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Monje v. Spin Master Inc.

United States District Court, Ninth Circuit

May 29, 2013

Mark Monje and Beth Monje, husband and wife, individually and on behalf of their minor son; and RM, minor son, Plaintiffs,
v.
Spin Master Inc., a Delaware corporation; Spin Master Limited, a Canadian company; Toys

ORDER

G. MURRAY SNOW, District Judge.

Defendant Moose Enterprises Propriety Limited has filed a Motion to Dismiss (Doc. 85) the Amended Complaint (Doc. 1-1) for lack of personal jurisdiction under Rule 12(b)(2). After reviewing the Parties' submissions, the Court denies the Motion.[1]

BACKGROUND[2]

Moose is an Australian company that is registered in Melbourne. (Doc. 1-1 (Am. Compl.) ¶ 7; Doc. 85-1, Ex. A ¶ 4.) It does not have any offices in the United States, nor does it directly conduct retail or wholesale operations here. (Doc. 85-1, Ex. A ¶¶ 5-7.) Moose specializes in the design, development, manufacture, marketing, and distribution of a variety of children's toys throughout the world. (Doc. 1-1 (Am. Compl.) ¶ 7.) In order to facilitate expansion of its products into North America, Moose contracts with Defendant Spin Master to handle the distribution of Moose toys. ( Id. )

One of those products is "Bindeez", which Spin Master marketed and sold in the United States as "Aqua Dots." ( Id. ) Aqua Dots are small, colorful beads that children could use to make various crafts. ( Id. ¶ 16.) The idea was for children to arrange the beads into various designs on a tray. ( Id. ) The child would then spray her creation with water, which fused the beads together and enabled the child to remove her creation from the tray for display or play. ( Id. )

Moose acquired the design for Aqua Dots from an independent toy inventor. (Doc. 85-1, Ex. A ¶ 13.) Moose contracted with a Chinese firm, JSSY, Ltd., to manufacture Aqua Dots. (Doc. 1-1 (Am. Compl.) ¶ 17; Doc. 85-1, Ex. A ¶ 13.) Moose then contracted with Spin Master for Aqua Dot distribution in the United States. (Doc. 1-1 (Am. Compl.) ¶¶ 18-19; Doc. 85-1, Ex. A ¶¶ 12-15.) Aqua Dots arrived on the shelves of United States retailers on April 1, 2007. (Doc. 1-1 (Am. Compl.) ¶ 20.) Moose, through Spin Master, distributed around 4.2 million packages of Aqua Dots in the United States. (Doc. 106-1, Ex. 15.)

At some point in 2007, Plaintiffs Mark and Beth Monje purchased Aqua Dots from a Toys "R" Us store in Maricopa County, Arizona. (Doc. 1-1 (Am. Compl.) ¶ 11.) In July of 2007, Plaintiff Ryan Monje, the Monjes' 18-month-old son, ate some Aqua Dots. ( Id. ¶¶ 2, 11.) Unbeknownst to the Monjes, Aqua Dots contained 1, 4-butanediol, a harmful toxin that, when metabolized, converts into GHB, also known as the "date rape" drug. ( Id. ¶ 22.) Ryan experienced "significant seizures, continued vomiting, went into respiratory failure, required intubation, and slipped into a coma." ( Id. ¶ 13.) He was air-evacuated to Phoenix Children's Hospital. ( Id. ) Ryan suffered severe and permanent injuries to his brain and central nervous system. ( Id. ¶ 15.)

Nurses found Aqua Dots in Ryan's vomit. ( Id. ¶ 13.) The Monjes allege that Moose pressured JSSY to keep costs down and that pressure led to the substitution of the cheaper 1, 4-butanediol for the more expensive nontoxic compound. ( Id. ¶ 22.) On November 7, 2007, the United States Consumer Product Safety Commission ordered the recall of all Aqua Dots after several reports of injuries similar to those suffered by Ryan surfaced in the media. ( Id. ¶ 21.) The Monjes bring a variety of product liability claims against Moose, Spin Master, and Toys "R" Us. Moose has moved to dismiss the Amended Complaint for a lack of personal jurisdiction.

DISCUSSION

I. LEGAL STANDARD

The plaintiff bears the burden of establishing personal jurisdiction. See, e.g., Ziegler v. Indian River Cnty., 64 F.3d 470, 473 (9th Cir. 1995). Once a defendant has moved to dismiss, "the plaintiff is obligated to come forward with facts, by affidavit or otherwise, supporting personal jurisdiction" over the defendant. Cummings v. W. Trial Lawyers Assoc., 133 F.Supp.2d 1144, 1151 (D. Ariz. 2001) (internal quotations omitted). "[M]ere allegations of a complaint, when contradicted by affidavits, are not enough to confer personal jurisdiction over a non-resident defendant." Chem Lab Prods., Inc. v. Stepanek, 554 F.2d 371, 372 (9th Cir. 1977); Data Disc, Inc. v. Sys. Tech. Assocs., 557 F.2d 1280, 1285 (9th Cir. 1977) ("[W]e may not assume the truth of allegations in a pleading which are contradicted by affidavit.") A court may look to affidavits submitted by the parties in its determination. Doe v. Unocal Corp., 248 F.3d 915, 922 (9th Cir. 2001). However, "conflicts between the facts contained in the parties' affidavits must be resolved in [plaintiffs'] favor for purposes of deciding whether a prima facie case for personal jurisdiction exists." AT&T v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir. 1996).

Because no statutory method for resolving the personal jurisdiction issue exists, the district court determines the method of its resolution. See Data Disc, Inc. v. Sys. Tech. Assocs., 557 F.2d 1280, 1285 (9th Cir. 1977) (citing Gibbs v. Buck, 307 U.S. 66, 71-72 (1939)). A district court may, but is not required to, allow discovery to help determine whether it has personal jurisdiction over a defendant. See id. at 1285 n.1. In addition, a district court may, but is not required to, hear evidence at a preliminary hearing to determine its jurisdiction. See id. at 1285 n.2. If the district court does not hear testimony or make findings of fact and permits the parties to submit only written materials, then the plaintiff must only make a prima facie showing of jurisdictional facts to defeat the defendant's motion to dismiss. See Omeluk v. Langsten Slip & Batbyggeri A/S, 52 F.3d 267, 268 (9th Cir. 1995). Under this prima facie burden of proof, the plaintiff need only establish facts, through admissible evidence, that if true would support personal jurisdiction over the defendant. See Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir. 1995). The Court has determined to proceed on the written materials submitted by the Parties. Accordingly, the Monjes' request for discovery is denied.

II. ANALYSIS

A. The Test

To establish that personal jurisdiction over Moose is proper, the Monjes must demonstrate that (1) Arizona's long arm statute confers jurisdiction over Moose, and (2) that "the exercise of jurisdiction comports with the constitutional principles of Due Process." See Rio Props. v. Rio Int'l Interlink, 284 F.3d 1007, 1019 (9th Cir. 2002) (citation omitted); Fed.R.Civ.P. 4(k)(1)(A). Because Arizona's long-arm statute extends jurisdiction "to the maximum extent permitted by the... Constitution of the United States, " the personal jurisdiction inquiry collapses into a Due Process analysis. See Ariz. R. Civ. P. 4.2(a); Davis v. Metro Prod., Inc., 885 F.2d 515, 520 (9th Cir. 1989); Williams v. Lakeview Co., 199 Ariz. 1, 5, 13 P.3d 280, 282 (2000). Absent traditional bases for personal jurisdiction (e.g., physical presence, domicile, and consent) the Due Process Clause requires that nonresident defendants have certain "minimum contacts" with the forum state such that the exercise of personal jurisdiction does not offend traditional notions of fair play and substantial justice. See Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945).

"In determining whether a defendant had minimum contacts with the forum state such that the exercise of jurisdiction over the defendant would not offend the Due Process Clause, courts focus on the relationship among the defendant, the forum, and the litigation.'" Brink v. First Credit Resources, 57 F.Supp.2d 848, 860 (D. Ariz. 1999) (quoting Shaffer v. Heitner, 433 U.S. 186, 204 (1977)). If a defendant's contacts with the forum state are sufficient to satisfy the Due Process Clause, then the Court must exercise either "general" or "specific" jurisdiction over the defendant. See Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 414-15 nn. 8-9 (1984); Ziegler, 64 F.3d at 473. The nature of a defendant's contacts with the forum state will determine whether the Court exercises general or specific jurisdiction over him. Helicopteros Nacionales, 466 U.S. at 414-15 nn.8-9. Because no party contends that the Court has general jurisdiction over Moose, only the exercise of specific jurisdiction will be considered.

Schwarzenegger governs determinations of whether sufficient minimum contacts exist to enable a given forum to exercise specific jurisdiction. Specific jurisdiction exists only if (1) the defendant purposefully availed himself of the privileges of conducting activities in the forum, thereby invoking the benefits and protections of its laws, or purposely directs conduct at the forum that has effects in the forum; (2) the claim arises out of the defendant's forum-related activities; and (3) the exercise of jurisdiction comports with fair play and substantial justice, i.e., it is reasonable. See Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 801-02 (9th Cir. 2004). Since the Monjes assert that the Court has jurisdiction over Moose, they have the burden of establishing the first two elements; if they are successful, Moose must come forward with a ...


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