United States District Court, D. Arizona
the Court is Defendants Canadian Metal Commodities, Inc.
(“CMC”) and Gerald Mrakava's motion to
dismiss for lack of personal jurisdiction pursuant to Federal
Rule of Civil Procedure 12(b)(2). (Doc. 18.) The motion is
fully briefed (Docs. 22, 25), and the Court heard oral
argument on July 15, 2019. For the reasons stated below,
Defendants' motion is granted.
AMG Resources Corporation (“AMG”) is a processor
and marketer of scrap metal incorporated in Delaware with its
principal place of business in Allegheny County,
Pennsylvania. (Doc. 19-1 at 145.) AMG also has commercial
offices around the country, including one in Phoenix,
Arizona. (Id. at 164-66.) CMC is a seller of scrap
metal incorporated in Canada with its principal place of
business in Canada. (Doc. 20 ¶¶ 2, 4.) Mrakava is a
Canadian citizen and the sole officer and director of CMC.
(Id. ¶¶ 1-3.)
November 2016, Mrakava reached out to James Orendorff, a
resident of Phoenix, Arizona and President of AMG's
Pacific Division, in hopes of forming a business
relationship. (¶¶ 10-11.) After brief
phone discussions, Orendorff flew to Calgary, Alberta, Canada
to meet with Mrakava to discuss the possibility of AMG
distributing CMC's scrap metal in the United States.
(¶¶ 11-12.) Following his return to Arizona,
Orendorff told Eric Goldstein, AMG's President, to begin
drafting a non-disclosure agreement (“NDA”).
(¶ 13; Doc. 1 ¶ 11.) Orendorff then forwarded the
NDA drafted by Goldstein to Mrakava. (Doc. 1 ¶ 12.)
Although the parties exchanged several drafts of the NDA and
participated in a conference call to discuss the terms, they
never finalized or agreed to terms of the NDA. (¶¶
13-14; Doc. 20 ¶¶ 13, 16, 18.) Regardless, the
parties formed a business relationship and agreed in January
2017 to the terms of a Scrap Metal Brokering and Shipping
Arrangement (the “Master Contract”), although the
parties dispute who drafted it. (Doc. 1 ¶¶ 14-15; Doc.
20 ¶¶ 20-21.)
the drafting of the Master Contract, AMG and CMC engaged in
several preliminary arrangements for transactions in which
AMG would send railcars to Canada to pick up scrap metal from
CMC and deliver it to customers in Iowa and Indiana. (Doc.
19-1 at 11-15.) The parties arranged four transactions in
total, but ultimately no scrap metal was delivered to Iowa or
Indiana. (Id. at 15-18.)
on these four failed transactions, AMG filed a lawsuit
against Defendants in the Court of Common Pleas of Allegheny
County, Pennsylvania, alleging breach of contract and fraud
claims (the “Pennsylvania Litigation”).
(Id. at 6-20). Defendants moved to dismiss the
claims for lack of personal jurisdiction and the court
granted their motion. (Id. at 37, 160-62.) AMG did
not appeal the Pennsylvania court's decision; instead it
filed this action, which is nearly identical to the complaint
filed in the Pennsylvania Litigation “save for its
references to ‘Pennsylvania' (instead of
‘Arizona') in its jurisdictional allegation.”
(Docs. 18 at 6; 1 ¶ 9.) Defendants again have moved to
dismiss the claims against them for lack of personal
a defendant moves to dismiss a complaint for lack of personal
jurisdiction, the plaintiff bears the burden of demonstrating
that jurisdiction is appropriate.” Schwarzenegger
v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir.
2004). In the absence of an evidentiary hearing, and where
the plaintiff's proof is based on written materials,
“the plaintiff need only make a prima facie showing of
jurisdictional facts.” Sher v. Johnson, 911
F.2d 1357, 1361 (9th Cir. 1990). The court must assume the
truth of uncontroverted allegations in the plaintiff's
complaint, and conflicts between facts contained in the
parties' affidavits must be resolved in the
plaintiff's favor. Am. Tel. & Tel. Co. v.
Compagnie Bruxelles Lambert, 94 F.3d 586, 588-89 (9th
Cir. 1996). The court, however, “may not assume the
truth of allegations in a pleading which are contradicted by
an affidavit.” Data Disc, Inc., v. Sys. Tech Assocs.,
Inc., 557 F.2d 1280, 1284-85 (9th Cir. 1977).
Personal Jurisdiction Principles
courts ordinarily follow state law in determining the bounds
of their jurisdiction over persons.” Daimler AG v.
Bauman, 571 U.S. 117, 125 (2014). Arizona allows courts
to exercise jurisdiction co-extensive with federal due
process standards. Ariz. R. Civ. P. 4.2(a). The Court
therefore may exercise personal jurisdiction over a defendant
who is not physically present in the state if the defendant
has sufficient minimum contacts with the state such that the
suit can be maintained without offending traditional notions
of fair play and substantial justice. Int'l Shoe Co.
v. Washington, 326 U.S. 310, 316 (1945).
jurisdiction may be general or specific depending on the
strength of the defendant's contacts with the forum
state. Id. at 317-18. General personal jurisdiction
exists over a non-resident defendant when the defendant's
contacts with the forum state are so continuous and
systematic “as to justify suit against it on causes of
action arising from dealings entirely distinct from those
activities.” Id. Where a defendant's
contacts are not so substantial, a court can exercise
specific personal jurisdiction when a lawsuit arises out of
the defendant's activities within the forum state.
Helicopteros Nacionales de Colo., S.A. v. Hall, 466
U.S. 408, 414 n.8 (1984). Here, AMG does not contend that the
Court has general personal jurisdiction over Defendants. The
issue is whether the Court can exercise specific personal
determining whether the Court can exercise specific personal
jurisdiction over a non-resident defendant, the Court employs
a three-pronged test:
(1) The non-resident defendant must purposefully direct his
activities or consummate some transaction with the forum or
resident thereof; or perform some act by which he
purposefully avails himself of the privilege of conducting
activities in the ...