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Hungerstation LLC v. Fast Choice LLC

United States District Court, N.D. California

January 13, 2020

HUNGERSTATION LLC, Plaintiff,
v.
FAST CHOICE LLC, et al., Defendants.

          ORDER ON MOTIONS TO DISMISS AND MOTION FOR PRELIMINARY INJUNCTION RE: DKT. NOS. 12, 23, 35, 45

          Haywood S. Gilliam, Jr. United States District Judge.

         Before the Court are three motions: (1) Defendant Fast Choice LLC's motion to dismiss for lack of personal jurisdiction and based on forum non conveniens, Dkt. No. 12; (2) Defendant Inspiring Trading Apps LLC's motion to dismiss for lack of personal jurisdiction, improper service, and failure to state a claim, Dkt. No. 35; and (3) Plaintiff's motion for preliminary injunction, Dkt. No. 23. Because the Court finds that it does not have personal jurisdiction over Defendants, the Court GRANTS Defendants' motions to dismiss and DENIES Plaintiff's motion for preliminary injunction.

         I. BACKGROUND

         Plaintiff Hungerstation LLC, Defendant Fast Choice LLC d/b/a Pace, and Defendant Inspiring Trading Apps LLC d/b/a Swyft are all limited liability companies formed under the laws of the Kingdom of Saudi Arabia. Dkt. No. 1 (“Compl.”) ¶¶ 4-6. All parties have their principal place of business in Saudi Arabia. Id.

         Plaintiff is one of the leading online food delivery services in Saudi Arabia. Id. ¶ 11. It developed three software apps in connection with its food delivery service: (1) a customer-facing app, on which customers can order food from local restaurants; (2) a restaurant-facing app, which restaurants use to accept customer orders; and (3) a rider-facing app, which couriers use to pick up and deliver the food. Id. ¶ 13. Plaintiff owns the source code for all three apps and has registered the copyrighted materials with the U.S. Copyright Office. Id. ¶ 31. It “creates, stores, and updates its copyrighted source code” on GitHub servers. Id. ¶ 32. GitHub is a third party based in the United States with servers in California, Washington, and Virginia. Id.

         As a result of operating these apps and accumulating data over time, Plaintiff has developed “valuable confidential information, ” which includes customer databases, restaurant databases, key contacts, and marketing strategies. Id. ¶ 14. Its confidential data is stored on Amazon Web Services, Inc. servers, which are in the United States and controlled through Cloudflare, Inc. Id. ¶ 51. Cloudflare is also a U.S.-based company. Id.

         Pace owns and operates a rider-facing food delivery mobile app, and Swyft owns and operates a customer-facing food delivery mobile app. Id. ¶¶ 16, 18. Swyft is a direct competitor of Plaintiff. Id. ¶ 18. According to the complaint, Pace and Swyft operate financially as one entity and “should be treated as alter egos of each other.” Id. ¶¶ 19-29.

         At issue here is the alleged unlawful theft of Plaintiff's source code and confidential data. Plaintiff alleges that Defendants “launched a plan to raid Hungerstation's intellectual property for the benefit of Defendants, who were direct competitors of Hungerstation.” Id. ¶ 43. Specifically, Defendants allegedly “attempted to recruit or exploit key members of Hungerstation's senior management team and software development team to either join Defendants … or to transfer confidential information to Defendants.” Id. This purported scheme involved “penetrating Hungerstation's computer servers in the United States in order to steal Hungerstation's trade secrets.” Id. ¶ 44. According to Plaintiff, Defendants' employees used “their then-valid Hungerstation credentials to wrongfully access, copy, and steal Hungerstation's GitHub repositories of copyrighted and proprietary source code, ” and “accessed Hungerstation's confidential data” stored on Amazon Web Services. Id. ¶¶ 46, 51. Defendants allegedly stored the “copycat source code on GitHub's U.S. servers.” Id. ¶ 48

         Defendants then purportedly “contracted with California-based Apple, Inc. and Google LLC, and transmitted executable files created using the infringing source code to those companies to be stored on their California-based servers, to distribute Defendant's infringing apps to smart phone users across the world.” Id. ¶ 50. According to Plaintiff, Defendants “signed terms of services and/or other contracts with Apple and Google … that explicitly contained choice of law provisions stating that California laws would govern the agreements.” Id. At the time Plaintiff filed the complaint, the apps were allegedly available for download in the United States on Apple's AppStore and GooglePlay. Id.

         Based on the allegations, Plaintiff brings six causes of action against Defendants: (1) misappropriation of trade secrets under the Defend Trade Secrets Act, 18 U.S.C. § 1836 et seq.; (2) misappropriation of trade secrets under California Uniform Trade Secrets Act, Cal. Civ. Code § 3426 et seq.; (3) copyright infringement, 17 U.S.C. § 101 et seq.; (4) violation of Computer Fraud and Abuse Act, 18 U.S.C. § 1030 et seq.; (5) violation of California's Comprehensive Computer Data Access and Fraud Act, Cal. Penal Code § 502(c); and (6) unfair competition under Cal. Bus. and Prof. Code § 17200 et seq. Id. ¶¶ 67-117

         II. MOTIONS TO DISMISS: PERSONAL JURISDICTION

         Because personal jurisdiction is a threshold issue and relevant to the likelihood of success factor of a preliminary injunction analysis, the Court first considers whether it has jurisdiction over the parties.[1]

         A. Legal Standard

         “When a defendant moves to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating that the court has jurisdiction over the defendant.” Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 (9th Cir. 2006). When personal jurisdiction is challenged, “the district judge has considerable procedural leeway in choosing a methodology for deciding the motion.” 5B Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1351 (3d ed. 2018). The court may rest on the allegations in the pleadings, weigh the contents of affidavits and other evidence, or even hold a hearing and resort to oral testimony. Id. Where, as here, the motion is based on written materials rather than an evidentiary hearing, Plaintiff need only make a prima facie showing of jurisdictional facts. Bauman v. DaimlerChrysler, 579 F.3d 1088, 1094 (9th Cir. 2009), vacated on other grounds, 603 F.3d 1141 (9th Cir. 2010) (citations omitted).

         The court “may not assume the truth of allegations in a pleading which are contradicted by affidavit.” CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1073 (9th Cir. 2011) (quotations omitted); see also Amba Mktg. Sys., Inc. v. Jobar Int'l, Inc., 551 F.2d 784, 787 (9th Cir. 1977) (plaintiff “could not simply rest on the bare allegations of its complaint, but rather was obligated to come forward with facts, by affidavit or otherwise, supporting personal jurisdiction”). But, the court must resolve conflicts between the facts contained in the parties' affidavits in plaintiff's favor. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004).

         B. Discussion

         Due process limits a court's power to “render a valid personal judgment against a nonresident defendant.” See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980). Where a state authorizes “jurisdiction on any basis not inconsistent with the Constitution of this state or of the United States, ” as does California, see Cal. Civ. Proc. Code § 410.10, federal courts must determine whether the exercise of jurisdiction over a defendant “comports with the limits imposed by federal due process.” Daimler AG v. Bauman, 571 U.S. 117, 126 (2014); see also Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011) (“California's long-arm statute . . . is coextensive with federal due process requirements, so the jurisdictional analyses under state law and federal due process are the same.”). Due process requires that a nonresident defendant have sufficient “‘minimum contacts' with the forum such that the assertion of jurisdiction ‘does not offend traditional notions of fair play and substantial justice.'” Pebble Beach, 453 F.3d at 1155 (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 315 (1945)).

         There are two categories of traditional personal jurisdiction a plaintiff can invoke: general and specific. Ranza v. Nike, Inc., 793 F.3d 1059, 1068 (9th Cir. 2015). “If the defendant's activities in the forum are substantial, continuous and systematic, general jurisdiction is available; in other words, the foreign defendant is subject to suit even on matters unrelated to his or her contacts to the forum.” Doe v. Unocal Corp., 248 F.3d 915, 923 (9th Cir. 2001). The Supreme Court has held that the “paradigm forums” for the exercise of general jurisdiction are an individual's domicile and a corporation's place of incorporation and principal place of business. Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 924 (2011); see Daimler, 571 U.S. at 134. This is in contrast to specific jurisdiction, which “exists when a case arises out of or relates to the defendant's contacts with the forum.” Ranza, 793 F.3d at 1068 ...


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