United States District Court, D. Arizona
DAVID G. CAMPBELL, District Judge.
Defendant T-Win Systems, Inc. has filed a motion to dismiss for lack of personal jurisdiction. Doc. 97. The motion is fully briefed. The Court will grant the motion.
On January 23, 2008, Plaintiff Seth Haller was hired by Defendant Advanced Industrial Computer, Incorporated ("AIC") as the Director of Business Management of Platform Solutions Group ("PSG"), which is a division of AIC. Doc. 31, ¶¶ 7, 15, 16. Haller is an Arizona resident and predominately worked for PSG out of his home. Doc. 106-1, ¶ 5. AIC is a California corporation headquartered in City of Industry, California. Doc. 97-1, ¶ 4. It is a wholly owned subsidiary of T-Win Systems, Inc. ("T-Win"), which is a Taiwanese corporation with its principal place of business in the Republic of China. Id., ¶¶ 3, 4.
T-Win manufactures products in Taiwan that are sold in the United States through AIC via purchase order. Id., ¶¶ 5, 6. T-Win is not qualified to do business in the United States and has never done business in Arizona. Id., ¶¶ 7, 8. It "does not own or lease any property in Arizona, does not advertise in Arizona, does not pay taxes in Arizona, and does not have offices, employees, equipment, operations, bank accounts, post offices boxes or telephone listings in Arizona." Id., ¶ 8. Haller was not an employee of T-Win. Id., ¶ 9.
Haller negotiated the terms of his compensation over the phone with Sherman Tang, vice president of PSG, from his home in Arizona. Doc. 106-1, ¶ 3. In mid-2009, Haller received notice that his home office had been designated as an AIC branch location for purposes of workers compensation. Id., ¶¶ 6, 8. During his employment, Haller sold nearly $2 million worth of business to companies in Arizona. Id., ¶¶ 8, 9. In addition, Haller recruited another Arizona resident, Sean Baeza, to work for PSG. Doc. 106 at 4. Baeza also worked from his Arizona residence. Id.
On October 18, 2013, Haller filed a lawsuit alleging that he was terminated from his employment with AIC based on his race, as well as several contract claims. The case was removed to this Court. Doc. 1. Shortly thereafter, Plaintiff filed an amended complaint naming AIC as the only Defendant. Doc. 8. On April 28, 2014, Plaintiff filed a second amended complaint naming both AIC and T-Win as Defendants and terminated Laura Haller as a party. Doc. 31. Although T-Win had not yet been served, Defendants filed a motion under Rule 12(b)(6) to dismiss several of Plaintiff's claims, arguing that the alter ego theory alleged in the second amended complaint was factually deficient. Doc. 38 at 4-6. On August 15, 2014, the Court denied the motion, noting that "[w]hether Plaintiffs can adduce sufficient evidence to support their alter ego claim must be addressed at summary judgment... but the Court concludes that they have pled sufficient facts to move beyond the pleading stage." Doc. 60 at 5. On October 7, 2014, T-Win authorized counsel to accept service of process. Doc. 83. A month later, T-Win filed the instant motion to dismiss for lack of personal jurisdiction. Doc. 97. The parties have since engaged in substantial discovery.
II. 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). "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." Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011). "The plaintiff cannot simply rest on the bare allegations of its complaint, ' but uncontroverted allegations in the complaint must be taken as true." Id. (quoting Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004). The Court may not assume the truth of allegations in a pleading that are contradicted by an affidavit, but factual disputes are resolved in Plaintiff's favor. Id.
"Federal courts ordinarily follow state law in determining the bounds of their jurisdiction over persons." Daimler AG v. Bauman, 134 S.Ct. 746, 753 (2014). Arizona has authorized its courts to exercise jurisdiction to the maximum extent permitted by the Due Process Clause of the Constitution. See, e.g., Ariz. R. Civ. P. 4.2(a); see Menken v. Emm, 503 F.3d 1050, 1056 (9th Cir. 2007). Under the Due Process Clause, a court may exercise jurisdiction over a person who is not physically present within the territorial jurisdiction of the court. Walden v. Fiore, 134 S.Ct. 1115, 1121 (2014). The nonresident generally must have certain minimum contacts with the forum so 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).
A. Personal Jurisdiction.
Plaintiff argues that this Court may exercise either general or specific personal jurisdiction over T-Win. Both theories require an analysis of the corporate defendant's contacts with the forum state. See Martinez v. Aero Caribbean, 764 F.3d 1062, 1068 (9th Cir. 2014) (noting that " International Shoe indicates that a corporation may be subject to personal ...