Preview
H Robert
Katrina
M.
R.
Bodzin,
Durek,
State
State
Bar
Bar
No.
No.
201327
289461 'FILED
BURNHAM BROWN SAN MATEO COUNTY
A Professional Law Corporation
ucr a 201a
P.O. Box 119 g
Oakland; California 94604
1901 Harrison‘Street, 14th Floor
Oakland,
\oooqaxmam‘dov
California 94612
Telephone: "(510) 444-6800
Facsimile: (510)835—6666
rbodzin@burnhambrown.com
kdurek@burnhambrown.com
Attorneys for SpeciaIIy—Appearing Defendant
DANNY FISHMAN
O .
SUPERIOR COURT 0F CALIFORNIA, coUNTY 0F SAN MATEO
r—t CIVIL DIVISION 4 SOUTHERN BRANCH
N UNLIMITED JURISDICTION
(A FRED H. GEISLER, M.D., Ph.D., an Case No. 17CIV02888
individual and NORMAN C. FLEMING, an
A individual, directly, and derivatively on SPECIALLY-APPEARING
behalf of RHAUSLER, INC. a California DEFENDANT DANNY FISHMAN’S
UI Corporation MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT OF
a Plaintiffs, MOTION TO QUASH SERVICE OF
SUMMONS AND THIRD AMENDED
\l v. COMPLAINT FOR LACK OF
-
PERSONAL JURISDICTION
co TERRY J. JOHNSTON, an individual;
KATIE SIMS, CPA, an individual;
I
NO ROBERT JOHN GLYNN, JR., an Date: November 28, 2018
individual; 3COR MEDICAL, INC;, a Time: 2 p.m.
c California Corporation; TEDAN Dept.: 2
SURGICAL INNOVATIONS, LLC, a
H Texas Limited Liability Company, and Complaint Filed: June 28, 2017
DOES 1 to 25 Second Amended Complaint Filed:
N May 29, 201 8
Defendants. Third Amended Complaint ’
Filed:
OJ September 27, 2018
And RHAUSLER, |NC., a California Trial Date: 'None Set
A Corporation,
17— CIV— 02888
UI Nominal Defendant. MPAS W
Memorandum and Authorities'm Sup;
of Points
1448624
O\ i
l
\l |
m
SPECIALLY-APPEARING DEFENDANT DANNY FISHMAN'S Case No. 17C|V02888
MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO QUASH
SERVICE OF SUMMONS AND THIRD AMENDED COMPLAINT FOR LACK
OF PERSONAL JURISDICTION
TABLE OF CONTENTS
|. INTRODUCTION 4
......................................................................................
ll. STATEMENT OF FACTS 4
........................................................................
HI. LEGAL STANDARD .
6
............................................................................ .....
IV. ARGUMENT 6
..................
...........................................................................
i
A. Mr. Fishman Lacks Minimum Contacts Sufficient to Establish
General Jurisdiction ................... ....................................................... ........
t
-
6
B. Mr. Fishman is Not Subject to Specific Jurisdiction 7
............................
1. Mr. Fishman Did'Not Purposefully Avail Himself ofthe
Benefits of California in This Case ............................................. 7
2. The Alleged Controversy Does Not Arise Out of Mr.
Fishman’s Contacts with California ............................................
8
3. Mr. Fishman’s Role in TeDan is Not a Basis to
Exercise 10
Jurisdiction ...................................................................
I
4. Mr. Johnston’s Actions Cannot be Imputed on Mr.
Fi§hman for Purposes of Jurisdiction. 11
.....................................
C: Mr. Fishman’s Prior Involvement as a Defendant in a
Dismissed Separate Lawsuit does not Create General or
Specific l2
Jurisdiction. ...............................................................................
D. Mr. Fishman’s Role as an Axcess Member DOes Not Create
General Jurisdiction ................................................................................
13
E. The New Allegations StillShow that Mr. Fishman Lacks
Minimum Contacts with California to Establish Personal
Jurisdiction 14
...............................................................................................
V. CONCLUSION 15
........................................................................................
24
25
26
27
28 2
SPECIALLY—APPEARING DEFENDANT DANNY FISHMAN’S Case No. 17C1V02888
MEMORANDUM OF POINTS AND AUTHORITIES [SO MOTION TO QUASH
SERVICE OF SUMMONS AND THIRD AMENDED COMPLAINT FOR LACK
OF PERSONAL JURISDICTION
TABLE, OF A UTHORITIES ‘
/ Page(s)
Cases
Burger King Corp. v. Rudzewicz
(1985) 471 U.S. 462 9
.............................................................................................................. 8,
Cornelison v. Chaney -
\(1978) 16.Cal.3d 143 '
9
........................................................... ............
Goehring v. Superibr Court .
(1998) 62 Cal.App.4th 894 .............. .................................................................................. 10,
_
13
Hanson v. Denckla
(1958) 357 U.S. 235 9
....................................
10
Keelon v. Hustler Magazine, Inc.
1] (1984) 465 U.S. 770 ‘.
9
..............................
...................................................................................
~
V12 Pavlovich v.Superior Court
(2002) 29 Cal.4th 262 ................................................................................................................ 7
13
Sacramento Suncreek Aparnnems, LLC, v. Cambridge Advantaged Proper/ies [1,
14 ‘
LP.
15 (2010) 187 Ca1.App.4th 1 ............... 10, 11
................................................................................
16 Shearer v. Superior Court ‘
'
(1977) 70 Cal.App. 3d 424 H
........................................................................ ..............................
17
Sher v. Johnson
18 911 F.2d 1357 12
(9th Cir. 1990) ..................................................................................
..............
_.
19
Vans Companies, Inc. v. Seabesr Foods, Inc.
(1996) 14 Cal.4th 434 6, 7, 8, 13
............................................................................
20
2.1 Wells Fargo & C0. v. Wells Fargo Express Ca,
(9th Cir.1977) 556 F.2d 406 11
....................................................................................................
.22
World- Wide Volkmlvagen Corp. v. Woodson I
'
23 (1980) 444 U.S. 286 8
............. ...............................................................................................
.....
_.
i
24
Statutes
25
CALCOde ofCiv. proc.§410.1o ............................................ 6
..........
‘26
Cal.C01p.Code§ 15009(1) (Supp.1990) 11
............................................................................
27
28 3
SPECIALLY-APPEARING DEFENDANT DANNY FISHMAN'S Case No. 17C|V02888
MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO QUASH
SERVICE OF SUMMONS AND THIRD AMENDED COMPLAINT FOR LACK
OF’ PERSONAL JURISDICTION _
I. INTRODUCTION
Defendant Danny Fishman hereby moves to quash service of Summons and
‘of
Plaintiffs’ Third Amended Complaint (“TAC”) for lack personal jurisdiction. Mr.
Fishman has insufficient contact with the State of California to permit this Court to
exercise-jurisdiction over him. Without minimum contacts, the interests of the Plaintiffs
and the state in providing a local forum do not warrant the imposition ofjurisdiction over
Mr. Fishman, an individual defendant and Texas resident. Plaintiffs cannot attribute to
‘
Mr. Fishman the alleged acts of Defendants TeDan and Mr. Johnston for purposes of
establishing jurisdiction.
10 ||.‘ STATEMENTOF FACTS
11 Defendant Danny Fishman is a managing member of TeDan Surgical
12 Innovations (hereafter “TeDan”), a Texas Limited Liability Company. (Declération of
‘13 Danny Fishman in Support of Motion to Quash Service of Summons for Lack of
14 'Personal Jurisdiction (hereafter “Fishman Decl.”) at 111.) Mr. Fishman is a resident of
Texas, where he has lived since 1999. (Decl. of Fishman at TI 2.) Mr. Fishman has a
.16 Texas driver‘s license and is registered to vote in .Texas. (Id. at ‘fl 3.) He is not a
17 resident ofVCalifornia. (Id. at fl 4.) TeDan’s principal place of business i's
in Sugar Land,
18 Texas. This is the only office where Mr. Fishman conducts business as Managing
19 Member of TeDan. (Id. at 11 5.) Mr. Fishman is a member of a California limited liability
20 corporation known as Axcess Surgical Innovations, LLC. (Id. at 1] 6.)
TeDan moved to quash thé First Amended Complaint on the basis‘that itdid not
22 have sufficient contacts with California. Judge Greenberg denied the motion and found _
23 that the Court had specific jurisdiction over TeDan, in part based on Plaintiffs"
24 allegations that TeDan, through its member Terrnyohnston, operated an office in
25 California. The Court also stated in its order that there was specific jurisdiction over
26 TeDan based on the acts of California resident Defendant Johnston, who was allegedly
27 acting on .TeDan's behalf as member and agent when he committed various acts. (A
28 4
SPECIALLY-APPEARING DEFENDANT DANNY FISHMAN’S Case N0. 17CIV02888
MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO QUASH
SERVICE OF SUMMONS AND THIRD AMENDED COMPLAINT FOR LACK
OF PERSONAL JURISDICTION
copy of the Order of Judge Greenberg denying TeDan's motion to quash is attached to
V
.
the Bodzin Declaration as Exhibit A.)
~ _
Plaintiff’s TAC was filed on September 27, 2018. The Summons and Third
Amended Complaint are attached to the Declaration of Robert M. Bodzin (“Bodzin‘
the,
Décl.”) as Exhibit B. The TAC is the fourth iteration of Plaintiffs’ complaint, and is
second time that Plaintiffs named Danny Fishman as a Defendant. Plaintiffs first named
Mr. Eishman as a Defendant in the SAC filed on May 29, 2018.
a.
'The TAC’s specific allegations against Mr. 'Fishman are that he is 34%
owner/member of TeDan which operated as a stealth business inside RHAUSLER,
10 using its business executive offices, warehouse space, employees. computers, phones
11 and Federal Express account without ever reimbursing Rhausler. (TAC at 14:12—16, ‘fl
12 20.) The TAC further alleges that Danny is part owner with Bass of‘a California
13 business named Axcess Surgical, whose business is to manufacture medical devices
14 ‘for TeDan which are sold from the San Carlos office. Plaintiffs allege that Mr. Fishman
15 has been doing business in California through Axcess Surgical Innovations since
'16 January 1312011. (TAC at 14:15—21, 1]20.) The new factual addition in the TAC is thét
17 Mr. Fishman signed a notarized statement dated Jénuaw 12, 2011, which was
18 “confirmation of the ‘common ownership' of Rhausler and TSI, and Johnston's status as
19 President of-both entities." (TAC a‘t14:26-28, TI 20.) v
‘20 Plaintiffs’ claims against Danny Fishman are Fraud, Conversion, Aiding and
Abetting, UCL, Misappropriation of Trade Secrets, and Civil Conspiracy. They allege
22
'
that Mr. Fishman and TeDan knew that Mr. Johnston was engaging in wrongful conduct
23 and that he planned to commit wrongful acts against Rhausler shareholders and Mr.
24 Geisler. Plaintiffs further allege, that Mr. Bass, Mr. Fishman, and TeDan conspired with
25 Mr. Johnston for Mr. Johnston to convert and 'misappropriate Rhausler’s money, assets,
26 and property. There are no specific allegations regarding Mr. Fishman’s direct aqtions.
27 Plaintiffs 'have not alleged any facts to support that Mr. Fishman was directly involved in
28 .
5
SPECIALLY—APPEARING DEFENDANT DANNY FISHMAN'S Case No. 17C|V02888
MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO QUASH
SERVICE OF SUMMONS AND THIRD AMENDED COMPLAINT FOR LACK
OF PERSONAL JURISDICTION
any of the alleged activities or actions serving a‘s the factual basis for the causes of
acti'on asserted in Plaintiffs’ complaint. Plaintiffs have not alleged facts to support that
Mr. Fishman had any knowledge, consent or control over the/alleged actions serving as
.
the basis for causes of action alleged in the TAC.
III. LEGAL STANDARD
California’s long—arm statute allows California courts to exercise personal
jurisdiction on nonresident. defendants on any basis not inconsistent with the
Constitution of the United States or the Constitution of California. (Cal. Code of Civ.
Proc. 410.10.) “A state court's assertion of personal jurisdiction over a nonresident
§
10 defendant who has not been served with process within the state comports with the
11 requirements of the due process clause of the federal Constitution if the defendant has
12 such minimum contacts with the state that the assertion of jurisdiction does not violate
13 ”traditional notions of fair play and substantial justice.“ [Citations.]” (Vons Companies,
14 Invc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 444—445.) “Personal jurisdiction may
be either general or specific." (/d. at 445.)
16 Once a defendant files a motion to quésh for lack of personal jurisdiction, the
17 burden is on the plaintiff to establish the requisite minimum contacts with the forum
18 state to justify the forum state exercising personal jurisdiction over the defendant.
19 (Vons Companies, /nc., supra, 14 Cal.4th at 449.) If plaintiff is able to meet their
20 burden, the burden shifts to the defendant to demonstrate that the forum state‘s
exercise ofjurisdiction would be unreasonable. I(Ibid.)
22 IV. ARGUMENT
23 A. Mr. Fishman Lacks Minimum Contacts Sufficient to Establish
General Jurisdiction
24
.
J
25 For general jurisdiction, a nonresident defendant will be subject to the jurisdiction
26 of the forum state if the defendant's contacts in the forum state are substantial,
27 continuous, and systematic. (Vons Companies, supra, 14 Cal.4th at 445.) S/ubstantial,
28 6
SPECIALLY-APPEARING DEFENDANT DANNY FISHMAN‘S Case NO. 1-7CIV02888
MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO QUASH
SERVICE OF SUMMONS AND THIRD AMENDED COMPLAINT FOR LACK
OF PERSONAL JURISDICTION
continuous, and systématic means that “a defendant’s contacts with the forum are so
wide—rafiging that they take the place of physical presence in the forum as a basis for
jurisdiction." (Id. at446.)
As outlined above, Mr. Fishman's contacts with the forum state are extremely
attenuated at best. Mr. Fishman has no contacts with California that are “so wide-
ranging that they take the place of physical presence in the'forum as a basis for
jurisdiction." (Vons Companies, supra, 14~Cal.4th at 446.) Mr. Fishman is a f'oreign
'defendant who resides in Texas. (Fishman Decl., 11 2.) As Managing Member of TeDan,
he works out of TeDan’s office in Sugar Land, Texas. (Fishman 'Declq 115.) Mr.
Fishman’s relationship with California is everything but substantial, continfious. and
basis‘to general over.
systematic. Therefore, there is no exercise jurisdiction Mr.
Fishman because he does not have sufficient contacts with the State of California.
B. Mr. Fishman is Not Subject to Specific Jurisdiction
If a defendant lacks minimum contacts with the forum state, they may still be
subject to the specific jurisdiction of the state if the defehdant has purposefully availed
himself of the benefits of the forum state and the controversy arises out of or is related
to the defendant’s contaCts‘with the forum state. (Vans Companies, /nc., supra, 14
Cal.4th at 446.) There is no evidence that Mr. Fishman purposefully availed himself of
the benefits of California, or that the Plaintiffs‘ claims arise out of his contacts with
20 California.
1. Mr. Fishman Did Not Purposefully Avail Himself of the
Benefits of California in This Case
.22
”’The purposeful availment inquiry focuses on the defendant's inten‘tionality.
23
[Citétions] This prong is only satisfied when the defendant purposefully and voluntarily
24
directs his activities toward the forum so that he should expect, by virtue of the benefit
25
he receives, to subject to the court's jurisdiction base on’ his contacts with the forum.
be
26
[Citations.]” (Pavlovich v. Superior Coufl (2002) 29 Cél.4th 262, 269.) The “purposeful
27
availment requirement ensures that a defendant will not be haled into a jurisdiction
28 7
SPECIALLY-APPEARING DEFENDANT DANNY FISHMAN’S Case N0. 17C|V02888
MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO QUASH
SERVICE OF SUMMONS AND THIRD AMENDED '
COMPLAINT FOR LACK
OF PERSONAL JURISDICTION '
solely as a result of ‘random,’ ‘fortuitous,’ or' ‘attenuated’ contacts [Citations], or of the
‘unilateral activity of another party or a third person.’ [Citations.]” (Burger King'Corp. v.
Rudzewicz (19.85) 471 U.S. 462, 475.) “When a [deferidant] ‘purposefully avails itself of
the privilege of conducting activities’within the forum State,‘ [Citations], it has clear
notice that it is subject to suit there, and can act to alleviate the risk of burdensome
litigation by procuring insurance, passing the expected costs on to customers, or, if the
risks are too great, sever-ing its connection with the State.”.(Wor/d—Wide Volkswagen
Corp. v. Woodson (1980) 444 U.S. 286, 297.) As the defendant’s contacts with the
forum state become more attenuated, the scope of thé forum state’s jurisdiction retracts
10 limiting plaintiff’s ability to compel the defendant to defend ih the forum state. (Vons
11 Companies, Inc., supra, 14 Cal.4th at 448.)
12 Mr. Fishman has intentionally directed his personal activities toward California
13 such that he should expect to be subject to California jurisdiction. Being a member of
14 TeDan, a Texas LLC, is not sufficient activity to give Mr. Fishman notice that he
personally is subject to suit in California. He does not reside in California, and does not
16 work in California. Mr. Fishman cannot be subject'to jurisdiction simply because of his
17 membership with TeDan. Plainfiffs are unable to meet their burden of establishing that
18 Mr. Fishman has purp‘osefully availed himself 0f the benefits of California.
19 2. The Alleged Controversy Does Not Arise Out of Mr.
Fishman’s Contacts with California.
20
In order for the controversy to arise out of the defendant’s contact with the forum
21
state, the causes of action alleged must arise from an act or tranéaction consummated
22
by the defendant in the forum state. (Vons Companies, Ina, supra, 14 Cal.4th'at 448.)
23
The Supreme Court of the United States has declared that “with respect to interstate
24
contractUal
'
obligations parties who ‘re‘ach out‘ beyond ”one state and create
25
continuing relationships and obligétions with Citizens of another state’ are subject to
26
regulation and sanctions in the other State for the consequences of their activities.
27
[Citations.]” (Burger King, supra, 471 U.S. at 473.)
28 4
8
SPECIALLY—APPEARING DEFENDANT DANNY FISHMAN'S Case No. 17CIVO2888
MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO QUASH
SERVICE OF SUMMONS AND THIRD AMENDED COMPLAINT FOR LACK
OF PERSONAL JURISDICTION
Commercial'activities that are carried out oh behalf of a nonresident defendant
may be ascribed to the nonresident defendant where the nonresident defendant is the
primary participant and has acted purposefully in directing those activities. (/d. at fn.
22.) The unilateral activity of a third party who it is claimed by Plaintiff has some
relationship to the nonresident defendant cannot be used to satisfy the requirement of
contact with the forum state. (See Id. at 475; see also, Hanson v. Denck/a (1958) 357
U.S. 235, 253.) “Each defendant’s contacts with the forum State must be assessed
individually." (Keaton v. Hustler Magazine, Inc. (1984) 465 U.S. 770 at fn.'13.)
“The crucial inquiry concerns the character o'f the defendant’s activity ih the
forum, whether the cause of action arises out of or has a substantial connection with
that activity, and upon the balancing of the convenience of the parties and the interests
of the state in assuming jurisdiction.” (Cornelison v3 Chaney (1978) 16 Cal.3d 143,
148.)
The SAC is absent of any activity where Mr. Fishman is fhe primarily participant
who acted purposefully. Plaintiffs do not mention in the SAC any activities directed by
Mr. Fishman. The character of Mr. Fiéhman’s alleged activity— being a member of
'TeDan and knowing of Mr. Johnston’s alleged wrongdding — is passive and peripheral
at best. Based bn the SAC, there is no alleged conduct of Mr. Fishman that would
constitute a substantial connection with the claims alleged in Plaintiffs’ SAC. None of
the causes of action alleged by Plaintiffs arise out of Mr. Fishmaa’s actions in California.
Based on Mr. Fishman‘s insufficient contacts with Plaintiffs” chosen forum, the balance
of convenience of the parties and the state's‘interest in assuming jurisdiction weighs
against assumption ofjurisdiction over Mr. Fishman. _
None of the causes of action al'leged in Plaintiffs' Second Amended Complaint
arise from Mr. Fishmanis personal activity in California. Mr. Fishman was not a primary
participant in any of the activities or actions alleged in the Second Amended Complaint
'
\
‘27 and did not direct any of the alleged activities.
28 9
SPECIALLY-APPEARING DEFENDANT DANNY FISHMAN’S Case No. 17CIV02888
MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO QUASH
SERVICE OF SUMMONS AND THlRD AMENDED COMPLAINT FOR LACK
OF PERSONAL JURISDICTION
3. Mr. Fishman’s Role in TeDan is Not a Basis to Exercise
Jurisdiction
Under California law, Mr. Fishman being a member of TeDan is not sufficient for
California to exercise jurisdiction over him. This state can only exercise jurisdiction over
Mr. Fishman if he personally has sufficient minimum contacts with California. Plaintiffs
are attempting to have this Court assume jurisdiction over Mr. Fishman through the
.
alleged individual activities of some of TeDén’s members simply because they are
members of TeDan: California law clearly holds that being a partner in a partnership
that does business in California is not sufficient for California to exercis’e jurisdiction
9 over the partner, and that California can only exercise jurisdiction over the partner ifthe
10 partner itself has sufficient minimum contacts with California.
1'1-
Goehring V. Superior Coun‘ (1998) 62 Cal.App.4th 894 has a si
Preview
H Robert Katrina M. R. Bodzin, Durek, State State Bar Bar No. No. 201327 289461 'FILED BURNHAM BROWN SAN MATEO COUNTY A Professional Law Corporation ucr a 201a P.O. Box 119 g Oakland; California 94604 1901 Harrison‘Street, 14th Floor Oakland, \oooqaxmam‘dov California 94612 Telephone: "(510) 444-6800 Facsimile: (510)835—6666 rbodzin@burnhambrown.com kdurek@burnhambrown.com Attorneys for SpeciaIIy—Appearing Defendant DANNY FISHMAN O . SUPERIOR COURT 0F CALIFORNIA, coUNTY 0F SAN MATEO r—t CIVIL DIVISION 4 SOUTHERN BRANCH N UNLIMITED JURISDICTION (A FRED H. GEISLER, M.D., Ph.D., an Case No. 17CIV02888 individual and NORMAN C. FLEMING, an A individual, directly, and derivatively on SPECIALLY-APPEARING behalf of RHAUSLER, INC. a California DEFENDANT DANNY FISHMAN’S UI Corporation MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF a Plaintiffs, MOTION TO QUASH SERVICE OF SUMMONS AND THIRD AMENDED \l v. COMPLAINT FOR LACK OF - PERSONAL JURISDICTION co TERRY J. JOHNSTON, an individual; KATIE SIMS, CPA, an individual; I NO ROBERT JOHN GLYNN, JR., an Date: November 28, 2018 individual; 3COR MEDICAL, INC;, a Time: 2 p.m. c California Corporation; TEDAN Dept.: 2 SURGICAL INNOVATIONS, LLC, a H Texas Limited Liability Company, and Complaint Filed: June 28, 2017 DOES 1 to 25 Second Amended Complaint Filed: N May 29, 201 8 Defendants. Third Amended Complaint ’ Filed: OJ September 27, 2018 And RHAUSLER, |NC., a California Trial Date: 'None Set A Corporation, 17— CIV— 02888 UI Nominal Defendant. MPAS W Memorandum and Authorities'm Sup; of Points 1448624 O\ i l \l | m SPECIALLY-APPEARING DEFENDANT DANNY FISHMAN'S Case No. 17C|V02888 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO QUASH SERVICE OF SUMMONS AND THIRD AMENDED COMPLAINT FOR LACK OF PERSONAL JURISDICTION TABLE OF CONTENTS |. INTRODUCTION 4 ...................................................................................... ll. STATEMENT OF FACTS 4 ........................................................................ HI. LEGAL STANDARD . 6 ............................................................................ ..... IV. ARGUMENT 6 .................. ........................................................................... i A. Mr. Fishman Lacks Minimum Contacts Sufficient to Establish General Jurisdiction ................... ....................................................... ........ t - 6 B. Mr. Fishman is Not Subject to Specific Jurisdiction 7 ............................ 1. Mr. Fishman Did'Not Purposefully Avail Himself ofthe Benefits of California in This Case ............................................. 7 2. The Alleged Controversy Does Not Arise Out of Mr. Fishman’s Contacts with California ............................................ 8 3. Mr. Fishman’s Role in TeDan is Not a Basis to Exercise 10 Jurisdiction ................................................................... I 4. Mr. Johnston’s Actions Cannot be Imputed on Mr. Fi§hman for Purposes of Jurisdiction. 11 ..................................... C: Mr. Fishman’s Prior Involvement as a Defendant in a Dismissed Separate Lawsuit does not Create General or Specific l2 Jurisdiction. ............................................................................... D. Mr. Fishman’s Role as an Axcess Member DOes Not Create General Jurisdiction ................................................................................ 13 E. The New Allegations StillShow that Mr. Fishman Lacks Minimum Contacts with California to Establish Personal Jurisdiction 14 ............................................................................................... V. CONCLUSION 15 ........................................................................................ 24 25 26 27 28 2 SPECIALLY—APPEARING DEFENDANT DANNY FISHMAN’S Case No. 17C1V02888 MEMORANDUM OF POINTS AND AUTHORITIES [SO MOTION TO QUASH SERVICE OF SUMMONS AND THIRD AMENDED COMPLAINT FOR LACK OF PERSONAL JURISDICTION TABLE, OF A UTHORITIES ‘ / Page(s) Cases Burger King Corp. v. Rudzewicz (1985) 471 U.S. 462 9 .............................................................................................................. 8, Cornelison v. Chaney - \(1978) 16.Cal.3d 143 ' 9 ........................................................... ............ Goehring v. Superibr Court . (1998) 62 Cal.App.4th 894 .............. .................................................................................. 10, _ 13 Hanson v. Denckla (1958) 357 U.S. 235 9 .................................... 10 Keelon v. Hustler Magazine, Inc. 1] (1984) 465 U.S. 770 ‘. 9 .............................. ................................................................................... ~ V12 Pavlovich v.Superior Court (2002) 29 Cal.4th 262 ................................................................................................................ 7 13 Sacramento Suncreek Aparnnems, LLC, v. Cambridge Advantaged Proper/ies [1, 14 ‘ LP. 15 (2010) 187 Ca1.App.4th 1 ............... 10, 11 ................................................................................ 16 Shearer v. Superior Court ‘ ' (1977) 70 Cal.App. 3d 424 H ........................................................................ .............................. 17 Sher v. Johnson 18 911 F.2d 1357 12 (9th Cir. 1990) .................................................................................. .............. _. 19 Vans Companies, Inc. v. Seabesr Foods, Inc. (1996) 14 Cal.4th 434 6, 7, 8, 13 ............................................................................ 20 2.1 Wells Fargo & C0. v. Wells Fargo Express Ca, (9th Cir.1977) 556 F.2d 406 11 .................................................................................................... .22 World- Wide Volkmlvagen Corp. v. Woodson I ' 23 (1980) 444 U.S. 286 8 ............. ............................................................................................... ..... _. i 24 Statutes 25 CALCOde ofCiv. proc.§410.1o ............................................ 6 .......... ‘26 Cal.C01p.Code§ 15009(1) (Supp.1990) 11 ............................................................................ 27 28 3 SPECIALLY-APPEARING DEFENDANT DANNY FISHMAN'S Case No. 17C|V02888 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO QUASH SERVICE OF SUMMONS AND THIRD AMENDED COMPLAINT FOR LACK OF’ PERSONAL JURISDICTION _ I. INTRODUCTION Defendant Danny Fishman hereby moves to quash service of Summons and ‘of Plaintiffs’ Third Amended Complaint (“TAC”) for lack personal jurisdiction. Mr. Fishman has insufficient contact with the State of California to permit this Court to exercise-jurisdiction over him. Without minimum contacts, the interests of the Plaintiffs and the state in providing a local forum do not warrant the imposition ofjurisdiction over Mr. Fishman, an individual defendant and Texas resident. Plaintiffs cannot attribute to ‘ Mr. Fishman the alleged acts of Defendants TeDan and Mr. Johnston for purposes of establishing jurisdiction. 10 ||.‘ STATEMENTOF FACTS 11 Defendant Danny Fishman is a managing member of TeDan Surgical 12 Innovations (hereafter “TeDan”), a Texas Limited Liability Company. (Declération of ‘13 Danny Fishman in Support of Motion to Quash Service of Summons for Lack of 14 'Personal Jurisdiction (hereafter “Fishman Decl.”) at 111.) Mr. Fishman is a resident of Texas, where he has lived since 1999. (Decl. of Fishman at TI 2.) Mr. Fishman has a .16 Texas driver‘s license and is registered to vote in .Texas. (Id. at ‘fl 3.) He is not a 17 resident ofVCalifornia. (Id. at fl 4.) TeDan’s principal place of business i's in Sugar Land, 18 Texas. This is the only office where Mr. Fishman conducts business as Managing 19 Member of TeDan. (Id. at 11 5.) Mr. Fishman is a member of a California limited liability 20 corporation known as Axcess Surgical Innovations, LLC. (Id. at 1] 6.) TeDan moved to quash thé First Amended Complaint on the basis‘that itdid not 22 have sufficient contacts with California. Judge Greenberg denied the motion and found _ 23 that the Court had specific jurisdiction over TeDan, in part based on Plaintiffs" 24 allegations that TeDan, through its member Terrnyohnston, operated an office in 25 California. The Court also stated in its order that there was specific jurisdiction over 26 TeDan based on the acts of California resident Defendant Johnston, who was allegedly 27 acting on .TeDan's behalf as member and agent when he committed various acts. (A 28 4 SPECIALLY-APPEARING DEFENDANT DANNY FISHMAN’S Case N0. 17CIV02888 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO QUASH SERVICE OF SUMMONS AND THIRD AMENDED COMPLAINT FOR LACK OF PERSONAL JURISDICTION copy of the Order of Judge Greenberg denying TeDan's motion to quash is attached to V . the Bodzin Declaration as Exhibit A.) ~ _ Plaintiff’s TAC was filed on September 27, 2018. The Summons and Third Amended Complaint are attached to the Declaration of Robert M. Bodzin (“Bodzin‘ the, Décl.”) as Exhibit B. The TAC is the fourth iteration of Plaintiffs’ complaint, and is second time that Plaintiffs named Danny Fishman as a Defendant. Plaintiffs first named Mr. Eishman as a Defendant in the SAC filed on May 29, 2018. a. 'The TAC’s specific allegations against Mr. 'Fishman are that he is 34% owner/member of TeDan which operated as a stealth business inside RHAUSLER, 10 using its business executive offices, warehouse space, employees. computers, phones 11 and Federal Express account without ever reimbursing Rhausler. (TAC at 14:12—16, ‘fl 12 20.) The TAC further alleges that Danny is part owner with Bass of‘a California 13 business named Axcess Surgical, whose business is to manufacture medical devices 14 ‘for TeDan which are sold from the San Carlos office. Plaintiffs allege that Mr. Fishman 15 has been doing business in California through Axcess Surgical Innovations since '16 January 1312011. (TAC at 14:15—21, 1]20.) The new factual addition in the TAC is thét 17 Mr. Fishman signed a notarized statement dated Jénuaw 12, 2011, which was 18 “confirmation of the ‘common ownership' of Rhausler and TSI, and Johnston's status as 19 President of-both entities." (TAC a‘t14:26-28, TI 20.) v ‘20 Plaintiffs’ claims against Danny Fishman are Fraud, Conversion, Aiding and Abetting, UCL, Misappropriation of Trade Secrets, and Civil Conspiracy. They allege 22 ' that Mr. Fishman and TeDan knew that Mr. Johnston was engaging in wrongful conduct 23 and that he planned to commit wrongful acts against Rhausler shareholders and Mr. 24 Geisler. Plaintiffs further allege, that Mr. Bass, Mr. Fishman, and TeDan conspired with 25 Mr. Johnston for Mr. Johnston to convert and 'misappropriate Rhausler’s money, assets, 26 and property. There are no specific allegations regarding Mr. Fishman’s direct aqtions. 27 Plaintiffs 'have not alleged any facts to support that Mr. Fishman was directly involved in 28 . 5 SPECIALLY—APPEARING DEFENDANT DANNY FISHMAN'S Case No. 17C|V02888 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO QUASH SERVICE OF SUMMONS AND THIRD AMENDED COMPLAINT FOR LACK OF PERSONAL JURISDICTION any of the alleged activities or actions serving a‘s the factual basis for the causes of acti'on asserted in Plaintiffs’ complaint. Plaintiffs have not alleged facts to support that Mr. Fishman had any knowledge, consent or control over the/alleged actions serving as . the basis for causes of action alleged in the TAC. III. LEGAL STANDARD California’s long—arm statute allows California courts to exercise personal jurisdiction on nonresident. defendants on any basis not inconsistent with the Constitution of the United States or the Constitution of California. (Cal. Code of Civ. Proc. 410.10.) “A state court's assertion of personal jurisdiction over a nonresident § 10 defendant who has not been served with process within the state comports with the 11 requirements of the due process clause of the federal Constitution if the defendant has 12 such minimum contacts with the state that the assertion of jurisdiction does not violate 13 ”traditional notions of fair play and substantial justice.“ [Citations.]” (Vons Companies, 14 Invc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 444—445.) “Personal jurisdiction may be either general or specific." (/d. at 445.) 16 Once a defendant files a motion to quésh for lack of personal jurisdiction, the 17 burden is on the plaintiff to establish the requisite minimum contacts with the forum 18 state to justify the forum state exercising personal jurisdiction over the defendant. 19 (Vons Companies, /nc., supra, 14 Cal.4th at 449.) If plaintiff is able to meet their 20 burden, the burden shifts to the defendant to demonstrate that the forum state‘s exercise ofjurisdiction would be unreasonable. I(Ibid.) 22 IV. ARGUMENT 23 A. Mr. Fishman Lacks Minimum Contacts Sufficient to Establish General Jurisdiction 24 . J 25 For general jurisdiction, a nonresident defendant will be subject to the jurisdiction 26 of the forum state if the defendant's contacts in the forum state are substantial, 27 continuous, and systematic. (Vons Companies, supra, 14 Cal.4th at 445.) S/ubstantial, 28 6 SPECIALLY-APPEARING DEFENDANT DANNY FISHMAN‘S Case NO. 1-7CIV02888 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO QUASH SERVICE OF SUMMONS AND THIRD AMENDED COMPLAINT FOR LACK OF PERSONAL JURISDICTION continuous, and systématic means that “a defendant’s contacts with the forum are so wide—rafiging that they take the place of physical presence in the forum as a basis for jurisdiction." (Id. at446.) As outlined above, Mr. Fishman's contacts with the forum state are extremely attenuated at best. Mr. Fishman has no contacts with California that are “so wide- ranging that they take the place of physical presence in the'forum as a basis for jurisdiction." (Vons Companies, supra, 14~Cal.4th at 446.) Mr. Fishman is a f'oreign 'defendant who resides in Texas. (Fishman Decl., 11 2.) As Managing Member of TeDan, he works out of TeDan’s office in Sugar Land, Texas. (Fishman 'Declq 115.) Mr. Fishman’s relationship with California is everything but substantial, continfious. and basis‘to general over. systematic. Therefore, there is no exercise jurisdiction Mr. Fishman because he does not have sufficient contacts with the State of California. B. Mr. Fishman is Not Subject to Specific Jurisdiction If a defendant lacks minimum contacts with the forum state, they may still be subject to the specific jurisdiction of the state if the defehdant has purposefully availed himself of the benefits of the forum state and the controversy arises out of or is related to the defendant’s contaCts‘with the forum state. (Vans Companies, /nc., supra, 14 Cal.4th at 446.) There is no evidence that Mr. Fishman purposefully availed himself of the benefits of California, or that the Plaintiffs‘ claims arise out of his contacts with 20 California. 1. Mr. Fishman Did Not Purposefully Avail Himself of the Benefits of California in This Case .22 ”’The purposeful availment inquiry focuses on the defendant's inten‘tionality. 23 [Citétions] This prong is only satisfied when the defendant purposefully and voluntarily 24 directs his activities toward the forum so that he should expect, by virtue of the benefit 25 he receives, to subject to the court's jurisdiction base on’ his contacts with the forum. be 26 [Citations.]” (Pavlovich v. Superior Coufl (2002) 29 Cél.4th 262, 269.) The “purposeful 27 availment requirement ensures that a defendant will not be haled into a jurisdiction 28 7 SPECIALLY-APPEARING DEFENDANT DANNY FISHMAN’S Case N0. 17C|V02888 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO QUASH SERVICE OF SUMMONS AND THIRD AMENDED ' COMPLAINT FOR LACK OF PERSONAL JURISDICTION ' solely as a result of ‘random,’ ‘fortuitous,’ or' ‘attenuated’ contacts [Citations], or of the ‘unilateral activity of another party or a third person.’ [Citations.]” (Burger King'Corp. v. Rudzewicz (19.85) 471 U.S. 462, 475.) “When a [deferidant] ‘purposefully avails itself of the privilege of conducting activities’within the forum State,‘ [Citations], it has clear notice that it is subject to suit there, and can act to alleviate the risk of burdensome litigation by procuring insurance, passing the expected costs on to customers, or, if the risks are too great, sever-ing its connection with the State.”.(Wor/d—Wide Volkswagen Corp. v. Woodson (1980) 444 U.S. 286, 297.) As the defendant’s contacts with the forum state become more attenuated, the scope of thé forum state’s jurisdiction retracts 10 limiting plaintiff’s ability to compel the defendant to defend ih the forum state. (Vons 11 Companies, Inc., supra, 14 Cal.4th at 448.) 12 Mr. Fishman has intentionally directed his personal activities toward California 13 such that he should expect to be subject to California jurisdiction. Being a member of 14 TeDan, a Texas LLC, is not sufficient activity to give Mr. Fishman notice that he personally is subject to suit in California. He does not reside in California, and does not 16 work in California. Mr. Fishman cannot be subject'to jurisdiction simply because of his 17 membership with TeDan. Plainfiffs are unable to meet their burden of establishing that 18 Mr. Fishman has purp‘osefully availed himself 0f the benefits of California. 19 2. The Alleged Controversy Does Not Arise Out of Mr. Fishman’s Contacts with California. 20 In order for the controversy to arise out of the defendant’s contact with the forum 21 state, the causes of action alleged must arise from an act or tranéaction consummated 22 by the defendant in the forum state. (Vons Companies, Ina, supra, 14 Cal.4th'at 448.) 23 The Supreme Court of the United States has declared that “with respect to interstate 24 contractUal ' obligations parties who ‘re‘ach out‘ beyond ”one state and create 25 continuing relationships and obligétions with Citizens of another state’ are subject to 26 regulation and sanctions in the other State for the consequences of their activities. 27 [Citations.]” (Burger King, supra, 471 U.S. at 473.) 28 4 8 SPECIALLY—APPEARING DEFENDANT DANNY FISHMAN'S Case No. 17CIVO2888 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO QUASH SERVICE OF SUMMONS AND THIRD AMENDED COMPLAINT FOR LACK OF PERSONAL JURISDICTION Commercial'activities that are carried out oh behalf of a nonresident defendant may be ascribed to the nonresident defendant where the nonresident defendant is the primary participant and has acted purposefully in directing those activities. (/d. at fn. 22.) The unilateral activity of a third party who it is claimed by Plaintiff has some relationship to the nonresident defendant cannot be used to satisfy the requirement of contact with the forum state. (See Id. at 475; see also, Hanson v. Denck/a (1958) 357 U.S. 235, 253.) “Each defendant’s contacts with the forum State must be assessed individually." (Keaton v. Hustler Magazine, Inc. (1984) 465 U.S. 770 at fn.'13.) “The crucial inquiry concerns the character o'f the defendant’s activity ih the forum, whether the cause of action arises out of or has a substantial connection with that activity, and upon the balancing of the convenience of the parties and the interests of the state in assuming jurisdiction.” (Cornelison v3 Chaney (1978) 16 Cal.3d 143, 148.) The SAC is absent of any activity where Mr. Fishman is fhe primarily participant who acted purposefully. Plaintiffs do not mention in the SAC any activities directed by Mr. Fishman. The character of Mr. Fiéhman’s alleged activity— being a member of 'TeDan and knowing of Mr. Johnston’s alleged wrongdding — is passive and peripheral at best. Based bn the SAC, there is no alleged conduct of Mr. Fishman that would constitute a substantial connection with the claims alleged in Plaintiffs’ SAC. None of the causes of action alleged by Plaintiffs arise out of Mr. Fishmaa’s actions in California. Based on Mr. Fishman‘s insufficient contacts with Plaintiffs” chosen forum, the balance of convenience of the parties and the state's‘interest in assuming jurisdiction weighs against assumption ofjurisdiction over Mr. Fishman. _ None of the causes of action al'leged in Plaintiffs' Second Amended Complaint arise from Mr. Fishmanis personal activity in California. Mr. Fishman was not a primary participant in any of the activities or actions alleged in the Second Amended Complaint ' \ ‘27 and did not direct any of the alleged activities. 28 9 SPECIALLY-APPEARING DEFENDANT DANNY FISHMAN’S Case No. 17CIV02888 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO QUASH SERVICE OF SUMMONS AND THlRD AMENDED COMPLAINT FOR LACK OF PERSONAL JURISDICTION 3. Mr. Fishman’s Role in TeDan is Not a Basis to Exercise Jurisdiction Under California law, Mr. Fishman being a member of TeDan is not sufficient for California to exercise jurisdiction over him. This state can only exercise jurisdiction over Mr. Fishman if he personally has sufficient minimum contacts with California. Plaintiffs are attempting to have this Court assume jurisdiction over Mr. Fishman through the . alleged individual activities of some of TeDén’s members simply because they are members of TeDan: California law clearly holds that being a partner in a partnership that does business in California is not sufficient for California to exercis’e jurisdiction 9 over the partner, and that California can only exercise jurisdiction over the partner ifthe 10 partner itself has sufficient minimum contacts with California. 1'1- Goehring V. Superior Coun‘ (1998) 62 Cal.App.4th 894 has a si