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Netgear, Inc. v. Redzone Wireless, LLC

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

May 31, 2017

NETGEAR, INC., Plaintiff,
v.
REDZONE WIRELESS, LLC, Defendant.

          ORDER GRANTING DEFENDANT'S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION [Re: ECF Nos.9, 30]

          BETH LABSON FREEMAN United States District Judge

         In this declaratory relief action, Defendant Redzone Wireless, LLC (“Redzone”) moves to dismiss for lack of personal jurisdiction and lack of a case or controversy, or alternatively to transfer the case to the U.S. District Court for the District of Maine. Mot., 9. For the reasons set forth below, the Court GRANTS the motion to dismiss for lack of personal jurisdiction, and thus declines to address the remaining issues raised in Redzone's motion.

         I. BACKGROUND

         In March 2015, Redzone, which is incorporated and has its principal place of business in Maine, reached out to declaratory judgment Plaintiff Netgear, Inc. (“Netgear”), which is incorporated in Delaware and has its principal place of business in California, to inquire whether an inventory of Netgear routers were available for purchase. Ex. 1 to Notice of Removal (“Compl.”) ¶ 10, ECF 1; Mot. 7, 9. Netgear had manufactured the routers pursuant to specifications of a different wireless carrier, which Netgear told Redzone. Compl. ¶¶ 9, 11. To assist Redzone in determining whether the routers were compatible with its network, Netgear sent samples to Redzone for testing. Id. ¶ 11. Netgear informed Redzone that were it to purchase the routers, they would be sold “as is” with no further modifications or support. Id.

         After Redzone determined that the routers were compatible with its network, the parties negotiated an agreement whereby Redzone agreed to purchase routers from Netgear. Id. ¶¶ 12-13. On April 6, 2015, the parties executed Netgear's Standard Terms and Conditions Agreement (“T&C Agreement”). Id. ¶ 13; Ex. A to Compl. (“T&C Agreement”), ECF 1. Approximately three weeks later, on April 28, 2015, the parties entered into a Redzone Wireless Custom LG6100 SKU Side Letter (“Side Letter Agreement”), which obligated the parties to terms in addition to the T&C Agreement. Compl. ¶ 14; Ex. B to Compl. (“Side Letter Agreement”), ECF 1. Redzone took delivery of the routers in June 2015, and subsequently began installing them in customers' homes. Compl. ¶ 16.

         Between the time Redzone tested the routers for compatibility with its network and began installing them in its customers' homes, Redzone made significant alterations to its wireless system. Id. Once Redzone installed the routers, it began receiving complaints of connectivity drops from its customers. Id. Redzone alerted Netgear of the issue on July 16, 2015, and requested a solution. Id.

         Netgear was unable to discover the root cause of the connectivity issues, but nonetheless provided patches for the router firmware in November and December 2015, even though it contends it was not contractually required to do so. Id. ¶ 17. Netgear alleges that Redzone continued to demand that it provide additional support for the routers, and thus Netgear brought this declaratory judgment suit seeking a declaration that it is not obligated to devote further time and resources to the connectivity issues being experienced by Redzone's customers. Id. ¶¶ 18-19.

         Redzone now moves to dismiss this action for lack of personal jurisdiction and lack of a case or controversy. Mot. 2. Alternatively, Redzone asks the Court to transfer the action to the District Court for the District of Maine. Netgear opposes the motion. Opp'n, ECF 20.

         II. MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION

         Redzone first argues that the Court does not have personal jurisdiction over it, and therefore, the action cannot be maintained in this Court. Mot. 4. Netgear contends, however, that this Court may exercise specific jurisdiction over Redzone. Opp'n 4.

         A. Legal Standard

         Federal Rule of Civil Procedure 12(b)(2) authorizes a defendant to seek dismissal of an action for lack of personal jurisdiction. Fed.R.Civ.P. 12(b)(2). “Where, as here, the defendant's motion is based on written materials rather than an evidentiary hearing, the plaintiff need only make a prima facie showing of jurisdictional facts to withstand the motion to dismiss.” Ranza v. Nike, Inc., 793 F.3d 1059, 1068 (9th Cir. 2015) (internal quotation marks and citation omitted). “[T]he plaintiff cannot simply rest on the bare allegations of its complaint.” Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004) (internal quotation marks and citation omitted). However, uncontroverted allegations in the complaint are accepted as true, and factual disputes created by conflicting affidavits are resolved in the plaintiff's favor. Id.

         Where no applicable federal statute governs personal jurisdiction, “the law of the state in which the district court sits applies.” Harris Rutsky & Co. Ins. Servs., Inc. v. Bell & Clements Ltd., 328 F.3d 1122, 1129 (9th Cir. 2003). “California's long-arm statute allows courts to exercise personal jurisdiction over defendants to the extent permitted by the Due Process Clause of the United States Constitution.” Id. “[D]ue process requires that the 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.'” Ranza, 793 F.3d at 1068 (quoting Int'l Shoe Co. v. Wash., 326 U.S. 310, 316 (1945)) (internal quotation marks and citation omitted).

         B. ...


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