Capbran Holdings, Llc et al v. Firemall Llc et al

NOTICE OF MOTION AND MOTION to Dismiss Case [OR TO TRANSFER THE ACTION ]

C.D. Cal.December 2, 2016

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 i Lena N. Bacani (SBN 213556) lbacani@foxrothschild.com Christopher R. Kinkade (Pro Hac Vice) ckinkade@foxrothschild.com Steven J. Link (Pro Hac Vice) slink@foxrothschild.com Shoshana Rosenthal (Pro Hac Vice) srosenthal@foxrothschild.com FOX ROTHSCHILD LLP 1800 Century Park East, Suite 300 Los Angeles, CA 90067-1506 Telephone: 310-598-4150 Facsimile: 310-556-9828 Counsel for Third-Party Defendants JOSEPH SCHWARTZ and NIKA PROMO INC. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION CAPRAN HOLDINGS, LLC, a California LLC, and NUTRIBULLET, LLC, a California LLC, Plaintiffs, v. FIREMALL LLC, a New York LLC, and MITCHEL BERKOWITZ, an individual, Defendants. Case No.: 2:16-CV-02980-DSF-AFM THIRD-PARTY DEFENDANTS JOSEPH SCHWARTZ AND NIKA PROMO INC.’S NOTICE OF MOTION AND MOTION TO DISMISS Date: 1/9/17 Time: 1:30 pm Courtroom: 7D Complaint served: 9/29/16 New response date: 12/02/16 FIREMALL LLC, a New York LLC, and MITCHEL BERKOWITZ, an individual, Counterclaimants, v. CAPRAN HOLDINGS, LLC, a California LLC, and NUTRIBULLET, LLC, a California LLC, Counterclaim-defendants. Case 2:16-cv-02980-DSF-AFM Document 65 Filed 12/02/16 Page 1 of 25 Page ID #:671 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ii FIREMALL LLC, a New York LLC, Third-Party Plaintiff, v. JOSEPH SCHWARTZ, an individual d.b.a. NIKA CORP; NIKA PROMO INC., a New York Corporation; DOES 1-10, Third-Party Defendants. Case 2:16-cv-02980-DSF-AFM Document 65 Filed 12/02/16 Page 2 of 25 Page ID #:672 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iii TO THE COURT, ALL PARTIES AND THEIR COUNSEL OF RECORD: PLEASE TAKE NOTICE THAT, on January 9, 2017 at 1:30 pm or on such other date to be set by the Court, at 350 West 1st Street, Courtroom 7D, Los Angeles California, before Honorable Dale S. Fischer, Third Party Defendants Joseph Schwartz, an individual, Nika Promo Inc., and Nika Promotions LLC (“Defendants”) will and hereby do move the Court, pursuant to Fed. R. Civ. P. 12(b) for an order dismissing the instant action. The court should: (1) decline personal jurisdiction of this case; (2) dismiss for failure to state a claim; and/or (3) dismiss for improper venue. In the alternative, Defendants move the Court for an order severing and transferring the instant case to the Southern District of New York, pursuant to 28 U.S.C. § 1404(a). This motion is based on the Memorandum of Points and Authorities filed concurrently herewith, all pleadings and papers on file or to be filed in this action, and upon any additional evidence and argument that may be presented at the hearing of this motion. Local Rule 7-3 Certification This motion is made following the conference of counsel pursuant to L.R. 7-3 which took place on November 29, 2016. Dated: December 2, 2016 FOX ROTHSCHILD LLP By: ;/s/ Chistopher Kinkade Christopher Kinkade (Admitted pro hac vice) Lena N. Bacani Attorneys for Defendants Nika Inc., Nika Promo Inc., and Joseph Schwartz Case 2:16-cv-02980-DSF-AFM Document 65 Filed 12/02/16 Page 3 of 25 Page ID #:673 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iv TABLE OF CONTENTS I. INTRODUCTION ................................................................................................ 1 II. BACKGROUND .................................................................................................. 2 III. ARGUMENT ........................................................................................................ 4 A. This Court Lacks Personal Jurisdiction over Third-Party Defendants and Accordingly Should Dismiss the Third-Party Complaint. .................................................................................................. 4 1. This Court Lacks General Jurisdiction over Third-Party Defendants and Accordingly Should Dismiss This Case. ............... 5 2. This Court Lacks Specific Jurisdiction over Third-Party Defendants and Accordingly Should Dismiss This Case. ............... 6 a. This Court Lacks Specific Jurisdiction over Nika Promo Inc. and Nika Promotions. ......................................... 7 b. This Court Lacks Specific Jurisdiction over Joseph Schwartz. ............................................................................... 9 B. Firemall’ Claims Should Be Dismissed for Failure to State a Claim and Accordingly this Court Should Dismiss this Case. ........................... 10 1. Firemall Fails to State a Claim for Relief for Indemnification under the California Uniform Commercial Code. ......................... 11 2. Firemall Fails to State a Claim for Relief for Contribution. .......... 13 C. The Central District of California is an Improper Venue for this Case and Accordingly this Court Should Dismiss this Case. .................. 14 D. In the Alternative, Third-Party Defendants Request a Transfer of Venue Pursuant to 28 U.S.C. § 1404(A). ................................................. 15 IV. CONCLUSION ................................................................................................... 18 Case 2:16-cv-02980-DSF-AFM Document 65 Filed 12/02/16 Page 4 of 25 Page ID #:674 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 v TABLE OF AUTHORITIES Page(s) Cases Abbot v. Limited Mut. Compensation Ins. Co., 30 Cal. App. 2d 157 (1938) ...........................................................................................................12 Advantage Lift Systems, Inc. v. OMER S.P.A, No. 96-0951, 1997 WL 398033 (S.D. Cal. March 19, 1997) ..........................................................5 Arno v. Club Med Inc., 22 F.3d 1464 (9th Cir. 1994) .........................................................................................................12 Atl. Marine Constr. Co. v. U.S. Dist. Court for W. Dist. of Texas, 134 S. Ct. 568 (2013) .....................................................................................................................14 Barclays Disc. Bank Ltd v. Levy, 743 F.2d 722 (9th Cir. 1984) .........................................................................................................11 Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124 (9th Cir. 2010) .........................................................................................................7 Burger King v. Rudzewicz, 471 U.S. 462 (1985) .........................................................................................................................6 Carijano v. Occidental Petroleum Corp., 643 F.3d 1216 (9th Cir. 2011) .................................................................................................16, 17 Chapman v. Sky L’Onda Mut. Water Co., 69 Cal. App. 2d 667 (1946) ...........................................................................................................12 Construction Tech., Inc. v. Lockformer Co., 781 F. Supp. 195 (S.D.N.Y. 1990) ................................................................................................13 Crispin v. Christian Audigier, Inc., 839 F. Supp. 2d 1086 (C.D. Cal. 2011) .........................................................................................13 Daimler AG v. Bauman, 134 S. Ct. 746 (2014) ...................................................................................................................5, 6 Data Disc. Inc. v. Systems Tech. Assoc. Inc., 557 F.2d 1280 (9th Cir. 1977) .........................................................................................................5 Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834 (9th Cir. 1986) .........................................................................................................15 Doherty v. Wireless Broad Sys. Of Sacramento, Inc., 151 F.3d 1129 (9th Cir. 1998), cert. denied, 528 U.S. 813 ...........................................................13 Case 2:16-cv-02980-DSF-AFM Document 65 Filed 12/02/16 Page 5 of 25 Page ID #:675 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 vi Dole Food Co. Inc. v. Watts, 303 F.3d 1104 (9th Cir. 2002) .........................................................................................................4 Group A. Autosports, Inc. v. Holtzberg, No. EDCV-08-00215, 2008 WL 4382661 (C.D. Cal. Sept. 2, 2008) ............................................15 Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (1984) .........................................................................................................................5 Lueck v. Sundstrand Corp., 236 F.3d 1137 (9th Cir. 2001) .......................................................................................................16 Rees v. Mosaic Technologies, Inc., 742 F.2d 765 (3d. Cir. 1984)............................................................................................................8 Rutherford v. FIA Card Services, N.A., No. CV 11-054422, 2012 WL 993885 (C.D. Cal. Mar. 23, 2012) ................................................11 SCG Characters LLC v. Telebrands Corp., No. CV. 15-00374, 2015 WL 4624200 (C.D. Cal. Aug. 3, 2015) .............................................9, 10 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797 (9th Cir. 2004) .......................................................................................................4, 5 Steele v. Litton Industries, Inc., 260 Cal. App. 2d 157 (Cal. 1969) ..................................................................................................13 In re Vortex Fishing Systems, Inc., 277 F.3d 1057 (9th Cir. 2002) .........................................................................................................8 Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136 (9th Cir. 2003) .......................................................................................................11 William O. Gilley Enterprises, Inc. v. Atlantic Richfield Co., 588 F.3d 659 (9th Cir. 2009) .........................................................................................................11 Yahoo! Inc. v. La Ligue Control Le Racisme Et L’Antisemitisme, 433 F.3d 1199 (9th Cir. 2006) .........................................................................................................6 Zero Tolerance Entm’t, Inc. v. Ferguson, 254 F.R.D. 123 (C.D. Cal. 2008) ...................................................................................................13 Statutes 28 U.S.C. § 1391 ..................................................................................................................................14 28 U.S.C. § 1391(b) .............................................................................................................................14 28 U.S.C. § 1404(A) ......................................................................................................................15, 16 Cal. Civ. Code § 1646 ....................................................................................................................11, 12 Case 2:16-cv-02980-DSF-AFM Document 65 Filed 12/02/16 Page 6 of 25 Page ID #:676 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 vii Cal. Civ. Proc. Code § 410.10 ...............................................................................................................4 Cal. Comm. Code § 1301 .....................................................................................................................11 California UCC ..................................................................................................................11, 12, 13, 17 California Uniform Commercial Code ................................................................................................11 Copyright Act.......................................................................................................................................13 Lanham Act ..........................................................................................................................................13 UCC ...............................................................................................................................................12, 17 Other Authorities 18 Am. Jur. 2d Corp. §119 (1965) .........................................................................................................7 Fed. R. Civ. P. 8(a)(2) ..........................................................................................................................11 Federal Rule of Civil Procedure 12(b)(2) ..............................................................................................4 Federal Rule of Civil Procedure 12(b)(6) ......................................................................................10, 11 Case 2:16-cv-02980-DSF-AFM Document 65 Filed 12/02/16 Page 7 of 25 Page ID #:677 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 I. INTRODUCTION Third-Party Plaintiff Firemall LLC (“Firemall”) asserts claims against Joseph Schwartz (allegedly dba Nika Corp.) and Nika Promo Inc. (collectively “Third-Party Defendants”) based on alleged violations of the California Commercial Code’s implied warranty against infringement, seeking indemnity or contribution to Firemall arising out of the underlying lawsuit by Capbran Holdings, LLC and Nutribullet, LLC against Firemall for trademark, trade dress, copyright, and design patent infringement. This Court does not have personal jurisdiction over either Third-Party Defendant. Firemall has failed to establish any actual, cognizable claim for which relief can be granted. And this District is an improper venue. Accordingly, Firemall’s third-party complaint should be dismissed or, in the alternative, transferred to the U.S. District Court for the Eastern District of New York, where Firemall and Third-Party Defendants reside. First, this Court lacks personal jurisdiction over Third-Party Defendants. Joseph Schwartz resides in New York and has no personal or business assets in California. See generally Declaration of Joseph Schwartz (“Schwartz Decl.”) at ¶¶ 25-40. Nika Promo Inc. (“Nika Promo”) is organized and operating in accordance with the laws of New York and resides in New York. Significantly, Nika Promo did not exist until May 2016 - well after the operative events at issue in this lawsuit -- which allegedly occurred in October 2015. See Declaration of Joseph Schwartz (“Schwartz Decl.”) at ¶¶ 6-7. Nika Promo has no connection to California and has never even done business with Firemall. See id. at ¶¶ 8-12. Likewise Nika Promotions LLC (“Nika Promotions”)1 is a Delaware limited liability company which has no relationship with California and has never conducted business in California. Id. at ¶¶ 21-25. Neither Nika Promo nor Nika Promotions has ever availed itself of the legal protections of the State of California, and neither may be forced to defend 1 Nika Promotions is a distinct entity from Nika Promo. Schwartz Decl. at C. This Answer addresses any allegations directed at Nika Promotions as if Plaintiffs identified Nika Promotions as a defendant in this action. Case 2:16-cv-02980-DSF-AFM Document 65 Filed 12/02/16 Page 8 of 25 Page ID #:678 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 this suit in California. Likewise, Schwartz has not purposefully availed himself of California in any way regarding the events in question. Id. at ¶ 25. Second, Firemall has failed to state a claim for any plausible form of relief under California’s Commercial Code for indemnification or for contribution, because none of the transactions at issue in the third-party complaint bear an appropriate relation to California. Rather, all of the transactions at issue were between New York-based parties for the provision of goods to Firemall in locations outside of California. Accordingly, New York law and not California law applies. Third, Firemall’s complaint must be dismissed for improper venue, because no substantial event giving rise to the claims occurred in California, and none of Third-Party Defendants resides in California. In the alternative, the Court should exercise its discretion to sever and transfer this action to the Southern District of New York for the convenience of the parties and witnesses. For the reasons discussed herein, this Court should dismiss Firemall’ claims for lack of personal jurisdiction, failure to state a claim and improper venue, or in the alternative transfer this case to New York. II. BACKGROUND On May 2, 2016, plaintiffs Capbran Holdings, LLC and Nutribullet, LLC (collectively “Capbran”) filed a complaint against Firemall LLC and Mitchel Berkowitz for trademark, trade dress, copyright and patent infringement. See Capbran Complaint at Dkt. 1. Capbran alleges that Firemall and Berkowitz sold Capbran products designated as the Magic Bullet Nutribullet Blender (“Nutribullet”) thereby infringing Capbran’s federally registered trademarks, trade dress, copyright, and design patents and breaching California’s unfair competition statute. Id. On September 16, 2016, Firemall filed a third-party complaint against Third-Party Defendants for indemnification and contribution for any liability of infringement determined from the Capbran claims. Case 2:16-cv-02980-DSF-AFM Document 65 Filed 12/02/16 Page 9 of 25 Page ID #:679 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 Firemall’s third-party complaint fails to state essential details regarding the transaction wherein Third-Party Defendants allegedly sold Firemall the Nutribullets that are the subject of Capbran’s complaint against Firemall. On or about October 13, 2015, Firemall emailed Schwartz regarding an interest in buying Nutribullets. Schwartz Decl. at ¶ 26. Firemall and Schwartz engaged in negotiations and pricing arrangements out of their respective offices in New York. See id. at ¶ 28. From October 2015 through March 2016, Firemall ordered Nutribullets from Schwartz to sell through Firemall’s virtual storefront on Amazon.com. Firemall issued a purchase order for each order of Nutribullets, as there was no other contract governing these transactions. Id. at ¶ 27. Each purchase order was negotiated and executed in New York, and none was executed in California. Id. at ¶ 28. Third-Party Defendants are not the manufacturers or suppliers of the Nutribullet products at issue; they essentially served as brokers that matched Firemall’s orders with an appropriate supplier. The Nutribullets that Firemall ordered were shipped directly from Schwartz’s supplier to locations that the supplier requested. Id. at ¶ 30. When Firemall ordered the accused products from Schwartz, he contacted his supplier, which informed him that products were arriving at a warehouse in California. Schwartz notified Firemall that Firemall could either pick them up at the California warehouse or they could be shipped to Firemall elsewhere. Firemall arranged a freight forwarder to pick up the products in California and ship them to an Amazon.com fulfillment center in Pennsylvania. Neither Schwartz, Nika Promo, nor Nika Promotions ever physically possessed any of the Nutribullets sold to Firemall. Schwartz Decl. at ¶ 29. Rather, the supplier exclusively dictated the shipping terms. Id. at ¶ 31. Thus, Schwartz had no involvement in directing, authorizing, or otherwise causing any Nutribullets to be shipped to California. Id. Instead, Schwartz’s supplier delivered the Nutribullets to California where Firemall had the option and chose to arrange a freight truck to pick them up there and deliver them to an Amazon.com warehouse in Pennsylvania. Case 2:16-cv-02980-DSF-AFM Document 65 Filed 12/02/16 Page 10 of 25 Page ID #:680 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 Thus, the alleged nexus to California-the warehouse where the supplier shipped the Nutribullets for Firemall to pick up-was not owned, controlled, or paid for in any manner by Joseph Schwartz or any of his companies. In essence, Schwartz was merely a broker who arranged that the goods be supplied from one New York company to another New York company. It just so happens that the goods were passing through California and Firemall elected to take custody there, prior to which time they were in the supplier’s custody. Furthermore, Nika Promo did not exist until May 16, 2016, after the operative events at issue. Schwartz Decl. at ¶ 6. Nika Promo did not exist when Firemall alleges any wrongful conduct occurred, which according to Firemall’s Third Party Complaint, was on or before October 13, 2015. Id. III. ARGUMENT A. This Court Lacks Personal Jurisdiction over Third-Party Defendants and Accordingly Should Dismiss the Third-Party Complaint. Federal Rule of Civil Procedure 12(b)(2) allows district courts to dismiss an action for lack of personal jurisdiction. “Where defendants move to dismiss a complaint for lack of personal jurisdiction, plaintiffs bear the burden of demonstrating that jurisdiction is appropriate.” Dole Food Co. Inc. v. Watts, 303 F.3d 1104, 1108 (9th Cir. 2002). “[U]ncontroverted allegations in the Complaint 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). California's long-arm jurisdictional statute permits the exercise of personal jurisdiction so long as it comports with federal due process. See Cal. Civ. Proc. Code § 410.10; Schwarzenegger, 374 F.3d at 800-01. “For a court to exercise personal jurisdiction over a nonresident defendant, that defendant must have at least ‘minimum contacts’ with the relevant forum such that the exercise of jurisdiction ‘does not Case 2:16-cv-02980-DSF-AFM Document 65 Filed 12/02/16 Page 11 of 25 Page ID #:681 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 offend traditional notions of fair play and substantial justice.’” Id. at 801 (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). 1. This Court Lacks General Jurisdiction over Third-Party Defendants and Accordingly Should Dismiss This Case. General jurisdiction does not exist over Third-Party Defendants because none of them conducts substantial or continuous and systematic activities in California. A court may exercise general jurisdiction over a defendant whose contacts with the forum are so “continuous and systematic” that personal jurisdiction is proper in any action. Data Disc. Inc. v. Systems Tech. Assoc. Inc., 557 F.2d 1280, 1287 (9th Cir. 1977). For this Court to exercise all-purpose general jurisdiction over a non-resident corporate defendant, the defendant’s “affiliations” with this State must be “so constant and pervasive ‘as to render [it] essentially at home in the forum State.’” Daimler AG v. Bauman, 134 S. Ct. 746, 751 (2014) (citations omitted). The Court must evaluate each defendant's individual actions to determine if there are sufficient contacts to support a finding of jurisdiction. See Advantage Lift Systems, Inc. v. OMER S.P.A, No. 96-0951, 1997 WL 398033 at *6 (S.D. Cal. March 19, 1997). The leading United States Supreme Court case discussing general jurisdiction is Helicopteros, in which the Supreme Court said that the court did not have general personal jurisdiction despite the fact that defendant had sent employees to the forum state for training, made several business trips, made limited sales, formed contracts, and accepted checks drawn on accounts in the forum state. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 419 (1984). Here, Third-Party Defendants' contacts with California are substantially more limited than those of the non-resident corporation identified in Helicopteros. In fact, Third-Party Defendants' contacts with California are essentially non-existent. Third-Party Defendants are foreign residents who do not manufacture, sell, lease or promote in California. Therefore, this Court lacks the substantial, systematic, and continuous contacts required for general jurisdiction. Nika Promo was Case 2:16-cv-02980-DSF-AFM Document 65 Filed 12/02/16 Page 12 of 25 Page ID #:682 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 incorporated on May 16, 2016 in New York and thus never participated in any of the alleged activities. Schwartz Decl. at ¶ 6. Nika Promo has never conducted business in California, engaged in business in California, employed workers in California, or owned any real estate or assets in California. Id. at ¶¶ 8-12. Likewise, Nika Promotions has no connections, business, or office in California. Schwartz Decl. at ¶¶ 21-24. Schwartz is a resident of New York who does not perform any business in California. Id. at 25. Third-Party Defendants have never been qualified or authorized to do business in the State of California and do not have an agent for service of process in California. They do not pay taxes in California. They have no office, place of business, joint venture, bank account, real estate, or telephone listing in California. They have never employed any California residents or maintained an office in California. As shown by the Schwartz Declaration, Third-Party Defendants do not have any contacts, ties, or relations with the State of California or its residents, and therefore, the exercise of general jurisdiction is not appropriate. 2. This Court Lacks Specific Jurisdiction over Third-Party Defendants and Accordingly Should Dismiss This Case. Absent general jurisdiction, a court may also exercise specific jurisdiction over a defendant where “jurisdiction [is] based on the relationship between the defendant's forum contacts and the plaintiffs claim.” Yahoo! Inc. v. La Ligue Control Le Racisme Et L'Antisemitisme, 433 F.3d 1199, 1205 (9th Cir. 2006). “[T]he commission of some single or occasional acts of the corporate agent in a state may sometimes be enough to subject the corporation to jurisdiction in that State’s tribunals with respect to suits relating to that in-state activity.” Bauman, 134 S. Ct. at 754 (citations omitted). Thus, a court may exercise “specific jurisdiction” if “the defendant has purposefully directed his activities at residents of the forum . . . and the litigation results from alleged injuries that arise out of or relate to those activities.” Burger King v. Rudzewicz, 471 U.S. 462, 472-73 (1985) (citations omitted). The Ninth Circuit employs a three-part test to determine if a defendant has Case 2:16-cv-02980-DSF-AFM Document 65 Filed 12/02/16 Page 13 of 25 Page ID #:683 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 sufficient minimum contacts to be subject to specific personal jurisdiction: (1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim must be one which arises out of or relates to the defendant’s forum-related activities; and (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e., it must be reasonable. Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124, 1128 (9th Cir. 2010). The Ninth Circuit finds purposeful direction when the defendant allegedly (1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state.” Id. As for the “express aim,” prong, the Ninth Circuit has found merely hosting a website on the internet is insufficient to subject a party domiciled in one state to jurisdiction in another. Id. at 1129 (citations omitted). Rather the defendant must perform “something more” to demonstrate that he or it directed his activity towards the forum state. Id. (citations omitted). So defendants must conduct “individual targeting” of forum residents for the court to maintain jurisdiction. See id. at 1129-31. a. This Court Lacks Specific Jurisdiction over Nika Promo Inc. and Nika Promotions. This court does not have specific jurisdiction over Nika Promo because it was not incorporated until May 16, 2016, well after the events in question, so did not aim any of the alleged activities at the forum. In general, a corporation does not exist as a legal entity until incorporated, and therefore cannot have agents before its organization. See 18 Am. Jur. 2d Corp. §119 (1965). Nika Promo could not have purposefully availed itself of the benefits and protections of California law, because it Case 2:16-cv-02980-DSF-AFM Document 65 Filed 12/02/16 Page 14 of 25 Page ID #:684 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 was not even formed yet. Nika Promo did not consummate any transaction with the forum, as it was non-existent nor performed any act that availed the entity of the privilege of conducting activities in California. As it did not yet exist, Nika Promo did not expressly aim any activities at the forum state, therefore this Court lacks specific jurisdiction over Nika Promo.2 The Court lacks specific jurisdiction over Nika Promo Inc. even on the basis of pre-incorporation contracting. A legal entity must act in its corporate capacity before it will be held liable for a contract entered into by a promoter on its behalf because the mere act of incorporation alone is insufficient to impose liability. See In re Vortex Fishing Systems, Inc., 277 F.3d 1057, 1070 (9th Cir. 2002). The Third Circuit has found personal jurisdiction over a corporation for a pre-incorporation contract only when the entity later ratified the actions of the promoter. Rees v. Mosaic Technologies, Inc., 742 F.2d 765, 769 (3d. Cir. 1984). Even on the theory of pre- incorporation contracting, Schwartz directed no action to California. He directed the transaction in New York and never aimed any of the dealings towards California. Schwartz’s supplier distributed the Nutribullets to California and offered Firemall the option to pick the products up there. Firemall then arranged transportation of the Nutribullets from California to the Amazon warehouse in Pennsylvania. Thus, even on the basis of pre-incorporation liability, Schwartz, acting as the pre-incorporation promoter to Nika Promo Inc., did not directly target California on behalf of Nika Promo in any way. Rather, he acted as a broker to get the shipment of Nutribullets to 2 Firemall alleges personal jurisdiction over Nika Promo based on a bill of lading attached to Firemall’s Third Party Complaint. Complaint at ¶ 7, Ex. 2. Firemall alleges this bill of lading demonstrates “on information and belief” that Nika Promo “authorized, directed, and/or caused the importation of” Nutribullets into California. Id. at ¶ 7. However, Nika Promotions-not Nika Promo-is identified as the shipper on the alleged invoice, which predates the formation of Nika Promo. Id. at Ex. 2. Nika Promotions is not named as a defendant in this action. Furthermore, the bill of lading does not relate to Nutribullets, but rather to a separate product altogether, the “Cool Gear Ez-Freeze(R) Expandable food storage set[s]” to Amazon at 550 Oak Ridge Road, Hazleton, PA 18202. Schwartz Decl. at ¶ 17, Ex. B. In sum, Nika Promo was not and could not be involved in this irrelevant transaction that does not concern any products at issue in Firemall’s Third Party Complaint or the underlying litigation. Case 2:16-cv-02980-DSF-AFM Document 65 Filed 12/02/16 Page 15 of 25 Page ID #:685 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 New York. It was Firemall who then chose to pick them up in California rather than New York. Thus, even on the basis of pre-incorporation liability, this Court must dismiss Firemall’ claims against Nika Promo for lack of personal jurisdiction. Similarly, the Court lacks specific jurisdiction over Nika Promotions. Nika Promotions has no connections to California and never conducted business in California. Schwartz Decl. at ¶ 21-24. Nika Promotions never sold Nutribullets to Firemall and thus has no affiliation to this case. Accordingly, this Court lacks specific jurisdiction over Nika Promotions because it did not direct any activities to California or even engage, transact or contract with Firemall. As Nika Promotions had no engagement with the transaction at issue, this Court lacks specific jurisdiction over Nika Promotions. b. This Court Lacks Specific Jurisdiction over Joseph Schwartz. Firemall has failed to prove the court has an independent basis to exercise jurisdiction over Joseph Schwartz in an individual capacity. Even if a corporation is subject to the personal jurisdiction of a particular forum, that fact does not necessarily confer jurisdiction over the corporation’s non-resident officers, directors, agents or employees. Under the “fiduciary shield” doctrine, a court cannot exercise personal jurisdiction over a non-resident corporate officer of a corporation, even if the court has jurisdiction over the corporation, if the officer’s activities were performed solely in his corporate or employment capacity. SCG Characters LLC v. Telebrands Corp., No. CV. 15-00374, 2015 WL 4624200 at *3 (C.D. Cal. Aug. 3, 2015) (citing Calder v. Jones, 465 U.S. 783, 790 (1984); Davis v. Metro Productions, Inc., 885 F.2d 515, 520 (9th Cir. 1989); Forsythe v. Overmyer, 576 F.2d 779, 783 (9th Cir. 1978)). Instead, a plaintiff bringing a claim against an individual officer must prove that the court has an independent basis to exercise jurisdiction over the officer. Id. (citing Davis, 885 F.2d at 520). Thus, a court cannot find purposeful availment exists unless the plaintiff establishes that: (1) the corporation is the agent or alter ego of the Case 2:16-cv-02980-DSF-AFM Document 65 Filed 12/02/16 Page 16 of 25 Page ID #:686 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 individual; or (2) the individual had control of, and directly participated in, the alleged activities. Id. (citing Wolf Designs, Inc. v. DHR Co., 322 F.Supp. 2d 1065, 1072 (C.D. Cal. 2004)). In the latter case, the primary inquiry is whether the individual was a “primary participant” or “guiding spirit” in the alleged wrongdoing directed at the form state. Id. This Court does not have specific jurisdiction over Schwartz because he did not engage in any solicitation of the California warehouse or deal with it directly. While he was a primary participant and essentially the guiding spirit in the transaction in New York, none of his actions directed his, Nika Promo’s, or Nika Promotions’ activities towards California. Rather, he acted as the broker between Firemall and the supplier. Schwartz’s supplier, not Schwartz, acted as the guiding spirit for the California transactions. Schwartz’s supplier gave Firemall the option of picking up the goods in California. Firemall opted to pick up the Nutribullets in California and ship them directly to the Amazon facility in Pennsylvania. Thus this court has no personal jurisdiction over Schwartz because Nika Promo did not even exist until after the transaction took place, so Schwartz did not act as the “alter ego” of either Nika Corp. or Nika Promo. Nor does this Court have personal jurisdiction over Schwartz because he did not act as the guiding spirit for the transactions that occurred in California. Rather, the distributor, Schwartz’s supplier, arranged to have the goods shipped to California. Schwartz did not expressly aim or directly target any operation in California. Thus, this court should dismiss the claims against Joseph Schwartz in his individual capacity for lack of personal jurisdiction. B. Firemall’ Claims Should Be Dismissed for Failure to State a Claim and Accordingly this Court Should Dismiss this Case. Pursuant to Federal Rule of Civil Procedure 12(b)(6) and upon a civil defendant’s motion, courts may dismiss a complaint for failure to state a claim upon which relief can be granted. See id. A 12(b)(6) motion to dismiss requires the court to determine the sufficiency of the plaintiff’s complaint and whether or not it contains Case 2:16-cv-02980-DSF-AFM Document 65 Filed 12/02/16 Page 17 of 25 Page ID #:687 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11 a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). A Rule 12(b)(6) motion is granted when a plaintiff files a complaint that does not contain “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” See Iqbal, 129 S.Ct. at 1949-50; William O. Gilley Enterprises, Inc. v. Atlantic Richfield Co., 588 F.3d 659, 668 (9th Cir. 2009). Though the court must accept all well-pleaded allegations of fact in the complaint, it is “not required to accept as true conclusory allegations which are contradicted by documents referred to in the complaint.” Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003) (citations omitted). 1. Firemall Fails to State a Claim for Relief for Indemnification under the California Uniform Commercial Code. Firemall fails to state a claim for indemnification under the California Commercial Code; thus this Court should dismiss this claim. Cal. Comm. Code § 1301 provides that “[i]n the absence of an agreement [where the parties agreed to the choice of law, the California UCC] applies to transactions bearing an appropriate relation to this state.” (emphasis added). California courts employ three different choice of law analyses to determine whether a transaction bears an appropriate relation to California. See Rutherford v. FIA Card Services, N.A., No. CV 11-054422, 2012 WL 993885, at *2 (C.D. Cal. Mar. 23, 2012) (describing California courts’ application of Cal. Civ. Code § 1646, the Restatement (Second) of Conflict of Laws § 188, and the “governmental interest balancing test.”). Under Cal. Civ. Code § 1646, “a contract is governed by the law and usage of the place where it is to be performed, or, if place of performance is not indicated, by the law and usage of the place where it is made.” The Ninth Circuit clarified that where contracts do not specify a place of performance, Cal. Civ. Code § 1646 requires the court to apply the law where the contract was made. See Barclays Disc. Bank Ltd v. Levy, 743 F.2d 722, 725 (9th Cir. 1984) (affirming the district court’s use of a prior version of section 1646 in an international UCC dispute, finding that the statutory Case 2:16-cv-02980-DSF-AFM Document 65 Filed 12/02/16 Page 18 of 25 Page ID #:688 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12 scheme replaced the common law/restatement); Arno v. Club Med Inc., 22 F.3d 1464, 1469 n. 6 (9th Cir. 1994) (noting conflict among California courts, but determining the court must apply the law of California where the contract was made, i.e. accepted, when the contract does not specify place of performance). None of the purchase orders indicate a place of performance, thus this Court must apply the law where the contract is made. Here, parties negotiated and executed the contract in New York. All of Firemall’s purchase orders were directed to ship to Firemall in Brooklyn. Therefore, the law of New York, the place where the contract was made, will govern this action, not California. Because the California UCC does not govern this transaction, this court must dismiss Firemall’s UCC indemnification claims for failure to state a claim for which relief can be granted. Even if the purchase orders indicate a place of performance, that place is New York.3 Thus, California UCC law does not govern these claims and Firemall has failed to state a claim for which relief can be granted. Furthermore, Firemall fails to state a claim for relief against Nika Promo because Nika Promo was not incorporated at the time the events in question took place. A corporation cannot be held liable for acts of its promotors nor obligated by their conduct and contracts, in absence of the corporation adopting such conduct or contracts after it comes into existence. Chapman v. Sky L’Onda Mut. Water Co., 69 Cal. App. 2d 667, 676 (1946). To prove such adoption, the evidence must show some affirmative act by the corporation from which [adoption] may be inferred. Abbot v. Limited Mut. Compensation Ins. Co., 30 Cal. App. 2d 157, 163 (1938). Receipt of benefits from the performance of the contract without actual knowledge of its terms is insufficient. Id. Also the fact that some of the promoters subsequently became officers and employees of the new corporation does not make the corporation liable upon the promoters’ contract unless it adopted it after its incorporation. Steele v. 3 The only other cognizable place of performance would be Pennsylvania, where Firemall intended and ultimately delivered the Nutribullets to, for storage at Amazon.com’s fulfillment center. Case 2:16-cv-02980-DSF-AFM Document 65 Filed 12/02/16 Page 19 of 25 Page ID #:689 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13 Litton Industries, Inc., 260 Cal. App. 2d 157, 170 (Cal. 1969). While Schwartz entered into contracts with Firemall before Nika Promo was incorporated, Nika Promo never ratified, and thus is not bound by, the pre-incorporation contracts. Thus, Firemall fails to state a claim against Nika Promo because all of the alleged events took place before Nika Promo existed. 2. Firemall Fails to State a Claim for Relief for Contribution. Firemall fails to state a claim for which relief can be granted for its contribution claim. Generally, federal courts find that the Lanham Act and Copyright Act establish comprehensive remedial schemes which do not permit the creation of new indemnity and contribution claims.4 “A defendant held liable under a federal statute has a right to indemnification or contribution from another only if such right arises: (1) through the affirmative creation of a right of action by Congress, either expressly or implicitly, or (2) under the federal common law.” Doherty v. Wireless Broad Sys. Of Sacramento, Inc., 151 F.3d 1129, 1130-31 (9th Cir. 1998), cert. denied, 528 U.S. 813. California federal courts have held that no right to contribution exists under either the Copyright Act or federal common law. Zero Tolerance Entm’t, Inc. v. Ferguson, 254 F.R.D. 123, 126-27 (C.D. Cal. 2008) (listing cases); Crispin v. Christian Audigier, Inc., 839 F. Supp. 2d 1086, 1099 (C.D. Cal. 2011) (dismissing indemnification claims because federal law does not recognize a right to indemnification under the Copyright Act). Similarly, courts have held there is no right to contribution under the Lanham Act. See Zero Tolerance Entm’t, 254 at 127 (citing Getty Petroleum Corp. v. Island Transp. Corp., 862 F.2d 10 (2d Cir. 1988), cert. denied, 490 U.S. 1006 (1989) which found no express or implied right to contribution exists under the Lanham Act). Likewise, courts have found that there is not a right of contribution in patent cases. Construction Tech., Inc. v. Lockformer Co., 781 F. Supp. 195, 201 (S.D.N.Y. 1990) (“there is not right of contribution in patent cases”). Thus, Firemall fails to state a 4 Defendants acknowledge that California does allow indemnification for breach of implied warranty against infringement under California UCC law, but that statute does not appear to allow any remedy for contribution. Case 2:16-cv-02980-DSF-AFM Document 65 Filed 12/02/16 Page 20 of 25 Page ID #:690 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14 claim for which relief can be granted with its contribution claim. Firemall is not entitled to any relief in the form of contribution from Third-Party Defendants for their alleged federal intellectual property infringement liability, as pronounced quite clearly from the federal law on this issue. Thus, Firemall’s claim for contribution must be dismissed for failure to state a claim. C. The Central District of California is an Improper Venue for this Case and Accordingly this Court Should Dismiss this Case. The Central District of California is not a proper venue for this action because none of the Third-Party Defendants are residents, a substantial part of the events giving rise to Firemall claims did not occur in California, and this court lacks personal jurisdiction over all Third-Party Defendants. When venue is challenged, the court must determine whether the case falls within one of the three categories set out in the general venue statute. 28 U.S.C. § 1391. Atl. Marine Constr. Co. v. U.S. Dist. Court for W. Dist. of Texas, 134 S. Ct. 568, 577 (2013). If the case does not within one of these three categories, venue is improper, and the case must be dismissed or transferred under § 1406(a). Atl. Marine Constr. Co., 134 S.Ct. at 577. Venue is proper in (1) a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located; (2) in a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred; and (3) if there is no district in which an action may otherwise be brought as provided in this section, any judicial district in which any defendant is subject to the court’s personal jurisdiction with respect to such action. 28 U.S.C. § 1391(b). This case does not fall into the first venue category, because neither Third-Party Defendant resides in California. This case does not fall into the third venue category, because (a) there is another district in which this action may otherwise be brought, namely the Eastern District of New York, and (b) the court lacks personal jurisdiction over both Third-Party Defendants. As for the second venue category, a substantial part of the events or omissions Case 2:16-cv-02980-DSF-AFM Document 65 Filed 12/02/16 Page 21 of 25 Page ID #:691 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15 giving rise to the claim did not occur in California. In cases of manufacture, distribution, and sale of products disputes, this Court has analyzed the place of solicitation, the place of negotiation, the place of contracting, the place of execution of the contract and the place of performance to determine proper venue. Group A. Autosports, Inc. v. Holtzberg, No. EDCV-08-00215, 2008 WL 4382661 at *2-*3 (C.D. Cal. Sept. 2, 2008); see also Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 842 (9th Cir. 1986) (venue is proper not in the place where the contract was repudiated, but in the place of intended performance, reasoning that “the place of performance is determined at the inception of the contract and therefore parties can anticipate where they may be sued.”). A substantial part of the events giving rise to Firemall’s claims did not occur in California. Rather, Firemall in New York solicited Schwartz in New York. Schwartz Decl. at ¶ 26. The two parties negotiated the transactions and purchase orders in New York, executed the contracts in New York, and the final products ended up in New York. Schwartz’s supplier distributed the Nutribullets to California only as a means for Firemall to transport them to the Amazon.com fulfillment center in Pennsylvania. Thus, the California warehouse was merely a means to an end and did not constitute the place where a substantial part of the events or omissions giving rise to the claim occurred. Only an extremely minor event occurred in California, the transfer from Schwartz’s supplier to Firemall, which Third-Party Defendants did not control. Thus, Firemall’s complaint should be dismissed for improper venue because Firemall fails to meet all three threshold venue requirements. D. In the Alternative, Third-Party Defendants Request a Transfer of Venue Pursuant to 28 U.S.C. § 1404(A). Even if the Court finds that venue is proper, the Court has discretion to transfer a case to another district pursuant to 28 U.S.C. §1404(a). That statute provides: “[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been Case 2:16-cv-02980-DSF-AFM Document 65 Filed 12/02/16 Page 22 of 25 Page ID #:692 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 16 brought or to any district or division to which all parties have consented.” 28 U.S.C. § 1404(a). To obtain dismissal on forum non conveniens grounds, a defendant must demonstrate that an adequate alternative forum exists, and that private and public interest factors favor trial there. Lueck v. Sundstrand Corp., 236 F.3d 1137, 1143 (9th Cir. 2001). Defendant bears the burden of showing the existence of an adequate alternative forum. Id. (citations omitted). New York is an adequate alternative forum and the private and public interest factors weigh in favor of having a trial there. An alternative forum exists when defendants are amenable to service of process in the foreign forum. Id. (citing Piper Aircraft Co. v. Reynow, 454 U.S. 235, 254 n. 22 (1981)). A foreign forum is adequate when it provides the plaintiff with a sufficient remedy for his wrong. See id. New York is an adequate alternative forum because Third-Party Defendants, as residents of New York, are subject to the jurisdiction of New York and amenable to process there. New York permits the subject matter of the claims thus provides an adequate remedy and adequate procedural safeguards for Firemall’s claims. Thus, New York is an adequate alternative forum for Firemall’s claims. The private interests also weigh in favor of New York as an appropriate alternative forum. Relevant private interests include: “(1) the residence of the parties and the witnesses; (2) the forum's convenience to the litigants; (3) access to physical evidence and other sources of proof; (4) whether unwilling witnesses can be compelled to testify; (5) the cost of bringing witnesses to trial; (6) the enforceability of the judgment; and (7) all other practical problems that make trial of a case easy, expeditious and inexpensive.” Carijano v. Occidental Petroleum Corp., 643 F.3d 1216, 1229 (9th Cir. 2011) (citations omitted). Here, the convenience factors point overwhelmingly in favor of the alternative forum. With regard to private interest factors, all of the witnesses and evidence regarding Firemall and Third-Party Defendant’s conduct at issue in this case is located in New York. Schwartz Decl. at ¶ 40. The entirety of the events at issue in this case Case 2:16-cv-02980-DSF-AFM Document 65 Filed 12/02/16 Page 23 of 25 Page ID #:693 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17 occurred in New York. The transactions between the parties in this lawsuit all occurred in New York. Firemall’s initial solicitation of Third-Party Defendants occurred in New York, the negotiations between the parties occurred in New York, and the Firemall received the Nutribullets in New York. Both Firemall and Third- Party Defendants reside in New York. Firemall is a New York limited liability company and Plaintiff Berkowitz is an individual residing in New York. Despite the fact that Firemall must defend against Capbran’s federal intellectual property claims in the Central District of California, New York is a more convenient forum for the Firemall and Third-Party Defendants in this case. All the relevant transactions were both negotiated and occurred in New York. Initial conversations between Schwartz and Firemall occurred in New York and Firemall issued purchase orders out of its New York offices, thus all access to physical evidence and other sources of proof is out of New York. Even the correspondence with Schwartz’s supplier is out of New York because that is where both parties communicated and transacted with Schwartz’s supplier. All pertinent witnesses will be from New York, thus reducing the costs of brining witnesses to trial. As New York provides an enforceable UCC remedy, all of Firemall’s claims may be enforced in New York. Thus, the private interest factors weigh in favor of transferring this case to New York. Likewise, public interest factors weigh in favor of transferring the case to New York. Public interest factors include: “(1) the local interest in the lawsuit, (2) the court's familiarity with the governing law, (3) the burden on local courts and juries, (4) congestion in the court, and (5) the costs of resolving a dispute unrelated to a particular forum.” Carijano, 643 F.3d at 1232 (citations omitted). With regard to public interest factors, the interests of California citizens in deciding this case are minimal. California played only a nominal role in the overall transaction and has little to do with the operating parties. As described above, the California UCC does not even govern this lawsuit as the case does not bear an appropriate relation to California. The burden on the Court and the potential jurors of litigating the case with Case 2:16-cv-02980-DSF-AFM Document 65 Filed 12/02/16 Page 24 of 25 Page ID #:694 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 18 foreign witnesses and evidence would be great. The cost of resolving the dispute in New York is much more efficient and effective as both parties reside there. Additionally, New York has a much greater interest than California of resolving disputes between New York residents under New York law. Therefore, in the event that the Court does not dismiss the third-party complaint in its entirety, the Court should transfer the case to the U.S. District Court for the Eastern District of New York. IV. CONCLUSION Based upon the above facts and law there is no basis for personal jurisdiction over Third-Party Defendants Joseph Schwartz, Nika Promo, or Nika Promotions in this forum. Firemall fails to state a claim for which relief can be granted against Third-Party Defendants. As such, all claims against Third-Party Defendants should be dismissed. Alternatively, if this Court decides against dismissing all claims, venue should be transferred to the Southern District of New York. Dated: Los Angeles, California December 2, 2016 FOX ROTHSCHILD LLP /s/ Lena Bacani Lena N. Bacani (SBN 213556) Christopher Kinkade (Admitted pro hac vice) ckinkade@foxrothschild.com lbacani@foxrothschild.com Attorneys for Defendants Nika Inc., Nika Promo Inc., and Joseph Schwartz Case 2:16-cv-02980-DSF-AFM Document 65 Filed 12/02/16 Page 25 of 25 Page ID #:695 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DECLARATION OF JOSEPH SCHWARTZ 1 ACTIVE\43124805.v4-12/2/16 Lena N. Bacani (SBN 213556) lbacani@foxrothschild.com Christopher R. Kinkade (admitted Pro Hac Vice) ckinkade@foxrothschild.com Steven J. Link (admitted Pro Hac Vice) slink@foxrothschild.com Shoshana Rosenthal (admitted Pro Hac Vice) srosenthal@foxrothschild.com FOX ROTHSCHILD LLP 1800 Century Park East, Suite 300 Los Angeles, CA 90067-1506 Telephone: 310-598-4150 Facsimile: 310-556-9828 Counsel for Third-Party Defendants JOSEPH SCHWARTZ and NIKA PROMO INC. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION CAPRAN HOLDINGS, LLC, a California LLC, and NUTRIBULLET, LLC, a California LLC, Plaintiffs, v. FIREMALL LLC, a New York LLC, and MITCHEL BERKOWITZ, an individual, Defendants. Case No.: 2:16-CV-02980-DSF-AFM DECLARATION OF JOSEPH SCHWARTZ FIREMALL LLC, a New York LLC, and MITCHEL BERKOWITZ, an individual, Counterclaimants, v. CAPRAN HOLDINGS, LLC, a California LLC, and NUTRIBULLET, LLC, a California LLC, Counterclaim-defendants. Case 2:16-cv-02980-DSF-AFM Document 65-1 Filed 12/02/16 Page 1 of 6 Page ID #:696 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DECLARATION OF JOSEPH SCHWARTZ 2 ACTIVE\43124805.v4-12/2/16 FIREMALL LLC, a New York LLC, Third-Party Plaintiff, v. JOSEPH SCHWARTZ, an individual d.b.a. NIKA CORP; NIKA PROMO INC., a New York Corporation; DOES 1-10, Third-Party Defendants. Pursuant to 28 U.S.C. § 1746, I, Joseph Schwartz, being duly sworn, declare: 1. I am a named third-party defendant in the above-captioned action, and I have personal knowledge of all facts in this Declaration. 2. I reside at 14 Dover Terrace, Monsey, New York 10952. 3. I am the sole shareholder of Nika Promo Inc. (“Nika Promo”), which has also been named as a third-party defendant in this action.1 4. I am the sole member of Nika Promotions LLC (“Nika Promotions”), a Delaware limited liability company with a registered business office located at Suite 804, 1220 N. Market Street, Wilmington, Delaware 19801. 5. I make this Declaration in support of Third-Party Defendants’ motion to dismiss for lack of personal jurisdiction or, in the alternative, to transfer to the Eastern District of New York. A. Nika Promo Did Not Exist During the Relevant Time Period. 6. Nika Promo is a New York corporation formed on May 16, 2016. A true and correct copy of Nika Promo’s corporate entity status information from the New York Department of State, Division of Corporations’ website is attached as Exhibit A. 1 Joseph Schwartz and Nika Promo are referred to collectively herein as “Third- Party Defendants.” Case 2:16-cv-02980-DSF-AFM Document 65-1 Filed 12/02/16 Page 2 of 6 Page ID #:697 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DECLARATION OF JOSEPH SCHWARTZ 3 ACTIVE\43124805.v4-12/2/16 7. Nika Promo did not exist when Firemall alleges any wrongful conduct occurred, which according to Firemall’s Third Party Complaint, was on or before October 13, 2015. B. Nika Promo Has No Connections with California. 8. Nika Promo has never conducted business in California. 9. Nika Promo has never done business with Firemall LLC (“Firemall”). 10. Nika Promo has never sold Firemall products under the designation MAGIC BULLET NUTRIBULLET PRO 900 SERIES BLENDER/MIXER SYSTEM (“Nutribullet”). 11. Nika Promo does not employ workers in California. 12. Nika Promo does not own any real property or hold any assets in California. C. Nika Promotions is a Separate Entity from Nika Promo. 13. Firemall alleges personal jurisdiction over Nika Promo based on a bill of lading attached to Firemall’s Third Party Complaint. (See Third Party Compl. at ¶ 7, Ex. 2). 14. Firemall alleges this bill of lading demonstrates “on information and belief” that Nika Promo “authorized, directed, and/or caused the importation of” Nutribullets into California. (Id. at ¶ 7). 15. However, Nika Promotions-not Nika Promo-is identified as the shipper on the alleged invoice, which predates the formation of Nika Promo. (Id. at Ex. 2). 16. Furthermore, the bill of lading does not relate to Nutribullets, but rather to a separate product altogether. 17. On December 28, 2015, Firemall issued a purchase order for the shipment of 400 “Cool Gear Ez-Freeze(R) Expandable food storage set[s]” to Amazon at 550 Oak Ridge Road, Hazleton, PA 18202. A true and correct copy Case 2:16-cv-02980-DSF-AFM Document 65-1 Filed 12/02/16 Page 3 of 6 Page ID #:698 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DECLARATION OF JOSEPH SCHWARTZ 4 ACTIVE\43124805.v4-12/2/16 of an email exchange between myself and Leah Singer of Firemall, which includes a copy of the relevant purchase order, is attached as Exhibit B. 18. The pallet labels for this shipment contained an identification number of “FBA3891M1B.” A true and correct copy of an email exchange between myself and Ms. Singer, which includes a copy of the relevant pallet labels provided by Firemall, is attached as Exhibit C. 19. This unique identification number is reflected on the bill of lading attached as Exhibit 2 to the Third Party Complaint, and confirms a shipment to the same Amazon address on the purchase order. 20. In sum, Nika Promo was not and could not be involved in this irrelevant transaction that does not concern any products at issue in Firemall’s Third Party Complaint or the underlying litigation. D. Nika Promotions Has No Connections with California. 21. Nika Promotions has never conducted business in California. 22. Nika Promotions has never sold Nutribullets to Firemall. 23. Nika Promotions does not employ workers in California. 24. Nika Promotions does not own any real property or hold any assets in California. E. I Do Not Have Any Connections with California. 25. I have no connections with California. I have never (i) been a resident of California, (ii) owned real property or other assets in California, (iii) maintained an office in California, or (iv) otherwise intentionally transacted business in California. 26. On or about October 13, 2015, Firemall emailed me regarding its interest in buying Nutribullets. 27. Firemall issued a purchase order for each order of Nutribullets; there was no other contract executed in connection with these transactions. Case 2:16-cv-02980-DSF-AFM Document 65-1 Filed 12/02/16 Page 4 of 6 Page ID #:699 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DECLARATION OF JOSEPH SCHWARTZ 5 ACTIVE\43124805.v4-12/2/16 28. Each purchase order was executed in New York, and none were executed in California. 29. Neither I nor any of my companies ever physically possessed of any Nutribullets sold to Firemall. 30. The Nutribullets that Firemall ordered were shipped directly from the supplier to locations that the supplier requested. 31. Because the supplier exclusively dictated the shipping terms, I had no involvement in directing, authorizing, or otherwise causing any Nutribullets to be shipped to California. 32. Furthermore, to the extent any Nutribullets were shipped to California, I am unaware of any Nutribullets sold to Firemall being sold to customers in California. 33. To the best of my knowledge, this supplier does not maintain offices in California, is not a California resident, does not own real property or other assets in California, and does not employ workers in California. 34. My primary residence is in Monsey, New York. 35. I maintain a secondary residence in Brooklyn, New York. 36. My principal place of business is in Brooklyn, New York. 37. I do not now and never have had any residence or place of business in California. 38. I do not own any real property or hold any assets in California. 39. I do not employ any employees in California. 40. All potentially relevant documents in my possession are in New York, not in California. Case 2:16-cv-02980-DSF-AFM Document 65-1 Filed 12/02/16 Page 5 of 6 Page ID #:700 Case 2:16-cv-02980-DSF-AFM Document 65-1 Filed 12/02/16 Page 6 of 6 Page ID #:701 Case 2:16-cv-02980-DSF-AFM Document 65-2 Filed 12/02/16 Page 1 of 13 Page ID #:702 10/27/2016 Entity Information https://appext20.dos.ny.gov/corp_public/CORPSEARCH.ENTITY_INFORMATION?p_token=075D6A9438D0E5CEA02C6E126F49FA60BD1E63A086461D9DB… 1/2 NYS Department of State Division of Corporations Entity Information The information contained in this database is current through October 26, 2016. Selected Entity Name: NIKA PROMO INC. Selected Entity Status Information Current Entity Name: NIKA PROMO INC. DOS ID #: 4947404 Initial DOS Filing Date: MAY 16, 2016 County: ROCKLAND Jurisdiction: NEW YORK Entity Type: DOMESTIC BUSINESS CORPORATION Current Entity Status: ACTIVE Selected Entity Address Information DOS Process (Address to which DOS will mail process if accepted on behalf of the entity) JOSEPH SCHWARTZ 14 DOVER TERRACE MONSEY, NEW YORK, 10952 Registered Agent NONE This office does not record information regarding the names and addresses of officers, shareholders or directors of nonprofessional corporations except the chief executive officer, if provided, which would be listed above. Professional corporations must include the name(s) and address(es) of the initial officers, directors, and shareholders in the initial certificate of incorporation, however this information is not Case 2:16-cv-02980-DSF-AFM Document 65-2 Filed 12/02/16 Page 2 of 13 Page ID #:703 10/27/2016 Entity Information https://appext20.dos.ny.gov/corp_public/CORPSEARCH.ENTITY_INFORMATION?p_token=075D6A9438D0E5CEA02C6E126F49FA60BD1E63A086461D9DB… 2/2 recorded and only available by viewing the certificate. *Stock Information # of Shares Type of Stock $ Value per Share 200 No Par Value *Stock information is applicable to domestic business corporations. Name History Filing Date Name Type Entity Name MAY 16, 2016 Actual NIKA PROMO INC. A Fictitious name must be used when the Actual name of a foreign entity is unavailable for use in New York State. The entity must use the fictitious name when conducting its activities or business in New York State. NOTE: New York State does not issue organizational identification numbers. Search Results New Search Services/Programs | Privacy Policy | Accessibility Policy | Disclaimer | Return to DOS Homepage | Contact Us Case 2:16-cv-02980-DSF-AFM Document 65-2 Filed 12/02/16 Page 3 of 13 Page ID #:704 Case 2:16-cv-02980-DSF-AFM Document 65-2 Filed 12/02/16 Page 4 of 13 Page ID #:705 1 Link, Steven J. From: Leah Singer [mailto:leah@firemallonline.com] Sent: Monday, December 28, 2015 4:53 PM To: Joseph Schwartz Subject: PO 16204 Hi, Please review the attached PO and confirm. Please ship to the following and advise on labels. Amazon.com 550 Oak Ridge Rd Hazleton, PA 18202 Shipment ID FBA3891M1B Please ship as instructed on this email. Make sure you received box or pallet labels to apply next to the shipping label. These labels are needed so that the boxes can be scanned in.. I have included an estimated amount, if you need more labels do not hesitate to contact me. Make sure to include the shipment id (and reference id when ltl) in the shipping address. If there are multiple addresses on this email, make sure to ship the correct amount, to the correct location, with the correct shipment id. Please be advised that a box may not exceed 50lb. unless a single unit is more than 50lb. Please send me tracking within 24 hours of the receipt of this email. We look forward to doing business with you shortly, Thank You _xt{ fA Firemall LLC leah@firemallonline.com 845-205-9519 Case 2:16-cv-02980-DSF-AFM Document 65-2 Filed 12/02/16 Page 5 of 13 Page ID #:706 2 Case 2:16-cv-02980-DSF-AFM Document 65-2 Filed 12/02/16 Page 6 of 13 Page ID #:707 Firemall LLC 1014 Stanley Ave. Brooklyn, NY 11208 TEL: 8777984139 Purchase Order: 16204 Vendor Number: PO Date: 12/28/2015 FROM Ship To NIka , US Amazon.com 550 Oak Ridge Rd Hazleton, PA 18202 US QTY ORDRD QTY RECVD ITEM NO. Product Name Unit Price SubTotal 400 MAIN-16657 Cool Gear EZ-Freeze(R) Expandable food storage set $13.50 $5,400.00 Sub Total: $5,400.00 Grand Total: $5,400.00 Balance: $0.00 Page 1 of 1 PO# 16204 Case 2:16-cv-02980-DSF-AFM Document 65-2 Filed 12/02/16 Page 7 of 13 Page ID #:708 Case 2:16-cv-02980-DSF-AFM Document 65-2 Filed 12/02/16 Page 8 of 13 Page ID #:709 1 Link, Steven J. From: Leah Singer [mailto:leah@firemallonline.com] Sent: Tuesday, December 29, 2015 4:41 PM To: Joseph Schwartz Subject: RE: PO 16204 Scheduling pickup. See attached pallet labels for this. Will send BOL when have it. Thank You _xt{ fA From: Leah Singer Sent: Tuesday, December 29, 2015 3:46 PM To: 'Joseph Schwartz' Subject: RE: PO 16204 Thank You _xt{ fA From: Joseph Schwartz [mailto:jschwartz80@verizon.net] Sent: Tuesday, December 29, 2015 3:35 PM To: Leah Singer Subject: RE: PO 16204 Each carton of 6 is 20.86 X15.75 X 7.68 and weight 20.53 Pallets are 41 X 48 X Approximate 60 Thanks Case 2:16-cv-02980-DSF-AFM Document 65-2 Filed 12/02/16 Page 9 of 13 Page ID #:710 2 Joseph Schwartz 347 623 7684 From: Leah Singer [mailto:leah@firemallonline.com] Sent: Tuesday, December 29, 2015 3:30 PM To: Joseph Schwartz Subject: RE: PO 16204 Do you have dims and weights for pallets and box count and weight so I can quote ups as well? Thank You _xt{ fA From: Joseph Schwartz [mailto:jschwartz80@verizon.net] Sent: Monday, December 28, 2015 4:59 PM To: Leah Singer Subject: RE: PO 16204 2 Pallets who will pick this up? This will ship from 1325 Atlantic ave, Brooklyn NY 11216 Thanks Joseph Schwartz 347 623 7684 From: Leah Singer [mailto:leah@firemallonline.com] Sent: Monday, December 28, 2015 4:53 PM To: Joseph Schwartz Subject: PO 16204 Hi, Please review the attached PO and confirm. Please ship to the following and advise on labels. Amazon.com 550 Oak Ridge Rd Hazleton, PA 18202 Shipment ID FBA3891M1B Please ship as instructed on this email. Make sure you received box or pallet labels to apply next to the shipping label. These labels are needed so that the boxes can be scanned in.. I have included an estimated amount, if you need more labels do not hesitate to contact me. Make sure to include the shipment id (and reference id when ltl) in the shipping address. If there are multiple addresses on this email, make sure to ship the correct amount, to the correct location, with the correct shipment id. Please be advised that a box may not exceed 50lb. unless a single unit is more than 50lb. Please send me tracking within 24 hours of the receipt of this email. We look forward to doing business with you shortly, Case 2:16-cv-02980-DSF-AFM Document 65-2 Filed 12/02/16 Page 10 of 13 Page ID #:711 3 Thank You _xt{ fA Firemall LLC leah@firemallonline.com 845-205-9519 Case 2:16-cv-02980-DSF-AFM Document 65-2 Filed 12/02/16 Page 11 of 13 Page ID #:712 PLEASE LEAVE THIS LABEL UNCOVERED FBA SHIP FROM: Firemall LLC 1325 Atlantic Ave. Brooklyn, NY 11216 United States SHIP TO: FBA: Digital Pavilion Electronics LLC Amazon.com 550 Oak Ridge Rd Hazleton, PA 18202 United States Package 1 FBA3891M1B FBA-NEW / Stickerless PLEASE LEAVE THIS LABEL UNCOVERED FBA SHIP FROM: Firemall LLC 1325 Atlantic Ave. Brooklyn, NY 11216 United States SHIP TO: FBA: Digital Pavilion Electronics LLC Amazon.com 550 Oak Ridge Rd Hazleton, PA 18202 United States Package 1 FBA3891M1B FBA-NEW / Stickerless PLEASE LEAVE THIS LABEL UNCOVERED FBA SHIP FROM: Firemall LLC 1325 Atlantic Ave. Brooklyn, NY 11216 United States SHIP TO: FBA: Digital Pavilion Electronics LLC Amazon.com 550 Oak Ridge Rd Hazleton, PA 18202 United States Package 1 FBA3891M1B FBA-NEW / Stickerless PLEASE LEAVE THIS LABEL UNCOVERED FBA SHIP FROM: Firemall LLC 1325 Atlantic Ave. Brooklyn, NY 11216 United States SHIP TO: FBA: Digital Pavilion Electronics LLC Amazon.com 550 Oak Ridge Rd Hazleton, PA 18202 United States Package 1 FBA3891M1B FBA-NEW / Stickerless PLEASE LEAVE THIS LABEL UNCOVERED FBA SHIP FROM: Firemall LLC 1325 Atlantic Ave. Brooklyn, NY 11216 United States SHIP TO: FBA: Digital Pavilion Electronics LLC Amazon.com 550 Oak Ridge Rd Hazleton, PA 18202 United States Package 1 FBA3891M1B FBA-NEW / Stickerless PLEASE LEAVE THIS LABEL UNCOVERED FBA SHIP FROM: Firemall LLC 1325 Atlantic Ave. Brooklyn, NY 11216 United States SHIP TO: FBA: Digital Pavilion Electronics LLC Amazon.com 550 Oak Ridge Rd Hazleton, PA 18202 United States Package 1 FBA3891M1B FBA-NEW / Stickerless Case 2:16-cv-02980-DSF-AFM Document 65-2 Filed 12/02/16 Page 12 of 13 Page ID #:713 PLEASE LEAVE THIS LABEL UNCOVERED FBA SHIP FROM: Firemall LLC 1325 Atlantic Ave. Brooklyn, NY 11216 United States SHIP TO: FBA: Digital Pavilion Electronics LLC Amazon.com 550 Oak Ridge Rd Hazleton, PA 18202 United States Package 1 FBA3891M1B FBA-NEW / Stickerless PLEASE LEAVE THIS LABEL UNCOVERED FBA SHIP FROM: Firemall LLC 1325 Atlantic Ave. Brooklyn, NY 11216 United States SHIP TO: FBA: Digital Pavilion Electronics LLC Amazon.com 550 Oak Ridge Rd Hazleton, PA 18202 United States Package 1 FBA3891M1B FBA-NEW / Stickerless Case 2:16-cv-02980-DSF-AFM Document 65-2 Filed 12/02/16 Page 13 of 13 Page ID #:714 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 [PROPOSED] ORDER GRANTING MOTION TO DISMISS OR, IN THE ALTERNATIVE, TO TRANSFER ACTION Lena N. Bacani (SBN 213556) lbacani@foxrothschild.com Christopher R. Kinkade (Pro Hac Vice) ckinkade@foxrothschild.com Steven J. Link (Pro Hac Vice) slink@foxrothschild.com Shoshana Rosenthal (Pro Hac Vice) srosenthal@foxrothschild.com FOX ROTHSCHILD LLP 1800 Century Park East, Suite 300 Los Angeles, CA 90067-1506 Telephone: 310-598-4150 Facsimile: 310-556-9828 Counsel for Third-Party Defendants JOSEPH SCHWARTZ and NIKA PROMO INC. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION CAPRAN HOLDINGS, LLC, a California LLC, and NUTRIBULLET, LLC, a California LLC, Plaintiffs, v. FIREMALL LLC, a New York LLC, and MITCHEL BERKOWITZ, an individual, Defendants. Case No.: 2:16-CV-02980-DSF-AFM [PROPOSED] ORDER GRANTING MOTION TO DISMISS, OR, IN THE ALTERNATIVE, TO TRANSFER THE ACTION Complaint served: 9/29/16 Date: January 9, 2017 Time: 1:30 p.m. Location: Courtroom 7D FIREMALL LLC, a New York LLC, and MITCHEL BERKOWITZ, an individual, Counterclaimants, v. CAPRAN HOLDINGS, LLC, a California LLC, and NUTRIBULLET, LLC, a California LLC, Counterclaim-defendants. Case 2:16-cv-02980-DSF-AFM Document 65-3 Filed 12/02/16 Page 1 of 3 Page ID #:715 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 [PROPOSED] ORDER GRANTING MOTION TO DISMISS OR TO STRIKE, OR, IN THE ALTERNATIVE, TO STAY ACTION 2 FIREMALL LLC, a New York LLC, Third-Party Plaintiff, v. JOSEPH SCHWARTZ, an individual d.b.a. NIKA CORP; NIKA PROMO INC., a New York Corporation; DOES 1-10, Third-Party Defendants. Case 2:16-cv-02980-DSF-AFM Document 65-3 Filed 12/02/16 Page 2 of 3 Page ID #:716 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 [PROPOSED] ORDER GRANTING MOTION TO DISMISS OR IN THE ALTERNATIVE, TO TRANSFER ACTION ORDER Having considered the Motion to Dismiss or, in the Alternative, to Transfer the Action (“Motion”) filed by Third-Party Defendants Joseph Schwartz and Nika Promo Inc. and opposition papers, arguments, and all other matters presented to the Court, IT IS HEREBY ORDERED that: [OPTION NO. 1] Plaintiffs Firemall LLC and Mitchel Berkowitz (“Plaintiffs’”) Complaint is hereby DISMISSED in its entirety. [OPTION NO. 2] The action is hereby TRANSFERRED to the United States District Court of the Southern District of New York. SO ORDERED. Date: __________ Hon. Dale S. Fischer JUDGE OF THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA Case 2:16-cv-02980-DSF-AFM Document 65-3 Filed 12/02/16 Page 3 of 3 Page ID #:717