Billups, Inc. v. Ambassador Techs., Inc.

• Decision Date: 26 February 2021
• Docket Number: 3:20-cv-00891-BR
• Parties: BILLUPS, INC., an Oregon corporation, Plaintiff, v. AMBASSADOR TECHNOLOGIES, INC. dba BYPROXIE, a foreign corporation; HOMETOWN HEART, a foreign corporation; EAZE TECHNOLOGIES INC., a foreign corporation; and HERBAN INDUSTRIES CA LLC, a foreign limited liability company, Defendants.
• Court: U.S. District Court — District of Oregon

BILLUPS, INC., an Oregon corporation, Plaintiff, v. AMBASSADOR TECHNOLOGIES, INC. dba BYPROXIE, a foreign corporation; HOMETOWN HEART,a foreign corporation; EAZE TECHNOLOGIES INC., a foreign corporation; and HERBANINDUSTRIES CA LLC, a foreign limited liability company, Defendants.

3:20-cv-00891-BR

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON

February 26, 2021

OPINION AND ORDER

NICHOLAS M. M. DRUM

DAYNA J. CHRISTIAN

Immix Law Group PC

600 N.W. Naito Parkway, Suite G

Portland, Oregon 97209

(503) 802-5533

Attorneys for Plaintiff

STEVEN C. BERMAN

LYDIA ANDERSON-DANA

Stoll Stoll Berne Lokting & Shlachter P.C.

209 S.W. Oak Street, Suite 500

Portland, OR 97204

(503) 227-1600

PAUL T. LLEWELLYN

EVANGELINE A.Z. BURBIDGE

Amy Kashiwabara

Lewis & Llewellyn LLP

601 Montgomery Street, Suite 2000

San Francisco, CA 94111

(415) 800-0590

Attorneys for Defendants Hometown Heart and Eaze Technologies, Inc.

BROWN, Senior Judge.

This matter comes before the Court on the Motion (#20) of Eaze Technologies Inc., and Hometown Heart (HTH) to Dismiss the First Amended Complaint. The Court concludes the record is sufficiently developed, and therefore, oral argument would not be helpful to resolve these Motions.

For the reasons that follow, the Court GRANTS the Motion of HTH and Eaze and DISMISSES Plaintiff's First Amended Complaint as to HTH and Eaze for lack of personal jurisdiction without prejudice.

BACKGROUND

The following facts are taken from Plaintiff's First Amended Complaint (FAC) and the parties' filings related to the Motion to Dismiss of HTH and Eaze and are taken as true unless otherwise noted.

Plaintiff Billups, Inc., is an Oregon corporation "that specializes in the placement of certain Out of Home (OOH) and other media advertising for . . . companies and advertising agencies." FAC at ¶ 1.

Defendant Ambassador Technologies, Inc. dba ByProxie (ByProxie) is an advertising agency registered in Delaware and has its principal place of business in California. ByProxie is not registered with the Oregon Secretary of State to conduct business in Oregon.

Defendant Herban Industries CA LLC is a limited liability company registered and headquartered in California. Herban sells and delivers cannabis provided by Defendant HTH under the brand names "CaliChill" and "Chill." Herban is not registered with the Oregon Secretary of State to conduct business in Oregon.

Defendant HTH is a cannabis dispensary registered and headquartered in California. At all relevant times HTH sold cannabis exclusively through Herban's online platform. Until February 2020 HTH and Herban were jointly owned by DionyMed, Incorporated,¹ a Canadian corporation.

Defendant Eaze Technologies, Inc., "is a Delaware

corporation operating in California." Decl. of David Adams at ¶ 3.

In April 2019 DionyMed "used HTH and Herban in tandem for one principal purpose: to sell and deliver cannabis online in California. HTH, as a dispensary in California, would sell the cannabis, while Herban would provide an online user-facing platform called Chill or Calichill, whereby users could order the delivery of HTH's cannabis." FAC at ¶ 9. Plaintiff alleges at some point that

HTH and Herban appointed ByProxie to act as their advertising agent. Specifically, HTH and Herban appointed ByProxie to arrange and execute an advertising campaign, wherein their advertising content . . . would be displayed on various OOH sites in California and on other media. On information and belief, ByProxie was duly authorized to sign contracts on behalf of HTH and Herban in furtherance of their advertising campaign.

FAC at ¶ 10. Defendants HTH and Eaze dispute these allegations.

On April 25, May 1, May 20, June 25, June 26, and September 17, 2019, ByProxie and Billups entered into Media Authorizations in which ByProxie authorized Plaintiff "to act as [ByProxie's] agent in placing out of home advertising with owners and other applicable parties, entering into contracts and schedules for placement of OOH on behalf of [ByProxie], and directing the production and installation of advertising media." FAC Exs. A at 8, B at 3, C at 7, D at 8, E at 9, F at 4. The Authorizations noted "[t]he parties acknowledge that [ByProxie] may be acting as agent to an advertising customer (Advertiser), and that if so, Advertiser shall guarantee [ByProxie's] payment of all charges, expenses and costs arising out of all contracts and/or schedules with OOH owners." FAC Exs. A at 8, B at 3, C at 7, D at 8, E at 9, F at 4 (emphasis added).

Plaintiff alleges it "fully performed under" all of the Authorizations, but ByProxie paid only part of the funds due under the April 25, May 1, and May 20, 2019, Authorizations and did not pay any of the funds due under the June 25, June 26, and September 17, 2019, Authorizations.

On October 29, 2019, DionyMed was "placed into receivership in Canada." FAC at ¶ 35. Herban and HTH, however, "continued to conduct business." FAC at ¶ 35.

In February 2020 DionyMed sold HTH to Eaze, and Herban's online user-facing platform "ceased operation." FAC at ¶ 36. Plaintiff asserts Eaze, "having acquired HTH in 2019,² has assumed HTH's liabilities and, as such, is liable for HTH's contractual obligations to Plaintiff." FAC at ¶ 37. "In the alternative, Eaze's purchase of HTH's assets has resulted in either a consolidation or merger of HTH with Eaze, or a continuation of HTH's business. As such, Eaze is liable for HTH's debts under Oregon law." FAC at ¶ 38. Defendants Eaze and HTH dispute both of these allegations.

On June 3, 2020, Plaintiff filed a Complaint in this Court and brought claims for breach of contract and unjust enrichment against ByProxie, HTH, and Eaze.

On September 18, 2020, Plaintiff filed a First Amended Complaint in which it added Herban as a defendant and attached the six Media Authorizations at issue.

On October 19, 2020, Defendants HTH and Eaze filed a Motion to Dismiss the claims against them in Plaintiff's First Amended Complaint on the ground that this Court lacks personal jurisdiction over HTH and Eaze.

On December 9, 2020, the Court entered an Order of Default as to Herban.

On January 5, 2021, the Court entered an Order of Default as to ByProxie.

STANDARDS

When "the existence of personal jurisdiction is challenged and the defendant appears specially to contest its presence in the jurisdiction, the plaintiff has the burden to come forward with some evidence to establish jurisdiction." Dist. Council No. 16 of Intern. Union of Painters & Allied Trades, Glaziers, Architectural Metal & Glass Workers, Local 1621 v. B&B Glass, Inc., 510 F.3d 851, 855 (9^th Cir. 2007)(citing Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9^th Cir. 2004)). "The court may consider evidence presented in affidavits to assist it in its determination and may order discovery on the jurisdictional issues." Doe v. Unocal Corp., 248 F.3d 915, 922 (9^th Cir. 2001)(citing Data Disc, Inc. v. Sys. Tech. Assoc., Inc., 557 F.2d 1280, 1285 (9^th Cir. 1977)). If the court makes a jurisdictional decision based only on pleadings and affidavits submitted by the parties and does not conduct an evidentiary hearing, the plaintiff need make only a prima facie showing of personal jurisdiction. B&B Glass, 510 F.3d at 855 (citation omitted). When determining whether the plaintiff has met the prima facie showing, the court must assume the truth of uncontroverted factual allegations in the complaint. Ochoa v. J.B. Martin and Sons Farms, Inc., 287 F.3d 1182, 1187 (9^th Cir. 2002). See also In re Boon Glob. Ltd., 923 F.3d 643, 650 (9^th Cir. 2019)("When the party invoking jurisdiction does not ask for jurisdictional discovery . . . [the court] must evaluate whether the pleadings and affidavits establish a prima facie showing of jurisdictional facts. Although the party asserting jurisdiction is required only to establish a prima facie showing of jurisdictional facts, the standard is not toothless. The party asserting jurisdiction cannot simply rest on the bare allegations of its complaint; however, uncontroverted allegations in the complaint must be taken as true.")(quotations omitted)).

A court's personal jurisdiction over a particular defendant is proper either as "general" or "specific" personal jurisdiction. "General jurisdiction exists when the defendant's contacts with the forum state are so 'continuous and systematic' as to render the defendant essentially 'at home' in that forum." Freestream Aircraft (Bermuda) Ltd. v. Aero Law Grp., 905 F.3d 597, 602 (9^th Cir. 2018)(citing Daimler AG v. Bauman, 134 S. Ct. 746, 761 (2014)).

Even if the district court does not have general jurisdiction over the defendant, the court may have specific jurisdiction "if the controversy is sufficiently related to or arose out of the defendants' contacts with the forum." Omeluk v. Langsten Slip & Batbyggeri A/S, 52 F.3d 267, 270 (9^th Cir. 1995). See also Jine v. OTA Franchise Corp., No. SACV2000769JVSKESX, 2020 WL 7129374, at *4 (C.D. Cal. Sept. 11, 2020)("A defendant is subject to specific personal jurisdiction only if a controversy arises out of or is sufficiently related to the defendant's contacts with the forum state.").

DISCUSSION

As noted, HTH and Eaze move to dismiss the claims against them in Plaintiff's First Amended Complaint on the ground that this Court does not have personal jurisdiction over them. Although it is not entirely clear, it appears from Plaintiff's response to the Motion to Dismiss that Plaintiff does not contend this Court has general jurisdiction over HTH and Eaze but instead asserts the Court has specific jurisdiction over HTH and Eaze.

I. Specific Jurisdiction Standards

"Personal jurisdiction over a nonresident defendant is tested by a two-part analysis. First, the exercise of jurisdiction must satisfy the requirements of the applicable state long-arm statute. Second, the exercise of jurisdiction must comport with federal due process." Bauman v. DaimlerChrysler Corp., 579 F.3d 1088, 1094 (9^th Cir. 2009) (quotations omitted). "Oregon Rule...