Stage Nine Design, LLC v. Rock-It Cargo U.S., LLC

• Decision Date: 11 August 2021
• Docket Number: 2:21-cv-00722-WBS-AC
• Parties: STAGE NINE DESIGN, LLC, Plaintiff, v. ROCK-IT CARGO USA, LLC; VALUED FREIGHT SERVICES, LLC; GLOBALTRANZ ENTERPRISES, LLC; SPN CARGO, INC.; and DOES 1 to 20, inclusive, Defendants.
• Court: U.S. District Court — Eastern District of California

STAGE NINE DESIGN, LLC, Plaintiff, v. ROCK-IT CARGO USA, LLC; VALUED FREIGHT SERVICES, LLC; GLOBALTRANZ ENTERPRISES, LLC; SPN CARGO, INC.; and DOES 1 to 20, inclusive, Defendants.

No. 2:21-cv-00722-WBS-AC

United States District Court, E.D. California

August 11, 2021

ORDER RE: DEFENDANT GLOBALTRANZ'S MOTION TO DISMISS

WILLIAM B. SHUBB UNITED STATES DISTRICT JUDGE

Plaintiff Stage Nine Design, LLC (“Stage Nine”) brought this action against defendants Rock-It Cargo USA, LLC (“Rock-It”), Valued Freight Services, LLC (“Valued Freight”), GlobalTranz Enterprises, LLC (“GlobalTranz”), and SPN Cargo, Inc. (“SPN”), for breach of contract, negligence, and violations of the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706.^[1] (See generally GlobalTranz's Notice of Removal, Ex. A (“Compl.”) (Docket No. 1-1).) GlobalTranz now moves to dismiss Stage Nine's claims against it on the ground that this court lacks personal jurisdiction. (Mot. to Dismiss (Docket No. 21).)

I. Factual Background

In April 2020, Stage Nine engaged Rock-It to ship its traveling pop culture museum exhibition (entitled “Hall of Heroes”) from West Palm Beach, Florida, to the Springfield Museum in Springfield, Massachusetts. (Compl ¶ 3.) Shortly thereafter, Rock-It subcontracted its obligations under the engagement to Valued Freight, who subsequently subcontracted the shipment to GlobalTranz. (Compl. ¶ 4.) On July 8, 2020, GlobalTranz contracted with SPN to operate as a motor carrier for the shipment. (Id.)

On July 10th, SPN picked up the exhibition trailer from West Palm Beach. (Compl. ¶ 5.) En route to Massachusetts, the SPN driver, Veljko, stopped at the Kenworth dealer in Riviera Beach, Florida, because he noticed the “check engine” light illuminate on his tractor. (Id.) Stage Nine alleges that Veljko left the trailer on the street unattended and unsecured near the dealership as the tractor was being serviced. (Id.) Sometime between July 10th and 11th, the trailer was stolen, and still has not been recovered. (Id.) Stage Nine alleges the value of the goods lost to be approximately $462, 742. (Id.)

Stage Nine and Rock-It's relationship was governed by a 2017 written agreement, in which Rock-It agreed to perform transportation brokerage services and logistics assistance on behalf of Stage Nine (the “2017 Agreement”). (Compl. ¶ 1.) (Compl. ¶¶ 1, 17-18.) Stage Nine claims that Rock-It breached the terms of this agreement by “failing to use its best efforts to select and engage responsible carriers and other transportation intermediaries, ” failing to “ensure there was adequate insurance without exclusions to protect Stage Nine, ” and failing to “properly and reasonable supervise and oversee the shipment.” (Compl. ¶ 17.) Stage Nine further claims that Valued Freight, GlobalTranz, and SPN each breached their respective agreements with Stage Nine, as a third-party beneficiary, for similar reasons as articulated in its claims against Rock-It, (see Compl. ¶¶ 18-20), and that each defendant is strictly liable for Stage Nine's losses under the Carmack Amendment to the Interstate Commerce Act (see Compl. at 15).

When it answered Stage Nine's complaint, SPN filed its own cross-claim against GlobalTranz. (See Answer of Defendant SPN Cargo, Inc. and Cross-Claim against Co-Defendant GlobalTranz Enterprises, LLC, at 14-17 (“SPN Cross-Claim”) (Docket No. 7).) It is not clear exactly what claims SPN is asserting against GlobalTranz, as the cross-claim only contains factual allegations and does not expressly label or list any claims, but, similar to Stage Nine's complaint, the thrust of SPN's cross-claim appears to be that GlobalTranz breached its contract with SPN, was negligent, and is liable under the Carmack Amendment because it failed to correctly and fully inform SPN of the value of the cargo it asked SPN to transport. (See id.)

II. Discussion

Federal Rule of Civil Procedure 12(b)(2) authorizes dismissal of a plaintiff's claims where the court lacks personal jurisdiction over the defendant. See Fed.R.Civ.P. 12(b)(2). In opposing a defendant's motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing that jurisdiction is proper. CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1073 (9th Cir. 2011). “Where, as here, the defendant's motion is based on written materials rather than an evidentiary hearing, ‘the plaintiff need only make a prima facie showing of jurisdictional facts to withstand the motion to dismiss.'” Id. (quoting Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124, 1127 (9th Cir. 2010)). A plaintiff may not simply rest on the “bare allegations of [the] complaint, ” but uncontroverted allegations must be taken as true, and “[c]onflicts between parties over statements contained in affidavits must be resolved in the plaintiff's favor.” Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004).

“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.” Chan v. Soc'y Expeditions, Inc., 39 F.3d 1398, 1404-05 (9th Cir. 1994). California's long-arm statute allows courts to “exercise jurisdiction on any basis not inconsistent with the Constitution of [California] or of the United States.” Cal. Code Civ. Proc. § 410.10. This provision allows courts to exercise jurisdiction to the limits of the Due Process Clause of the U.S. Constitution. See Mattel, Inc. v. Greiner & Hausser GmbH, 354 F.3d 857, 863 (9th Cir. 2003). Thus, the governing standard here is whether exercising personal jurisdiction over GlobalTranz would comport with the limits of the Due Process Clause of the 14th Amendment.

“The Due Process Clause protects an individual's liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful ‘contacts, ties, or relations.'” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-72 (1985) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 319 (1945)). “[T]he test for personal jurisdiction requires that ‘the maintenance of the suit . . . not offend traditional notions of fair play and substantial justice.'” Ins. Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702-03 (1982) (quoting Int'l Shoe, 326 U.S. at 316).

The Supreme Court has “recogniz[ed] two types of personal jurisdiction.” Ford Motor Co. v. Mont. Eighth Jud. Dist., 141 S.Ct. 1017, 1024 (2021). First, the court may assert “general” or “all-purpose” jurisdiction over the defendant if the defendant is “essentially at home” in the forum state. Id. And second, the court may assert “specific” or “case-linked” jurisdiction if the defendant has purposefully availed itself of the forum state and the plaintiff's claims “arise out of or relate to” the defendant's contacts with the forum. Id. at 1025 (citing Int'l Shoe, 326 U.S. at 319).

A. General Jurisdiction

“General jurisdiction, as its name implies, extends to ‘any and all claims' brought against a defendant.” Id. “Those claims need not relate to the forum State or the defendant's activity there; they may concern events and conduct anywhere in the world.” Id. “But that breadth imposes a correlative limit: Only a select ‘set of affiliations with a forum' will expose a defendant to such sweeping jurisdiction.” Id. (quoting Daimler, 571 U.S. at 137); see also Ranza v. Nike, 793 F.3d 1059, 1069 (9th Cir. 2015) (“Because the assertion of judicial authority over a defendant is much broader in the case of general jurisdiction than specific jurisdiction, a plaintiff invoking general jurisdiction must meet an ‘exacting standard' for the minimum contacts required.”).

“In what [the Supreme Court] has called the ‘paradigm' case, an individual is subject to general jurisdiction in her place of domicile.” Ford, 141 S.Ct. at 1024 (citing Daimler, 571 U.S. at 137). “And the ‘equivalent' forums for a corporation are its place of incorporation and the principal place of business.” Id. (citing Daimler, 571 U.S. at 137). Outside of these paradigm cases, however, plaintiffs must meet a “demanding” standard to show that a foreign corporation's “affiliations with the State are so continuous and systematic as to render [it] essentially at home in the forum State.” Daimler, 571 U.S. at 139; see also Kipp v. Ski Enter. Corp. of Wisconsin, 783 F.3d 695, 698 (7th Cir. 2015) (“Daimler raised the bar for general jurisdiction and ‘require[s] more than the substantial, continuous, and systematic course of business that was once thought to suffice.'”). Accordingly, the Supreme Court has instructed that only “in an exceptional case” should a court exercise general jurisdiction over a corporation in a state other than its place of incorporation or principal place of business. Id. at 139 n.19; see also Amiri v. DynCorp Int'l, Inc., No. 14-cv-3333-SC, 2015 WL 166910, at *3 (N.D. Cal. Jan. 13, 2015) (noting that “in the overwhelming majority of cases there will be no occasion to explore whether” a corporation is at home in states other than its place of incorporation or principal place of business).

Additionally the Supreme Court has noted that the general jurisdiction inquiry does not “focus solely on the magnitude of the defendant's in-state contacts, ” but must also take into account a “corporation's activities in their entirety, nationwide and worldwide.” Daimler, 571 U.S. at 139 n.20. The court's general jurisdiction analysis must therefore involve a comparative assessment of the defendant's business activities in different locations. See Lindora, LLC v. Isagenix Int'l, LLC, 198 F.Supp.3d 1127, 1137 (S.D. Cal. 2016) (no...