Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 DALRADA PRECISION CORP., et al., Case No.: 24-cv-1122-AJB-DEB 12 ORDER GRANTING DEFENDANT’S Plaintiffs, MOTION TO DISMISS 13 v. 14 (Doc. No. 140) STUART COX, 15 16 Defendant. 17 Defendant Stuart Cox (“Defendant”), appearing pro se, has filed a motion to dismiss 18 Plaintiffs’ First Amended Complaint (“FAC”). (Doc. No. 140.) Plaintiffs filed an 19 opposition (Doc. No. 142), and Defendant replied (Doc. No. 144). For the reasons stated 20 herein, the Motion to Dismiss is GRANTED. 21 I. BACKGROUND 22 Defendant currently resides in the Republic of the Philippines.1 (Doc. No. 129 ¶ 8.) 23 Plaintiff Dalrada Precision Corp. (“Dalrada Precision”) is a California Corporation with its 24 principal place of business in Escondido, California. (Id. ¶ 6.) Plaintiff Dalrada Financial 25 26 1 It is unclear whether Defendant is a citizen of the United Kingdom or the Republic of the Philippines. 27 (Compare Doc. No. 129 ¶¶ 2, 8 (stating that Defendant is a citizen of the Philippines), with Doc. No. 140 at 9 (providing that “Defendant remained a UK resident”). However, it is undisputed that Defendant 28 1 Corporation (“Dalrada Financial”) is a Wyoming Corporation with its principal place of 2 business also in Escondido, California. (Id. ¶ 7.) Plaintiffs allege that “[a]ll transactions 3 subject to this Complaint have taken place in the United States, State of California,” and 4 “[u]pon information and belief, Defendant Cox has had regular, continuous, and ongoing 5 contact with this jurisdiction.” (Id. ¶¶ 9, 10.) 6 In June 2019, Defendant was the sole owner/shareholder of Likido Limited 7 (“Likido”), a United Kingdom company with a physical plant location in Edinburgh, 8 Scottland. (Id. ¶ 13.) Likido produces and manufactures a commercial heat pump device 9 designed to conserve energy and lower utility costs. (Id. ¶ 14.) 10 Plaintiffs and Defendant entered into a Stock Purchase Agreement in December 11 2019, whereby Defendant effectively transferred ownership of Likido to Plaintiffs. (Id. 12 ¶ 15; see also Doc. No. 129-2, Ex. A.) Plaintiffs agreed to purchase 100% of Defendant’s 13 share certificates in exchange for his Six Million One Hundred Eighteen Thousand 14 ($6,118,000.00) common equity shares in Dalrada Financial. (Doc. No. 129 ¶ 16.) Under 15 the Stock Purchase Agreement, liabilities also transferred from Defendant to Plaintiffs. 16 (Id. ¶ 28.) Plaintiffs state that this Stock Purchase Agreement is not “part of this action.” 17 (Id. ¶ 15.) Additionally, Plaintiffs provided Defendant a “Consultant Agreement,” under 18 which Plaintiffs agreed to pay Defendant a guaranteed salary of £60,000.00 (approximately 19 $74,442.00) over a period of thirty-six months. (Id. ¶ 17, Ex. B.) The Consultant Agreement 20 contains a forum selection clause providing that any action to enforce the Consultant 21 Agreement “shall be brought in any state or federal court located in the State of California, 22 San Diego County.” (Id., Ex. B ¶ 11.) Plaintiffs do not allege a breach of the Consultant 23 Agreement, nor does the Consultant Agreement serve as a basis for any of the alleged 24 causes of action. 25 Prior to entering into the Stock Purchase Agreement with Plaintiffs, Defendant 26 agreed to sell to MAPtech, a South Carolina company that is not a party to this action, 27 industrial chilling systems manufactured by Likido for $429,987.98. (Id. ¶¶ 21–23.) 28 MAPtech sent the funds to Defendant’s personal bank account, but MAPtech never 1 received the Likido industrial chilling systems. (Id. ¶¶ 22–23.) Plaintiffs allege that 2 Defendant “had absolutely no ability to perform his part of the agreement [with MAPtech]” 3 but nevertheless priced the MAPtech contract into Likido’s value during his negotiations 4 with Plaintiffs over the Stock Purchase Agreement. (Id. ¶¶ 23–24.) According to the FAC, 5 Defendant “failed to inform Plaintiffs [prior to entering into the Stock Purchase 6 Agreement] . . . that he had already received the payment for the order of the chillers, had 7 pocketed the money, and was now unable to deliver on his promise to manufacture the 8 units for MAPtech.” (Id. ¶ 25.) Plaintiffs also allege that “Defendant refused to provide any 9 access to the Likido bank accounts preventing Plaintiffs from having any visibility 10 whatsoever to what was occurring with the funds being sent from Plaintiffs’ California 11 bank account to the [Likido] bank account in an effort to further conceal his fraudulent 12 activities.” (Id. ¶ 31.) 13 After Likido failed to produce and deliver the chilling units, MAPtech filed a Notice 14 of Arbitration in the United Kingdom alleging conversion, fraudulent misrepresentation, 15 breach of contract, and unjust enrichment. (Id. ¶ 27.) On January 10, 2023, the Arbitrator 16 issued its award in favor of MAPtech in the amount of $429,987.98, including interest. (Id. 17 ¶¶ 28–29.) Because Plaintiffs assumed Likido’s liabilities pursuant to the Stock Purchase 18 Agreement, this award became Plaintiffs’ liability. (Id.) 19 Plaintiffs allege that beginning in May 2022, Defendant’s behavior became 20 “unpredictable and bizarre.” (Id. ¶ 33.) According to the FAC, Defendant sent “threatening 21 and, at times, vulgar” emails to Climagal, a potential customer. (Id. ¶ 34.) Plaintiffs then 22 determined that Defendant’s employment with Plaintiffs needed to end. (Id. ¶ 36.) Plaintiffs 23 offered Defendant a six-month paid leave with any future relationship to be discussed after 24 the leave. (Id.) Defendant’s leave, and associated payments to him, ceased on February 18, 25 2023. (Id. ¶ 31.) Plaintiffs allege that “Defendant basically informed [Plaintiffs] that they 26 needed to continue making payments to him or he would ruin them.” (Id. ¶ 39.) Plaintiffs 27 also contend that Defendant contacted some of Plaintiffs’ employees located outside of 28 1 California, slandered Plaintiffs to these employees, and attempted to coax the employees 2 into working for Defendant. (Id. ¶ 40.) 3 Plaintiffs now bring the instant action alleging seven causes of action: (1) fraudulent 4 misrepresentation, (2) fraudulent concealment, (3) fraudulent inducement, (4) unjust 5 enrichment, (5) injunctive relief, (6) defamation, and (7) violations of California’s Unfair 6 Competition Law (“UCL”), California Business and Professions Code §§ 17200–17207. 7 II. LEGAL STANDARDS 8 A. Federal Rule of Civil Procedure 12(b)(2) 9 An action is subject to dismissal if the Court lacks personal jurisdiction over 10 defendant. See Fed. R. Civ. P. 12(b)(2). Where there is no federal statute applicable to 11 determine personal jurisdiction, a district court should apply the personal jurisdiction law 12 of the state where the federal court sits. See Schwarzenegger v. Fred Martin Motor Co., 13 374 F.3d 797, 800 (9th Cir. 2004). California law requires only that the exercise of personal 14 jurisdiction comply with federal due process requirements. See id. at 800–01. 15 Personal jurisdiction may be either general or specific. See Picot v. Weston, 780 F.3d 16 1206, 1211; Morrill v. Scott Fin. Corp., 873 F.3d 1136, 1141–42 (9th Cir. 2017); see also 17 Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 nn.8–9 (1984). 18 “General jurisdiction exists when a defendant is domiciled in the forum state or his 19 activities there are ‘substantial’ or ‘continuous and systematic.’” Panavision Int’l, L.P. v. 20 Toeppen, 141 F.3d 1316, 1320 (9th Cir. 1998) (quoting Helicopteros, 466 U.S. at 414–16). 21 Even if a defendant has not had continuous and systematic contacts with the state sufficient 22 to confer general jurisdiction, a court may exercise specific jurisdiction over the defendant. 23 Picot, 780 F.3d at 1211. Specific jurisdiction exists where the claim for relief arises directly 24 from a defendant’s contacts with the forum state. AT&T Co. v. Compagnie Bruxelles 25 Lambert, 94 F.3d 586, 588 (9th Cir. 1996). 26 In the face of a 12(b)(2) motion, “the plaintiff bears the burden of demonstrating that 27 the court has jurisdiction.” In re W. States Wholesale Nat. Gas Antitrust Litig., 715 F.3d 28 716, 741 (9th Cir. 2013). “Personal jurisdiction must exist for each claim asserted against 1 a defendant.” Action Embroidery Corp. v. Atl. Embroidery, Inc., 368 F.3d 1174, 1180 (9th 2 Cir. 2004) (citing Data Disc, Inc. v. Sys. Tech. Assocs., Inc., 557 F.2d 1280, 1289 n. 8 (9th 3 Cir. 1977)). 4 B. Leave to Amend 5 Where a motion to dismiss is granted, “leave to amend should be granted ‘unless the 6 court determines that the allegation of other facts consistent with the challenged pleading 7 could not possibly cure the deficiency.’” DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 8 658 (9th Cir. 1992) (quoting Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 9 1393, 1401 (9th Cir. 1986)). In other words, where leave to amend would be futile, the 10 Court may deny leave to amend. See Desoto, 957 F.2d at 658; Schreiber, 806 F.2d at 1401. 11 III. DISCUSSION 12 A. Personal Jurisdiction 13 Absent traditional bases for personal jurisdiction (physical presence, domicile, or 14 consent), due process requires that the defendant have certain minimum contacts with the 15 forum state such that the maintenance of the suit does not offend traditional notions of fair 16 play and substantial justice. See International Shoe Co. v. Washington, 326 U.S. 310, 316 17 (1945). To establish minimum contacts, the court relies on the Dole factors: (1) the 18 non-resident defendant must purposefully direct his activities or consummate some 19 transaction with the forum or resident thereof; or perform some act by which he 20 purposefully avails himself of the privileges of conducting activities in the forum, thereby 21 invoking the benefits and protections of its laws; (2) the claim must be one which arises 22 out of or relates to the defendant’s forum-related activities; and (3) the exercise of 23 jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable. 24 Dole Food Co. v. Watts, 303 F.3d 1104, 1111 (9th Cir. 2002). The minimum contacts 25 inquiry “looks to the defendant’s contacts with the forum State itself, not the defendant’s 26 contacts with persons who reside there,” and “it is the defendant’s conduct that must form 27 the necessary connection with the forum State.” Walden v. Fiore, 571 U.S. 277, 285 (2014); 28 see also Bristol-Myers Squibb Co. v. Superior Court, 582 U.S. 255, 262 (2017). 1 Defendant moves to dismiss the FAC, in its entirety, arguing that this Court lacks 2 personal jurisdiction over him. (See Doc. No. 140.) Defendant contends that the California 3 “job offer was never performed,” “Defendant remained a UK resident,” and “there were 4 no ‘suit-related’ activities performed by the Defendant in California.” (Id. at 9.) 5 Plaintiffs oppose the motion arguing that Defendant “purposefully availed” himself 6 of California by: (1) acting as an executive and manager of Likido, which was funded and 7 controlled exclusively by a California corporation; (2) traveling to California for business 8 meetings related to corporate strategy and operations; (3) performing work on U.S.-based 9 projects under a Consultant Agreement contemplating California jurisdiction; (4) receiving 10 payroll, operating funds, and financial support from California banking institutions; 11 (5) communicating regularly with California-based executives and stakeholders; and (6) 12 engaging in conduct directed at and harming a California company. Plaintiffs allege the 13 claims asserted arise directly from Defendant’s conduct performed while acting as an 14 executive and manager for Plaintiff’s operations which are funded and controlled from 15 California. Plaintiffs contend Defendant’s misconduct occurred within the scope of his 16 relationship with Plaintiffs and while interacting with California-based executives and 17 resources. The Court disagrees. 18 Here, it is undisputed that Defendant does not reside in California. (See Doc. No. 19 129 at ¶¶ 2, 8.) Thus, the Court analyzes whether Defendant has minimum contacts with 20 California such that the maintenance of this suit does not offend traditional notions of fair 21 play and substantial justice. See International Shoe, 326 U.S. at 316. Because personal 22 jurisdiction must exist for each claim asserted, see Action Embroidery, 368 F.3d at 1180, 23 the Court separately analyzes personal jurisdiction for each claim asserted. 24 Plaintiffs’ claims arise from two distinct categories of conduct. First, Plaintiffs allege 25 Defendant fraudulently induced them into entering the Stock Purchase Agreement by 26 misrepresenting Likido’s financial condition and concealing liabilities associated with 27 MAPtech. Although Plaintiffs contend the Stock Purchase Agreement is not “part of this 28 action,” the basis of several of Plaintiffs’ causes of action are exclusively predicated on 1 Defendant’s representations related to the Stock Purchase Agreement. According to the 2 FAC, Defendant represented that Likido possessed valuable pending purchase orders, 3 including the profitable contract with MAPtech. The FAC alleges that the assets associated 4 with those agreements would transfer to Plaintiffs as part of the acquisition. But as it relates 5 to the MAPtech contract, because MAPtech paid Defendant directly, Plaintiffs never 6 received those funds. And Plaintiffs allege Defendant never disclosed the receipt of those 7 funds. Plaintiffs further allege that, after Plaintiffs purchased Likido, MAPtech initiated 8 arbitration proceedings arising from Defendant’s conduct, ultimately resulting in an 9 arbitration award that Plaintiffs became obligated to satisfy. Plaintiffs contend that 10 Defendant concealed these liabilities and intentionally misrepresented Likido’s value in 11 order to induce Plaintiffs into executing the Stock Purchase Agreement. 12 Second, Plaintiffs allege that following the dispute related to the MAPtech liabilities 13 and Defendant’s separation from the company, Defendant embarked on a campaign of 14 harassment and defamation directed toward Plaintiffs and their employees. Plaintiffs allege 15 that Defendant threatened to use his shares of Dalrada Financial stock to “destroy” 16 Plaintiffs and harm future public relations announcements unless Plaintiffs continued 17 making payments to him. Plaintiffs further allege that Defendant made disparaging and 18 defamatory remarks to employees and business contacts. According to the FAC, Defendant 19 referred to Plaintiffs and their personnel using derogatory language, attempted to lure 20 employees away from Plaintiffs, and posted false and damaging statements on LinkedIn 21 and other social media platforms. Plaintiffs allege these statements harmed their reputation, 22 business relationships, and prospective economic opportunities. The Court first addresses 23 whether this Court has personal jurisdiction over Defendant for the claims related to the 24 Stock Purchase Agreement. The Court then turns to the defamation-related claims. 25 1. Claims Related to the Stock Purchase Agreement 26 Under the first prong of the specific jurisdiction analysis, Plaintiffs must establish 27 that Defendant “either purposefully availed [himself] of the privilege of conducting 28 activities in California, or purposefully directed [his] activities toward California.” 1 Schwarzenegger, 374 F.3d at 802. Courts have interpreted “purposeful availment” and 2 “purposeful direction” as distinct concepts. The purposeful direction analysis is generally 3 used for claims sounding in tort, while the purposeful availment analysis is used for claims 4 sounding in contract. Picot, 780 F.3d at 1212. Here, each of Plaintiffs’ causes of action 5 sound in tort, thus the Court must determine whether Defendant purposefully directed his 6 activities toward California. 7 Courts in the Ninth Circuit analyze purposeful direction under the three-part “effects 8 test” from the Supreme Court’s opinion in Calder v. Jones, 465 U.S. 783, 787–89 (1984). 9 See Schwarzenegger, 374 F.3d at 803. “Under this test, the defendant allegedly must have 10 (1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm 11 that the defendant knows is likely to be suffered in the forum state.” Brayton Purcell LLP 12 v. Recordon & Recordon, 606 F.3d 1124, 1128 (9th Cir. 2010) (internal quotation marks 13 and citation omitted) abrogated on other grounds as recognized by Axiom Foods, Inc. v. 14 Acerchem Int’l, Inc., 874 F.3d 1064, 1069 (9th Cir. 2017). “If any of the three requirements 15 is not satisfied, jurisdiction in the forum would deprive the defendant of due process of 16 law.” Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1155 (9th Cir. 2006) (quoting Omeluk 17 v. Langsten Slip & Batbyggeri A/S, 52 F.3d 267, 270 (9th Cir. 1995)). A plaintiff must 18 show “something more” than just “a mere foreseeable effect” to justify the assertion of 19 specific jurisdiction. Id. at 1156. 20 It cannot be said that Plaintiffs’ “claim[s] for relief arise[] directly from 21 [Defendant’s] contacts with the forum state.” AT&T, 94 F.3d at 588. None of the conduct 22 Plaintiffs argue establish jurisdiction over Defendant—Defendants’ travels to California; 23 Defendant’s work under the Consultant Agreement; Defendant receiving payroll, operating 24 funds, and financial support from California banking institutions; or Defendant’s 25 communications with California-based executives and stakeholders—relate to the causes 26 of action for intentional misrepresentation, fraudulent concealment, fraud in the 27 Inducement, unjust enrichment, or injunctive relief. Rather, each of these causes of action 28 are based on allegations that Defendant, a nonresident, negotiated and executed a Stock 1 Purchase Agreement with Plaintiffs concerning the acquisition of a foreign entity, Likido. 2 Plaintiffs allege Defendant misrepresented the liabilities and contractual obligations related 3 to MAPtech. However, the FAC does not allege that the Stock Purchase Agreement was 4 negotiated, executed, or was to be performed in California. Nor does the FAC allege that 5 the misrepresentations concerning MAPtech were expressly directed toward California in 6 a manner sufficient to constitute purposeful direction. Rather, the allegations concern 7 Defendant’s conduct related to a foreign company, transactions occurring outside 8 California, alleged misrepresentations made outside of California, and an arbitration award 9 that resulted from an arbitration in a foreign country. 10 In short, as it relates to the fraud-based claims, Plaintiffs have not made a prima facie 11 showing that Defendant purposefully directed his activities toward California. Thus, the 12 first prong of the specific jurisdiction test fails. Because Plaintiffs fail to satisfy their burden 13 under the first prong of the specific jurisdiction test, precluding the Court from exercising 14 specific jurisdiction over Defendant, the Court need not address the other two prongs of 15 that test. See Schwarzenegger, 374 F.3d at 802 (holding that “[i]f the plaintiff fails to satisfy 16 either of [the first or second] prongs, personal jurisdiction is not established in the forum 17 state”). 18 Because Plaintiffs fail to allege adequate forum-related conduct connecting 19 Defendant’s alleged misrepresentations and concealment to California, the Court lacks 20 specific personal jurisdiction over Defendant as to the causes of action arising from the 21 Stock Purchase Agreement and the MAPtech-related allegations. Plaintiffs cannot recover 22 damages arising from the MAPtech arbitration award or liabilities imposed through that 23 arbitration in this action because those alleged damages arise from claims over which this 24 Court lacks personal jurisdiction over Defendant. Accordingly, the Motion to Dismiss as 25 to Plaintiffs’ claims for Fraud (Intentional Misrepresentation), Fraudulent Concealment, 26 Fraud in the Inducement, Unjust Enrichment, and Injunctive Relief (Claims 1–5) is 27 GRANTED. 28 1 2. Defamation Related Claims 2 The Court now turns to Plaintiffs’ claims for Defamation (Claim 6) and Violation of 3 California’s UCL (Claim 7). These claims arise from Defendant’s alleged campaign of 4 disparagement, harassment, and threats directed toward Plaintiffs, their employees, and 5 business associates. The Court addresses these allegations as two distinct categories of 6 conduct. First, the allegedly defamatory text messages and emails Defendant sent to 7 Anthony Pagnotti, Brian McGoff, Kyle McCollum, and Stéphane Moya.2 Second, the 8 social media posts which Plaintiffs allege constitute a “campaign of public defamation.” 9 As discussed above, because these claims sound in tort, Plaintiffs must allege that 10 Defendant (1) committed an intentional act, (2) expressly aimed at the forum state, (3) 11 causing harm that the defendant knows is likely to be suffered in the forum state. Picot, 12 780 F.3d at 1212. The “expressly aimed” analysis “looks to the defendant’s contacts with 13 the forum State itself, not the defendant’s contacts with persons who reside there.” Walden, 14 571 U.S. at 285. Simply put, “it is the defendant’s conduct that must form the necessary 15 connection with the forum State that is the basis for its jurisdiction over him.” Id. “The 16 proper question is not where the plaintiff experienced a particular injury or effect but 17 whether the defendant’s conduct connects him to the forum in a meaningful way.” Janus 18 v. Freeman, 840 F. App’x 928, 930 (9th Cir. 2020) (citation omitted). Thus, to satisfy the 19 purposeful direction test, Plaintiffs must show that Defendant “expressly aim[ed]” conduct 20 at California. Pebble Beach, 453 F.3d at 1156. Plaintiffs fail to do so. 21 a. Text Messages and E-mails 22 The FAC alleges that Defendant made defamatory private statements by text and 23 email to Anthony Pagnotti, Brian McGoff, Kyle McCollum, and Stéphane Moya. (Doc. 24 No. 129 ¶ 87.) It further alleges that Pagnotti is a Pennsylvania resident. (Id. ¶ 40.) 25 26 27 2 The Court notes that the FAC erroneously identifies Mr. Moya as “Stephanie.” (See Doc. No. 129 ¶¶ 34, 28 1 Plaintiffs do not allege that any of the recipients of any of the communications were 2 California residents or located in California when they received the messages.3 3 That omission is significant. Under Walden, it is not enough that Plaintiffs are 4 California-based or that they experienced reputational or economic injury in California; the 5 relevant inquiry is whether Defendant’s own communications created contacts with 6 California. See Walden, 571 U.S. at 289–90. In Walden, the Supreme Court stressed that, 7 even where an intentional tort is alleged, the “defendant’s suit-related conduct must create 8 a substantial connection with the forum State,” and this “relationship must arise out of 9 contacts that the ‘defendant himself’ creates with the forum State.” Walden, 571 U.S. at 10 277 (emphasis in original) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 11 (1985)). Furthermore, “the plaintiff cannot be the only link between the defendant and the 12 forum. Rather, it is the defendant’s conduct that must form the necessary connection with 13 the forum State that is the basis for its jurisdiction over him.” Id. at 1122. Thus, even where 14 the Calder test is invoked, a “forum State’s exercise of jurisdiction over an out-of-state 15 intentional tortfeasor must be based on intentional conduct by the defendant that creates 16 the necessary contacts with the forum,” and the specific jurisdiction analysis must focus on 17 the “relationship among the defendant, the forum, and the litigation.” Id. at 1123. The Court 18 emphasized that “[t]he proper question is not where the plaintiff experienced a particular 19 injury or effect but whether the defendant’s conduct connects him to the forum in any 20 meaningful way.” Id. at 1125. 21 The private communications here do not satisfy the “express aiming” requirement. 22 The FAC does not allege that Defendant sent the texts or emails into California, that the 23 recipients were in California, or that the communications were designed to reach a 24 California audience. Even if some messages concerned Plaintiffs, a California company, 25 26 27 3 Based on the emails attached to the FAC, it appears that Stéphane Moya is a resident of either France or Spain. (See Doc. No. 129-1 at 131 (the country codes associated with Stéphane Moya’s phone numbers 28 1 or were received by company personnel connected to California, the Supreme Court 2 requires more than a showing that a California plaintiff felt the impact of out-of-state 3 speech. See Walden, 571 U.S. at 289–90. Accordingly, as to the text messages and emails, 4 the FAC falls short of alleging personal jurisdiction over Defendant. 5 b. Social Media Posts 6 As it relates to the allegedly defamatory and disparaging social media posts, it is a 7 closer call. But the Court determines these posts are not sufficient to establish personal 8 jurisdiction over Defendant. 9 “[S]ocial media and internet-based activities present a unique context for assessing 10 personal jurisdiction under Calder.” Moore v. Cecil, 109 F.4th 1352, 1363 (11th Cir. 2024). 11 Neither party cites controlling Ninth Circuit precedent addressing the application of the 12 Calder effects test in the social media context, and the Court finds none. However, the 13 Ninth Circuit’s unpublished memorandum disposition in Janus v. Freeman, 840 F. App’x 14 928 (9th Cir. 2020) is instructive. 15 In Janus, the plaintiff, a California resident, sued Freeman, a Texas resident, in the 16 Central District of California. Id. at 929. Freeman began posting allegedly defamatory 17 material about Janus and his business, 17hats, on social media after Freeman’s wife began 18 working at Janus’s company in California and began a romantic relationship with Janus. 19 Id. at 932. Specifically, Freeman contacted 17hats’ Director of Operations, pretending to 20 be interested in a job, and sent messages over Facebook Messenger accusing Janus of using 21 his company as a “personal matchmaking service.” Id. at 933. These messages were visible 22 to several employees. Id. On another occasion, Freeman allegedly posted a comment to a 23 livestream that was viewed by 17hats’ employees and customers. Id. at 933. Freeman also 24 made accusations to his estranged wife that Janus was being criminally investigated and 25 had previously been accused of crimes. Id. 26 Applying Walden, the majority affirmed the district court’s dismissal for lack of 27 jurisdiction, stating that “the mere making of defamatory comments to persons known to 28 be Californians is not sufficient, without more, to establish purposeful direction under 1 Walden. What matters is the creation of “reputation-based effects” within California . . . 2 and Janus’s showing on this score is essentially nonexistent.” Id. at 931. 3 Other circuits have similarly addressed social media and internet-based activities 4 post-Walden. In Moore, the Eleventh Circuit opined that other circuits “have uniformly 5 held that in determining whether the allegedly defamatory comments or information was 6 directly aimed at the forum, the court must look to the defendant’s focus, purpose, and/or 7 intent in posting the information.” Id. 8 The Fourth Circuit held that the application of Calder in the internet context 9 “requires proof that the out-of-state defendant’s [i]nternet activity is expressly targeted at 10 or directed to the forum state”—i.e., did the defendant “manifest an intent” to direct its 11 internet content to an audience in the forum state. Young v. New Haven Advocate, 315 F.3d 12 256, 262–63 (4th Cir. 2002). Mere knowledge that the effects of the defendant’s conduct 13 would be felt in the forum state, without more, is insufficient. Id. In Johnson v. 14 TheHuffingtonPost.com, Inc., 21 F.4th 314 (5th Cir. 2021), the Fifth Circuit noted that 15 “[t]he key question, under Calder, is whether the forum state was the focal point both of 16 the [alleged defamation] and of the harm suffered.” Johnson, 21 F.4th at 318 (quotations 17 omitted). And the Eight Circuit held that a Colorado defendant who posted an allegedly 18 defamatory statement online about the Missouri plaintiff’s business “does not create the 19 type of substantial connection between [the defendant] and Missouri necessary to confer 20 specific personal jurisdiction.” Johnson v. Arden, 614 F.3d 785, 797 (8th Cir. 2010). 21 The Tenth Circuit addressed the issue in Dudnikov v. Chalk & Vermilion Fine Arts, 22 Inc., 514 F.3d 1063 (10th Cir. 2008); Eighteen Seventy, LP v. Jayson, 32 F.4th 956 (10th 23 Cir. 2022); and Shrader v. Biddinger, 633 F.3d 1235 (10th Cir. 2011). See Dudnikov, 514 24 F.3d at 1077 (“[U]nder the Calder test[,] plaintiffs . . . must establish . . . not only that 25 defendants foresaw (or knew) that the effects of their conduct would be felt in the forum 26 state, but also that defendants undertook intentional actions that were expressly aimed at 27 that forum state.” (emphasis in original)); see also Eighteen Seventy, 32 F.4th at 972 28 (explaining that the second prong of Calder effects test focuses “on whether the 1 defendant’s allegedly tortious conduct was focused on or directed at the forum state—not 2 . . . on whether the defendant’s wrongful conduct was focused on or directed at the interests 3 of plaintiffs who reside in or otherwise have significant connections to the forum state”); 4 Shrader, 633 F.3d at 1241 (explaining that in the internet context when determining 5 whether the defamatory information was aimed at the forum state, courts must look for 6 “indications that a defendant deliberately directed its message at an audience in the forum 7 state and intended harm to the plaintiff occurring primarily or particularly in the forum 8 state”). 9 Thus, where there is no evidence that the defendant posted the allegedly defamatory 10 information hoping to reach the forum state or an audience in the forum state specifically, 11 the Calder effects test is not satisfied. See, e.g., Blessing v. Chandrasekhar, 988 F.3d 889, 12 906–07 (6th Cir. 2021) (holding that the court lacked personal jurisdiction where “[t]here 13 [was] no evidence that the defendants posted the tweets hoping to reach [the forum state] 14 specifically as opposed to their Twitter followers generally”); Herman v. Cataphora, Inc., 15 730 F.3d 460, 466 (5th Cir. 2013) (holding that personal jurisdiction did not exist because, 16 while the plaintiffs demonstrated that the harm caused by the allegedly defamatory 17 statements would be felt in the forum state of Louisiana, they failed to show “that the 18 statements’ focal point was Louisiana” and there was no evidence that the statements were 19 directed at Louisiana residents or that the website had a “disproportionately high Louisiana 20 readership”). 21 Applying these principles to the instant case, to satisfy the Calder effects test for 22 personal jurisdiction, Plaintiffs need to show that California was the focal point of 23 Defendant’s social media posts. Plaintiffs fail to do so. 24 Here, Plaintiffs allege only that Defendant posted defamatory statements on 25 LinkedIn and other social media platforms, and that those statements harmed Plaintiffs’ 26 reputation and business opportunities in California and elsewhere. However, the FAC is 27 conclusory and does not clearly allege facts showing that the posts were specifically 28 targeted at California. Indeed, in reviewing the posts at issue (Doc. No. 129-1 at 150–57, 1 Ex. P), there is no evidence that California was the focal point of the alleged defamation. 2 The LinkedIn posts were not directed at California readers nor were California customers 3 targeted, as opposed to a national audience generally. Finally, no California residents or 4 business were tagged in any of the posts. Merely mentioning a California business in a 5 social media post is insufficient to establish Defendant’s conduct as being expressly aimed 6 at California. Plaintiffs have not shown “something more” than just “a mere foreseeable 7 effect” to justify the assertion of specific jurisdiction. The allegation that the posts were 8 public, standing alone, is insufficient. Accordingly, these allegations are insufficient to 9 establish personal jurisdiction over Defendant. Defendant’s Motion to Dismiss as to 10 Plaintiffs’ defamation and UCL claims is GRANTED. 11 B. Leave to Amend 12 As to the claims premised on the misrepresentations related to the Stock Purchase 13 Agreement, the Court finds amendment would be futile. Because Plaintiffs cannot cure the 14 deficiency by amendment, these claims are DISMISSED without leave to amend. See 15 Wheeler v. City of Santa Clara, 894 F.3d 1046, 1059 (9th Cir. 2018) (“Leave to amend 16 may be denied if the proposed amendment is futile or would be subject to dismissal.”). 17 However, as it relates to the defamation and UCL claims, the Court finds that Plaintiffs 18 may be able cure the defects described above by pleading additional facts to establish 19 personal jurisdiction over Defendant. Accordingly, these claims are DISMISSED with 20 leave to amend.4 21 IV. CONCLUSION 22 For the forgoing reasons, the Court GRANTS Defendant’s Motion to Dismiss under 23 Rule 12(b)(2). The Court ORDERS as follows: 24 25 26 4 The Court notes that Plaintiffs did not seek leave to amend in their Opposition. (See Doc. No. 142.) However, given the Ninth Circuit’s liberal policy favoring amendments, the Court will allow Plaintiffs 27 leave to amend these claims. See Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003). 28 l 1. Plaintiffs’ claims for fraudulent misrepresentation, fraudulent concealment, 2 fraudulent inducement, unjust enrichment, injunctive relief (Claims 1—5) are dismissed 3 || without leave to amend. 4 2. Plaintiffs’ defamation and UCL claims (Claims 6 and 7) are dismissed with 5 leave to amend. 6 3. Should Plaintiffs choose to do so, they may file a Second Amended Complaint 7 later than September 9, 2026. Any amended complaint must cure the deficiencies 8 || outlined in this order and must not re-allege the claims dismissed without leave to amend. 9 || Because Plaintiffs have already been afforded one opportunity to amend, this will be their 10 || final opportunity to establish personal jurisdiction over Defendant.° 11 4. Failure to timely file an amended complaint will result in this action be 12 || dismissed with prejudice pursuant to Federal Rule of Civil Procedure 41(b). 13 5. If Plaintiffs file an amended complaint, Defendant must file a responsive 14 || pleading no later than September 30, 2026. 15 IT IS SO ORDERED. 16 ||Dated: August 26, 2026 © ¢ 7 Hon. Anthony J.@Battaglia 18 United States District Judge 19 20 21 22 23 24 95 ||° See Rich v. Shrader, 823 F.3d 1205, 1209 (9th Cir. 2016) (“[W]hen the district court has already afforded a plaintiff an opportunity to amend the complaint, it has wide discretion in granting or refusing leave to 26 ||amend after the first amendment, and only upon gross abuse will [its] rulings be disturbed.”) (alteration in original) (cleaned up); Chodos v. W. Publ’g Co., 292 F.3d 992, 1003 (9th Cir. 2002) (noting district 27 || court’s discretion is “particularly broad” when it has already granted a plaintiff leave to amend). World 28 Wide Rush, LLC v. City of L.A., 606 F.3d 676, 690 (9th Cir. 2010) (holding that a “district court’s discretion to deny leave to amend is broad where a Plaintiff previously has amended complaint’). 16