Ramiro Giron et Al., v. Hong Kong And Shanghai Bank Company et al

NOTICE OF MOTION AND MOTION to Dismiss Case as to the Third Amended Class Action Complaint

C.D. Cal.August 18, 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 MOTION TO DISMISS 2:15-cv-08869-ODW-JC Stuart M. Richter (SBN 126231) stuart.richter@kattenlaw.com Gregory S. Korman (SBN 216931) gregory.korman@kattenlaw.com KATTEN MUCHIN ROSENMAN LLP 2029 Century Park East, Suite 2600 Los Angeles, CA 90067-3012 Telephone: 310.788.4400 Facsimile: 310.788.4471 Attorneys for Defendant Hongkong and Shanghai Banking Corporation Limited UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA RAMIRO GIRON, NICOLAS J. HERRERA, and ORLANDO ANTONIO MENDEZ, on behalf of themselves and a class of all other similarly situated. Plaintiffs, v. HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED, a foreign company; HSBC BANK USA, N.A., a national banking association; and DOES 1 through 100, inclusive Defendants. Case No. 2:15-cv-08869-ODW-JC Notice of Motion and Motion by Defendant Hongkong and Shanghai Banking Corporation Limited’s to Dismiss Third Amended Class Action Complaint [F.R.C.P. 12(b)(2) and 12(b)(5)] Hearing Date: September 26, 2016 Time: 1:30 p.m. Place: Courtroom 11 [Filed concurrently with the Declaration of Susan Yiu, Declaration of Daron Finn, Request for Judicial Notice, and Proposed Order] Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 1 of 28 Page ID #:965 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 MOTION TO DISMISS 1 2:15-cv-08869-ODW-JC TO ALL PARTIES AND THEIR COUNSEL OF RECORD: Please take notice that on September 26, 2016 at 1:30 p.m., or as soon thereafter as the matter may be heard, before the Honorable Otis D. Wright II in Courtroom 11 of the United States District Court, Central District of California, Western Division, at 312 North Spring Street, Los Angeles, CA 90012, Defendant Hongkong and Shanghai Banking Corporation Limited (“HBAP”) will and does move under Federal Rules of Civil Procedure 12(b)(2) and 12(b)(5) for an order dismissing the Third Amended Class Action Complaint asserted by Plaintiffs Ramiro Giron, Nicolas J. Herrera, and Orlando Antonio Mendez (collectively, “Plaintiffs”). HBAP’s motion to dismiss should be granted because Plaintiffs have not alleged sufficient facts to establish that this Court has personal jurisdiction over HBAP, and the evidence establishes that there is no basis for asserting personal jurisdiction over HBAP in California. Plaintiffs do not attempt to establish general jurisdiction; and while they try for specific jurisdiction, all of HBAP’s alleged activity primarily took place in Hong Kong, not California. Plaintiffs’ pleading contains no allegations plausibly establishing that HBAP purposefully availed itself of the privileges of doing business in the forum state. Plaintiffs’ complaint also fails for insufficient service of process. On January 14, 2016, this Court issued an order directing service of process abroad, requiring Plaintiffs, through the Clerk of Court, to serve HBAP in accordance with the Hague Convention on Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters and in accordance with Federal Rule of Civil Procedure 4(f)(2)(C)(ii). HBAP has not been served in accordance with the Hague Convention, and the materials it has otherwise received are incomplete and inadequate, contrary to this Court’s directive. Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 2 of 28 Page ID #:966 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 MOTION TO DISMISS 2 2:15-cv-08869-ODW-JC This motion is made following the conference of counsel pursuant to L.R. 7-3 which took place on February 24, 2016 and August 2, 2016. This motion is based on this Notice, the attached Memorandum of Points and Authorities, the Declarations of Susan Yiu and Daron Finn, the concurrently filed Request for Judicial Notice, the pleadings on file, such other matters of which this Court must or may take judicial notice, and such arguments as may be considered by the Court at the hearing on this motion. Respectfully submitted, Dated: August 18, 2016 KATTEN MUCHIN ROSENMAN LLP By: /s/ Stuart M. Richter Attorneys for Defendant Hongkong and Shanghai Banking Corporation Limited. Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 3 of 28 Page ID #:967 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 MOTION TO DISMISS i 2:15-cv-08869-ODW-JC TABLE OF CONTENTS Page I. INTRODUCTION .................................................................................. 1 II. PERTINENT ALLEGATIONS AND FACTS ......................................... 2 A. Plaintiffs Allege They Were Scammed By Non-Party WCM777. ...................................................................................... 2 B. Plaintiffs’ Conclusory Allegations of Personal Jurisdiction. ................................................................................... 2 1. Plaintiffs complain about the conduct of others (not HBAP) in the United States ................................................. 3 2. Plaintiffs allege what HBAP supposedly did in Hong Kong .......................................................................... 3 3. Plaintiffs allege HBAP’s internet presence .......................... 4 4. Plaintiffs allege HBAP’s indirect parent’s “global brand” .................................................................................. 4 C. The Actual Jurisdictional Facts About HBAP ............................... 4 D. Plaintiffs’ Ineffective Service of the Complaint on HBAP. ........................................................................................... 5 III. THE COMPLAINT SHOULD BE DISMISSED BECAUSE THIS COURT LACKS PERSONAL JURISDICTION OVER HBAP. .................................................................................................... 7 A. Legal Standard. ............................................................................. 7 B. The Court Lacks General Jurisdiction Over HBAP Because HBAP is Not “At Home” in California. ........................... 8 C. The Court Lacks Specific Jurisdiction Over HBAP Because HBAP Did Not Engage in Any Case-Related Activity In California. ................................................................... 9 1. Plaintiffs have not and cannot establish the purposeful availment requirement. ..................................... 11 Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 4 of 28 Page ID #:968 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 MOTION TO DISMISS ii 2:15-cv-08869-ODW-JC a. HBAP did not direct any suit-related activity towards California. ................................................... 11 b. Having a correspondent account in New York does not support personal jurisdiction in California. ................................................................ 11 c. Having a website does not establish specific personal jurisdiction in California. ........................... 12 d. Plaintiffs cannot skirt the purposeful- availment requirement by pointing to HBAP’s indirect parent’s “global brand”. ................ 15 2. The arising-out-of prong is also not met. ........................... 16 3. Exercising personal jurisdiction over HBAP is unreasonable. ..................................................................... 18 IV. HBAP WAS NOT PROPERLY SERVED. ........................................... 18 A. Legal Standard ............................................................................ 18 B. Plaintiffs’ Method of Service Failed to Comply with the Court’s Order. ............................................................................. 19 C. Plaintiffs Have Not Even Attempted to Serve HBAP with the Second Amended Complaint Or, More Importantly, the Operative TAC. ..................................................................... 20 V. CONCLUSION ..................................................................................... 20 Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 5 of 28 Page ID #:969 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 MOTION TO DISMISS iii 2:15-cv-08869-ODW-JC TABLE OF AUTHORITIES Page(s) Cases Allstar Mktg. Grp., LLC v. Your Store Online, LLC, 666 F. Supp. 2d 1109 (C.D. Cal. 2009) .............................................................. 14 Amberson Holdings LLC v. Westside Story Newspaper, 110 F. Supp. 2d 332 (D.N.J. 2000) ..................................................................... 14 Ayunan v. Caktiong, Case No. 15-cv-9355, 2016 WL 738288 (C.D. Cal. Feb. 23, 2016) .................. 16 Ballard v. Savage, 65 F.3d 1495 (9th Cir. 1995) .............................................................................. 12 Bank of Am. v. Whitney Cent. Nat. Bank, 261 U.S. 171 (1923) ........................................................................................... 11 Brockmeyer v. May, 383 F.3d 798 (9th Cir. 2004) .............................................................................. 18 Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) ........................................................................................... 10 Butcher’s Union Local No. 498, United Food & Commercial Workers v. SDC Inv., Inc., 788 F.2d 535 (9th Cir. 1986) ................................................................................ 7 Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414 (9th Cir. 1997) .............................................................................. 13 Daimler AG v. Bauman, 134 S. Ct. 746 (2014) ....................................................................................... 7, 8 DFSB Kollective Co. v. Bourne, 897 F. Supp. 2d 871 (N.D. Cal. 2012)................................................................ 15 Dtex, LLC v. BBVA Bancomer, S.A., 405 F. Supp. 2d 639 (D.S.C. 2005) ...................................................................... 9 E.I.C., Inc. v. Bank of Virginia, 108 Cal. App. 3d 148 (1980) .............................................................................. 11 Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 6 of 28 Page ID #:970 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 MOTION TO DISMISS iv 2:15-cv-08869-ODW-JC Flores v. Koster, Case No. 3:11-cv-0726-M-BH, 2013 WL 506555 (N.D. Tex. Jan. 14, 2013) ............................................................................................................... 9 Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846 (2011) ......................................................................................... 8 Hughes v. Equity Plus Fin., No. 09cv2927, 2010 WL 4723711 (S.D. Cal. Nov. 15, 2010) ........................... 20 iAccess, Inc. v. Webcard Techs., Inc., 182 F. Supp. 2d 1183 (D. Utah 2002) ................................................................ 14 IM Partners v. Debit Direct, Ltd., 394 F. Supp. 2d 503 (D. Conn. 2005) ................................................................ 19 In re Hackman, 534 B.R. 867 (E.D. Va. 2015) .................................................................. 9, 15, 16 Int’l Shoe Co. v. Washington, 326 U.S. 310 (1945) ............................................................................................. 7 Keeton v. Hustler Magazine, Inc., 465 U.S. 770 (1984) ............................................................................................. 9 Kruska v. Perverted Justice Found. Inc., No. CV 08-0054-PHX-SMM, 2009 WL 249432 (D. Ariz. Feb. 2, 2009) ................................................................................................................... 14 Matus v. Premium Nutraceuticals, LLC, No. EDCV 15-01851 DDP (DTBx), 2016 WL 3078745 (C.D. Cal. May 31, 2016) ........................................................................................ 13, 14, 15 Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218 (9th Cir. 2011) ........................................................................ 8, 13 Oriental Imports & Exports, Inc. v. Maduro & Curiel’s Bank, N.V., 701 F.2d 889 (11th Cir. 1983) ............................................................................ 12 Pfister v. Selling Source, LLC, 931 F. Supp. 2d 1109 (N. Nev. 2013) .................................................................. 8 Picot v. Weston, 780 F.3d 1206 (9th Cir. 2015) .............................................................. 7, 9, 10, 13 Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 7 of 28 Page ID #:971 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 MOTION TO DISMISS v 2:15-cv-08869-ODW-JC Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797 (9th Cir. 2004) .......................................................................... 7, 10 TAGC Mgmt. LLC v. Lehman, Lee & Xu Limited, Case No. 10-cv-5447-PSG, 2010 WL 3119254 (C.D. Cal. Aug. 2, 2010) ............................................................................................................. 16, 17 Walden v. Fiore, 134 S. Ct. 1115 (2014) ....................................................................... 9, 10, 11, 17 Statutes Cal. Civ. Proc. Code § 410.10 ................................................................................... 7 Rules Fed. R. Civ. P. 4 ....................................................................................................... 18 Fed. R. Civ. P. 4(f)(1) .......................................................................................... 6, 19 Fed. R. Civ. P. 4(f)(2)(C)(ii) ................................................................................ 6, 19 Fed. R. Civ. P. 12(b)(2) ....................................................................................... 7, 20 Fed. R. Civ. P. 12(b)(5) ..................................................................................... 18, 20 Other Authorities Wright & Miller, Federal Practice and Procedure: Civil 3d § 1353 ....................... 18 Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 8 of 28 Page ID #:972 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 MOTION TO DISMISS 1 2:15-cv-08869-ODW-JC I. INTRODUCTION The Court should dismiss Plaintiffs’ claims against Hongkong and Shanghai Banking Corporation Limited (“HBAP”) for lack of personal jurisdiction. The only allegations in the Third Amended Complaint (“TAC”) concerning HBAP are that Plaintiffs wired money to a non-party’s HBAP account (maintained in Hong Kong) at the non-party’s direction based on the non-party’s alleged fraud. HBAP has no contacts-let alone minimal ones-to California. And its United States-related activity (to the extent it has any) has no connection to the claims in this case. As a result, Plaintiffs have not alleged (and cannot allege) sufficient facts for the Court to assert personal jurisdiction over Hong Kong-based-and-headquartered HBAP. To be clear, HBAP is a foreign banking institution that has no California presence: • The alleged conduct (i.e., a foreign bank being a foreign bank and maintaining deposit accounts in a foreign country) took place in Hong Kong, where HBAP is organized, headquartered and conducts its banking operations. • HBAP has no employees in California, owns no property in California, has no branches in California, does not advertise in California, and does not solicit business in California. • Its banking business is centered in Asia, where all of its personnel, records, and core operating systems are located, and where its accounts are maintained and serviced. Accordingly, Plaintiffs’ primary jurisdictional argument-that “Defendants” have “sufficient minimum contacts with the state, and otherwise intentionally avail themselves of the markets of this state”-is not just conclusory, it’s wrong. Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 9 of 28 Page ID #:973 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 MOTION TO DISMISS 2 2:15-cv-08869-ODW-JC Moreover, HBAP has not even been properly served. The Court issued an order directing how Plaintiffs must serve HBAP with the First Amended Complaint, and Plaintiffs failed to follow it; they failed to serve HBAP with the full package of materials the Court required in its order and they failed to serve through Hong Kong’s Chief Secretary of Administration. Even if they had served the First Amended Complaint correctly, they have done nothing to serve either the Second Amended Complaint or the operative TAC. The Court may dismiss the claims against HBAP for this reason alone. Either way, Plaintiffs’ TAC should be dismissed without leave to amend, because the facts demonstrate that haling HBAP across the globe and into a California court would be improper. II. PERTINENT ALLEGATIONS AND FACTS A. Plaintiffs Allege They Were Scammed By Non-Party WCM777. Non-party WCM7771 is a “multi-level marketing scheme” that was operated by Phil Ming Xu and his related corporate entities. TAC ¶¶ 18-20. According to an SEC action, WCM777 was a pyramid scheme that solicited investors by apparently offering “packages” of cloud computing services that promised a 100% return on investment in 100 days. Id. ¶ 22. Plaintiffs were all California residents and investors in WCM777 who transferred money into WCM777’s alleged bank accounts at HBAP in Hong Kong at WCM777’s direction. Id. ¶¶ 6-8, 81-83. B. Plaintiffs’ Conclusory Allegations of Personal Jurisdiction. Without distinguishing between them, Plaintiffs allege this Court has personal jurisdiction over both HBAP and HSBC Bank USA N.A. (collectively, “Defendants”) because “certain of them have business operations 1 WCM777 and its related entities are American corporations that conducted business in California. TAC ¶¶ 19-20. Or else they were Chinese and British Virgin Island corporations. Id. ¶¶ 48-50, 58-59. Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 10 of 28 Page ID #:974 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 MOTION TO DISMISS 3 2:15-cv-08869-ODW-JC in this state, while others have sufficient minimum contacts with the state, and otherwise intentionally avail themselves of the markets of this state so as to render this Court’s exercise of jurisdiction permissible under traditional notions of fair play and substantial justice.” Id. ¶ 5. 1. Plaintiffs complain about the conduct of others (not HBAP) in the United States Plaintiffs discuss WCM777’s alleged fraud extensively; it maintained 23 bank accounts at HBAP; and it directed investors to transfer their investments to the HBAP accounts. Id. ¶¶ 24, 26, 47, 71. Plaintiffs discuss what HBAP’s indirect affiliates allegedly did: HSBC Holdings plc and its American “counterpart,” HSBC Bank USA, N.A., entered into a Deferred Prosecution Agreement to set up anti-money laundering procedures. Id. ¶¶ 31, 32. Plaintiffs discuss what WCM777’s customers allegedly did: at WCM777’s direction, they made 1,681 wire transfers to WCM777 accounts at HBAP, see id. ¶ 70, totaling over $29 million, see id. ¶ 74. 2. Plaintiffs allege what HBAP supposedly did in Hong Kong All the conclusory allegations about HBAP reflect activities in Hong Kong: • HBAP’s knowledge occurred in Hong Kong (Id. ¶¶ 49, 59 (that WCM777 and its related entities “had just been incorporated in China”); ¶¶ 50-52, 58, 60 (that World Capital Markets, Inc., a corporation of the British Virgin Islands, was the parent company of WCM777, and that the British Virgin Islands is a “Jurisdiction of Primary Concern” among known money laundering countries); ¶¶ 55, 62 (that WCM777 offered investments)); Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 11 of 28 Page ID #:975 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 MOTION TO DISMISS 4 2:15-cv-08869-ODW-JC • HBAP’s internal procedures were devised and exercised in Hong Kong. (Id. ¶¶ 46, 64 “Know Your Customer” procedure imposed by Hong Kong anti-money laundering law; Id. ¶ 54 (imposing conditions on WCM777’s accounts and information); and • HBAP’s internet activity occurred in Hong Kong (Id. ¶ 66 (visited WCM777’s website)). 3. Plaintiffs allege HBAP’s internet presence Plaintiffs allege HBAP maintains a website with a “Log on” link for enrolled HBAP depositors to perform internet banking. Id. ¶ 5. Plaintiffs allege that this website is hosted on computer servers in California and New York. Id. 4. Plaintiffs allege HBAP’s indirect parent’s “global brand” Plaintiffs discuss how “HSBC” is a global brand: it is “‘one of the world’s largest banking and financial organisations’” operating “‘under a single brand name and logo all over the world.’” Id. C. The Actual Jurisdictional Facts About HBAP HBAP is an unlisted company incorporated in the Hong Kong Special Administrative Region of the People’s Republic of China (“Hong Kong”). Declaration of Susan Yiu (“Yiu Decl.”) ¶ 2. It is separate and independent from HSBC Bank USA, N.A. Id. ¶ 17. It is headquartered in Hong Kong, id. ¶ 2, and has no branches in California, no employees in California, no property (owned or leased) in California, and no bank accounts in California. Id. at ¶¶ 6-9, 13. It doesn’t advertise in California, it doesn’t solicit business in California, and it’s not qualified to transact business in California. Id. ¶¶ 10- 12. It focuses its business on customers doing business in Asia, not the U.S. Id. ¶ 16. All of HBAP’s personnel, core operating systems, and records are located outside of the United States, and all HBAP accounts (and the funds deposited in them) are maintained and serviced outside the United States. Id. ¶¶ 4-5, 23. Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 12 of 28 Page ID #:976 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 MOTION TO DISMISS 5 2:15-cv-08869-ODW-JC HBAP maintains a correspondent bank account in the State of New York at HSBC Bank USA, N.A. That account has a limited purpose. It is not accessible to HBAP customers traveling in the United States and cannot be used domestically to conduct banking activities; rather, that account exists only to passively facilitate bank-to-bank funds transfers from U.S. banks to HBAP. Id. ¶ 14. Contrary to the allegations in Paragraphs 5(a) through 5(j), HBAP’s website does not originate in California and is not hosted on servers located in California or anywhere else in the United States. As explained in the Declaration of Daron Finn, HBAP, like many other companies, subscribes to a Content Distribution Network or CDN. Declaration of Daron Finn (“Finn Decl.”) ¶ 3. The purpose of the CDN is to speed up the delivery of HBAP website content to customers who may be traveling or reside in places outside of Hong Kong. Id. For example, if an HBAP customer traveling in Japan were to log into his account through the HBAP website, he would have to do so through an Japanese internet provider. Id. ¶ 4. The process would be very slow as content from Hong Kong, where the HBAP website is hosted, is downloaded to Japan. Id. The CDN copies static content, or images of web pages, from the HBAP website in Hong Kong and makes them available on servers in Japan and other countries around the world. Id. ¶ 5. As a result, downloading web pages is much faster. However, non-static content, such as account data, must still be accessed from the HBAP website in Hong Kong. Id. Thus, banking business must be done through core banking systems in Hong Kong. Id.¶¶ 5, 7. D. Plaintiffs’ Ineffective Service of the Complaint on HBAP. Following an unopposed ex parte application from Plaintiffs regarding service on HBAP, the Court issued an Order Directing Service of Process Abroad (the “Order”) on January 14, 2016. ECF No. 20; Request for Judicial Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 13 of 28 Page ID #:977 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 MOTION TO DISMISS 6 2:15-cv-08869-ODW-JC Notice (“RJN”) Ex. A. The Court directed Plaintiffs to serve HBAP in one of two ways: 1. Pursuant to Fed. R. Civ. Proc. 4(f)(1), the Clerk of Court was to deliver two (2) copies of the (i) summons, (ii) complaint, (iii) Civil Case Cover Sheet, (iv) a USM-94 form “Request for Service Abroad of the Judicial or Extrajudicial Documents” executed by the Clerk, (v) summary of documents to be served, and (vi) a copy of the Order to the Chief Secretary of Administration of Hong Kong Special Administrative Region. See RJN Ex. A at p. 2:7-15. 2. Pursuant to Fed. R. Civ. Proc. 4(f)(2)(C)(ii), the Clerk of Court shall serve HBAP by sending, via FedEx, one (1) copy of the (i) summons, (ii) complaint, (iii) Civil Case Cover Sheet, (iv) the Order, and (v) an affidavit and cover letter provided by Plaintiffs. See RJN Ex. A at p. 2:16-20. On February 2, 2016, the Clerk of Court filed a Receipt for Foreign Service from United States Post Office Re Complaint, indicating service to HBAP directly via FedEx. ECF No. 29; RJN Ex. B. HBAP received the FedEx package on February 5, 2016. Yiu Decl. ¶ 19. The FedEx package comprised two copies of a cover letter from Plaintiffs’ counsel listing the documents enclosed, two copies of the summons to HBAP, two copies of the amended class action complaint (not the TAC), two copies of the civil cover sheet, and two copies of the Order. Id. ¶ 19. No affidavit was enclosed in the FedEx package. Id. ¶ 20. To date, HBAP has not received any documents from the Chief Secretary of Administration of Hong Kong Special Administrative Region or any other governmental entity regarding this case. Id. ¶ 21. Moreover, since the Order was issued, Plaintiffs have amended their complaint twice. ECF Nos. 47 & 54. The operative pleading is now the TAC. Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 14 of 28 Page ID #:978 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 MOTION TO DISMISS 7 2:15-cv-08869-ODW-JC To date, HBAP has not been served with either the Second Amended Complaint or the TAC. Yiu Decl. ¶ 22. III. THE COMPLAINT SHOULD BE DISMISSED BECAUSE THIS COURT LACKS PERSONAL JURISDICTION OVER HBAP. A. Legal Standard. To survive a motion to dismiss for lack of personal jurisdiction under Rule 12(b)(2), a plaintiff bears the burden of demonstrating that jurisdiction is appropriate and of making “a prima facie showing of jurisdictional facts.” Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004) (internal quotations and citation omitted). However, jurisdictional facts cannot, be established by nonspecific, conclusory statements. Butcher’s Union Local No. 498, United Food & Commercial Workers v. SDC Inv., Inc., 788 F.2d 535, 540 (9th Cir. 1986). “Because ‘California’s long-arm statute allows the exercise of personal jurisdiction to the full extent permissible under the U.S. Constitution,’” the Court need inquire only whether exercising jurisdiction comports with federal due process. Picot v. Weston, 780 F.3d 1206, 1211 (9th Cir. 2015) (quoting Daimler AG v. Bauman, 134 S. Ct. 746, 753 (2014)); see also Cal. Civ. Proc. Code § 410.10 (“A court of this state may exercise jurisdiction on any basis not inconsistent with the Constitution of this state or of the United States.”). “Due process requires that the defendant ‘have certain minimum contacts’ with the forum state ‘such that the maintenance of the suit does not offend “traditional notions of fair play and substantial justice.”’” Picot, 780 F.3d at 1211 (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). Depending on the strength of a defendant’s contacts, personal jurisdiction may be general or specific. See id. Here, Plaintiffs have not alleged the Court has general jurisdiction over HBAP. And though they attempt to allege a basis for specific jurisdiction, Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 15 of 28 Page ID #:979 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 MOTION TO DISMISS 8 2:15-cv-08869-ODW-JC Plaintiffs’ nonspecific, conclusory allegations fall well short of their burden. And HBAP’s evidence establishes conclusively that it is not subject to jurisdiction in the State of California. B. The Court Lacks General Jurisdiction Over HBAP Because HBAP is Not “At Home” in California. Plaintiffs do not allege that HBAP is subject to the Court’s general jurisdiction. Nor could they. The Supreme Court’s decision in Daimler held that general jurisdiction exists only where nonresident corporations’ “affiliations with the State are so ‘continuous and systematic’ as to render them essentially at home in the forum State.” 134 S. Ct. at 754 (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2851 (2011)); see also Goodyear, 131 S. Ct. at 2853-54 (identifying corporation’s place of incorporation and principal place of business as the “paradigm” forums for the exercise of general jurisdiction). Because HBAP is a Hong Kong bank headquartered in Hong Kong and conducting its business solely in Asia, it is not “at home” in California and is therefore not subject to general jurisdiction. See TAC ¶ 9; Yiu Decl. ¶¶ 2-13.2 Indeed, this was the rule even before Daimler. Three years ago, the United States District Court for the Northern District of Texas held it lacked personal jurisdiction over HBAP in a similar case for similar reasons. See Flores v. Koster, Case No. 3:11-cv-0726-M-BH, 2013 WL 506555, at *4 (N.D. 2 Notably, Plaintiffs attempt to establish that HBAP is subject to personal jurisdiction in California because it maintains a website that is hosted on servers located in California and New York. TAC ¶ 5. However, even a highly interactive website is insufficient to establish general jurisdiction. See Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1226 (9th Cir. 2011) (holding that the “operation of an interactive website-even a ‘highly interactive’ website-does not confer general jurisdiction”). Further, “courts within [the Ninth] circuit have rejected the contention that server location within the forum can constitute a basis for the exercise of personal jurisdiction.” Pfister v. Selling Source, LLC, 931 F. Supp. 2d 1109, 1116 (D. Nev. 2013). Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 16 of 28 Page ID #:980 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 MOTION TO DISMISS 9 2:15-cv-08869-ODW-JC Tex. Jan. 14, 2013). In Flores, the court held that “Plaintiffs have not shown that Defendant has any contacts with Texas, and nothing that demonstrates that Defendant is ‘at home’ in the forum state.” Id. Here too, Plaintiffs allege only that HBAP has its principal place of business in Hong Kong, China, which is certainly not sufficient to find HBAP to be “at home” in California. See TAC ¶ 9. As with the Defendant in Flores, there is no general jurisdiction over HBAP. Other courts have come to the same conclusion when addressing efforts to subject HBAP to jurisdiction in the United States. See In re Hackman, 534 B.R. 867, 872-73 (E.D. Va. 2015) (“‘customer-initiated bank- to-bank wire transfers do not establish the ‘continuous and systematic’ purposeful presence necessary to establish personal jurisdiction over a foreign bank’” (quoting Dtex, LLC v. BBVA Bancomer, S.A., 405 F. Supp. 2d 639, 645 (D.S.C. 2005)). C. The Court Lacks Specific Jurisdiction Over HBAP Because HBAP Did Not Engage in Any Case-Related Activity In California. A court’s exercise of specific jurisdiction requires a sufficient nexus between the defendant, the forum, and the claims asserted in the case. See Walden v. Fiore, 134 S. Ct. 1115, 1121 (2014) (“[t]he inquiry whether a forum State may assert specific jurisdiction over a nonresident defendant ‘focuses on the relationship among the defendant, the forum, and the litigation.’” (quoting Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 775 (1984))). “For a State to exercise jurisdiction consistent with due process, the defendant’s suit-related conduct must create a substantial connection with the forum State.” Id. (emphasis added). A plaintiff relying on specific jurisdiction must demonstrate that substantial connection for each claim. See Picot, 780 F.3d at 1211. When determining whether a substantial connection exists between the defendant’s suit-related conduct and the forum state, the Court considers only Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 17 of 28 Page ID #:981 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 MOTION TO DISMISS 10 2:15-cv-08869-ODW-JC the defendant’s forum-directed activities. Walden instructs that “the relationship must arise out of contacts that the ‘defendant himself’ creates with the forum State,” 134 S. Ct. at 1122 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985)), and that the Court has “consistently rejected attempts to satisfy the defendant-focused ‘minimum contacts’ inquiry by demonstrating contacts between the plaintiff (or third parties) and the forum State.” Id. The correct analysis focuses on the defendant’s conduct oriented toward the forum state, not to its contacts with persons residing there. See id. “[M]ere injury to a forum resident is not a sufficient connection to the forum.” Id. at 1125. The Ninth Circuit has synthesized these principles into a three-part test to determine if a nonresident defendant is properly 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. Picot, 780 F.3d at 1211 (quoting Schwarzenegger, 374 F.3d at 802). Plaintiffs bear the burden of proving the first two prongs. See id. They have not met and cannot meet that burden. And moreover, exercising personal jurisdiction would not be fair or just. Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 18 of 28 Page ID #:982 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 MOTION TO DISMISS 11 2:15-cv-08869-ODW-JC 1. Plaintiffs have not and cannot establish the purposeful availment requirement. a. HBAP did not direct any suit-related activity towards California. HBAP did not direct any suit-related conduct (or any conduct at all) at California. Everything Plaintiffs allege about HBAP-what it knew, its internal procedures, its internet activity-took place in Hong Kong. The only arguable connections to California are that Plaintiffs wired money from California to Hong Kong and that HBAP subscribes to a CDN that maintains copies of certain HBAP web pages on servers in California. Both are quintessential, passive activities. Indeed, accepting a deposit of money in Hong Kong is not purposeful activity directed at California. The California part of the transaction involved contacts solely by Plaintiffs and non-party WMC777. These kinds of contacts are the opposite of what is required for personal jurisdiction-what matters are the “contacts that the ‘defendant himself’ creates with the forum State.” Walden, 134 S. Ct. at 1122. HBAP created none. b. Having a correspondent account in New York does not support personal jurisdiction in California. By itself, maintaining a domestic correspondent bank account does not support personal jurisdiction-that has been the law of the land for a century. See, e.g., Bank of Am. v. Whitney Cent. Nat. Bank, 261 U.S. 171, 173 (1923) (holding activities of a correspondent bank within the forum were not activities of foreign bank within forum); see also E.I.C., Inc. v. Bank of Virginia, 108 Cal. App. 3d 148, 154 (1980) (“It would be a distortion of due process to hold that a state acquires general personal jurisdiction over an out-of-state bank . . . merely because the bank has a correspondent relationship with a bank within the state and a balance on deposit with its correspondent bank.”); Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 19 of 28 Page ID #:983 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 MOTION TO DISMISS 12 2:15-cv-08869-ODW-JC Oriental Imports & Exports, Inc. v. Maduro & Curiel’s Bank, N.V., 701 F.2d 889, 891 (11th Cir. 1983) (“Although there appears to be no Florida authority directly on point, courts in other jurisdictions have held that the maintenance of a correspondent banking relationship alone is not sufficient to confer personal jurisdiction over a foreign bank.”). During the February 24, 2016 meet-and-confer on this motion, Plaintiffs’ counsel referenced Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir. 1995) (finding personal jurisdiction over an Austrian bank in a Ponzi-scheme case). But the Austrian bank in Ballard had significant contacts with the United States. Indeed, a majority of its customers were in the United States, and it directed its marketing activities at the United States. Id. at 1497. More importantly, the bank’s letterhead was used to give the Ponzi scheme credibility, and the bank directly refunded, with its own money, the losses claimed by a defrauded investor. Id. at 1496. In Ballard, there was thus a direct link between the bank’s activities and the alleged wrongdoing. Here, there is none. Moreover, the correspondent accounts held by the Austrian bank in Ballard operated in practical effect as a local branch of the foreign bank- its United States customers could walk into a Union Bank branch in Los Angeles and do their foreign banking locally. Id. at 1497. In stark contrast, HBAP’s correspondent account does not work that way. To the contrary, it is a passive account for bank-to-bank funds transfers; it cannot be used by HBAP customers traveling in the United States to conduct ordinary banking activities; and it is located at one bank in New York, not at “several U.S. banks,” and certainly not at a bank in California. Yiu Decl. ¶ 14. c. Having a website does not establish specific personal jurisdiction in California. Further, HBAP’s website does not establish specific personal jurisdiction. This should be obvious because the allegations about HBAP’s Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 20 of 28 Page ID #:984 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 MOTION TO DISMISS 13 2:15-cv-08869-ODW-JC website have nothing to do with Plaintiffs wiring money based on a non- party’s fraud. See Picot, 780 F.3d at 1211 (“the claim must be one which arises out of or relates to the defendant’s forum-related activities”). But even if HBAP’s website had something to do with the claims in this case (which it does not), it still would be insufficient to permit the Court to exercise specific personal jurisdiction. The Ninth Circuit has adopted a sliding-scale approach focused on how interactive a defendant’s internet website must be before it may exercise specific personal jurisdiction. See Mavrix Photo, 647 F.3d at 1229; Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414, 417-20 (9th Cir. 1997). Courts must distinguish between “passive” websites and “interactive” sites, in which “users can exchange information with the host computer when the site is interactive.” Cybersell, Inc., 130 F.3d at 418. While maintaining a passive website alone is insufficient, doing “‘something more’-conduct directly targeting the forum-is sufficient.” Mavrix Photo, 647 F.3d at 1229 (emphasis added). “Something more” includes the interactivity of the defendant’s website, “the geographic scope of the defendant’s commercial ambitions,” and “whether the defendant ‘individually targeted’ a plaintiff known to be a forum resident.” Id. For instance, in Matus v. Premium Nutraceuticals, LLC, No. EDCV 15-01851 DDP (DTBx), 2016 WL 3078745 (C.D. Cal. May 31, 2016), the court found that it lacked specific jurisdiction where the defendant operated an interactive website by which consumers could purchase defendant’s products. Id. at *3-*4. Although defendant sold and marketed its product through its website and a portion of its sales were from California, Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 21 of 28 Page ID #:985 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 MOTION TO DISMISS 14 2:15-cv-08869-ODW-JC there was no evidence that defendant specifically targeted California. Id. at *2- *3.3 Here, HBAP has not done the “something more” necessary for it to be subject to jurisdiction in California. Plaintiffs argue that because HBAP has a website that may be accessed by anyone and anywhere, then it is fair for them to be sued presumably in any state. See TAC ¶ 5. While Plaintiffs allege that HBAP’s website has a “Log in” feature and is hosted on servers in California, see id., neither is sufficient. See Kruska v. Perverted Justice Found. Inc., No. CV 08-0054-PHX-SMM, 2009 WL 249432, at *3 (D. Ariz. Feb. 2, 2009) (finding “Plaintiff’s attempt to show jurisdiction [in Arizona] over Defendant Ochoa based on the fact that her websites allegedly use an Arizona-based web server is insufficient”); iAccess, Inc. v. Webcard Techs., Inc., 182 F. Supp. 2d 1183, 1187-89 (D. Utah 2002) (finding no specific jurisdiction despite defendant’s interactive website where users could email defendant or log in to view their orders).4 And HBAP’s website is not “hosted” on servers in California as alleged in the TAC. As explained in the Finn Declaration, HBAP web pages are copied onto servers that are part of a Content Distribution Network or CDN. The CDN allows HBAP customers traveling outside of Hong Kong faster access to these webpages, but all business with HBAP still has to be transacted through the HBAP website, which is hosted in Hong Kong. Finn Decl., ¶¶ 3-7. 3 On the other hand, in Allstar Mktg. Grp., LLC v. Your Store Online, LLC, 666 F. Supp. 2d 1109 (C.D. Cal. 2009), specific jurisdiction was found where defendants “operat[ed] a highly commercial website through which regular sales . . . [were] made to customers in [California].” Id. at 1122. 4 See also Amberson Holdings LLC v. Westside Story Newspaper, 110 F. Supp. 2d 332, 336 (D.N.J. 2000) (“This court, therefore, refuses to hold that inter-computer transfers of information, which are analogous to forwarding calls to a desired phone number through a switchboard, should somehow establish sufficient contacts that would subject a defendant to personal jurisdiction. [To do so] would defy common reason.”). Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 22 of 28 Page ID #:986 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 MOTION TO DISMISS 15 2:15-cv-08869-ODW-JC In any event, there is no allegation that the webpages copied to the CDN have anything to do with WMC777 or any of the allegations in the TAC. Thus, Plaintiffs do not allege any facts that HBAP directs its website towards California residents, or even that California residents use it. “[M]erely operat[ing] a website, even a highly interactive website, that is accessible from, but does not target, the forum state” is not enough. DFSB Kollective Co. v. Bourne, 897 F. Supp. 2d 871, 881 (N.D. Cal. 2012) (internal quotations and citation omitted); see also Matus, 2016 WL 3078745, at *3 (finding no personal jurisdiction from an interactive commercial website where consumers can make purchases, as there was “no indication [defendant] took other efforts to target California consumers”). Without that “something more” that targets California, HBAP merely operates a website through which a third party may direct its actions towards Hong Kong; HBAP does not target anyone or anything in California. This was exactly the situation in In re Hackman, where the court found that HBAP’s website was not a sufficient basis for personal jurisdiction because there was no evidence it was used to facilitate the supposedly improper wire transfers that were part of the fraudulent scheme in that case. 534 B.R. at 873-74. d. Plaintiffs cannot skirt the purposeful-availment requirement by pointing to HBAP’s indirect parent’s “global brand”. In an attempt to establish the requisite purposeful availment, Plaintiffs flood the Court with allegations that “HSBC” is a global brand. See TAC ¶ 5. That proposition is obvious but irrelevant because it has nothing to do with whether due process permits personal jurisdiction over a foreign-based, foreign-governed, and foreign-organized banking institution. Global advertising and marketing efforts by HBAP’s indirect parents or affiliates are Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 23 of 28 Page ID #:987 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 MOTION TO DISMISS 16 2:15-cv-08869-ODW-JC not attributable to HBAP, a separate entity; nor are those materials promoting HBAP in California or targeting California specifically. Indeed, none of these allegations so much as implies that HBAP intentionally directs its activities at California customers, such that HBAP could reasonably expect to be subjected to suit in a California court. At most, Plaintiffs’ assertions establish that HSBC Holdings plc has subsidiaries all over the world. See id. That’s true, but it has no bearing on the jurisdictional analysis in this case, because there is a presumption of corporate separateness between HBAP and its affiliates. See TAGC Mgmt. LLC v. Lehman, Lee & Xu Limited, Case No. 10-cv-5447-PSG, 2010 WL 3119254 at *2 (C.D. Cal. Aug. 2, 2010) (refusing to maintain claims against HSBC Bank USA based on alleged conduct by HBAP because HSBC Bank USA “credibly contend[ed] that it is an entirely separate institution.”).5 2. The arising-out-of prong is also not met. Plaintiffs’ claims don’t even remotely arise out of HBAP’s forum-related activities for a simple reason: HBAP has no contacts with California specifically. It has no employees in California; it owns no property in California; it conducts no business in California; it has no branches in California; and it does not advertise or solicit business in California. By necessity, Plaintiffs’ claims do not arise from HBAP’s California contacts. Consequently, Plaintiffs have not established that “but-for” HBAP’s conduct in California, Plaintiffs’ claims against HBAP would not have arisen. See Ayunan v. Caktiong, Case No. 15-cv-9355, 2016 WL 738288, at *7 (C.D. Cal. 5 Plaintiffs may attempt to argue personal jurisdiction based on allegations in the TAC regarding the Deferred Prosecution Agreement (the “DPA”) executed by HSBC Holdings plc and HSBC Bank USA, N.A. That settlement arose out of alleged money laundering activities and has nothing to do with the misconduct supposedly engaged in by WMC777. See In re Hackman, 534 B.R. at 874 (“The Court views the Plaintiffs’ reliance on these settlements [the DPA] in order to attempt to establish personal jurisdiction over HSBC in the United States to be frivolous.”) Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 24 of 28 Page ID #:988 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 MOTION TO DISMISS 17 2:15-cv-08869-ODW-JC Feb. 23, 2016) (rejecting a finding of specific personal jurisdiction where foreign defendant had offices in California, was registered to do business in California, and had employees, but plaintiffs’ allegations failed to show how their claims arose from forum-related activities).6 This explains why Plaintiffs’ jurisdictional allegations are so murky and unspecific. Plaintiffs lump together collectively as “Defendants” both HSBC Bank USA, N.A., which does have a California presence, and HBAP, which does not. Then they allege of “Defendants” that “certain of them have business operations in this state, while others have sufficient minimum contacts with the state, and otherwise intentionally avail themselves of the markets of this state so as to render this Court’s exercise of jurisdiction permissible under traditional notions of fair play and substantial justice.” TAC ¶ 5. The “certain of them” operating in California does not include HBAP. And it’s settled that HSBC Bank USA, N.A.’s operations in California cannot be imputed to HBAP to establish personal jurisdiction in this Court. See Walden, 134 S. Ct. at 1122; see also TAGC Mgmt. LLC, 2010 WL 3119254 at *2. Thus, because Plaintiffs cannot meet the arising-from prong for personal jurisdiction either, the Court should dismiss the TAC as to HBAP. 6 Even if HBAP’s correspondent account were in California, Plaintiffs’ claims still would not arise from or relate to the existence of that account. Their claimed injury is losing money by aggressively investing in a risky (if not too-good-to-be-true) scheme that promised them 100% returns in 100 days. HBAP’s correspondent account was at most a passive stopover for electronic funds transfers, an adventitious channel through which money was transmitted from Plaintiffs to WCM777. That channel did not contribute to their alleged losses-they would have suffered the same harm had they opted to fund their investments by sending a certified check through the mail. Surely the U.S. Postal Service’s contacts with the State of California would not subject HBAP (or any other a foreign bank) to jurisdiction here, no matter how many letters Plaintiffs chose to send to Hong Kong. Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 25 of 28 Page ID #:989 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 MOTION TO DISMISS 18 2:15-cv-08869-ODW-JC 3. Exercising personal jurisdiction over HBAP is unreasonable. Finally, subjecting HBAP to this Court’s jurisdiction is unreasonable. It is not fair to hale HBAP into court in California when it has not purposefully availed itself of the privilege of doing business in California in the first instance. As explained above, it’s not qualified to do business here; it has no branches here; and it has no employees here. Certainly there is no one that could be easily summoned into Court here. Instead, HBAP’s employees, witnesses, and documents are all in Hong Kong, thousands of miles and several time zones away. While communication and travel across the globe is certainly possible, it would be a deprivation of due process to demand that HBAP appear in this Court when it lacks ties to California. Yiu Decl. ¶ 23. In sum, the Complaint is devoid of factual allegations that suffice to establish specific personal jurisdiction over HBAP in this Court, and the factual realities negate any plausible theory warranting amendment. Jurisdiction over HBAP is fatally absent, and dismissal of the TAC against HBAP is therefore warranted. IV. HBAP WAS NOT PROPERLY SERVED. A. Legal Standard Federal Rule of Civil Procedure 12(b)(5) recognizes motions to dismiss for “insufficiency of service of process.” Once service is challenged, plaintiff bears the burden of establishing that service was valid under Federal Rule of Civil Procedure Rule 4. Brockmeyer v. May, 383 F.3d 798, 801 (9th Cir. 2004). When granting a Rule 12(b)(5) motion, federal courts have broad discretion to dismiss the action or to retain the case but quash the service made on the defendant. See Wright & Miller, Federal Practice and Procedure: Civil 3d § 1353. Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 26 of 28 Page ID #:990 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 MOTION TO DISMISS 19 2:15-cv-08869-ODW-JC B. Plaintiffs’ Method of Service Failed to Comply with the Court’s Order. This Court’s Order provided Plaintiffs with two avenues for proper service on HBAP: (1) service in accordance with the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil Or Commercial Matters (“Hague Convention”) and Federal Rule of Civil Procedure 4(f)(1), or (2) service in accordance with Federal Rule of Civil Procedure 4(f)(2)(C)(ii). Plaintiffs did not successfully comply with either of the Court’s directives as to the First Amended Complaint. With respect to the first option, HBAP received a package of materials by FedEx on February 5, 2016. Yiu Decl. ¶ 19. Per the Court’s Order, the Clerk of Court had to serve an affidavit with the summons, complaint, civil case cover sheet, Order, and cover letter. HBAP received no affidavit from Plaintiffs or the Clerk of Court with the materials received via FedEx. Id. ¶ 20. Service is therefore insufficient and inadequate per the Court’s Order. In the alternative, the Order required that two sets of the summons, complaint, an affidavit, and a USM-94 form “Request for Service Abroad of the Judicial or Extrajudicial Documents” executed by the Clerk of Court, among other things, be served on the Chief Secretary of Administration of Hong Kong Special Administrative Region for service on HBAP. See RJN Ex. A. Under the Hague Convention, signatory countries like Hong Kong must designate a central authority that receives requests for service from other signatories. IM Partners v. Debit Direct, Ltd., 394 F. Supp. 2d 503, 511 (D. Conn. 2005). Having received the materials to be served, the central authority is responsible for serving the foreign party. See id. at 512. To date, HBAP has not been served with the Court-ordered materials by the Chief Secretary of Administration of Hong Kong Special Administrative Region. See Yiu Decl. ¶ 21. Nor is it clear that that package of materials was Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 27 of 28 Page ID #:991 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 MOTION TO DISMISS 20 2:15-cv-08869-ODW-JC ever delivered to the Chief Secretary, Hong Kong’s designated central authority for service in Hong Kong. See RJN Ex. B (reflecting only service of complaint and other materials to HBAP directly via FedEx). C. Plaintiffs Have Not Even Attempted to Serve HBAP with the Second Amended Complaint Or, More Importantly, the Operative TAC. HBAP has not been served with the TAC. See Yiu Decl. ¶ 22. Plaintiffs appear to believe they can rely on the failed service of the First Amended Complaint from February 2016. But even if that service had been accomplished, it would not put HBAP on notice of any of the new facts or allegations. See Hughes v. Equity Plus Fin., No. 09cv2927, 2010 WL 4723711, at *4 (S.D. Cal. Nov. 15, 2010) (“If an initial complaint has been superseded by an amended complaint, service is ineffective if a defendant is served with the original complaint rather than the amended complaint.”) Accordingly, Plaintiffs have failed to effect proper service on HBAP and their TAC should therefore be dismissed. V. CONCLUSION For the foregoing reasons, HBAP requests that the Court dismiss Plaintiffs’ TAC under Federal Rule of Civil Procedure 12(b)(2) for want of personal jurisdiction and Federal Rule of Civil Procedure 12(b)(5) for failure to effect proper service. Respectfully submitted, Dated: August 18, 2016 KATTEN MUCHIN ROSENMAN LLP By: /s/ Stuart M. Richter Attorneys for Defendant Hongkong and Shanghai Banking Corporation Limited Case 2:15-cv-08869-ODW-JC Document 56 Filed 08/18/16 Page 28 of 28 Page ID #:992 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 REQUEST FOR JUDICIAL NOTICE 2:15-cv-08869-ODW-JC Stuart M. Richter (SBN 126231) stuart.richter@kattenlaw.com Gregory S. Korman (SBN 216931) gregory.korman@kattenlaw.com KATTEN MUCHIN ROSENMAN LLP 2029 Century Park East, Suite 2600 Los Angeles, CA 90067-3012 Telephone: 310.788.4400 Facsimile: 310.788.4471 Attorneys for Defendant Hongkong and Shanghai Banking Corporation Limited UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA RAMIRO GIRON, NICHOLAS J. HERRERA, and ORLANDO ANTONIO MENDEZ, on behalf of themselves and a class of all other similarly situated. Plaintiffs, v. HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED, a foreign company; HSBC BANK USA, N.A., a national banking association; and DOES 1 through 100, inclusive Defendants. Case No. 2:15-cv-08869-ODW-JC Request for Judicial Notice in Support of Defendant Hongkong and Shanghai Banking Corporation Limited’s Motion to Dismiss the Third Amended Class Action Complaint Hearing Date: September 26, 2016 Time: 1:30 p.m. Place: Courtroom 11 [Filed concurrently with the Motion to Dismiss, Declaration of Susan Yiu, Declaration of Daron Finn, and Proposed Order] Case 2:15-cv-08869-ODW-JC Document 56-1 Filed 08/18/16 Page 1 of 12 Page ID #:993 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 REQUEST FOR JUDICIAL NOTICE 1 2:15-cv-08869-ODW-JC TO THE COURT AND ALL COUNSEL: Pursuant to the Federal Rule of Evidence 201, Defendant The Hongkong and Shanghai Banking Corporation Limited (“HBAP”) requests that the Court take judicial notice of the following exhibits: 1. Exhibit A: A copy of this Court’s “Order Directing Service of Process Abroad,” issued on January 14, 2016 and assigned docket number 20. 2. Exhibit B: A copy of a “Receipt for Foreign Service from United States Post Office RE Complaint,” filed by the Clerk of Court on February 2, 2016 and assigned docket number 29. GROUNDS FOR JUDICIAL NOTICE: Under Rule 201, “[t]he court may judicially notice a fact that is not subject to reasonable dispute because it: (1) is generally known within the trial court’s territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b); Lee v. City of Los Angeles, 250 F. 3d 668, 668-69 (9th Cir. 2001). In considering a motion to dismiss, courts are not strictly bound or limited by the allegations of the complaint, but may also consider facts in materials that can be judicially noticed. See Yang v. Dar Al-Handash Consultants, 250 Fed. Appx. 771, 772 (9th Cir. 2007). These exhibits are pleadings that have been filed in this proceeding and are readily accessible and via PACER for download and verification. As such, judicial notice of Exhibits A and B is proper. Respectfully submitted, Dated: August 18, 2016 KATTEN MUCHIN ROSENMAN LLP By: /s/ Stuart M. Richter Attorneys for Defendant Hongkong and Shanghai Banking Corporation Limited. Case 2:15-cv-08869-ODW-JC Document 56-1 Filed 08/18/16 Page 2 of 12 Page ID #:994 EXHIBIT A Case 2:15-cv-08869-ODW-JC Document 56-1 Filed 08/18/16 Page 3 of 12 Page ID #:995 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 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA RAMIRO GIRON, NICOLAS J. HERRERA, ORLANDO ANTONIO MENDEZ, on behalf of themselves and a class of all others similarly situated; Plaintiffs, vs. HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED; HSBC BANK USA, N.A.; and DOES 1 through 100, inclusive, Defendants. CASE NO.: CV-15-08869-ODW (JCx) ORDER DIRECTING SERVICE OF PROCESS ABROAD Case 2:15-cv-08869-ODW-JC Document 20 Filed 01/14/16 Page 1 of 3 Page ID #:126Case 2:15-cv-08 69-ODW-JC Document 56-1 il 8/ 8/ 4 f 12 Page ID #:996 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 Plaintiffs have made an Ex Parte Application seeking from the Court an Order pursuant to Fed. R. Civ. P. 4(f)(1), and Fed. R. Civ. P. 4(f)(2)(c)(ii) directing alternate methods for service of process abroad on Defendant Hongkong and Shanghai Banking Corporation Limited. No opposition was received by Defendants HSBC Bank USA, N.A. The Court, having reviewed the Ex Parte Application, finds that the order is appropriate. IT IS ORDERED that: (a) Pursuant to Fed. R. Civ. P. 4(f)(1), and the Hague Service Convention on Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, the Clerk of the Court shall deliver, via FedEx, two copies of: (1) Plaintiffs’ complaint; (2) summons to Hongkong and Shanghai Banking Corporation Limited; (3) Civil Case Cover Sheet; (4) USM-94 “Request for Service Abroad of the Judicial or Extrajudicial Documents,” which is to be executed by the Clerk; (5) Summary of the Documents to be Served; and (6) an order regarding service on HSBC Hong Kong (“Order”); to the Chief Secretary of Administration of Hong Kong Special Administrative Region, Central Government Offices, Lower Albert Road, Hong Kong for service upon Hongkong and Shanghai Banking Corporation Limited, 1 Queen’s Road, Central Hong Kong. (b) Pursuant to Fed. R. Civ. P. §4(f)(2)(C)(ii), the Clerk of the Court shall service Hongkong and Shanghai Banking Corporation Limited by sending, via FedEx, one copy of: (1) Plaintiffs’ complaint; (2) summons to Hongkong and Shanghai Banking Corporation Limited; (3) civil case cover sheet; (4) Order; and (5) affidavit, along with a cover letter provided by Plaintiffs to Hongkong and Shanghai Banking Corporation Limited, 1 Queen’s Road, Central Hong Kong. (c) Plaintiffs may file a copy of the FedEx “proof of signature” (or substantially equivalent document) as proof, pursuant to Fed. R. Civ. P. §4(l)(2)(B), that service has been effectuated on HSBC Hong Kong, pursuant to this Court ordered alternate method of service under Fed. R. Civ. P. §4(f)(2); (d) Pursuant to Fed. R. Civ. P. 12(a)(1)(A), HSBC Hong Kong’s response to the complaint shall be due twenty-one (21) days after receipt of copy of the summons and complaint. /// Case 2:15-cv-08869-ODW-JC Document 20 Filed 01/14/16 Page 2 of 3 Page ID #:127Case 2:15-cv-08 69-ODW-JC Document 56-1 il 8/ 8/ 5 f 12 Page ID #:997 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 (e) Plaintiffs shall ensure that the Clerk has the requisite pre-paid and pre-addressed international express mail and FedEx envelopes to carry out the requirements of this order; IT IS SO ORDERED. January 14, 2016 ____________________________________ OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE Case 2:15-cv-08869-ODW-JC Document 20 Filed 01/14/16 Page 3 of 3 Page ID #:128Case 2:15-cv-08 69-ODW-JC Document 56-1 il 8/ 8/ 6 f 12 Page ID #:998 EXHIBIT B Case 2:15-cv-08869-ODW-JC Document 56-1 Filed 08/18/16 Page 7 of 12 Page ID #:999 Case 2:15-cv-08869-ODW-JC Document 29 Filed 02/02/16 Page 1 of 5 Page ID #:189Case 2:15-cv-08869-ODW-JC Document 56-1 il 8/18/ 8 f 12 Page ID #:1000 Case 2:15-cv-08869-ODW-JC Document 29 Filed 02/02/16 Page 2 of 5 Page ID #:190Case 2:15-cv-08869-ODW-JC Document 56-1 il 8/18/ 9 f 12 Page ID #:1 01 Case 2:15-cv-08869-ODW-JC Document 29 Filed 02/02/16 Page 3 of 5 Page ID #:191Case 2:15-cv-0 869-ODW-JC Document 56-1 Filed 8/ 8/16 Page 10 of 12 Page ID #:1002 Case 2:15-cv-08869-ODW-JC Document 29 Filed 02/02/16 Page 4 of 5 Page ID #:192Case 2:15-cv-0 869-ODW-JC Document 56-1 Filed 8/ 8/16 Page 11 of 12 Page ID #:1003 Case 2:15-cv-08869-ODW-JC Document 29 Filed 02/02/16 Page 5 of 5 Page ID #:193Case 2:15-cv-0 869-ODW-JC Document 56-1 Filed 8/ 8/16 Page 12 of 12 Page ID #:1004 Stuart "t0· Richter (SBN 126231) stuart.nchter@kattenlaw. com Gregory S. Korman (SBN 216931) gregory .kormanla)kattenlaw .com KA fTEN MUCliiN ROSENMAN LLP 2029 Century Park East, Suite 2600 Los Angeles, CA 90061-3012 Telephone: 310.788.4400 Facs1mile: 310.788.4471 Attorneys for Defendant Hongkong and Shanghai Banking Corporation Limited UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA RAMIRO GIRON, NICHOLAS J. HERRERA, and ORLANDO ANTONIO MENDEZ, on behalf of themselves and a class of all other similarly situated. Plaintiffs, v. HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED, a foreign company; HSBC BANK USA, N.A., a national banking association; and DOES 1 through 100, inclusive Defendants. DECLARATION OF SUSAN YIU Case No. 2:15-cv-08869-0DW-JC Declaration of Susan Yiu in Support of Defendant Hongkong and Shanghai Banking Corporation Limited's Motion to Dismiss Third Amended Class Action Complaint Hearing Date: September 26, 2016 Time: 1:30 p.m. Place: Courtroom 11 [Filed concurrently with the Motion to Dismiss, Declaration of Daron Finn, Request for Judicial Notice, and Proposed Order] 2: 15-cv-08869-0DW -JC Case 2:15-cv-08869-ODW-JC Document 56-2 Filed 08/18/16 Page 1 of 4 Page ID #:1005 1 2 3 4 5 6 7 8 9 10 11 12 13 j 14 cJ 2:!~ 15 ... ~ ~! 16 17 18 19 20 21 22 23 24 25 26 27 28 I, Yiu Yuen Shan Susan, declare and state as follows: 1. I am Senior Legal Counsel in The Hongkong and Shanghai Banking Corporation Limited's ("HBAP") legal department. My duties include, among other things, providing legal support for HBAP' s litigation matters, and processing and reviewing documents served on HBAP. By virtue of my position, I am readily familiar with HBAP 's direct and indirect affiliates and its organizational structure. 2. HBAP is an unlisted company limited by its own shares incorporated in Hong Kong Special Administrative Region of the People's Republic of China ("Hong Kong"). HBAP is headquartered in Hong Kong. 3. HBAP maintains and staffs its own internal regional legal department primarily in Hong Kong, of which I am a part. 4. All accounts of HBAP customers are maintained and serviced out of the United States. 5. All fu'nds of HBAP customers deposited into HBAP accounts are maintained and serviced out of the United States. 6. HBAP maintains no branch in the State of California. 7. I-IBAP has no employees in the State of California. 8. HBAP owns no property in the State of California. 9. HBAP leases no property in the State of California. 10. HBAP solicits no business in the State of California. 11. I-IBAP does not advertise in the State of California. 12. I-IBAP is not qualified to transact banking business in the State of California. 13. HBAP does not maintain any bank accounts m the State of California. RESTRICTED DECLARATION OF YIU YUEN SHAN SUSAN 2: 15-cv-08869-0DW-JC Case 2:15-cv-08869-ODW-JC Document 56-2 Filed 08/18/16 Page 2 of 4 Page ID #:1006 1 2 3 4 5 6 7 8 9 10 11 12 13 " 14 c: j (!) • 15 ..... fi ..... ~ rt:l ~ ~~ 16 17 18 19 20 21 22 23 24 25 26 27 28 14. HBAP maintains a correspondent bank account in the State of New York at HSBC Bank USA, N.A. That account is not accessible to HBAP customers and does not allow HBAP customers traveling in the United States to conduct ordinary banking activities at HSBC Bank USA, N.A. Instead, HBAP's correspondent account exists only to passively facilitate bank-to-bank electronic funds transfers from a bank in the United States to HBAP in Hong Kong. 15. HBAP does not generally accept service of process in the United States, except for summonses and subpoenas served by the United States Attorney General or Secretary of the Treasury for information related to correspondent bank accounts as required by the USA PATRIOT Act. 16. HBAP primarily focuses its business on customers doing business in Asia Pacific. HBAP does not focus its business on customers doing business in the U.S. generally or California specifically. 17. HBAP is an independent banking entity that maintains its own customer database independent from HSBC Bank USA, N.A. 18. HBAP' s direct parent is an entity located outside the United States. HBAP's ultimate, indirect parent is HSBC Holdings plc, a European institution headquartered in London, England. 19. On February 5, 2016, HBAP received a package of documents from Plaintiffs' counsel Ward & Hagen LLP via FedEx. The package contained the following: • Three FedEx shipping labels directed to HBAP. • Two copies of a transmittal cover letter from Steven Nunez, Esq. at Ward & Hagen LLP listing the contents of the package. • Two copies of a "Summons in a Civil Action on the Amended Complaint." • Two copies of the Amended Class Action Complaint. RESTRICTED DECLARATION OF YIU YUEN SHAN SUSAN 2 2: 15-cv-08869-0DW-JC Case 2:15-cv-08869-ODW-JC Document 56-2 Filed 08/18/16 Page 3 of 4 Page ID #:1007 1 2 3 4 5 6 7 8 9 10 11 12 13 6 l I 14 cj il .!:l~ " 15 ..... ~i~ C\1~ ,, ~~ .s 16 17 18 19 20 21 22 23 24 25 26 27 28 • Two copies of the Civil Cover Sheet. • Two copies of the Order Directing Service of Process Abroad. 20. The transmittal cover letter indicated that the package contained an affidavit, but the affidavit was missing from the package's contents. 21. To date, HBAP has not been served by the Chief Secretary of Administration ofHong Kong Special Administrative Region or any other entity with documents relating to the instant case. 22. To date, HBAP has not been served with either the second amended class action complaint or the third amended class action complaint. 23. Because HBAP's personnel, core operating systems, and records are all located outside the United States; because Hong Kong is a 12-14 hour flight from Los Angeles; and because Hong Kong is 16 hours ahead of Los Angeles, making same-day communications between the two cities difficult, requiring HBAP to participate in a lawsuit in Los Angeles would be extremely burdensome. I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed this 18 day of August 2016 at Hong Kong, China. Yiu Yuen Shan Susan RESTRICTED DECLARATION OF YlU YUEN SHAN SUSAN 3 2: 15-cv-08869-0DW-JC Case 2:15-cv-08869-ODW-JC Document 56-2 Filed 08/18/16 Page 4 of 4 Page ID #:1008 1 2 3 4 5 6 7 8 9 10 11 12 13 14 c: QJ ....... 15 ...... ro ~ 16 17 18 19 20 21 22 23 24 25 26 27 28 Stuart M. Richter (SBN 126231) stuart.richter@kattenlaw. com Gregory S. Korman (SBN 216931) gregpry .korman@kattenlaw .com KATTEN MUCFIIN ROSENMAN LLP 2029 Century Park East, Suite 2600 Los Angeles, CA 90067-3012 Telephone: 310.788.4400 Facsimile: 310.788.4471 Attorneys for Defendant I-Iongkong and Shanghai Banking Corporation Limited UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA RAMIRO GIRON, NICHOLAS J. HERRERA, and ORLANDO ANTONIO MENDEZ, on behalf of themselves and a class of all other similarly situated. Plaintiffs, v. HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED, a foreign company; HSBC BANK USA, N.A., a national banking association; and DOES 1 through 100, inclusive Defendants. RESTRICTED DECLARATION OF DARON FINN Case No. 2: 15-cv-08869-0DW -JC Declaration of Daron Finn in Support of Defendant Hongkong and Shanghai Banking Corporation Limited's Motion to Dismiss Third Amended Class Action Complaint Hearing Date: September 26, 2016 Time: 1:30 p.m. Place: Courtroom 11 [Filed concurrently with the Motion to Dismiss, Declaration of Susan Yiu, Request for Judicial Notice, and Proposed Order] 2: 15-cv-08869-0DW -JC Case 2:15-cv-08869-ODW-JC Document 56-3 Filed 08/18/16 Page 1 of 4 Page ID #:1009 0 0 ~ .'J ~ ti .il t: Q) i ...... ...... 0 ~ " ~ 1 2 3 4 5 6 7 8 9 10 11 12 ~13 ~ h4 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I, Daron Finn, declare and state as follows: 1. I am currently employed as the Head of Technology Platform, Frameworks and Tooling for HSBC Digital Solutions, HSBC Operations, Services and Technology, and HSBC Technologies Inc. These business units are part of the HSBC family of companies. In my position, I am responsible for, among other things, providing HSBC entities with technical solutions associated with internet security and the management of the frameworks that support web content. In addition, I am also responsible for global and North America enterprise application integration (the integration of enterprise systems for various HSBC entities). As a result, I am familiar with how the content of the websites for HSBC entities is maintained and delivered. It is my experience that these processes are generally similar for virtually all I-ISBC entities. I have worked with persons responsible for the Hong Kong and Shanghai Banking Corporation Limited ("HBAP") website and I understand generally how it is maintained and how the content for that website is delivered. 2. I have reviewed paragraphs 5(a) through 5U) of the third amended complaint filed in this lawsuit. I am familiar with the technical information recited in these paragraphs. I don't believe the statement contained in paragraph 5U) that HBAP website content "originates" in the US and "never leaves US soil" is accurate. I also do not agree with the statement in paragraph 5( e) that the website :YY..\:YJY.JJB.h.£~hk is "hosted" on servers physically located in California and New York. I explain below. 3. HBAP and other HSBC business entities (as well as many other companies), subscribe to what is known as a content distribution network or CDN. I understand that CDN is a network of computer servers located around the world. HBAP subscribes to the Akamai CDN, which I understand consists of more than 175,000 servers in more than 100 countries around the world. The purpose of the Akamai CDN (and other competing CDNs) is to speed the RESTRICTED DECLARATION OF DARON FINN 1 2: 15-cv-08869-0DW -JC Case 2:15-cv-08869-ODW-JC Document 56-3 Filed 08/18/16 Page 2 of 4 Page ID #:1010 1 2 3 4 5 6 7 8 9 10 11 12 13 14 c:: Q) oi-J 15 oi-J ro ~ 16 17 18 19 20 21 22 23 24 25 26 27 28 delivery of HBAP website content to HBAP customers who may reside in or are traveling outside of Hong Kong, where the HBAP servers that house the HBAP website are located. 4. If HBAP did not use a CDN, an HBAP customer traveling say for example in Japan, would have to log onto the HBAP website in Hong Kong through a Japanese internet provider. The HBAP website content would have to be downloaded across multiple platforms to get to the customer. The process likely would be very slow and frustrating. 5. It is my understanding that the CDN system works like a local "way station" for content from the HBAP website in Hong Kong. Thus, static content, or images of webpages and other materials that are not generated interactively with customers, are copied from the HBAP website in Hong Kong and stored on the CDN servers in close proximity to the hypothetical custo!l).er traveling in Japan. Because the webpages don't have to be downloaded from the HBAP website in Hong Kong (copies of the pages are viewed on a CDN server in Japan), the processing speed for customer internet access is greatly enhanced. Non-static information, such as data input by the customer or account data requested by the customer, still has to be accessed through and processed by the HBAP website in Hong Kong. All customer account data is housed on the HBAP servers in Hong Kong. Therefore, in the simplest terms, the CDN merely holds copies static website content from the HBAP site in Hong Kong and makes it available from a server that is closer to the HBAP customer's location. 6. Thus, HBAP website data does not "originate" from servers on US soil. Nor is it technically "hosted" on servers in California and New York. It is more accurate to state that certain of the website content (static pages) is copied from the HBAP website in Hong Kong and is made available on servers in the United States and on thousands of servers across the globe. I also do not believe it is correct to state that the HBAP website content does not "leave US soil." RESTRICTED DECLARATION OF DAR ON FINN 2 2: 15-cv-08869-0DW -JC Case 2:15-cv-08869-ODW-JC Document 56-3 Filed 08/18/16 Page 3 of 4 Page ID #:1011 g '!l 3 ~ ~ c: ~