John Farina v. Savwcl III, LLC

A funnel hovered over the American West. Into the large

end went investor dollars and investor dreams. Out the little end

streamed dollars into Las Vegas, where a Nevada intermediary

made loans to Nevada land developers who had high hopes for big

projects. The funnel channeled over $40 million in 2006 and

2007. But remember what happened next: the subprime

meltdown. The investors ended up getting back just 17 cents on

the dollar. They sued the developers.

The question is where. Where can this suit proceed? The

answer is: not in California. The investors knew they were

sending their dollars to Nevada—to Nevada residents who said

they aimed to develop Nevada land. The Nevada developers did

not know where the investors lived. Some investors lived in

California, but the Nevada developers got money only from the

Nevada intermediary, which is not in this suit and apparently

now bankrupt. So when unhappy investors sued the Nevada

developers in a California trial court, that court quashed their

case for want of personal jurisdiction over the all-Nevada

defendants. This ruling was right because you do not

purposefully avail yourself of California benefits if you do not

know your actions somehow connect to California. We affirm.

I

The apparently-bankrupt Nevada intermediary was Aspen

Financial Services, LLC (Aspen). It has never been a party to

this lawsuit, but it was in the middle of the money flow. We

describe its operation.

When it was solvent, Aspen was a hard money broker in

Las Vegas, Nevada. It raised money from individual investors

and pooled the money into loans for property developers. Many

3

investors funded a typical loan, with each investor owning a

fraction of it.

Borrowers could get loans through Aspen faster and more

easily than from banks because Aspen was not regulated like a

bank. Thus, developers were willing to pay a premium to borrow

through Aspen. In turn, investors who funded the loans got

higher interest rates than from a bank deposit. Everyone

prospered from the arrangement—during good times, anyway,

when borrowers made their payments.

Aspen brokered two loans for West Charleston Lofts III,

LLC (West Charleston), a Nevada real estate developer. Aspen

made the first loan in 2006, for around $19 million. It made the

second loan in 2007, for about $24 million. Over 500 investors

funded the loans. The vast majority lived in Aspen’s home state

of Nevada, but about a tenth lived in California. Another 111

were from other states.

Promissory notes for the loans designated the individual

investors, not Aspen, as the lenders. Each investor entered a

loan servicing agreement with Aspen. This agreement made

Aspen the investor’s agent to service each note, to protect the

lender’s interest in and enforce the lender’s rights under each

note and, if necessary, to manage, refinance, or sell a property.

The investors gave the loans’ principal to Aspen, which in

turn gave it to West Charleston. Repayment from West

Charleston to the investors also flowed through Aspen. The

promissory notes provided West Charleston would make

payments to Aspen’s Las Vegas address. Once Aspen got the

payments, it distributed them to the investors.

4

Aspen’s founder and president, Jeffrey Guinn, testified he

believed Aspen had a fiduciary duty to the investors. Guinn said

Aspen owed no duty to borrower West Charleston.

West Charleston used the money from the loans to buy

Nevada property for development. Deeds of trust for the property

secured the promissory notes.

There were personal guarantees as well, so we expand our

cast of characters. Christopher Stuhmer ran West Charleston.

His wife was Michelle Stuhmer. Their trust was JCS Family #2

Trust. These individuals and their trust, as well as Christopher

Homes, LLC, all gave personal guarantees for the loans to West

Charleston. The personal guarantees required the Stuhmers,

their trust, and Christopher Homes to repay the investors if West

Charleston defaulted on the loans.

The first loan matured in October 2007, but West

Charleston said it could not repay investors due to the thenunfolding recession. So Aspen gave West Charleston an

extension. Over the next several years, Aspen gave West

Charleston more loan extensions.

In May 2011, West Charleston’s Christopher Stuhmer sent

a letter to Aspen’s Jeff Guinn. This letter plays a central role in

this controversy. The investor plaintiffs say this letter was the

linchpin of a fraud by Stuhmer to wriggle out of Stuhmer’s

family’s personal loan guarantees and thus to trick the investors

into accepting more risk.

Stuhmer’s letter proposed the investors transform their

loans into equity.

Stuhmer’s proposal was that the investors convert their

loans to West Charleston into equity in a new joint venture, led

by Stuhmer, that would take over development of the property.

5

The joint venture would include (1) the Aspen investors, (2) a new

investor to fund predevelopment holding costs and operating

expenses, and (3) West Charleston, which would contribute the

Nevada property it bought with the original loan funds. The

Aspen investors would get 87 percent of equity in the joint

venture and, in exchange, would relinquish their interest in the

promissory notes, deeds of trust, and personal guarantees.

That last part about how the investors would relinquish

their interests in Stuhmer’s personal guarantees would assume

dominating importance. The plaintiff investors in this suit would

claim Stuhmer engineered this letter as a trick to escape his

personal guarantees of the loans.

Guinn wrote the individual investors to explain the

proposed joint venture. Guinn also included a copy of Stuhmer’s

letter. Most investors told Aspen they approved of the joint

venture plan. So in January 2012, Aspen executed the Joint

Venture Agreement as attorney-in-fact for the investors. The

joint venture’s name is SAVWCL III, LLC. We are unsure how to

pronounce that, so we call it Joint Venture.

Under the Joint Venture Agreement, the investors canceled

the promissory notes, deeds of trust, and personal guarantees.

West Charleston conveyed its property to Joint Venture.

Joint Venture hired an architectural firm and a real estate

consulting firm to work on the development. The firms worked

for Joint Venture from their California offices. And Joint

Venture paid the firms at their California offices. Ultimately,

though, Joint Venture never developed the Nevada property.

In January 2016, Joint Venture sold the property and

distributed the proceeds. It was a massive loss: the distributions

returned 17 cents for each dollar the investors originally lent.

6

A dozen investors, including seven Californians, filed suit

in Los Angeles Superior Court. We refer to plaintiffs as

Investors. Investors named eight defendants:

● West Charleston, LLC, the Nevada company that

originally borrowed the investors’ money.

● Christopher Stuhmer, the Nevada resident who

guaranteed the loans and ran West Charleston.

Investors named Stuhmer individually and as trustee

of JCS Family Trust #2, the Nevada trust that also

guaranteed the loans.

● Michelle Stuhmer, spouse of Christopher Stuhmer

and a Nevada resident who also guaranteed the

loans.

● Christopher Homes, LLC, the Nevada company that

also guaranteed the loans.

● SAVWCL III, LLC, the Nevada company we call

Joint Venture.

● SAV Management, LLC, the Nevada company that

served as trustee for the Nevada trust the investors

created in tandem with Joint Venture.

● Christopher & Company, LLC, the Nevada company

that was the operations manager for Joint Venture.

● Christopher Companies, LLC, the Nevada company

Investors claim is an alter ego of Joint Venture and

Christopher Stuhmer.

We refer to defendants collectively as Developers.

Investors allege Aspen and Guinn conspired with Developers, but

did not name either as defendants. Investors’ complaint states

Aspen and Guinn are in bankruptcy proceedings.

7

Investors asserted 11 causes of action, including fraud,

breach of contract, and elder abuse. Investors claimed Stuhmer

and his coconspirators lured Investors with false promises of

personal guarantees, tricked Investors into converting debt to

equity, and broke promises to repay the loans.

As mentioned above, the core of Investors’ complaint is

Stuhmer’s May 2011 letter to Guinn. Investors claim Stuhmer

directed Guinn to forward the letter to Investors. And Investors

say Stuhmer and Guinn materially misled Investors by failing to

inform them they could enforce the personal guarantees rather

than approve the joint venture.

Developers moved to quash service for lack of personal

jurisdiction. The trial court allowed jurisdictional discovery and

requested supplemental briefing. It granted Developers’ motion

because it found Developers did not have the minimum contacts

with California necessary to support jurisdiction.

II

We first state the standard of review and then outline the

principles of personal jurisdiction.

A

When a defendant moves to quash service for lack of

jurisdiction, the plaintiff bears the burden of proving jurisdiction

by a preponderance of the evidence. (Felix v. Bomoro

Kommanditgesellschaft (1987) 196 Cal.App.3d 106, 110.)

We defer to the trial court’s factual findings that are

supported by substantial evidence. (Vons Companies, Inc. v.

Seabest Foods, Inc. (1996) 14 Cal.4th 434, 449 (Vons), abrogated

on other grounds by Bristol-Myers Squibb Co. v. Superior Court

(2017) ___ U.S. ___, ___ [137 S.Ct. 1773, 1781] (Bristol-Myers).)

8

We independently review the trial court’s application of law to

facts. (Vons, supra, at p. 449.)

B

California courts may exercise jurisdiction on any basis

consistent with the state or federal Constitution. (Code Civ.

Proc., § 410.10.) Under those Constitutions, jurisdiction is proper

if a defendant has minimum contacts with California such that a

suit in the state does not offend traditional notions of fair play

and substantial justice. (International Shoe Co. v. State of

Washington, etc, (1945) 326 U.S. 310, 316; Jayone Foods, Inc. v.

Aekyung Industrial Co. Ltd. (2019) 31 Cal.App.5th 543, 552.)

Personal jurisdiction can be all-purpose (also called

“general”) or case-linked (also called “specific”). (Bristol-Myers,

supra, 137 S.Ct. at pp. 1779–1780.) (We use the more descriptive

labels instead of the “general”/“specific” names.)

A court has all-purpose jurisdiction over defendants who

are at home in the court’s forum. All-purpose jurisdiction allows

a court to hear any claim against a defendant, no matter where

the underlying events happened. By contrast, in a forum where a

defendant is not at home, a court may not exercise all-purpose

jurisdiction, but may still exercise case-linked jurisdiction. Caselinked jurisdiction allows a court to adjudicate only those

disputes relating to a defendant’s contact with the forum. (See

Bristol-Myers, supra, 137 S.Ct. at p. 1780.)

We address only case-linked jurisdiction, because Investors

do not contend California courts have all-purpose jurisdiction

over Developers.

To assess case-linked jurisdiction, courts apply a threeprong test. Case-linked jurisdiction exists where: (1) the

defendant has purposefully availed itself of a forum’s benefits; (2)

9

the controversy relates to or arises out of the defendant’s contacts

with the forum; and (3) the exercise of jurisdiction comports with

fair play and substantial justice. (Pavlovich v. Superior Court

(2002) 29 Cal.4th 262, 269 (Pavlovich).) Here the dispute focuses

on the first prong: whether Developers purposefully availed

themselves of California’s benefits.

A defendant purposefully avails itself of a forum’s benefits

if it intentionally directs its activities at a forum such that, by

virtue of the benefits the defendant has received, it should

reasonably expect to be haled into the forum’s courts. (Burger

King Corp. v. Rudzewicz (1985) 471 U.S. 462, 475–476 (Burger

King).) By focusing on the defendant’s purpose, this requirement

ensures defendants will not be haled into a jurisdiction solely

because fortuitous or attenuated contacts or because of the

unilateral activity of another party. (Id. at p. 475.)

III

The trial court correctly determined Investors did not carry

their burden to establish jurisdiction. No evidence shows

California has case-linked jurisdiction over Developers.

On appeal, Investors argue jurisdiction is proper because:

(1) Developers “caused” Aspen to contact California investors; (2)

Developers formed ongoing contractual relationships with

California investors; and (3) Developers paid taxes to Nevada’s

Clark County Treasury Office in Los Angeles and retained

California firms to work on the development. Investors also

claim the trial court applied an erroneous legal rule.

Investors’ arguments fail, for reasons we will explain. But

first, we address a problem that recurs throughout Investors’

arguments.

10

Investors often pinpoint a single defendant’s action, and

then extrapolate from it a conclusion about all eight defendant

Developers. For instance, Investors write, “Respondents also

purposefully availed themselves of California’s benefits when

[Joint Venture] sent, through Aspen, semi-annual assessment

payments to Clark County’s Treasury Office in Los Angeles.” Yet

even if Joint Venture purposefully availed itself of California

benefits by sending payments to Los Angeles, it does not

immediately follow, as Investors suggest, that all “Respondents

also purposefully availed themselves of California’s benefits.”

The flip side of this problem occurs when Investors make a broad

statement about how Developers, as a whole, have contacted

California, but then fail to support their statement by pointing to

the actions of each of the eight defendants.

Personal jurisdiction is determined defendant by

defendant: we assess each defendant’s individual contacts with a

forum to determine whether jurisdiction is proper as to it.

(Burdick v. Superior Court (2015) 233 Cal.App.4th 8, 24.) Even

when a plaintiff alleges conspiracy, as Investors do, the purposes

and acts of one party cannot be imputed to others. (In re

Automobile Antitrust Cases I & II (2005) 135 Cal.App.4th 100,

113.)

For that reason alone, Investors’ arguments do not prove

jurisdiction for several of the Developers. But Investors’

arguments also fail independently, for the following reasons.

A

Investors contend jurisdiction is proper because Developers

“caused” Aspen to contact California investors. Specifically,

Investors claim Developers used Aspen to induce Investors into

loans, repayment forbearances, and the joint venture proposal.

11

The actions of third parties, like Aspen, generally are

irrelevant to whether defendants, like Developers, purposefully

availed themselves of a forum’s benefits. (See HealthMarkets,

Inc. v. Superior Court (2009) 171 Cal.App.4th 1160, 1169

(HealthMarkets).) Only when a defendant purposefully directs a

third party’s activities toward the forum state can the actions of

the third party be imputed to the defendant. (Ibid.) Thus, even

when a third party is involved, the focus of our inquiry remains

on the defendant’s actions and intent.

Investors have not shown Developers purposefully directed

Aspen’s activities toward California.

Investors’ claim that Developers directed Aspen’s contacts

mostly centers on one item of evidence: the May 2011 letter

Stuhmer sent to Aspen’s Jeff Guinn, proposing the new joint

venture, which Guinn forwarded to Investors. The trial court

called Stuhmer’s letter the key piece of evidence purportedly

tying Developers to Aspen.

Stuhmer’s letter does not establish jurisdiction in

California because the trial court found an absence of evidence

Stuhmer (and his wife) knew any lenders were California

residents. Even if Stuhmer wanted Aspen to forward his letter to

all investors—there is contradictory evidence about that—this

fact would not prove Stuhmer intentionally directed Aspen’s

activities toward California.

To be sued in California for your business, you must intend

that your business will benefit from California. (See Burger

King, supra, 471 U.S. at p. 474.) Here, Developers did not know

their business was connected to California. The Stuhmers lacked

this knowledge and purpose, so jurisdiction in California was

improper.

12

Substantial evidence supports the trial court’s finding

Stuhmer and his wife did not know investors lived in California.

Stuhmer declared he “had no knowledge of any of Aspen’s

investors, how many there were, where they resided, who they

were, how much they had invested, where they invested from,

and had no knowledge about anything about them at all.”

Investors argue Developers “had constructive knowledge

that Aspen’s activities were directed towards California residents

because Aspen was [Developers’] agent” and Aspen knew some

investors lived in California. (See Civ. Code, § 2332 [providing an

agent’s knowledge is imputed to its principal].) But Investors’

Loan Servicing Agreements provided Aspen was Investors’ agent,

not Developers’. Thus, we impute Aspen’s knowledge to

Investors, not Developers. Developers did not have constructive

knowledge some investors lived in California.

Investors also claim “Mr. and Ms. Stuhmer had actual

knowledge of the identities of all lenders listed on the loan and

guaranty documents that the Stuhmers signed.” The loan and

guaranty documents signed by the Stuhmers list Investors’

names only. Names do not reveal residences. No proof shows the

Stuhmers knew where Investors lived.

Nor, as Investors argue, were Developers deliberately

ignorant of Investors’ location. Assuming for the sake of

argument deliberate ignorance can suffice, there was none here.

Deliberate ignorance is when you suspect a fact would be to your

disadvantage if you learned it, so you take steps to avoid

confirming your suspicion. (See U.S. v. Black (7th Cir. 2008) 530

F.3d 596, 604 (Black), vacated and remanded on other grounds in

Black v. U.S. (2010) 561 U.S. 465; accord, Alexander Sarch,

Willful ignorance in law and morality (2018) Philosophy Compass

13

[as of June 9, 2020],

archived at .)

The key is deliberately taking steps to avoid confirming

your suspicion. That key creates “the distinction between willful

ignorance and ordinary ignorance.” (Black, supra, 530 F.3d at p.

604; see generally U.S. v. Heredia (9th Cir. 2007) 483 F.3d 913,

918–920.)

The stock reference invokes the ostrich’s supposed

proclivity, when encountering danger, to hide its head in the

sand. Judge Posner decried this as “pure legend and a canard on

a very distinguished bird. . . . It is too late, however, to correct

this injustice.” (Black, supra, 530 F.3d at p. 604.)

Investors cite no evidence Developers had definite

suspicions about where Investors lived, or that they deliberately

took steps to avoid confirming their suspicions. The Developers

never said “No, do not tell me; I don’t want to know” or anything

like that.

There was no reason Developers should have known or

cared where Investors were located. West Charleston received

the loan principal from Aspen, not the individual investors, and

paid interest to Aspen’s Las Vegas office, not the individual

investors.

On this record, there was no willful ignorance. There was

just ignorance. The standard requires purpose, not ignorance.

The trial court ruling was right.

Eventually, the Stuhmers received records from Aspen that

included Investors’ addresses. Investors say this occurred in

2011. They cite Guinn’s deposition testimony. But, in fact,

Guinn said, “we turned [records] over to [the] partnership before

Aspen closed down, and I want to say June of 2013. So if it would

14

have closed down obviously before June of 2013, the partnership

itself, Chris would have access to all the documents that Aspen

had at the time because now they were all joint ventures with the

investors.” Stuhmer declared, “On May 30, 2013, [Aspen] turned

over originals of its records relating to the [Joint Venture].”

Thus, the evidence suggests Developers learned of the

lenders’ residences years after Stuhmer’s May 2011 letter, and

long after the January 2012 formation of Joint Venture. All the

actions Investors claim constitute purposeful availment—

inducing California investors into loans, repayment forbearances,

and the joint venture proposal—were before Developers received

Investors’ addresses in 2013.

Investors cite an inapposite precedent. They analogize

their case to Keeton v. Hustler Magazine, Inc. (1984) 465 U.S.

770. In Keeton, there was jurisdiction over a libel action in a

forum where the defendant publisher made “regular monthly

sales of thousands of magazines.” (Id. at pp. 773–774.) Keeton is

nothing like this case. In Keeton it was “unquestionable” the

defendant purposefully availed itself of the forum, and the court

focused on whether jurisdiction was otherwise unfair. (Ibid.)

Here, there is no evidence Developers intentionally directed

activity toward California, by themselves or through Aspen.

Keeton is irrelevant.

Because Developers did not direct Aspen’s activities toward

California, there is no jurisdiction in California.

B

Investors argue California courts have jurisdiction because

Developers created ongoing contractual relationships with

California residents. This argument is incorrect. The contracts

15

between Investors and Developers do not show Developers

purposefully availed themselves of California benefits.

A forum has jurisdiction over defendants who reach out and

create continuing relationships and obligations with the forum’s

residents. (Burger King, supra, 471 U.S. at pp. 473, 475–476.)

But the Supreme Court of the United States has explained a

contract with a forum resident, alone, is insufficient to establish

jurisdiction. (Id. at p. 478.) Courts must scrutinize the

underlying business transaction—past negotiations,

contemplated future consequences, contract terms, and the

parties’ actual course of dealing—to determine whether the

defendant purposefully established minimum contacts with the

forum. (Id. at p. 479.) Choice of law provisions are relevant to

this inquiry. (See id. at pp. 481–482.)

This case is like Goehring v. Superior Court (1998) 62

Cal.App.4th 894 (Goehring), where a court found Texan

defendants’ contracts with a California company showed the

defendants did not purposefully avail themselves of California

benefits. In Goehring, the contracts between the Texan

defendants and the California company consisted of a sales

agreement, security agreement, escrow agreement, and six

promissory notes with a California company. (Id. at pp. 902,

907.) Looking past the mere existence and number of contracts,

the Goehring court focused on the contracts’ terms and the

parties’ underlying business deal. (See id. at p. 907.) The court

noted the contacts were governed by Texas law and were

prepared by a Texas law firm. (Ibid.) The documents were

executed in Texas and the payments necessary to close the

transaction were made to a bank in Texas. (Ibid.) And the

16

contract concerned Texas-based payphones, so all future

consequences were in Texas. (Ibid.)

In this case, Developers and Investors entered a slew of

contracts. But, as in Goehring, the contracts only underscore

that Developers did not purposefully avail themselves of

California benefits. Stuhmer executed the promissory notes in

Nevada. The notes have a Nevada choice of law provision. They

consent to the jurisdiction of Nevada courts. They require

repayment at Aspen’s Nevada address.

The related deeds of trust also show the Developers did not

purposefully avail themselves of California. Stuhmer executed

them in Nevada. They have a Nevada choice of law provision.

They state the investors’ addresses are in the care of Aspen at its

Nevada address. They transfer an interest in Nevada real

property.

The personal guaranties also show the Developers did not

purposefully avail themselves of California. The personal

guaranty for the 2006 loan has a Nevada choice of law provision.

Investors represent the “relevant provisions” of the guarantees

for the 2006 and 2007 loans are identical.

The Joint Venture Agreement also shows the Developers

did not purposefully avail themselves of California. Aspen, as the

attorney-in-fact for Investors, and West Charleston executed the

Joint Venture Agreement in Nevada. The agreement has a

Nevada choice of law provision. It also contains a forum-selection

clause saying “Any action or arbitration, mediation or legal

proceeding brought by any party to this Agreement . . . shall,

unless otherwise required by law, be commenced in the courts of

Clark County.” The Joint Venture Agreement requires notice to

West Charleston at a Nevada address, West Charleston’s lawyers

17

at a Nevada address, Aspen at a Nevada address, and Aspen’s

lawyers at a Nevada address.

The Amended Operating Agreement for Joint Venture also

shows the Developers did not purposefully avail themselves of

California. It contains a Nevada choice of law provision. It

requires all disputes be settled by arbitration in Nevada.

Driving all these agreements was a plan to develop real

estate in Nevada.

Investors again rely upon inapt decisions. Discussing these

contracts, Investors cite Jayone Foods, Inc. v. Aekyung Industrial

Co. Ltd., supra, 31 Cal.App.5th at p, 559. In Jayone, a Korean

manufacturer purposefully availed itself of California benefits by

knowingly shipping “thousands of units of its products” through

the Ports of Los Angeles and Long Beach to a distributor located

in California. (Id. at pp. 556–557.) The Korean manufacturer

communicated regularly with the California distributor by phone,

e-mail, and purchase orders. (Id. at p. 557.) Representatives

from the Korean manufacturer visited the distributor’s California

facility as well as a Los Angeles retail store where the

representatives could see their products being sold. (Ibid.) All of

this showed the manufacturer was intentionally participating in

California’s market, thus purposefully availing itself of California

benefits. Investors’ case is the opposite. Developers were

intentionally participating in Nevada’s market and in no other.

The contracts highlight that point.

Developers did not purposefully avail themselves of

California benefits through contracts with Investors.

C

Investors argue jurisdiction is proper because Developers

(1) paid taxes to Nevada’s Clark County Treasury Office in

18

Los Angeles, and (2) retained California firms to work on the

development. The first argument fails on the facts and the

second argument fails on the law.

1

Investors claim the Joint Venture “sent, through Aspen,

semi-annual assessment payments to Clark County’s Treasury

Office in Los Angeles.” But as the trial court noted, Investors

make this assertion by relying on a declaration the declarant

later recanted. Indeed, the declarant initially said Joint Venture

made payments to Clark County’s Los Angeles Treasury office

only because Investors’ counsel “intentionally misled” her. The

evidence supports the trial court’s implicit finding that Joint

Venture did not send payments to Clark County’s Los Angeles

Treasury office. (See HealthMarkets, supra, 171 Cal.App.4th at

p. 1168 [noting a trial court’s “implied factual findings” are

reviewed for substantial evidence].)

2

Investors’ second claim is that Joint Venture retained

California firms to work on the development. This claim is

factually accurate but legally irrelevant.

Joint Venture hired KTGY, an architecture firm, and John

Burns Real Estate Consulting. KTGY and John Burns worked

for Joint Venture from their California offices, and Joint Venture

paid the firms at their California offices. Developers purposefully

availed themselves of California benefits through these contacts.

However, the contacts do not relate to Investors’ claims. For a

court to exercise case-linked jurisdiction over a claim, the claim

must arise out of or relate to the defendant’s contacts with the

forum. (Pavlovich, supra, 29 Cal.4th at p. 269.)

19

Investors’ attempt to link their claims to Joint Venture’s

hiring of California firms is unsuccessful. Investors argue

Developers “entered into contracts and paid John Burns and

KTGY paltry sums on development studies to create the

impression of development work in furtherance of their scheme to

take [Investors’] loan funds.” Yet the record contains no evidence

Joint Venture told Investors it hired John Burns or KTGY. No

evidence shows Investors knew John Burns or KTGY existed

before Investors filed their lawsuit. Developers raise this point in

their brief and Investors do not address it on reply. That is a

concession.

Because Investors’ claims do not arise out of or relate to

Joint Venture’s retention of California firms, jurisdiction does not

exist.

D

Investors argue the trial court applied an erroneous version

of the purposeful availment standard. The point is irrelevant

because we independently apply law to facts. (Vons, supra, 14

Cal.4th at p. 449, abrogated on other grounds by Bristol-Myers,

supra, 137 S.Ct. at p. 1781.) Our independent analysis shows

jurisdiction is improper.

IV

The Supreme Court has emphasized the burden on the

defendant is the primary concern when assessing case-linked

jurisdiction. (Bristol-Myers, supra, 137 S.Ct. at p. 1780.) That

burden encompasses not only the practical problems of litigating

in a foreign forum, but also “the more abstract matter of

submitting to the coercive power of a State that may have little

legitimate interest in the claims in question.” (Ibid.)

20

Federalism is the byword. (World-Wide Volkswagen Corp.

v. Woodson (1980) 444 U.S. 286, 292–294.) Personal jurisdiction

ensures states, through their courts, do not reach out beyond the

limits imposed on them by their status as coequal sovereigns in a

federal system. (Id. at p. 294.)

Here those limits are controlling.

This case fundamentally centers in Nevada. Through a

Nevada intermediary that is not in the case, some Californians

chose to invest in Nevada developers that were developing

Nevada land. The Californians joined with many other people

from other states, but most of the investors were from Nevada.

The Nevada developers dealt with the Nevada intermediary and

did not know money came from California.

California courts do not have jurisdiction over this Nevada

case.

We affirm the judgment and award costs to the Respondents.