Silverman v. Move Inc.

          ORDER GRANTING WITHOUT LEAVE TO AMEND NATIONAL ASSOCIATION OF REALTORS' MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION; GRANTING MOVE, INC'S AMENDED MOTION TO COMPEL ARBITRATION; STAYING ACTION AND VACATING CASE MANAGEMENT CONFERENCE [RE: ECF 25, 37]

          BETH LAB SON FREEMAN, United States District Judge.

         Before the Court are two motions: (1) Defendant National Association of Realtors' (“NAR”) Motion to Dismiss for Lack of Personal Jurisdiction and Failure to State a Claim (MTD, ECF 25); and (2) Defendant Move, Inc.'s (“Move”) Amended Motion to Compel Arbitration and to Dismiss, or in the Alternative, to Stay, the Case (MTC, ECF 37). For the reasons discussed below, NAR's motion to dismiss is GRANTED WITHOUT LEAVE TO AMEND, and Move's motion to compel arbitration is GRANTED. The case is STAYED pending arbitration, and the initial case management conference set for July 18, 2019 is VACATED.

         I. BACKGROUND

         In this putative class action, Plaintiff Courtney Silverman alleges a single cause of action against Defendants NAR and Move for advertising text messages that violated the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227. See First Am. Compl. (“FAC”) ¶¶ 78-84, ECF 56. Plaintiff, a citizen and resident of Florida, is a licensed real estate sales associate and a member of NAR. FAC ¶ 8. NAR, an Illinois corporation, owns and promotes the domain realtor.com, which NAR describes as its official website. FAC ¶¶ 2, 12. Realtor.com has its headquarters in California. FAC ¶ 14. Realtor.com is the promotional hub for NAR and its members, which allows realtors to market homes to consumers and allows realtors to develop leads on consumers' behalves. FAC ¶¶ 15, 29-32, 45. NAR provides numerous resources, services, and benefits for its members through Realtor.com. FAC ¶¶ 33-34.

         Move, a California corporation, operates the website for NAR under a licensing agreement. FAC ¶¶ 3, 11, 20. In 1996, NAR and Move entered into a “strategic partnership” via a perpetual marketing agreement and trademark license through which Move operates Realtor.com. FAC ¶ 22. This agreement is governed by California law. FAC ¶ 23. Through this agreement, NAR engaged Move to promote Realtor.com and its services to real estate professionals, which includes the text messages at issue in this action. FAC ¶ 24. While Move operates Realtor.com, ultimately NAR has control over the site and final approval over the site's advertising and branding. FAC ¶¶ 36, 46. Move has stated in its SEC filings that NAR has “significant influence” over its corporate governance, including that the two companies share confidential information, officers, board members, logos, and approve some of each other's mergers and directors. FAC ¶ 35.

         Move and NAR, jointly and as agents of one another, allegedly sent unsolicited advertising text messages to real estate professionals, including Plaintiff and the putative class, who were members of NAR, in order to promote Realtor.com and its services. FAC ¶¶ 4-6, 19, 25, 44, 48, 49, 54. Defendants had previously obtained the cellphone numbers of Plaintiff and the class and “purportedly their consents” to receive emails from Realtor.com. FAC ¶¶ 49-51. This agreement also allowed members to opt out or unsubscribe from such messages. FAC ¶ 55. Pursuant to the agreement, Plaintiff and the class members unsubscribed, but Defendants continued to send the text messages. FAC ¶¶ 56-62.

         Based on Defendants' actions, Plaintiff filed her Complaint here on September 26, 2018, asserting a single TCPA claim. See ECF 1. She brings this claim on behalf of a nationwide class of individuals defined as, “[w]ithin the applicable statute of limitations, all persons in the United States to which and to whom Defendants sent or caused to be sent a text message stating ‘realtor.com' using an ATDS after receiving the reply text message: ‘Stop.'” FAC ¶ 70. Excluded from the class are those who entered into arbitration agreements with Move that had not yet expired. FAC ¶ 71.

         On December 10, 2018, NAR filed its motion to dismiss for lack of personal jurisdiction and failure to state a claim. ECF 25. Plaintiff never opposed this motion. On the same day, Move filed a motion to compel arbitration. ECF 27. On December 20, 2018, the Court granted the parties' stipulation to extend Plaintiff's deadline to oppose the motions to January 23, 2019. ECF 31. On January 23, 2019, Move filed an amended motion to compel arbitration, which is at issue here. ECF 37. On January 28, 2019, without moving for leave of Court or obtaining a stipulation from Defendants, Plaintiff filed an amended complaint. ECF 41. On March 6, 2019, the Court granted Defendants' motion to strike Plaintiff's amended complaint. ECF 50. On March 7, 2019, Plaintiff moved for leave to amend her complaint (ECF 51), which Defendants opposed. On March 22, 2019, Plaintiff opposed Move's amended motion to compel arbitration. ECF 53.

         On April 2, 2019, the Court granted Plaintiff's motion for leave to amend and converted the two pending motions pertaining to the Complaint into motions pertaining to the First Amended Complaint (“FAC”). ECF 55. Because Move had not yet filed its reply in support of its motion to compel, the Court directed Move to address the FAC in its reply and gave Plaintiff the opportunity to file a sur-reply. Id. Because Plaintiff never opposed NAR's motion to dismiss, the Court gave NAR the opportunity to file a supplemental brief in support of its motion to dismiss and declined to give Plaintiff the opportunity to respond to this supplemental brief. Id. To resolve NAR's motion, the Court will consider arguments Plaintiff made in her motion for leave to amend as they relate to NAR's motion to dismiss. See MLTA, ECF 51. On May 23, 2019, the Court held a hearing on the motions. ECF 62.

         II. MOTION TO DISMISS

         NAR moves to dismiss Plaintiff's claim because this Court does not have personal jurisdiction over NAR and because Plaintiff fails to state a claim against NAR. See generally MTD. Because the Court agrees that it does not have personal jurisdiction over NAR, it does not address NAR's Rule 12(b)(6) arguments.

         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). Uncontroverted allegations in the complaint are taken as true, Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004), and factual disputes contained within declarations or affidavits are resolved in the plaintiff's favor, Boschetto v. Hansing, 539 F.3d 1011, 1015 (9th Cir. 2008).

         Under Federal Rule of Civil Procedure 4(k)(1)(A), this Court has personal jurisdiction if the defendant would be “subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located, ” i.e., California. Because California's long-arm statute is coextensive with federal due process requirements, the Court may exercise personal jurisdiction so long as it comports with due process. See Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011). “[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. Washington, 326 U.S. 310, 316 (1945)).

         B. Discussion

         The Court first discusses additional relevant facts and then the parties' arguments here.

         1. Additional Facts

         As discussed, Plaintiff is a citizen and resident of Florida and a member of NAR. FAC ¶ 8. NAR is an Illinois corporation. FAC ¶¶ 2, 12. NAR's website shows that its home office is in Chicago, IL. McGrath Decl., Ex. 1, ECF 25-1. Realtor.com has its headquarters in California. FAC ¶ 14. NAR provides numerous resources, services, and benefits for its members nationwide through Realtor.com. FAC ¶¶ 33-34.

         NAR allegedly “transacts substantial business in, and has maintained continuous and systematic contacts in and with, California generally and specifically relating to marketing its official moniker, website, REALTOR marketing hub, and brand, ‘Realtor.com' in and from California, from which the text messages at issue were sent.” FAC ¶ 12. This business includes NAR's “strategic partnership” with Move, starting with the 1996 perpetual marketing agreement (“1996 Agreement”) that sets forth the relationship between the parties. FAC ¶ 22; McGrath Decl., Ex. 2 (“Agreement”).^[1] The 1996 Agreement discusses the terms of how Move will operate Realtor.com and sets forth the relationship of the parties:

This agreement is not intended to create, and shall not be deemed or treated as creating, a partnership, joint venture, employment contract or any other relationship between the parties other than the service relationship expressly provided for in this Agreement. All commitments, obligations, undertakings and liabilities associated with the [operation of Realtor.com] shall be entered in the name of, and shall be the sole responsibility of, [Move]^[2], and neither party shall be authorized to enter into any commitment, obligation, undertaking or liabilities in the name of, or on behalf of, the other party.

Agreement ¶ 3.4.

         The 1996 Agreement also makes Move responsible for carrying out Realtor.com's marketing program:

[Move] shall be responsible for developing and implementing a program to identify Authorized Advertisers for the System and to solicit advertisements from such Persons; and [Move] shall be responsible for carrying out such program. [Move] shall be responsible for the costs of soliciting such advertising, setting such advertisements up on the System in compliance with the requirements set forth in Section 5.7, and collecting revenues associated therewith . . . . No. Advertising shall indicate that a product or service is endorsed or sponsored by NAR or RIN unless the advertiser has been authorized to do so by NAR or RIN, as the case may be.

Id. ¶¶ 5.7(b) and (c).

         The 1996 Agreement states that California law governs it and that the venue for disputes under it shall be California. Id. Sched H, ¶ 12; FAC ¶ 23. The 1996 Agreement also provides that NAR has ultimate authority to approve the advertising plan; that NAR may audit the marketing process; that Move must open its records to NAR; that Move must prepare a business plan related to its efforts on NAR's behalf; and other related oversight provisions. FAC ¶ 36 (citing 1996 Agreement).

         Apart from Realtor.com, NAR has other significant ties to California. “NAR and its constituent board and state associations form a composite organization of brokers and salespeople, including, as of November 2018, approximately 200, 000 NAR members in California, which is the state with the most NAR members in the United States.” FAC ¶ 17. Certain California real estate associations were founding members of NAR many decades ago. FAC ¶ 16. NAR is registered with the California Secretary of State; has bylaws and a constitution adopted in California; has marketing agreements with various California entities, including Move and Realtor.com; sets operational standards for California Realtor associations; regularly conducts business in California, including through its approximately 200, 000 California members; holds regular meetings and events in California; has had several presidents and officers who hail from California; and maintains a regional vice president in California. FAC ¶ 18.

         2. Discussion

         Plaintiff argues that the Court has general personal jurisdiction over NAR; she does not argue that the Court has specific jurisdiction over NAR. See generally MLTA. The Court first discusses general jurisdiction law and then analyzes the facts here.

         a. General Jurisdiction Law

         The Supreme Court has recognized two types of personal jurisdiction: (1) general (or all-purpose) jurisdiction and (2) specific (or case-specific) jurisdiction. See Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 927 (2011). General jurisdiction is based on certain limited affiliations that the defendant has with the forum state. Id. at 919. A court may exercise general jurisdiction only when the defendant's “affiliations with the State are so ‘continuous and systematic' as to render [the defendant] essentially at home in the forum State.” Daimler AG v. Bauman, 134 S.Ct. 746, 754 (2014) (quoting Goodyear, 564 U.S. at ...