District Court Dismisses Suit against Non-U.S. Corporation and Individuals Based on Plaintiff's Failure To Produce Evidence of Sufficient Contacts with Forum

The World in U.S. Courts: Spring 2016 - Personal Jurisdiction/Foreign Sovereign Immunities Act (FSIA)/Forum Non Conveniens

Ayunan v. Caktiong, U.S. District Court for the Central District of California, February 23, 2016

Plaintiff Moises Ayunan sued defendants Tony Tan Caktiong and Grace A. Tan Caktiong (citizens of the Philippines) as well as Jollibee Food Corporation ("JFC USA") for dissolution of partnership, accounting, declaratory judgment and other grounds. Ayunan alleged that the defendants had failed to compensate him properly after he assisted them in the development and commercialization of a new kind of hamburger. All the defendants moved to dismiss for lack of personal jurisdiction.

The Court stated that personal jurisdiction over a defendant generally is proper where authorized by the forum State's long-arm statute and is consistent with the Due Process Clause of the U.S. Constitution. The forum State in this case was California, and California's long-arm statute authorizes personal jurisdiction to the fullest extent allowed by the U.S. Constitution. Therefore, the Court analyzed whether the defendants had sufficient minimum contacts with California that exercising personal jurisdiction would comport with traditional notions of fair play and substantial justice.

Turning to the individual defendants first, the Court stated that general personal jurisdiction exists when a defendant's actions in a given forum are so continuous and systematic that the defendant could be thought "at home" in the district. The Court noted that the burden of demonstrating this lies with the plaintiff, who can rely on uncontested allegations in the complaint. However, when a plaintiff's allegations are contested by affidavits provided by the defendant, the plaintiff must document admissible evidence in support of its allegations.

In this case, Ayunan alleged that Mr. and Mrs. Caktiong lived in the U.S. However, this allegation was contradicted by an affidavit which established they were residents and citizens of the Philippines. Ayunan made additional allegations, but each of them lacked admissible evidence in support, except for a claim that Mr. and Mrs. Caktiong stayed at his house in California for more than a month in 1977. As this was insufficient to establish the necessary minimum contacts, the Court held that it could not exercise general personal jurisdiction over the individual defendants.

The Court then considered whether it could exercise specific personal jurisdiction over the individual defendants, focusing on whether Ayunan's claim arose out of the defendants' forum-related activities—whether the claim would not exist "but-for" the claimed contacts. The Court held that Ayunan's failure to make any argument on this point required that specific jurisdiction over the individual defendants be found not to exist.

Next, the Court considered whether general personal jurisdiction over JFC USA was appropriate, asking again whether the non-U.S. corporation's contact with a given forum was so continuous and systematic as to render the corporation "at home" in the forum. In analyzing this question, courts consider the places the defendant corporation is licensed to do business and whether it has made sales or solicited business in the forum, among other factors. Courts also must consider the entirety of a foreign corporation's actions world-wide. Here, Ayunan alleged that JFC USA's offices in California, its license to do business in California, its employment of human resources personnel in its California offices, and its appointment of an agent for service of process in California all indicated JFC USA was "at home" in California. While the Court accepted Ayunan's allegations, it noted that he failed to demonstrate that JFC USA actually transacted any business in California. Furthermore, Ayunan presented no information regarding JFC USA's business outside the U.S. As a result, the Court held that JFC USA did not have sufficient contacts to render it "at home" in California, and therefore exercising general personal jurisdiction would be inappropriate.

Finally, the Court determined it could not exercise specific personal jurisdiction over JFC USA. While Ayunan alleged contacts between JFC USA and California, the Court concluded that he had not demonstrated how his claim arose out of those contacts.

Because it lacked personal jurisdiction over Mr. and Ms. Caktiong and JFC USA, the Court dismissed the case.

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