BENJAMIN H. SETTLE, District Judge.
This matter comes before the Court on Defendant Joel Pearce's ("Pearce") motion to dismiss for lack of personal jurisdiction. Dkt. 13. The Court has considered the pleadings filed in support of and in opposition to the motion and the remainder of the file and denies the motion because (1) Pearce's status as a corporate officer does not somehow insulate him from personal jurisdiction arising from his alleged tortious actions aimed at Washington State residents; and (2) Plaintiffs Thomas and Karen Matison have alleged actions by Pearce that sufficiently demonstrate the Court's personal jurisdiction over him.
On May 11, 2016, Plaintiffs filed a complaint in Pierce County Superior Court against Defendants Rockwest, Inc. ("Rockwest"), Pearce, and Turnbull and Born, P.L.L.C., seeking to quiet title, obtain declaratory relief that collection on a promissory note is time-barred, that a deed of trust is void, and that the substitution of trustee to the deed of trust is void. Dkt. 3. Plaintiffs also seek damages in a tort claim against Rockwest and Pearce under Washington's Consumer Protection Act ("CPA"), RCW Chapter 19.86, for alleged violations of the Washington Collection Agency Act ("WCAA"), RCW Chapter 19.16. Id.
On June 3, 2016, Rockwest and Pearce removed to this Court asserting jurisdiction pursuant to 28 U.S.C. § 1332. Dkt. 1. On June 10, 2016, Rockwest filed a timely answer. Dkt. 9; see Fed. R. Civ. P. 81(c).
On July 18, 2016, Pearce filed his motion to dismiss for lack of personal jurisdiction, presently before the Court. Dkts. 13, 14. On August 5, 2016, Plaintiffs responded. Dkts. 15, 16, 17. On August 12, 2016, Pearce replied. Dkt. 20.
Pearce moves to dismiss Plaintiffs' claim against him for lack of personal jurisdiction.
Personal jurisdiction refers to the Court's power to render a valid and enforceable judgment on a particular defendant. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980). This power is limited by the Due Process Clause of the Fourteenth Amendment, which requires that out-of-state defendants have sufficient "minimum contacts" with the forum state such that requiring the defendant to litigate in that forum would comport with "traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945).
"Where a defendant moves to dismiss a complaint for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating that jurisdiction is appropriate." Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004). When a court rules on the motion based on affidavits and discovery materials rather than an evidentiary hearing, the plaintiff need only make a prima facie showing of personal jurisdiction. See Ochoa v. J.B. Martin & Sons Farms, Inc., 287 F.3d 1182, 1187 (9th Cir. 2002). "Although the plaintiff cannot simply rest on the bare allegations of its complaint, uncontroverted allegations in the complaint must be taken as true." Schwarzenegger, 374 F.3d at 800 (internal quotation marks and citations omitted). "Additionally, any evidentiary materials submitted on the motion are construed in the light most favorable to the plaintiffs and all doubts are resolved in their favor." Ochoa, 287 F.3d at 1187 (internal quotation marks omitted).
Pearce's motion to dismiss is premised on the argument that his corporate role immunizes him from personal jurisdiction for the actions he takes on behalf of his corporation. The Court rejects this argument because (A) Pearce's corporate role does not shorten the reach of Washington's long-arm statute and (B) Plaintiffs have alleged actions by Pearce sufficient to establish the necessary "minimum contacts" with Washington State.
Pearce's argument implicates the "fiduciary shield doctrine." Although he does not expressly reference this doctrine in his briefing, it is the sum of his jurisdictional argument: particularly, that personal jurisdiction is deficient because "Plaintiff's allegations against Pearce are premised exclusively on his role as a corporate officer of Rockwest." Dkt. 13 at 4.
"Under the fiduciary shield doctrine, a person's mere association with a corporation that causes injury in the forum state is not sufficient in itself to permit that forum to assert jurisdiction over the person." Davis v. Metro Prods., Inc., 885 F.2d 515, 520 (9th Cir. 1989). However, in applying the Supreme Court's precedent from Calder v. Jones, 465 U.S. 783 (1984), and Keeton v. Hustler Magazine, Inc., 465 U.S. 770 (1984), the Ninth Circuit in Davis recognized that the Supreme Court "did not consider the existence of a state-created corporate form to create a due process limit on jurisdiction." Davis, 885 F.2d at 521. Under this guiding principle, the Ninth Circuit largely abandoned the fiduciary shield doctrine, determining that a forum's "long-arm statute may, consistent with constitutional due process, allow assertion of personal jurisdiction over officers of a corporation as long as the court finds those officers to have sufficient minimum contacts with [the forum]." Davis, 885 F.2d at 522.
Although various courts approach the fiduciary shield doctrine inconsistently,
Because Washington's long-arm statute is coextensive with due process requirements, Shute v. Carnival Cruise Lines, 113 Wn.2d 763, 766-67 (1989), Pearce's role as a corporate officer does not prevent the Court from exercising personal jurisdiction over him.
Instead of examining Pearce's corporate role in determining whether personal jurisdiction exists, the proper inquiry before the Court is whether Pearce's alleged actions satisfy a "typical minimum contacts analysis." Kukui Gardens, 664 F. Supp. 2d at 1111. The Ninth Circuit applies a three-part test to determine whether due process is satisfied by exercising personal jurisdiction over an out-of-state defendant based on his contacts with the forum:
Yahoo! Inc. v. La Ligue Contre Le Racisme Et L'Antisemitisme, 433 F.3d 1199, 1205-06 (9th Cir. 2006). Under this minimum contacts analysis, the plaintiff bears the burden of establishing the first two prongs. CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1076 (9th Cir. 2011). The burden then shifts to the defendant "to set forth a `compelling case' that the exercise of jurisdiction would not be reasonable." Id.
When determining whether a defendant has purposefully directed activities toward a forum state, the Ninth Circuit employs the "Calder-effects test."
Plaintiffs' factual allegations satisfy this test. They allege that Pearce contacted them at their Washington home in December 2005 and began collecting payments on an allegedly fraudulent promissory note. Dkt. 1-1 at 5-6. They further allege Pearce, without a required license, telephoned in May 2014 and left a message, seeking to collect on the loan and threatening foreclosure absent payment. Dkt. 1-1 at 7, 12. The Calder effects test is satisfied by such alleged wrongful attempts at debt collection. See, e.g., Weakley v. Redline Recovery Servs., LLC, 723 F.Supp.2d 1341, 1344 (S.D. Cal. 2010), clarified on denial of reconsideration, No. 09-CV-1423 BEN, 2010 WL 3033801 (S.D. Cal. Aug. 2, 2010) ("Because individual Defendants . . . contacted Plaintiff . . . in California, by telephone to collect Plaintiff's alleged debt, Defendants have performed acts or transactions within the forum."). Such alleged actions are clearly both intentional and aimed at Washington residents. Additionally, Plaintiffs claim to have suffered resulting harm occurring within the forum state. Dkt. 1-1 at 6-8, 13.
The facts outlined in the complaint adequately allege that Pearce, while acting on behalf of Rockwest, was instrumental in establishing, directing, and/or ratifying these debt collection practices. Pearce's repeated assertions that he "is merely the sole shareholder and president of Rockwest," is of no consequence in the face of such allegations. Dkt. 13 at 2. See State v. Ralph Williams' N. W. Chrysler Plymouth, Inc., 87 Wn.2d 298, 322 (1976) (Under the CPA, "[i]f a corporate officer participates in the wrongful conduct, or with knowledge approves of the conduct, then the officer, as well as the corporation, is liable for the penalties. Corporate officers cannot use the corporate form to shield themselves from individual liability.").
The second prong of the minimum contacts analysis demands that "the claim must be one which arises out of or relates to the defendant's forum-related activities." Yahoo!, 433 F.3d at 1206. As stated above, Plaintiffs' claim against Pearce arises from their allegations that Pearce engaged in unlawful debt collection practices aimed at Washington State. Specifically, Plaintiffs bring a claim under the CPA for alleged violations of the WCAA. Dkt. 1-1 at 10-13. Because Plaintiffs' claim against Pearce is premised on Pearce's debt collection activities aimed at Washington State, it properly arises from his forum related activities.
After a plaintiff satisfies the first two prongs of the minimum contacts analysis, the burden falls upon the defendant "to set forth a `compelling case' that the exercise of jurisdiction would not be reasonable." CollegeSource, 653 F.3d at 1076. Pearce once again relies on his corporate position, arguing that the Court's exercise of personal jurisdiction would be unreasonable because his contacts with the forum were based on his role as Rockwest's officer and agent. Dkt. 20 at 5-6. For the reasons expressed above, the Court rejects this argument.
Pearce also contends that subjecting him to litigation in Washington is unreasonable where his corporation, Rockwest, is vicariously liable for his actions. Dkt. 20 at 5-6. Although Pearce contends that this means Plaintiffs will receive "no marginal substantive benefit" from his inclusion, Dkt. 20 at 6, the Court finds otherwise. Plaintiffs cannot recover from Pearce on a judgment solely against Rockwest. If Rockwest lacks assets to compensate Plaintiffs for any damages sustained by Pearce's and Rockwest's alleged violation of the CPA, a dismissal would effectively allow Pearce to shield himself from personal liability for his tortious conduct. See Ralph Williams, 87 Wn.2d at 322 ("Corporate officers cannot use the corporate form to shield themselves from individual liability."). The purpose of vicarious liability is to protect the injured by imputing tort liability to the principal of the agent, not to allow an agent to escape responsibility for his own tortious acts. Johnson v. Harrigan-Peach Land Dev. Co., 79 Wn.2d 745, 753 (1971) ("An officer of a corporation, consequently, is liable for a tort committed in the course and within the scope of his official duties to the corporation the same as any other agent or servant is liable for his torts, for an agent is not exonerated from the consequences of his torts by the facts that, in committing them, he acted for his principal.").
Most importantly, Pearce has failed to address any of the seven reasonableness factors set forth in Rio Properties, Inc. v. Rio Int'l Interlink, 284 F.3d 1007, 1021 (9th Cir. 2002). Lacking any other argument,
Therefore, it is hereby