United States District Court, C.D. California
j2 GLOBAL, INC. and ADVANCED MESSAGING TECHNOLOGIES, INC., Plaintiff,
v.
FAX87.COM, FARJAD FANI, MATT JOHNSON FINANCE INC., Defendants.
ORDER RE: DEFENDANTS FARJAD FANI, ELNAZ FANI, STEVEN
THONG WAY SEN, AND CHARLES MONTGOMERY'S MOTIONS TO
DISMISS [DKT. NO. 55, 59, 66, 72]
DEAN
D. PREGERSON United States District Judge.
Before
the court is Defendant Farjad Fani's Motion to Dismiss
for Insufficient Service of Process under Rule 12(b)(5);
Defendant Elnaz Fani's Motion to Dismiss for Insufficient
Service of Process and Lack of Personal Jurisdiction under
Rule 12(b)(2) and (5); Defendant Steven Thong Way Sen's
Motion to Dismiss for Insufficient Service of Process and
Lack of Personal Jurisdiction under Rule 12(b)(2) and (5);
and Defendant Charles Montgomery's Motion to Dismiss for
Lack of Personal Jurisdiction Under Rule 12(b)(2). Having
considered the submissions of the parties and heard oral
argument, the court grants the motion in part, denies the
motion in part, and adopts the following Order.
I.
BACKGROUND
This
court has explained the factual background of this case in
connection with a prior order regarding Defendant Farjad
Fani's Motion to Dismiss. (Dkt. 32.) In brief, Plaintiff
j2 Global, Inc. is the holder of two patents related to the
transmission and storage of facsimile and audio messages.
(First Amended and Supplemental Complaint ("FASC"
or "Amended Complaint") ¶ 25, 29.) In a prior
action, j2 Global, Inc. and Advanced Messaging Technologies,
Inc. (collectively, "j2") brought suit against
Defendants Fax87, Farjad Fani, and Matt Johnson Finance, Inc.
("MJF") for patent infringement. (Id.
¶ 45.) The parties ultimately settled the case and j2
entered into a patent license agreement with MJF (doing
business as Fax87.com). (Id. ¶¶ 46-47.)
On July
24, 2013, Plaintiffs filed a new action against Mr. Fani,
Fax87, and MJF asserting breach of contract in connection
with the licensing agreement for, inter alia,
failure to provide royalty reports, remit royalty payments,
and selling the business without timely notice. (Complaint
¶ 42.) On February 5, 2014, this Court issued an order
finding service of process insufficient and dismissing the
Complaint against Mr. Fani. (Dkt. 32.)
On
April 15, 2016, j2 filed the Amended Complaint reasserting
breach of license agreement claims against Mr. Fani and MJF
and raising, for the first time, claims for patent
infringement, trademark infringement, and unfair competition
against Mr. Fani, his sister, Elnaz Fani, Steven Thong,
Charles Montgomery, and other individuals and corporate
entities. (Dkt. 43.) j2 included the various
entities--OnlineFaxes, FaxVision, eFax4Less, MyPhone Fax,
ResellFax, OneVoix--as defendants on the theory that they are
either alter egos or affiliates of one another working in
concert to disguise the licensing breach and infringement
from j2. (FASC ¶¶ 81, 84.) j2 added the individual
defendants alleging that they were affiliated with the
various entities. (FASC ¶¶ 125, 130, 135.)
Now
before the court are Defendants Farjad Fani, Elnaz Fani,
Steven Thong, and Charles Montgomery's individual Motions
to Dismiss. Mr. Fani moves to dismiss for insufficient
process. (Dkt. 55.) Ms. Fani and Mr. Thong move to dismiss
for insufficient process and lack of personal jurisdiction.
(Dkt. 59, 66.) Mr. Montgomery moves to dismiss for lack of
personal jurisdiction. (Dkt. 72.) Rather than recount here
the allegations concerning each individual Defendant's
association with various entities and the efforts to serve
them, the Court will state the facts as needed to address
each issue.
II.
LEGAL STANDARD
A.
Motion to Dismiss Under Rule 12(b)(5)
"[S]ervice
of summons is the procedure by which a court having venue and
jurisdiction of the subject matter of the suit asserts
jurisdiction over the person of the party served."
Mississippi Publ'g Corp. v. Murphree, 326 U.S.
438, 444-445 (1946). "Before a federal court may
exercise personal jurisdiction over a defendant, the
procedural requirement of service of summons must be
satisfied." Omni Capital Int'l, Ltd. v. Rudolf
Wolff & Co., 484 U.S. 97, 104 (1987). Accordingly,
Federal Rule of Civil Procedure 12(b)(5) provides that
insufficient service may be a basis for dismissal of a
complaint. Once service is challenged, the plaintiff bears
the burden of establishing that service was valid.
Brockmeyer v. May, 383 F.3d 798, 801 (9th Cir.
2004).
Requirements
for the contents and manner of service are established by
Rule 4. Under Rule 4(e)(2)(B), a person may be served by
"leaving a copy of each at the individual's dwelling
or usual place of abode with someone of suitable age and
discretion who resides there." Rule 4(e)(1) further
provides that process may be served in accordance with
"state law for serving a summons in an action brought in
courts of general jurisdiction in the state where the
district court is located or where service is made." The
applicable state law is described below, as necessary.
B.
Motion to Dismiss Under Rule 12(b)(2)
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, but need only make "a prima facie showing of
jurisdictional facts to withstand the motion to
dismiss." 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.
III.
INSUFFICIENT PROCESS CLAIMS
A.
Farjad Fani
1.
Relevant Facts
After
this Court issued its prior order granting Mr. Fani's
first Motion to Dismiss on February 5, 2014, j2 renewed its
effort to serve Mr. Fani. (Declaration of Agostino von
Hassell ¶ 6.) In 2013 and 2014, j2 employed
investigators who were unable to conclusively determine Mr.
Fani's whereabouts. (Id.) Around this time, from
January 2014 to August 2015, Mr. Fani reports residing in
Bellevue, Washington, where he had returned from overseas in
order to care for his terminally ill father. (Declaration of
Farjad Fani ("Farjad Decl.") ¶ 4.) In August
2015, Mr. Fani moved back overseas after his father passed
away. (Id.) In 2015, j2's investigator reports
connecting Mr. Fani with an apartment in Kuala Lampur but
states that Mr. Fani had already left for India by the time
process servers arrived. (von Hassell Decl. ¶¶
14-15.)
On
February 3, 2016, j2's process server attempted to serve
Mr. Fani at 12707 NE 120th St., Unit B11, Kirkland, WA 98033
("12707 Residence"). (Dkt. 36.) It is undisputed
that Mr. Fani's brother Sarfaraz Fani resides at this
address. (Declaration of Sarfaraz Fani in Support of Farjad
Fani's Motion to Dismiss ("Sarfaraz First
Decl.") ¶ 4.) j2 contends that Mr. Fani also
resided at this address. (Plaintiffs' Omnibus Opposition
to Defendants' Motion to Dismiss ("Opp'n")
at 9).
On
April 15, 2016, j2 filed its Amended Complaint with the
court. (Dkt. 43.) On April 19, 2015, j2's process server
purportedly served Mr. Fani in the same manner by leaving a
Summons and the Amended Complaint with his brother Sarfaraz
at the 12707 Residence. (Dkt. 46.)
2.
12(b)(5) Claim
As
noted above, a plaintiff is allowed to utilize the service
procedures of the state in which the district court is
located (California) or where service is made (Washington).
Fed.R.Civ.P. 4(e)(1). Washington law echoes the federal rules
and provides that an individual may be served by
"leaving a copy of the summons at the house of his or
her usual abode with some person of suitable age and
discretion then resident therein." Wash. Rev. Code
§ 4.28.080(16). California law provides that "a
summons may be served by leaving a copy of the summons and
complaint at the person's dwelling house, usual place of
abode, usual place of business, or usual mailing
address." Cal. Code Civ. P. § 415.20(b). While
California law allows service at an individual's mailing
address, in addition to usual place of abode, it also
requires that a plaintiff attempt personal service "with
reasonable diligence" before utilizing substituted
service. Id. "Two or three attempts to
personally serve a defendant at a proper place ordinarily
qualifies as ‘reasonably diligence.'" Am.
Express Centurion Bank v. Zara, 199 Cal.App.4th 383, 389
(2011). A copy of the summons and complaint must also be
mailed to the person to be served at the place where the
summons and complaint were left. Cal. Code Civ. P. §
415.20(b).
The
parties disagree about whether Mr. Fani's service should
be evaluated with reference to Washington's rule for
serving someone at their "usual abode" or
California's rule for serving someone at their
"usual place of abode . . . or usual mailing
address" with its additional diligence requirements.
Regardless of which law we apply, the case must be dismissed
if j2 cannot make a prima facie case that 12707 NE
120th St., Unit B11, Kirkland, WA 98033 is either
Mr. Fani's "place of abode" or his "usual
mailing address." Under Washington law, the term
"‘usual abode' . . . is to be liberally
construed to effectuate service and uphold jurisdiction of
the court." Sheldon v. Fettig, 129 Wash.2d 601,
609 (1996) (en banc). Washington has elaborated on this
definition by explaining that place of abode "must be
taken to mean such center of one's domestic activity that
service left with a family member is reasonably calculated to
come to one's attention within the statutory period for
defendant to appear." Id. at 610 (internal
quotations and citations omitted). Likewise, in California,
"[t]he critical question is whether a place . . . has
‘sufficient indicia of permanence' - i.e., it is
not a temporary residence." United States v.
Wen-Bing Soong, No. C-13-4088, 2014 WL 988632, at *2
(N.D. Cal. Mar. 10, 2014).
Mr.
Fani argues he is entitled to dismissal because there is no
credible evidence he ever lived or received mail at his
brother's residence, even on a temporary basis.
(Defendant Farjad Fani's Motion to Dismiss ("Farjad
Mot.") 8-9.) In support, Mr. Fani submitted declarations
by himself and his brother attesting that he does not now nor
has he ever lived at the residence. (Farjad Decl. ¶ 3;
Sarfaraz First Decl. ¶ 3.) Mr. Fani further states that
he has only visited the residence "once or twice since
they have lived there." (Farjard Decl. ¶ 3.)
Finally, Mr. Fani notes that the process server never
reported ...