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Allphin v. Peter K. Fitness, LLC

United States District Court, N.D. California, San Jose Division

December 11, 2014

SONDRA J ALLPHIN, Plaintiff,
v.
PETER K. FITNESS, LLC, et al., Defendants.

ORDER GRANTING: (1) CROSS-DEFENDANT IDEAL JACOBS (MALAYSIA) CORPORATION'S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION; (2) FULCO FULFILLMENT, INC. AND PETER K. FITTNESS, LLC'S REQUESTS TO UNDERTAKE JURISDICTIONAL DISCOVERY [RE: ECF 122]

BETH LABSON FREEMAN, District Judge.

This case arises out of a strict products liability claim by Plaintiff, who contends she was injured while using a defective fitness band. Presently before the Court is a motion brought by third-party and cross-claim defendant Ideal Jacobs (Malaysia) Corporation ("IJ Malaysia") to dismiss third-party plaintiff Peter K. Fitness, LLC's Third Amended Third-Party Complaint, and cross-claimant Fulco Fulfillment, Inc.'s ("Fulco") cross-claim, for lack of personal jurisdiction. See ECF 122. Peter K. Fitness, ECF 127, and Fulco, ECF 124, have both filed oppositions in which they request the Court grant jurisdictional discovery if the Court finds that they have not made a prima facie showing of personal jurisdiction over IJ Malaysia.

Having reviewed the submissions and oral argument of the parties, as well as the governing case law, the Court GRANTS IJ Malaysia's motion to dismiss, but grants Peter K. Fitness and Fulco leave to amend their respective pleadings. The Court further grants Fulco and Peter K. Fitness the opportunity to conduct limited jurisdictional discovery as outlined herein.

I. BACKGROUND

A. Relevant Procedural History

Plaintiff filed her Complaint in the Santa Clara Superior Court on February 13, 2013, alleging a single cause of action for strict products liability against Peter K. Fitness, Peter T. Kofitsas, and Fulco. ECF 1-1. Peter K. Fitness and Peter Kofitsas removed the action to this Court on March 25, 2013. ECF 1.

On December 20, 2013, Fulco filed a cross-claim against various parties, including IJ Malaysia, for indemnification and contribution. ECF 58. Soon thereafter, on January 3, 2014, Peter K. Fitness and Peter Kofitsas filed their operative Third Amended Third Party Complaint ("TATPC") against IJ Malaysia, Ideal Jacobs (Xiamen) Corporation, Ideal Jacobs Corporation, and Andrew Conrad Jacobs. ECF 61.

On February 12, 2014, Andrew Conrad Jacobs moved to dismiss the TATPC for insufficient service of process pursuant to Federal Rule of Civil Procedure 12(b)(5), on the grounds that he was not a managing or general agent of IJ Malaysia and could not accept service on its behalf. ECF 76. Following briefing, the Court denied Mr. Jacobs' motion. ECF 110.

IJ Malaysia filed the instant motion on September 8, 2014. Fulco and Peter K. Fitness filed separate oppositions on September 22, 2014, and Peter K. Fitness also filed a request for judicial notice. See ECF 129. The Court heard oral argument on the motion on December 11, 2014.

B. Factual Background

1. Allegations In Peter K. Fitness's TATPC

Peter K. Fitness alleges that IJ Malaysia is a limited-share public company incorporated in Malaysia, and "an investment holding company for Third-Party Defendant Ideal Jacobs (Xiamen)." TATPC ¶ 17 (capitalization omitted). The TATPC includes a cursory allegation that IJ Malaysia is subject to personal jurisdiction in California by virtue of doing business in California or committing a tortious act in California. Id. at ¶ 22. The TATPC alleges that IJ Malaysia designed, constructed, and sold the Peter K. Fitness Resistance Band, see id. at ¶¶ 32-34, which is the product Plaintiff alleges was defective and caused her injury. The TATPC also alleges that Andrew Jacobs is the Non-Executive Chairman of IJ Malaysia and is "instrumental in developing the strategic direction" of the company and its subsidiaries "including [making] decisions regarding marketing, sales and finance, " id. at ¶ 24, and that Jacobs conducted business in California. Id. at ¶ 25.

2. Allegations in Fulco's Cross-Claim

Fulco alleges that IJ Malaysia is a subsidiary of Ideal Jacobs Corporation, see Cross-Claim, ECF 58 ¶ 19, and is a foreign corporation authorized to do business in California, id. at ¶ 21. Fulco's Cross-Claim similarly includes a cursory allegation that IJ Malaysia is subject to personal jurisdiction in California. Id. at ¶ 22. Fulco also alleges that Ideal Jacobs (Xiamen) is a wholly-owned subsidiary of IJ Malaysia, id. at ¶ 23, and that IJ Malaysia is engaged in a joint venture with the other cross-claim defendants. See id. at ¶ 27 ("Peter K. Fitness, Kofitsas, Jacobs, Ideal Jacobs, Ideal Jacobs Xiamen, Ideal Jacobs Malaysia, and each of them, were the agents, employer, employees, joint venturers, partners, and/or associates of each other.") Like Peter K. Fitness, Fulco alleges that IJ Malaysia designed, constructed, fabricated, or otherwise manufactured the Peter K. Fitness Resistance Band, and that IJ Malaysia is "in the chain of commerce" of the Fitness Band. Id. at ¶¶ 31-32.

3. Facts Alleged by IJ Malaysia in its Motion

IJ Malaysia contends that it is neither subject to general or specific jurisdiction in

California.[1] IJ Malaysia argues that it has no contacts whatsoever with either the State of California or the United States. See Mot., ECF 122 at 8. It contends that it is "merely a holding company, and its only business is its passive investments in its eight subsidiaries." Id. at 9. IJ Malaysia states that it wholly owns Ideal Jacobs Xiamen, id. at 10, but that it is not a party to any contractual agreement with Peter K. Fitness or Fulco, and that it had no involvement in the design, construction, fabrication, or sale of the Resistance Band at issue. Id. at 9-10.

II. LEGAL STANDARD

Once a defendant brings a challenge to the court's jurisdiction under Rule 12(b)(2), the plaintiff bears the burden of establishing personal jurisdiction. See, e.g., Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800-01 (9th Cir. 2004); see also Scott v. Breeland, 792 F.2d 925, 927 (9th Cir. 1986) (stating that a plaintiff must "come forward with facts, by affidavit or otherwise, supporting personal jurisdiction").

When, as is the case here, the Motion is based on written materials and not an evidentiary hearing, the non-moving parties "need only make a prima facie showing of jurisdictional facts." Schwarzenegger, 374 F.3d 797, 800. "Uncontroverted allegations in the complaint must be taken as true, " id., but a non-movant cannot "simply rest on the bare allegations of its complaint." Amba Mktg. Sys., Inc. v. Jobar Int'l, Inc., 551 F.2d 784, 787 (9th Cir. 1977). Conflicts between facts contained within declarations ...


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