United States District Court, D. Oregon
LIBERTY NATURAL PRODUCTS, INC., and, JAMES R. DIERKING, Plaintiffs,
VALERIE HAWK HOFFMAN, AKA VALERIE HOLLAND HAWK, AKA VALERIE HAWK FUREY, AKA ARDEN HOFFMAN, AKA ARDEN KOFFMAN, AKA ALLIE LOUGHLIN, AKA ALLIE LOUGHLIN; DAVID BOYD HOFFMAN, AKA DAVID BOYD, AKA DAVID KOFFMAN; SUNRISE HERBAL REMEDIES, INC., DISSOLVED; SAGE ADVICE OF PALM BEACH INC., DISSOLVED; FRESH HERBS AND TEAS, INC, LLC; PEACEFUL PROPERTIES LLC; HOFFMAN AND HAWK LLC; AND WESLEY AMOS HAWK; AND UNNAMED PERSONS AIDING THEM IN COURT PROCEEDINGS, Defendants.
F. DIERKING, IMOTHY J. VANAGAS Attorneys for Plaintiffs.
WILLIAM D. BRANDT Attorney for Defendants.
OPINION AND ORDER
J. BROWN, UNITED STATES SENIOR DISTRICT JUDGE.
matter comes before the Court on the Motion (#111) to Dismiss
Under Rule 12(b) and the Alternative Motion (#114) to Strike
Certain Paragraphs of Plaintiffs' Second Amended
Complaint filed by Defendants Valerie Hawk Hoffman; David
Hoffman; Wesley Amos Hawk; Peaceful Properties, LLC; and
Hoffman and Hawk, LLC.
reasons that follow, the Court GRANTS in
part and DENIES in part
Defendants' Motion to Dismiss and DENIES as
moot Defendants' Motion to Strike.
following facts are taken from Plaintiffs' Second Amended
Complaint and the pleadings submitted by the parties and are
construed in the light most favorable to Plaintiffs.
Liberty Natural Products, Inc., is an Oregon corporation
engaged in the manufacture, marketing, and distribution of
herbal extracts. Plaintiff James R. Dierking is the
president, CEO, and sole shareholder of Liberty Natural.
Valerie Hoffman is a Florida resident and was the president
of Defendant Sunrise Herbal Remedies, Inc., a Connecticut
corporation. Sunrise was engaged in the sale and distribution
of herbal extract consumer goods and did business in Oregon.
On May 1, 2006, Sunrise was dissolved. On May 23, 2006,
Valerie Hoffman formed Defendant Sage Advice of Palm Beach,
LLC, a Florida corporation, which was also subsequently
dissolved. In February 2007 Valerie Hoffman formed Defendant
Fresh Herbs and Teas, LLC, a Florida corporation, which was
also subsequently dissolved. Defendant David Hoffman, the
former husband of Valerie Hoffman, is also a Florida resident
and was the manager and operator of Sunrise and Fresh Herbs.
Defendant Peaceful Properties, LLC, is a Maine corporation
formed by David Hoffman for the purpose of holding certain
real property. Defendant Wesley Amos Hawk, who is Valerie
Hoffman's father, is a resident of Connecticut and was
the general manager of Defendant Hoffman and Hawk, a
dissolved Connecticut limited liability company.
in 2008 Liberty filed an action against Valerie Hoffman,
David Hoffman, and Sunrise in Clackamas County Circuit Court
for debts owed to Liberty Natural. Valerie Hoffman filed a
counterclaim against Liberty. In April 2009 Liberty obtained
a judgment in the Clackamas County case for $152, 252.91
against Valerie Hoffman and Sunrise. David Hoffman was found
not liable for the debts owed by Valerie Hoffman and Sunrise.
December 2010 Liberty filed another action against Valerie
Hoffman, Sunrise, Sage, and Kevin Brague in Clackamas County
Circuit Court and asserted a claim for wrongful use of civil
proceedings. On March 2, 2011, Valerie Hoffman filed a Notice
of Removal to federal court, Case No. 3:11-cv-00264. The
removal action was assigned to Magistrate Judge Dennis J.
29, 2013, Liberty and James R. Dierking filed a Complaint in
this court, Case No. 3:13-cv-00886, asserting claims for
intentional interference with business relationships and
fraud against all Defendants. Plaintiffs also sought an
injunction against Defendants and a declaration that
Defendants had violated federal RICO statutes. The case was
assigned to this judicial officer.
25, 2013, Valerie Hoffman filed a Notice (#10) of Bankruptcy
Filing in which she stated that she had filed a petition in
the United States Bankruptcy Court for the Middle District of
Florida seeking relief under Chapter 13 of the bankruptcy
29, 2013, the Court directed the parties to file a notice
with this Court and to indicate whether there was a basis for
this action to proceed without obtaining relief in the
bankruptcy court from the automatic stay. Order (#11).
August 11, 2013, Plaintiffs filed a Notice (#12) of Basis to
Continue Proceedings Without Obtaining Relief from Automatic
Stay, requested the Court “sever all claims” as
to all Defendants other than Valerie Hoffman, and requested
leave to file a motion for preliminary injunction as to all
other Defendants. Plaintiffs also requested leave to seek
relief from the automatic stay in the bankruptcy court as to
August 26, 2013, Valerie Hoffman filed a Response to
Plaintiffs' Notice and provided a copy of an Order issued
by Magistrate Judge Hubel staying the case assigned to him
based on Valerie Hoffman's bankruptcy filing.
August 29, 2013, the Court issued a stay in this case. The
[T]here is not any basis to find the automatic stay does not
apply to Defendant Valerie Hoffman in whatever capacity she
may be designated in Plaintiffs' Complaint and to the
other named Defendants for whose actions Hoffman is allegedly
responsible. Thus, the Bankruptcy Court is in the best
position to determine the extent to which these
litigants' issues should be resolved in the bankruptcy
proceeding as opposed to this pending matter. Accordingly,
the Court finds the automatic stay applies in this action,
which the Court now STAYS for all purposes pending an order
from the Bankruptcy Court authorizing relief from stay as to
all or part of this action. . . . Finally, unless such relief
[from] stay is obtained before December 16, 2013, the Court
will then dismiss this action without prejudice to
Plaintiffs' efforts to pursue its claims in the
December 15, 2013, Plaintiffs filed a Motion (#24) to
Continue this case pending further proceedings in the
December 28, 2013, the Court granted Plaintiffs' request,
continued the case, and directed Plaintiffs to file a status
report after relief from the stay was obtained or on
resolution of the bankruptcy matter. Order (#28).
January 8, 2015, Plaintiffs filed a Status Report (#38) and
stated the bankruptcy court had issued an order
“providing relief of the automatic stay to Liberty and
Dierking to continue the litigation in the Oregon District
Court against non-Debtors David Boyd Hoffman, Peaceful
Properties, LLC, Hoffman and Hawk, LLC, and Wesley Amos
Hawk.” On January 14, 2015, the Court granted
Plaintiffs leave to file a motion to continue these
proceedings against the non-debtor Defendants. Order (#39).
On February 11, 2015, Plaintiffs filed a Motion (#41) to
Continue Proceedings against the non-debtor Defendants.
March 2, 2015, the non-debtor Defendants filed a Motion (#44)
to Dismiss Plaintiffs' Complaint based on lack of
personal jurisdiction, improper venue, lack of proper
service, and failure to state a claim. The non-debtor
Defendants indicated their Motion to Dismiss was a
“Limited Appearance.” They also filed a Response
(#45) to Plaintiffs' Motion to Continue Proceedings
against them on the same grounds asserted earlier in their
Motion to Dismiss.
April 10, 2015, Plaintiffs filed a Motion (#58) to Postpone
Court Action on the Defendants' Motion to Dismiss Until
Plaintiff Has Made Service upon the Defendants Wesley Hawk
and David Hoffman and Their Depositions Have Been Taken and a
Motion (#59) to Allow Service by Alternative Means. On April
16, 2015, the non-debtor Defendants filed their oppositions
(#62, #63) to Plaintiffs' Motions.
April 17, 2015, the Court denied Plaintiffs' Motion to
Postpone Court Action on Defendants' Motion to Dismiss
and set a briefing schedule for Defendants' Motion to
Dismiss and Plaintiffs' Motion for Alternative Service.
8, 2015, the Court denied Plaintiffs' Motion to Continue
Proceedings against David Hoffman, Peaceful Properties,
Hoffman and Hawk, and Hawk. Order (#78). The Court stated:
After considering the parties' Motions, the Court
concludes although the automatic bankruptcy stay no longer
necessitates a stay of this matter as to Defendants David
Boyd Hoffman; Peaceful Properties, LLC; Hoffman & Hawk,
LLC; and Wesley Amos Hawk, the continuance of a stay is,
nonetheless, appropriate in the exercise of this Court's
case-management discretion because the claims in this action
against the non-debtor Defendants are inextricably
intertwined with the claims against the bankruptcy debtor
Defendant Valerie Hawk Furey (formerly Valerie Hawk Hoffman).
Court also denied as moot Defendants' Motion to Dismiss
and Plaintiffs' Motion for Alternative Service.
February 9, 2017, Defendants filed a Notice (#93) of
Discharge in Bankruptcy as to Valerie Hoffman. On March 6,
2017, the parties filed a Joint Status Report (#95) asserting
various positions regarding the effect of the bankruptcy
March 9, 2017, the Court lifted the stay in this case and
directed the parties to file by March 24, 2017, a Joint
Statement of Remaining Issues and a proposed case-management
April 3, 2017, in response to the parties' Joint
Statement, the Court stated:
The Court concludes an important step to moving this matter
to conclusion requires a current statement of all
Plaintiff[s'] claims that Plaintiff[s] contend should
be litigated in this proceeding, and, therefore, the Court
concludes in the exercise of its case-management discretion
that Plaintiff[s] should be permitted to file an Amended
Complaint. The Court also notes because Defendants'
original Motion to Dismiss (#44) was denied as moot (#78) and
because that Motion to Dismiss raised issues of jurisdiction
and service, those fundamental legal matters need to be
addressed in motions against any Amended Complaint if
Plaintiff[s] choose to file an Amended Complaint or against
the existing Complaint (#1) together with Defendants'
challenge referenced in the Joint Statement (#97) in which
Defendants assert all claims against them are barred because
of the bankruptcy discharge of Valerie Hoffman.
(#99). The Court subsequently set deadlines for the filing of
Plaintiffs' Amended Complaint and Defendants'
“answer, motion to dismiss, or other challenge”
to the Amended Complaint.
10, 2017, Plaintiffs filed an Amended Complaint (#107). On
July 13, 2017, Plaintiffs filed a Second Amended Complaint
(#108) to “correct clerical errors in Plaintiffs'
Amended Complaint” and to assert claims for fraud,
intentional interference with business relations, civil
conspiracy, and violation of the Racketeer Influenced and
Corrupt Organizations Act (RICO), 18 U.S.C. §§
1961, et seq. Plaintiffs also seek an injunction and
declaratory judgment referring Defendants to the United
States Attorney for criminal prosecution.
August 7, 2017, all Defendants filed their Motion (#111) to
Dismiss and Alternative Motion (#114) to Strike.
Motion to Dismiss
survive a motion to dismiss a complaint must contain
sufficient factual matter, accepted as true, to “state
a claim for relief that is plausible on its face.”
Bell Atlantic v. Twombly, 550 U.S. 544, 545 (2007).
A claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged. Id. at 556. “The plausibility
standard is not akin to a ‘probability requirement,
' but it asks for more than a sheer possibility that a
defendant has acted unlawfully.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009)(quoting
Twombly, 550 U.S. at 546). When a complaint is based
on facts that are “merely consistent with” a
defendant's liability, it “stops short of the line
between possibility and plausibility of entitlement to
relief.” Iqbal, 556 U.S. at 678 (citing
Twombly, 550 U.S. at 557). See also Bell
Atlantic, 550 U.S. at 555-56. The court must accept as
true the allegations in the complaint and construe them in
favor of the plaintiff. Din v. Kerry, 718 F.3d 856,
859 (9th Cir. 2013).
pleading standard under Federal Rule of Civil Procedure 8
“does not require ‘detailed factual allegations,
' but it demands more than an unadorned,
Iqbal, 556 U.S. at 678 (quoting Twombly,
550 U.S. at 555). See also Federal Rule of Civil
Procedure 8(a)(2). “A pleading that offers
‘labels and conclusions' or ‘a formulaic
recitation of the elements of a cause of action will not
do.'” Id. (citing Twombly, 550
U.S. at 555). A complaint also does not suffice if it tenders
“naked assertion[s]” devoid of “further
factual enhancement.” Id. at 557.
ruling on a 12(b)(6) motion, a court may generally consider
only allegations contained in the pleadings, exhibits
attached to the complaint, and matters properly subject to
judicial notice." Swartz v. KPMG LLP, 476 F.3d
756, 763 (9th Cir. 2007)(citing Jacobson v.
Schwarzenegger, 357 F.Supp.2d 1198, 1204 (C.D. Cal.
2004)). A court, however, "may consider a writing
referenced in a complaint but not explicitly incorporated
therein if the complaint relies on the document and its
authenticity is unquestioned." Id. (quoting
Parrino v. FHP, Inc., 146 F.3d 699, 706
(9th Cir. 1998), superseded by statute on other grounds
as stated in Abrego v. Dow Chem. Co., 443 F.3d 676 (9th
Motion to Strike
to strike are disfavored and are not the proper vehicle to
dismiss a claim for failure to state a claim. Pinnacle
Sys., Inc. v. XOS Tech., Inc., No. C-02-03804, 2003 WL
21397845, at *4 (N.D. Cal., May 19, 2003). Federal Rule of
Civil Procedure 12(f) allows the court to strike any
“redundant, immaterial, impertinent, or scandalous
material.” To be impertinent or immaterial, the
allegations must not have any possible bearing on the
controversy. Employers Ins. of Wausau v. Musick, Peeler,
& Garrett, 871 F.Supp. 381, 391 (S.D. Cal. 1994),
opin. amended on reconsideration, 948 F.Supp. 942
(S.D. Cal. 1995). “Immaterial matter” within the
meaning of Rule 12(f) is material that does not have any
essential or important relationship to the claim or the
defenses being pleaded. Van Slyke v. Capital One
Bank, 503 F.Supp.2d 1353, 1367 (N.D. Cal. 2007).
considering a motion to strike, the court must view the
pleadings in the light most favorable to the nonmoving party.
In re 2TheMart.com Secs. Litig., 114 F.Supp.2d 955,
965 (C.D. Cal. 2000).
their Second Amended Complaint Plaintiffs allege a myriad of
facts regarding actions by and between the parties over many
years in Maine, Florida, and Oregon. The basis of this action
is the inability of Plaintiffs to collect a judgment they
obtained in Oregon against Valerie Hoffman and the allegedly
fraudulent conduct by Defendants that kept Plaintiffs from
collecting that judgment.
Defendants' Motion to Dismiss
move to dismiss Plaintiffs' claims on the grounds that
(1) Plaintiffs' claims against Valerie Hoffman violate
the discharge that she obtained in the bankruptcy proceeding
and the settlement agreement between the parties; (2)
Plaintiffs have not properly served Defendants David Hoffman,
Wesley Amos Hawk, Peaceful Properties, and Hoffman and Hawk
(non-debtor Defendants); (3) non-debtor Defendants are not
subject to the personal jurisdiction of this Court; (4)
Plaintiffs' claims against all Defendants are barred by
the applicable statute of limitations; (5) Plaintiffs fail to
state a claim against all Defendants; and (6) Plaintiffs'
claims against all Defendants are barred by the doctrine of
res judicata. Defendants also contend Plaintiffs do
not have standing to request that the Court refer this matter
to the United States Attorney for criminal prosecution.
their Response Plaintiffs contend (1) Defendants' Motion
to Dismiss is not timely, (2) Valerie Hoffman is an
indispensable party, (3) non-debtor Defendants were properly
served and are subject to the jurisdiction of this Court, (4)
Plaintiffs have adequately stated claims against all
Defendants, and (5) Plaintiffs' claims against all
Defendants are not barred by the statute of limitations or by
Claims against Valerie Hoffman
noted, the Court stayed this case on August 29, 2013, based
on the automatic stay imposed by the bankruptcy court at the
time Valerie Hoffman filed for bankruptcy. Plaintiffs,
nevertheless, contend Valerie Hoffman is “an
indispensable party.” Plaintiffs, however, fail to
provide any legal authority to support their proposition, and
the Court's Orders (#16, #78) relied on by Plaintiffs do
not support their position. In those Orders the Court
concluded the automatic stay imposed by Valerie Hoffman's
bankruptcy petition applied to this action and was
appropriate because the claims asserted against the
non-debtor Defendants were “inextricably
intertwined” with the claims against Valerie Hoffman to
such a degree that Plaintiffs' claims against the
non-debtor Defendants might become moot if Valerie
Hoffman was discharged in bankruptcy.
addition, Defendants attach to their Motion to Dismiss a copy
of the Settlement Agreement dated November 7, 2014, between
Plaintiffs and Valerie Hoffman. In that Settlement Agreement
the parties agreed Plaintiffs would withdraw their opposition
to Valerie Hoffman's discharge in bankruptcy and agreed
[u]pon the filing by [Plaintiffs] of a motion for relief from
the automatic stay to continue litigation in Oregon and
Florida against non-debtor defendants, David Hoffman and
Wesley Hawk, [Valerie Hoffman] will consent to, or not
oppose, the relief requested in such motions, so long as such
motions are limited to seeking relief from the automatic stay
to continue litigation against the non-debtor defendants
of William Brandt (#113), Ex. 3 at ¶ 6.
on the discharge in bankruptcy obtained by Valerie Hoffman
and the Settlement Agreement between the parties, the Court
concludes Plaintiffs' claims against Valerie Hoffman are
barred. On this record, therefore, the Court concludes
Valerie Hoffman is not an indispensable party for purposes of
this litigation. Accordingly, the Court
GRANTS Defendants' Motion to Dismiss as
to Plaintiffs' claims against Valerie Hoffman.
Timeliness of Defendants' Motion to Dismiss
contend Defendants' Motion is not timely on the ground
that it was filed more than four years after this action was
commenced and after the Court's Order (#16)
Rule of Civil Procedure 12 requires a defendant to file a
responsive pleading or motion within 21 days of being served
with summons and complaint. Plaintiffs' initial Complaint
in this case was filed on May 29, 2013. On July 17, 2013,
Valerie Hoffman filed a Notice (#7) of Related Case advising
the Court of the pending case before Magistrate Judge Hubel.
On July 25, 2013, Valerie Hoffman filed her Notice (#10) of
Bankruptcy Filing. As noted, the Court indicated its
intention to stay this matter pursuant to the bankruptcy
notice. Although Plaintiffs objected and requested this case
to continue without obtaining any relief from the automatic
stay, the Court, nevertheless, entered an Order (#16) on
August 29, 2013, staying this case “for all
January 8, 2015, Plaintiffs filed a Notice (#38) on
Bankruptcy Motion Status stating the bankruptcy court had
issued an order on December 16, 2014, providing relief from
the automatic stay to allow Plaintiffs to continue the case
in this Court as to the non-debtor Defendants.
February 22, 2015, Plaintiffs filed a Motion (#41) to
Continue Proceedings Against Non-Debtor Defendants.
March 2, 2015, non-debtor Defendants filed a Motion (#44) to
Dismiss Plaintiffs' Complaint on the grounds of lack of
personal jurisdiction, improper venue, lack of service, and
failure to state a claim. Non-debtor Defendants indicated
their Motion was a “limited appearance.”
April 20, 2015, Plaintiffs filed a Motion (#58) to Postpone
Court Action on Defendants' Motion to Dismiss and a
Motion (#59) to Allow Service by Alternative Means on David
Hoffman and Hawk.
8, 2015, the Court continued the stay in this case and denied
as moot non-debtor Defendants' Motion (#44) to Dismiss
and Plaintiffs' Motion (#59) to Allow Alternative
Service. Order (#78).
March 9, 2017, the Court lifted the stay in this case. Order
(#96). The Court also noted the outstanding issues raised by
non-debtor Defendants' original Motion (#44) to Dismiss
filed in 2015 and the possibility that Plaintiffs “may
choose to file an amended complaint.” On April 5, 2017,
the parties filed a Supplemental Joint Case Management
Statement (#100) in which they indicated Plaintiffs intended
to file an amended complaint. The Court set a deadline of
June 5, 2017, for Plaintiffs to file their amended complaint
and on June 9, 2017, extended that deadline to July 10, 2017.
On July 10, 2017, the Court extended the deadline for
Defendants' response to August 7, 2017.
10, 2017, Plaintiffs filed their Amended Complaint (#107) and
on July 13, 2017, filed a Second Amended Complaint (#108)
“to correct clerical errors.” On August 7, 2017,
Defendants filed their Motion (#111) to Dismiss.
record the Court concludes Defendants' Motion to Dismiss
was timely filed.
Service on Non-Debtor Defendants
Defendants contend they have not been properly served with
summons and complaint in accordance with Rule 4©)
because they have not been personally served.
Rule of Civil Procedure 4(e) provides an individual within a
judicial district of the United States may be served (1) by
following state law for serving a summons in an action
brought in courts of general jurisdiction in the state where
the district court is located, (2) by personal service, (3)
by service at the individual's dwelling or usual place of
abode to someone of suitable age who also resides there, or
(4) by service upon an agent authorized to receive service.
Rule of Civil Procedure 7D(2)(d)(I) provides service of a
summons and complaint may be accomplished by personal
service, substitute service, office service, or service by
mail. Service by mail requires mailing true copies of the
summons and complaint to the defendant by first class mail
and by certified, registered, or express mail with return
receipt requested. Under Oregon Rule of Civil Procedure
7D(2)(d)(ii) service is accomplished when the defendant signs
a receipt for the mailing or seven days after the mailing if
mailed to an address outside of the state. Or. R. Civ. P.
David Hoffman has been properly served.
argue the Court should conclude David Hoffman has been served
“because of the adverse inference stemming from his
egregious misconduct” in avoiding personal service.
Plaintiffs contend, in any event, David Hoffman was served
through his attorney.
February 11, 2015, Plaintiffs filed the Declaration (#43) of
Roger Dierking in Support of Plaintiffs' Motion (#41) to
Continue Proceedings Against Non-Debtors. Attached to the
Declaration is an Affidavit of Due Diligence and Evasion
submitted by a process server listing service attempts at
David Hoffman's residence in Florida on June 29, July 10,
July 12, and July 20, 2013, that were unsuccessful. Decl.
Dierking at Ex. 11. On July 2, 2013, Plaintiffs mailed a copy
of the Summons and Complaint to David Hoffman at his Florida
residence by first class and certified mail. These mailings
were returned as “unclaimed, ” “unable to
forward, ” and “return to sender.”
David Hoffman concedes the Florida address to which these
mailings were sent was his residence, he contends he
“was only in Florida on and off during the summer
months of 2013.”
to the Federal Rules of Civil Procedure and the Oregon Rules
of Civil Procedure, service by mail is allowed and is
complete seven days after mailing to an out-of-state address.
Plaintiffs' mailing to David Hoffman at his residence in
Florida was made July 2, 2013, and, therefore, service was
completed on him as of July 9, 2013.
Hawk, Peaceful Properties, and Hoffman and Hawk have not been
their Response to Defendants' Motion to Dismiss
Plaintiffs do not provide any arguments regarding service on
Hawk, Peaceful Properties, or Hoffman and Hawk. In their
Second Amended Complaint, however, Plaintiffs allege Hawk was
served with summons and complaint by serving his attorney.
on an attorney does not qualify as service on the party
unless the agent is authorized to receive process. Or. R.
Civ. P. 7D(1). See also Bishop v. OBEC Consulting
Eng'rs, 160 Or.App. 548, 555 (1999).
summary, the Court concludes on this record that David
Hoffman has been properly served with summons and complaint
and Hawk, Peaceful Properties, and Hoffman and Hawk have not
been properly served with summons and complaint. Accordingly,
the Court DENIES Defendants' Motion to
Dismiss as to David Hoffman and GRANTS the
Motion as to Hawk, Peaceful Properties, and Hoffman and Hawk
on the basis that these non-debtor Defendants have not been
Hawk, Peaceful Properties, and Hoffman and Hawk had been
properly served, non-debtor Defendants contend this Court
lacks personal jurisdiction over any of the non-debtor
Defendants because they have not engaged in any conduct in
Oregon sufficient to subject them to the jurisdiction of this
contend David Hoffman is subject to the jurisdiction of this
Court on the grounds that he made regulatory complaints in
Clackamas County that were intended to further the conspiracy
to damage and to intimidate Plaintiffs in their Oregon
business. Plaintiffs also contend non-debtor Defendants
entered a general appearance in this Court and subjected
themselves to the Court's jurisdiction by filing an
unopposed motion for extension of time to answer
Plaintiffs' Amended Complaint.
party seeking to invoke the personal jurisdiction of the
federal court has the burden to establish that jurisdiction
exists. Data Disc, Inc. v. Sys. Tech. Assoc., Inc.,
557 F.2d 1280, 1285 (9th Cir. 1977). When "a defendant
moves to dismiss a complaint for lack of personal
jurisdiction, the plaintiff bears the burden of demonstrating
that jurisdiction is appropriate." Schwarzenegger v.
Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir.
court may consider evidence presented in affidavits to assist
it in its determination and may order discovery on the
jurisdictional issues." Doe v. Unocal Corp.,
248 F.3d 915, 922 (9th Cir. 2001)(citing Data Disc, Inc.
v. Sys. Tech. Assoc., Inc., 557 F.2d at 1285). If the
court makes a jurisdictional decision based only on pleadings
and affidavits submitted by the parties, "the plaintiff
need make only a prima facie showing of
jurisdictional facts to withstand the motion to
dismiss." Id. (quoting Ballard v.
Savage, 65 F.3d 1495, 1498 (9th Cir. 1995)). When
determining whether the plaintiff has met the prima
facie showing, the court must assume the truth of
uncontroverted allegations in the complaint. Ochoa v.
J.B. Martin and Sons Farms, Inc., 287 F.3d 1182, 1187
(9th Cir. 2002). If the court rules on a defendant's
motion to dismiss for lack of personal jurisdiction without
holding an evidentiary hearing, the plaintiff's version
of the facts, unless directly contravened, is taken as true
and the court must resolve factual conflicts in the
parties' affidavits in favor of the plaintiff. Harris
Rutsky & Co. Ins. Serv., Inc. v. Bell & Clements
LTD, 328 F.3d 1122, 1129 (9th Cir. 2003).
General Personal Jurisdiction
general personal jurisdiction to exist over a nonresident
defendant, the defendant must engage in “continuous and
systematic general business contacts” that
“approximate physical presence” in the forum
state. Id. (citing Helicopteros Nacionales de
Colombia, S.A. v. Hall, 466 U.S. 408, 416 (1984), and
Bancroft & Masters, Inc. v. Augusta Nat'l,
Inc., 223 F.3d 1082, 1086 (9th Cir. 2000)).
Specific Personal Jurisdiction
court lacks general jurisdiction, the court may, nonetheless,
determine it has specific personal jurisdiction when (1) the
nonresident defendant purposefully directs his activities or
consummates some transaction with the forum, or purposefully
avails himself of the privilege of conducting activities in
the forum, thereby invoking the benefits and protections of
its law; (2) the claim arises out of or relates to the
defendant's forum-related activities; and (3) the
exercise of jurisdiction comports with fair play and
substantial justice (i.e., it must be reasonable).
Schwarzenegger, 374 F.3d at 802 (citing Lake v.
Lake, 817 F.2d 1416, 1421 (9th Cir. 1987)). The
plaintiff bears the burden of satisfying the first two
requirements of this test. If the plaintiff fails to satisfy
either of these requirements, personal jurisdiction is not
established in the forum state. If the plaintiff succeeds in
satisfying the first two requirements, the burden shifts to
the defendant to “present a compelling case” that
the exercise of personal jurisdiction would not be
reasonable. Id. (citing Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 476 (1985)).
David Hoffman is subject to the personal jurisdiction of this
allege claims for fraud, intentional interference with
business relations, civil conspiracy, and RICO violations.
Although Plaintiffs allege numerous acts by David Hoffman
that occurred outside of the State of Oregon, Plaintiffs
specifically allege David Hoffman filed a land-use complaint
with Clackamas County in Oregon regarding Plaintiffs'
business operations and that complaint as well as other
complaints made by David Hoffman to the FDA and EPA
interfered with Plaintiffs' “contractual and
prospective economic advantage” and constitute
sufficient contacts with this state to confer personal
jurisdiction over David Hoffman. Plaintiffs allege David
Hoffman filed complaints with Clackamas County and other
federal agencies regarding Plaintiffs' business
operations in Oregon, and Plaintiffs' claim of
intentional interference with business relations arises out
of or relates to these activities. David Hoffman's
conduct supports the conclusion that he purposefully availed
himself of the privilege of conducting activities in this
Hoffman concedes he made statements against Plaintiffs in
Oregon, but he contends the statements are privileged and,
therefore, do not constitute sufficient contacts with the
forum state to subject him to the personal jurisdiction of
the Court finds the facts related to David Hoffman's
conduct in Oregon as alleged in this case fall short of being
“continuous and systematic, ” and, therefore,
they do not establish this Court's general jurisdiction
over David Hoffman. David Hoffman, however, has not submitted
any evidence that presents a “compelling case”
that this Court lacks personal jurisdiction over him. David
Hoffman's contention that his communications are
“privileged” does not defeat the Court's
exercise of personal jurisdiction over him. Such contention
relates only to the legal efficacy of Plaintiffs' claim
rather than whether this Court has personal jurisdiction over
record, therefore, the Court concludes Plaintiffs have met
their burden to establish that David Hoffman is subject to
the personal jurisdiction of this Court. Accordingly, the
Court DENIES Defendants' Motion to
Dismiss for lack of personal jurisdiction as to David
Hawk, Peaceful Properties, and Hoffman and Hawk are not
subject to the personal jurisdiction of this Court.
have not submitted any evidence nor made any argument in
response to Defendants' assertions that this Court does
not have personal jurisdiction over Hawk, Peaceful
Properties, or Hoffman and Hawk except to state that
non-debtor Defendants' unopposed Motion (#109) for
Extension of Time to Answer Amended Complaint constitutes a
“general appearance” and subjects them to the
personal jurisdiction of this Court. Non-debtor Defendants,
in turn, contend such a motion is not an appearance
sufficient to confer jurisdiction.
can waive the defect of lack of personal jurisdiction by
appearing generally without first challenging the defect in a
preliminary motion, or in a responsive pleading.”
Jackson v. Hayakawa, 682 F.2d 1344, 1347 (9th Cir.
1982). “An appearance ordinarily is an overt act by
which the party comes into court and submits to the
jurisdiction of the court, and that overt act affirms an
intention to appear.” Benny v. Pipes, 799 F.2d
489, 493 (9th Cir. 1986)(holding the defendants' three
motions to extend time to respond to the complaint did not
constitute a general appearance). In Blankenship v.
Account Recovery Services, Inc., the court held the