Upload
david-s-gingras
View
230
Download
0
Embed Size (px)
Citation preview
8/3/2019 Xcentric Ventures v. Borodkin - Response to MTD Re JX
http://slidepdf.com/reader/full/xcentric-ventures-v-borodkin-response-to-mtd-re-jx 1/16
RESPONSE TO MOTION TO DISMISS RE: PERSONAL JURISDICTION
1
2
3
45
6
7
8
9
10
11
12
13
14
15
16
1718
19
20
21
22
23
24
25
26
27
28
G I N G R A S L A W
O F F I C E , P L L C
3 9 4 1 E . C H A N D L E R B L V D
. , # 1 0 6 - 2 4 3
P H O E N I X
, A R I Z O N A 8 5 0 4 8
David S. Gingras, #021097Gingras Law Office, PLLC3941 E. Chandler Blvd., #106-243Phoenix, AZ 85048Tel.: (480) 668-3623Fax: (480) 248-3196
[email protected] Attorney for Plaintiff Xcentric Ventures, LLC
UNITED STATES DISTRICT COURT
DISTRICT OF ARIZONA
XCENTRIC VENTURES, LLC, anArizona limited liability company,
Plaintiff,
v.
LISA JEAN BORODKIN et al .,
Defendants.
Case No.: 11-CV-1426-GMS
PLAINTIFF’S RESPONSE TODEFENDANTS’ MOTION TODISMISS FOR LACK OF PERSONALJURISDICTION
Plaintiff XCENTRIC VENTURES, LLC (“Plaintiff” or “Xcentric”) respectfully
submits the following Response to Defendants’ RAYMOND MOBREZ, ILIANA
LLANERAS and ASIA ECONONOMIC INSTITUTE, LLC (“Defendants” or the
“Mobrez Defendants”) Motion to Dismiss for Lack of Personal Jurisdiction (Doc. #18).
I. INTRODUCTION
This is an action for malicious prosecution 1, with emphasis on the word malice.
As alleged in Xcentric’s Complaint, this case arises from Defendants’ failed attempt to
use perjury, lies, and fraud in an effort to defeat the law. These illegal efforts were
intentionally aimed at only one state (Arizona), caused severe harm in only one state
(Arizona), and they are sufficient to establish personal jurisdiction here.
1 As explained in prior pleadings ( see Doc. #13), the Arizona Revised Jury Instructions (4 th ed.)(Intentional Torts—Instruction 19) use the term “Malicious Prosecution” to refer to claims basedon the wrongful misuse of either civil or criminal proceedings, while the Restatement (Second)of Torts § 674 calls the tort “Wrongful Use of Civil Proceedings”. For purposes of consistency,Xcentric will use the term “malicious prosecution” here.
Case 2:11-cv-01426-GMS Document 26 Filed 10/12/11 Page 1 of 16
8/3/2019 Xcentric Ventures v. Borodkin - Response to MTD Re JX
http://slidepdf.com/reader/full/xcentric-ventures-v-borodkin-response-to-mtd-re-jx 2/16
8/3/2019 Xcentric Ventures v. Borodkin - Response to MTD Re JX
http://slidepdf.com/reader/full/xcentric-ventures-v-borodkin-response-to-mtd-re-jx 3/16
3
RESPONSE TO MOTION TO DISMISS RE: PERSONAL JURISDICTION
1
2
3
45
6
7
8
9
10
11
12
13
14
15
16
1718
19
20
21
22
23
24
25
26
27
28
G I N G R A S L A W
O F F I C E , P L L C
3 9 4 1 E . C H A N D L E R B L V D
. , # 1 0 6 - 2 4 3
P H O E N I X
, A R I Z O N A 8 5 0 4 8
After Whitney’s Florida lawsuit ended, Xcentric filed a new action against
Whitney and Whitney’s counsel in Arizona state court for malicious prosecution which
was eventually removed to this court. See Magedson v. Whitney Info. Network , Case No.
09-CV-1715-DGC (D.Ariz.). Exactly as the Mobrez Defendants have done here,Whitney and its counsel moved to dismiss claiming that by suing Xcentric in Florida,
Whitney had not engaged in sufficient contacts with Arizona to permit the exercise of
personal jurisdiction here. As in this case, the Whitney defendants also moved to dismiss
for improper venue and/or inconvenient forum.
The Arizona district court rejected these arguments and denied Whitney’s
motions. In doing so, the court found that personal jurisdiction in Arizona could be based
solely on the unlawful commencement and continuation of groundless litigation in
another forum which had the intended effect of harming Xcentric in Arizona. See
Magedson v. Whitney Information Network, Inc. , 2009 WL 113477 (D.Ariz. 2009)
(denying defendant’s Motion to Dismiss and Motion to Transfer Venue).
To be fair, Judge Campbell’s decision in Whitney is not binding on the Mobrez
Defendants, nor is this Court obligated to follow it. See In re Silverman , 616 F.3d 1001,
1005 (9th
Cir. 2010) (noting, ““[t]he doctrine of stare decisis does not compel one districtcourt judge to follow the decision of another.””) (quoting Starbuck v. City and County of
San Francisco , 556 F.2d 450, 457 n. 13 (9 th Cir. 1977)). Of course, this does not mean
the Whitney case is of no importance.
Rather, Whitney involved identical arguments, identical points of law, virtually
identical facts, and at least one identical party. As such, while it may be non-binding, it
is highly instructive here. See Hart v. Massanari , 266 F.3d 1155, 1169 (9 th Cir. 2001)
(explaining, “When ruling on a novel issue of law, [federal courts] will generally
consider how other courts have ruled on the same issue. This consideration will not be
limited to courts at the same or higher level, or even to courts within the same system of
sovereignty.”) Ultimately, whether this Court gives Whitney much weight or no weight
at all, the law plainly requires the denial of the Mobrez Defendants’ motion.
Case 2:11-cv-01426-GMS Document 26 Filed 10/12/11 Page 3 of 16
8/3/2019 Xcentric Ventures v. Borodkin - Response to MTD Re JX
http://slidepdf.com/reader/full/xcentric-ventures-v-borodkin-response-to-mtd-re-jx 4/16
4
RESPONSE TO MOTION TO DISMISS RE: PERSONAL JURISDICTION
1
2
3
45
6
7
8
9
10
11
12
13
14
15
16
1718
19
20
21
22
23
24
25
26
27
28
G I N G R A S L A W
O F F I C E , P L L C
3 9 4 1 E . C H A N D L E R B L V D
. , # 1 0 6 - 2 4 3
P H O E N I X
, A R I Z O N A 8 5 0 4 8
II. ARGUMENT
The motion before the court is narrow and the issues are not complex. Xcentric
does not allege that the Mobrez Defendants are generally subject to personal jurisdiction
in Arizona, so the only issue for determination is whether they are subject to specific jurisdiction here.
This Court is surely familiar with the “effects doctrine” of Calder v. Jones and the
Ninth Circuit’s interpretation of these legal standards, so this response will not belabor
these points of law. Defendants’ motion argues that Xcentric has failed to satisfy the
three-prong standard for specific jurisdiction: “(1) has the defendant purposefully
directed tortious activities at the forum or a resident thereof or performed some act by
which he purposefully availed himself of the privileges of conducting activities in the
forum, (2) do the claims arise out of or result from the defendant's forum-related
activities, and (3) is the exercise of jurisdiction reasonable?” Bancroft & Masters, Inc. v.
Augusta Nat'l Inc ., 223 F.3d 1082, 1087 (9 th Cir.2000) (citing Panavision Int'l, L.P. v.
Toeppen , 141 F.3d 1316, 1321 (9 th Cir. 1998)). Naturally, Xcentric asserts it has met
these standards, and its position on each point is set forth below.
a. Defendants Intentionally Targeted Arizona
Relying primarily on a case from outside the Ninth Circuit— Wallace v. Herron
778 F.2d 391 (7 th Cir. 1985)—the Mobrez Defendants argue that their contacts with
Arizona were “too attenuated” to support jurisdiction here. Of course, the defendants in
Whitney also cited Wallace for the same premise, and this argument was rejected as
inconsistent with Ninth Circuit precedent. See Whitney , 2009 WL 113477, *2 n. 2
(specifically rejecting defendants’ reliance on Wallace v. Herron and explaining, “While
the Court is inclined to agree with Wallace's treatment of Calder , the Court is bound by
Ninth Circuit law. ‘[C]ases from this circuit bear out the conclusion that ‘express aiming’
encompasses wrongful conduct individually targeting a known forum resident .”)
(emphasis in original) (quoting Bancroft , 223 F.3d at 1087). Because it conflicts with
Ninth Circuit authority such as Bancroft , Wallace does not help Defendants’ position.
Case 2:11-cv-01426-GMS Document 26 Filed 10/12/11 Page 4 of 16
8/3/2019 Xcentric Ventures v. Borodkin - Response to MTD Re JX
http://slidepdf.com/reader/full/xcentric-ventures-v-borodkin-response-to-mtd-re-jx 5/16
5
RESPONSE TO MOTION TO DISMISS RE: PERSONAL JURISDICTION
1
2
3
45
6
7
8
9
10
11
12
13
14
15
16
1718
19
20
21
22
23
24
25
26
27
28
G I N G R A S L A W
O F F I C E , P L L C
3 9 4 1 E . C H A N D L E R B L V D
. , # 1 0 6 - 2 4 3
P H O E N I X
, A R I Z O N A 8 5 0 4 8
Not only does Bancroft remain good law on this point, several years after the case
was decided the Ninth Circuit substantially expanded Bancroft by holding that not only
will “intentional targeting” of a local resident support local jurisdiction regardless of
where the wrongful conduct occurred, the same is true even if the “brunt” of the harmwas caused outside the local forum; “We take this opportunity to clarify our law and to
state that the ‘brunt’ of the harm need not be suffered in the forum state. If a
jurisdictionally sufficient amount of harm is suffered in the forum state, it does not matter
that even more harm might have been suffered in another state.” Yahoo! Inc. v. La Ligue
Contre Le Racisme Et L’Antisemitisme , 433 F.3d 1199, 1207 (9 th Cir. 2006) (emphasis
added) (finding that by sending demand letters to Yahoo! in California, serving Yahoo!
with process in California, and commencing litigation against Yahoo! in France in an
effort to change Yahoo!’s business practices , French defendant had engaged in sufficient
contacts with California to permit the exercise of personal jurisdiction in California).
As explained in the Affidavit of Xcentric’s manager, Edward Magedson,
submitted herewith, Xcentric alleges that the wrongful conduct of the Mobrez Defendants
caused Xcentric to needlessly incur nearly $100,000 in attorney’s fees and costs. See
Affidavit of Edward Magedson (“Mageson Aff.”) ¶ 7. This amount (which does notinclude other damages that Xcentric suffered such as fees paid to other attorneys in
California) was paid from Xcentric’s bank account in Arizona to Xcentric’s counsel
Jaburg & Wilk in Arizona who appeared pro hac vice in the California proceeding. See
Magedson Aff. ¶ 8. In addition to other damages, including punitive damages, these
costs and fees are recoverable here. See Restatement (Second) of Torts § 681 (1977)
(noting, “When the essential elements of a cause of action for wrongful civil proceedings
have been established, the plaintiff is entitled to recover for … (c) the expense that he has
reasonably incurred defending himself against the proceedings … .”)
Standing alone, this demonstrates that “a jurisdictionally sufficient amount of
harm is suffered in the forum state,” Yahoo! , supra . Nothing more is necessary to satisfy
the first prong of the specific jurisdiction test.
Case 2:11-cv-01426-GMS Document 26 Filed 10/12/11 Page 5 of 16
8/3/2019 Xcentric Ventures v. Borodkin - Response to MTD Re JX
http://slidepdf.com/reader/full/xcentric-ventures-v-borodkin-response-to-mtd-re-jx 6/16
6
RESPONSE TO MOTION TO DISMISS RE: PERSONAL JURISDICTION
1
2
3
45
6
7
8
9
10
11
12
13
14
15
16
1718
19
20
21
22
23
24
25
26
27
28
G I N G R A S L A W
O F F I C E , P L L C
3 9 4 1 E . C H A N D L E R B L V D
. , # 1 0 6 - 2 4 3
P H O E N I X
, A R I Z O N A 8 5 0 4 8
In an effort to minimize their wrongful conduct and de-emphasize their contacts
with Arizona, the Mobrez Defendants incorrectly argue that “The only contacts that
Plaintiff pleads in its Complaint are attributed to Mobrez—seven telephone calls—
contacts that are far too attenuated to satisfy due process.” Mot. at 5:15–17. Thisargument is both factually incorrect and legally irrelevant.
First, as a matter of law and as the district court held in Whitney , jurisdiction does
not require that a defendant engage in any particular conduct in Arizona ; rather,
“purposeful availment is satisfied even by a defendant ‘whose only “contact” with the
forum state is the “purposeful direction” of a foreign act having effect in the forum
state’.” Whitney , 2009 WL 113477, *2 (quoting Dole Food Co. v. Watts , 303 F.3d 1104,
1111 (9 th Cir. 2002)). Further, the Whitney court specifically agreed that the “purposeful
direction or availment” standard is satisfied where the Complaint alleges that the
Defendants engaged in wrongful conduct entirely outside of Arizona (i.e., the groundless
Florida litigation) which was targeted at Xcentric whom the Whitney defendants knew
was based in Arizona. See Whitney , 2009 WL 113477, *2.
This is exactly the case here. In their motion, the Mobrez Defendants never deny
knowing that Xcentric was an Arizona LLC when they commenced the underlying actionin California. This is not surprising given that the caption of the Complaint from that
action (attached as Exhibit A to Xcentric’s Complaint in this matter; Doc. #1) clearly
reflected Defendants’ knowledge that Xcentric was an Arizona limited liability company.
Caption from Original Complaint (Doc. #1, Ex. A)
Case 2:11-cv-01426-GMS Document 26 Filed 10/12/11 Page 6 of 16
8/3/2019 Xcentric Ventures v. Borodkin - Response to MTD Re JX
http://slidepdf.com/reader/full/xcentric-ventures-v-borodkin-response-to-mtd-re-jx 7/16
7
RESPONSE TO MOTION TO DISMISS RE: PERSONAL JURISDICTION
1
2
3
45
6
7
8
9
10
11
12
13
14
15
16
1718
19
20
21
22
23
24
25
26
27
28
G I N G R A S L A W
O F F I C E , P L L C
3 9 4 1 E . C H A N D L E R B L V D
. , # 1 0 6 - 2 4 3
P H O E N I X
, A R I Z O N A 8 5 0 4 8
As the Whitney court concluded, nothing further is necessary to satisfy Calder’s
“purposeful direction or availment” prong—the fact that the Mobrez Defendants engaged
in wrongful conduct outside of Arizona is sufficient to expose them to personal
jurisdiction here as long as their conduct was purposely directed at Arizona and causedharm here which, of course, it did. See Whitney , 2009 WL 113477, *2. These are
precisely the facts alleged in Xcentric’s Complaint. See Doc. #1, ¶ 9 (alleging,
“Defendants’ actions were specifically intended to cause harm to Plaintiff within the
State of Arizona and, in fact, Defendants’ actions had the intended effect of actually
causing substantial harm to Plaintiff within the State of Arizona. Defendants, and each of
them, are therefore properly subject to personal jurisdiction within the State of Arizona.”)
Furthermore, even if jurisdiction could only be based on a defendant’s contacts
with a forum (as opposed to non-forum activities which caused harm here), Arizona
courts have previously held that a single telephone call made to an Arizona resident,
coupled with other unlawful conduct causing harm here, can be sufficient to establish
personal jurisdiction in Arizona. See Bils v. Nixon, Hargrave, Devans & Doyle , 179
Ariz. 523, 526, 880 P.2d 743, 746 (App. 1994) (finding that where New York law firm
allegedly obtained the credit report of an Arizona resident in violation of the Fair CreditReporting Act and made single telephone call to Arizona seeking information about the
plaintiff, personal jurisdiction was proper “[b]ecause the alleged conduct of [defendants]
was intentionally directed at an Arizona resident and was calculated to cause injury to
him here, their contacts were sufficient to confer personal jurisdiction.”)
b. Forum Related Activities
“The second requirement for specific jurisdiction is that the contacts constituting
purposeful availment must be the ones that give rise to the current suit.” Bancroft , 223
F.3d at 1088. In Whitney , the district court determined that this prong was “easily
satisfied” by Xcentric’s allegation that “but for” the defendants’ unlawful commencement
of litigation in Florida which caused harm in Arizona, Xcentric would not have sued
Whitney in Arizona. See Whitney , 2009 WL 113477, *3 (citing Bancroft ).
Case 2:11-cv-01426-GMS Document 26 Filed 10/12/11 Page 7 of 16
8/3/2019 Xcentric Ventures v. Borodkin - Response to MTD Re JX
http://slidepdf.com/reader/full/xcentric-ventures-v-borodkin-response-to-mtd-re-jx 8/16
8
RESPONSE TO MOTION TO DISMISS RE: PERSONAL JURISDICTION
1
2
3
45
6
7
8
9
10
11
12
13
14
15
16
1718
19
20
21
22
23
24
25
26
27
28
G I N G R A S L A W
O F F I C E , P L L C
3 9 4 1 E . C H A N D L E R B L V D
. , # 1 0 6 - 2 4 3
P H O E N I X
, A R I Z O N A 8 5 0 4 8
Apparently misunderstanding this point, on pages 7–8 of their motion the Mobrez
Defendants suggest that the second prong of the specific jurisdiction analysis requires a
showing that “Plaintiff’s claims … arise out of Defendants’ particular activities in the
forum state .” Mot. at 7:13–14 (double emphasis in original) (citing Bancroft , 223 F.3dat 1087). This argument is simply incorrect as a matter of law. In fact, this is a direct
misstatement of the holding in Bancroft which actually stands for the exact opposite
premise.
In other words, as explained above, the first prong (“purposeful availment”) is
satisfied by showing that the defendant engaged in “wrongful conduct individually
targeting a known forum resident ” regardless of where the wrongful conduct actually
occurred. Here, as in Whitney , the Mobrez defendants engaged in wrongful conduct
outside Arizona that was individually targeted at a known Arizona victim (Xcentric) and
which caused substantial harm in Arizona. But for those actions, this case would never
have been brought. A fortiori , as the district court held in Whitney , the second prong of
specific jurisdiction is satisfied because “the contacts constituting purposeful availment
must be the ones that give rise to the current suit.” Bancroft , 223 F.3d at 1088. Here, the
contacts constituting purposeful availment are the ones that give rise to the current suit.As such, the second prong of specific jurisdiction is met.
c. Reasonableness
Because the first and second prongs of specific jurisdiction have been met, “the
burden shifts to the defendant to ‘present a compelling case that the presence of some
other considerations would render jurisdiction unreasonable.’” Whitney , 2009 WL
113477, *3 (quoting Burger King Corp. v. Rudzewicz , 471 U.S. 462, 477, 105 S.Ct. 2174,
85 L.Ed.2d 528 (1985)) (citing Ballard v. Savage , 65 F.3d 1495, 1500 (9 th Cir. 1995)
(characterizing this as a “heavy burden of rebutting the strong presumption in favor of
jurisdiction”). Of course, the issue of reasonableness requires a review of the seven
factors identified in Burger King and discussed in pages 8–11 of Defendants’ motion.
Xcentric offers the following brief comments on each point.
Case 2:11-cv-01426-GMS Document 26 Filed 10/12/11 Page 8 of 16
8/3/2019 Xcentric Ventures v. Borodkin - Response to MTD Re JX
http://slidepdf.com/reader/full/xcentric-ventures-v-borodkin-response-to-mtd-re-jx 9/16
9
RESPONSE TO MOTION TO DISMISS RE: PERSONAL JURISDICTION
1
2
3
45
6
7
8
9
10
11
12
13
14
15
16
1718
19
20
21
22
23
24
25
26
27
28
G I N G R A S L A W
O F F I C E , P L L C
3 9 4 1 E . C H A N D L E R B L V D
. , # 1 0 6 - 2 4 3
P H O E N I X
, A R I Z O N A 8 5 0 4 8
i. Extent of Purposeful Interjection Into Arizona
Defendants argue that by suing Xcentric in California, their interjection into
Arizona was “ de minimus ”. Xcentric strongly disagrees.
At its core, the underlying California litigation was commenced by the MobrezDefendants because, among other things, they wanted Xcentric to remove material from
its website and to also make sweeping changes to the way that Xcentric conducts
business in Arizona. See Magedson Aff. ¶¶ 11–15. If they had prevailed in that quest,
this would have necessarily had an immediate and dramatic impact on Xcentric’s
operations in Arizona, potentially making it impossible for Xcentric to remain in
business. See Magedson Aff. ¶ 15. By attempting to illegally force Xcentric to change
the way it operates in Arizona or to close its doors permanently, the Mobrez Defendants
interjected themselves into Arizona in a very meaningful way.
Furthermore, during the course of the underlying California litigation, the Mobrez
Defendants and their counsel attempted to unlawfully induce an employee of Xcentric to
steal confidential business records from Xcentric in Arizona and transport those records
to them in California. See Magedson Aff. ¶ 17. Although this effort was ultimately
unsuccessful, it underscores the substantial and deliberate efforts the Mobrez Defendantstook to reach into Arizona and to attempt to cause harm to Xcentric in Arizona. As such,
this factor should weigh strongly in favor of Xcentric. See Yahoo!, Inc. v. La Ligue
Contre Le Racisme Et L’Antisemitisme , 145 F.Supp.2d 1168, 1177 (N.D.Cal. 2001)
(finding that where French entity sent demand letters to Yahoo! in California, served
Yahoo! with process in California, and then commenced litigation in France in an effort
to change Yahoo! practices, the “purposeful injection” factor weighed in favor of
jurisdiction in California), aff’d , 433 F.3d 1199 (9 th Cir. 2006).
In all candor, the Whitney court determined the “purposeful injection” factor was
neutral in that case. See Whitney , 2009 WL 113477, *3. However, as noted above, the
facts of Whitney were much less egregious than the facts of this case. As such, Whitney
is distinguishable on this point.
Case 2:11-cv-01426-GMS Document 26 Filed 10/12/11 Page 9 of 16
8/3/2019 Xcentric Ventures v. Borodkin - Response to MTD Re JX
http://slidepdf.com/reader/full/xcentric-ventures-v-borodkin-response-to-mtd-re-jx 10/16
10
RESPONSE TO MOTION TO DISMISS RE: PERSONAL JURISDICTION
1
2
3
45
6
7
8
9
10
11
12
13
14
15
16
1718
19
20
21
22
23
24
25
26
27
28
G I N G R A S L A W
O F F I C E , P L L C
3 9 4 1 E . C H A N D L E R B L V D
. , # 1 0 6 - 2 4 3
P H O E N I X
, A R I Z O N A 8 5 0 4 8
ii. Burden of Litigating in Arizona
Implying poverty, the Mobrez Defendants suggest that litigating this action in
Arizona would be a “heavy burden” and that because Xcentric has survived costly
litigation in the past, it would be fair to force it to incur even more expense by litigatingthis action in California (which it already spent 18 months doing during the preceding
action). This argument should be summarily rejected because the Mobrez Defendants
offer no evidence to establish their financial position so there is no basis to conclude that
they are financially unable to litigate in Arizona.
In addition, a significant procedural difference between the Arizona and California
courts actually shows that the burden of litigating this action in Arizona would be far
lower for both parties than it would be in California. Specifically, under the local rules
of the Central District of California, every motion (regardless of how trivial or minor) is
required to be set for hearing on the assigned judge’s general “law and motion” day
(meaning a cattle call date when all matters on the calendar are scheduled for the same
time). Counsel for both sides are required to personally attend each hearing unless
excused. See Central District Local Rule L.R. 7–4 and L.R. 7–14. 2 The local rules of the
California state court system are essentially the same.In the original California lawsuit filed against Xcentric, because of the extreme
efforts that the Mobrez Defendants took to avoid a merits-based disposition and to
prolong the action, this resulted in numerous motions and hearings on various dates
including April 13, April 19, June 24, June 28, July 12, September 20, and November 1,
2010. Xcentric’s Arizona-based counsel was required to attend each hearing, typically
resulting in an entire day of traveling to/from Los Angeles and waiting sometimes hours
for the case to be called, even if the actual hearing lasted only five minutes.
As this Court is aware, the Arizona District Court does not require every motion to
be set for hearing. On the contrary, hearings on motions (particularly simple/routine
matters) are only rarely required. By this fact alone, it is likely that other than the trial of
2 See http://www.cacd.uscourts.gov/CACD/LocRules.nsf
Case 2:11-cv-01426-GMS Document 26 Filed 10/12/11 Page 10 of 16
8/3/2019 Xcentric Ventures v. Borodkin - Response to MTD Re JX
http://slidepdf.com/reader/full/xcentric-ventures-v-borodkin-response-to-mtd-re-jx 11/16
11
RESPONSE TO MOTION TO DISMISS RE: PERSONAL JURISDICTION
1
2
3
45
6
7
8
9
10
11
12
13
14
15
16
1718
19
20
21
22
23
24
25
26
27
28
G I N G R A S L A W
O F F I C E , P L L C
3 9 4 1 E . C H A N D L E R B L V D
. , # 1 0 6 - 2 4 3
P H O E N I X
, A R I Z O N A 8 5 0 4 8
this matter itself (which would be burdensome to all parties regardless of where it
occurs), litigating this case in Arizona would result in a substantial savings of time and
costs for all parties as compared with litigating the case in California. Under these
circumstances, and given the ease with which pleadings and motions may be filed via theCourts’s ECF/PACER system, Arizona is plainly the most efficient and least burdensome
forum in which this case could be heard. This factor strongly favors Xcentric.
iii. Extent of Conflict with California Sovereignty
For reasons that continue to baffle undersigned counsel, the Mobrez Defendants
argue that Xcentric’s Complaint in this action “depends heavily” upon a series of
recorded telephone conversations which Defendants suggest were created in violation of
California law. This is baffling because not only is the argument directly inconsistent
with the facts, the same argument was specifically raised before and specifically rejected
by the California court. Despite this, the Mobrez Defendants continue to ignore reality
by pretending that the court somehow ruled in their favor on this point when, in fact, it
specifically ruled against them on this point.
Because this is such a tangential and collateral issue, it is not necessary to discuss
the details in exhaustive detail here. Rather, it suffices to say that as alleged in paragraph26 of Xcentric’s Complaint and as explained in the California court’s ruling on
Xcentric’s first Motion for Summary Judgment, 2010 WL 4977054, *9–11, Mr. Mobrez
made a total of seven phone calls to Xcentric’s main telephone number in Arizona in
April and May 2009. Two of these calls were simply voicemail messages that Mr.
Mobrez left for Mr. Magedson. Of the remaining five calls, four were automatically
recorded by Xcentric’s telephone system without Mr. Mobrez’s knowledge. Of the four
remaining calls that were recorded, Mr. Mobrez’s wife (Ms. Llaneras) was secretly
listening to three of them without the knowledge of Mr. Magedson. As alleged in the
Complaint here, these recordings demonstrate that both Mr. Mobrez and Ms. Llaneras
committed perjury in the prior litigation because they both gave materially false
testimony regarding the contents of these telephone conversions.
Case 2:11-cv-01426-GMS Document 26 Filed 10/12/11 Page 11 of 16
8/3/2019 Xcentric Ventures v. Borodkin - Response to MTD Re JX
http://slidepdf.com/reader/full/xcentric-ventures-v-borodkin-response-to-mtd-re-jx 12/16
12
RESPONSE TO MOTION TO DISMISS RE: PERSONAL JURISDICTION
1
2
3
45
6
7
8
9
10
11
12
13
14
15
16
1718
19
20
21
22
23
24
25
26
27
28
G I N G R A S L A W
O F F I C E , P L L C
3 9 4 1 E . C H A N D L E R B L V D
. , # 1 0 6 - 2 4 3
P H O E N I X
, A R I Z O N A 8 5 0 4 8
Because the recordings were so devastating to their claims, the Mobrez
Defendants vigorously tried to suppress them in the prior case, arguing that they were
inadmissible under California’s “wiretapping” statute, Cal. Pen. Code § 632. Far from
accepting this argument as Defendants now imply, the district court specifically rejectedit, finding that recordings were admissible under federal law regardless of whether they
were made in violation of California state law:
The Omnibus Crime Control and Safe Streets Act (“the Act”) is the federallaw that regulates the interception of oral communications. 18 U.S.C. §§2510 et. seq . Section 2511(2)(d) provides that the interception of wire, oral,or electronic communications shall not be unlawful where the interceptionis done by a party to the conversation or where one of the parties to the
conversation has given prior consent to such interception, unless thecommunication is intercepted for the purpose of committing any criminal or tortuous act. 18 U.S.C. § 2511(2)(d). In the present case, DefendantsXcentric and Magedson clearly gave prior consent to the third party vendor to record all telephone calls coming into the main Ripoff Report telephonenumber. Further, there is no evidence, nor any suggestion, that the purposeof the recordings was to perpetrate a criminal or tortuous act. AlthoughPlaintiffs allege that Defendants used the phone to communicateextortionate threats to Plaintiffs, even if that were true, there is nosuggestion that the recordings were used for the purpose of extortion. To
the contrary, Defendants have presented evidence that all calls to the Ripoff Report's main telephone number were recorded in the ordinary course of business. Therefore, the recordings at issue do not violate federal law.
In sum, because the recordings at issue comply with federal law, they may be admitted as evidence without regard to California Penal Code § 632.
2010 WL 4977054, *11–12 (emphasis added). Of course, after concluding that the
recordings were not unlawful and were otherwise admissible, the district court excluded
them solely because Xcentric declined to disclose the identity of the third-party vendor
who created them. See 2010 WL 4977054, *13. This point (which ultimately was
irrelevant to the disposition of the action) does not mean that the recordings are
inadmissible in this case. Rather, the only reason Xcentric declined to disclose the
identity of its vendor at the time was because the Mobrez Defendants refused to stipulate
Case 2:11-cv-01426-GMS Document 26 Filed 10/12/11 Page 12 of 16
8/3/2019 Xcentric Ventures v. Borodkin - Response to MTD Re JX
http://slidepdf.com/reader/full/xcentric-ventures-v-borodkin-response-to-mtd-re-jx 13/16
13
RESPONSE TO MOTION TO DISMISS RE: PERSONAL JURISDICTION
1
2
3
45
6
7
8
9
10
11
12
13
14
15
16
1718
19
20
21
22
23
24
25
26
27
28
G I N G R A S L A W
O F F I C E , P L L C
3 9 4 1 E . C H A N D L E R B L V D
. , # 1 0 6 - 2 4 3
P H O E N I X
, A R I Z O N A 8 5 0 4 8
to a protective order which would have prevented them from disclosing the identity of
this vendor to any of Xcentric’s detractors and critics. As this court may recall based on
prior matters such as Xcentric Ventures, LLC v. William Stanley, et al. , Case No. 07-CV-
0954-GMS, Xcentric has an unfortunately long history of being targeted by unlawfulattacks, including harassment campaigns directed at third party vendors who provide
services to Xcentric. See Xcentric Ventures, LLC v. William Stanley, et al. , 2009 WL
113563 (D.Ariz. 2009) (finding defendant in contempt for violating a preliminary
injunction which precluded defendant from harassing Xcentric’s third party vendors).
Given how clearly unlawful the conduct of the Mobrez Defendants was in the
prior proceeding, Xcentric determined that it would not and could not disclose the name
of the third party vendor without an appropriate protective order in place. Of course,
upon the entry of such an order in this case , Xcentric could certainly identify the vendor
who, in turn, could authenticate the recorded telephone call and thereby resolve the
concerns which precluded their admission in the previous action.
All these points aside, even if California’s wiretapping law was relevant here,
which it is not, California law does not favor Defendants’ position in any way. This is so
because the California courts have expressly held that even when a tape recordingviolates Penal Code § 632, it may always be used for impeachment. See Frio v. Superior
Court , 203 Cal.App.3d 1480, 1497, 250 Cal.Rptr. 819, 828 (2 nd Dist. 1988) (explaining,
“the party asserting the [exclusionary] sanction [of Cal. Pen. Code § 632] should not be
permitted to use it as a shield for perjury.”)
Thus, regardless of the fact that Arizona is a one-party state and that the
recordings were clearly lawful under Arizona law, even if this court were to somehow
apply California law, the recordings would be entirely admissible (assuming sufficient
authentication). Thus, litigating this case in Arizona would not conflict in any way with
the sovereignty of California. On the contrary, because perjury is a crime under Arizona,
California, and federal law, all of these jurisdictions have a strong interest favoring the
punishment of this type of behavior.
Case 2:11-cv-01426-GMS Document 26 Filed 10/12/11 Page 13 of 16
8/3/2019 Xcentric Ventures v. Borodkin - Response to MTD Re JX
http://slidepdf.com/reader/full/xcentric-ventures-v-borodkin-response-to-mtd-re-jx 14/16
14
RESPONSE TO MOTION TO DISMISS RE: PERSONAL JURISDICTION
1
2
3
45
6
7
8
9
10
11
12
13
14
15
16
1718
19
20
21
22
23
24
25
26
27
28
G I N G R A S L A W
O F F I C E , P L L C
3 9 4 1 E . C H A N D L E R B L V D
. , # 1 0 6 - 2 4 3
P H O E N I X
, A R I Z O N A 8 5 0 4 8
iv. Arizona’s Interest In Adjudicating Dispute
Defendants argue that because most of their unlawful conduct happened in
California, Arizona has no interest in this dispute. This position is baseless; “Arizona has
a strong interest in ensuring that its residents are compensated for their injuries.”Whitney , 2009 WL 113477, *4 (citing Gates Learjet Corp. v. Jensen , 743 F.2d 1325,
1333 (9 th Cir. 1984)). This factor favors Xcentric.
v. Most Efficient Judicial Resolution
In Whitney , the court found this factor was neutral because witnesses and evidence
were located in both Arizona and Florida. Whitney , 2009 WL 113477, *4. Here,
Xcentric agrees the factor is neutral for the same reason; evidence and witnesses 3 are
located in both Arizona and California.
vi. Importance Of Litigating In Arizona
While correctly noting that this factor is generally entitled to little weight,
Defendants argue that this factor favors them. Xcentric could dispute this point, but
given how strongly the other factors support jurisdiction here, it is unnecessary to do so.
vii. Existence of an Alternative Forum
Xcentric agrees that an alternative forum exists in California.viii. Summary
In Whitney , the district court concluded that in light of all the factors, the
defendants failed to make a “compelling case” that it would be unreasonable to require
them to litigate in Arizona. See Whitney , 2009 WL 113477, *4. The same is true here.
Further, the Whitney court observed “on the issue of reasonableness … Defendants
intentionally required [Xcentric] to litigate the first lawsuit in Florida. The Florida
Defendants cannot now argue persuasively that it is unreasonable for them to be required
to litigate the second lawsuit in Arizona.” Id . Again, the same is true here.
3 Defendants suggest that Mr. Magedson “is likely a resident of California”. Mot. at10:24. Mr. Magedson is a citizen and resident of Arizona, and only Arizona. SeeMagedson Aff. ¶ 16.
Case 2:11-cv-01426-GMS Document 26 Filed 10/12/11 Page 14 of 16
8/3/2019 Xcentric Ventures v. Borodkin - Response to MTD Re JX
http://slidepdf.com/reader/full/xcentric-ventures-v-borodkin-response-to-mtd-re-jx 15/16
15
RESPONSE TO MOTION TO DISMISS RE: PERSONAL JURISDICTION
1
2
3
45
6
7
8
9
10
11
12
13
14
15
16
1718
19
20
21
22
23
24
25
26
27
28
G I N G R A S L A W
O F F I C E , P L L C
3 9 4 1 E . C H A N D L E R B L V D
. , # 1 0 6 - 2 4 3
P H O E N I X
, A R I Z O N A 8 5 0 4 8
As one final note on the issue of reasonableness and foreseeability, it is worth
mentioning that the Mobrez Defendants were warned that their unlawful actions in
California would result in the commencement of litigation against them in Arizona.
Specifically, attached to Xcentric’s Complaint in this matter as Exhibit E is a copy of aletter dated May 11, 2010 that was sent to Defendants, through their counsel, a few days
after the deposition of Mr. Mobrez in which the recorded telephone calls were revealed.
This letter could not be any clearer—it plainly stated: “Assuming the present federal case
in Los Angeles is resolved in favor of Xcentric, a new lawsuit will immediately be filed
against your clients in Arizona seeking to recover all damages caused by their illegal
conduct.” Of course, this warning was ignored by the Mobrez Defendants and they
continued prosecuting their sham proceeding even more aggressively than before. Thus,
as promised, immediately after the California action was resolved in Xcentric’s favor,
this case was filed here in Arizona.
Under these circumstances, the commencement of this action in this forum could
not have come as any surprise. To the contrary, because they were expressly warned that
their unlawful conduct would result in Xcentric suing them in Arizona, the Mobrez
Defendants surely could “reasonably anticipate being haled into court there” to answer for their actions. World-Wide Volkswagen Corp. v. Woodson , 444 U.S. 286, 297, 100
S.Ct. 559, 567, 62 L.Ed.2d 490 (1980). The fact that Defendants ignored this warning
and Xcentric kept its promise does not offend traditional notions of fair play and
substantial justice.
III. CONCLUSION
For the reasons stated herein, the Mobrez Defendants’ Motion to Dismiss for lack
of personal jurisdiction should be denied.
DATED October 12, 2011.
GINGRAS LAW OFFICE, PLLC/S/ David S. GingrasDavid S. GingrasAttorneys for Plaintiff
Case 2:11-cv-01426-GMS Document 26 Filed 10/12/11 Page 15 of 16
8/3/2019 Xcentric Ventures v. Borodkin - Response to MTD Re JX
http://slidepdf.com/reader/full/xcentric-ventures-v-borodkin-response-to-mtd-re-jx 16/16
16
1
2
3
45
6
7
8
9
10
11
12
13
14
15
16
1718
19
20
21
22
23
24
25
26
27
28
G I N G R A S L A W
O F F I C E , P L L C
3 9 4 1 E . C H A N D L E R B L V D
. , # 1 0 6 - 2 4 3
P H O E N I X
, A R I Z O N A 8 5 0 4 8
CERTIFICATE OF SERVICE
I hereby certify that on October 12, 2011 I electronically transmitted the attached
document to the Clerk’s Office using the CM/ECF System for filing, and for transmittalof a Notice of Electronic Filing to the following:
Hartwell Harris, Esq.LAW OFFICE OF HARTWELL HARRIS
1809 Idaho AvenueSanta Monica, CA 90403Attorney for Defendants
Raymond MobrezIliana Llaneras and
Asia Economic Institute, LLC
John S. Craiger, Esq.David E. Funkhouser III, Esq.
Krystal M. Aspey, Esq.Quarles & Brady LLP
One Renaissance SquareTwo North Central Avenue
Phoenix, Arizona 85004-2391Attorney for Defendant Lisa J. Borodkin
And a courtesy copy of the foregoing delivered to:HONORABLE G. MURRAY SNOW
United States District CourtSandra Day O’Connor U.S. Courthouse, Suite 622
401 West Washington Street, SPC 80Phoenix, AZ 85003-215
/s/David S. Gingras
Case 2:11-cv-01426-GMS Document 26 Filed 10/12/11 Page 16 of 16