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Edwards v. Nutrition

United States District Court, D. Arizona

July 20, 2018

John Edwards, Plaintiff,
v.
Vemma Nutrition, et al., Defendants.

          ORDER

          Honorable G. Murray Snow United States District Judge

         Pending before the Court are the Motions to Dismiss of Defendants Haresh Mehta, (Doc. 57), Vemma International Holdings Inc., (Doc. 70), and Tom and Bethany Alkazin, (Doc. 74). For the reasons discussed below, the Court grants the motions and dismisses Defendant Mehta. The Court grants Vemma International Holdings' and Tom Alkazin, and Bethany Alkazin's Motions to Dismiss with leave for Dr. Edwards to amend the complaint within thirty days.

         BACKGROUND

         Plaintiff Dr. John Edwards is a resident of California. (Doc. 13 ¶ 1). In December 2007, Dr. Edwards became an “affiliate” of Vemma Nutrition, a multi-level marketing company focused on selling nutritional products. (Doc. 61). Vemma Nutrition is incorporated in Arizona. (Doc. 13 ¶ 8). Dr. Edwards is an expert in the use of mangosteen as a dietary supplement, and he has copyrighted books and video recordings on the subject. (Doc. 13 ¶ 18).

         Defendant Tom Alkazin and his wife Bethany Alkazin are also affiliates of Vemma Nutrition. They currently live in Nevada and previously resided in California during the alleged conduct. (Doc. 13 ¶¶ 3, 32). Under the direction of Vemma Nutrition, Mr. Alkazin worked with a Montana-based talent agency called Hot Biz Tools to contract with Dr. Edwards for the use of Dr. Edwards's copyrighted material. (Doc. 13 ¶ 22). Soon thereafter, Mr. Alkazin terminated the agreement with Hot Biz Tools and worked with a California-based media company named XL Media Solutions. (Doc. 13 ¶ 23). Under this new agreement, Dr. Edwards licensed his copyrighted works to XL Media, and Mr. Alkazin agreed to purchase CDs of the copyrighted material exclusively from XL Media. (Doc. 13 ¶ 23). Two years later, Mr. Alkazin terminated the agreement with XL Media, and the Alkazins contracted with Dr. Edwards to market and distribute the copyrighted materials on a website named VmaTools.com. (Doc. 13 ¶ 25). The Complaint then alleges that Vemma Nutrition, Tom Alkazin, and Bethany Alkazin violated the marketing and distribution agreements by copying and selling CDs without Dr. Edwards' permission and without paying him royalties. (Doc. 13 ¶ 26). Dr. Edwards also alleges that Mr. Alkazin wrongfully undermined Dr. Edwards' opportunities to present at Vemma Nutrition conferences in Las Vegas, Nevada and various international cities. (Doc. 13 ¶ 42).

         Mr. Haresh Mehta resides in South Carolina and is another alleged affiliate of Vemma Nutrition. Mr. Haresh Mehta worked with Tarak Mehta and Vemma Nutrition to open a Vemma Nutrition franchise in India under the name Vemma Vitamins Pvt. Ltd. (Doc. 13 ¶ 31). Dr. Edwards alleges that Defendant Vemma “induced, participated in, aided and abetted, and profited from the copying and distribution” in India of Dr. Edwards' copyrighted material, but he does not allege anything concerning Haresh Mehta's individual participation. (Doc. 13 ¶ 31). Additionally, Dr. Edwards entrusted Haresh Mehta with a book script to be taken to India for printing. (Doc. 13 ¶ 52). Dr. Edwards alleges that Haresh Mehta hid the script at his home in South Carolina for the benefit of Vemma Nutrition. (Doc. 13 ¶ 53).

         Dr. Edwards filed a Complaint against multiple defendants concerning copyright infringement and racketeering, as well as a breach of contract claim against Vemma Nutrtion. (Doc. 13). The Complaint names both Vemma Nutrition, Inc. and Vemma International Holdings as corporate defendants, although the Complaint generally does not differentiate between these two entities and refers to them collectively as “Vemma.” (Doc. 13 ¶ 2). The Court previously dismissed Defendant Vemma Nutrition, Inc. due to an arbitration agreement. (Doc. 61). Defendants Haresh Mehta and Tom and Bethany Alkazin filed motions to dismiss for lack of personal jurisdiction, and Defendant Vemma International Holding filed a motion to dismiss for failure to state a claim. (Docs. 57, 70, 74).

         DISCUSSION

         I. Motions to Dismiss for Lack of Personal Jurisdiction

         A. Legal Standard

         “The party seeking to invoke the court's jurisdiction bears the burden of establishing that jurisdiction exists.” Scott v. Breeland, 792 F.2d 925, 927 (9th Cir. 1986) (citing Data Disc, Inc. v. Systems Tech. Assocs., 557 F.2d 1280, 1285 (9th Cir. 1977)). “When a defendant moves to dismiss for lack of personal jurisdiction, the plaintiff is ‘obligated to come forward with facts, by affidavit or otherwise, supporting personal jurisdiction.'” Id. (quoting Amba Mktg. Sys., Inc. v. Jobar Int'l, Inc., 551 F.2d 784, 787 (9th Cir. 1977)). “The mere allegations of a complaint, when contradicted by affidavits, are not enough to confer personal jurisdiction over a nonresident defendant.” Chem Lab Products, Inc. v. Stepanek, 554 F.2d 371, 372 (9th Cir. 1977) (citing Taylor v. Portland Paramount Corp., 383 F.2d 634, 639 (9th Cir. 1967)); Data Disc, 557 F.2d at 1284 (citing Taylor, 383 F.2d at 639).

         To establish a prima facie case for personal jurisdiction, the plaintiff has the burden of showing that the exercise of jurisdiction comports with the state long-arm statute and the 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). Plaintiff Mr. Edwards bases jurisdiction over Haresh Mehta and the Alkazins on a basis of specific personal jurisdiction. (Doc. 13 ¶ 11; doc. 62 at 3-11; doc. 83 at 4-5).

         B. Analysis

         1. Specific ...


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