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Case Number: B294516
Judge: Wiley, J.
Court: California Court of Appeals Second Appellate District, Division Eight on appeal from the Superior Court, County of Los Angeles
Plaintiff's Attorney: Caleb E. Mason and Kenneth P. White
Defendant's Attorney: Chad F. Clement, Joseph C. Campo, Jeffry A. Miller and Ernest Slome
Description: 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.
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
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.
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.
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.
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
● Christopher Homes, LLC, the Nevada company that
also guaranteed the loans.
● SAVWCL III, LLC, the Nevada company we call
● 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
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.
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.
We first state the standard of review and then outline the
principles of personal jurisdiction.
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).)
We independently review the trial court’s application of law to
facts. (Vons, supra, at p. 449.)
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
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)
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.)
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’
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,
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.
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.
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
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
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,
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
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
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
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.
Investors argue California courts have jurisdiction because
Developers created ongoing contractual relationships with
California residents. This argument is incorrect. The contracts
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
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
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
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.
Investors argue jurisdiction is proper because Developers
(1) paid taxes to Nevada’s Clark County Treasury Office in
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.
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].)
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.)
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
Because Investors’ claims do not arise out of or relate to
Joint Venture’s retention of California firms, jurisdiction does not
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.
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.)
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
Outcome: We affirm the judgment and award costs to the Respondents.