Opinion
CV-20-02474-PHX-ROS
10-19-2022
Sukhi Ghuman, et al., Plaintiffs, v. Nicolas Nicholson, Defendant.
ORDER
ROSLYN O. SILVER, SENIOR UNITED STATES DISTRICT JUDGE
Plaintiffs Sukhi Ghuman and Kiran Ghuman are husband and wife. They now live in Arizona, but previously lived in the United Kingdom. While living in the United Kingdom, Sukhi was involved in a business that failed. As a result of that failure, and after years of litigation in the United Kingdom, a monetary judgment was issued against Sukhi. Plaintiffs are aware of the judgment but have opted not to pay it.
Defendant Nicolas Nicholson, a resident of the United Kingdom, was appointed by a United Kingdom court to collect the judgment. According to Plaintiffs, Nicholson attempted to induce payment of the judgment by engaging “in a scheme to destroy Plaintiffs' lives and business relationships.” (Doc. 35 at 4). That “scheme” allegedly involved contacts between Nicholson, Plaintiffs, and other individuals in Arizona. The present suit involves claims against Nicholson based on those contacts. The parties filed cross-motions for summary judgment, but those motions will be denied because there are obvious disputes of material fact. In short, Plaintiffs claim Nicholson engaged in the contacts while Nicholson denies doing so. If he did make those contacts, there is sufficient evidence to conclude the contacts might result in liability for Plaintiffs' claims. But because personal jurisdiction turns on whether Nicholson engaged in the contacts, the Court will hold an evidentiary hearing regarding personal jurisdiction before scheduling the trial.
BACKGROUND
The parties have not provided a clear overview of the factual and legal background of their present disputes. In particular, the parties have not provided an adequate explanation of how the legal proceedings in the United Kingdom progressed and the exact role Nicholson played in those proceedings. However, Plaintiffs admit those proceedings eventually resulted in a monetary judgment against Sukhi and it is undisputed that judgment has not been paid.
Sukhi describes himself as “a businessman who has extensive experience in the security industry,” referring to the physical security of buildings. (Doc. 8-1 at 2). As of 2010, Sukhi and Kiran were living in the United Kingdom. At that time, Sukhi was “associated” with a company known as “Octavian Security Limited.” (Doc. 1-3 at 3). The parties have not explained the exact role Sukhi had with Octavian, but his role meant he was receiving payments from Octavian.
In 2010, Nicholson “was appointed by Her Majesty's Revenue and Customs (“HMRC”) as the liquidator of” Octavian. (Doc. 5-1 at 3). HRMC is the U.K. tax agency, roughly equivalent to the Internal Revenue Service. Roberts v. Bennaceur, 2015 WL 1471889, at *7 (D. Conn. Mar. 31, 2015) (noting HMRC is “the U.K. equivalent of the IRS). When Octavian failed, it had outstanding debts of approximately 2.6 million pounds with HRMC as the largest creditor. (Doc. 5-1 at 3). Octavian lacked the funds to pay its debts and legal proceedings commenced regarding Octavian's debts.
The parties do not explain what a “liquidator” is but, from context, it appears a “liquidator” performs tasks like those performed by trustees in bankruptcy proceedings in the United States. See, e.g., In re Castillo, 297 F.3d 940, 950 (9th Cir. 2002) (“Generally, the trustee is to gather and liquidate the property of the estate, to be accountable for the estate, ensure that the debtor performs his or her obligations, investigate the finances of the debtor, review the proofs of claim, and where appropriate, oppose the debtor's discharge, be available to provide relevant information to parties-in-interest, and by court order, operate the business on a short-term basis.”).
In November 2012, Sukhi moved to Arizona and Kiran moved to Arizona the following year. In 2015, Nicholson “caused a petition for involuntary bankruptcy to be filed in the United Kingdom against” Sukhi. (Doc. 1-3 at 3). Eventually, that proceeding resulted in a “judgment debt” entered against Sukhi on December 15, 2016. (Doc. 21 at 4). When Sukhi did not pay that debt, Nicholson “obtained a Bankruptcy Order in the UK against Sukhi.” (Doc. 5-1 at 3). The parties do not provide explanations of these foreign legal terms. Instead, they simply describe these events and agree there is an outstanding monetary judgment against Sukhi that Nicholson is trying to collect. (Doc. 1-3 at 4).
According to Plaintiffs, in 2018 Nicholson began contacting Kiran as well as Sukhi's “business associates, relatives,” hoping to convince Sukhi to pay the outstanding judgment. (Doc. 1-3 at 4). One of the individuals Nicholson allegedly contacted was named Sukhbinder Khangura. In March 2018, Sukhi allegedly was offered employment by Khangura. (Doc. 8-8 at 3). That position would pay at least $600,000 per year. Nicholson allegedly learned of this employment offer and called Khangura. During phone calls with Khangura, Nicholson allegedly explained the “involuntary bankruptcy action” and the outstanding judgment against Sukhi. (Doc. 1-3 at 6). Nicholson further stated he would impose “a lien on any assets of or on any business that Suki [sic] Ghuman was involved in.” (Doc. 8-8 at 3). And Nicholson allegedly told Khangura that Sukhi “was unable to legally work anywhere in the world.” (Doc. 1-3 at 6). Based on these communications, Khangura withdrew the employment offer.
In a strange coincidence, Khangura allegedly received a very similar series of calls in November 2013 from Sukhi's brother. At that time, Sukhi was involved in a dispute with his brother. The brothers' dispute ended up in litigation in the United Kingdom. The records from that case show Sukhi's brother allegedly called Khangura and “disparage[d] the reputation of [Sukhi] in his business.” (Doc. 5-2 at 2). The written decision in that case indicates the telephone calls likely did not occur. (Doc. 5-2 at 14). It is possible Khangura received disparaging phone calls from Sukhi's brother in 2013 and then Khangura received disparaging phone calls from Nicholson in 2018. But it is surprising, and unclear, how Khangura manages to attract disparaging phone calls from whomever Sukhi happens to be involved in litigation against.
Around this same time, Nicholson allegedly contacted other individuals who were interested in working with Sukhi. (Doc. 1-3 at 6-7). Nicholson told those individuals similar information to what he allegedly told Khangura. The other individuals were also dissuaded from working with Sukhi. Finally, starting in late 2018 and continuing for approximately six months, Nicholson allegedly made “half a dozen phone calls” to Kiran. (Doc. 45-1 at 2). Kiran claims she was “quickly able to identify that the caller was Nicholas Nicholson.” (Doc. 45-1 at 2). During those calls, Nicholson allegedly “issued various threats and cast vehement aspersion against” Sukhi. According to Kiran, Nicholson stated he “would destroy” Sukhi, Kiran, and their two children. Nicholson also “repeatedly” spoke to Kiran about “allegations of Sukhi's infidelity.” (Doc. 45-1 at 3). Nicholson's calls allegedly “drove [Kiran] over the edge and caused [her] to have a psychological breakdown.” (Doc. 45-1 at 3). Nicholson's calls allegedly drove Kiran to attempt suicide. (Doc. 45-1 at 4).
In a previous declaration, Kiran stated the caller “identified himself as Nicholas Nicholson.” (Doc. 8-5 at 3). Kiran's two declarations may be reconcilable but stating she was “quickly able to identify” the caller as Nicholson is a strange way of describing the interaction if, in fact, the caller explicitly identified himself as Nicholson. Kiran's declarations do, however, materially conflict on other points. For example, in her January 2021 declaration Kiran stated she has “3 children.” (Doc. 8-5 at 3). In her July 2022 declaration, however, Kiran stated she has “two children.” (Doc. 45-1 at 2). Plaintiffs' motion for summary judgment states Kiran has “three children.” (Doc. 35 at 4).
In 2020, Sukhi and Kiran filed the present suit. The operative complaint alleges claims against Nicholson for intentional interference with contract, tortious interference with business expectancies, and intentional infliction of emotional distress. (Doc. 17). On March 12, 2021, the Court issued its Scheduling Order. (Doc. 20). Under that Order, the parties were required to complete all fact discovery by December 15, 2021, and all expert discovery by May 2, 2022. The parties never sought an extension of those deadlines. On June 1, 2022, the parties filed cross-motions for summary judgment as well as motions to exclude certain testimony.
ANALYSIS
The cross-motions for summary judgment require the Court “view the evidence for each of the motions in the light most favorable to the nonmoving party for that motion and determine whether there are any genuine issues of material fact.” Riley's Am. Heritage Farms v. Elsasser, 32 F.4th 707, 719 (9th Cir. 2022). Here, neither side is entitled to summary judgment because there are disputes of fact regarding the entire premise of thisdsuit: did Nicholson make the contacts Plaintiffs ascribe to him?
I. Nicholson May Withdraw His Admissions
Before exploring the obvious dispute of fact that prevents awarding summary judgment to either side, the Court must resolve a dispute involving the parties' behavior during discovery. Plaintiffs argue Nicholson did not provide timely responses to Requests for Admission under Federal Rule of Civil Procedure 36 and Plaintiffs believe that failure means all the requests must be deemed admitted. Given the evidence in the record, including Nicholson's request to withdraw the deemed admissions, Plaintiffs' position is incorrect.
Parties are required to present discovery disputes to the Court before the close of discovery. The parties should have raised this issue earlier than the filing of the motions for summary judgment.
On September 30, 2021, Plaintiffs sent Nicholson their “First Set of Requests for Admissions.” (Doc. 35-7 at 2). As evidenced by emails between counsel, shortly after Plaintiffs sent those requests the parties were negotiating the timing of responses to various discovery requests. (Doc. 46-5 at 7). On October 21, 2021, Nicholson's counsel stated the parties had agreed to an extension such that Plaintiffs would provide their responses to Nicholson's discovery requests by October 25, 2021. (Doc. 46-5 at 6). In that same email, Nicholson's counsel requested a two-week extension to serve responses to Plaintiffs' Requests for Admission. Plaintiffs' counsel agreed to that extension. However, Plaintiffs did not provide their discovery responses on October 25 and the parties' subsequent communications indicate significant efforts by defense counsel to obtain those discovery responses.
On November 2, 2021, Nicholson's counsel emailed asking for an update. Plaintiffs' counsel responded that his client still had not provided the responsive material. (Doc. 46-5 at 5). On November 3, 2021, Nicholson's counsel emailed to express some “concern[]” that Plaintiffs still had not provided the discovery responses. Nicholson's counsel asked for a firm commitment that the responses would be provided by November 8, 2021. Plaintiffs' counsel responded his clients had “guarantee[d]” the responsive material would be given to counsel by November 5. (Doc. 46-5 at 3). Plaintiffs did not provide the responsive material by that date but on November 9, 2021, Plaintiffs' counsel informed Nicholson's counsel the discovery responses would be sent “within a couple of days.” The docket indicates the discovery responses were not served until November 17, 2022. (Doc. 28).
Beyond the initial request for a two-week extension, these emails do not reference the deadline for Nicholson's responses to the Requests for Admission. All that is known is that Plaintiffs were not producing discovery by the agreed-upon deadlines, but Nicholson's counsel was forgiving. Given the parties' interactions, if Plaintiffs believed the responses to the Requests for Admission were overdue, it is surprising they did not mention that.
At the same time the parties were discussing discovery matters, they were also engaged in settlement negotiations. From November 2021 through April 2022, the parties' emails show negotiations were proceeding very slowly. In February 2022, Nicholson's counsel asked for an update regarding settlement because they could not “keep delaying things.” (Doc. 46-6 at 3). Plaintiffs' counsel promised a response after he spoke with his client on February 24, but no response was provided. On February 28, 2022, Nicholson's counsel again asked for an update. The record does not contain a response. On March 2, 2022, Nicholson's counsel asked again for an update. The record does not contain a response. Finally, on April 15, 2022, Nicholson's counsel stated if the parties were not going to settle, they would need to proceed with depositions of the experts. (Doc. 46-7 at 2). Nicholson served his responses to the Requests for Admission that same day. (Doc. 46-8 at 2). Again, the only evidence provided shows Nicholson's counsel was patient while Plaintiffs were nonresponsive.
After Nicholson served his responses to the Requests for Admission on April 15, 2022, Plaintiffs did not immediately object to them as untimely. The parties attended a status conference on May 26, 2022, and Plaintiffs made no mention of the allegedly untimely Requests for Admission. Instead, Plaintiffs waited until their summary judgment motion filed on June 1, 2022, to raise the untimeliness of the responses to the Requests for Admission. In Nicholson's opposition to the motion for summary judgment, he argues he should be allowed to withdraw his admissions given the history of the parties' interactions. Nicholson states he is willing to file a formal motion to that effect but claims Plaintiffs' “attempt to utilize gamesmanship” should merit relief even absent a separate motion. (Doc. 46 at 18).
Federal Rule of Civil Procedure 36 allows a party to serve Requests for Admission. Rule 36(a)(3) states “[a] matter is admitted unless, within 30 days after being served, the party to whom the request is directed serves” its answers or objections. And Rule 36(b) provides “[a] matter admitted under this rule is conclusively established unless the court, on motion, permits the admission to be withdrawn or amended.” A “court may permit withdrawal or amendment if it would promote the presentation of the merits of the action and if the court is not persuaded that it would prejudice the requesting party.” Fed.R.Civ.P. 36(b).
Before reaching the issue of whether Nicholson should be permitted to withdraw his admissions, it is important to note that many of Plaintiffs' Requests for Admission were improper. As the Ninth Circuit has explained, Requests for Admission are “not to be used in an effort to harass the other side or in the hope that a party's adversary will simply concede essential elements.” Conlon v. United States, 474 F.3d 616, 622 (9th Cir. 2007). In support of that conclusion, the Ninth Circuit relied on a case from the Eleventh Circuit. In that case the Eleventh Circuit held it was improper to send Requests for Admission “with the wild-eyed hope that the other side will fail to answer and therefore admit essential elements (that the party has already denied in its answer).” Perez v. Miami-Dade Cnty., 297 F.3d 1255, 1268 (11th Cir. 2002). In fact, it was “inappropriate” and an “abuse of Rule 36” to serve Requests for Admission when the propounding party knew the opposing party had already denied the substance of the requests. Id.
In the present case, Nicholson sought to dismiss the complaint for lack of personal jurisdiction. In connection with that motion, Nicholson submitted a declaration stating, among other things, “I did not call, send text messages, or otherwise attempt to contact Sukhbinder Khangura” and “I have never spoken with Sukhbinder Khangura.” (Doc. 5-1 at 4). Nicholson's declaration also stated “I did not call, send text messages, or otherwise attempt to contact” another individual who allegedly received calls from Nicholson. (Doc. 5-1 at 5). Despite these statements, Plaintiffs' Requests for Admission asked Nicholson to either admit or deny that he has “communicated to or with” Sukhbinder Khangura and the other individual. (Doc. 35-7 at 4). Given Nicholson's statements in his declaration, Plaintiffs' Requests for Admission were exactly the type of requests the Ninth and Eleventh Circuits have noted are improper. Conlon, 474 F.3d at 622; Perez, 297 F.3d at 1268. That is, Plaintiffs were aware Nicholson denied making the contacts when Plaintiff sent their requests and there was effectively no chance the Requests for Admission would provide useful information.
Despite Plaintiffs' Requests for Admission being improper, Nicholson still should have served timely responses. The record does not disclose, however, exactly when Nicholson's responses were due. Due to the initial two-week extension, the responses were due no earlier than November 2021 but were not filed until April 2022. Therefore, the responses were many months late. Nicholson has not explained this delay beyond claiming the parties were negotiating a settlement during those months. Those negotiations should not have prevented Nicholson from serving timely responses or getting a firm commitment from Plaintiffs that the responses would be deemed timely.
Nevertheless, Plaintiffs' own behavior indicates they did not believe the responses were overdue. Prior to the close of discovery in December 2021, Plaintiffs never indicated Nicholson's responses were overdue. If Plaintiffs believed the responses were due in November 2021, the lack of responses by December 2021 should have prompted Plaintiffs to inquire with Nicholson. At the very least, after receiving Nicholson's allegedly untimely responses in April 2022, Plaintiffs should have alerted Nicholson that they believed the responses were ineffective. Plaintiffs did not do so. Instead, Plaintiffs waited until months after the close of discovery and six weeks after Nicholson served his responses to raise the alleged untimeliness in the context of seeking summary judgment. The record discloses that, during this same time period, defense counsel was repeatedly asking for Plaintiffs to respond to pending discovery requests. Plaintiffs promised to do so by certain dates, only for those dates to pass without responses. In general, the record shows Plaintiffs failed to abide by agreed-upon deadlines to provide their own discovery responses, but they believe the Court must strictly enforce a deadline against Nicholson. Plaintiffs' one-sided approach to deadlines is misguided.
Even assuming Plaintiffs had not ignored deadlines, Nicholson would be entitled to withdraw his alleged admissions. As noted earlier, Rule 36(b) provides the Court may, “on motion, permit[] the admission to be withdrawn or amended.” Nicholson did not file a formal motion and Plaintiffs are adamant that such a motion is required before the Court may grant Nicholson relief. According to Plaintiffs, “a formal, separate motion to withdraw/amend is required before a court may consider the request to withdraw/amend the deemed admissions.” (Doc. 53 at 2). Plaintiffs cite cases they view as supporting this position. Plaintiffs have missed a crucial nuance in the cases they cite.
The phrase “on motion” appears throughout the Federal Rules of Civil Procedure. For example, Rule 25 states a court may “on motion” allow a case “to be continued by or against” a party who has become incompetent. Similarly, Rule 30 allows a court “on motion” to require “a deposition be taken by telephone or other remote means.” The phrase “on motion” also appears in other rules accompanied by additional language that indicates no “motion” is required and a court may act sua sponte. For example, Rule 21 states a court “[o]n motion or on its own” may “add or drop a party.” And Rule 26(b)(2)(C) says a court “[o]n motion or on its own” may limit “the frequency or extent of discovery.”
The text of Rule 36 allows for a party to withdraw admissions only “on motion.” The absence of any indication that a court may withdraw admissions “on its own” establishes courts are not allowed to withdraw admissions sua sponte, i.e. without any request from the relevant party. This limitation on court authority is consistent with the cases cited by Plaintiffs.
Plaintiffs cite Joe Hand Promotions Inc. v. Donaldson as stating a formal motion to withdraw admissions is required. In that case, the court held the failure to respond to Rule 36 Requests for Admission and the failure “to file a Rule 36(b) motion to withdraw admissions,” meant the admissions had to be given effect. 2016 WL 3269723, at *3 (D. Ariz. June 15, 2016). But the defendants in that case were not participating and there was no action by the defendants that could possibly be construed as a request to withdraw admissions. Accordingly, the Joe Hand court was merely noting a court cannot, sua sponte, withdraw admissions.
Plaintiffs also cite In re Manning which held a party “never sought relief” from the deemed admissions and, therefore, the court “abused its discretion” when it “withdrew the admissions sua sponte.” 2013 WL 4428761, at *8 (B.A.P. 9th Cir. Aug. 19, 2013). Again, there is no indication the party who had made the admissions took any action that could be reasonably construed as a request to withdraw the admissions.
Finally, Plaintiffs cite a Fifth Circuit case that held “the district court's sua sponte refutations of the admissions” were improper. Am. Auto. Ass'n (Inc.) v. AAA Legal Clinic of Jefferson Crooke, P.C., 930 F.2d 1117, 1121 (5th Cir. 1991). But again, the party who had made the admissions took no action that could be reasonably construed as a request to withdraw them. In fact, the party who made the admissions had taken additional actions seemingly confirming they agreed with the earlier admissions.
These cases cited by Plaintiffs make clear a court may not, on its own, withdraw admissions. But these cases do not stand for the proposition Plaintiffs now seek to invoke. That is, these cases do not indicate a separate, formal “motion” is required before a party may be allowed to withdraw admissions.
Here, Nicholson was not aware until Plaintiffs' motion for summary judgment that Plaintiffs believed his untimely responses to the Requests for Admission meant he had admitted all the requests. In his opposition to the motion for summary judgment, Nicholson explains his responses were delayed due to settlement negotiations and, to the extent necessary, his service of the responses should be categorized as a “withdrawal motion.” In addition, Nicholson argues he is willing to file a formal motion if necessary. (Doc. 46 at 18). In their reply, Plaintiffs do not identify any meaningful benefit that would be gained by requiring Nicholson to file a separate motion nor do they identify how they have been prejudiced because a written, specific motions has not been filed. Rather, they merely reiterate that such a motion is required.
The language of Rule 36(a) prohibits a court from withdrawing admissions sua sponte but that does not mean a party wishing to withdraw admissions must file a separate, written document requesting as much. See, e.g., Bergemann v. United States, 820 F.2d 1117, 1120 (10th Cir. 1987) (deeming argument that separate motion required to withdraw admissions “overly technical”); Kerry Steel, Inc. v. Paragon Indus., Inc., 106 F.3d 147, 153 (6th Cir. 1997) (allowing oral motion to withdraw admissions). When it is obvious a party wishes to withdraw admissions, requiring a separate, written motion would be a needless formality. That is especially true here because it is clear Nicholson wishes to withdraw the admissions and the parties have been able to fully brief their factual and legal positions. Plaintiffs raised the issue and Nicholson requested his admissions be withdrawn. Under these circumstances, the Court is acting pursuant to the parties' arguments and not sua sponte. Therefore, Nicholson's arguments will be construed as the “motion” required by Rule 36.
Federal Rule of Civil Procedure 11 provides explicit guidance for a situation when a formal, separate motion is required. Rule 36(a) contains no similar details.
Viewing Nicholson's arguments as the requisite “motion,” the final question is whether relief is merited. A court may grant relief from deemed admissions “only when (1) the presentation of the merits of the action will be subserved, and (2) the party who obtained the admission fails to satisfy the court that withdrawal or amendment will prejudice that party in maintaining the action or defense on the merits.” Conlon v. United States, 474 F.3d 616, 621 (9th Cir. 2007).
The first requirement “is satisfied when upholding the admissions would practically eliminate any presentation of the merits of the case.” Id. That is the situation here. If the admissions are not withdrawn, Nicholson will have admitted he made the contacts at issue and that those contacts included “threaten[ing]” Kiran and the “business partners and/or prospective business partners of Sukhi.” (Doc. 46-8 at 6). While the admissions may not eliminate all aspects of this case, prohibiting their withdrawal would significantly hamper reaching a reliable result on the merits.
The second requirement for withdrawal involves whether Plaintiffs will suffer “prejudice” in the form of “difficulty . . . proving [their] case.” Conlon, 474 F.3d at 624. The Ninth Circuit has explicitly held “reliance on a deemed admission in preparing a summary judgment motion does not constitute prejudice.” Id. In addition, even a party's professed failure to pursue discovery likely does not qualify as the relevant sort of “prejudice.” Id. Instead, the prejudice must go to the inability to present the merits of the case. For example, reliance on the admissions meant a party did not pursue evidence from witnesses who are no longer available. Id. Here, Plaintiffs have not identified any convincing way in which they will be prejudiced should the admissions be withdrawn. Plaintiffs will still be able to call witnesses and present the relevant documents at trial. Withdrawing the admissions would, in effect, have no impact on how this case proceeds. Instead, it would merely deprive Plaintiffs of an unmerited early win. Nicholson's request to withdraw his admissions to the Requests for Admission will be granted and those admissions are replaced by Nicholson's substantive responses.
II. Merits of Summary Judgment Motions
The merits of the parties' cross-motions for summary judgment can be resolved in very simple terms. Plaintiffs claim Nicholson made the contacts and threats while Nicholson claims he did not. This dispute of material act precludes granting summary judgment for either side. If the contacts did not happen, Plaintiffs' claims cannot possibly succeed. Conversely, if the contacts happened exactly as Plaintiffs claim, they may be sufficient to support Plaintiffs' claims for intentional infliction of emotional distress and interference with contract or business expectancy.
Nicholson argues, pursuant to Midas Muffler Shop v. Ellison, the alleged statements were not sufficiently outrageous to support a claim for intentional infliction of emotional distress. 650 P.2d 496 (Ariz.Ct.App. 1982). In Midas, a bill collector made six phone calls during which he told the debtors the collection company “was going to sue your asses or sue the hell out of you.” Id. at 498. The Arizona court concluded those calls were “not so extreme and outrageous as to permit recovery” for intentional infliction of emotional distress. Id. at 500. Here, Nicholson allegedly made approximately six calls to Kiran. During those calls, Nicholson allegedly issued “various threats” and stated he would “destroy” Sukhi, Kiran, and their children. (Doc. 45-1 at 2). Nicholson also allegedly repeatedly mentioned that Sukhi “was having multiple affairs with other women.” (Doc. 85 at 3). Threatening to “destroy” Kiran and her children, and repeatedly speaking of extramarital affairs, is significantly different from a bill collector threatening a lawsuit. The claim for intentional infliction of emotional distress can survive summary judgment under the view that the calls and threats happened.
Under Arizona law, a claim for interference with business expectancy requires interference with “a colorable economic relationship between the plaintiff and a third party with the potential to develop into a full contractual relationship.” Dube v. Likins, 167 P.3d 93, 101 (Ariz.Ct.App. 2007). Sukhi claims he was on the cusp of finalizing various business opportunities when Nicholson contacted the prospective business partners and dissuaded them from working with Sukhi. If true, the interference claim may succeed.
Plaintiffs attempt to avoid this conclusion by arguing Nicholson's declaration denying the contacts is insufficient because it is “conclusory, self-serving, and lacking in detailed facts and supporting evidence.” (Doc. 35 at 11). Plaintiffs correctly cite Ninth Circuit authority stating “[a] conclusory, self-serving affidavit, lacking detailed facts and any supporting evidence, is insufficient to create a genuine issue of material fact.” F.T.C. v. Publ'g Clearing House, Inc., 104 F.3d 1168, 1171 (9th Cir. 1997). But Plaintiffs attempt to extend this rule far beyond its intended reach.
Plaintiffs' argument is puzzling because their own declarations would be subject to the same criticism. The declarations Plaintiffs filed in support of their motion for summary judgment are “self-serving,” contain relatively few “detailed facts,” and are not supported by convincing corroborating evidence. In particular, Plaintiffs do not point to phone records establishing the date, time, and duration of the calls they allege were placed by Nicholson to Kiran and others. Because the same rules apply to both sides in this case, if the Court were to deem Nicholson's declaration inadequate, it would have to do the same for Plaintiffs' declarations.
In general, the statement that “conclusory” declarations are insufficient is referencing situations where the facts set out in a declaration are “in the form of legal conclusions” or are speculative. Orsini v. O/S SEABROOKE O.N., 247 F.3d 953, 960 n.4 (9th Cir. 2001). For example, the Ninth Circuit rejected a summary judgment declaration where a female plaintiff claimed her male coworkers had engaged in the same misconduct she had but they were treated more leniently than she was. Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054, 1059 (9th Cir. 2002). The Ninth Circuit held the declaration was insufficient to defeat summary judgment because it “included facts beyond the declarant's personal knowledge and ‘provide[d] no indication how she knows [these facts] to be true.'” S.E.C. v. Phan, 500 F.3d 895, 910 (9th Cir. 2007) (quoting Villiarimo, 281 F.3d at 1059 n.5). Accordingly, a declaration may be deemed “conclusory” when the declarant lacks personal knowledge regarding the stated facts. But when a declaration is based on the declarant's “personal recollection of the events,” it is unlikely to qualify as “conclusory.” Orsini, 247 F.3d at 960 n.4.
Next, the statement that “self-serving declarations” must be treated with caution has been highlighted as in significant tension with the entire purpose of submitting declarations at summary judgment. As the Ninth Circuit noted in multiple cases, declarations submitted in connection with a summary judgment motion “oftentimes will be self-serving-[a]nd properly so, because otherwise there would be no point in [a party] submitting [them].” S.E.C. v. Phan, 500 F.3d 895, 909 (9th Cir. 2007). It would require a very strange case where a party would file a declaration at summary judgment that was not “self-serving” and actually helpful to the opposing party.
As for the requirements that declarations contain “detailed facts” and be supported by “corroborating evidence,” those requirements must be limited to situations where they make sense. For example, in a case where the dispute involved what was said during private conversations, the Ninth Circuit noted it was “unremarkable” a declarant could not provide corroborating evidence regarding the contents of that conversation. Phan, 500 F.3d at 910. A declaration is properly faulted for lacking support in corroborating evidence only when it is obvious such evidence exists.
Under the correct understanding of the Ninth Circuit's requirement for adequate declarations, the declaration submitted by Nicholson is sufficient to create a dispute of material fact. In his declaration Nicholson definitively states he never made any of the contacts alleged by Plaintiffs. That position is self-serving, the same as inevitably every declaration. But Nicholson has sufficient personal knowledge to make the statements that the contacts did not occur. And the lack of “corroborating evidence” is not surprising given that Nicholson is claiming things did not occur. The relatively sparse declaration from Nicholson is sufficient to create a dispute of material fact.
Finally, the parties' summary judgment briefs have extensive arguments regarding the amount and type of damages (e.g., punitive and lost profits) that may be recoverable. Those disputes are best resolved either in the form of pretrial motions or after the presentation of evidence.
III. Personal Jurisdiction
Shortly after this suit was filed, Nicholson moved to dismiss claiming the Court lacked personal jurisdiction. (Doc. 5). In connection with that motion Nicholson filed a declaration stating he did not have the contacts alleged in the complaint. In denying the motion to dismiss, the Court accepted Plaintiffs' allegations that Nicholson “intentionally engaged in harassing behavior by contacting several people he knew to be Arizona residents in a targeted effort to harm [Plaintiffs'] economic and personal prospects in Arizona.” (Doc. 11 at 4). At this point, the Court has not specifically evaluated the credibility of Plaintiffs' allegations that establish jurisdiction. But a more careful inquiry is required before proceeding to a full jury trial.
When there are “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.” Data Disc, Inc. v. Sys. Tech. Assocs., Inc., 557 F.2d 1280, 1285 (9th Cir. 1977). See also Lake v. Lake, 817 F.2d 1416, 1420 (9th Cir. 1987) (noting district court may “take evidence at preliminary hearing in order to resolve any questions of credibility or fact” related to personal jurisdiction); Albino v. Baca, 747 F.3d 1162, 1170 (9th Cir. 2014) (noting “a judge rather than a jury decides disputed factual questions relevant to jurisdiction”). Requiring Nicholson appear for trial in Arizona before a complete assessment of personal jurisdiction would be unduly burdensome to Nicholson and an unwise use of judicial resources. The Court will hear testimony and take evidence regarding the alleged contacts. Plaintiffs always bear the burden of establishing jurisdiction exists. In planning their evidence, Plaintiffs should keep in mind that because Nicholson is in the United Kingdom, there is a higher than usual burden for establishing jurisdiction. See, e.g., Core-Vent Corp. v. Nobel Indus. AB, 11 F.3d 1482, 1489 (9th Cir. 1993) (“[L]itigation against an alien defendant creates a higher jurisdictional barrier than litigation against a citizen from a sister state because important sovereignty concerns exist.”).
Holding this evidentiary hearing may require resolving some issues that overlap with the merits of Plaintiffs' claims. See Dorchester Fin. Sec., Inc. v. Banco BRJ, S.A., 722 F.3d 81, 87 (2d Cir. 2013) (noting jurisdictional issues may overlap with merits but district court still entitled to make “preliminary findings”); Boit v. Gar-Tec Prod., Inc., 967 F.2d 671, 677 (1st Cir. 1992) (noting preliminary hearing appropriate when the “significant expense and burden of trial on the merits in [a] foreign forum” may be “unfair in the circumstances”). The Ninth Circuit has not prohibited evidentiary hearings even when there is some overlap. Data Disc, Inc. v. Sys. Tech. Assocs., Inc., 557 F.2d 1280, 1285 (9th Cir. 1977) (noting when “jurisdictional facts are intertwined with the merits” it may be “preferable” to proceed to trial).
IV. Motions to Exclude Witnesses
Plaintiffs filed a motion to exclude testimony by an expert retained by Nicholson regarding a forensic examination of his cell phone. Nicholson filed motions to exclude testimony by an expert who also plans to address technical aspects of cell phones as well as an expert who plans to address the extent of Plaintiffs' monetary losses. These motions will be denied with leave to refile in the event a trial is scheduled.
Accordingly, IT IS ORDERED the Motions for Summary Judgment (Doc. 35, 36) are DENIED.
IT IS FURTHER ORDERED the Motions to Exclude Testimony (Doc. 32, 33, 34) are DENIED.
IT IS FURTHER ORDERED no later than November 1, 2022, the parties shall prepare and file a Joint Proposed Pretrial Order following the form outlined on the Court's website. This Joint Proposed Pretrial Order shall be limited solely to the issue of personal jurisdiction. The parties need not prepare Proposed Findings of Fact and Conclusions of Law in connection with their Joint Proposed Pretrial Order.
Available at https://www.azd.uscourts.gov/sites/default/files/judge-orders/ROS%20Joint%20Proposed%20Pretrial%20Order.pdf.