United States District Court, C.D. California
February 3, 2015
KAZANJIAN BROS., INC., a California corporation, Plaintiff,
NEILA JAZIRI; NEILA VINTAGE & DESIGN; ART WORLD, Defendants.
ORDER DENYING DEFENDANTS' MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION [Dkt. No. 8]
DEAN D. PREGERSON, District Judge.
Presently before the Court is Defendants' Motion to Dismiss for Lack of Personal Jurisdiction ("Motion"). (Dkt. No. 8.) Having considered the parties' submissions, the Court DENIES the Motion and adopts the following order.
Kazanjian Bros., Inc. ("Plaintiff") is a California corporation that operates a high-end jewelry business. (Opposition to Motion to Dismiss ("Opp."), Dkt. No. 11, at 1.) Plaintiff operates a store and showroom in Beverly Hills, California. (Id.) Defendant Neila Jaziri ("Jaziri") is a French citizen residing in Paris, France. (Mot. at 3.) Jaziri is the sole manager and owner of Art World and Neila Vintage & Design (collectively with Jaziri, "Defendants"). (Id.) Art World is a business registered and organized in France with its principal place of business in Paris, France. (Id.) Art World operates a retail vintage fashion boutique business in Paris, France known as Neila Vintage & Design. (Id.)
Plaintiff alleges the parties have developed a mutually beneficial relationship based on the sale and purchase of high-end jewelry, where Plaintiffs would sell Defendants items for resale to Defendants' international clientele. (Opp. at 5-6.) This relationship began in August 2011 and went through 2013. (Id. at 6.) Prior to the transaction at issue in this case, Plaintiff alleges Defendants purchased a platinum necklace from Defendants in August 2011 and a sapphire ring from Defendants in September 2011. (Id. at 5.) During the course of this business relationship, Plaintiff alleges, the parties exchanged over 500 emails. (Id.) Defendants also came to Plaintiff's store in Beverly Hills on April 27, 2012, to look at jewelry pieces in person. (Id. at 5-6.) Although Defendants claim that all contact concerning the sale of any piece of jewelry was initiated by Plaintiff and that Defendants never viewed jewelry in person in California (see Declaration of Neila Jaziri ("Jaziri Decl."), Dkt. No. 9-1, ¶¶ 12, 14, 15), Plaintiff claims that Defendants reached out to Plaintiff multiple times to inquire whether Plaintiff had particular items for sale. (Opp. at 6-8.)
The present dispute concerns Plaintiff's sale of a Van Cleef & Arpels diamond bracelet ("the bracelet") to Defendants. Plaintiff alleges Defendant agreed to purchase the bracelet from Plaintiff on June 11, 2013, for the sum of $660, 000. (Id. at 2.) On that date, Plaintiff's agent delivered the bracelet to Defendants in Paris, France. (Id.) The payments were to be made in two installments to Plaintiff's bank account in Beverly Hills, CA. (Id.) Defendants signed an invoice that stated the purchase price was $660, 000. (Id. at 2-3; Exh. A to Declaration of Jasmine Rafati ("Rafati Decl."), Dkt. No. 11-2.)
Plaintiff alleges Defendants never made the payments as scheduled. (Id. at 3.) Instead, Plaintiff states, during several months of dialogue over the payments, Defendants finally made two wire transfers to Plaintiff's bank account totaling $200, 000. (Id. at 3-4.) The last payment Plaintiff allegedly received was made on April 18, 2014. (Id. at 4.)
On June 2, 2014, Plaintiff filed a complaint in California Superior Court ("Complaint"), stating causes of action for breach of written and oral contract, fraud, conversion, and trespass to chattels. (Dkt. No. 1-1.) All causes of action arise from the single transaction detailed above - Plaintiff's sale of the bracelet to Defendants. Id. On July 21, 2014, Defendants removed this action to federal court under diversity jurisdiction. (Dkt. No. 1.) Defendants now move to dismiss the action for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2). (Dkt. No. 8.)
II. LEGAL STANDARD
Federal Rule of Civil Procedure 12(b)(2) provides that a court may dismiss a suit for lack of personal jurisdiction. The plaintiff has the burden of establishing that jurisdiction exists. See Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990). Where, as here, the motion is based on written materials rather than an evidentiary hearing, "the plaintiff need only make a prima facie showing of jurisdictional facts." Caruth v. International Psychoanalytical Ass'n, 59 F.3d 126, 128 (9th Cir. 1977); Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 (9th Cir. 2006). "Although the plaintiff cannot simply rest on the bare allegations of its complaint, uncontroverted allegations in the complaint must be taken as true." Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 797 (9th Cir. 2004) (internal quotations and citation omitted). Conflicts between parties over statements contained in affidavits must be resolved in the plaintiff's favor. Id.
District courts have the power to exercise personal jurisdiction to the extent authorized by 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. 1998). Because California's long-arm statute authorizes personal jurisdiction coextensive with the Due Process Clause of the United States Constitution, see Cal. Civ. Code § 410.10, this Court may exercise personal jurisdiction over a nonresident defendant when that defendant has "at least minimum contacts' with the relevant forum such that the exercise of jurisdiction does not offend traditional notions of fair play and substantial justice.'" Schwarzenegger, 374 F.3d at 800-01 (citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). The contacts must be of such a quality and nature that the defendants could reasonably expect to be "haled into court there." World-Wide Volkswagen v. Woodson, 444 U.S. 286, 297 (1980).
There are two types of personal jurisdiction: general and specific. Reebok Int'l Ltd. v. McLaughlin, 49 F.3d 1387, 1391 (9th Cir. 1995). A court may exercise general personal jurisdiction over a defendant when the defendant's contacts are "so continuous and systematic as to render them essentially at home in the forum state." Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S.Ct. 2846, 2851 (2011) (internal quotations omitted).
Specific personal jurisdiction may be found when the cause of action arises out of the defendant's contact or activities in the forum state. See Roth v. Garcia Marquez, 942 F.2d 617, 620 (9th Cir. 1991). The Ninth Circuit has set forth the following three-pronged test to determine whether specific personal jurisdiction exists: "(1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim must be one which arises out of or relates to the defendant's forum-related activities; and (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable." Lake v. Lake, 817 F.2d 1416, 1421 (9th Cir. 1986). If the plaintiff succeeds in establishing the first two prongs, the burden then shifts to the defendant to "present a compelling case" that the court's assertion of jurisdiction would be unreasonable. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-78 (1985).
Plaintiff acknowledges that the Court does not have general personal jurisdiction over the Defendants. (Opp. at 8.) The sole issue is whether the Court has specific jurisdiction over Defendants.
A. Purposeful Availment or Purposeful Direction
The first prong of the specific jurisdiction test is satisfied by either purposeful availment or purposeful direction. These are two distinct concepts: "A purposeful availment analysis is most often used in suits sounding in contract. A purposeful direction analysis, on the other hand, is most often used in suits sounding in tort." Schwarzenegger, 374 F.3d at 802 (internal citations omitted). The Ninth Circuit has held that the first prong of the specific jurisdiction test "may be satisfied by purposeful availment of the privilege of doing business in the forum; by purposeful direction of activities at the forum; or by some combination thereof." Yahoo! Inc. v. La Ligue Contre Le Racisme Et L'Antisemitisme, 433 F.3d 1199, 1206 (9th Cir. 2006).
The parties appear to dispute which test should apply. In their Motion, Defendants contend that the purposeful direction analysis applies. (Mot. at 6.) Plaintiff, in its opposition papers, argues that both the purposeful direction and the purposeful availment tests apply and are satisfied. (Opp. at 11.)
Here, because Plaintiff's intentional tort claims arise out of the contract for the necklace, the Court will apply the purposeful availment test. Sher v. Johnson, 911 F.2d 1357, 1362 (9th Cir. 1990) (applying the purposeful availment test in a case where, although some of the claims sounded in tort, all arose out of the plaintiff's contractual relationship with the defendants).
B. Purposeful Availment
A defendant purposefully avails itself to the laws a forum state when that defendant "perform[s] some type of affirmative conduct which allows or promotes the transaction of business within the forum state." Sinatra v. National Enquirer, Inc., 854 F.2d 1191, 1195 (9th Cir. 1988). In determining purposeful availment, the Court should consider factors such as "prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing." Burger King, 471 U.S. at 479. "[T]he purposeful availment analysis turns upon whether the defendant's contacts are attributable to actions by the defendant himself, or conversely to the unilateral activity of another party." Hirsch v. Blue Cross, Blue Shield of Kansas City, 800 F.2d 1474, 1478 (9th Cir. 1986) (internal quotations omitted).
Plaintiff argues that Defendants are subject to personal jurisdiction because Defendants willingly committed themselves to agreements with Plaintiff to purchase and pay for the bracelet, solicited other business with Plaintiff by sending Plaintiff hundreds of emails over several years, and coming in person to California to look at jewelry for possible purchase and resale. Defendants argue that there are insufficient contacts to constitute purposeful availment, contending that the dispute arises from an isolated transaction - the sale of the bracelet - and that the major aspects of the sale did not take place in California. Plaintiff and Defendants also dispute which party initiated contact during their relationship: Defendants contend that Plaintiff was always the one to initiate contact, whereas Plaintiff contends that Defendants reached out to Plaintiff many times on their own accord.
The Court resolves conflicts in the parties' affidavits in Plaintiff's favor, and finds that Defendants did purposefully avail themselves of the laws of California. Plaintiff's affidavits show that the parties had a multi-year relationship that began in August 2011 and continued through 2013. The affidavits state that the parties exchanged hundreds of emails in which Defendants contacted Plaintiff's salesperson multiple times in inquiring after the availability of various types of jewelry for sale. These contacts resulted in the sale of three items over the years, and were such that when Jaziri traveled to California in 2012, she informed Plaintiff and visited Plaintiff's showroom to view items for sale.
The factual allegations advanced by Plaintiff do not show unilateral activity on Plaintiff's part; rather, they show that Defendants affirmatively contacted Plaintiff multiple times to inquire into purchasing items from Plaintiff, and that the relationship was a mutual one. Defendants knew Plaintiff operated in California and that they were agreeing to purchase items for sale in California; they should not be surprised that they might be subject to liability in California for allegedly failing to pay for items as agreed.
C. Arising out of Forum-Related Activities
Under the second prong of the specific jurisdiction test, the Court must determine whether the asserted claims arise out of or was related to the defendant's contact with the forum state. This requirement is measured in terms of "but for" causation. Bancroft & Masters, Inc. v. Augusta Nat'l Inc., 223 F.3d 1082, 1088 (9th Cir. 2000).
Here, Plaintiff has provided little evidence regarding the origins of this transaction, the Court finds that the harm does relate to Defendants' California-related activities. Plaintiff does not provide any facts with respect to how the contract for sale of the bracelet arose; instead, Plaintiff states that the parties came to an agreement whereby Plaintiff would deliver the bracelet to Defendants in France, and Defendants would wire the payments for the bracelet to Plaintiff in California. Despite this omission, the Court finds that but for Defendants' contacts with Plaintiff in California and the existing relationship between the parties, the sale - and hence the injury to Plaintiff - would not have occurred.
Because Plaintiff has satisfied the first two prongs, the burden shifts to Defendants to rebut the presumption that jurisdiction is reasonable by presenting a compelling case that specific personal jurisdiction would be unreasonable. Burger King, 471 U.S. at 477 ("[the defendant] must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable"). To determine reasonableness, the Court considers: (1) the extent of purposeful interjection into the forum state; (2) the burden on the defendant; (3) the conflict with the sovereignty of the defendant's state; (4) the forum state's interest in the suit; (5) the most efficient judicial resolution of the dispute; (6) the convenience and effectiveness of relief for the plaintiff; and (7) the existence of an alternative forum. Id. at 475. All seven factors must be weighed, and no single factor is dispositive. Ziegler v. Indian River Cnty., 64 F.3d 470, 475 (9th Cir. 1995).
1. Purposeful Interjection
The first factor is the extent of purposeful interjection into the forum state. Here, the factor weighs in favor of finding jurisdiction. Defendants established an ongoing relationship for approximately two years with Plaintiff, which operates its business in California. Defendants affirmatively reached out to Plaintiff to inquire about the purchase of jewelry, knowing that Plaintiff's store was located in California.
2. Burden on the Defendant
The second factor is the burden on the defendant in defending in the forum state. Where "a defendant has done little to reach out to the forum state, the burden of defending itself in a foreign forum militates against exercising jurisdiction." Fed. Deposit Ins. Corp. v. British-American Ins. Co., Ltd., 828 F.2d 1439, 1444 (9th Cir. 1987) (internal quotations omitted). The burden of a defendant is increased when it is ordered to defend itself in the foreign legal system of another country. Asahi Metal Indus. Co., Ltd. v. Superior Ct. of Cal. Solano Cnty., 480 U.S. 102, 114 (1987). Here, Defendants are an individual located in France and a small French business that is owned by said individual. There might be a burden for Defendants to litigate in the United States, a foreign jurisdiction to Defendants, and in a foreign language. However, Defendants' sole argument on this point is that travel would be expensive and time-consuming. (Mot. at 7-8.) Plaintiff argues that the actual burden Defendants will suffer is not great due to the "advent of modern technology, " and that most discovery and document production can be handled without necessitating Defendant's physical presence in the United States. (Opp. at 18.) Defendants' described burden is a relatively mild one; however, this factor does weigh against finding jurisdiction.
3. Sovereignty Conflict
The third factor is the extent of conflict with the sovereignty of the defendant's state. As an initial matter, "a foreign state presents a higher sovereignty barrier than another state within the United States." Fed. Deposit Ins. Corp., 828 F.2d at 1444. Thus, "great care and reserve should be exercised when extending our notions of personal jurisdiction into the international field." Asahi Metal Indus., 480 U.S. at 115. However, Defendants do not address this factor in their Motion. Thus, the Court will not weigh this factor either in favor of or against finding jurisdiction in its analysis.
4. Forum State's Interest
The fourth factor is the forum state's interest in adjudicating the dispute. "California maintains a strong interest in providing an effective means of redress for its residents who are tortiously injured." Core-Vent Corp. v. Nobel Indus. AB, 11 F.3d 1482, 1489 (9th Cir. 1993). Plaintiff is a California business that has been injured. Thus, this factor weighs in favor of finding jurisdiction.
5. Most Efficient Judicial Resolution
The fifth consideration is the most efficient judicial resolution of the dispute. "In evaluating this factor, we have looked primarily at where the witnesses and the evidence are likely to be located." Core-Vent, 11 F.3d at 1489. Defendants argue that a French official who is an expert on import duty taxes in France would be an important potential witness in this suit. Defendants further point out that Jaziri resides in France. Plaintiff argues that a large part of the evidence, as well as witnesses who were involved in selling the bracelet, reside in California. The Court finds that this factor is neutral with respect to jurisdiction.
6. Plaintiff's Interest
The sixth factor is the plaintiff's interest in convenient and effective relief. "Neither the Supreme Court nor our court has given much weight to inconvenience to the plaintiff." Core-Vent, 11 F.3d at 1490. Plaintiff is located in California and has no evident ties to France other than having sold items to Defendants. However, it is unclear whether a judgment for Plaintiff in French court would be any less effective than a judgment here. On balance, this factor weighs in favor of finding jurisdiction.
7. Existence of Alternative Forum
The final factor is the availability of an alternate forum. The plaintiff bears the burden of proving the unavailability of an alternate forum. Fed. Deposit Ins. Corp., 828 F.2d at 1445. Defendants argue that France is a suitable alternate forum. In fact, it appears that Plaintiff is already pursuing a remedy against Defendants in France. Although Plaintiff points out that California would be a more convenient forum, it has not proved that it would be barred from obtaining a judgment against Defendants in France. This factor weighs against finding jurisdiction.
8. Balancing of Factors
Overall, this is a close case. Factors one, four, and six weigh in favor of finding jurisdiction. Factors two, five, and seven weigh against finding jurisdiction. However, defendant bears a heavy burden in proving that the Court cannot constitutionally find jurisdiction: "Once purposeful availment has been established, the forum's exercise of jurisdiction is presumptively reasonable. To rebut that presumption, a defendant must present a compelling case' that the exercise of jurisdiction would, in fact, be unreasonable." Roth v. Garcia Marquez, 942 F.2d 617, 625 (9th Cir. 1991). The Court finds that Defendants have not met that burden. Some factors do weigh against finding jurisdiction, but on balance Defendants' arguments do not present a "compelling case" against the reasonableness of exercising jurisdiction.
For the foregoing reasons, Defendants' Motion is DENIED.
IT IS SO ORDERED.