MN Investment Inc. et.al. v. Nguyen

Background

The plaintiffs—two corporations and an individual who is their sole shareholder—asserted eight claims involving alleged misrepresentations that induced investments totaling $540,000 in Amour International. The claims included fraud, breach of contract, breach of fiduciary duty, and a claim concerning a $15,000 loan. The defendants removed the case from state court to federal court and moved to dismiss, arguing that the court lacked personal jurisdiction and that venue was improper. The plaintiffs asked for transfer to the Southern District of Texas if the court found no personal jurisdiction; the defendants also requested that transfer in the alternative.

The parties disputed facts concerning contacts with California. The plaintiffs presented evidence that Do Nguyen made or communicated investment-related representations to Morgan Nguyen while she was in California, that the investment-related harm occurred there, and that Amour had business connections to California. The defendants presented evidence emphasizing their Texas residences, Texas incorporation, Texas operations, and Texas-based records and personnel.

Personal-Jurisdiction Rulings

The court held that it lacked personal jurisdiction over Alex Nguyen, Mira Song, and D & A Commercial Investments. The plaintiffs had conceded that point, and the parties stipulated to dismissal of those defendants at the August 18, 2022 hearing. The court therefore dismissed Alex Nguyen, Mira Song, and D & A Commercial Investments for lack of personal jurisdiction.

The court did not finally decide whether it had personal jurisdiction over Do Nguyen or Amour International. Because the jurisdictional facts were disputed, it ordered jurisdictional discovery limited to those two defendants. The parties agreed to mediate before conducting that discovery and were directed to prepare a discovery and briefing schedule for any renewed motion to dismiss.

The court described facts that could support personal jurisdiction, including Do Nguyen’s alleged California meeting and communications with Morgan Nguyen in California, the alleged ongoing business relationship, Amour’s alleged product shipments to a California business, and Amour’s use of California counsel. The court said that a fuller analysis of purposeful availment, purposeful direction, whether the claims arose from or related to the California contacts, and whether jurisdiction would be reasonable should wait until a later motion after discovery.

Venue, Transfer, Standing, and Sanctions

The court deferred the venue and transfer issues because personal jurisdiction was a threshold issue. It explained the standards for possible transfer to the Southern District of Texas but did not order a transfer.

The defendants’ standing argument concerning Morgan Nguyen was not sufficiently developed and was moot because the claim involving her had been asserted against Alex Nguyen, whom the court dismissed for lack of personal jurisdiction. The court denied the defendants’ request for sanctions under Rule 11, stating that jurisdictional discovery could clarify the parties’ factual dispute.

Disposition

The order resolved the motion identified as ECF No. 8 by dismissing Alex Nguyen, Mira Song, and D & A Commercial Investments for lack of personal jurisdiction; ordering jurisdictional discovery concerning Do Nguyen and Amour International; deferring the transfer inquiry; and denying the request for Rule 11 sanctions. Judge Laurel Beeler signed the order as a United States Magistrate Judge.