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Power Integrations, Inc. v. The Penbrothers International Inc.

United States District Court, N.D. California

November 18, 2019

POWER INTEGRATIONS, INC., Plaintiff,
v.
THE PENBROTHERS INTERNATIONAL INC., et al., Defendants.

          ORDER ON SPECIALLY APPEARING DEFENDANT THE PENBROTHERS INTERNATIONAL INC.'S MOTION TO DISMISS RE: DKT. NO. 26

          SUSAN VAN KEULEN, UNITED STATES MAGISTRATE JUDGE

         Plaintiff Power Integrations, Inc. (“PI”) claims that several of its former employees were recruited by Defendant The Penbrothers International Inc. (“Penbrothers”) to work for Silanna Semiconductor North America, Inc. (“Silanna”), a competitor of PI.[1] PI is headquartered in San Jose, California. Silanna is headquartered in San Diego, California. Defendant Penbrothers is located in the Philippines. Defendants Edison D. De Lara, Charles Reyes Evangelista, Ian Barrameda, and Alex F. Mariano (collectively, the “Individual Defendants”) are all citizens of the Philippines who formerly worked for PI in the Philippines and now work for Silanna.[2]

         Now before the Court is Penbrothers' motion to dismiss the First Amended Complaint (“FAC”). Dkt. 26. The parties have consented to the jurisdiction of a magistrate judge. Dkt. 10, 25, 28. The Court held a hearing on October 29, 2019. Based on review of the parties' submissions, arguments at the hearing, the case file, and applicable law, the Court hereby GRANTS Penbrothers' motion to dismiss under Rule 12(b)(2) for lack of personal jurisdiction. Because the Court finds it does not have personal jurisdiction over Penbrothers, it does not reach Penbrothers' alternative arguments that the case should be dismissed under Rule 12(b)(3) for improper venue and under Rule 12(b)(6) for failure to state a claim.

         I. BACKGROUND

         PI and Silanna compete in the market for power conversion technology. Dkt. 12 (FAC) ¶¶ 14, 15. The Individual Defendants each worked for PI until 2018 or 2019. Id. ¶ 18 (alleging that De Lara was employed by PI from approximately March 22, 2016 through May 11, 2019); ¶ 27 (alleging that Evangelista was employed by PI from approximately September 19, 2017 through May 16, 2019); ¶ 41 (alleging that Barrameda was employed by PI from approximately April 7, 2015 through March 2, 2019); ¶ 50 (alleging that Mariano was employed by PI from approximately October 1, 2008 through January 27, 2018). According to PI, the Individual Defendants' employment contracts with PI contained confidentiality, non-compete, and non-solicitation provisions. Id. ¶¶ 19-21; 28-30; 42-44; 51.

         Individual Defendants De Lara, Evangelista, and Barrameda are all citizens of the Philippines, worked for PI in the Philippines, and resided in the Philippines throughout their employment with PI. Dkt. 30-2 (De Lara Decl.) ¶¶ 2, 4; Dkt. 30-3 (Evangelista Decl.) ¶¶ 2, 4; Dkt. 30-5 (Barrameda Decl.) ¶ 2. Individual Defendant Mariano was engaged to provide services for PI in the Southeast Asia region, but he states that he is also a citizen of the Philippines who resided there throughout his employment with PI. Dkt. 30-6 (Mariano Decl.) ¶¶ 2, 3.

         Plaintiff alleges on information and belief that Silanna, either directly or in conspiracy with Penbrothers, intentionally targeted, approached, recruited, or attempted to recruit PI's current or recently separated key engineering employees who had knowledge and information about PI's trade secrets. Dkt. 12 (FAC) ¶ 57. Penbrothers describes itself as “a co-working space, backoffice processing provider” located in the Philippines. Dkt. 26-2 (Reyes Decl.) ¶ 2. It appears that Penbrothers is also a recruiter. See Dkt 26-3 (Ex. 1 to Reyes Decl.) at 3 (signature block describing Penbrothers employee as “Recruitment Specialist”); see also Dkt. 12 (FAC) ¶ 16 (alleging on information and belief that Penbrothers is a “staffing and office solution provider”). According to Penbrothers, in April 2019, it sent offer letters to Individual Defendants De Lara and Evangelista, but it withdrew the offers after receiving a cease and desist letter from PI's lawyers. Dkt. 26-2 (Reyes Decl.) ¶¶ 4-5. The job offers refer to Silanna but state that De Lara and Evangelista will be employed in the Philippines. Dkt. 26-3 (Ex. 1 to Reyes Decl.) at 2, 8 (offer to De Lara); Dkt. 26-3 (Ex. 2 to Reyes Decl.) at 15, 22 (offer to Evangelista). Penbrothers states that none of the Individual Defendants ever began work for or through Penbrothers. Dkt. 26-2 (Reyes Decl.) ¶ 5.

         In connection with their motion to dismiss, the Individual Defendants submitted declarations stating that they are now employed by Silanna and claiming they have never worked for or through Penbrothers. Dkt. 30-2 (De Lara Decl.) ¶ 4; Dkt. 30-3 (Evangelista Decl.) ¶¶ 4-5; Dkt. 30-5 (Barrameda Decl.) ¶ 3; Dkt. 30-6 (Mariano Decl.) ¶¶ 4-5. De Lara and Mariano state that they are “employed with Silanna Semiconductor North America, Inc., in San Diego, California.” Dkt. 30-2 ¶ 5; Dkt. 30-6 ¶5. Evangelista and Barrameda state that they work for “Silanna in San Diego.” Dkt. 30-3 ¶ 4; Dkt. 30-5 ¶ 3.

         II. DISCUSSION

         Penbrothers moves to dismiss the FAC for lack of personal jurisdiction under Rule 12(b)(2), improper venue under Rule 12(b)(3), and failure to state a claim under Rule 12(b)(6). As discussed below, the Court concludes that it does not have personal jurisdiction over Penbrothers and therefore does not reach Penbrothers' other arguments for dismissal.

         A. Personal Jurisdiction

         1. Legal Standard

         A party may challenge the Court's personal jurisdiction over it by bringing a motion under Federal Rule of Civil Procedure 12(b)(2).[3] A Rule 12(b)(2) motion “must be made before pleading if a responsive pleading is allowed.” Fed.R.Civ.P. 12(b).

         When a defendant raises a challenge to personal jurisdiction, the plaintiff bears the burden of establishing that jurisdiction is proper. Ranza v. Nike, Inc., 793 F.3d 1059, 1068 (9th Cir. 2015). The plaintiff may meet this burden by submitting evidence such as affidavits and discovery materials. Id. Where 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.” Id. (internal quotation marks and citation omitted). Although “the plaintiff cannot simply rest on the bare allegations of its complaint, ” in evaluating the plaintiff's showing, the court must accept uncontroverted allegations in the complaint as true and resolve ...


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