18 - motion to dismiss - mobrez-asia
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7/29/2019 18 - Motion to Dismiss - Mobrez-Asia
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MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION
LAW OFFICE OF HARTWELL HARRISHartwell Harris (California Bar No. 241695)1809 Idaho AvenueSanta Monica, California 90403Telephone: (310) 497-8858Facsimile: (310) [email protected]
Attorney for DefendantsRAYMOND MOBREZILIANA LLANERASASIA ECONOMIC INSTITUTE, LLC
UNITED STATES DISTRICT COURT
DISTRICT OF ARIZONA
XCENTRIC VENTURES, LLC, anArizona limited liability company,
Plaintiff,
vs.
LISA JEAN BORODKIN and JOHNDOE BORODKIN, husband and wife;RAYMOND MOBREZ and ILIANA
LLANERAS, husband and wife;DANIEL BLACKERT and JANE DOEBLACKERT, husband and wife;ASIA ECONOMIC INSTITUTE, LLC,a California limited liability company;DOES 1-10, inclusive,
Defendants.
CASE NO.: CV-11-1426-PHX-GMS
DEFENDANTS MOTION TO DISMISSFOR LACK OF PERSONALJURISDICTION PURSUANT TOF.R.C.P. 12(B)2; AND A STAY OFPROCEEDINGS PENDING OUTCOMEOF THIS MOTION
(Oral Argument Requested)
[Motion to Dismiss for Improper Venue; Or Inthe Alternative to Transfer For ImproperVenue (28 USC 1406(a)); Or In theAlternative to Transfer for Convenience (28USC 1404(a)); Declarations of RaymondMobrez, Iliana Llaners, and Hartwell Harrisfiled concurrently herewith]
Defendants hereby move pursuant to Federal Rule of Civil Procedure 12(b)(2) for
dismissal for lack of personal jurisdiction over them. This motion is supported by the
following Memorandum of Points and Authorities, the declarations of Raymond Mobrez,
Iliana Llaneras, and Hartwell Harris filed and served herewith, and upon the papers,
records and pleadings on file herein. Filed concurrently herewith is a Motion to Dismiss
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MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION
for Improper Venue, in the Alternative to Transfer for Improper Venue (28 USC
1406(a)); Or In the Alternative to Transfer for Convenience (28 USC 1404(a)).
If the Court the question of venue in favor of Defendants, it will not need to assess the
question of personal jurisdiction addressed in this motion.
I. INTRODUCTIONDefendants hereby move the Court for an Order dismissing Plaintiffs Complaint
with prejudice on the grounds that the Court lacks personal jurisdiction over Defendants.
Plaintiff has not, and cannot, allege any facts to support the conclusion that Defendants,
all residents of California, are subject to jurisdiction in an Arizona forum. Plaintiff has
not and cannot plead that any of the defendants have the requisite contacts with Arizona to
allow a court in Arizona to exercise personal jurisdiction over them. Accordingly, this
Court should dismiss the Complaint pursuant to Arizonas long-arm statute, Arizona Rule
of Civil Procedure 4.2(a).
II. BACKROUNDPlaintiffs Complaint asserts abuse of process claims against Asia Economic
Institute LLC (AEI), Raymond Mobrez, and Iliana Llaneras (collectively referred to
herein as Defendants) as well as the two lawyers who represented Defendants in the
underling matter litigated in the Central District of California. (AEI v. Xcentric Ventures,
LLC, Case no. 2:10-cv-01360-SVW-PJW). The Complaint lists two tort causes of action
arising out of that litigation: Wrongful Initiation of Civil Proceedings and Wrongful
Continuation of Civil Proceedings.
A. PARTIESPlaintiff Xcentric Ventures, LLC (Xcentric) is an Arizona company based in
Arizona. (Complaint (Compl.) at 3). Plaintiff claims to operate a consumer
information and advocacy website at www.ripoffreport.com (Ripoff Report), where
consumers and other visitors to the website can post complaints regarding companies.
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MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION
(Compl. at 12). Non-party Ed Magedson is the manager of Xcentric and was a
defendant in the underlying action. (Compl. at 9).
Defendant AEI is a California limited liability company, with its principal place of
business in California. (See Declaration of Raymond Mobrez (Mobrez Decl.) at 6).
The company operated from 2000 June 2009 as a free, online, non-governmental
publication of current news and events. (Id. at 7). AEI has effectively been a defunct
entity since 2009 after false postings on Xcentrics website put it out of business. Id. AEI
was owned and operated by its principals Mobrez and Llaneras.
AEI has never conducted any business in Arizona or solicited any business in
Arizona. AEI has never done any business with the Plaintiff. AEI has no contracts with
the Plaintiff or with any Arizona companies. AEI does not own any assets in Arizona,
have any offices in Arizona, or have any agents in Arizona, and AEI does not conduct any
business in Arizona. (Id. at 8).
Defendant Raymond Mobrez is a married man and a resident of the State of
California and has been a resident of the State of California for approximately 35 years.
(Id. at 3). He has never resided in the State of Arizona. He has never owned property in
Arizona. He has never employed agents or employees in Arizona. (Id. at 5).
Defendant Iliana Llaneras is a married woman and a resident of the State of
California and has been a resident of the State of California for approximately 40 years.
(See Declaration of Iliana Llaneras (Llaneras Decl.) at 3). She has never resided in
the State of Arizona. She has never owned property in Arizona. She has never employed
agents or employees in Arizona. (Id. at 5).
B. Plaintiffs Allegations Regarding JurisdictionDefendants Mobrez and Llaneras are a married couple residing in California and
were the principals of AEI. (Complaint at 5-6) Plaintiff alleges that it is an Arizona
limited liability company. Based on these allegations and an alleged amount in
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MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION
controversy exceeding $75,000, Plaintiff asserts that this Court has subject matter
jurisdiction is over this matter.
Next, Plaintiff alleges that this Court has personal jurisdiction of Defendants in a
conclusory fashion without any specific factual allegations:
Defendants, and each of them, have knowingly, intentionallyand deliberately engaged in tortious activity directed at andwithin the State of Arizona and intentionally directed atXcentric and Xcentrics principals, officers, agents andemployees including non-party Edward Magedson(Magedson), both residents of the State of Arizona. Asmore specifically alleged herein, Defendants actions werespecifically intended to cause harm to Plaintiff within the State
of Arizona and, in fact, Defendants actions had the intendedeffect of actually causing substantial harm to Plaintiff withinthe State of Arizona. Defendants, and each of them, aretherefore properly subject to personal jurisdiction within theState of Arizona.
(Compl. at 9.) As outlined herein, none of these alleged facts, even if true, would
support this Courts exercise of jurisdiction over these Defendants. The Complaint
contains no other allegations that purport to support this Courts jurisdiction over these
Defendants. Indeed, Plaintiff cannot allege facts to establish this Courts jurisdiction over
these Defendants.
III. ARGUMENTFederal due process requires that a nonresident defendant have minimum contacts
with the forum state such that the exercise of personal jurisdiction does not offend
traditional notions of fair play and substantial justice. International Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945). To avoid dismissal, a plaintiff must make a prima
facie showing of jurisdictional facts. Lake v. Lake, 817 F.2d 1416, 1420 (9th Cir. 1987).
Plaintiff has not met its burden of showing a prima facie case of personal jurisdiction.
A federal court sitting in Arizona in a diversity proceeding applies Arizonas long-
arm statute to determine whether it has personal jurisdiction over a defendant. Ariz. R.
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Civ. P. 4(e)(2). Arizonas long-arm statute grants Arizona courts jurisdiction coextensive
with the limits of federal due process. Batton v. Tennessee Farmers Mut. Ins. Co., 736
P.2d 2, 4 (Ariz. Ct. App. 1987). Where a defendants activities within the forum state are
not so systematic or pervasive as to allow the exercise of general jurisdiction, a court may
assert specific jurisdiction, depending on the nature and quality of the defendants contact
with the forum state. Lake, 817 F.2d at 1421. Plaintiff has not alleged that any of the
Defendants have had systematic or pervasive contacts with Arizona; thus Plaintiff has not
alleged that this Court has general jurisdiction over Defendants.
A. The Complaint Should Be Dismissed Because Plaintiffs Failed to MeetTheir Burden of Proof in Establishing a Prima Facie Case for Personal
Jurisdiction.
Plaintiff has also failed to plead the necessary minimum contacts with Arizona as
to each Defendant to establish specific jurisdiction. Plaintiff has failed to allege that
defendants Llaneras and AEI have had any contacts with Arizona, so both should be
dismissed forthwith. The only contacts that Plaintiff pleads in its Complaint are attributed
to Mobrezseven telephone callscontacts that are far too attenuated to satisfy due
process.
Plaintiff seems to allege that because Defendants allegedly committed an
intentional tort with intended effects in Arizona, the Arizona district court may exercise
personal jurisdiction over them. But these contacts are too attenuated a connection to
support personal jurisdiction. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S.
286, 294 (1980); accord Wallace v. Herron, 778 F.2d 391, 395 (7th Cir. 1985) (intentional
tort of malicious prosecution allegedly committed against resident of forum state was
insufficient to establish personal jurisdiction over defendants), cert. denied, 475 U.S. 1122
(1986)).
Courts in the Ninth Circuit traditionally have applied a three-part analysis to
determine whether specific jurisdiction exists: (1) the defendant purposefully directs
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MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION
activity at the forum state or performs some act by which he or she has availed himself or
herself of the privileges of conducting activities in the forum, thus invoking the benefits or
protections of the forum states laws; (2) the claim arises out of or relates to defendants
forum-related activities; and (3) the exercise of personal jurisdiction comports with fair
play and substantial justice. Brainerd v. Governors of Univ. of Alberta, 873 F.2d 1257,
1259 (9th Cir. 1989). The plaintiff must satisfy the first two prongs of the test otherwise
personal jurisdiction is not established in the forum state. Schwarzenegger v. Fred
Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004). If plaintiff succeeds, however, the
defendant must then show the exercise of jurisdiction would be unreasonable. Id.
1. Defendants Did Not Target Arizona Nor Purposefully AvailThemselves of This Forum
When a case involves tort claims, the court uses the effects doctrine to examine
whether the defendant purposefully availed himself or herself of the jurisdiction.
Panavision Intl v. Toeppen, 141 F.3d 1316, l32l (9th Cir. l998). Under the effects
doctrine, jurisdiction may attach if the defendants conduct is aimed at or has an effect in
the forum state. Panavision, l41 F.3d at 1321;see also Ziegler, 64 F.3d at 473. Personal
jurisdiction, under the effects doctrine, can be based upon: (1) intentional actions (2)
expressly aimed at the forum state (3) causing harm, the brunt of which is suffered - and
which the defendant knows is likely to be suffered - in the forum state. Panavision, 141
F.3d at l32l;see also Core-Vent Corp. v Nobel Indus. AB, 11 F.3d 1482, 1486 (9th Cir.
l993).
Defendants did not purposefully avail themselves of Arizona. Defendants filed
their lawsuit against Xcentric in California courts and did not direct its lawsuit at Arizona.
The lawsuit focused on the harm that Xcentric and Magedson caused Mobrez, Llaneras,
and AEI in California. Moreover, Plaintiffs have not alleged what effects it felt in
Arizona, if any. Even though Plaintiffs Complaint alleges facts centered around the
conduct of Ed Magedson, any effects felt by Magedson are irrelevant because he is not
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MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION
a party to this action; plus, he likely lives in California. (See Mobrez Decl. at 10, Ex.
A).
Defendants actions that allegedly give rise to this abuse of process lawsuit arise
out of Defendants actions solely conducted in the state of California. The entire matter
was litigated in California.
2. Plaintiff Did Not and Cannot Allege Any Forum-Based ActivitiesIn addition to meeting this prong of the test, Plaintiff must also meet the second
prong of the test. If either of the prongs is not met, then no personal jurisdiction attaches
to these Defendants. In a specific jurisdiction inquiry, we consider the extent of the
defendants contacts with the forum and the degree to which the plaintiffs suit is related
to those contacts. A strong showing on one axis will permit a lesser showing on the
other. Menken v. Emm, 503 F. 3d 1050, 1058 (9th Cir. 2007). For this Court to have
specific jurisdiction over a nonresident, Plaintiffs claims must arise out of Defendants
particular activities in the forum state. Bancroft & Masters, Inc. v. Augusta Nat. Inc.,
223 F. 3d 1082, 1087 (9th Cir. 2000) (emphasis added). This requirement is satisfied if
Plaintiff would not have been harmed but for Defendants conduct in Arizona. See Rio
Props., Inc. v. Ro Intl Interlink, 284 F.3d 1007, 1017, 1021 (9th Cir. 2002). The
Complaint, however, is replete with factual allegations of Defendants conduct in
California. The Complaint alleges that Defendants decided to file suit, to perform legal
research, and to formulate a litigation strategy presumably in California where they reside.
(Compl. at 23-25.) The matter originated in Los Angeles Superior Court. (Compl. at
28) All the hearings took place in the Central District of California (Compl. at 31, 54,
61-62). Most importantly, all the declarations were made in California. Since Plaintiff
founds the bulk of its allegations on these declarations, the fact that the declarations were
executed in California dictates against personal jurisdiction. (Compl. at 32-40, 49-50).
The only conduct alleged by Plaintiff that could arguably be Arizona-related would be
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seven telephone calls from Mobrez to Arizona. (Compl. at 26). Plaintiff, however,
makes no claim that these are the contacts on which it alleges specific jurisdiction.
Finally, Plaintiffs personal jurisdiction allegations are found in 9 cited in full
above. It is axiomatic that Plaintiffs bear the burden to establish that jurisdiction exists.
But Plaintiff bore no burden at all by including boilerplate jurisdiction allegations in its
Complaint. Plaintiff cannot make a prima facie showing of jurisdiction to avoid dismissal
by resting on the bare allegations of [its] Complaint. Amba Mktg. Sys. Inc. v. Jobar
Intl, Inc., 551 F.2d 784 (9th Cir. 1977).
3. Subjecting Defendants to Jurisdiction in Arizona for CaliforniaLitigation is Unreasonable
Even if Plaintiff has met the pleadings standards of both prongs above, the
exercise of jurisdiction is reasonable if it does not offend traditional notions of fair play
and substantial justice. International Shoe, 326 U.S. at 316. The reasonableness prong
exists to protect defendants from unfairly inconvenient litigation. World-Wide
Volkswagen, 444 U.S. at 292. Courts balance seven factors to determine the
reasonableness of exercising jurisdiction: (1) the extent of the defendants purposeful
interjection into the forum states affairs; (2) the burden on the defendant of defending in
the forum; (3) the extent of conflict with the sovereignty of the defendants state; (4) the
forum states interest in adjudicating the dispute; (5) the most efficient judicial resolution
of the controversy; (6) the importance of the forum to the plaintiffs interest in convenient
and effective relief; and (7) the existence of an alternative forum. Burger King Corp. v.
Rudzewicz, 471 U.S. 462 (1985).
1. Defendants Purposeful Interjection into Arizona was De Minimis.Plaintiff has alleged no interjection into Arizona by Defendants Llaneras and AEI.
The only other purposeful interjections alleged by Plaintiff are seven phone calls to
Arizona by Mobrez. Considering how small these interjections are, this factor weighs in
favor of Defendants.
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MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION
2. Defending This Action in Arizona Would Be a Heavy Burden on Defendants.Defendants would be unfairly burdened if they are haled into court in Arizona.
Defendants are two individuals and a defunct company; the expenses of litigating in a
foreign forum would be significant. On the other hand, this type of litigation is a cost of
doing business for Xcentric. In fact, Ed Magedson brags in an email to Mobrez:
Weve spent over 3.4 million in legal fees never lost a case people know, we DO NOT RMEOVE [sic] REPORTS
You can file a rebuttal
No amount of money can change this.
Even if you were the pope,. [sic] It would not make adifference. The pope has access to a computer Im sure.
(Ex. A to Mobrez Decl.) This factor weighs in favor of Defendants.
3. Jurisdiction in an Arizona Forum Significantly Conflicts with the Sovereignty ofCalifornia.
This factor is critical for this Court to consider. Plaintiff admits in its Complaint
that it was secretly taping telephone conversations between Magedson and Mobrez:
Unbeknownst to Defendants MOBREZ and LLANERAS, all of Defendant MOBREZs
calls to the Ripoff Report website were automatically recorded by Xcentrics phone
system. (Compl. at 41). The allegations in Plaintiffs Complaint depend heavily on
these recorded conversations. These recordings, though, violate California penal law, and
such tapes are inadmissible as evidence at trial in California. Arizonas laws differ. Their
admissibility was a contentious issue in the underlying action.
Since this is a case based solely on diversity and does not include any federal
question, the laws of the forum govern the admissibility of recorded conversations.
Feldman v. Allstate Insurance Comp., 322 F.3d 660, 666-68 (9th Cir. 2003). The statute
outlawing secretly taping conversations embodies a state substantive interest in the
privacy of California citizens from exposure of their confidential conversations to third
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parties. We also note that the California Constitution expressly guarantees a right to
privacy. Id. at 667.
Furthermore, the Hon. Stephen V. Wilson stated on page 22 lines 4-10 in his
7/19/10 Order issued in the underlying case: Furthermore, even though the recordings
complied with the laws in the forum state in which the recordings were made (Arizona), if
the Court were to engage in a choice-of-law analysis between Arizona and California law,
the Court undoubtedly would apply California law, given Californias strong public
interest in protecting the confidentiality of certain communications. (Ex. D to Harris
Decl.). This factor weighs in favor of Defendants.
4. Arizona Has No Interest in Adjudicating this Dispute.Arizona has no interest in adjudicating an abuse of process lawsuit where the
alleged abuse did not occur in its jurisdiction; the underlying case occurred in California.
On the other hand, California has a substantial interest in adjudicating this dispute. First,
the underlying litigation and the alleged abuse of the system occurred in California.
Second, as described above, the admissibility of recorded conversations is at issue, and
California has substantial interest in protecting its citizens privacy rights and the state
constitution. This factor weighs in favor of Defendants.
5. Jurisdiction in California is the Most Efficient Judicial Resolution.In evaluating this factor, courts primarily focus on where the witnesses and the
evidence are located. CoreVent Corp. v. Nobel Indus. AB, 11 F.3d 1482, 1489 (9th Cir.
1993). California is a more convenient forum because all of the Defendants named in this
action are residents of California and will likely be witnesses at trial as well as deposed in
this matter. Importantly, Ed Magedson who was a defendant in the underlying action but
not a party in this action is likely a resident of California. (Ex. A to Mobrez Decl.).
Furthermore, as evidenced by the underlying action, Plaintiff has already shown that it can
easily litigate in California. Plus, it did not object to personal jurisdiction during that
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matter evidencing that litigation in California was not a substantial hardship on it. This
factor weighs in favor of Defendants.
6. The Importance of Arizona to the Plaintiffs Interest in Convenient andEffective Relief is Minor.
[I]n this circuit, the plaintiffs convenience is not of paramount importance.
Dole Food Co. Inc. v. Watts, 303 F.3d 1104, 1116 (9th Cir. 2002). Again, Plaintiff has
already shown that it can easily litigate in California. Plus, in the underlying matter, it did
not object to personal jurisdiction or move to transferevidencing that litigation in
California was not a substantial hardship on it. This factor weighs in favor of Defendants.
7. The Central District of California is the Preferred Alternative Forum.This action could have been brought and should have been brought in the Central
District of California. In fact, it is the preferred forum under federal statute. This factor is
fully explored in Defendants Motion to Dismiss for Improper Venue filed concurrently
herewith.
IV. CONCLUSIONPlaintiffs Complaint should be dismissed pursuant to Federal Rule of Civil
Procedure 12(b)(2) for lack of personal jurisdiction over all defendants.
DATE: Sept. 30, 2011 LAW OFFICES OF HARTWELL HARRIS
By /s/ Hartwell HarrisHartwell HarrisAttorney for Raymond Mobrez, Iliana Llaneras,and Asia Economic Institute, LLC.
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CERTIFICATE OF SERVICE
I hereby certify that on September 30, 2011 I electronically transmitted the attached
document to the Clerks Office using the CM/ECF System for filing, and for transmittal of
a Notice of Electronic Filing to the following:
David GringaisGingras Law Office, PLLC3941 E. Chandler Blvd., #106-243Phoenix, AZ 85048
Lisa J. BorodkinIverson, Yoakum, Papiano & Hatch
633 W. 5th Street, Suite 6400Los Angeles, CA 90071
Daniel BlackertP.O. Box 2092Los Angeles, CA 90078
And a courtesy copy of the foregoing delivered to:
HONORABLE G. MURRY SNOWUnited States District Court Sandra Day OConnor U.S. CourthouseSuite 622 401 West Washington Street, SPC80 Phoenix, AZ 85003-215
__/s/ Hartwell Harris_________
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