United States District Court, D. Nevada
DINAR CORP. INC., a Nevada Corporation and HUSAM TAYEH, an individual, Plaintiffs,
STERLING CURRENCY GROUP, LLC, dba DINAR BANKER; TYSON RHAME and JANE DOE RHAME, husband and wife; FRANK BELL and JANE DOE BELL, husband and wife; JORDAN DOE and JANE DOE, husband and wife; MATTHEW ADAMS and JANE DOE ADAMS, husband and wife; MARK DILEO and JANE DOE DILEO, husband and wife; DOE Defendants I-X INCLUSIVE; and ROE Defendants I-X, INCLUSIVE, Defendants.
ORDER TRANSFERRING CASE
ANDREW P. GORDON, District Judge.
Defendants Sterling Currency Group, LLC, Tyson Rhame, Frank Bell, Tracy Bell, and Matthew Adams have moved to dismiss this case for lack of personal jurisdiction. (Dkt. #4.) The motion is appropriate for disposition without oral argument under Local Rule 78-2. Because the defendants have not purposefully availed themselves of the privileges and benefits of Nevada law, dismissal would be appropriate. However, under the circumstances of this case, the more appropriate relief is to transfer this case to the United States District Court for the Northern District of Georgia pursuant to 28 U.S.C. § 1406(a).
Plaintiff Dinar Corp. Inc. ("Dinar Corp") and defendant Sterling Currency Group, LLC ("Sterling") are competitors in the online currency exchange industry. Plaintiffs Dinar Corp and Husam Tayeh (Dinar Corp's president and sole shareholder) allege that Sterling, together with its employees Tyson Rhame, Frank Bell, Jordan Doe, and Matthew Adams,  led an online "smear campaign" against Dinar Corp. Specifically, they allege the Defendants posed as customers and posted poor reviews and disparaging comments about Dinar Corp to a website called "dinarreview.com, " a site purporting to be a neutral platform where customers of online currency exchange companies can post reviews, comment about their experiences, and research companies' reputations. Plaintiffs further allege that Sterling's employees sent emails with false and disparaging information to two of Dinar Corp's advertisers and a prospective client.
Plaintiffs' lawsuit alleges defamation, business disparagement, false advertising and unfair competition under the Lanham Act, false light invasion of privacy, tortious interference with current and prospective business relationships, aiding and abetting, and conspiracy. (Dkt. #5.) Defendants argue that they lack sufficient contacts with Nevada to justify the exercise of jurisdiction over them. Because Defendants have not purposefully availed themselves of the privileges and benefits of Nevada law, this Court lacks personal jurisdiction over them. However, rather than dismissing the lawsuit, the interest of justice favors transfer of the case to the Northern District of Georgia pursuant to 28 U.S.C. § 1406(a).
A. Legal Standard
A district court may exercise personal jurisdiction over a defendant only if (1) the jurisdiction is provided for by law, and (2) the exercise of jurisdiction comports with the constitutional guarantees of due process. Greenspun v. Del E. Webb Corp., 634 F.2d 1204, 1207 (9th Cir. 1980). "Federal courts ordinarily follow state law in determining the bounds of their jurisdiction over persons." Daimler AG v. Bauman, 134 S.Ct. 746, 753 (2014) (citing Fed.R.Civ.P. 4(k)(1)(A)). Under Nevada's long-arm statute, a Nevada court "may exercise jurisdiction over a party to a civil action on any basis not inconsistent with the constitution of [Nevada] or the Constitution of the United States." NRS § 14.065(1). Thus, "Nevada's long-arm statute... reaches the limits of due process set by the United States Constitution." Baker v. Eighth Judicial Dist. Ct., 999 P.2d 1020, 1023 (Nev. 2000).
The constitutional touchstone for determining whether an exercise of personal jurisdiction comports with due process "remains whether the defendant purposefully established minimum contacts' in the forum State, " Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)), such that "the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Int'l Shoe, 326 U.S. at 316 (internal quotation omitted). Two categories of contacts can satisfy the requirements of due process. First, a court may exercise general jurisdiction over a defendant where the defendant's contacts with the forum are so "continuous and systematic' as to render [him] essentially at home in the forum state." Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S.Ct. 2846, 2851 (2011) (quoting Int'l Shoe, 326 U.S. at 316). See also Tuazon v. R.J. Reynolds Tobacco Co., 433 F.3d 1163, 1171 (9th Cir. 2006) (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415 (1984)). Second, "if the defendant has purposefully directed' his activities at residents of the forum, and the litigation results from the alleged injuries that arise out of or relate to' those activities" the court may exercise specific jurisdiction over the defendant. Burger King, 471 U.S. at 472 (citations omitted). Under either category, "the defendant's conduct and connection with the forum State must be such that he should reasonably anticipate being haled into court there." Id. at 477-78. The "essential" inquiry is whether "the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and privileges of its laws." Id. at 475.
Once "minimum contacts" have been established, the court considers those contacts "in light of other factors to determine whether the assertion of personal jurisdiction would comport with fair play and substantial justice." Id. at 476. These factors are: (1) the burden on the defendant to litigate in the forum, (2) the forum state's interest in adjudicating the dispute, (3) the plaintiff's interest in obtaining convenient and effective relief, (4) the interstate judicial system's interest in obtaining the most efficient resolution of controversies, and (5) the shared interest in the states in furthering fundamental substantive social policies. Id. at 477 (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980)). Additionally, a defendant who has purposefully directed his activities at a forum may defeat jurisdiction by presenting a "compelling case that the presence of some other considerations would render jurisdiction unreasonable." Id. However, compelling cases "are limited to the rare situation in which the plaintiff's interest and the state's interest in adjudicating the dispute in the forum are so attenuated that they are clearly outweighed by the burden of subjecting the defendant to litigation within the forum." Patent Rights Prot. Group, LLC v. Video Gaming Techs., Inc., 603 F.3d 1364, 1369 (Fed. Cir. 2010) (citation omitted).
Finally, where a defendant moves to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating that the court's exercise of jurisdiction over the defendant would be appropriate. Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990). Where the motion is based on written materials, "the plaintiff need only make a prima facie showing of jurisdictional facts." Id. In doing so, however, the plaintiff may not "simply rest on the bare allegations of [his] complaint." Amba Mktg Sys., Inc. v. Jobar Int'l, Inc., 551 F.2d 784, 787 (9th Cir. 1977). But any uncontroverted allegations in the complaint must be taken as true and any conflicts between statements contained in affidavits must be resolved in the plaintiff's favor. AT&T v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir. 1996).
Defendants do not challenge any of the jurisdictional allegations in the Complaint, but rather assert that those allegations are insufficient to demonstrate the court's jurisdiction. Consequently, I will presume Plaintiffs' jurisdictional facts to be true.
According to the Complaint, Defendants' contacts with Nevada are minimal. Sterling is a Georgia limited liability company with its principal place of business in Georgia. The other moving defendants are residents of Georgia. Plaintiffs allege that (1) Defendants' purported actions were done with the knowledge and intention that Plaintiffs would suffer harm in Nevada; (2) Defendants "did things and caused things to happen" in Nevada; (3) Defendants directed "defamatory statements" about Plaintiffs to Nevada residents; and (4) Defendants "conspired ...