Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

IceMOS Technology Corp. v. Omron Corp.

United States District Court, D. Arizona

July 6, 2018

IceMOS Technology Corporation, Plaintiff,
v.
Omron Corporation, Defendant.

          ORDER

          James A. Teilborg, Senior United States District Judge

         Pending 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.

         I. BACKGROUND

         On 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).

         A. Facts

         The 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.).

         Around 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).

         In the 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).[1] 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).

         At a 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).[2] 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).

         During 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 falsity.” (Id.).

         II. MOTION TO DISMISS

         Defendant 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 arguments first.

         A. Personal Jurisdiction

         Generally, 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).

         Due 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.

         Where a 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).

         1. General Jurisdiction

         Generally, 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.

         2. Specific Jurisdiction

         The 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).

         a. Purposeful Availment and Purposeful Direction

         Under 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. 2015).

         i. Purposeful Availment

         The 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 citations omitted).

         Plaintiff 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.

         Plaintiff 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 Arizona.

         ii. Purposeful Direction

         The 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 ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.