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Bralich v. Sullivan

United States District Court, D. Hawaii

April 23, 2018



          Alan C. Kay, Sr. United States District Judge.

         For the reasons set forth below, the Court GRANTS Defendants Stanford University and Nuance Communications' Motions to Dismiss, ECF Nos. 12, 15. Both Stanford and Nuance are DISMISSED WITH PREJUDICE for lack of personal jurisdiction, subject to discovery showing that Stanford or Nuance committed acts which would establish either general or specific personal jurisdiction consistent with the Court's discussion of personal jurisdiction in this Order. If the Court had personal jurisdiction over them, it would be inclined to dismiss the RICO, fraud, and conspiracy claims against Stanford and Nuance, as it does not appear Plaintiff has a factual basis for plausibly stating such claims against them at this time.


         This case has an extensive factual and procedural background, with which the Court and the parties are all familiar. The Court incorporates the factual and procedural background sections of its prior Order from April 10, 2018 addressing the motions and joinder by Defendants, Craig Weissman, Chris Fry, and Microsoft, ECF No. 134, (“Salesforce Order”), and declines to repeat those sections here except as relevant.

         Plaintiff alleges that Defendants Stanford University (“Stanford”) and Nuance Communications, Inc. (“Nuance”) were both “named as participants in the theft, conspiracy, conversion, chain of misappropriation, and fraud by Sullivan.” Third Am. Compl. ¶¶ 12, 62, 191, ECF No. 1-5 (“TAC”). The apparent basis of these allegations is Exhibit L to the Third Amended Complaint, a print-out of a company profile for Thrownet, as of an unknown date. See TAC ¶ 191 & Ex. L. The Court notes that in quoting this exhibit in another allegation, Plaintiff does not mention Stanford or Nuance. See id. ¶ 103. Nuance also allegedly participated in an international virtual reality conference in 1998 where Plaintiff won first prize for “Best Innovation.” Id. ¶ 72

         Stanford and Nuance both filed motions to dismiss, which were reinstated in the instant case. See ECF Nos. 8, 12 (“Stanford Mot.”), 15 (“Nuance Mot.”). Plaintiff's previously filed responses were also reinstated in this case. See ECF Nos. 8, 20 (“Opp. to Stanford”), 21 (“Opp. to Nuance”). Plaintiff also filed a “Further Response and Further Evidence to Counter Initial Motions, ” ECF No. 92 (“Pl. Supp. Resp.”), which this Court has declined to strike. See Salesforce Order at 8 n.4. Replies were filed on April 9, 2018. ECF Nos. 131 (“Stanford Reply”), 133 (“Nuance Reply”).[1]

         The Court held a hearing on Stanford and Nuance's Motions on April 23, 2018.


         Federal Rule of Civil Procedure 12(b)(6) authorizes the Court to dismiss a complaint that fails “to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). Rule 12(b)(6) is read in conjunction with Rule 8(a), which requires only “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). The Court may dismiss a complaint either because it lacks a cognizable legal theory or because it lacks sufficient factual allegations to support a cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988).

         In resolving a Rule 12(b)(6) motion, the Court must construe the complaint in the light most favorable to the plaintiff and accept all well-pleaded factual allegations as true. Sateriale v. R.J. Reynolds Tobacco Co., 697 F.3d 777, 783 (9th Cir. 2012). The complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “The plausibility standard . . . asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. “Where a complaint pleads facts that are ‘merely consistent with' a defendant's liability, it ‘stops short of the line between possibility and plausibility of entitlement to relief.'” Id. (quoting Twombly, 550 U.S. at 557).

         Pro se pleadings and briefs are to be construed liberally. Balistreri, 901 F.2d at 699. However, “a pro se litigant is not excused from knowing the most basic pleading requirements.” Am. Ass'n of Naturopathic Physicians v. Hayhurst, 227 F.3d 1104, 1107 (9th Cir. 2000). Before a district court may dismiss a pro se complaint the court must provide the pro se litigant “with notice of the deficiencies in his complaint in order to ensure that the litigant uses the opportunity to amend effectively.” Akhtar v. Mesa, 698 F.3d 1202, 1212 (9th Cir. 2012) (citation omitted). However, the court may deny a pro se litigant leave to amend where amendment would be futile. Flowers v. First Hawaiian Bank, 295 F.3d 966, 976 (9th Cir. 2002) (citation omitted).


         Both Stanford and Nuance raise the issue of whether Plaintiff has established personal jurisdiction over them, as well as whether Plaintiff has stated claims for RICO, conspiracy, and fraud. See generally Stanford Mot.; Nuance Mot. Nuance also contests Plaintiff's ability to bring a patent infringement claim. Nuance Mot. at 5. The Court has already addressed the arguments Nuance raises regarding the recoverability of patent damages and Plaintiff's standing for a patent claim in its prior Order and dismissed Plaintiff's patent infringement claims with prejudice. See Salesforce Order at 18-31. The Court declines to repeat its discussion here and will only briefly address Nuance's suggestion that because Plaintiff has no standing for a patent infringement claim, he also “has no standing to assert claims sounding in fraud, conspiracy, conversion, and/or chain of misappropriation resulting from the alleged patent infringement.” Nuance Mot. at 5.

         First, to the extent that these claims belong to Ergo, rather than Plaintiff, Ergo currently lacks capacity to bring suit. See Salesforce Order at 31. In addition, the Court has not determined whether Plaintiff would have standing for a patent infringement claim, but even if it had, such a conclusion would not necessarily be dispositive of standing for the other claims. Standing is analyzed on a claim by claim basis. See California ex rel. Imperial Cty. Air Pollution Control Dist. v. U.S. Dep't of the Interior, 767 F.3d 781, 789 (9th Cir. 2014) (citing Lewis v. Casey, 518 U.S. 343, 358 n.6 (1996)). If Plaintiff's theory of standing and injury for patent infringement and the other claims was similar, the same determination might result. However, even if Plaintiff has to substantively show patent infringement occurred in order to prove his other claims, his standing for fraud, conversion, misappropriation or conspiracy claims is not necessarily controlled by or dependent on having standing for patent infringement, especially if his claimed injury is different. Nuance's unsupported and unexplained assertion that Plaintiff lacks standing for any claim “resulting from an alleged patent infringement, ” Nuance Mot. at 5, does not provide a sufficient basis for the Court to conclude that this is the case. Thus, to the extent that Nuance is seeking to dismiss these other claims for lack of standing, the Court DENIES Nuance's Motion.

         The Court will next turn to the issue of personal jurisdiction before briefly addressing Nuance and Salesforce's arguments about particular claims.

         1. Personal Jurisdiction[2]

         “Where a defendant moves to dismiss a complaint for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating that jurisdiction is appropriate.” Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004)). “Where, as here, the motion is based on written materials rather than an evidentiary hearing, the plaintiff need only make a prima facie showing of jurisdictional facts.” Id. (internal citation and quotation omitted).

         “Federal courts apply state law to determine the bounds of their jurisdiction over a party.” Williams v. Yamaha Motor Co., 851 F.3d 1015, 1020 (9th Cir. 2017) (citing Fed.R.Civ.P. 4(k)(1)(A)).[3] Hawaii's long-arm statute allows service on a defendant to the full extent permissible by the Due Process Clause of the Fourteenth Amendment of the U.S. Constitution. Kowalski v. Anova Food, LLC, Civ. No. 11-00795 HG-RLP, 2012 WL 3308884, at *3 (D. Haw. Aug. 10, 2012) (citing Haw. Rev. Stat. (“HRS”) § 634-35 and Cisneros v. Trans Union, LLC, 293 F.Supp.2d 1156, 1164 (D. Haw. 2003)). As such, this Court need only decide whether federal constitutional due process permits the exercise of personal jurisdiction over Defendants.[4] See Schwarzenegger, 374 F.3d at 800-01. “A court's exercise of personal jurisdiction over a nonresident defendant may be either general or specific.” Doe v. Am. Nat'l Red Cross, 112 F.3d 1048, 1050 (9th Cir. 1997). “Each defendant's contacts with the forum State must be assessed individually.” Calder v. Jones, 465 U.S. 783, 790 (1984).

         A. Consent to Personal Jurisdiction

         In his Opposition to Nuance's Motion, Plaintiff makes several arguments which he suggests show that Nuance, as well as the other corporate and institutional defendants, have consented to personal jurisdiction in Hawaii. See generally Opp. to Nuance at 8-14.

         Plaintiff first states that aside from Microsoft who entered a special appearance, the other non-resident defendants waived their right to object to personal jurisdiction by entering general appearances. Id. at 9. However, the distinction between special and general appearances has been eliminated; Rule 12 makes no reference to either and instead makes clear that no defense is waived by joining it with any other defense. See 5B Wright & Miller, Fed. Prac. & Proc. Civ. § 1344 (3d ed.); see also Romero v. Star Markets, Ltd., 82 Haw. 405, 415, 922 P.2d 1018, 1028 (Haw. Ct. App. 1996) (holding that the distinction between special and general appearances has also been eliminated in the Hawaii rules such that a party need not make a special appearance to assert lack of personal jurisdiction). Rather, only a party who fails to dispute personal jurisdiction in making a general appearance or responsive pleading will waive such defense. See Benny v. Pipes, 799 F.2d 489, 492 (9th Cir. 1986), amended, 807 F.2d 1514 (9th Cir. 1987) (“A general appearance or responsive pleading by a defendant that fails to dispute personal jurisdiction will waive any defect in service or personal jurisdiction.” (citing Fed.R.Civ.P. 12(h)(1))). Because both Stanford and Nuance have asserted the lack of personal jurisdiction in their motions to dismiss, Stanford Mot. at 7-14; Nuance Mot. at 4, they have not waived the defense of personal jurisdiction despite making general appearances.

         Plaintiff next seems to suggest that by registering to do business in Hawaii, the corporate defendants may have consented to jurisdiction through the designation of an agent for service of process and/or through a possible written consent to jurisdiction. See Opp. to Nuance at 13. The Ninth Circuit has suggested that “[i]t is an open question whether...a state may require a corporation to consent to general jurisdiction as a condition of registering to do business in the state.” See AM Trust v. UBS AG, 681 Fed.Appx. 587, 588-89 (9th Cir. 2017). However, Plaintiff has pointed to no Hawaii statute, nor has the Court been able to locate one, requiring such consent as a condition of registering to do business in Hawaii. Indeed, Hawaii specifically provides that “[t]he appointment or maintenance of a registered agent in the State does not by itself create the basis for personal jurisdiction over the ...

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