Miller v. S&S Hay Co.
| Decision Date | 26 March 2013 |
| Docket Number | 1:12-CV-01796-LJO-SMS |
| Court | U.S. District Court — Eastern District of California |
| Parties | WILLIAM JAKE MILLER, Plaintiff, v. S&S HAY COMPANY, SKYE SAUER, and ARI SCHIFF, Defendants. |
ORDER ON MOTION TO DISMISS
(Doc. 14)
Judges in the Eastern District of California carry the heaviest caseload in the nation, and this Court is unable to devote inordinate time and resources to individual cases and matters. This Court cannot address all arguments, evidence and matters raised by parties and addresses only the arguments, evidence and matters necessary to reach the decision in this order given the shortage of district judges and staff. The parties and counsel are encouraged to contact the offices of United States Senators Feinstein and Boxer to address this Court's inability to accommodate the parties and this action. The parties are required to consider consent to a Magistrate Judge to conduct all further proceedings in that the Magistrate Judges' availability is far more realistic and accommodating to parties than that of U.S. District Judge Lawrence J. O'Neill who must prioritize criminal and older civil cases.
Civil trials set before Judge O'Neill trail until he becomes available and are subject to suspension mid-trial to accommodate criminal matters. Civil trials are no longer reset to a later date if Judge O'Neill is unavailable on the original date set for trial. Moreover, this Court's Fresno Divisionrandomly and without advance notice reassigns civil actions to U.S. District Judges throughout the nation to serve as visiting judges. In the absence of Magistrate Judge consent, this action is subject to reassignment to a U.S. District Judge from outside the Eastern District of California.
On November 2, 2012 Plaintiff William Jake Miller ("Miller") brought this action for violation of the California Unfair Competition Law ("UCL"), Cal. Bus. and Prof. Code §§ 17200, et seq. against Defendants S&S Hay Company ("S&S Hay"), Skye Sauer ("Sauer"), and Ari Schiff ("Schiff") (collectively "Defendants"). Defendants filed the instant motion to dismiss under Fed. R. Civ. P. 9(b), 12(b)(2), 12(b)(3), and 12(b)(6) on January 7, 2013. As discussed further below, the Court DISMISSES with leave to amend Miller's complaint.
This action involves the issue of trying to find $112,750 in a 500 ton haystack.
In July 2008, Miller entered into a verbal agreement with S&S Hay through Sauer under which S&S Hay would deliver 500 tons of dry cow hay to Miller for the sum of $112,750. Miller made payment to S&S Hay, and S&S Hay delivered the hay in August 2008. Miller found that the hay S&S Hay delivered was substandard and did not conform to the terms of the agreement. S&S Hay removed the hay and resold it soon thereafter.
Miller requested a full refund from S&S Hay and Sauer. Sauer, on behalf of S&S Hay, refused and instead offered Miller "in house" credit for that amount. Sauer indicated this decision was made in conjunction with Schiff, his partner at S&S Hay, and was non-negotiable.
Miller filed suit against S&S Hay and Sauer in Kings County Superior Court alleging breach of oral contract, intentional and negligent misrepresentation, false promise, and conversion. On October 26, 2009, Miller obtained a default judgment against S&S Hay and Sauer for $112,750 plus interest accruing at the rate of 10% per annum from September 5, 2008, in addition to $750 in costs.
S&S Hay and Sauer have not paid any of the judgment, and Miller has been unable to collect on the judgment. Miller alleges that Sauer and Schiff have taken affirmative steps to prevent Miller from collecting on the judgment. Specifically, Miller alleges that S&S Hay either has let itscommercial liability insurance lapse or has failed to report Miller's claim to S&S Hay's insurer. S&S Hay also has stopped doing business with California entities known to Miller to avoid potential liens. Lastly, Miller alleges that Sauer has transferred and concealed his assets.
On November 2, 2012, Miller initiated this action for violation of the UCL, Cal. Bus. and Prof. Code §§ 17200, et seq., against Defendants in this Court on the basis of diversity jurisdiction. Miller seeks restitution and compensatory damages, pre- and post-judgment interest, and costs and fees.1 Defendants filed the instant motion to dismiss under Fed. R. Civ. P. 9(b), 12(b)(2), 12(b)(3), and 12(b)(6) on January 7, 2013. Miller filed an opposition on February 19, 2013, and Defendants did not file a reply.
Fed. R. Civ. P. 12(b)(2) allows a defendant to challenge a complaint "for lack of jurisdiction over the person" as a threshold issue. A district court's determination whether to exercise personal jurisdiction is a question of law. Rio Properties, Inc. v. Rio Int'l Interlink, 284 F.3d 1007, 1019 (9th Cir.2002). Although defendant is the moving party on the motion to dismiss, plaintiff is the party who invoked the court's jurisdiction. Therefore, plaintiff bears the burden of proof on the necessary jurisdictional facts; e.g., the existence of "minimum contacts" between defendant and the forum state. Id.
When defendant's motion to dismiss is made as its initial response and the court decides the motion without conducting an evidentiary hearing, plaintiff need only make a prima facie showing that personal jurisdiction exists. Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir.1995). A "prima facie" showing means that plaintiff has produced admissible evidence which, if believed, would be sufficient to establish the existence of personal jurisdiction. See, Harris Rutsky & Co. Ins. Services, Inc. v. Bell & Clements Ltd, 328 F.3d 1122, 1129 (9th Cir.2003). The complaint's uncontroverted factualallegations must be accepted as true, and any factual conflicts in the parties' declarations must be resolved in plaintiff's favor. Id. To defeat plaintiff's prima facie showing of jurisdiction on a Fed. R. Civ. P. 12(b)(2) motion, defendants must demonstrate the presence of other considerations that would render personal jurisdiction unreasonable. OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1091 (10th Cir.1998).
The Court considers both state and federal law in a personal jurisdiction challenge. California's long-arm statute authorizes the exercise of personal jurisdiction on any basis not inconsistent with the state or federal constitution. Cal.Code Civ. Proc. § 410.10. As to federal law, "[e]xercise of in personam jurisdiction over an out-of-state defendant is limited by the Due Process Clause of the Fourteenth Amendment." Tuazon v. R.J. Reynolds Tobacco Co., 433 F.3d 1163, 1168-69 (9th Cir.2006) (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 413-14 (1984)). Based on considerations of Due Process and California's long-arm statute, two recognized bases exist for personal jurisdiction over nonresident defendants: (1) "general jurisdiction" which arises when a defendant's contacts with the forum state are so pervasive as to justify the exercise of jurisdiction over the person in all matters; and (2) "specific" or "limited" jurisdiction which arises out of the defendant's contacts with the forum giving rise to the subject of the litigation. Helicopteros Nacionales, 466 U.S. at 414. Absent a traditional basis for jurisdiction (presence, domicile or consent), due process requires that the defendant have "certain minimum contacts with (the forum state) such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945).
Defendants claim that this Court lacks both general and specific personal jurisdiction over S&S Hay, Sauer, and Schiff. Miller only seeks to establish specific personal jurisdiction over Defendants. As to specific jurisdiction, Defendants argue that the Court should consider only Defendants' contacts with the forum for the period after the entry of the default judgment. Miller contends that the Court should consider Defendants' contacts with the forum prior to entry of the default judgment because Miller's current UCL claim is based on Defendants' entire course of dealing with Miller.
Specific or limited jurisdiction arises from defendants' contacts with the forum state that give rise to the subject of the action. The Ninth Circuit uses a three-part test to determine whether the district court may exercise specific jurisdiction over a nonresident defendant:
Omeluk v. Langsten Slip & Batbyggeri A/S, 52 F.3d 267, 270 (9th Cir.1995) (quoting Data Disc, Inc. v. Systems Tech. Assoc., Inc., 557 F.2d 1280, 1287 (9th Cir.1977)). "If the plaintiff succeeds in satisfying both of the first two prongs, the burden then shifts to the defendant to 'present a compelling case' that the exercise of jurisdiction would not be reasonable." Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-78, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985).
The Ninth Circuit also has stated that "courts must examine the defendant's contacts with the forum at the time of the events underlying the dispute when determining whether they have jurisdiction." Steel v. United States, 813 F.2d 1545, 1549 (9th Cir. 1987). "When a court is exercising specific jurisdiction over a defendant arising out of or related to the defendant's contacts with the forum, the fair warning...
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