Global Commodities Trading Grp., Inc. v. Beneficio De Arroz Choloma, S.A.

972 F.3d 1101

GLOBAL COMMODITIES TRADING GROUP, INC.; Insurance Company of the State of Pennsylvania, Plaintiffs-Appellants,

v.BENEFICIO DE ARROZ CHOLOMA, S.A., a Honduran Company; Sady Farid Andonie Reyes; Joyce Mary Jarufe Dox, aka Joyce Jarufe De Andonie, Defendants-Appellees.

No. 18-16026

United States Court of Appeals, Ninth Circuit.

Argued and Submitted December 4, 2019 San Francisco, California

Filed August 26, 2020

Michael E. Chase (argued), Boutin Jones Inc., Sacramento, California, for Plaintiffs-Appellants.

Brant C. Hadaway (argued), Diaz Reus & Targ LLP, Miami, Florida, for Defendants-Appellees.

Before: Sidney R. Thomas, Chief Judge, and William A. Fletcher and Eric D. Miller, Circuit Judges.

W. FLETCHER, Circuit Judge:

From 2008 through 2012, Global Commodities Trading Group, Inc. ("Global"), sold over fifty million dollars of agricultural commodities to Beneficio de Arroz Choloma, S.A. ("Bachosa"). After Bachosa fell behind on its payments on two contracts, Global brought suit against the corporation and two of its officers in the United States District Court for the Eastern District of California. The district court dismissed Global's claims for lack of personal jurisdiction and denied as moot the defendants’ motion to dismiss for forum non conveniens . We hold that the district court had personal jurisdiction over both the corporate and individual defendants and that litigation in the Eastern District of California would not result in disproportionate inconvenience. We therefore reverse in part, vacate in part, and remand with instructions to deny the forum non conveniens motion on the merits.

I. Facts and Procedural History

Global is a California corporation with its headquarters in Placer County, California. At the time of the events giving rise to this action, it was engaged in the business of international sales of agricultural commodities. Bachosa is a corporation organized under the laws of Honduras with its principal place of business in Choloma, Cortés, Honduras. It is engaged in the business of importing and processing rice and corn from countries including the United States. Bachosa has no offices, real property, or employees in California.

From 2008 through 2012, Bachosa purchased approximately 137,450 metric tons of agricultural commodities from Global for more than $50 million pursuant to hundreds of separately negotiated contracts. The contracts generally were cost, insurance, freight ("CIF") contracts, meaning Global's contractual performance was considered complete when the goods were loaded at the point of shipment. Global and Bachosa primarily negotiated their contracts by phone and email. Global's President, Ramiro Velasquez, stated in his declaration that several Bachosa employees also made business trips to Global's office in California. Those employees included the individual defendants in this case—Bachosa's President, Sady Farid Andonie Reyes ("Andonie"), and Secretary, Joyce Mary Jarufe Dox ("Jarufe").

On December 17, 2011, Bachosa entered into a contract with Global to purchase 14,500 metric tons of U.S. No. 2 or better long grain rough rice and a separate contract to purchase 5,000 metric tons of U.S. No. 2 or better white corn. According to Velasquez's declaration, Andonie and Jarufe met with Global employees at Global's California office in January 2012 in connection with the contracts. Andonie and Jarufe represented to Global that they had successfully extended their Honduran import permits to allow receipt of the rice and corn under the contracts. Andonie and Jarufe dispute that such a meeting ever occurred. They claim to have traveled to California only on two occasions, each for purposes of tourism.

Following the alleged January meeting in California, Global arranged for shipment under the contracts. The United States Department of Agriculture issued an inspection certificate for the rice and corn in Woodland, California. The goods were shipped from the United States from Port of Darrow, Louisiana to Puerto Cortes, Honduras on the MV UBC Sacramento on January 19, 2012.

Upon arrival of the Sacramento in Honduras, Honduran authorities did not allow the goods to be offloaded. Global alleges that, contrary to the representations Bachosa's employees had made in California earlier that month, the company's import permits were invalid. While held in port in Honduras, the Sacramento incurred demurrage charges of approximately $644,000. Bachosa failed to make timely payment under its two contracts with Global, which it attributed to being assessed a 45% import duty on the goods. After further negotiations, Global and Bachosa entered into a memorandum of understanding, under which Bachosa acknowledged that it owed Global $7,073,648 for the goods and $644,697.92 for the shipping delays, and agreed to pay those sums. Andonie signed the memorandum as "Owner and Legal Representative" of the corporation.

Contemporaneously with the execution of the memorandum, Bachosa executed a promissory note in favor of Global for $11,000,000, and Andonie and Jarufe executed a personal guaranty that designated Jarufe a surety of the note. Although the document purports to bear her signature, Jarufe stated in her declaration that she "did not sign the guaranty," had "never spoken with Global or any of its agents regarding the guaranty," and "[n]ever saw the guaranty" before seeing the complaint in this action. In his declaration, Andonie claimed that Velasquez told him that he needed the memorandum, promissory note, and guaranty only so that he "could have something to show the banks," and that the agreements would not be legally binding. Global provided the memorandum, note, and guaranty to its bank in order to maintain its line of credit.

In the spring of 2014, Bachosa defaulted on its obligations under the memorandum and note, and neither Andonie nor Jarufe made payment pursuant to the guaranty. Global lost its line of credit and shuttered its office.

Global and its insurer brought suit in California state court later that year against Bachosa, Andonie, and Jarufe. The defendants removed the action to the United States District Court for the Eastern District of California. Once in federal court, they moved to dismiss for lack of personal jurisdiction and for forum non conveniens . The district court allowed limited jurisdictional discovery. Without holding an evidentiary hearing, the district court granted the motion to dismiss for lack of personal jurisdiction. It denied Global's motion for leave to amend its complaint to add claims for fraud related to Jarufe's purported signature on the guaranty and denied as moot defendants’ motion to dismiss for forum non conveniens . The district court reasoned that negotiations conducted through international communications were insufficient to support personal jurisdiction when the defendants were not physically present in the forum state. It discounted the visits Andonie and Jarufe made to Global's California office on behalf of Bachosa because those visits, if made, dealt with the underlying commodities contracts, not the subsequently executed memorandum, note, and guaranty.

Global timely appealed.

II. Standard of Review

"We review de novo a district court's dismissal for lack of personal jurisdiction." Picot v. Weston , 780 F.3d 1206, 1211 (9th Cir. 2015). The plaintiff bears the burden of demonstrating that personal jurisdiction is proper. Schwarzenegger v. Fred Martin Motor Co. , 374 F.3d 797, 800 (9th Cir. 2004). However, "[w]here, as here, the motion is based on written materials rather than an evidentiary hearing, ‘the plaintiff need only make a prima facie showing of jurisdictional facts.’ " Id. (quoting Sher v. Johnson , 911 F.2d 1357, 1361 (9th Cir. 1990) ). In this posture, we take as true all uncontroverted allegations in the complaint and resolve all genuine factual disputes in the plaintiff's favor. See id.

III. Discussion

A. Personal Jurisdiction

" ‘Federal courts ordinarily follow state law in determining the bounds of their jurisdiction over persons.’ Because ‘California's long-arm statute allows the exercise of personal jurisdiction to the full extent permissible under the U.S. Constitution,’ our inquiry centers on whether exercising jurisdiction comports with due process." Picot , 780 F.3d at 1211 (internal citations omitted) (quoting Daimler AG v. Bauman , 571 U.S. 117, 125, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014) ); see Cal. Code Civ. Proc. § 410.10.

Federal due process permits a court to exercise personal jurisdiction over a nonresident defendant if that defendant has "at least ‘minimum contacts’ with the relevant forum such that the exercise of jurisdiction ‘does not offend traditional notions of fair play and substantial justice.’ " Schwarzenegger , 374 F.3d at 801 (quoting Int'l Shoe Co. v. Washington , 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) ). Those contacts may be so continuous and systematic as to render a defendant essentially at home in the forum state and amenable to any suit there. Alternatively, a court may exercise jurisdiction over "issues deriving from, or connected with, the very controversy that establishes jurisdiction." Goodyear Dunlop Tires Operations, S.A. v. Brown , 564 U.S. 915, 919, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011). The Supreme Court has referred to these different bases for personal jurisdiction as "general" and "specific" jurisdiction. See, e.g. , id. ; Bristol-Myers Squibb Co. v. Superior Court of Cal. , ––– U.S. ––––, 137 S. Ct. 1773, 1779–80, 198 L.Ed.2d 395 (2017)

Global does not contend that either Bachosa or the individual defendants have contacts so continuous and systematic as to render them essentially at home in California and thus amenable to general jurisdiction. We consider whether their contacts with the State of California in connection with this controversy are enough to allow the exercise of specific jurisdiction.

1. Specific Jurisdiction over Bachosa

We use a three-prong test for...