as the parties' submissions for this motion. See Caruth v. Int'l Psychoanalytical Ass'n, 59 F.3d 126, 128 (9th Cir. 1995) (in a motion to dismiss for lack of personal jurisdiction, court may consider not only allegations in complaint but also evidence relating to jurisdiction presented in affidavits[1] attached to motion papers).

Plaintiff and Defendant are both staffing agencies that provide temporary personnel for companies in the information-technology sector. Defendant maintains a pool of personnel from which it can draw when approached, either directly or through another staffing agency, with a particular short-term staffing need. Once Defendant agrees to provide an employee to a customer, Defendant places an employee from its personnel pool with the customer for an agreed-upon period of time. Defendant sometimes works directly with customers, but more often deals through other staffing agencies, such as Plaintiff, that arrange for the placement of Defendant's employees. The instant litigation arises out of such an arrangement, with Plaintiff acting as a middle man to place an employee from Defendant's pool with Plaintiff's third-party client, Xavient Solutions ("Xavient"), in Denver, Colorado. Plaintiff and Defendant signed a procurement contract to formalize their arrangement regarding placement of an employee with Xavient on August 12, 2013. The contract includes a clause stipulating that the agreement be "construed in accordance with, and governed by, the laws of the State of California." Compl. ¶ 7, Ex. A (Contract § 21).

Pursuant to the terms of the contract, the parties executed a purchase order in which Defendant agreed to provide the services of Dinesh Patra as a Web Logic Administrative Consultant for a six-month engagement with Xavient beginning on August 29, 2013. Plaintiff in turn executed a work statement that formalized its agreement with Xavient to provide Patra's services.

The arrangement between Plaintiff and Defendant apparently broke down shortly thereafter. Plaintiff alleges that on August 26, 2013, Defendant abruptly informed Plaintiff that it would not be able to fulfill the purchase order. Plaintiff states that it attempted to hire a replacement for Patra in time to meet its obligation to Xavient, but that it was unable to do so due to the short timeframe and urgency of the project for Xavient. In the Complaint, Plaintiff alleges that its failure to fulfill the Xavient contract negatively affected all of its business with Xavient. Xavient apparently terminated its relationship with Plaintiff after this suit was filed, resulting in the loss of a significant portion of Plaintiff's business.

C. Evidence of Defendant's Contacts with California

Jurisdictional discovery reveals that Defendant has maintained some contact with California. Defendant has earned 5.3 percent of its total revenue over the past two years[2] through business operations in California. In 2013, $274, 196 of Defendant's total revenue of $5, 859, 201 was derived from "business conducted in" the state.[3] Defendant contracts with six staffing agencies that have a return address in California.[4] Defendant also provides staffing directly to one customer in California.

Defendant has placed, directly or indirectly, at least six employees in California over the past two years.[5] It has filed six visa applications with the Department of Labor over the same period of time for employees in California.[6] Two of Defendant's currently placed employees work in California. Defendant maintains some contact with California-based employees, as those employees submit time cards to Defendant via email.

Plaintiff has produced other evidence of Defendant's ties to California through independent research. Plaintiff provides the result of a December 6, 2013 search of Glassdoor.com, an employment-data website, that lists 20 salaries for employees of Defendant based in California. Plaintiff also provides the result of a search of Myvisajobs.com, conducted on the same date, revealing that Defendant sponsored seven candidates for visas to work in California from 2001 through 2009. Plaintiff also provides a copy of a web page on Defendant's website entitled "Open Positions, " also accessed on December 6, 2013, that appears ...


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