Tercero v. Sacramento Logistics, LLC

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TENIAH TERCERO, Plaintiff, v. SACRAMENTO LOGISTICS LLC, et al., Defendants.

No. 2:24-cv-00953-DC-JDP

United States District Court, E.D. California

November 22, 2024

ORDER GRANTING DEFENDANT C&S LOGISTICS OF SACRAMENTO/TRACY LLC'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT PURSUANT TO FED. R. CIV. P. 12(B)(2) FOR LACK OF PERSONAL JURISDICTION (DOC. NO. 16)

Dena Coggins United States District Judge

This matter is before the court on Defendant C&S Logistics of Sacramento/Tracy LLC's motion to dismiss Plaintiff's claims against it due to this court's lack of personal jurisdiction. (Doc. No. 16.) Pursuant to Local Rule 230(g) the pending motion was taken under submission to be decided on the papers. (Doc. No. 18.) For the reasons explained below, the court will grant Defendant's motion to dismiss.

BACKGROUND

On February 16, 2024, Plaintiff Teniah Tercero filed a wage-and-hour class action complaint against Defendants C&S Logistics of Sacramento/Tracy LLC (“C&S Logistics”), Sacramento Logistics LLC (“Sacramento Logistics”), and C&S Wholesale Grocers, LLC (“C&S Wholesale”) (collectively “Defendants”) in Sacramento County Superior Court. (Doc. No. 1 at 38-66.) Plaintiff's complaint alleges various violations of the California Labor Code and California Business & Professions Code. (Id. at 56-65.) Plaintiff alleges Defendants are Delaware limited liability companies that are authorized to do business in California and are doing business in California. (Id. at 39-40.) Plaintiff alleges she worked for Defendants from approximately July 2021 through August 2022 in Sacramento, California, but does not specify which of the three Defendants was her employer. (Id. at 39.) Plaintiff seeks to represent a proposed class of all current and former non-exempt employees who worked for any of the Defendants at any location in California within the four years prior to the filing of the complaint. (Id. at 43.)

On March 27, 2024, Defendants removed this action to this federal district court pursuant to 28 U.S.C. § 1446 alleging diversity jurisdiction under the Class Action Fairness Act (“CAFA”) (28 U.S.C. § 1332(d)), traditional diversity jurisdiction (28 U.S.C. § 1332(a)), and federal question jurisdiction (28 U.S.C. § 1331). (Id.) Plaintiff did not file a motion to remand to challenge Defendants' removal of this action.

On May 31, 2024, Defendant C&S Logistics filed the pending motion to dismiss Plaintiff's claims against it pursuant to Federal Rule of Civil Procedure 12(b)(2) on the ground that this court lacks personal jurisdiction over Defendant C&S Logistics.^[1] (Doc. No. 16.) On June 14, 2024, Plaintiff filed an opposition to the pending motion. (Doc. No. 22.) On June 24, 2024, Defendant C&S Logistics filed its reply thereto. (Doc. No. 26.)

LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(2) provides that a defendant may move to dismiss a complaint for lack of personal jurisdiction. Fed.R.Civ.P. 12(b)(2). In opposing a defendant's motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing jurisdiction is proper. Picot v. Weston, 780 F.3d 1206, 1211 (9th Cir. 2015). Where the defendant's motion is based on written materials rather than an evidentiary hearing, the plaintiff need only make aprima facie showing of jurisdictional facts to withstand the motion to dismiss. Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011). “Uncontroverted allegations in the complaint are taken as true, but in the face of a contradictory affidavit, the ‘plaintiff cannot simply rest on the bare allegations of its complaint.'” Yamashita v. LG Chem, Ltd., 62 F.4th 496, 502 (9th Cir. 2023) (quoting Mavrix, 647 F.3d at 1223); see also Data Disc, Inc. v. Sys. Tech. Assocs., Inc., 557 F.2d 1280, 1284 (9th Cir. 1977) (a court “may not assume the truth of allegations in a pleading which are contradicted by affidavit”). Rather, the plaintiff must “come forward with facts, by affidavit or otherwise, supporting personal jurisdiction.” Scott v. Breeland, 792 F.2d 925, 927 (9th Cir. 1986) (citation omitted).

Where, as here, no federal statute authorizes personal jurisdiction, the law of the state in which the district court sits applies. Core-Vent Corp. v. Nobel Indus. AB, 11 F.3d 1482, 1484 (9th Cir. 1993). California's long-arm jurisdictional statute is coextensive with federal due process requirements. Id. Due process requires that the defendant “have certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.'” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (citation omitted). “Depending on the strength of those contacts, there are two forms that personal jurisdiction may take: general and specific.” Picot, 780 F.3d at 1211 (citing Boschetto v. Hansing, 539 F.3d 1011, 1016 (9th Cir. 2008)). General jurisdiction exists when the defendant is domiciled in the forum state or has contacts with the forum state that are so “continuous and systematic” as to render the defendant essentially “at home” in that forum. Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011). Specific jurisdiction exists when a suit arises out of or relates to the defendant's contacts with the forum. Walden v. Fiore, 571 U.S. 277, 284 (2014).

Here, this court's personal jurisdiction over Defendant C&S Logistics is purportedly based on specific jurisdiction, not general jurisdiction. (Doc. No. 22.) Courts apply a three-part test to determine whether it can exercise specific personal jurisdiction over a defendant:

(1) The 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;

(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.

Davis v. Cranfield Aerospace Sols., Ltd., 71 F.4th 1154, 1161-62 (9th Cir. 2023) (citing Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004)). “The plaintiff bears the burden of meeting the first two prongs while the defendant shoulders the burden on the final prong.” Id. “If any of the three requirements is not satisfied, jurisdiction in the forum would deprive the defendant of due process of law.” Omeluk v. Langsten Slip & Batbyggeri A/S, 52 F.3d 267, 270 (9th Cir. 1995).

ANALYSIS

Defendant C&S Logistics moves to dismiss on the basis that this court lacks personal jurisdiction over it. (Doc. No. 16.) In her opposition to the pending motion, Plaintiff does not contend that the court has general personal jurisdiction over Defendant C&S Logistics. Rather, Plaintiff argues that the court has specific personal jurisdiction over Defendant C&S Logistics because (1) Defendant C&S Logistics is the alter ego of its wholly owned subsidiary non-party Tracy Logistics LLC (“Tracy Logistics”), or (2) Defendant C&S Logistics is the agent of Defendant C&S Wholesale.^[2] (Doc. No. 22.) The court addresses each argument in turn.

A. Alter Ego Test

“The existence of a parent-subsidiary relationship is insufficient, on its own, to justify imputing one entity's contacts with a forum state to another for the purpose of establishing personal jurisdiction.” Ranza v. Nike, Inc., 793 F.3d 1059, 1070 (9th Cir. 2015). However, “in certain limited circumstances, the veil separating affiliated entities may be pierced to impute liability from one entity to the other.” Id. Under the alter ego test, a plaintiff can “pierce[] the corporate veil ‘by showing that the subsidiary and the parent are one and the same . . . and thus, the jurisdictional contacts of the subsidiary are also jurisdictional contacts of the parent.'” Gibson v. Walmart Inc., No. 5:22-cv-00238-JWH-KK, 2023 WL 11195913, at *3 (C.D. Cal. Dec. 12, 2023) (citation omitted). “To satisfy the alter ego test, a plaintiff must make out a prima facie case (1) 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.” Ranza, 793 F.3d at 1073 (citation and internal quotation marks omitted) (alterations in original).

The “unity of interest and ownership” prong requires a “showing that the parent controls the subsidiary to such a degree as to render the latter the mere instrumentality of the former.” Id. (citation omitted). “This test envisions pervasive control over the subsidiary, such as when a parent corporation ‘dictates every facet of the subsidiary's business-from broad policy decisions to routine matters of day-to-day operation.'” Id. (citation omitted). “Total ownership and shared management personnel are alone insufficient to establish the requisite level of control.” Id. (citing Harris Rutsky & Co. Ins. Servs. v. Bell & Clements Ltd., 328 F.3d 1122, 1135 (9th Cir. 2003)).

Courts consider nine factors when assessing whether a unity of interest and ownership exists under the alter ego test:

(1) inadequate capitalization, (2) commingling of funds and other assets, (3) disregard of corporate formalities and failure to maintain an arm's length relationship, (4) holding out by one entity that is liable to the debts of the other, (5) identical equitable ownership, (6) use of the same offices and employees, (7) lack of segregation of corporate records, (8) manipulating assets between entities so as to concentrate the assets in one and the liabilities in

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