Case Name: Winwire Technologies, Inc., et al. v. eTekSmart, LLC, et al.
Case No.: 18CV324392

I. Background

This is a trade secrets lawsuit brought by plaintiffs Winwire Technologies, Inc. (“Winwire U.S.”) and Winwire Technologies India, Pvt. Ltd. (“Winwire India”) (collectively, “Plaintiffs”) against their former employees, defendants Braj Nayak (“Nayak”) and Vijay Kumar Kokkonda (“Kokkonda”), as well as an entity these employees disclosed trade secrets to, namely defendant eTekSmart, LLC (“ETS”).

It is fundamentally unclear from the complaint what Plaintiffs’ business is. In any event, Winwire U.S. is a California corporation that employed Nayak as a Senior Vice President of Professional Services beginning in 2012. Around the same time, Winwire India hired Kokkonda to work as a Senior Account Manager at its office in Hyderabad, India. Plaintiffs allege Nayak and Kokkonda misappropriated trade secrets — including customer lists, customer preferences, vendor lists, and pricing information — and disclosed these trade secrets to ETS, a “software solutions provider in the information technology industry” owned by their wives (Compl., ¶ 16).

Plaintiffs assert causes of action against Nayak, Kokkonda, and ETS for: (1) breach of contract (against Nayak); (2) breach of contract (against Kokkonda); (3) breach of the implied covenant of good faith and fair dealing (against Nayak and Kokkonda); (4) breach of fiduciary duty (against Nayak and Kokkonda); (5) fraud (against Nayak and Kokkonda); (6) contractual interference (against all defendants); and (7) misappropriation of trade secrets (against all defendants).

ETS moves to quash service of the summons on the ground of lack of personal jurisdiction.

II. Standard of Review

A defendant may move to quash service of the summons on the ground the court lacks personal jurisdiction. (Code Civ. Proc., § 418.10, subd. (a)(1).) When a defendant challenges personal jurisdiction by filing a motion to quash, “the plaintiff has the burden of proving, by a preponderance of the evidence, the factual bases justifying the exercise of jurisdiction.” (ViaView, Inc. v. Retzlaff (“ViaView”) (2016) 1 Cal.App.5th 198, 209-10; see also DVI, Inc. v. Super. Ct. (2002) 104 Cal.App.4th 1080, 1090-91.) To carry this initial burden, the plaintiff must present evidence and cannot simply rely on the allegations in the pleading. (ViaView, supra, 1 Cal.App.5th at p. 210.) If sufficient evidence is presented, the burden then shifts to the moving party to show the exercise of jurisdiction would be unreasonable. (Ibid.)

III. Analysis

“Personal jurisdiction over a [ ] defendant depends upon the existence of essentially two criteria: first, a basis for jurisdiction must exist [ ]; second, given that basis for jurisdiction, jurisdiction must be acquired by service of process in [ ] compliance with the requirements of our service statutes.” (Ziller Electronics Lab GmbH v. Super. Ct. (1988) 206 Cal.App.3d 1222, 1229, original italics.) ETS challenges whether Plaintiffs can establish the first criteria.

ETS is a Georgia corporation with a principal place of business in Alpharetta, Georgia. (Jha Decl., ¶ 2.) It is undisputed that ETS is not a resident of California. Pursuant to California’s long-arm statute, courts may exercise personal jurisdiction over nonresidents “on any basis not inconsistent with the Constitution of this state or of the United States.” (Code Civ. Proc., § 410.10.) “The United States Constitution permits a state to exercise jurisdiction over a nonresident defendant if the defendant has sufficient ‘minimum contacts’ with the forum such that ‘maintenance of the suit does not offend “traditional notions of fair play and substantial justice.” [Citations.]’” (Burdick v. Super. Ct. (2015) 233 Cal.App.4th 8, 17-18, quoting Internat. Shoe Co. v. Washington (1945) 326 U.S. 310, 316.) Thus, Plaintiffs must demonstrate ETS has minimum contacts with California that are sufficient to support the exercise of personal jurisdiction.

Depending on the quality and quantity of these minimum contacts, a court may exercise either “general” or “specific” personal jurisdiction. (Burdick, supra, 233 Cal.App.4th at p. 18.) “‘A nonresident defendant may be subject to the general jurisdiction of the forum if his or her contacts in the forum state are “substantial. . . continuous and systematic.” [Citations.]’” (ViaView, supra, 1 Cal.App.5th at p. 209, quoting Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 445.) Otherwise, if “the defendant lacks such pervasive forum contacts that [he or she] may [not] be treated as present for all purposes, it is nonetheless proper to subject the defendant to the forum state’s jurisdiction in connection with a particular controversy.” (ViaView, supra, 1 Cal.App.5th at p. 210.) This is known as specific jurisdiction. (Ibid.)

A. General Jurisdiction

ETS argues it is not subject to general jurisdiction because it does not have substantial, continuous, and systematic contacts with California. ETS’s evidence supports this argument. The evidence shows ETS does not have offices, employees, real property, or bank accounts in California and has never registered to do business or filed a lawsuit here. (Jha Decl., ¶¶ 2-12, 15.)

In opposition, Plaintiffs appear to concede this point. Although the basic legal standard in their memorandum of points and authorities contains a definition of general and specific jurisdiction, Plaintiffs do not actually argue ETS is subject to general jurisdiction. Plaintiffs do not assert ETS has substantial, continuous, and systematic contacts with California or otherwise present evidence and legal authority to support that conclusion.

For these reasons, Plaintiffs do not demonstrate ETS has sufficient minimum contacts to support the exercise of general jurisdiction.
B. Specific Jurisdiction

ETS also asserts it lacks controversy-specific minimum contacts to support the exercise of specific jurisdiction.

A court may exercise specific jurisdiction if: “(1) the defendant has purposefully availed itself of forum benefits with respect to the matter in controversy; (2) the controversy is related to or arises out of the defendant’s contacts with the forum; and (3) the exercise of jurisdiction would be reasonable and comports with fair play and substantial justice.” (ViaView, supra, 1 Cal.App.5th at p. 216.)

Although not especially clear, it appears ETS provides some type of employee placement services particularly for companies seeking temporary employees with software development skills. Plaintiffs present printouts of online postings by ETS soliciting employees for placement in software development positions. (Exs. C-E.) Plaintiffs also present printouts of ETS’s website, which lists a sales office in San Francisco, California. (Tengberg Decl., Exs. A-B.) This is the extent of Plaintiffs’ evidence.

With respect to the purported San Francisco sales office, Plaintiffs do not present any evidence showing this office actually exists. Their evidence shows only that ETS’s website listed an office in San Francisco at one point in time but does not even reflect the address of that office. In opposition to the motion, ETS represents it planned to open a sales office in San Francisco but never did so. (Jha Decl., ¶ 8.) Thus, the evidence shows ETS did not actually have an office in San Francisco, or anywhere else in California for that matter. In any event, even if ETS did have a California office, Plaintiffs do not articulate or present any evidence showing how this particular contact relates to the present controversy. For example, Plaintiffs do not assert trade secrets were misappropriated by employees from that office or that the trade secrets were thereafter used to support ETS’s operations in California.

Plaintiffs focus on the existence of ETS’s website and online job postings. Plaintiffs argue ETS’s website is sufficient to support the exercise of personal jurisdiction because it was an interactive website that solicited business from California customers. Plaintiffs’ argument is not supported by the evidence or the case upon which it relies, namely Snowney v. Harrah’s Entertainment, Inc. (2005) 35 Cal.4th 1054.

In Snowney, the California Supreme Court concluded Nevada hotels were subject to personal jurisdiction in California because they advertised to California residents through many mediums, including through their websites where they “tout[ed] the proximity of their hotels to California and provid[ed] driving directions from California to the hotels.” (Snowney, supra, 35 Cal.4th at pp. 1064-66.)

Unlike in Snowney, ETS’s website does not specifically target California residents. All that is shown by Plaintiffs’ printouts is that it listed one of its location as “San Francisco” and had a generic “contact us” page on its website. (Tengberg Decl., Exs. A-B.) Anyone could interact with the website by clicking on a link or submitting a message on the “contact us” page. There is no evidence that ETS targeted and made its website specifically available for California residents to engage in commercial transactions, such as reserving a hotel or purchasing goods. Having a website that is accessible to the public, including to California residents, is not sufficient to support the exercise of personal jurisdiction. (See Snowney, supra, 35 Cal.4th at p. 1063; see also Burdick, supra, 233 Cal.App.4th at pp. 21, 25; accord Pavlovich v. Super. Ct. (2002) 29 Cal.4th 262, 274.) Accordingly, Plaintiffs’ argument is not persuasive.

Plaintiffs also argue the online job postings constitute purposeful availment, but they do not cite any authority to support their argument. Significantly, an online posting must be “directed at the State of California or a California audience.” (Burdick, supra, 233 Cal.App.4th at pp. 27-28.) These postings were apparently uploaded to a public forum that was not geographically restricted. Even if these postings would ultimately result in placement of an employee with a California company, there is no evidence ETS specifically targeted or solicited applications from California residents.

In any event, even accepting Plaintiffs’ evidence as a whole is susceptible to an inference that ETS placed a few employees with California companies, there is no basis for concluding such contacts gave rise to the claims in this lawsuit. Plaintiffs’ evidence exclusively consists of generic printouts from the internet. None of this evidence independently shows ETS had controversy-specific contacts with California. Furthermore, ETS does not identify allegations in the pleading or present evidence to provide context for or otherwise tie the generic information from the internet to the facts and claims alleged in this lawsuit. Thus, Plaintiffs do not demonstrate ETS purposefully availed itself of the benefits of this forum in connection with the present controversy sufficient to show it is subject to specific jurisdiction.

IV. Conclusion

In conclusion, Plaintiffs fail to establish there is any basis for the exercise of personal jurisdiction over ETS. Accordingly, ETS’s motion to quash service of the summons is GRANTED.