Data Disc, Inc. v. Systems Technology Associates, Inc., 75-3331

CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)
Citation557 F.2d 1280
Docket NumberNo. 75-3331,75-3331
PartiesDATA DISC, INCORPORATED, Plaintiff-Appellant, v. SYSTEMS TECHNOLOGY ASSOCIATES, INC., Defendant-Appellee.
Decision Date13 July 1977

Eric W. Jorgenson, argued, Brobeck, Phleger & Harrison, San Francisco, Cal., for plaintiff-appellant.

Sandra J. Haas, argued, McCutchen, Doyle, Brown & Enersen, San Francisco, Cal., for defendant-appellee.

Appeal from the United States District Court for the Northern District of California.

Before BARNES and WALLACE, Circuit Judges, and KELLEHER, * District Judge.

WALLACE, Circuit Judge:

Data Disc brought a diversity action in the Northern District of California against Systems Technology Associates (STA), alleging that STA breached certain sales contracts by failing to pay the entire purchase price due. Data Disc also alleged that STA fraudulently induced it to resume delivery of goods which had previously been stopped for non-payment by misrepresenting the value of certain contract rights which were assigned to Data Disc by STA as security for payment. The district judge dismissed the action for lack of personal jurisdiction over STA and Data Disc appealed. We reverse and remand.


The facts in the record are contained in affidavits submitted by the parties which are in many respects conflicting. The district judge made no findings of fact in his order. Our recitation of the facts will state those which are apparently undisputed and note the points of conflict in the affidavits submitted by the parties.

Data Disc is a Delaware corporation with its principal place of business in California. STA is a Florida corporation with its principal place of business in Virginia. In January of 1973, the parties contracted for Data Disc to provide certain equipment, supplies, services and documentation to STA, apparently in connection with an STA contract with the National Aeronautics and Space Administration (NASA). The affidavits submitted by the parties conflict as to where the negotiations leading to this contract took place and where the contract was executed. STA says that Data Disc solicited the order in Virginia and its representative executed it there. Data Disc claims that at least some of the negotiations took place at the Data Disc plant in Sunnyvale, California, and that the agreements were "executed" there when Data Disc sent its "customer acknowledgment" forms back to STA.

After the execution of the initial purchase order, STA and NASA personnel visited Data Disc's Sunnyvale plant on five occasions. STA states that these visits were required both because Data Disc was late in supplying equipment under the contract and because some of the equipment supplied was defective. Data Disc says that these meetings were held to "discuss progress on the initial and subsequent contracts," and "any necessary changes." Data Disc also states that further orders were negotiated at these meetings. It is undisputed that STA supplied one of its own engineers to work with Data Disc in California on the project. However, STA says that this engineer was supplied at the request of Data Disc because of its difficulties, while Data Disc contends that the idea was proposed by STA.

In April of 1974, employees of the two parties had several telephone conversations, between Sunnyvale and Virginia, concerning STA's payment schedule. Data Disc refused to ship any more equipment until payment was assured, and STA agreed to provide security for payment by assigning to Data Disc its rights to sums due under a contract with NASA. Data Disc claims that STA employee Fitzhugh misrepresented the value of the contract rights by saying that they were "enough" to cover amounts owed by STA to Data Disc when in fact they were not. Data Disc states that in reliance upon these misrepresentations it resumed shipment of equipment to STA to its detriment. STA claims that no such misrepresentations were made and, in fact, that there were no representations as to the value of the contract rights nor of their adequacy in relation to STA's obligation to Data Disc.

Following oral argument on STA's motion to dismiss, the district judge stated "I think this Court lacks jurisdiction." No findings of fact were stated orally nor in in the order of dismissal entered pursuant to the district judge's oral ruling on the motion.


The parties' dispute pertaining to whether the district court could properly exercise in personam jurisdiction over STA turns largely on conflicting views of the facts. Therefore, before we can determine whether the district judge erred in granting STA's motion to dismiss, we must determine how we are to deal with the conflicting factual allegations which are now before us. If only one side of the conflict was supported by affidavit, our task would be relatively easy, for we may not assume the truth of allegations in a pleading which are contradicted by affidavit. Taylor v. Portland Paramount Corp., 383 F.2d 634, 639 (9th Cir. 1967). Here, however, both parties support their respective positions with affidavits.

To escape this impasse, STA argues that we must examine the facts in a light most favorable to the decision of the trial judge. In this situation, however, such an approach would not be appropriate. Where affidavits are directly conflicting on material points, we do not see how it is possible for the district judge to "weigh" the affidavits in order to resolve disputed issues. Except in those rare cases where the facts alleged in an affidavit are inherently incredible, and can be so characterized solely by a reading of the affidavit, the district judge has no basis for a determination of credibility. This is not one of those rare cases. Here the affidavits are in conflict with regard to the factual significance of the east coast and California negotiations, the instigation for the STA employees' activities in California subsequent to formation of the contract, and the alleged misrepresentations. The parties' briefs indicate that all of these are material facts in determining whether the court may exercise in personam jurisdiction over STA. Yet, without further evidence, we see no way to select one set of facts as more credible than the other.

Instead of "resolving" the factual disputes, we believe the matter may be determined by reference to the burden of proof which may properly be placed upon Data Disc. It is clear that the party seeking to invoke the jurisdiction of the federal court has the burden of establishing that jurisdiction exists. KVOS, Inc. v. Associated Press, 299 U.S. 269, 278, 57 S.Ct. 197, 81 L.Ed. 183 (1936). Yet the quantum of proof required to meet that burden may vary, depending upon the nature of the proceeding and the type of evidence which the plaintiff is permitted to present.

A defendant may move, prior to trial, to dismiss the complaint for lack of personal jurisdiction. Fed.R.Civ.P. 12(b)(2). Because there is no statutory method for resolving this issue, the mode of its determination is left to the trial court. See Gibbs v. Buck, 307 U.S. 66, 71-72, 59 S.Ct. 725, 83 L.Ed. 1111 (1939). The limits which the district judge imposes on the pre-trial proceedings will affect the burden which the plaintiff is required to meet.

If the court determines that it will receive only affidavits or affidavits plus discovery materials, 1 these very limitations dictate that a plaintiff must make only a prima facie showing of jurisdictional facts through the submitted materials in order to avoid a defendant's motion to dismiss. Any greater burden such as proof by a preponderance of the evidence would permit a defendant to obtain a dismissal simply by controverting the facts established by a plaintiff through his own affidavits and supporting materials. Thus a plaintiff could not meet a burden of proof requiring a preponderance of the evidence without going beyond the written materials. Accordingly, if a plaintiff's proof is limited to written materials, it is necessary only for these materials to demonstrate facts which support a finding of jurisdiction in order to avoid a motion to dismiss. See United States Railway Equipment Co. v. Port Huron & Detroit Railroad Co., 495 F.2d 1127, 1128 (7th Cir. 1974); O'Hare International Bank v. Hampton, 437 F.2d 1173, 1176 (7th Cir. 1971).

If a plaintiff make such a showing, however, it does not necessarily mean that he may then go to trial on the merits. If the pleadings and other submitted materials raise issues of credibility or disputed questions of fact with regard to jurisdiction, the district court has the discretion to take evidence at a preliminary hearing in order to resolve the contested issues. 5 C. Wright & A. Miller, Federal Practice and Procedure § 1373, at pp. 714-15 (1969); 4 J. Moore, Federal Practice § 26.56(6), at p. 26-190 (1976). In this situation, where plaintiff is put to his full proof, plaintiff must establish the jurisdictional facts by a preponderance of the evidence, just as he would have to do at trial. See McNutt v. General Motors Acceptance Corp.,298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936). 2

Here it appears that Data Disc, in opposing STA's motion to dismiss, was limited in the first instance to the submission of affidavits. Thus we must determine whether its pleadings and affidavits establish a prima facie showing of jurisdictional facts.


The power of a federal court entertaining a case based on diversity of citizenship to exercise personal jurisdiction over a nonresident defendant turns on two independent considerations: whether an applicable state rule or statute potentially confers personal jurisdiction over the defendant, and whether assertion of such jurisdiction accords with constitutional principles of due process. Amba Marketing Systems, Inc. v. Jobar International, Inc., 551 F.2d 784, 786 (9th Cir. 1977); Product Promotions, Inc. v. Cousteau, 495 F.2d 483, 489 (5th Cir. 1974); Arrowsmith v. United...

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