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R. Prasad Industries v. Flat Irons Environmental Solutions Corporation

United States District Court, D. Arizona

October 4, 2017

R. Prasad Industries, Plaintiff,
Flat Irons Environmental Solutions Corporation, et al., Defendants.



         Pending before the Court is Defendants' Motion for Leave to File a Motion to Dismiss for Lack of Personal Jurisdiction or in the Alternative, Request to Transfer the Case to the Central District of California (“Motion for Leave”) (Doc. 213). The Court now rules on the motion.

         I. BACKGROUND

         On August 6, 2017, Defendant Robert Carlile and his spouse (collectively “Carlile”) requested leave of the Court to file a Motion to Dismiss for Lack of Personal Jurisdiction. (Doc. 213; Doc. 214). Plaintiff submitted its Response in Opposition (Doc. 217) on August 7, 2017 and Defendants submitted their Reply (Doc. 219) on August 11, 2017.

         This case arose from “an alleged agreement for the purchase and sale of urea fertilizer between Plaintiff, R. Prasad Industries, a Guyanese company that sells and distributes fertilizer, and Defendant Flat Irons Environmental Solutions Corporation, an Arizona corporation owned and operated by Defendants Gary Miller and Bob Carlile.” (Doc. 148 at 1 (footnote omitted)). The Court has previously discussed the facts in this case at length and need not repeat them here. (See id. at 1-4).


         This motion comes over four years after the start of litigation in this case and over three years after the deadline set by the Court's Scheduling Order that “all dispositive motions shall be filed no later than June 28, 2014.” (Doc. 46 at 4). Defendants explain that “Defendants did not file a motion contesting personal jurisdiction as to the Carlile Defendants as the law on minimum contacts was not certain at the time required to make such a motion.” (Doc. 219 at 4).

         A. Personal Jurisdiction

         Defendants argue that the United States Supreme Court decision in Bristol-Myers Squibb Company v. Superior Court of California, San Francisco County (hereafter “Bristol-Myers Squibb”), decided June 19, 2017, “significantly alters the analysis” regarding the exercise of personal jurisdiction over a non-resident Defendant. (Doc. 213 at 2 (citing 137 S.Ct. 1773, 1776 (2017))). The Supreme Court, however, stated therein that “[s]ettled principles of specific jurisdiction control” the case. Bristol-Myers Squibb, 137 S.Ct. at 1776. There, “[a] group of plaintiffs-consisting of 86 California residents and 592 residents from 33 other States-filed eight separate complaints in California Superior Court, alleging that [Defendant's product] had damaged their health.” Id. at 1778. This case is distinguishable on its face from Bristol-Myers Squibb.

         Here, a single plaintiff brought suit against Defendants in the forum in which the corporate defendant-which the Court has already granted summary judgment against (Doc. 148)-was incorporated and maintained its principal place of business (See Defendants' Answer, Doc. 35 at ¶¶ 2; see also Doc. 148). Defendant Carlile was not only “a director and shareholder of Defendant corporation, ” but was also admittedly “listed as the president of the company” (Compare Defendants' Answer, Doc. 35 at ¶¶ 5 with Doc. 217-1 at 3). Elsewhere, Defendant Carlile held himself out as “CEO” of the corporate defendant with an Arizona address. (See Doc. 217-2). Holding one's self out as an officer in an Arizona corporation is sufficient to subject an individual to specific jurisdiction in Arizona for torts allegedly committed in connection with the Arizona corporation. See, e.g., Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316, 1319-24 (9th Cir. 1998) (holding that an Illinois resident operating over the internet from Illinois was subject to specific jurisdiction in California for registering a California company's trademark and effectively acting as the California company online). Nothing in Bristol-Myers Squibb alters this analysis.

         Rather, the Supreme Court simply conducted a “straightforward application in this case of settled principles of personal jurisdiction[.]” Bristol-Myers Squibb, 137 S.Ct. at 1783. There, non-resident plaintiffs asked a court to subject a non-resident corporation to personal jurisdiction in California based on nationwide advertising and distribution efforts. See id. at 1785. The Supreme Court reiterated therein that there must be an “affiliation between the forum and the underlying controversy” beyond regularly conducting sales in and operating within a given forum in order for a court to exercise personal jurisdiction over a non-resident, corporate defendant. Id. at 1781 (internal citation omitted). Bristol-Myers Squibb did not address the issue of whether an individual may be subject to personal jurisdiction in a forum based on the individual's affiliation with a resident corporation, as is at issue here. Accordingly, Defendants' reliance on Bristol-Myers Squibb as the basis for challenging personal jurisdiction at this late juncture is misplaced and does not alter the Court's jurisdictional analysis in this case.

         Furthermore, the requirement of personal jurisdiction may be explicitly or implicitly waived. See, e.g., Astronics Advanced Elecs. Sys. Corp. v. Lufthansa Technik AG, 561 Fed.Appx. 605, 606 (9th Cir. 2014) (citing Ins. Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 703 (1982)). “The defense of lack of personal jurisdiction[] may be waived as a result of the course of conduct pursued by a party during litigation.” Peterson v. Highland Music, Inc., 140 F.3d 1313, 1318 (9th Cir. 1998), as amended on denial of reh'g and reh'g en banc (June 15, 1998) (holding that a party can waive personal jurisdiction by actively participating in litigation). This rule applies even “when the party raises the defense but does not pursue it further” in a timely manner. Craters & Freighters v. Benz, 465 Fed.Appx. 719 (9th Cir. 2012) (citing Peterson, 140 F.3d at 1317-18).

         Here, Defendants set forth lack of personal jurisdiction as a defense “as to the noncorporate and/or non-Arizona-resident defendants” in Defendants' Answer (Doc. 35 at 27) and again in Defendants' Second Amended Answer (Doc. 87 at 11). Following these 2014 filings, however, Defendant Carlile actively participated in this litigation through dozens of motions and pleadings cited by Plaintiff before filing the instant motion. (See Doc. 217 at 2-3). Defendants concede that the instant motion is untimely in attempting to justify why this motion was not filed “at the time required to make such a motion.” (Doc. 219 at 4). Accordingly, the Court finds that Defendants waived the defense of lack of personal jurisdiction by submitting to jurisdiction in this Court based on their “course of conduct pursued” during this matter. See Peterson, 140 F.3d at 1318.

         B. ...

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