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Williams v. Wiggins

United States District Court, D. Arizona

October 4, 2019

Michael S. Williams, Plaintiff,
Christopher J. Wiggins, et al., Defendants.



         Before the Court is Christopher J. Wiggins and Seldon Wiggins (together, the “Defendants”) Motion to Dismiss for Lack of Personal Jurisdiction Under Federal Rule of Civil Procedure 12(b), or in the Alternative to Transfer Venue (the “Motion”). (Doc. 12) The Motion was fully briefed on July 5, 2019, and oral argument was requested by Plaintiff Michael S. Williams (the “Plaintiff”). (Docs. 18, 19) Because it would not assist in resolution of the instant issues, the Court finds the pending motion is suitable for decision without oral argument. See LRCiv. 7.2(f); Fed.R.Civ.P. 78(b); Partridge v. Reich, 141 F.3d 920, 926 (9th Cir. 1998). The Court's ruling is as follows.

         I. Background

         Defendant Christopher J. Wiggins (“Wiggins”) is a co-founder, former chief executive officer, and majority shareholder of ORhub, Inc. (“ORhub”). (Doc. 1-2 at 3; Doc. 18 at 5) ORhub is incorporated in Nevada and headquartered in Tempe, Arizona. (Doc. 18 at 26) The Plaintiff is an investor in ORhub and an Arizona resident. (Doc. 18 at 26) Frederic Buonincontri (“Buonincontri”) and Lanny Lang (“Lang”) are also ORhub investors and Arizona residents. (Doc. 18 at 26)

         In October 2018, Buonincontri filed a lawsuit against ORhub in the Maricopa County Superior Court. (Doc. 18 at 26) On April 4, 2019, Wiggins sent an email (the “April Email”) to approximately 78 ORhub investors and stockholders, including Williams, Buonincontri, and Lang, making statements that the Plaintiff alleges are defamatory. (Doc. 18 at 27; Doc. 1-2 at 4) The April Email (i) included statements alleging “collusion and wrongful behavior” between Williams, Buonincontri, and Lang; (ii) referred to Williams, Buonincontri, and Lang as “criminal, ” accusing them of “intentionally damaging the value of” ORhub; and (iii) stated that Williams, Buonincontri, and Lang “have continued to manipulate the truth and mislead [ORhub's] shareholders.” (Doc. 1-2 at 4-5)

         On April 17, 2019, the Plaintiff initiated this lawsuit (the “Complaint”) in the Maricopa County Superior Court alleging causes of action for defamation and false light invasion of privacy. (Doc. 1-2) The case was removed to this Court on May 24, 2019. (Doc. 1) The Defendants filed the Motion seeking dismissal of the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(2).

         II. Legal Standard

         “[T]he plaintiff bears the burden of demonstrating that jurisdiction is appropriate.” Picot v. Weston, 780 F.3d 1206, 1211 (9th Cir. 2015). Where, as here, a defendant's motion to dismiss is based on a written record and no evidentiary hearing is held, “the plaintiff need only make a prima facie showing of jurisdictional facts.” Id. “For a court to exercise personal jurisdiction over a non-resident defendant, that defendant must have at least ‘minimum contacts' with the relevant forum such that the exercise of jurisdiction ‘does not offend traditional notions of fair play and substantial justice.'” Dole Food Co. v. Watts, 303 F.3d 1104, 1110-11 (9th Cir. 2002) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). “In judging minimum contacts, a court properly focuses on ‘the relationship among the defendant, the forum, and the litigation.'” Calder v. Jones, 465 U.S. 781, 788 (1984) (quoting Shaffer v. Heitner, 433 U.S. 186, 204 (1977)). When no federal statute specifically defines the extent of personal jurisdiction, federal courts look to the law of the state where the district court sits-in this case, Arizona. CE Distribution, LLC v. New Sensor Corp., 380 F.3d 1107, 1110 (9th Cir. 2004). “Arizona's long-arm rule permits the exercise of personal jurisdiction to the extent allowed by the due process clause of the United States Constitution.” Ochoa v. J.B. Martin & Sons Farms, Inc., 287 F.3d 1182, 1188 (9th Cir. 2002).

         Personal jurisdiction may be either general or specific. See Bancroft & Masters, Inc. v. Augusta Nat'l Inc., 223 F.3d 1082, 1086 (9th Cir. 2000). General jurisdiction exists where a non-resident defendant engages in substantial, continuous or systematic activities within the forum. Marlyn Nutraceuticals, Inc. v. Improvita Health Prod., 663 F.Supp.2d 841, 848 (D. Ariz. 2009) (citing Perkins v. Benguet Consol. Mining, Co., 342 U.S. 437, 445 (1952)).

         In deciding whether a defendant is subject to specific personal jurisdiction, federal courts consider whether (1) the non-resident defendant purposefully directs his activities or consummates some transaction with the forum or resident thereof; or performs some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim arises out of or relates to the defendant's forum-related activities; and (3) the exercise of jurisdiction comports with fair play and substantial justice, i.e. it must be reasonable. Picot, 780 F.3d at 1211 (citing Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004)). The plaintiff has the burden of proving the first two prongs. CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1076 (9th Cir. 2011). If he does so, the burden shifts to the defendant to “set forth a ‘compelling case' that the exercise of jurisdiction would not be reasonable.” Id. (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985)). For claims sounding in tort, courts apply a “purposeful direction” test and look to evidence that the defendant has directed his actions at the forum state, even if those actions took place elsewhere. Schwarzenegger, 374 F.3d at 802.

         III. Analysis

         The Defendants seek dismissal of this case because the Court does not have personal jurisdiction over either of the Defendants. (Doc. 12 at 6) The Defendants argue that the Plaintiff fails to establish general or specific personal jurisdiction through the allegations in the Complaint because (i) the Defendants are not Arizona residents and (ii) the April Email was not directed at Arizona residents. (Doc. 12 at 6) In response, the Plaintiff argues that the Court has personal jurisdiction over the Defendants because the defamatory actions taken by the Defendants targeted and impacted persons and entities residing in Arizona. (Doc. 18 at 5)

         A. General Jurisdiction

         The Defendants argue that they do not have the requisite minimum contacts with Arizona for the Court to have general personal jurisdiction over the parties. The Defendants argue that they are California residents who do not reside or conduct business in Arizona. (Doc. 12 at 6) The Defendants also argue that they do not own any assets in Arizona and do not travel to Arizona. (Doc. 12 at 8) In response, the Plaintiff argues that the Defendants conduct business in ...

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