United States District Court, D. Arizona
A. Teilborg, Senior United States District Judge
before the Court is Defendant Omron Corporation's
(“Defendant”) Motion to Dismiss (Doc. 20)
pursuant to Federal Rules of Civil Procedure
(“Rules”) 12(b)(2) and 12(b)(6). The Court now
rules on the motion.
September 11, 2017, Plaintiff filed the pending Motion to
Dismiss (Doc. 20). Defendant filed a Response (Doc. 21) on
October 11, 2017. Plaintiff then filed a Reply (Doc. 22) on
October 26, 2017. The operative Complaint (Doc. 14) in this
case asserts the following causes of action discussed herein:
(i) breach of contract; (ii) breach of the implied duty of
good faith and fair dealing; (iii) promissory estoppel, in
the alternative; and (iv) fraud. (Doc. 14 at 18-23).
following facts are either undisputed or recounted in the
light most favorable to the non-moving party. See Wyler
Summit P'ship v. Turner Broad. Sys., Inc., 135 F.3d
658, 661 (9th Cir. 1998). Plaintiff IceMOS Technology
Corporation (“Plaintiff”) is a Delaware
corporation with its principal place of business in Tempe,
Arizona, and operations in Northern Ireland and Japan. (Doc.
14 at 4). Plaintiff provides super junction metal oxide
semiconductor field-effect transistors
(“MOSFETs”), microelectromechanical systems
solutions, and advanced engineering substrates to
third-parties. (Id.). Defendant is a Japanese
company that is publicly traded on the Tokyo Stock Exchange
and affiliated with a global network of companies with
subsidiaries located in the United States. (Doc. 21 at 12).
In 2007, Defendant purchased a wafer fabrication facility in
Yasu, Japan (the “Yasu Fab”) that fabricated
complementary metal-oxide semiconductor wafers. (Doc. 14 at
5). Plaintiff requires wafer fabrication services to produce
its products. (Id.).
the time of its purchase of the Yasu Fab, Defendant
approached Plaintiff's consultant in Japan and suggested
that Plaintiff and Defendant enter into a business
relationship. (Doc. 21 at 4). From 2008 through 2011,
Plaintiff and Defendant negotiated an agreement
(“Supply Agreement”) for the Yasu Fab to serve as
Plaintiff's fabrication facility. (Doc. 14 at 5). These
negotiations yielded two non-disclosure agreements and
ultimately led to Plaintiff and Defendant entering into the
Supply Agreement on February 28, 2011. (See Doc. 14
at 7; Doc. 21 at 4).
Supply Agreement, Defendant agreed to perform the
fabrications requested by Plaintiff, share equally in
production mask costs (initial sets), and fully resource the
development of all generations of MOSFETs for the duration of
the Supply Agreement. (Id. at 8). The Supply
Agreement term was for ten years and early termination could
only be effectuated upon three years' written notice,
including a “one (1) year period of transfer to other
wafer fabrication facilities, prior to termination.”
(Doc. 14-1 at 8). In an effort to ensure Defendant could
meet Plaintiff's production demands, Plaintiff paid for
the purchase and installation of a deep reactive ion etcher
(“DRIE”) necessary for MOSFET manufacturing in
the Yasu Fab. (Doc. 14 at 8-9). During the period of
performance of the Supply Agreement, Defendant traveled to
Arizona at least five times, sent invoices to Plaintiff in
Arizona, wrote and called Plaintiff in Arizona, shipped
samples to Arizona, and shipped products to Taiwan for
additional manufacturing so that the completed products could
ultimately be shipped to Arizona. (Doc. 21 at 6).
meeting on March 6, 2015, at Plaintiff's headquarters in
Arizona, Defendant orally notified Plaintiff that Defendant
intended to terminate the Supply Agreement and close the Yasu
Fab at the end of March, 2017. (Doc. 14 at 12). Plaintiff alleges
that, at this March 6, 2015 meeting, and again at a December
9, 2015 meeting in Japan, Defendant represented its intent to
fully support Plaintiff's MOSFETs throughout the
termination period proposed by Defendant. (Id. at
13). On or about May 9, 2017, Defendant notified Plaintiff by
letter that Defendant intended to cease all manufacturing of
Plaintiff's MOSFETs by July of 2017. (Id. at
17). This cessation date was set to occur prior to the
completion of the three year termination period.
(Id. at 25).
the course of the Supply Agreement's term, Plaintiff
claims that Defendant, among other allegations, refused to
fully resource the development of all generations of MOSFETs,
failed to share equally in the production mask costs (initial
sets), attempted to improperly terminate the Supply
Agreement, and repudiated its obligations to support
development and manufacturing of Plaintiff's MOSFETs
through the termination period. (Id. at 18).
Plaintiff also alleges that Defendant's March 6, 2015 and
December 9, 2015 representations-in which Defendant
represented its intent to fully support Plaintiff's
MOSFETs throughout the proposed termination period-were
false. (Id. at 22). Plaintiff goes on to allege that
when Defendant made these representations, it either knew
that they were false or made the representations as positive
assertions “with reckless disregard to [their] truth or
MOTION TO DISMISS
filed the pending Motion to Dismiss pursuant to Rules
12(b)(2), lack of personal jurisdiction, and 12(b)(6),
failure to state a claim upon which relief can be granted.
The Court will address the parties' jurisdictional
federal courts have personal jurisdiction over non-resident
defendants in a foreign country to the extent allowed by the
state in which the courts sit. Fed.R.Civ.P. 4(f), (k);
Walden v. Fiore, 134 S.Ct. 1115, 1121 (2014).
Arizona law provides for personal jurisdiction to the extent
allowed by the Constitution of the United States.
See Ariz. R. Civ. P. 4.2. The Due Process Clause of
the Fourteenth Amendment limits a state's power to grant
personal jurisdiction over a defendant to a tribunal.
Goodyear Dunlop Tires Operations, S.A. v. Brown, 564
U.S. 915, 923 (2011).
process requires that a defendant “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) (quoting
Milliken v. Meyer, 311 U.S. 457, 463 (1940)). This
minimum contacts framework gives rise to two forms of
personal jurisdiction: general jurisdiction and specific
jurisdiction. Bristol-Myers Squibb Co. v. Superior Ct. of
Cal., S.F. Cty., 137 S.Ct. 1773, 1779-80 (2017). Under
general jurisdiction, a court can hear any claim against a
defendant who can be “fairly regarded as at home”
in the state. Goodyear, 564 U.S. at 919. Under
specific jurisdiction, a court can hear claims related to a
defendant's voluntary, in-state activities.
Bristol-Myers Squibb, 137 S.Ct. at 1780.
defendant moves to dismiss a case for lack of personal
jurisdiction, the plaintiff bears the burden to establish
personal jurisdiction. Dole Food Co., Inc. v. Watts,
303 F.3d 1104, 1108 (9th Cir. 2002). Where a court resolves
the issue of personal jurisdiction solely by reference to the
parties' moving papers and filed documents, the plaintiff
satisfies this burden by making “only a prima facie
showing of jurisdictional facts to withstand the motion to
dismiss.” Pebble Beach Co. v. Caddy, 453 F.3d
1151, 1154 (9th Cir. 2006) (citation omitted). In such a
case, uncontroverted statements in the plaintiff's
complaint are taken as true, and conflicts between facts
contained in affidavits are resolved in the plaintiff's
favor. Schwarzenegger v. Fred Martin Motor Co., 374
F.3d 797, 800 (9th Cir. 2004).
an individual is at home where domiciled, while a corporation
is at home either where it is incorporated or where it has
its principal place of business. Daimler AG v.
Bauman, 571 U.S. 117, 137 (2014). Plaintiff alleges no
facts establishing that Defendant is either incorporated or
has its principal place of business in Arizona, so this Court
cannot exercise general jurisdiction over Defendant.
specific jurisdiction inquiry “focuses on ‘the
relationship among the defendant, the forum, and the
litigation.'” Walden, 134 S.Ct. 1121
(quoting Keeton v. Hustler Magazine, Inc., 465 U.S.
770, 775 (1984)). This analysis is concerned with the
defendant's contact-rather than a third party's-with
the forum state itself, rather than with a person who resides
there. Id. at 1122. Therefore, a defendant's
mere contact with a plaintiff, without more, is insufficient
to support specific jurisdiction. Id. at 1223. In
the Ninth Circuit, minimum contacts sufficient to justify
specific jurisdiction exist where: “(1) the defendant
has performed some act or consummated some transaction within
the forum or otherwise purposefully availed himself of the
privileges of conducting activities in the forum, (2) the
claim arises out of or results from defendant's
forum-related activities, and (3) the exercise of
jurisdiction is reasonable.” Pebble Beach, 453
F.3d at 1155 (quoting Bancroft & Masters, Inc. v.
Augusta Nat'l Inc., 223 F.3d 1082, 1086 (9th Cir.
2000)). The plaintiff has the burden of establishing the
first two factors. Schwarzenegger, 374 F.3d at 802.
If the plaintiff makes that showing, the burden then shifts
to the defendant to “‘present a compelling
case' that the exercise of jurisdiction would not be
reasonable.” Id. (quoting Burger King
Corp. v. Rudzewicz, 471 U.S. 462, 476-78 (1985)). In
performing a personal jurisdiction analysis, a court looks to
purposeful availment where the cause of action lies in
contract and to purposeful direction where the cause of
action lies in tort. Axiom Foods, Inc. v. Acerchem
Int'l, Inc., 874 F.3d 1064, 1069 (9th Cir. 2017).
Purposeful Availment and Purposeful Direction
the first prong of the Ninth Circuit test, a defendant must
avail itself of, or direct its activities toward, the forum
state. Schwarzenegger, 374 F.3d at 802. Because
Plaintiff asserts both contract and tort claims, both the
purposeful availment and purposeful direction tests apply.
Picot v. Weston, 780 F.3d 1206, 1212 (9th Cir.
purposeful availment test, which applies to Plaintiff's
contract claims, is met if “the defendant has taken
deliberate action within the forum state or if [the
defendant] has created continuing obligations to forum
residents.” Ballard v. Savage, 65 F.3d 1495,
1498 (9th Cir. 1995) (citing Hirsch v. Blue Cross, Blue
Shield of Kansas City, 800 F.2d 1474, 1478 (9th Cir.
1986)). However, “a contract alone does not
automatically establish minimum contacts in the
plaintiff's home forum.” Boschetto v.
Hansing, 539 F.3d 1011, 1017 (9th Cir. 2008).
“Rather, there must be ‘actions by the defendant
himself that create a ‘substantial
connection' with the forum state.'”
Picot, 780 F.3d at 1212 (quoting Burger
King, 471 U.S. at 475) (emphasis in original). These
actions must be more than “random, fortuitous, or
attenuated, ” and must include “prior
negotiations and contemplated future consequences, along with
the terms of the contract and the parties' actual course
of dealing.” Id. (internal quotation marks and
alleges that Defendant took deliberate action within Arizona
by seeking out and maintaining a contractual relationship
with Plaintiff in Arizona. (Doc. 14 at 2-3). Defendant
attempts to discount these deliberate actions by arguing that
Defendant's actions in Arizona constituted
“pre-contractual” activities and that the actual
negotiations for the Supply Agreement took place outside of
Arizona via writing, phone calls, and visits to Japan. (Doc.
20 at 4-5 (citing Galesburg 67, LLC v. Nw. Television,
Inc., No. EP- 13-CV-384-PRM, 2014 WL 10121177, at *4
(W.D. Tex. Aug. 27, 2014); McDowell v. Paykel, No.
CV-06-2679-PHX-FJM, 2007 WL 1412465, at *3 (D. Ariz. May 11,
2007))). Yet, in Burger King, the Supreme Court
recognized that prior negotiations are considered in a
jurisdictional analysis because a contract is
“ordinarily but an intermediate step serving to tie up
prior business negotiations.” 471 U.S. at 479.
Additionally, the Supreme Court noted the “inescapable
fact of modern commercial life that a substantial amount of
business is transacted solely by mail and wire communications
across state lines, thus obviating the need for physical
presence within a State in which business is
conducted.” Id. at 476. Following Burger
King's logic here, the “pre-contractual”
activities pointed to by Defendant are the prior business
negotiations that the Supply Agreement sought to tie up, and
the mere fact that all of these negotiations did not occur in
Arizona cannot preclude a finding of purposeful availment.
further argues that Defendant created continuing obligations
to Plaintiff in Arizona through the Supply Agreement. (Doc.
14 at 2). Defendant argues that the mere existence of the
Supply Agreement is insufficient to support personal
jurisdiction in the Plaintiff's home forum. (Doc. 20 at 4
(citing Picot, 780 F.3d at 1212)). Here, however,
Plaintiff does not argue that the Supply Agreement stands on
its own. (Doc. 14 at 3). Plaintiff alleges that, in addition
to entering into the Supply Agreement, Defendant sought out
business with Plaintiff in Arizona, mailed invoices and
samples to Plaintiff in Arizona, and was aware that its
product was intended to be delivered to Plaintiff in Arizona.
(Id.). Compare Picot, 780 F.3d at 1213
(holding a contract alone could not support purposeful
availment when the defendant never traveled to the forum
during negotiations, the contract did not envision product
being sent to the forum, and there were only two fortuitous
visits by defendant to the forum), with Ballard, 65
F.3d at 1498 (foreign bank was found to have purposefully
availed itself of the benefits of conducting business in the
forum because it sought out business with forum residents,
mailed account statements to forum customers, and was aware
that it was servicing forum residents); see also Haisten
v. Grass Valley Med. Reimbursement Fund, Ltd., 784 F.2d
1392, 1395 (9th Cir. 1986) (holding that forum had specific
jurisdiction over a foreign company with no physical contacts
with forum because it sought out and intentionally conducted
business with forum residents). Through the deliberate acts
of seeking out and cultivating business with Plaintiff in
Arizona, and creating continuing obligations to Plaintiff in
Arizona through the Supply Agreement, Defendant purposefully
availed itself of the benefits of conducting business in
purposeful direction, or effects, test, which applies to
Plaintiff's fraud claim, requires that a defendant:
“(1) committed an intentional act, (2) expressly aimed
at the forum state, (3) causing harm that the defendant knows
is likely to be ...