United States District Court, D. Hawaii
PACIFIC HELICOPTER TOURS, INC., a Hawaii limited Liability company, Plaintiff,
DRAGONFLY AVIATION, LLC, a Texas limited liability company, Defendant.
ORDER GRANTING DRAGONFLY AVIATION, LLC'S MOTION
C. KAY, SR. UNITED STATES DISTRICT JUDGE
reasons set forth below, the Court GRANTS Defendant Dragonfly
Aviation, LLC's Motion to Dismiss, ECF No. 5.
case arises out of a dispute over a lease agreement between
Pacific Helicopter Tours, Inc. (“Pacific
Helicopter”) and Dragonfly Aviation, LLC
(“Dragonfly”). Each party alleges that the other
breached the terms of the lease agreement. Pacific Helicopter
seeks to compel arbitration in Hawai‘i, while Dragonfly
contends that the Hawai‘i case must be dismissed for
procedural and jurisdictional defects or because it fails to
state a claim. Alternatively, Dragonfly asks this Court to
transfer venue to Texas, where a parallel lawsuit is pending.
The Lease Agreement
dispute arose soon after the parties entered into a lease
agreement (the ”Lease”),  whereby Dragonfly, a Texas
limited liability company, agreed to lease a McDonnel-Douglas
MD500D helicopter to Pacific Helicopter, a Hawai‘i
limited liability company. Respondent's Notice of Removal
of Action (“Removal Notice”), ECF No. 1,
¶¶ 6-9; Petition and Motion To Compel Arbitration
(“Petition”), ECF No. 1-1, PageID#: 7. The Lease,
executed in June 2017, provides for a 24-month term and sets
forth the mutual obligations of each party during the lease
period. See Mot. Dismiss at 3; Opp. Br. at 4. The
Lease was to take effect one month after the helicopter
reached Pacific Helicopter's “Hanger 109.”
Opp. Br. at 4 (citing the Lease).
Lease contains Texas choice of law provisions, Lease
§§ 22.5, 30.1, as well as a clause providing that
disputes over repairs to the helicopter that are due to the
fault or negligence of Pacific Helicopters are subject to
7.2 The LESSEE shall: . . .
7.2.2 Repair, at the expense of the LESSEE, the damages
caused by the fault or negligence of the LESSEE, however, if
the time life of the component to be repaired changes due to
repair, the cost of such repair or overhaul will be prorated
and subject to LESSOR Lease obligations. Any betterment on
components time or overhaul life will be at the expense
(subject to prior approval) of the LESSOR. In case of
dispute, a mutually agreeable third-party arbitrator will
determine applicable fault or negligence or shared fault or
§ 7.2.2 (emphasis added).
The Arbitration Demand and Lawsuits
Helicopter alleges that, after delivery of the helicopter, it
discovered that Dragonfly was in breach of the terms and
conditions of the Lease. See generally Petition.
Invoking Section 7.2.2, Pacific Helicopter sought to
arbitrate these disputes with Dragonfly. Id. Pacific
Helicopter contacted Dispute Resolution & Prevention,
Inc. (“DPR”) and sent an arbitration demand to
Dragonfly on November 9, 2018. Petition at PageID#: 6-7;
see also Arbitration Demand, ECF No. 1-1 at PageID#:
13-15. Dragonfly allegedly “repudiated [Pacific
Helicopter's] Arbitration Demand and refuses to designate
an arbitrator.” Petition at PageID#: 7.
response, on January 14, 2019, Pacific Helicopter filed the
instant lawsuit in Hawai‘i state court (the
“Hawaii Lawsuit”) seeking an order compelling
Dragonfly to arbitration pursuant to the earlier arbitration
demand. Petition at PageID#: 6. Dragonfly-apparently unaware
of the pending Hawai‘i litigation-filed a separate
lawsuit in a Texas state court (the “Texas
Lawsuit”) on April 19, 2019, alleging that
Pacific Helicopter had breached several other provisions of
the Lease. Mot. Dismiss 5; see also
Ex. B to Mot. Dismiss, ECF No. 5-5 (Texas amended
petition). Pacific Helicopter was served with
the Texas Lawsuit on May 9, 2019. Mot. Dismiss 5 (citing Ex.
D, ECF No. 5-7).
13, 2019, Pacific Helicopter faxed and emailed a copy of the
Petition in the Hawaii Lawsuit to Dragonfly's attorney
representing Dragonfly in the Texas Lawsuit. See Ex.
E to Mot. Dismiss, ECF No. 5-8. On June 10, 2109, Dragonfly
removed the Hawaii Lawsuit to this Court. See ECF
19, 2019, Dragonfly filed a Motion to Dismiss for Lack of
Personal Jurisdiction, Insufficient Process and Service of
Process, and Failure to State a Claim Upon Which Relief Can
Be Granted, or in the Alternative, for Change of Venue. ECF
No. 5. Pacific Helicopter filed its Opposition Brief on
September 17, ECF No. 14, and Dragonfly filed a Reply Brief
on September 24, ECF No. 15. A hearing was held on Tuesday,
October 8, 2019, at 11:00 a.m.
Rules 12(b)(4) and 12(b)(5)
Rules of Civil Procedure (“Rule”) 12(b)(4) and
12(b)(5) authorize dismissal based on insufficient process
and insufficient service of process, respectively. In
assessing the sufficiency of process and service of process,
courts may weigh the evidence and resolve disputed issues of
fact in accordance with Rule 12(i). 5B Charles A. Wright
& Arthur R. Miller, Federal Practice and
Procedure § 1353 (Civ.3d ed.) (“Any factual
question raised by the affidavits or other evidence presented
on a Rule 12(b)(4) or a Rule 12(b)(5) motion should be
determined by the district court in accordance with Rule
12(i).”). If a court finds process or service of
process insufficient, it may dismiss the action or retain the
case but quash the service that was made on the defendant.
Cranford v. United States, 359 F.Supp.2d 981, 984
(E.D. Cal. 2005).
motion to dismiss under Rule 12(b)(4), on the one hand,
challenges the form of the summons. “[A] Rule 12(b)(4)
motion is proper only to challenge noncompliance with the
provisions of Rule 4(b) or any applicable provision
incorporated by Rule 4(b) that deals specifically with the
content of the summons.” Federal Practice and
Procedure § 1353; see also Wasson v. Riverside
Cty., 237 F.R.D. 423, 424 (C.D. Cal. 2006) (quoting
same). “Defects in the form of summons are considered
technical and a dismissal is not proper unless the party can
demonstrate actual prejudice.” Crane v.
Battelle, 127 F.R.D. 174, 177 (S.D. Cal. 1989).
motion to dismiss pursuant to Rule 12(b)(5), on the other
hand, concerns the service of the summons and complaint. A
plaintiff bears the burden of demonstrating that service was
proper, which is determined under the requirements of Rule 4.
Brockmeyer v. May, 383 F.3d 798, 801 (9th Cir.
2004); see also Kyung Cho v. UCBH Holdings, Inc.,
890 F.Supp.2d 1190, 1198 (N.D. Cal. 2012). Courts have
explained that Rule 4 is a flexible rule that should be
liberally construed to uphold service so long as a party
receives sufficient notice of the complaint. United Food
& Commercial Workers Union, Local 197 v. Alpha Beta
Co., 736 F.2d 1371, 1382 (9th Cir. 1984). However,
because “[a] federal court does not have jurisdiction
over a defendant unless the defendant has been served
properly, ” Direct Mail Specialists v. Eclat
Computerized Techs., Inc., 840 F.2d 685, 688 (9th Cir.
1988), “neither actual notice nor simply naming the
defendant in the complaint will provide personal
jurisdiction” absent substantial compliance with Rule
4's requirements, Benny v. Pipes, 799 F.2d 489,
492 (9th Cir. 1986).
defendant has not been served within 90 days after the
complaint is filed, Rule 4(m) requires the court to either
dismiss the action without prejudice against that defendant,
or to order that service be made within a specified time.
Rule 4(m) requires an extension of time for service, however,
where the plaintiff has shown good cause for the failure to
exercise of personal jurisdiction may be challenged under
Rule 12(b)(2). The plaintiff bears the burden of showing that
the Court has jurisdiction over the defendant. Mavrix
Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223
(9th Cir. 2011). The Court may allow the plaintiff to submit
affidavits, allow affidavits plus discovery, or conduct an
evidentiary hearing. See Boschetto v. Hansing, 539
F.3d 1011, 1015, 1020 (9th Cir. 2008).
the Court rules without conducting an evidentiary hearing,
“the plaintiff need only make a prima facie showing of
jurisdictional facts” to avoid dismissal. Mavrix
Photo, 647 F.3d at 1223. The Court must take as true all
uncontroverted facts in the complaint but may not assume the
truth of allegations which are contradicted by affidavit.
CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d
1066, 1073 (9th Cir. 2011). The Court must resolve all
factual disputes in the plaintiff's favor. Mavrix
Photo, 647 F.3d at 1223. Nonetheless, “mere
‘bare bones' assertions of minimum contacts with
the forum or ...