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OOO Brunswick Rail Management v. Sultanov

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

June 6, 2017

OOO BRUNSWICK RAIL MANAGEMENT, et al., Plaintiffs,
v.
RICHARD SULTANOV, Defendant.

          ORDER GRANTING DEFENDANT RICHARD SULTANOV'S MOTION TO DISMISS RE: DKT. NO. 86

          EDWARD J. DAVILA United States District Judge

         Plaintiffs OOO Brunswick Rail Management and Brunswick Rail Group Limited (together, “Brunswick”) allege that Defendant Richard Sultanov misappropriated Brunswick's confidential information. Compl. ¶¶ 31-48, Dkt. No. 1. Sultanov moves to dismiss for lack of personal jurisdiction. Sultanov's motion will be GRANTED.

         I. BACKGROUND

         Sultanov is a former Brunswick employee. Compl. ¶ 21. Brunswick alleges that Sultanov improperly sent confidential information to his personal Gmail account and forwarded that information to Brunswick's creditors. Id. ¶¶ 35-45. Brunswick filed an ex parte application for an order to seize and preserve evidence, for expedited discovery, for a temporary restraining order, and to show cause why a preliminary injunction should not issue. Dkt. No. 3. This Court ordered evidence to be preserved, enjoined dissemination of Brunswick's confidential information, and set a preliminary injunction hearing. Dkt. No. 15. After the hearing, this Court denied Brunswick's application for a preliminary injunction for lack of personal jurisdiction (Dkt. No. 52) but allowed Brunswick to conduct limited jurisdictional discovery (Dkt. No. 83). Jurisdictional discovery has now been completed, and Sultanov moves to dismiss under Fed.R.Civ.P. 12(b)(2).

         II. LEGAL STANDARD

         Fed. R. Civ. P. 12(b)(2) allows dismissal for lack of personal jurisdiction. When the motion to dismiss is a defendant's first response to the complaint, the plaintiff need only make a prima facie showing that personal jurisdiction exists. See Data Disc, Inc. v. Sys. Tech. Assocs., Inc., 557 F.2d 1280, 1285 (9th Cir. 1977). While a plaintiff cannot “ ‘simply rest on the bare allegations of its complaint, ' uncontroverted allegations in the complaint must be taken as true” and “[c]onflicts between parties over statements contained in affidavits must be resolved in the plaintiff's favor.” Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004) (quoting Amba Marketing Sys., Inc. v. Jobar Int'l, Inc., 551 F.2d 784, 787 (9th Cir. 1977), and citing AT&T v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir. 1996)). Where a defendant moves to dismiss a complaint for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating that jurisdiction is appropriate. Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990).

         III. DISCUSSION

         Sultanov argues that this case must be dismissed because he is not subject to general or specific personal jurisdiction in this district. Def.'s Mot. to Dismiss (“MTD”), Dkt. No. 86. The Court agrees.

         A. General Personal Jurisdiction

         “For an individual, the paradigm forum for the exercise of general jurisdiction is the individual's domicile . . . .” Daimler AG v. Bauman, 134 S.Ct. 746, 760 (2014) (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 924 (2011)). “Unless a defendant's contacts with a forum are so substantial, continuous, and systematic that the defendant can be deemed to be ‘present' in that forum for all purposes, a forum may exercise only ‘specific' jurisdiction-that is, jurisdiction based on the relationship between the defendant's forum contacts and the plaintiff's claim.” Yahoo! Inc. v. La Ligue Contre Le Racisme Et L'Antisemitisme, 433 F.3d 1199, 1205 (9th Cir. 2006). In “rare instances, ” courts have exercised general jurisdiction “when the individual's contacts with a forum are so substantial that ‘the defendant can be deemed to be present in that forum for all purposes, ' ” but “frequent visits to a forum, [or] owning property in a forum, do not, alone, justify the exercise of general jurisdiction.” Hendricks v. New Video Channel Am., LLC, No. 2:14-CV-02989-RSWL-S, 2015 WL 3616983, at *4 (C.D. Cal. June 8, 2015).

         Sultanov was born in Russia and moved to California in 1998. MTD 1; Pls.' Opp'n to Def.'s Mot. to Dismiss (“Opp'n”) 2, Dkt. No. 97. He attended high school in Carmel and college at the University of California at Davis. Opp'n 2-3. He is a U.S. citizen and has a passport and Social Security number. Id. He left the United States in 2007 and now lives and works in Russia. MTD 3-4. Over the past decade, he has spent approximately 20 days in California. Id.; Def.'s Reply in Support of Mot. to Dismiss (“Reply”) 5, Dkt. No. 98. He has not visited California during the last four years. MTD 7.

         Brunswick presents several reasons why it believes Sultanov is domiciled in California or has contacts with California that are sufficiently continuous and systematic to establish general personal jurisdiction. First, it points to Sultanov's use of a mailing address in Monterey as evidence that Sultanov “maintains his status as a resident of California and Monterey County . . . .” Opp'n 15. Sultanov does not dispute that he receives mail and packages at that address, or that (as discussed below) the address is associated with his U.S. driver's license, bank accounts, and credit cards. Opp'n 7-8, 15, 18-19. But he contends that the address is nothing more than the location of “a family friend's property that [he] sometimes uses as a mailing address.” MTD 6-7. It is not his residence-he says that he resides in Russia, and he does not maintain a residence or own real property in Monterey or anywhere else in the United States. Id. at 2, 6-7. Brunswick shows that Sultanov has used the address when filling out certain forms or to receive mail, but it offers no evidence that Sultanov has ever physically resided there.

         Second, Sultanov has a checking account at Bank of America that includes the notation “DBA: Richard Sultanov Consulting.” Opp'n 4-5, 15-16. The account is associated with the Monterey address. Id. at 15. According to Brunswick, this notation shows that Sultanov operates a sole proprietorship with its principal place of business in California. Id. The account received a payment of $13, 000 from Paul Ostling (who was formerly a defendant in this action) for rendering services for a company called PSINOS. Id. at 15, 23. Sultanov responds that this consulting business “does not exist and has never existed, ” that he has never established any kind of business entity in California, and that he “agreed to add that notation to his personal checking account at the suggestion of a bank employee” in order to obtain certain unspecified benefits. Reply 7. Brunswick has not identified any business activity that Sultanov has conducted in California.

         Third, Sultanov has a California driver's license that he renewed most recently in 2016. Opp'n 7-8. He used the Monterey address. Id. The license renewal form required Sultanov to agree to the following language: “I consent to receive service of process at this mailing address pursuant to [three sections] of the Civil Procedure Code.” Id. at 8. Brunswick argues that Sultanov consented to personal jurisdiction by agreeing to this clause, but Sultanov responds that consent to service of process is not the same as consent to personal jurisdiction. See id.; Reply 8; AM Trust v. UBS AG, No. 15-15343, 2017 WL 836080, at *2 (9th Cir. Mar. 3, 2017) (“Nor does [Defendant's] acceptance ...


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