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Prn Medical Services LLC v. Neilson

United States District Court, D. Arizona

December 15, 2014

PRN Medical Services LLC, Plaintiff,
Michael Neilson, et al., Defendants.


G. MURRAY SNOW, District Judge.

Pending before the Court is Defendant Wilmington Medical Supply, Inc.'s Motion to Dismiss for Lack of Personal Jurisdiction. (Doc. 49.) For the following reasons, the Motion is denied.


PRN Medical Services LLC ("PRN") brings suit against several of its former employees alleging unfair competition. PRN also brings an unjust enrichment claim against Defendant Wilmington Medical Supply, Inc. ("Wilmington"), the company for whom these former employees currently work.

Specific to the current Motion, PRN alleges that Defendant John Pearce, while still an employee of PRN, sent an email to a director at Wilmington containing personal health information of PRN customers. This personal information originated from and is archived at PRN's Phoenix headquarters. PRN also alleges that, immediately prior to their departure to work for Wilmington three of its former employees illegally downloaded confidential information of thousands of PRN's customers, including more than 1, 500 of PRN's Arizona customers, from PRN's Arizona computer servers. Wilmington has a sales representative in Arizona, who began employment with Wilmington on February 24, 2014, approximately the same time as the five defendants left their PRN employ to work for Wilmington. Wilmington asserts that this Court has no jurisdiction over PRN's claims against it.


I. Legal Standard

Because the Court is resolving this Motion without holding an evidentiary hearing, PRN "need make only a prima facie showing of jurisdictional facts to withstand the motion." Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir. 1995); see Brainerd v. Governors of the Univ. of Alberta, 873 F.2d 1257, 1258 (9th Cir. 1989). The burden under the prima facie case is minimal: plaintiffs "need only demonstrate facts that if true would support jurisdiction over the defendant." Ballard, 65 F.3d at 1498. In addition, "[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) (citing A T & T v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir. 1996)).

To establish the prima facie case for personal jurisdiction, the plaintiff has the burden of showing that: (1) the forum state's long-arm statute confers jurisdiction over the nonresident defendant; and (2) the exercise of jurisdiction comports with principles of due process. Omeluk v. Langsten Slip & Batbyggeri A/S, 52 F.3d 267, 269 (9th Cir. 1995). Arizona's long-arm statute confers jurisdiction to the maximum extent allowed by the Due Process Clause of the United States Constitution. Ariz. R. Civ. P. 4.2(a); Doe v. American Nat'l Red Cross, 112 F.3d 1048, 1050 (9th Cir. 1997). Due process requires a nonresident defendant to have "certain minimum contacts with [the forum] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal citation omitted). There are two types of personal jurisdiction, general and specific. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473 n.5 (1985). PRN does not allege that the Court possesses general personal jurisdiction over Wilmington; it claims only that specific personal jurisdiction exists.

A. Specific Personal Jurisdiction

Specific jurisdiction exists if (1) the defendant purposefully directed tortious activities at the forum or a resident thereof or performed some act by which he purposefully availed himself of the privileges of conducting activities in the forum, (2) the claims arise out of or result from the defendant's forum-related activities, and (3) the exercise of jurisdiction is reasonable. See Bancroft & Masters, Inc. v. Augusta Nat'l Inc., 223 F.3d 1082, 1086 (9th Cir. 2000); Brainerd, 873 F.2d at 1259.

1. Purposeful Direction

A court has specific jurisdiction over a defendant where the intended effects of the defendant's non-forum conduct were purposely directed at and caused harm in the forum state. Calder v. Jones, 465 U.S. 783, 788-90 (1984); see also Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1155-56 (9th Cir. 2006) (noting that purposeful direction analysis is appropriate when "all of [the defendant's] action identified by [the plaintiff] is action taking place outside the forum"); Sinatra v. Nat'l Enquirer, Inc., 854 F.2d 1191, 1195 (9th Cir. 1988) ("[T]he decisions of this court have interpreted the holdings of Calder and Burger King as modifying the purposeful availment rubric to allow the exercise of jurisdiction over a defendant whose only "contact" with the forum is the "purposeful direction" of a foreign act having effect in the forum state.'") (quoting Haisten v. Grass Valley Med. Reimbursement Fund, 784 F.2d 1392, 1397 (9th Cir. 1986)).

Courts evaluate purposeful direction using the Calder "effects test." See Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124, 1128 (9th Cir. 2010). Under the "effects test, " the defendant must allegedly have: "(1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state." Dole Food Co., Inc. v. Watts, 303 F.3d 1104, 1111 (9th Cir. 2002). All three elements of the test must be satisfied. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 805 (9th Cir. 2004). "A finding of express aiming'... does not mean that a ...

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