CZ Services, Inc. v. Anthem Insurance Companies, Inc.

Background

The defendants moved to dismiss for lack of specific personal jurisdiction under Rule 12(b)(1). Specific personal jurisdiction asks whether the defendants have sufficient connections with the forum state that are related to the dispute. The court did not hold an evidentiary hearing, so the plaintiffs had to make a preliminary showing, based on the allegations, that jurisdiction existed.

Court’s Analysis

The court concluded that the complaint did not meaningfully connect the defendants to California or the Northern District of California. The plaintiffs acknowledged that none of the defendants was incorporated in California or had its principal place of business there. The court said that allegations about the defendants’ general business dealings in California did not establish the necessary connection between California and the underlying controversy.

The complaint also alleged that the defendants were “principals” and that non-party ESI was their agent. The court found those allegations conclusory and insufficient to plausibly allege an agency relationship for jurisdictional purposes. The court noted that pleading the allegations only “on information and belief” underscored the deficiency.

Ruling

The court dismissed the complaint with leave to amend concerning specific personal jurisdiction. It declined to reach the defendants’ arguments under Rule 12(b)(6), which concerns whether a complaint states a legally sufficient claim, until personal jurisdiction was adequately established. Judge James Donato allowed the plaintiffs to file an amended complaint by October 12, 2020, and stated that failure to amend by that date might result in dismissal under Rule 41(b). The plaintiffs could alternatively request transfer to an appropriate judicial district.