Mhmoud v. Cheetah X Inc.

Background

Dina Adel Mhmoud, representing herself, sued Cheetah X Inc. and its CEO, Alexander Debelov. Her claims arise from an agreement to purchase a fleet of electric scooters. She alleges violations of federal securities laws, breach of contract, fraud, violations of California Business and Professions Code § 17200, and conversion.

Debelov, also representing himself, filed a motion to dismiss. He argued that Mhmoud had not properly served him, that the court lacked personal jurisdiction over the defendants, that venue was improper, and that Mhmoud failed to state a claim. The court addressed the motion separately as to Cheetah X and Debelov.

Cheetah X’s Representation

Debelov filed the motion on behalf of himself and Cheetah X. The court held that a corporation may appear in federal court only through licensed counsel. Because Debelov is not a lawyer, the court struck the motion to dismiss as to Cheetah X.

The court’s conclusion did not resolve the claims against Cheetah X. The order states that the parties’ proposals must address when Cheetah X should answer the complaint or file a new motion to dismiss through counsel.

Service on Debelov

Mhmoud had previously asked to serve Debelov by alternative methods after unsuccessfully attempting to serve him at his residence seven times. Chief Magistrate Judge Ryu authorized alternative service, including posting the complaint, summons, and alternative-service order at a San Francisco property identified as Debelov’s primary California residence, mailing the documents there by certified mail, and sending them to the most current email address Mhmoud had previously used to communicate with him.

The court found that Mhmoud followed Judge Ryu’s order. It also found that the service methods were reasonably calculated to give Debelov actual notice. The court therefore rejected Debelov’s service objection and concluded that service was proper.

Personal Jurisdiction over Debelov

Personal jurisdiction is a court’s authority to exercise power over a particular defendant. The court considered both general jurisdiction and specific jurisdiction.

For general jurisdiction, Mhmoud relied on Debelov’s California residence, California driver’s license, and voter registration. Debelov stated that he maintained residences in Florida and California, spent only a limited amount of time in California, and maintained the license and voter registration for historical reasons. The court found the record too limited to determine whether Debelov was domiciled in California.

The court also considered documents listing a San Francisco business address for Cheetah X. It stated that those documents might help establish general jurisdiction over Cheetah X, but they did not directly establish jurisdiction over Debelov because an independent basis is generally needed to exercise jurisdiction over a corporate officer.

For specific jurisdiction, the court explained that Mhmoud needed to show that Debelov purposefully conducted activities in California, that her claims arose from or related to those activities, and that exercising jurisdiction would be reasonable. Debelov argued that Cheetah X had no California operations, employees, or customers; that no scooters were sold or deployed in California; and that the relevant activities occurred elsewhere. Mhmoud disputed those assertions and referred to materials concerning a San Francisco business address and alleged effects on California investors, although some of those materials were not in the record.

The court concluded that the record was also insufficient to decide specific jurisdiction. It ordered jurisdictional discovery—limited fact gathering about the court’s authority over Debelov—to address both general and specific jurisdiction.

Disposition

Judge Tigar stayed consideration of the motion to dismiss as to Debelov and ordered discovery on the personal-jurisdiction issues. The court required the parties to submit joint or separate proposals for completing that discovery within 14 days of the order. The court also struck the motion to dismiss as to Cheetah X. The order did not decide Debelov’s arguments about venue or failure to state a claim.