Venice Baking Company v. Sophast Sales And Marketing Llc et al

NOTICE OF MOTION AND MOTION to Dismiss for Lack of Jurisdiction

C.D. Cal.August 30, 2016

a N W z w z V z w Randall S. Leff (SBN 77148) rleff@ecjlaw.com Amy S. Russell (SBN 284131) arussell@ecjlaw.com ERVIN COHEN & JESSUP LLP 9401 Wilshire Boulevard, Ninth Floor Beverly Hills, California 90212-2974 Telephone (310) 273-6333 Facsimile (310) 859-2325 Attorneys for Defendant Sophast Sales and Marketing, LLC UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION 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 VENICE BAKING COMPANY, Plaintiff, SOPHAST SALES AND MARKETING, LLC, a Maryland Limited Liability Company; and DOES 1-10, inclusive, Defendant. 15779.12749762.22 Case No. 2:16-CV-06136-ODW-KS The Honorable Otis D. Wright II, Courtroom 11 (Spring St. Courthouse) DEFENDANT SOPHAST SALES AND MARKETING, LLC' S NOTICE OF MOTION AND MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION; MEMORANDUM OF POINTS AND AUTHORITIES [Fed. R. Civ. P. 12(b)(2)] [Supporting Declarations; (Proposed) Order Filed Concurrently] Hearing: Date: October 3, 2016 Time: 1:30 p.m. Courtroom: 11 (Springy St. Courthouse) MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION Case 2:16-cv-06136-ODW-KS Document 9 Filed 08/30/16 Page 1 of 20 Page ID #:83 a w z w z 0 u z w II TO THE COURT AND TO ALL PARTIES AND THEIR ATTORNEYS OF II RECORD HEREIN: PLEASE TAKE NOTICE THAT on October 3, 2016, at 1:30 p.m., in Courtroom 11 of the United States District Court for the Central District of ~~ California, Western Division, located at 312 North Spring Street, Los Angeles, ~~ California 90012-4701, Defendant Sophast Sales and Marketing, LLC ("Sophast"), through its undersigned counsel, will and hereby does move to dismiss the First Amended Complaint for Declaratory Relief filed against it by Plaintiff Venice Baking Company pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of ~ personal jurisdiction (the "Motion"), on the grounds that this Court has neither general or specific personal jurisdiction over Sophast for purposes of this action. This Motion is based on this Notice of Motion and Motion, the supporting ~ Memorandum of Points and Authorities, the concurrently filed Declarations of Ettor A. DelGuzzo and Amy S. Russell, the complete files and records in this action, and such additional material and arguments as may be presented to the Court at or before the hearing on this matter. This Motion is made following the conference of counsel pursuant to Local ~ Rule 7-3, which took place on August 23, 2016. [Declaration of Amy S. Russell ¶¶ 2-3.] 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 ~ DATED: August 30, 2016 15779.127497622 ERVIN COHEN & JESSUP LLP sy: ~,s ' 7 Randall S. eff Amy S. Russell Attorneys for Defendant Sophast Sales and Marketing, LLC MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION Case 2:16-cv-06136-ODW-KS Document 9 Filed 08/30/16 Page 2 of 20 Page ID #:84 J a N lJ'1 w z w z 0 U z w 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 TABLE OF CONTENTS Page MEMORANDUM OF POINTS AND AUTHORITIES .............................................1 I. INTRODUCTION .............................................................................................1 II. JURISDICTIONAL FACTS ...................e.........................................................2 A. Sophast Is A Maryland Limited Liability Company With Limited Contacts to California ..............................................................................2 B. The Contract Between Plaintiff and Sophast ..........................................3 C. The Deterioration Of The Relationship Between Plaintiff And Sophast And Plaintiffls Initiation Of This Action ..................................3 D. This Action And The Maryland Action ..................................................4 III. THE AlV~NDED COMPLAINT SHOULD BE DISMISSED UNDER FRCP 12(B)(2) FOR LACK OF PERSONAL JURISDICTION ......................6 A. Plaintiff Bears The Burden Of Establishing Personal Jurisdiction Of This Court Over Sophast ....................................................................6 B. California Courts Do Not Have General Personal Jurisdiction Over Sophast ............................................................................................7 C. S~pecific Personal Jurisdiction Does Not Exist Over Sophast In California For Purposes Of This Dispute ................................................8 1. Sophast has not "pur~osefully availed" itself of the privileges of conducting activities in California ...........................9 2. This Action does not arise out of Sophast's forum-related activities ..................................................................................... 11 3. This Court's exercise of personal jurisdiction over Sophast in this Action would not be reasonable ...................................... 12 IV. CONCLUSION ...............................................................................................14 15779.1274976222 MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION Case 2:16-cv-06136-ODW-KS Document 9 Filed 08/30/16 Page 3 of 20 Page ID #:85 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 15779.1:2749762.2 ii MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION TABLE OF AUTHORITIES Page(s) Cases Abokasem v. Royal Indian Raj Int’l Corp., No. C-10-01781 MMC, 2011 WL 635222 (N.D. Cal. Feb. 11, 2011) ............. 8 Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009) .................................................................................... 10 Boschetto v. Hansing, 539 F.3d 1011 (9th Cir. 2008) ........................................................................... 9 Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) .................................................................................... 9, 12 Carpenter v. Sikorsky Aircraft Corp., 101 F.Supp.3d 911(C.D. Cal. 2015) .................................................................. 8 Core-Vent Corp. v. Nobel Industries AB, 11 F.3d 1482 (9th Cir. 1993) ....................................................................... 6, 12 Daimler AG v. Bauman, 134 S. Ct. 746 (2014) ........................................................................................ 7 Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain Co., 284 F.3d 1114 (2002) ........................................................................................ 7 Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (2011) .......................................................................................... 7 In re Hydroxycut Mktg. and Sales Practices Litig., Nos. 09-md-2087 BTM(CAB), 10-cv-2580 BTM(CAB), 2011 WL 2066651 (S.D. Cal. May 24, 2011) ........ 10 Int’l Shoe Co. v. Washington, 326 U.S. 310 (1945) .......................................................................................... 7 Love v. Assoc. Newspapers Ltd., 611 F.3d 601 (9th Cir. 2010) ............................................................................. 6 Omeluk v. Langsten Slip & Batbyggeri A/S, 52 F.3d 267 (9th Cir. 1995) ............................................................................. 11 Pebble Beach Co. v. Caddy, 453 F.3d 1151 (9th Cir. 2006) ........................................................................... 8 Pelican Communications, Inc. v. Schneider, No. C-14-4371 EMC, 2015 WL 527472 (N.D. Cal. Feb. 6, 2015)................... 9 Rano v. Sipa Press, Inc., 987 F.2d 580 (9th Cir. 1993) ............................................................................. 8 Case 2:16-cv-06136-ODW-KS Document 9 Filed 08/30/16 Page 4 of 20 Page ID #:86 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 15779.1:2749762.2 iii MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797 (9th Cir. 2004) ................................................................... 6, 8, 12 Sinatra v. Nat’l Enquirer, Inc., 854 F.2d 1191 (9th Cir. 1988) ........................................................................... 9 Swartz v. KPMG LLP, 476 F.3d 756 (9th Cir. 2007) ............................................................................. 8 Terracom v. Valley Nat. Bank, 49 F.3d 555 (9th Cir. 1995) ................................................................. 11, 12, 13 Walden v. Fiore, 134 S. Ct. 1115 (2014) ............................................................................ 1, 9, 10 Statutes Cal. Code Civ. Pro. § 410.10 ....................................................................................... 6 Fed. Rule Civ. Pro. 12(b)(2) ........................................................................................ 6 Fed. Rule Civ. Pro. 4(k)(1)(A) .................................................................................... 6 No table of authorities entries found. Case 2:16-cv-06136-ODW-KS Document 9 Filed 08/30/16 Page 5 of 20 Page ID #:87 J a N N w z w z 0 u z w MEMORANDUM OF POINTS AND AUTHORITIES III. INTRODUCTION The First Amended Complaint (the "Amended Complaint" or "FAC") in this ~ ~ action should be dismissed for the basic reason that this Court lacks personal ~~ Jurisdiction over the sole defendant, Sophast Sales and Marketing, LLC ("Sophast" ~ ~ or "Defendant"). Briefly, shortly before filing this action Plaintiff Venice Baking Company ~ ("Plaintiff') sent notice to Sophast that it was terminating the contract previously entered into between the parties. Now, by the Amended Complaint, Plaintiff seeks a ~, ~ declaration that (a) it was entitled to terminate the contract for any reason or no reason on 90 days' notice, (b) the Maryland choice-of-law provision in the contract is unenforceable, and (c) the post-termination covenant not to compete in the contract is unenforceable. However because Plaintiff fails to allege sufficient facts to establish even prima facie personal jurisdiction of this Court over Sophast, the Amended Complaint must be dismissed. Indeed, there is no basis upon which this Court may exercise either general or ~ specific personal jurisdiction over Sophast in this action. Sophast is a Maryland limited liability company, its principal place of business is in Columbia, Maryland, and its sole member is a citizen and resident of the State of Maryland. Sophast's business involves sales to customer accounts in Maryland and throughout the United States, with only nominal sales to one customer account in California. And importantly, Plaintiff's claim does not arise from Sophast's conduct in or directed to California. In fact, Plaintiff's sole claim for declaratory relief arises from its own conduct directed to Sophast in Maryland - a fact which the United States Supreme Court has recently made clear is not sufficient to support the exercise of personal jurisdiction. See Walden v. Fiore, 134 S. Ct. 1115, 1122-23 (2014). Accordingly, for the reasons described more fully below the Amended ~ Complaint should be dismissed pursuant to Federal Rule of Civil Procedure 1 2 3 4 5 6 7 8 9 10 ll 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15779.1:2749762.2 MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION Case 2:16-cv-06136-ODW-KS Document 9 Filed 08/30/16 Page 6 of 20 Page ID #:88 a N w z w Z 0 u Z w 1 2 3 4 5 6 7 S 9 10 11 12 13 14 is 16 17 18 19 20~ 21 22 23 24 25 26 27 28 ~~ ("FRCP") 12(b)(2) because this Court lacks personal jurisdiction over Sophast. II. JURISDICTIONAL FACTS A. Sophast Is A Maryland Limited Liability Company With Limited Contacts to California As background, Sophast is a distributor of pizza and related food products including gluten-free pizza crusts. Sophast sells its "Senza Glutine" gluten-free pizza crusts primarily to distributors, pizza chains, and restaurants (collectively, the "Sophast Customers"). The majority of Sophast's Customers are located on the East Coast (New York, New Jersey, Pennsylvania, Maryland, Virginia, Tennessee, North Carolina, South Carolina, Georgia, and Florida) and in the Midwest (Indiana, Wisconsin, Ohio, Michigan), and Sophast has only a few small accounts on the West Coast including only one customer in California. (Declaration of Ettor A. DelGuzzo ("DelGuzzo Decl."), ¶¶ 6-7). Sophast also provides food broker services to manufacturers marketing their private label programs to third-party vendors. (Id., ¶ g)~ Sophast is a limited liability company organized and existing under the laws of the State of Maryland, and its principal place of business is in Columbia, Maryland. (FAC, ¶ 2; DelGuzzo Decl., ¶ 2). Sophast's sole member, Ettor A. DelGuzzo ("Mr. DelGuzzo"), is a resident and citizen of the State of Maryland. (DelGuzzo Decl., ¶ 2). Sophast does not maintain an office in California and does not lease, own, or possess real or personal property in California. Sophast does not have a telephone number or even a post office box in California. (Id., ¶ 3)0 Likewise, Sophast is not registered to do business in California and does not maintain a registered agent for service of process in California. (DelGuzzo Decl., ¶ 4). Sophast has no financial connection to California, including no bank accounts, and pays no taxes in California. (Id., ¶ 5). 15779.127497622 a MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION Case 2:16-cv-06136-ODW-KS Document 9 Filed 08/30/16 Page 7 of 20 Page ID #:89 a w z w z 0 U z w B. The Contract Between Plaintiff and Sophast1 On February 8, 2012, Plaintiff and Sophast entered into a written contract ~~ entitled "Broker Agreement." (FAC, ¶ 8, Ems. 1; DelGuzzo Decl., ¶ 15). Under the ~ ~ Broker Agreement, Plaintiff agreed to manufacture its gluten-free pizza crusts in a variety of shapes and sizes labeled with Sophast's "Senza Glutine" brand (the "SG ~ ~ Crusts") for distribution by Sophast to its Customers. (DelGuzzo Decl., ¶ 17). Sophast's sales of SG Crusts manufactured by Plaintiff are nominal, amounting to 3 4 5 6 7 less than 1% of Sophast's gross sales to all Sophast Customers. (Id., ¶ 7). In May 2012, the parties agreed to amend the product pricing for gluten-free ~~ pizza crusts and the commission amounts determined by Exhibit A to the Broker Agreement. (DelGuzzo Decl., ¶ 16). The written amendment, entitled "Exhibit A" (the "Amendment"), sets forth detailed pricing for gluten-free pizza crusts and ~ commission terms and identifies the broker accounts Sophast secured for Plaintiff with Domino's Pizza and Ledo's Pizza. (Id). The Amendment was first signed by Plaintiff on May 17, 2012, and then by NIr. DelGuzzo in Maryland on May 18, 2012. (Id., ¶ 16). (Hereinafter, the "Contract" collectively refers to the Broker ~ Agreement and the Amendment.) In 2012 and 2013, Sophast provided broker services to Plaintiff by marketing ~ Plaintiff's private label program for its gluten-free pizza crusts to third-party vendors, including franchises and pizza restaurants. (FAC, Exh.l; DelGuzzo Decl., ¶ 9). The third-party vendors that Sophast secured as new accounts for Plaintiff are ~ national franchises with locations nationwide or located in Maryland. (DelGuzzo Decl., ¶ 10). C. The Deterioration Of The Relationship Between Plaintiff And Sophast And Plaintiff s Initiation Of This Action In May or June 2013, Plaintiff entered into an agreement with one of Sophast's competitors, DOT Foods, Inc. ("DOT Foods"), a large, national redistributor of food products. DOT Foods markets and sells products for 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15779.127497622 3 MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION Case 2:16-cv-06136-ODW-KS Document 9 Filed 08/30/16 Page 8 of 20 Page ID #:90 a N N w z w z 0 V z w ~~ manufacturers to the very same customers as Sophast using similar marketing ~ ~ strategies. (DelGuzzo Decl., ¶ 20). After Plaintiff entered into the Contract with DOT Foods, it became ~ ~ dissatisfied with the Contract with Sophast and sought to renegotiate the Contract on ~ ~ terms more favorable to Plaintiff. (DelGuzzo Decl., ¶ 21). Sophast acquiesced to ~ ~ many of Plaintiff's demands but refused to negotiate an entirely new agreement given that the Contract is for aten-year term with afive-year extension. (Id., ¶ 22). 1 2 3 4 5 6 7 In January 2016, Plaintiff notified Sophast that it would begin implementing ~ new minimum order requirements that were contrary to the course of dealing between the parties and that Plaintiff knew Sophast could not meet for many of its Customers. (DelGuzzo Decl., ¶ 23). Sophast attempted to negotiate with Plaintiff, but Plaintiff rejected nearly all of Sophast's proposed revisions. (Id., ¶ 24). Unwilling to accept Plaintiff's take-it-or-leave-it offer that required Sophast to give up substantial rights, Sophast discontinued negotiations. (Id., ¶ 25). Subsequently, by letter dated March 30, 2016, Plaintiff notified Sophast that it was terminating the Contract on ninety (90) days' notice (the "Termination Letter"). (FAC, ¶ 16, Exh. 2; DelGuzzo Decl., ¶ 26). D. This Action And The Maryland Action Following issuance of the Termination Letter, Plaintiff made no efforts to contact Sophast to see if the parties could resolve their differences short of litigation. Instead, Plaintiff raced to the courthouse and filed this one-count declaratory judgment action against Sophast in Los Angeles Superior Court on May 4, 2016 (the "Action" or the "California Action"). (FAC; DelGuzzo Decl., ¶ 27). Plaintiff's transparent purpose in filing this Action was to forum shop and ~ deprive Sophast of its choice of forum, as demonstrated by an email from Plaintiff's counsel to Sophast's counsel dated May 11, 2016, stating: On May 4, 2016, Venice Bakery Company filed a single claim for declaratory relief against Sophast seeking to invalidate the unlawful 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15779.127497622 4 MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION Case 2:16-cv-06136-ODW-KS Document 9 Filed 08/30/16 Page 9 of 20 Page ID #:91 a N N W z w z U z w covenants not to compete found in the now terminated Broker Agreement. We hope to avoid a lengthy dispute, and are writing to determine if you'll accept service on behalf of Sophast. More importantly, we would like to open a dialog with your office to discuss an amicable resolution to this matter. (DelGuzzo Decl., ¶ 28). There was no reason to rush to file this Action. At the time of filing, the post- termination non-compete provision was not yet at issue given that the 90 days' notice of termination issued on March 30, 2016, had not expired and would not expire until June 28, 2016. (FAC, Ems. 2; DelGuzzo Decl., ¶ 29). Moreover, Plaintiff made no effort to "open a dialog" until after it filed this Action. (DelGuzzo Decl., ¶¶ 29-30). Beginning on June 29, 2016, Plaintiff began rejecting all purchase orders submitted by Sophast. (Id., ¶ 31). On July 6, 2016, Sophast filed a complaint against Plaintiff in state court in Maryland asserting claims for Interlocutory and Permanent Injunctive Relief, Declaratory Judgment, Breach of Contract, Misappropriation of Trade Secrets, and Violation of Maryland Uniform Trade Secrets Act, Md. Code Ann., Com. Law § 11- 1201, et. seq (the "Maryland Action"). (Delguzzo Decl., ¶ 32). On July 7, 2016, Sophast filed a Motion for Temporary Restraining Order and Request for Immediate Hearing in the Maryland Action, and a hearing was scheduled for July 8, 2016. Plaintiff did not appear at the July 8th hearing or otherwise contact the Court or Sophast's counsel despite receiving notice of the hearing. (DelGuzzo Decl., ¶ 33). Following the hearing on July 8th, the Circuit Court for Howard County issued a temporary restraining order in the Maryland Action enjoining Plaintiff from terminating the Contract, imposing minimum order requirements, or violating the non-disclosure and non-compete covenants in the Contract, and ordered the parties to appear for a hearing on issuance of a preliminary injunction on August 5, 2016 (the "TRO Order"). (Id., ¶ 34). 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 15779.127497622 5 MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION Case 2:16-cv-06136-ODW-KS Document 9 Filed 08/30/16 Page 10 of 20 Page ID #:92 J a N lJ'1 W z w Z U z w On July 12, 2016, Plaintiff was personally served with the TRO Order, the ~ Summons and Complaint in the Maryland Action, and a Motion to Seal. When !~ Plaintiff continued to refuse purchase orders from Sophast and to disregard the TRO ~ Order, Sophast filed a Motion for Contempt in the Maryland Action. (DelGuzzo ~ Decl., ¶ 35). Then, beginning on July 31, 2016, Plaintiff once again began accepting ~ purchase orders from Sophast. On August 1, 2016, the Court granted the parties' consent motion to extend the TRO Order and reschedule the hearing on a preliminary injunction to September 9, 2016. (Id., ¶ 36). III. THE AMENDED COMPLAINT SHOULD BE DISMISSED UNDER FRCP 12(B)(2) FOR LACK OF PERSONAL JURISDICTION A. Plaintiff Bears The Burden Of Establishing Personal Jurisdiction Of This Court Over Sophast This Court has authority to dismiss the Amended Complaint for lack of personal jurisdiction. FRCP 12(b)(2). Preliminarily, the plaintiff bears the burden of demonstrating that jurisdiction exists in an action. Love v. Assoc. Newspapers Ltd., 611 F.3d 601, 608 (9th Cir. 2010). When a motion to dismiss is based on written materials, "`we only inquire into whether [the plaintiff's] pleadings and affidavits make a prima facie showing of personal jurisdiction."' Schwa~zenegge~ v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004) (internal citation omitted). District courts have the power to exercise personal jurisdiction to the extent of the law of the state in which they sit. FRCP 4(k)(1)(A); Core-Vent Corp. v. Nobel Industries AB, 11 F.3d 1482, 1484 (9th Cir. 1993). The California long-arm statute permits jurisdiction to the limits of due process, therefore the analysis under California's long-arm statute and due process are the same. Cal. Code Civ. Pro. § 410.10; Core-Vent Copp., 11 F.3d at 1484. Constitutional due process requires that anon-resident defendant have sufficient minimum contacts with the forum state such that the maintenance of suit does not offend traditional notions of fair play and substantial justice. Glencore 1 2 3 4 5 6 7 8 9 10 11 IZ 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15779.12749762.2 D MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION Case 2:16-cv-06136-ODW-KS Document 9 Filed 08/30/16 Page 11 of 20 Page ID #:93 a N N W z w Z 0 V z w 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 Gain Rotterdam B. V. v. Shivnath Rai Harnarain Co., 284 F.3d 1114, 1123 (2002) ~~ citinglnt'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Depending on the ~~ nature and extent of the nonresident defendant's contacts with the forum, a court ~~ may obtain either general personal jurisdiction or specific personal jurisdiction over the defendant. Id. B. California Courts Do Not Have General Personal Jurisdiction Over Sophast General personal jurisdiction exists when anon-resident defendant's "affiliations with the State are so ̀ continuous and systematic' as to render them essentially at home in the forum State." Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011) (emphasis added). The Supreme Court recently clarified that "at home" is not synonymous with "doing business," and that "the inquiry under Goodyear is not whether a foreign corporation's in-forum contacts can be said to be in some sense ̀ continuous and systematic,' it is whether that corporation's ̀ affiliations with the State are so ̀ continuous and systematic' as to render [it] essentially at home in the forum State. "' Daimler AG v. Bauman, 134 S. Ct. 746, 761-62, n.20 (2014) quoting Goodyear, 564 U.S. at 919. The Supreme Court also noted that there are limited affiliations with a forum that will subject a defendant corporation to all-purpose general jurisdiction; those usually include the forum where the entity is incorporated or where it has its principal place of business. Id. at 760. Plaintiff has failed to carry its burden to show that this Court has general jurisdiction over Sophast. As stated above and in the concurrently filed DelGuzzo Declaration, Sophast is a limited liability company organized and existing under the laws of the State of Maryland with its principal place of business in Columbia, Maryland. (FAC, ¶ 2; DelGuzzo Decl., ¶ 2). Sophast does not maintain an office or even a post office box in California. (DelGuzzo Decl., ¶ 3). Therefore there is no plausible basis to support general jurisdiction by this Court over Sophast. 15779.12749762.2 7 MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION Case 2:16-cv-06136-ODW-KS Document 9 Filed 08/30/16 Page 12 of 20 Page ID #:94 a N W z w z 0 U z w Accordingly, Plaintiff has not and cannot allege facts sufficient to support this ~~ Court's exercise of general personal jurisdiction over Sophast. C. S~pecific Personal Jurisdiction Does Not Exist Over Sophast In California For Purposes Of This Dispute Unlike general personal jurisdiction, establishing specific personal jurisdiction "requires a showing of forum-related activities of the defendant that are related to the claim asserted." Carpenter v. Sikorsky Aircraft Corp., 101 F.Supp.3d 911, 921 (C.D. Cal. 2015) citing Rano v. Sipa Press, Inc., 987 F.2d 580, 588 (9th Cir. 1993). Plaintiff must allege something more than legal conclusions or "`bare bones' assertions of minimum contacts with the forum" to meet this burden. Abokasem v. Royallndian Raj Intl Corp., No. G10-01781 MMC, 2011 WL 635222, at *3 (N.D. Cal. Feb. 11, 2011) quoting Swartz v. KPMG LLP, 476 F.3d 756, 766 (9th Cir. 2007). Instead, Plaintiff must allege specific facts tending to show that jurisdiction is proper. Id. Plaintiff has failed to do so here. Specifically, Plaintiff has not alleged sufficient facts to satisfy the Ninth Circuit's three-prong test for specific personal jurisdiction over anon-resident defendant: (1) the defendant has performed some act or consummated some transaction within the forum or otherwise purposefully availed himself of the privileges of conducting activities in the forum, (2) the claim arises out of or results from the defendant's forum-related activities, and (3) the exercise of jurisdiction is reasonable. E.g., Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1155 (9th Cir. 2006); see also Schwarzenegger, 374 F.3d at 802 ("The plaintiff bears the burden of satisfying the first two prongs of the test. If the plaintiff fails to satisfy either of these prongs, personal jurisdiction is not established in the forum state. If the plaintiff succeeds in 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 satisfying both of the first two prongs, the burden then shifts to the defendant to `present a compelling case' that the exercise of jurisdiction would not be reasonable."). 25 26 27 28 15779.127497622 s MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION Case 2:16-cv-06136-ODW-KS Document 9 Filed 08/30/16 Page 13 of 20 Page ID #:95 a N w z w z 0 V z w 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 1 25 26 27 1. Sophast has not "purposefully availed" itself of the privileges of conducting activities in California First, the only fact alleged in the FAC on which Plaintiff could rely to demonstrate purposeful availment is that Sophast entered into the Contract with Plaintiff, a California corporation. (FAC, ¶¶ 1, 8). Yet this Court has held that a non- resident entering into a contract with a California resident is not itself sufficient to satisfy the due process inquiry for personal jurisdiction. Boschetto v. Hansing, 539 F.3d 1011, 1017 (9th Cir. 2008) citing Bugger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985) (holding that Plaintiff must allege "actions by the defendant himself that create a ̀substantial connection' with the forum State"); Walden, 134 S. Ct. at 1122, 1126 (explaining that the analysis "looks to the defendant's contacts within the forum State itself, not the defendant's contacts with persons who reside there" and that "the mere fact that [defendant's] conduct affected plaintiffs with connections to the forum State does not suffice to authorize jurisdiction."). Indeed, "the plaintiff cannot be the only link between the defendant and the forum. Rather, it is the defendant's conduct that must form the necessary connection with the forum State that is the bases of its jurisdiction over him." Walden, 134 S. Ct. at 1122. A defendant "must have performed some type of affirmative conduct which allows or promotes the transaction of business within the forum state." Sinatra v. Nat'l Enquire, Inc., 854 F.2d 1191, 1195 (9th Cir. 1988); see also Pelican Communications, Inc. v. Schneider, No. C-14-4371 EMC, 2015 WL 527472, at *3 (N.D. Cal. Feb. 6, 2015) ("[defendant's] contact with California appears to be random or fortuitous - i.e., resulting simply because [plaintiff) happens to be a California resident.") The Amended Complaint is devoid of any factual allegations demonstrating "purposeful availment," and instead contains one "bare bones" conclusory allegation as to jurisdiction that is wholly insufficient to make even a prima facie showing of 28 ~~ Purposeful availment. Specifically, the Amended Complaint states: 15779.12749762.2 9 MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION Case 2:16-cv-06136-ODW-KS Document 9 Filed 08/30/16 Page 14 of 20 Page ID #:96 a w z w z 0 U z w This Court is the proper Court for trial of this action because the contract upon which this action is based was entered into in California, the contract was performed in California, and Venice Baking performed its obligations under the contract -namely manufacturing pizza products - in Los Angeles, California. (FAC, ¶ 3 ; see also FAC, ¶ 11). This allegation is exactly the sort of "bare bones" assertion that courts reject when analyzing jurisdiction. See In re Hydroxycut Mktg. and Sales Practices Litig., Nos. 09-md-2087 BTM(CAB), 10-cv-2580 BTM(CAB), 2011 WL 2066651, at *1-2 (S.D. Cal. May 24, 2011) (finding plaintiff's allegation that "[a]t all times relevant hereto, [defendant] was and is doing business within this judicial district" insufficient to make out a prima facie case for jurisdiction). Although Plaintiff has alleged that Sophast entered into the Contract in California it fails to allege a single fact to support the assertion, such as who signed or where the Contract was executed. See Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) ("Nor does a complaint suffice if it tenders naked assertions devoid of further factual enhancement."). Plaintiff cannot make such allegations because Mr. DelGuzzo did not execute the Contract in California. (DelGuzzo Decl., ¶¶ 15-16). Plaintiff also alleges that the Contract was performed in California, but offers no facts demonstrating how the contract was performed, the nature of Sophast's performance, or the connection to California. The fact of the matter is that Sophast's principal place of business is Columbia, Maryland, and Sophast does not conduct business in California. (DelGuzzo Decl., ¶¶ 1-7). Thus while the Amended Complaint contains sufficiently detailed allegations as to Plaintiff's conduct in California, clearly Plaintiff has not alleged facts to support its bald conclusion that Sophast performed the Contract in California because none exist. To the extent there are any allegations to suggest Sophast conducted business in California, those allegations establish contact with a California resident (Plaintif as opposed to Sophast's own conduct within California as required by Walden. 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 15779.12749762.2 io MO~'ION TO DISMISS FOR LACK OF PERSONAL JURISDICTION Case 2:16-cv-06136-ODW-KS Document 9 Filed 08/30/16 Page 15 of 20 Page ID #:97 a N l/'1 w z w z 0 u z w 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 Accordingly, Plaintiff makes no specific allegations that Sophast "purposefully availed" itself of the privileges of doing business in California by performing any act in, or directed at, California. Without those necessary ~~ allegations, Plaintiff fails to satisfy the first prong of the test for specific jurisdiction ~~ and thus cannot show that specific jurisdiction exists over Sophast. 2. This Action does not arise out of Sophast's forum-related activities Plaintiff similarly cannot establish that its claim for declaratory relief arises out of Sophast's activities in the forum. "The second prong of the specific jurisdiction test is met if ̀ but for' the contacts between the defendant and the forum state, the cause of action would not have arisen." Te~racom v. Valley Nat. Bank, 49 F.3d 555, 561 (9th Cir. 1995); Omeluk v. Langsten Slip & Batbyggeri A/S, 52 F.3d 267, 272 (9th Cir. 1995) ("[Plaintiff] would have suffered the same injury even if none of [defendant's] Washington contacts had taken place. [Plaintiff's] claim was therefore not one which arose out of or resulted . from [defendant's] forum-related activities."). Here, Plaintiff cannot make the showing necessary for personal jurisdiction, as Plaintiff has not alleged that Sophast committed any act aimed at California that gave rise to this Action. To the contrary, the allegations in the Amended Complaint clearly demonstrate that it was Plaintiff's actions that gave rise to this declaratory suit. Specifically, Plaintiff seeks a declaratory judgment regarding its rights and obligations under the Contract, including its right to terminate, its obligations under the post termination covenant not to compete, and the agreed upon choice of Maryland law. (FAC, ¶ 26). However Sophast did not execute the contract in California. (DelGuzzo Decl., ¶¶ 15-16). And Plaintiff, by letter dated March 30, 2016, notified Sophast that it was terminating the Contract on 90 days' notice. (FAC, ¶¶ 13, 16, E~.2). Therefore but for Plaintiff's letter purporting to terminate 15779.1:27497622 11 MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION Case 2:16-cv-06136-ODW-KS Document 9 Filed 08/30/16 Page 16 of 20 Page ID #:98 a N l/'I w z w z 0 u z w ~~ the Contract, which was directed to Sophast in Maryland and injured Sophast in ~~ Maryland, Plaintiff would have no need for a judicial declaration of its right to terminate and its post-termination obligation not to compete. (See FAC, ¶ 27, Ems. ~~ B). Ultimately, because the claim alleged does not arise out of Sophast's contact ~ with the forum state, Plaintiff fails to satisfy the second part of the three-part ~ specific jurisdiction analysis and cannot show any basis for this Court to exercise specific personal jurisdiction over Sophast. 1 2 3 4 5 6 7 3. This Court's exercise of personal jurisdiction over Sophast in this Action would not be reasonable For the reasons described above, Sophast maintains that Plaintiff has not demonstrated that specific personal jurisdiction exists under the first two prongs of the Court's analysis. If, however, this Court finds that specific personal jurisdiction does exist, "the exercise of jurisdiction would not be reasonable." Schwarzenegge~, 374 F.3d at 802 citing Burger King, 471 U.S. at 476-78. Courts rely on seven factors to determine whether the exercise of jurisdiction over anon-resident defendant comports with fair play and substantial justice: (1) [T]he extent of the defendant['s] purposeful interjection into the forum state's affairs; (2) the burden on the defendant of defending in the forum; (3) the extent of conflict with the sovereignty of the defendant's state; (4) the forum state's interest in adjudicating the dispute; (5) the most efficient judicial resolution of the controversy; (6) the importance of the forum to the plaintiff's interest in convenient and effective relief; and (7) the existence of an alternative forum. Terracom, 49 F.3d at 561 citing Core-Vent, 11 F.3d at 1487-88. Under the circumstances of this case, the balance of factors weighs in favor of a finding that the exercise of personal jurisdiction over Sophast would be unreasonable. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23' 24 25 26 27 28 15779.1 2 749762 2 12 MOTION TO DISMISS FOR LACK OF PERSONAL NRISDICTION Case 2:16-cv-06136-ODW-KS Document 9 Filed 08/30/16 Page 17 of 20 Page ID #:99 a N w z w z 0 u z w Specifically, Sophast is a Maryland limited liability company and does not ~~ maintain an office in California, does not have a telephone number or post office ~ box in California, and is not registered to do business in California. Sophast has no ~ bank accounts and pays no taxes in California. (DelGuzzo Decl., ¶¶ 2-4). Moreover, ~ the Contract at issue contains a Maryland choice of law provision. (Id., ¶ 15; FAC, ~ Ems. 1). For these reasons, the burden on Sophast of defending this Action in this ~ forum is great as all of its witnesses, documents, and records will all have to be transported from Maryland to California. (DelGuzzo Decl., ¶¶ 2-7). On the other hand, Plaintiff would not be burdened by pursuing its claims in Maryland since a concurrent action is already pending between the parties in the Circuit Court of Maryland for Howard County. (Id., ¶¶ 32-36). Yet even if the burden on Plaintiff ~ were equal to that on Sophast, the balance would tip in favor of Sophast because "the law of personal jurisdiction is asymmetrical and is primarily concerned with the defendant's burden." Terr~acom, 49 F.3d at 561. Additionally, given the fact that Plaintiff's dispute concerns a Contract that ~ contains achoice-of-law provision requiring disputes to be determined according to Maryland law, the courts in the State of Maryland are best suited to hear this Action. Indeed Maryland has a strong state interest in the resolution of disputes concerning Maryland residents and entities while California, on the other hand, has no state interest in addressing Maryland contracts. Therefore Maryland is clearly a superior alternative forum for the parties' dispute, as well as the most efficient forum to hear and determine the parties' claims. For these reasons, even assuming a~guendo that Plaintiff could meet its burden of establishing the first two prongs of the test for specific jurisdiction, which it cannot, Sophast has demonstrated that the exercise of personal jurisdiction over it would be unreasonable in this District. For this reason, the Amended Complaint should be dismissed. 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 15779.12749762.2 13 MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION Case 2:16-cv-06136-ODW-KS Document 9 Filed 08/30/16 Page 18 of 20 Page ID #:100 a N W z w z 0 U z w IV. CONCLUSION For each of the independent reasons described above, Sophast respectfully requests that this Court grant this Motion and dismiss the Amended Complaint filed by Plaintiff. 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 28i DATED: August 30, 2016 15779.127497622 ERVIN COHEN & JESSUP LLP B~,: ~, i Randall ~. Leff Amy S. Russell Attorneys for Defendant Sophast Sales and Marketing, LLC 14 MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION Case 2:16-cv-06136-ODW-KS Document 9 Filed 08/30/16 Page 19 of 20 Page ID #:101 PROOF OF SERVICE n N N w z w z 0 V z W 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 STATE OF CALIFORNIA, COUNTY OF LOS ANGELES At the time of service, I was over 18 years of age and not a party to this action. I am employed in the County of Los Angeles, State of California. My business address is 9401 Wilshire Boulevard, Ninth Floor, Beverly Hills, CA 90212-2974. On August 30, 2016, I served true copies of the following documents) described as DEFENDANT SOPHAST SALES AND MARKETING, LLC'S NOTICE OF MOTION AND MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION; MEMORANDUM OF POINTS AND AUTHORITIES on the interested parties in this action as follows: Dylan W. Wiseman Peter H. Bales Nicole C. Moskowitz BUCHALTER NEMER 55 Second Street, Suite 1700 San Francisco, CA 94105 Tel: 415-227-0900 Fax: 415-227-0900 dwi seman@buchalter. com Attorneys for Plaintiff Venice Baking Company BY MAIL: I enclosed the documents) in a sealed envelope or package addressed to the persons at the addresses listed in the Service List and placed the envelope for collection and mailing, following our ordinary business practices. I am readily familiar with Ervin Cohen & Jessup LLP's practice for collecting and processing correspondence for mailing. On the same day that the correspondence is placed for collection and mailing, it is deposited in the ordinary course of business with the United States Postal Service, in a sealed envelope with postage fully prepaid. I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on August 30, 2016, at Beverly Hills, California. ~~~ Amv Russe 25 26 27 28 15779.12746318.1 PROOF OF SERVICE Case 2:16-cv-06136-ODW-KS Document 9 Filed 08/30/16 Page 20 of 20 Page ID #:102 ~. a N C/1 W z w z V z w Randall S. Leff (SBN 77148) rleff@ecjlaw.com Amy S. Russell (SBN 284131) arussell@ecjlaw.com ERVIN COHEN & JESSUP LLP 9401 Wilshire Boulevard, Ninth Floor Beverly Hills, California 90212-2974 Telephone (310) 273-6333 Facsimile (310) 859-2325 Attorneys for Defendant Sophast Sales and Marketing, LLC UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION 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 VENICE BAKING COMPANY, Plaintiff, v. SOPHAST SALES AND MARKETING, LLC, a Maryland Limited Liability Company; and DOES 1-10, inclusive, Defendant. 15779.12752417.1 Case No. 2:16-CV-06136-ODW-KS The Honorable Otis D. Wright II, Courtroom 11 (Spring St. Courthouse) DECLARATIONS OF ETTOR A. DELGUZZO AND AMY S. RUSSELL IN SUPPORT OF DEFENDANT SOPHAST SALES AND MARKETING, LLC'S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION [Notice Of Motion And Motion; Memorandum Of Points And Authorities; (Proposed) Order Filed Concurrently] Hearin: Date: October 3, 2016 Time: 1:30 p.m. Courtroom: 11 (Springy St. Courthouse) DECLARATIONS IN SUPPORT OF DEFENDANT'S MOTION TO DISMISS Case 2:16-cv-06136-ODW-KS Document 9-1 Filed 08/30/16 Page 1 of 11 Page ID #:103 a N l/'1 w ~s z w z 0 u z w DECLARATION OF ETTOR A. DELGUZZO I, Ettor A. DelGuzzo, hereby declare as follows: 1. I am over the age of eighteen and am competent to make this ~ declaration. Based upon personal knowledge, the facts stated below are true and ~ correct. If called as a witness, I could and would competently testify to the matters stated herein. 2. I am the sole member of Sophast Sales and Marketing LLC ~ ("Defendant" or "Sophast"). Sophast is a limited liability company organized and existing under the laws of the State of Maryland, and its principal place of business is in Columbia, Maryland. I am a resident and citizen of the State of Maryland. I am personally familiar with the corporate relationship between Sophast and Venice Baking Company ("Plaintiff' or "Venice"). I am personally familiar with the organization and operations of Sophast. 3. Sophast does not maintain an office in California. Sophast does not ~ lease, own or possess real or personal property in California. Sophast does not have a telephone number of post office box in California. 4. Sophast is not registered to do business in California and does not ~ maintain a registered agent for service of process in California. 5. Sophast has no financial connection to California. It has no bank ~ accounts and pays no taxes in California. 6. Sophast is a distributor of pizza and related food products, including ~ gluten-free pizza crusts. Sophast sells its "Senza Glutine" gluten-free pizza crusts primarily to distributors, pizza chains and restaurants (collectively, the "Sophast Customers"). Sophast's Customer are located primarily on the East Coast (New York, New Jersey, Pennsylvania, Maryland, Virginia, Tennessee, North Carolina, South Carolina, Georgia, and Florida) and in the Midwest (Indiana, Wisconsin, Ohio, .Michigan), with only a few small accounts on the West Coast (California and Texas). 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 15779.12752417.1 i DECLARATIONS IN SUPPORT OF DEFENDANT'S MOTION TO DISMISS Case 2:16-cv-06136-ODW-KS Document 9-1 Filed 08/30/16 Page 2 of 11 Page ID #:104 a N N w z w z 0 V z w 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. Sophast only has one customer in California. And Sophast's sales of ~ ~ Senza Glutine brand gluten-free pizza crusts manufactured by Plaintiff are nominal, ~ ~ less than 1 % of Sophast's gross sales to all the Sophast Customers. 8. Sophast also provides food broker services to manufacturers marketing ~ ~ their private label programs to third-party vendors. 9. In 2012 and 2013, Sophast provided broker services to Plaintiff marketing its private label program for its gluten-free pizza crusts to third-party vendors, including franchises and pizza restaurants. 10. The third-party vendors that Sophast secured as new accounts for ~ Plaintiff are national franchises with locations nationwide or located in Maryland. 11. To elaborate, in early 2011, Sophast and Plaintiff began discussing, ~ through email and telephone calls, the potential for a private label Senza Glutine Crust (the "SG Crust") and a broker agreement. 12. On December 1, 2011, Plaintiff executed "Sophast Sales &Marketing ~ Product Development Non-Disclosure Agreement" (the "NDA") and returned it to Sophast and then I signed it. 13. Thereafter, in January 2012, I met with Plaintiff's owner, James ~ DeSisto ("Mr. DeSisto"), and others in California and continued the discussions and negotiations of a broker and private label manufacturing/distribution agreement. 14. After that meeting, the parties continued to negotiate the terms of the ~ agreement. The negotiations occurred on telephone calls and emails exchanged ~ between me in Maryland and Mr. Desisto and others in California until early February 2012. The negotiations culminated in a written agreement that incorporated terms provided by both parties and was the result of long distance communications. 15. On February 8, 2012, the parties entered into a written contract entitled ~ "Broker Agreement," dated and signed by Plaintiff and Sophast and thereafter, amended by written agreement signed first by Mr. Desisto and then by me in 15779.1:2752417.1 2 DECLARATIONS IN SUPPORT OF DEFENDANT'S MOTION TO DISMISS Case 2:16-cv-06136-ODW-KS Document 9-1 Filed 08/30/16 Page 3 of 11 Page ID #:105 a N w z w z 0 V z w ~ ~ Maryland on May 18, 2012 (collectively, the "Contract"). The Contract provides ~ ~ that it is to be construed and enforced according to the laws of Maryland. 16. Specifically, in May 2012, the parties agreed to amend the product ~~ pricing for the SG Crusts and commission for the Broker Accounts on E~ibit A to ~~ the Contract. The parties entered into a written amendment to the Contract entitled ~~ "E~ibit A" (the "Amendment"), which was first signed by Mr. DeSisto on May 17, 2012. The Amendment set forth the detailed product pricing and commission terms 1 2 3 4 5 6 7 for broker accounts Sophast secured for Plaintiff with Domino's Pizza and Ledo's Pizza. I signed the Amendment in Maryland on May 18, 2012. Thus, the last act to ~ effectuate the Amendment was my signature on May 18, 2012. 17. Under the Contract, Plaintiff agreed to manufacture its gluten-free ~ pizza crusts in a variety of shapes and sizes labeled with Sophast's Senza Glutine brand for Sophast to distribute to its Senza Glutine Accounts. 18. Under the Contract, Sophast agreed to provide broker services to ~ Plaintiff marketing its private label program for gluten-free pizza crusts to third- party vendors and secure new accounts for Plaintiff, and in return, Plaintiff is obligated to pay Sophast commissions on all sales of SG Crusts to those new private label accounts for at least ten (10) years from the start date of each account. 19. Sophast has performed all of its obligations under the Contract. 20. In May or June 2013, Plaintiff entered into an agreement with DOT ~ Foods, Inc. ("DOT Foods"), a large, national redistributor of food products that markets and sells products for manufacturers like Plaintiff to the very same customers as Sophast using similar marketing strategies. 21. After Plaintiff entered into the Contract with DOT Foods, it became ~ dissatisfied with its Contract with Sophast and wanted to renegotiate the Contract on terms more favorable to Plaintiff. 22. Sophast acquiesced to many of Plaintiff's demands but refused to ~ negotiate new agreements since the Contract it had was for aten-year term with a 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15779.12752417.1 3 DECLARATIONS IN SUPPORT OF DEFENDANT'S MOTION TO DISMISS Case 2:16-cv-06136-ODW-KS Document 9-1 Filed 08/30/16 Page 4 of 11 Page ID #:106 a a N w z w z 0 U z oc w ~~ five year extension. Sophast was able to continue to distribute SG Crusts to its ~ ~ Accounts until earlier this year. 23. In January 2016, Plaintiff notified Sophast that it would begin ~ ~ implementing new minimum order requirements that were contrary to the course of Performance between the parties and that it knew Sophast's Accounts could not meet. 1 2 3 4 5 6 24. Sophast attempted to negotiate new agreements but Plaintiff rejected ~~ nearly all of Sophast's proposed revisions. 25. Unwilling to accept Plaintiff's take-it-or-leave-it agreements that ~ required Sophast to give up substantial rights, Sophast discontinued negotiations. 26. In response, Plaintiff, by letter dated March 30, 2016, notified Sophast ~ that it was terminating the Contract on ninety (90) days' notice (the "Termination Letter") 27. Faced with the threat of litigation, Plaintiff made no effort to respond to ~ the letter or to contact Sophast to see if a resolution could be reached. Instead, Plaintiff raced to the courthouse and filed this one-count declaratory judgment action against Sophast in the Superior Court of the State of California, County of Los Angeles on May 4, 2016. 28. Plaintiff's purpose in filing this action was to forum shop and deprive ~ Sophast of its choice of forum, as demonstrated by an email from Plaintiff's counsel to Sophast's counsel dated May 11, 2016, in which he states: On May 4, 2016, Venice Bakery Company filed a single claim for declaratory relief against Sophast seeking to invalidate the unlawful covenants not to compete found in the now terminated Broker Agreement. We hope to avoid a lengthy dispute, and are writing to determine if you'll accept service on behalf of Sophast. More importantly, we would like to open a dialog with your office to discuss an amicable resolution to this matter. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25~ 26 27 28 15779.12752417.1 4 DECLARATIONS IN SUPPORT OF DEFENDANT'S MOTION TO DISMISS Case 2:16-cv-06136-ODW-KS Document 9-1 Filed 08/30/16 Page 5 of 11 Page ID #:107 J a N l!1 w z w z 0 U z w 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 29. There was no reason to rush since the post-termination non-compete ~ ~ was not at issue because the Contract had not yet been terminated since the ninety ~~ (90) days' notice of termination was given on March 30, 2016 and thus, did not run ~ ~ until June 29, 2016. Moreover, Plaintiff made no effort to "open a dialog" until II after it filed this action. 30. Sophast agreed to engage in settlement discussions but only after the Parties entered into a tolling agreement. The parties were unable to reach a resolution, and on June 24, 2016, just five days before the expiration of Plaintiff's 90-day-termination-notice, the tolling agreement expired. 31. Beginning on June 29, 2016, Plaintiff rejected all "Purchase Orders" submitted by Sophast. 32. On July 6, 2016, Sophast filed a complaint against Plaintiff in state I~ court in Maryland asserting claims for Interlocutory and Permanent Injunctive Relief, a Declaratory Judgment, Breach of Contract and Misappropriation of Trade Secrets and Violation of Maryland Uniform Trade Secrets Act, Md. Code Ann., Com. Law §11-1201, et. seq (the "Maryland Action"). 33. On July 7, 2016, Sophast filed a Motion for Temporary Restraining ~ Order and request for immediate hearing (the "TRO Motion"), and a hearing was scheduled for July 8, 2016. Plaintiff did not appear at the July 8th hearing, or ~ otherwise contact the Court or Sophast's counsel despite receiving repeated notice from both prior to the hearing. 34. Following an ex parte hearing on July 8, 2016, the Circuit Court for ~ Howard County issued a temporary restraining order enjoining Plaintiff from terminating the Contract, imposing minimum order requirements and from violating the non-disclosure and non-compete covenants in the Contract, and ordering the parties to appear for a hearing on the motion for preliminary injunction on August 5, 2016 (the "TRO Order"). 15779.12752417.1 S DECLARATIONS IN SUPPORT OF DEFENDANT'S MOTION TO DISMISS Case 2:16-cv-06136-ODW-KS Document 9-1 Filed 08/30/16 Page 6 of 11 Page ID #:108 a w z w 2 0 u z w 3 5. On July 12, 2016, Plaintiff was personally served with the TRO Order, the Maryland Complaint and Summons, and a Motion to Seal. When Plaintiff continued to disregard the TRO Order, Sophast filed a Motion for Contempt in the Maryland Action. 36. Plaintiff initially violated the TRO Order but beginning on July 31, 2016, Plaintiff began accepting purchase orders from Sophast. On August 1, 2016, the Court granted the parties' consent motion to extend the TRO and reschedule the hearing on the preliminary injunction to September 9, 2016. 1 2 3 4 5 6 7 I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct and that this declaration was executed in Columbia, Maryland. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15779.12752417.1 D DECLARATIONS IN SUPPORT OF DEFENDANT'S MOTION TO DISMISS Case 2:16-cv-06136-ODW-KS Document 9-1 Filed 08/30/16 Page 7 of 11 Page ID #:109 t i s p J. V ~. ~ 11 ~ 1Z 13 w o Y4 V ~~ z ~ 16 w 17 1$ ].9 ~0 Z~ 22 23 24 ~5 zs ~~ 2s z c Executed on August, 201 b M07'lON T4 DISMISS FQR LACK OF PERSONAL 7URIgDICTION Case 2:16-cv-06136-ODW-KS Document 9-1 Filed 08/30/16 Page 8 of 11 Page ID #:110 a a w z w z 0 U z w DECLARATION OF AMY S. RUSSELL I, Amy S. Russell, declare as follows: 1. I am an attorney duly admitted to practice before this Court. I am an ~ ~ associate at Ervin Cohen &Jessup LLP, attorneys of record for Defendant Sophast 1 2 3 4 ~~ Sales and Marketing, LLC ("Sophast"). I have personal knowledge of the facts set ~~ forth herein, except as to those stated on information and belief and, as to those, I ~ am informed and believe that they are true. If called as a witness, I could and would competently testify to the matters stated herein. I make this declaration in support of Sophast's concurrently filed motion to dismiss for lack of personal jurisdiction (the "Motion"). 2. This Motion is made following the conference of counsel as required ~ by Local Rule 7-3. Specifically, on August 22, 2016, I spoke with counsel for Plaintiff Venice Baking Company ("Venice"), Dylan W. Wiseman ("Attorney Wiseman"), on the telephone and informed him that Sophast intended to file a motion to dismiss the First Amended Complaint for lack of personal jurisdiction. Attorney Wiseman and I agreed to formally meet and confer regarding the Motion by telephone on August 23, 2016. 3. On August 23, 2016, Attorney Wiseman and I met and conferred telephonically regarding the Motion, and discussed both Sophast's grounds for bringing the Motion as well as Venice's grounds for opposing the Motion. Because we were unable to resolve the matter informally, I informed Attorney Wiseman that Sophast intended to file the Motion on August 30, 2016. Following the telephonic meet and confer, I sent an email to Attorney Wiseman confirming our conversation. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 I declare under penalty of perjury under the laws of the United States of ~ America that the foregoing is true and correct. 22 23 24 25 26 27 28 1 57791 27524 1 7.1 s DECLARATIONS IN SUPPORT OF DEFENDANT'S MOTION TO DISMISS Case 2:16-cv-06136-ODW-KS Document 9-1 Filed 08/30/16 Page 9 of 11 Page ID #:111 J a N V'I W z w z 0 U z w Executed August 29, 2016, at Beverly Hills, California. S ~%~ Amy S. R sell 1 2 3 4 5 6 7 8 9 10 11 IZ 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15779.12752417.1 9 DECLARATIONS IN SUPPORT OF DEFENDANT'S MOTION TO DISMISS Case 2:16-cv-06136-ODW-KS Document 9-1 Filed 08/30/16 Page 10 of 11 Page ID #:112 PROOF OF SERVICE 2 3 4 5 6 7 8 9 10 a ~ 11 N W 12--~ `~' 13 z w z 14 O v 15 z ~ 16 W 17 18 19 20 21 Zz 23 24 STATE OF CALIFORNIA, COUNTY OF LOS ANGELES At the time of service, I was over 18 years of age and not a party to this action. I am employed in the County of Los Angeles, State of California. My business address is 9401 Wilshire Boulevard, Ninth Floor, Beverly Hills, CA 90212-2974. On August 30, 2016, I served true copies of the following documents) described as DECLARATIONS OF ETTOR A. DELGUZZO AND AMY S. RUSSELL IN SUPPORT OF DEFENDANT SOPHAST SALES AND MARKETING, LLC'S MOTION TO DISMISS FOR LACK OF PERSONAL JTJRISDICTION on the interested parties in this action as follows: Dylan W. Wiseman Peter H. Bales Nicole C. Moskowitz BUCHALTER NEMER 55 Second Street, Suite 1700 San Francisco, CA 94105 Tel: 415-227-0900 Fax: 415-227-0900 dwi seman@buchalter. com Attorneys for Plaintiff Venice Baking Company BY MAIL: I enclosed the documents) in a sealed envelope or package addressed to the persons at the addresses listed in the Service List and placed the envelope for collection and mailing, following our ordinary business practices. I am readily familiar with Ervin Cohen & Jessup LLP's practice for collecting and processing correspondence for mailing. On the same day that the correspondence is placed for collection and mailing, it is deposited in the ordinary course of business with the United States Postal Service, in a sealed envelope with postage fully prepaid. I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on August 30, 2016, at Beverly Hills, California. Amv Russe 25 26 27 28 15779.12746318.1 PROOF OF SERVICE Case 2:16-cv-06136-ODW-KS Document 9-1 Filed 08/30/16 Page 11 of 11 Page ID #:113 J a N w z w z U z w Randall S. Leff (SBN 77148) rleff@ecjlaw.com Amy S. Russell (SBN 284131) arussell ec~law.com ERVIN CO EN & JESSUP LLP 9401 Wilshire Boulevard, Ninth Floor Beverly Hills, California 90212-2974 Telephone 310) 273-6333 Facsimile (10) 859-2325 Attorneys for Defendant Sophast Sales and Marketing, LLC UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION 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 Venice Baking Company, Plaintiff, ►~ Sophast Sales and Marketin , LLC, a Maryland Limited Liability ~ompany; and Does 1-20, inclusive, Defendant. 15779.12753145.1 Case No. 2:16-CV-06136-ODW-KS The Honorable Otis D. Wri~ght II, Courtroom 11 (Spring St. Courthouse) ~PROPOSED ORDER GRANTINGEFENDAN~'S MOTION AND DISMISSING FIRST AMENDED COMPLAINT [Notice Of Motion And Motion; Memorandum Of Points And Authorities; Supporting Declarations Filed Concurrently] Hearin: Date: October 3, 2016 Time: 1:30 p.m. Courtroom: 11 (Snrin~ St. Courthouse) ORDER (PROPOSED) Case 2:16-cv-06136-ODW-KS Document 9-2 Filed 08/30/16 Page 1 of 3 Page ID #:114 a w z w z 0 V z w ORDER (PROPOSED) This matter come on regularly before Department 11 of the above-entitled United States District Court with respect to Defendant Sophast Sales and Marketing, LLC's ("Sophast") Motion to Dismiss the First Amended Complaint of Plaintiff Venice Baking Company ("Venice") for Lack of Personal Jurisdiction (the "Motion"). The Court, having considered the pleadings and all papers filed in support and in opposition to the Motion, and having heard the argument of counsel, hereby finds that this court is without personal jurisdiction over Sophast. It is therefore ORDERED that the Motion is GRANTED and the First Amended Complaint is DISMISSED. IT IS SO ORDERED. 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 27 281 DATED: The Honorable Otis D. Wright II UNITED STATES DISTRICT JUDGE 15779.12753145.1 1 ORDER (PROPOSED) Case 2:16-cv-06136-ODW-KS Document 9-2 Filed 08/30/16 Page 2 of 3 Page ID #:115 PROOF OF SERVICE ~.J a N w z w 2 O U z w 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 STATE OF CALIFORNIA, COUNTY OF LOS ANGELES At the time of service, I was over 18 years of age and not a party to this action. I am employed in the County of Los Angeles, State of California. My business address is 9401 Wilshire Boulevard, Ninth Floor, Beverly Hills, CA 90212-2974. On August 30, 2016, I served true copies of the following documents) described as [PROPOSED] ORDER GRANTING DEFENDANT'S MOTION AND DISMISSING FIRST AMENDED COMPLAINT on the interested parties in this action as follows: Dylan W. Wiseman Peter H. Bales Nicole C. Moskowitz BUCHALTER NEMER 55 Second Street, Suite 1700 San Francisco, CA 94105 Tel: 415-227-0900 Fax: 415-227-0900 dwi seman@buchalter. com Attorneys for Plaintiff Venice Baking Company BY MAIL: I enclosed the documents) in a sealed envelope or package addressed to the persons at the addresses listed in the Service List and placed the envelope for collection and mailing, following our ordinary business practices. I am readily familiar with Ervin Cohen & Jessup LLP's practice for collecting and processing correspondence for mailing. On the same day that the correspondence is placed for collection and mailing, it is deposited in the ordinary course of business with the United States Postal Service, in a sealed envelope with postage fully prepaid. I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on August 30, 2016, at Beverly Hills, California. "~~s~~ Amv Russell 22 23 24 25 26 27 28 15779.12746318.1 PROOF OF SERVICE Case 2:16-cv-06136-ODW-KS Document 9-2 Filed 08/30/16 Page 3 of 3 Page ID #:116