HK China Group, Inc. v. Beijing United Automobile & Motorcycle Manufacturing Corp. , 417 F. App'x 664 ( 2011 )

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS FILED
FOR THE NINTH CIRCUIT MAR 02 2011
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
HK CHINA GROUP, INC., No. 09-56423
Plaintiff - Appellant, D.C. No. 2:08-cv-01348-SVW-SS
v.
MEMORANDUM*
BEIJING UNITED AUTOMOBILE &
MOTORCYCLE MANUFACTURING
CORPORATION,
Defendant - Appellee.
Appeal from the United States District Court
for the Central District of California
Stephen V. Wilson, District Judge, Presiding
Argued and Submitted February 15, 2011
Pasadena, California
Before: ALARCÓN, RYMER, and BYBEE, Circuit Judges.
HK China Group, Inc., a California corporation, appeals the dismissal of its
complaint against Beijing United Automobile & Motorcycle Manufacturing
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Corporation, a Chinese corporation, for lack of personal jurisdiction. We have
jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.1
I
We have a three-prong test for specific jurisdiction, the first prong of which
is that “[t]he non-resident defendant must purposefully direct his activities or
consummate some transaction with the forum or resident thereof; or perform some
act by which he purposefully avails himself of the privilege of conducting
activities in the forum, thereby invoking the benefits and protections of its laws.”
Yahoo! Inc. v. La Ligue Contre Le Racisme Et L’Antisemitisme, 433 F.3d 1199,
1205-06 (9th Cir. 2006) (en banc) (quoting Schwarzenegger v. Fred Martin Motor
Co., 374 F.3d 797, 802 (9th Cir. 2004)). The plaintiff bears the burden on this
prong. Schwarzenegger, 374 F.3d at 802.
“A purposeful availment analysis is most often used in suits sounding in
contract. A purposeful direction analysis, on the other hand, is most often used in
suits sounding in tort.” Id. (citation omitted). Suits that include both a breach of
contract claim and a fraud claim may “sound primarily in contract” when the
1
We review de novo a district court’s decision to dismiss for lack of
personal jurisdiction. Harris Rutsky & Co. Ins. Servs., Inc. v. Bell & Clements
Ltd., 328 F.3d 1122, 1128 (9th Cir. 2003).
2
alleged fraud is merely the representations in the contract that gave rise to the
breach. Boschetto v. Hansing, 539 F.3d 1011, 1016 (9th Cir. 2008); cf. CE
Distribution, LLC. v. New Sensor Corp., 380 F.3d 1107 (9th Cir. 2004) (tort and
contract claims involved different parties). “[W]e have typically analyzed cases
that sound primarily in contract . . . under a ‘purposeful availment’ standard.”
Boschetto, 539 F.3d at 1016.
This case sounds primarily in contract. The alleged fraud arises out of “false
representations” that “Plaintiff would be a principal member of any joint venture,”
while the alleged breach of contract is “excluding Plaintiff as a founding partner in
the joint venture.” Because the alleged fraud is merely the representation in the
contract that gave rise to the breach, purposeful availment analysis applies to the
entire suit. Boschetto, 539 F.3d at 1016.
An out-of-state party does not purposefully avail itself of a forum merely by
entering into a contract with a forum resident. Burger King Corp. v. Rudzewicz,
471 U.S. 462, 478 (1985). Instead, we evaluate “prior negotiations and
contemplated future consequences, along with the terms of the contract and the
parties’ actual course of dealing” to determine purposeful availment. Id. at 479.
Few of the prior negotiations in this case occurred in California. The Letter
of Intent was signed in China and written in Chinese. Beijing United and HK
3
China met a couple of times in California, but this “temporary physical presence”
is insufficient “to overcome the lack of any indicia of a calculated effort by [the
defendant] to conduct business in California.” Fed. Deposit Ins. Corp. v.
British-American Ins. Co., 828 F.2d 1439, 1443 (9th Cir. 1987). There was no
such calculated effort by Beijing United here; it was HK China that reached out to
Beijing United to conduct domestic business in China.
The Letter of Intent did not contemplate future consequences in California,
nor did its terms indicate purposeful availment of California. The seat belts were
to be manufactured in China. Even if HK China would have played some role in
the joint venture from California, the Letter of Intent did not purport to establish
such a joint venture, but instead merely prescribed future negotiations about its
possible formation. The Letter of Intent did not contain a choice of law provision
for California law, but instead indicated that it was prepared in accordance with
both the Chinese and “American laws.”
As a result, we conclude that Beijing United did not purposefully avail itself
of California. We therefore need not reach the other prongs of the specific
jurisdiction inquiry. The district court properly dismissed the complaint on the
basis that it lacked personal jurisdiction over Beijing United.
4
II
The district court did not err in declining to allow HK China jurisdictional
discovery on the question of general jurisdiction. We review decisions to deny
jurisdictional discovery for abuse of discretion. Boschetto, 539 F.3d at 1020.
“‘Where a plaintiff’s claim of personal jurisdiction appears to be both attenuated
and based on bare allegations in the face of specific denials made by the
defendants, the Court need not permit even limited discovery.’” Pebble Beach Co.
v. Caddy, 453 F.3d 1151, 1160 (9th Cir. 2006) (quoting Terracom v. Valley Nat.
Bank, 49 F.3d 555, 562 (9th Cir.1995)) (internal alterations omitted).
To establish general jurisdiction, HK China had to show that Beijing United
engaged in “continuous and systematic” business contacts with California.
Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416 (1984).
However, Beijing United did no business in California; all its sales in the United
States were to a single Alabama company. Given how attenuated HK China’s
general jurisdiction claims were, the district court did not abuse its discretion in not
granting jurisdiction discovery.
AFFIRMED.
5