Brian Sciara v. Stephen Campbell ( 2020 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS DEC 24 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
BRIAN SCIARA, No. 20-15123
Plaintiff-Appellant, D.C. No. 2:18-cv-01700-DJA
v.
MEMORANDUM*
STEPHEN CAMPBELL,
Defendant-Appellee.
Appeal from the United States District Court
for the District of Nevada
Daniel J. Albregts, Magistrate Judge, Presiding
Argued and Submitted December 11, 2020
San Francisco, California
Before: BOGGS,** M. SMITH, and BENNETT, Circuit Judges.
Brian Sciara appeals from the district court’s orders granting Stephen
Campbell’s motion to dismiss for lack of personal jurisdiction and denying
Sciara’s motion for reconsideration. We have jurisdiction under 28 U.S.C. § 1291.
We affirm in part, reverse in part, and remand for further proceedings.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Danny J. Boggs, United States Circuit Judge for the
U.S. Court of Appeals for the Sixth Circuit, sitting by designation.
We review de novo the district court’s dismissal for lack of personal
jurisdiction. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th
Cir. 2004). We must view all “uncontroverted allegations in the complaint . . . as
true” and resolve “[c]onflicts between parties over statements contained in
affidavits . . . in the plaintiff’s favor.” Id.“Where, as here, there is no applicable federal statute governing personal
jurisdiction, the district court applies the law of the state in which the district court
sits.” Id. Nevada’s long-arm statute is coextensive with federal due process
standards. See Baker v. Eighth Jud. Dist. Ct., 999 P.2d 1020, 1023 (Nev. 2000).
Thus, “the jurisdictional analyses under state law and federal due process are the
same.” Schwarzenegger, 374 F.3d at 801.
In determining whether specific jurisdiction exists, we apply a three-prong
test: (1) “[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,” (2) “the claim must be one which arises out of or relates to
the defendant’s forum-related activities,” and (3) “the exercise of jurisdiction must
comport with fair play and substantial justice, i.e. it must be reasonable.” Id. at
2
802 (citation omitted).1 The plaintiff must establish the first two prongs, and if the
plaintiff meets that burden, “the burden then shifts to the defendant to ‘present a
compelling case’ that the exercise of jurisdiction would not be reasonable.” Id.(quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985)).
Sciara’s complaint alleges claims that sound in contract and tort. To
establish the first prong for his contract claims, Sciara must show that Campbell
purposefully availed himself of the privilege of conducting activities in Nevada.
See id. at 802–03. The allegations, with all conflicts resolved in Sciara’s favor,
show the following: Campbell, knowing that Sciara was a long-time Nevada
resident, deliberately negotiated and contracted with Sciara to benefit from, and
eventually acquire for his company, Sprout Financial, the assets, clients, and
intellectual property of Sciara’s Nevada-based company, CapFund Enterprises, Inc.
The contract between Campbell and Sciara created an ongoing business
relationship that obligated Campbell to pay dividends to Sciara in Nevada. And
over the course of their contractual relationship, Campbell regularly contacted
Sciara in Nevada, often travelled to Nevada to meet business contacts supplied by
Sciara, worked with clients in Nevada, and hired individuals from Nevada. These
allegations make a prima facie showing that Campbell purposefully availed
1
Sciara does not challenge the district court’s determination that it lacked general
jurisdiction over Campbell.
3
himself of the privilege of conducting activities in Nevada. See Burger King, 471
U.S. at 479–80.
The allegations also make a prima facie showing of the second prong.
Absent Campbell’s conduct—entering into a contract that envisioned ongoing
obligations to and contacts with Sciara in Nevada—Sciara would have no claims
based on the contract. See Fireman’s Fund Ins. Co. v. Nat’l Bank of Coops., 103
F.3d 888, 894 (9th Cir. 1996). Thus, the district court erred in concluding that
Sciara failed to establish the first two prongs of the specific jurisdiction test for his
contract claims.
Turning to the third prong, we consider several factors in determining
whether the exercise of jurisdiction is reasonable. See Roth v. Garcia Marquez,
942 F.2d 617, 623 (9th Cir. 1991). Campbell has shown that two factors appear to
weigh in his favor—it would be more efficient to litigate in Arizona because
Sprout Financial is located in Arizona, and Arizona is an available alternative
forum.2 But two factors weigh in Sciara’s favor—Campbell deliberately injected
himself into Nevada affairs, and it would be more convenient for Sciara to litigate
2
Campbell also argues that exercising jurisdiction would be unreasonable because
he did not inject himself into Nevada affairs, traveling to Nevada and defending
the suit there would be a “tremendous burden,” and Nevada has a limited interest
in the suit because Sciara suffered no harms in Nevada. These arguments are not
persuasive because, construing the allegations in Sciara’s favor, Campbell
deliberately injected himself into Nevada affairs, he often travelled to Nevada for
business, and Sciara suffered the harm arising from the contract claims in Nevada.
4
in Nevada. Considering these two factors against the two that appear to weigh in
Campbell’s favor, we are not compelled to conclude that the exercise of personal
jurisdiction would be unreasonable. See id. at 625.
At least at this stage of the case, Nevada appears to have personal
jurisdiction over Campbell for the contract claims, and the district court erred in
holding otherwise.3
As for the tort claims, however, we affirm the district court’s dismissal
because Sciara fails to meet his burden of establishing that Campbell purposefully
directed his conduct toward Nevada. See Schwarzenegger, 374 F.3d at 803. The
alleged harm arising from the tortious conduct—deprivation of an ownership
interest in Sprout Financial, which is headquartered in Arizona, and access to its
books and records, which are located in Arizona—is not “tethered to [Nevada] in
any meaningful way.” Picot v. Weston, 780 F.3d 1206, 1215 (9th Cir. 2015).
Moreover, Sciara’s argument that Campbell expressly aimed his acts at Nevada
rests only on the fact that Sciara is a Nevada resident. This is insufficient under
Walden v. Fiore, 571 U.S. 277, 290 (2014) (“[M]ere injury to a forum resident is
not a sufficient connection to the forum.”). We therefore affirm the district court’s
dismissal of the tort claims.
3
Because neither the district court nor the parties identified which claims should
be considered contract-based or tort-based, we leave it to the district court on
remand to make such determination in the first instance, if necessary.
5
The district court denied Sciara’s motion for reconsideration because he
failed to show that the evidence supporting his motion was newly discovered and
either that the court had committed clear error or that manifest injustice would
result. Sciara fails to explain why these determinations were an abuse of
discretion. See Kona Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 883 (9th Cir.
2000) (“We also review a district court’s denial of a motion for reconsideration for
abuse of discretion.”). Thus, we affirm the district court’s denial of Sciara’s
motion for reconsideration as to the tort claims.4
Each party shall bear its own costs on appeal.
AFFIRMED in part, REVERSED in part, and REMANDED.
4
Because we reverse the district court’s dismissal of the contract claims, we do not
address the district court’s denial of the reconsideration motion as to those claims.
Cf. Swirsky v. Carey, 376 F.3d 841, 853 n.24 (9th Cir. 2004) (finding challenge to
the denial of a motion to reconsider moot given the court’s decision to reverse the
grant of summary judgment).
6