Opinion
B333736
07-25-2024
JNT COMPANY, LLC, Petitioner, v. THE SUPERIOR COURT OF LOS ANGELES COUNTY, Respondent; JOSE J. LICEA, Real Party in Interest.
Buchalter, Christina M. Morgan and Efrat M. Cogan for Petitioner. No appearance for Respondent. Pacific Trial Attorneys and Scott J. Ferrell for Real Party in Interest.
NOT TO BE PUBLISHED
ORIGINAL PROCEEDINGS in mandate. Los Angeles County Super. Ct. No. 23STCV16244 Barbara A. Meiers, Judge. Petition granted and writ issued with directions.
Buchalter, Christina M. Morgan and Efrat M. Cogan for Petitioner.
No appearance for Respondent.
Pacific Trial Attorneys and Scott J. Ferrell for Real Party in Interest.
FEUER, J.
Jose Licea sued JNT Company, LLC for unauthorized access to computer data in violation of Penal Code section 502,invasion of privacy, and related claims. JNT, a Kansas corporation, moved to quash service of summons for lack of personal jurisdiction. The trial court denied the motion, and JNT filed a petition for writ of mandate in this court. We issued an order to show cause and now grant the petition. We conclude Licea failed to present evidence JNT purposefully availed itself of the benefits of doing business in California. In addition, Licea made no showing in the trial court that it was entitled to jurisdictional discovery as to whether JNT had sales or other contacts with California.
Further undesignated statutory references are to the Penal Code.
FACTUAL AND PROCEDURAL BACKGROUND
A. The Complaint
On July 12, 2023 Licea filed a complaint in Los Angeles County Superior Court alleging five causes of action against JNT: unauthorized access to computer data in violation of section 502, invasion of privacy in violation of sections 630 through 638, common law invasion of privacy, intrusion upon seclusion, and publication of private information.
The complaint alleged JNT is a Kansas-based creative marketing agency that provides services including business card design and social media management. In mid-2023 Licea "visited [JNT's] website and communicated with [JNT]. By using [spyware], [JNT] accessed [Licea's] device, extracted information about [Licea], and shared that information with [other parties] in the hopes of turning [Licea] into an 'actionable sales lead.'"
Pursuant to the parties' stipulation, the trial court struck from the complaint the name of the specific spyware allegedly used by JNT, but not the allegation that JNT used spyware to access Licea's computer.
B. The Motion To Quash Service of Summons
On October 2, 2023 JNT moved to quash service of summons under Code of Civil Procedure section 418.10 for lack of personal jurisdiction. In a supporting declaration, Jeff Hake, the founder and Chief Executive Officer of JNT, stated JNT has its principal place of business in Kansas, has no physical presence in California, does not have any employees or clients in California, and "derives zero revenue from California contacts." JNT argued that because it did not have substantial contacts with California, it could not be subject to specific jurisdiction in California.
In its opposition Licea argued the "interactive and highly commercial nature" of JNT's website demonstrated its "purposeful direction" of activity to California and Licea's claims arose out of JNT's forum-related activities. Therefore, JNT was subject to jurisdiction in California courts. Licea also argued JNT was subject to jurisdiction in California pursuant to section 502, subdivision (j), which states: "For purposes of bringing a civil or criminal action under this section, a person who causes, by any means, the access of a computer, computer system, or computer network in one jurisdiction from another jurisdiction is deemed to have personally accessed the computer, computer system, or computer network in each jurisdiction." Alternatively, Licea requested the trial court defer ruling on the motion to quash until Licea could conduct jurisdictional discovery.
In his supporting declaration, Licea stated he visited JNT's website once in June 2023 using his computer in California and watched a video on the website. The website advertised web hosting services, but Licea acknowledged he did not become a paid subscriber. Licea added that he "did not anticipate that [he] would enter into an ongoing relationship with Defendant governed by extensive contractual terms."
Licea's attorney, Scott Ferrell, submitted a declaration in which he stated that in October 2023 he directed his employees to visit JNT's website. Ferrell attached pages from the JNT website to his declaration. Ferrell explained the website home page had a link at the bottom that stated, "'Get Support.'" By clicking on the link, the user was directed to a webpage titled "CONTACT US" that read, "Please feel free to fill out the form and share as much detail as you can to help us ensure we have the right person at JNT to contact you." The webpage included a form in which the user could enter a name, email, and message. The form also had drop-down menus from which the user would select a "Reason For Contacting" JNT and the "service interested in." The "Contact Us" page lists the locations of JNT's four offices: three in Kansas and one in Kansas City, Missouri. Licea did not state in his declaration that he clicked any links on the website or provided any information to JNT.
The website home page as depicted in the record has several graphics with links to information about the company, including company news, upcoming events, and customer testimonials. The news outlets, events, and customers identified all appear to be based in Kansas. The website also contains a testimonial from a Kansas State University student who had an internship at JNT. She wrote, "JNT is a local marketing agency that works with other local businesses to provide them with marketing solutions."
The trial court held a hearing on the motion to quash on November 9, 2023.[ After hearing argument the court denied the motion in a minute order that stated, "The allegation is that this defendant reached into California to commit a tort, to be treated as an 'in personam' invasion here and liability is being alleged based on that, not on any particular . . . means allegedly used."
According to the minute order there was no court reporter at the hearing, and the parties have not provided a settled statement pursuant to California Rules of Court, rule 8.137.
C. The Petition for Writ of Mandate
JNT timely filed a petition for writ of mandate, seeking an order directing the trial court to grant its motion to quash service of summons for lack of personal jurisdiction. We issued an order to show cause.[
In lieu of filing a written return, Licea requested we rely on his preliminary opposition to the petition.
DISCUSSION
A. Governing Law and Standard of Review
California courts may exercise personal jurisdiction "on any basis not inconsistent with the Constitution of this state or of the United States." (Code Civ. Proc., § 410.10.) The exercise of jurisdiction over a nonresident defendant comports with the California and United States Constitutions if the defendant has such minimum contacts with California that the assertion of jurisdiction does not violate traditional notions of fair play and substantial justice. (Snowney v. Harrah's Entertainment, Inc. (2005) 35 Cal.4th 1054, 1061 (Snowney); Pavlovich v. Superior Court (2002) 29 Cal.4th 262, 268 (Pavlovich); Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 444-445 (Vons Companies, Inc.).)
Under the minimum contacts test, personal jurisdiction may be either general or specific. (Bristol-Myers Squibb Co. v. Superior Court of Cal., San Francisco Cty. (2017) 582 U.S. 255; Snowney, supra, 35 Cal.4th at p. 1062.) General jurisdiction exists when the defendant's contacts with the forum state are so "substantial" or "continuous and systematic" that it is consistent with traditional notions of fair play and substantial justice to subject the defendant to the jurisdiction of the forum even when the cause of action is unrelated to the defendant's contacts with the forum. (Vons Companies, Inc., supra, 14 Cal.4th at pp. 445446; accord, Daimler AG v. Bauman (2014) 571 U.S. 117, 127.)
Specific jurisdiction requires some nexus between the cause of action and the defendant's activities in the forum state. Under well-established case law, specific jurisdiction exists when (1) the defendant has "'purposefully availed himself or herself of forum benefits'"; (2) the controversy is related to or arises out of the defendant's contacts with the forum; and (3) the assertion of personal jurisdiction would comport with "'"'fair play and substantial justice.'"'" (Pavlovich, supra, 29 Cal.4th at p. 269; accord, Daimler AG v. Bauman, supra, 571 U.S. at pp. 126-127; Burger King Corp. v. Rudzewicz (1985) 471 U.S. 462, 472-473 ; Vons Companies, Inc., supra, 14 Cal.4th at p. 446.) There are no bright line rules for determining jurisdiction. "'[R]ather, the facts of each case must be weighed to determine whether the requisite "affiliating circumstances" are present.'" (Pavlovich, at p. 268; see Rivelli v. Hemm (2021) 67 Cal.App.5th 380, 392 [analysis of specific jurisdiction is "intensely fact-specific"].)
When a defendant moves to quash service of process based on jurisdiction, the plaintiff bears the initial burden of establishing the first two elements of specific jurisdiction.[ (Vons Companies, Inc., supra, 14 Cal.4th at p. 449.) "The plaintiff must come forward with affidavits and other competent evidence to carry this burden and cannot simply rely on allegations in an unverified complaint." (ViaView, Inc. v. Retzlaff (2016) 1 Cal.App.5th 198, 210; see Rivelli v. Hemm (2021) 67 Cal.App.5th 380, 393.) If the plaintiff meets this initial burden, "the out-of-state defendant then bears the burden of convincing the court why the exertion of personal jurisdiction would not comport with fair play and substantial justice." (Jacqueline B. v. Rawls Law Group, P.C. (2021) 68 Cal.App.5th 243, 253 (Jacqueline B.).)
Licea does not contend JNT is subject to general jurisdiction in California; we therefore focus our analysis on whether the trial court erred in finding specific jurisdiction.
When the evidence of jurisdictional facts is in conflict, we resolve that conflict in favor of the trial court's order, as long as it is supported by substantial evidence. (Snowney, supra, 35 Cal.4th at p. 1062; Vons Companies, Inc., supra, 14 Cal.4th at p. 449.) Where, as here, if the evidence is undisputed, the question of jurisdiction is one of law, and we independently review the trial court's decision. (Snowney, at p. 1062; Vons Companies, Inc., at p. 449.)
B. The Trial Court Lacked Specific Jurisdiction over JNT
1. Purposeful availment and websites
"'"The purposeful availment inquiry . . . focuses on the defendant's intentionality. [Citation.] This prong is only satisfied when the defendant purposefully and voluntarily directs [its] activities toward the forum so that [it] should expect, by virtue of the benefit [it] receives, to be subject to the court's jurisdiction based on" [its] contacts with the forum.'" (Snowney, supra, 35 Cal.4th at p. 1062.) Thus, purposeful availment occurs where a nonresident defendant "(1) purposefully directs its activities at the forum state's residents, (2) purposefully derives a benefit from its activities in the forum state, or (3) purposefully invokes the privileges and protections of the forum state's laws by (a) purposefully engaging in 'significant activities' within the forum state or (b) purposefully creating 'continuing [contractual] obligations' between itself and the residents of the forum state." (Jacqueline B., supra, 68 Cal.App.5th at p. 253; accord, Snowney, at p. 1063.)
"By limiting the scope of a forum's jurisdiction in this manner, the '"purposeful availment" requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of "random," "fortuitous," or "attenuated" contacts ....' [Citation.] Instead, the defendant will only be subject to personal jurisdiction if '"it has clear notice that it is subject to suit there, and can act to alleviate the risk of burdensome litigation by procuring insurance, passing the expected costs on to customers, or, if the risks are too great, severing its connection with the state."'" (Snowney, supra, 35 Cal.4th at p. 1063.)
"In assessing whether an out-of-state defendant's operation of a website constitutes purposeful availment, we examine (1) whether the website targets California residents [citations], and, if it does not, (2) where the website falls on a 'sliding scale' of 'interactivity' with Internet users, with websites allowing the out-of-state defendant to conduct business with California residents at one end of the scale and websites that passively make information available at the other end."[ (Jacqueline B., supra, 68 Cal.App.5th at p. 254; accord, Snowney, supra, 35 Cal.4th at p. 1063; Pavlovich, supra, 29 Cal.4th at p. 274.) For purposes of the sliding scale analysis, a defendant will be found to "conduct business" over the internet if "'the defendant enters into contracts with residents of a foreign jurisdiction that involve the knowing and repeated transmission of computer files over the Internet.'" (Pavlovich, at p. 274; accord, Snowney, at p. 1063.) On the other hand, "'[a] passive Web site that does little more than make information available to those who are interested in it is not grounds for the exercise [of] personal jurisdiction." (Pavlovich, at p. 274; accord, Snowney, at p. 1063.) A middle ground "'is occupied by interactive Web sites where a user can exchange information with the host computer. In these cases, the exercise of jurisdiction is determined by examining the level of interactivity and commercial nature of the exchange of information that occurs on the Web site.'" (Pavlovich, at p. 274; accord, Snowney, at p. 1063.)
The "sliding scale" analysis of a website's interactivity is not related to the sliding scale approach to specific jurisdiction that was disapproved in Bristol-Myers Squibb Co. v. Superior Court of Cal., San Francisco Cty., supra, 582 U.S. at pages 264 to 265, under which if the defendant had wide-ranging forum contacts that were unrelated to the plaintiffs' claims, less of a connection needed to be shown between the plaintiff's claims and the forum to support jurisdiction. (See Thurston v. Fairfield Collectibles of Georgia, LLC (2020) 53 Cal.App.5th 1231, 1238, fn. 2 ["The 'sliding scale' in Snowney [and Pavlovich] is specific to websites. It does not look to how wide-ranging the defendant's forum contacts are; it looks instead to how interactive and commercial the website is. We conclude that it is still good law."].)
2. Licea failed to present evidence of purposeful availment
Licea contends the "interactive and highly commercial" nature of JNT's website supports a finding of purposeful availment under the sliding scale analysis.[ However, there is no evidence JNT sold goods or services through its website, or even allowed users to check prices or request quotes, which might support a finding of purposeful availment. (See Snowney, supra, 35 Cal.4th at p. 1063 [defendants' website that "quotes room rates to visitors and permits visitors to make reservations at their hotels, is interactive and, at a minimum, falls within the middle ground"]; Thurston v. Fairfield Collectibles of Georgia, LLC (2020) 53 Cal.App.5th 1231, 1240 ["making a substantial number of sales of goods or services to California residents via one's own website constitutes purposeful availment"].)
Licea does not argue that JNT's website targeted California residents for purposes of establishing personal jurisdiction.
The only interactive feature of the JNT website that Licea identifies is the fillable form on the "Contact Us" page on which a user could enter his or her information in order to send a message to JNT. This feature, absent any other commercial exchange of information on the website or any targeting of California residents, places JNT's website on the "passive website" end of the sliding scale. (See Shisler v. Sanfer Sports Cars, Inc. (2006) 146 Cal.App.4th 1254, 1261 [website did not establish jurisdiction where California plaintiff purchased car after seeing it advertised on nonresident's website and "defendant's Web site merely advertised its vehicles and (presumably) included a credit application. There is no evidence that files were exchanged via Web site or that any business was actually conducted via the site"].)
The conclusion that JNT's website falls on the passive side of the sliding scale is supported by the court's decision in Pavlovich. In that case, Pavlovich, a Texas resident, posted source code of a decryption program to his website. (Pavlovich, supra, 29 Cal.4th at p. 267.) The website "consisted of a single page with text and links to other Web sites. The site only provided information; it did not solicit or transact any business and permitted no interactive exchange of information between its operators and visitors." (Id. at pp. 266-267.) A non-profit trade association sued Pavlovich in California for misappropriation of trade secrets based on Pavlovich's posting of the decryption program source code. (Id. at p. 267.) Pavlovich moved to quash service, arguing he had no contacts with California. (Ibid.) The association argued jurisdiction was proper because Pavlovich knew his post would harm businesses located in California. (Ibid.) The trial court denied the motion to quash, and the Court of Appeal denied Pavlovich's petition for writ of mandate. (Id. at pp. 267-268.)
The Supreme Court granted review and adopted the sliding scale analysis for determining personal jurisdiction based on out-of-state websites. (Pavlovich, supra, 29 Cal.4th at p. 273-274.) The court found Pavlovich's website fell on the passive end of the sliding scale because it "merely posts information and has no interactive features. There is no evidence in the record suggesting that the site targeted California. Indeed, there is no evidence that any California resident ever visited, much less downloaded the [source code]." (Id. at p. 274.) The court continued, "'"Creating a site, like placing a product into the stream of commerce, may be felt nationwide-or even worldwide-but, without more, it is not an act purposefully directed toward the forum state."' [Citations.] Otherwise, 'personal jurisdiction in Internet-related cases would almost always be found in any forum in the country.' [Citation.] Such a result would 'vitiate long-held and inviolate principles of' personal jurisdiction." (Id. at pp. 274-275.) Accordingly, the court held, "Pavlovich's alleged 'conduct in . . . posting [a] passive Web site[ ] on the Internet is not,' by itself, 'sufficient to subject' him 'to jurisdiction in California.'"[ (Id. at p. 274.)
The court additionally found that Pavlovich's knowledge his conduct may harm California residents was insufficient to establish jurisdiction based on the facts in that case. (Pavlovich, supra, 29 Cal.4th at pp. 275-276.)
Like the website in Pavlovich, JNT's website was a largely passive website that contained information about the company. While JNT's website was slightly more interactive given that a user could fill out a contact form, there was no evidence the website targeted California users. Even if the fillable form were sufficient to place the JNT website into the "middle ground" of interactivity, such interactivity is diminished by the fact that Licea unilaterally initiated the contact. (See Jacqueline B., supra, 68 Cal.App.5th at p. 255 ["website occupied a 'middle ground' because it ostensibly allowed plaintiff to exchange information with the firm's website [citation], although the fact that plaintiff herself had to reach out to the [defendant] directly confirms the minimal interactivity of the website"].)
Given the minimal nature of the website's interactivity and the lack of evidence of any targeting of California residents by JNT, the website alone is insufficient to constitute purposeful availment.[
The parties discuss at length the recent Ninth Circuit opinion Briskin v. Shopify, Inc. (9th Cir. 2023) 87 F.4th 404, which held the defendants' extraction and retention of consumer data through a "nationally available e-commerce payment platform" that is "indifferent to the location of end-users," without more, did not subject the defendants to jurisdiction in the forum where the end-user was located. (Id. at p. 409.) However, the opinion has been vacated and will be heard en banc. (Briskin v. Shopify, Inc. (9th Cir. 2024) 101 F.4th 706.)
3. Section 502 does not confer personal jurisdiction on JNT
Licea contends section 502, subdivision (j), establishes the purposeful availment prong of specific jurisdiction. Section 502, subdivision (c), makes it a crime for an individual to knowingly access a computer, a computer system or network, or computer data, with specified types of prohibited access. As discussed, section 502, subdivision (j), states that "a person who causes . . . the access of a computer . . . in one jurisdiction from another jurisdiction is deemed to have personally accessed the computer . . . in each jurisdiction." Licea argues that based on subdivision (j), JNT is deemed to have been in California when it allegedly accessed his computer, thus automatically satisfying the requirements of purposeful availment. This argument lacks merit.
Licea has cited no authority for the proposition that section 502 (or any other statute) was intended by the Legislature to circumvent the minimum contacts requirement for personal jurisdiction otherwise mandated by the United States and California Constitutions. Thus, even if JNT's allegedly tortious conduct was deemed to have been committed in California under California law for purposes of supporting a violation of section 502, that would not end the inquiry. Licea would still need to present evidence (other than the allegations in the complaint) showing JNT's contacts with California were purposeful and voluntary, rather than random, fortuitous, attenuated, or the result of the "'"unilateral activity of another party or third person."'" (Pavlovich, supra, 29 Cal.4th at p. 269; accord, Snowney, supra, 35 Cal.4th at p. 1063.)
Otherwise, a plaintiff could hale an out-of-state company with no contacts with California into California based solely on an allegation that the company through its website had committed a tort in California by installing spyware on the plaintiff's computer (what the trial court referred to as an "'in personam' invasion"). It cannot. (See Pavlovich, supra, 29 Cal.4th at p. 273 ["[t]he plaintiff has the initial burden of demonstrating facts justifying the exercise of jurisdiction,"' italics added]; see also Snowney, supra, 35 Cal.4th at p. 1065 [plaintiff established specific jurisdiction over defendant hotels where evidence showed hotels' website targeted California residents, hotels advertised extensively in California, and hotels obtained a significant percentage of their patrons from California].)
Licea presented no evidence that JNT targeted California residents or conducted any business in California, and it is undisputed Licea unilaterally chose to visit the JNT website. Under these circumstances, the facts do not support a finding that JNT purposefully availed itself of forum benefits such that a finding of personal jurisdiction would be proper. (See Pavlovich, at p. 272 [rejecting argument that location of the injury is dispositive in determining personal jurisdiction, explaining, "[t]he knowledge that harm will likely be suffered in the forum state, "'when unaccompanied by other contacts,' is therefore 'too unfocused to justify personal jurisdiction'"].)
C. Licea Has Not Made a Sufficient Showing To Support His Request for Jurisdictional Discovery
Prior to the trial court's ruling on the motion to quash, Licea served discovery requests on JNT directed toward establishing jurisdictional facts, including a notice of taking the deposition of JNT's person most knowledgeable and a request for 21 categories of documents.
In his opposition to the motion in the trial court, Licea requested additional time to conduct the discovery. The trial court never reached Licea's request because it denied the motion to quash. In his preliminary opposition Licea argued that, if we find the trial court erred in denying the motion to quash, we should order the trial court to allow him to conduct jurisdictional discovery. However, Licea did not make a sufficient showing to support jurisdictional discovery.
A trial court has discretion to continue a hearing on a motion to quash to allow the plaintiff to conduct jurisdictional discovery. (Preciado v. Freightliner Custom Chassis Corporation (2023) 87 Cal.App.5th 964, 972.) In order to prevail on a request for jurisdictional discovery, a "'plaintiff should demonstrate that discovery is likely to lead to the production of evidence of facts establishing jurisdiction.'" (Ibid.) The right to jurisdictional discovery is limited, and it is not designed to be a fishing expedition. (See 1880 Corp. v. Superior Court of San Francisco (1962) 57 Cal.2d 840, 843 [a nonresident defendant "cannot be required to answer any question which is not relevant to the subject matter of the motion [to quash], and it should have the right to protect itself against oppressive interrogatories without making a general appearance"].)
Licea concedes Hake's declaration states JNT derives no revenue from California and has no physical presence, employees, or clients in California. But Licea notes the declaration is written in the present tense and does not preclude the possibility that JNT at some prior point conducted business in California. But other than Licea's generic allegation in its complaint that Licea "believes that [JNT] generates a minimum of eight percent of revenues from its website based upon interactions with Californians," Licea has not presented any basis on which to conclude that additional discovery is likely to lead to the production of evidence that JNT previously conducted business in California. If Licea had a basis to support this allegation, it is puzzling that he would not produce that evidence to demonstrate that additional discovery would produce evidence to support jurisdiction. (See § 128.7, subdivision (b)(3) [by filing a complaint or other pleading, a party or attorney "is certifying that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, . . . [t]he allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery"].)
Moreover, at oral argument counsel for Licea stated the only basis for the allegation that JNT generated at least 8 percent of its revenues from California was that California has approximately 12 percent of the country's population. But it is pure speculation that the percentage of JNT's total revenue from sales made to California residents is proportional to the percentage of the United States population that lives in California. Indeed, the focus of JNT's website on local marketing projects supports a contrary inference. Licea did not make any other showing that discovery was "'likely to lead to the production of evidence of facts establishing jurisdiction.'" (Preciado v. Freightliner Custom Chassis Corporation, supra, 87 Cal.App.5th at p. 972.) Further, the discovery Licea served on JNT shows that Licea intended to embark on an improper fishing expedition, seeking the production of documents and testimony from the person most knowledgeable pertaining to JNT's revenue over the prior two years; the portion of revenue attributable to California sales; JNT's sales to California; JNT's customers in California; the number of JNT employees and agents in California; all business travel to California by any officer, employee, or agent of JNT; JNT's contacts and communications with California; JNT's advertising directed to California; all lawsuits in California in which JNT was a party; and numerous other topics. (See 1880 Corp. v. Superior Court of San Francisco, supra, 57 Cal.2d at p. 843.) Although the trial court did not rule on Licea's request for a continuance to conduct jurisdictional discovery, on the facts Licea presented in support of its motion, allowing jurisdictional discovery would have been an abuse of discretion.
DISPOSITION
The petition for writ of mandate is granted. Let a peremptory writ of mandate issue directing the superior court to vacate its order denying JNT's motion to quash service of summons and to enter a new order granting JNT's motion to quash and denying Licea's request for jurisdictional discovery. JNT is to recover its costs in this proceeding.
We concur: SEGAL, Acting P. J. STONE, J.