United States District Court, D. Hawaii
STATE OF HAWAI‘I, by its Office of Consumer Protection, Plaintiff,
ROBERT L. STONE and CYNTHIA A. STONE, doing business as GAH Law Group, LLC, Defendants.
ORDER GRANTING DEFENDANT CYNTHIA STONE'S MOTION
TO DISMISS FOR LACK OF PERSONAL JURISDICTION
DERRICK K. WATSON, UNITED STATES DISTRICT JUDGE
30, 2019, the State of Hawai‘i, through its Office of
Consumer Protection (OCP or Plaintiff), brought this action
by filing a Complaint against Robert and Cynthia Stone
(collectively, Defendants), alleging violation of numerous
federal and state laws. Thereafter, Cynthia Stone (Cynthia)
filed a Motion to Dismiss for Lack of Personal Jurisdiction
(Motion), arguing that she is a resident of Illinois and she
has neither transacted business nor committed a tort in
Hawai‘i. In opposition, OCP argues that this Court has
personal jurisdiction over Cynthia because she acted in
Hawai‘i through her husband, co-defendant Robert Stone
(Robert). OCP's arguments, however, are misplaced. Even
if the Court was willing to accept that Robert acted as an
agent in Hawai‘i, he allegedly did so for
Defendants' company, GAH Law Group, LLC (GAH Law Group),
not Cynthia. Moreover, although OCP asserts that
“Cynthia Stone is GAH Law Group, ” OCP fails to
carry its jurisdictional burden by explaining why this Court
should find GAH Law Group to be Cynthia's alter ego.
Therefore, the Motion is GRANTED.
a state civil law enforcement agency responsible for
investigating suspected violations of and enforcing consumer
protection laws. In essence, in the Complaint, Dkt. No. 1,
OCP alleges that Defendants violated the consumer protection
laws of Hawai‘i and the federal government by,
inter alia, taking payment from consumers for
services not yet performed, failing to use written contracts
with consumers, and operating a company that was not
registered to do business in Hawai‘i.
the defendants, Cynthia, proceeding pro se, has moved to
dismiss the Complaint for lack of personal jurisdiction. Dkt.
No. 17. OCP has filed an opposition to the Motion,
Dkt. No. 29, and Cynthia has filed a reply, Dkt. No. 41. On
September 26, 2019, the Court vacated the hearing on the
Motion, Dkt. No. 45, and this Order now follows.
to Federal Rule of Civil Procedure 12(b)(2), a defendant may
move for dismissal due to a lack of personal jurisdiction.
When a defendant does so, “the plaintiff bears the
burden of establishing that jurisdiction is proper.”
Mavrix Photo, Inc. v. Brand Technologies, Inc., 647
F.3d 1218, 1223 (9th Cir. 2011). As in this case, when an
evidentiary hearing is not held, while the plaintiff cannot
rest on the allegations of its complaint, uncontroverted
allegations may be taken as true. However, a court cannot
take as true allegations that are contradicted by affidavit.
as the Court is concerned, based upon the arguments OCP makes
for exercising personal jurisdiction over Cynthia, resolution
of the Motion is straightforward and requires little detailed
investigation into the substance of Cynthia's alleged
contacts with Hawai‘i in this case.
argues that Cynthia is subject to personal jurisdiction in
Hawai‘i on the basis of “agency principles,
because Cynthia acted in Hawaii through her husband
Robert.” Dkt. No. 29 at 2. In other words, Robert was
the agent of Cynthia when Robert committed the numerous
Hawai‘i-based acts alleged in the Complaint. But OCP
also argues that Robert acted “on behalf of GAH Law
Group, ” and this conduct, as well as Cynthia sharing
in money paid by Hawaiian consumers, is enough to subject her
to personal jurisdiction in this State. Id. at 32.
In other words, OCP also asserts that Robert was the agent of
GAH Law Group. There is a good reason why OCP takes this
latter tack: there are absolutely no allegations in the
Complaint, inferable or otherwise, that Robert was acting as
Cynthia's agent when he acted in Hawai‘i.
Instead, to the extent an agency relationship can be inferred
from the Complaint, it was one between Robert and the company
for which he allegedly transacted business, GAH Law Group.
See, e.g., Compl. at ¶ 135 (“For
representing clients under the guise that the clients were
appearing pro se, Robert Stone told his clients to make
payment to GAH Law Group, and the clients made their payments
to GAH Law Group as instructed.”), Dkt. No.
practical implication of this is that, while, arguably,
Robert may have allegedly acted as the agent of GAH Law
Group, that alone does not allow OCP to attribute
Robert's alleged contacts with Hawai‘i to Cynthia.
In order to do that, at best, OCP would need to make an
additional argument: that GAH Law Group was Cynthia's
alter ego. OCP makes no such argument however, and
simply saying that “Cynthia Stone is GAH Law
Group” does not suffice. See Ranza v. Nike,
Inc., 793 F.3d 1059, 1073 (9th Cir. 2015) (“To
satisfy the alter ego test, a plaintiff must make out a prima
facie case (1) that there is such unity of interest and
ownership that the separate personalities [of the two
entities] no longer exist and (2) that failure to disregard
[their separate identities] would result in fraud or
injustice.”) (quotations omitted, alterations in
this link is missing in OCP's analysis, the Court finds
that there is no basis for attributing Robert's
alleged actions in Hawai‘i to Cynthia in determining
whether she should be subject to personal jurisdiction here.
As a result, this leaves OCP's assertion that Cynthia
allegedly shared in or accepted money paid by Hawaiian
consumers. In addition, it appears that Cynthia is alleged to
have signed checks to pay for services performed in
Hawai‘i and had checks for GAH Law Group printed with a
Hawai‘i address. OCP makes no argument, however, that
this alleged conduct alone justifies exercising
personal jurisdiction over Cynthia.
in this light, OCP provides no valid basis for this Court to
exercise personal jurisdiction over Cynthia, and the Motion
is GRANTED. See Fiorani v. Berenzweig, 441 Fed.Appx.
540, 541 (9th Cir. July 6, 2011) (stating that a dismissal
for lack of personal jurisdiction should be without