Opinion
Case No. 2:22-cv-00429-SPG-KS
2022-11-03
RIOT GAMES, INC., a Delaware corporation, Plaintiff, v. SUGA PTE, LTD., a company incorporated under the laws of Singapore, IMBA Technology Company Limited, a company incorporated under the laws of Vietnam; IMBA Network LLC, a Delaware Limited Liability Co.; and Does through 10, inclusive, Defendants.
Marc Ellis Mayer, Mitchell Silberberg and Knupp LLP, Los Angeles, CA, Theresa B. Bowman, Pro Hac Vice, Mitchell Silberberg and Knupp LLP, Washington, DC, for Plaintiff. John D. Tran, Rosalind Thuy Ong, Rhema Law Group PC, Irvine, CA, for Defendants IMBA Technology Company Limited, IMBA Network LLC.
Marc Ellis Mayer, Mitchell Silberberg and Knupp LLP, Los Angeles, CA, Theresa B. Bowman, Pro Hac Vice, Mitchell Silberberg and Knupp LLP, Washington, DC, for Plaintiff. John D. Tran, Rosalind Thuy Ong, Rhema Law Group PC, Irvine, CA, for Defendants IMBA Technology Company Limited, IMBA Network LLC.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS FOR LACK OF JURISDICTION [ECF No. 27]
SHERILYN PEACE GARNETT, UNITED STATES DISTRICT JUDGE
Before the Court is Suga PTE, Ltd.'s ("Suga") and IMBA Technology Co. Ltd.'s ("Imba Tech") (collectively, "Defendants") motion to dismiss for lack of jurisdiction under Federal Rule of Civil Procedure 12(b)(2) ("Motion"). (ECF No. 27 ("Mot.")). This matter was originally set for hearing on October 19, 2022. Having considered the parties' submissions, the relevant law, and the record in this case, the Court finds pursuant to Federal Rule of Civil Procedure 78(b) and Central District of California Local Rule 7-15 that the matter is suitable for resolution without oral argument. The Motion has been taken under submission. For the reasons stated below, the Court DENIES the Motion as to Imba Tech and GRANTS the Motion as to Suga PTE. The Court also GRANTS Riot Games, Inc.'s ("Plaintiff") request for jurisdictional discovery on its alter ego liability theory.
I. BACKGROUND
A. Factual Background
The complaint alleges that Plaintiff is a corporation organized and existing under the laws of Delaware, with its principal place of business in Los Angeles, California. (ECF No. 1 ¶ 6 (hereinafter "Compl.")). Plaintiff is in the business of producing, developing, publishing, distributing, and marketing a catalog of video game products, including "League of Legends" ("LoL") and its spin-off title, "Teamfight Tactics." (Id. ¶ 15). Plaintiff's LoL allows two five-player teams ("champions") to battle head-to-head across computer-generated battlefields. (Id. ¶ 16). Players may choose among more than 150 different champions, each with a unique design, backstory, and playstyle. (Id. ¶ 17). LoL is played by more than 100 million players every month and its champions have been featured on television, consumer products, clothing, action figures, and comic books. See (id. ¶ 1).
Defendant Suga PTE, Ltd. ("Suga") is a company incorporated under the laws of Singapore. (Id. ¶ 7). Plaintiff alleges on information and belief that among Suga's divisions or subsidiaries is Imba Technology Company, Limited ("Imba Tech"), a mobile game development studio with its principal place of business at Ho Chi Min City, Vietnam. (Id.). Plaintiff has yet to determine whether Imba is a subsidiary company of Suga or a division of Suga. (Id.)
Imba Network, LLC ("Imba Network") is a limited liability company registered under the laws of Delaware. (Id. ¶ 8). Plaintiff alleges on information and belief that Imba Network has a business address in Dover, Delaware, and that an individual named Do Tuan Minh serves as both "Head of Imba" and as director and/or member of Imba Network. (Id.). The complaint does not allege the residence of Imba Network's members, and Plaintiff has yet to determine whether Imba Network is a subsidiary or division of Imba Tech and Suga. See (id.).
The complaint alleges that Suga, Imba Tech, and Imba Network (collectively, "Defendants") have sought to leverage the popularity and goodwill of Plaintiff's LoL champions in their own games. (Id. ¶ 2). Specifically, in 2020, Defendants released via the Google Play and Apple App Store its own LoL mobile game titled "I Am Hero-AFK Tactical Teamfight" (hereinafter, "I Am Hero"). (Id. ¶ 3). I Am Hero allows players to create a team, from a roster of 40 different characters, to deploy against another on a computer-generated battlefield. See (id. ¶¶ 30, 33-35). I Am Hero features a roster of "heroes" that Plaintiff asserts Defendants deliberately designed to be substantially and confusingly similar to LoL's "champions." (Id. ¶ 3). In particular, Plaintiff alleges that many, if not all, of the "heroes" are characters that are substantially similar to LoL's champions, including their character designs, names, abilities, and background stories. (Id.)
I Am Hero does not charge consumers for downloading the game; rather, it generates revenue by selling virtual currency which can be used to "unlock" new characters. (Id. ¶ 22). These in-game purchases are advertised in U.S. dollars. (Id. ¶ 13(b)). I Am Hero has earned at least $500,000 from these in-game purchases. See (id. ¶ 2); (ECF No. 33-1, Exhibit 1 at 87).
B. Procedural History
On January 20, 2022, Plaintiff filed the operative complaint. (Compl.). The complaint alleges a single claim for copyright infringement against the Defendants and seeks an injunction against Defendants, an accounting of all sales of products or services that infringe on Plaintiffs' copyright, and damages, among other relief. See (Id. ¶¶ 41-49 and "Prayer for Relief").
On May 16, 2022, Defendants Suga and Imba Tech specially appeared and filed the instant Motion, which seeks dismissal of the complaint against them for lack of personal jurisdiction. (Mot.). In support of the Motion, Defendants Suga and Imba Tech also filed the declarations of Tuan Minh Do, who is the CEO of Imba Tech, and Ngoc Duy Truong, who is the CEO of Suga PTE. (ECF Nos. 27-3 ("Truong Decl."), 27-4 ("Do Decl.")). Defendants Suga and Imba Tech argue that neither has purposefully established minimum contacts in California, or even in the United States, for this Court to exercise personal jurisdiction over them. (Mot. at 6); (Truong Decl., ¶ 4); (Do Decl. ¶ 5).
On June 13, 2022, Plaintiff filed an opposition to the Motion. (ECF No. 33 ("Opp")). Plaintiff argues that the Court may exercise personal jurisdiction over Defendant Imba Tech under the federal long-arm statute, see (Opp. at 19-31), and over Suga and Imba Tech based on the theory of alter ego liability. See (id. at 27). In support of its Opposition, Plaintiff has submitted the declaration of Plaintiff's counsel, accompanied by numerous exhibits. (ECF No. 33-1). Alternatively, Plaintiff requests the Court allow jurisdictional discovery if the Court finds personal jurisdiction over Suga and Imba Tech are lacking. See (Opp. at 27-28).
On June 27, 2022, Defendants filed their reply to the opposition. (ECF No. 36). Imba Network does not contest jurisdiction. See (Mot. at 6). II. LEGAL STANDARD
On July 26, 2022, Defendant filed a Notice of Supplemental Authority in support of its opposition without first receiving leave from the Court. (ECF No. 40). Without leave from the Court, the Court declines to consider this filing. C.D. Cal. L.R. 7-10 ("Absent prior written order of the Court, the opposing party shall not file a response to the reply."); see also Brown v. DIRECTV, LLC, Case No. CV 13-1170-DMG (Ex), 2019 WL 6604879, at *10, 2019 U.S. Dist. LEXIS 211854, at *28 (C.D. Cal. Aug. 5, 2019) (citing Nichols v. Harris, 17 F. Supp. 3d 989, 996 n.3 (C.D. Cal. 2014)) ("[A] non-movant may not file a notice of supplemental authority in order to belatedly advance an argument that could have been included in the opposition.").
"For a court to exercise personal jurisdiction over a nonresident defendant, that defendant must have at least 'minimum contacts' with the relevant forum such that the exercise of jurisdiction 'does not offend traditional notions of fair play and substantial justice.' " Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 801 (9th Cir. 2004) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). Minimum contacts may be established via general jurisdiction or specific jurisdiction. General jurisdiction exists where the defendant's contacts with the forum state "are so 'continuous and systematic' as to render them essentially at home in the forum state." Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011) (quoting Int'l Shoe Co., 326 U.S. at 316, 66 S.Ct. 154)). Specific jurisdiction exists when the plaintiff's claims or causes of action "arise out of or relate to" the defendant's contacts with the forum state. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984)).
Federal Rule of Civil Procedure 12(b)(2) allows a court to dismiss a complaint for lack of personal jurisdiction. "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, 374 F.3d. at 800 (citing Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990)). In determining whether jurisdiction is appropriate, the court is permitted to consider evidence introduced by declaration or affidavit and it may order jurisdictional discovery, if necessary. Doe v. Unocal Corp., 248 F.3d 915, 922 (9th Cir. 2001) (citing Data Disc, Inc. v. Sys. Tech. Assoc., Inc., 557 F.2d 1280, 1285 (9th Cir. 1977)). If the motion to dismiss for lack of personal jurisdiction is not based upon an evidentiary hearing and is based solely upon written materials, a plaintiff need only make a prima facie showing of facts supporting jurisdiction to survive the motion. Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011) (citing Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124, 1127 (9th Cir. 2010)). "In such cases, 'we only inquire into whether [the plaintiff's] pleadings and affidavits make a prima facie showing of personal jurisdiction.' " Schwarzenegger, 374 F.3d at 800 (quoting Caruth v. Int'l Psychoanalytical Ass'n, 59 F.3d 126, 128 (9th Cir. 1995)). Although the plaintiff cannot "simply rest on the bare allegations of its complaint," uncontroverted allegations in the complaint must be taken as true by the court. See CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1073 (9th Cir. 2011) (citation omitted). Finally, "[c]onflicts between parties over statements contained in affidavits must be resolved in the plaintiff's favor." Schwarzenegger, 374 F.3d at 800 (citations omitted).
III. DISCUSSION
Imba Tech and Suga argue that no Court in the United States can exercise personal jurisdiction over them because neither has "sold anything, distributed anything, or had any substantial contacts in California or the United States, including but not limited to, no contacts with Google Play or Apple App Store in the United States." (Do Decl. ¶ 5); (Truong Decl. ¶ 5). Imba Tech and Suga also argue that neither company has ever "had any employees in California or in the United States and has never owned, rented or leased office or property in California or the U.S., nor [have the Defendants] generated any income or owed or paid taxes in California or the U.S." (Do Decl. ¶ 6); (Truong Decl. ¶ 6).
Plaintiff does not dispute that this Court lacks general jurisdiction over Imba Tech and Suga. (Opp. at 18). Instead, Plaintiff argues that this Court has specific jurisdiction over Imba Tech under the federal long-arm statute due to Imba Tech's "distribution, marketing, monetization, support, and other exploitation of" the alleged infringing game in the United States. (Id.). Plaintiff also argues the Court may exercise jurisdiction over both Imba Tech and Suga because the Defendants are so closely intertwined that they are alter egos of each other. (Id. at 36). The Court addresses each argument in turn.
A. Personal Jurisdiction Over Imba Tech
If a foreign defendant contends that he cannot be sued in the forum state and refuses to identify any other state where suit is possible, then a federal court may assess the propriety of jurisdiction using Federal Rule of Civil Procedure 4(k)(2) (i.e., the federal long-arm statute). See Holland Am. Line, Inc. v. Wartsila N. Am., Inc., 485 F.3d 450, 461 (9th Cir. 2007) (citations omitted). In analyzing whether Rule 4(k)(2) allows a court to exercise personal jurisdiction over a foreign defendant, "the United States serves as the relevant forum for a minimum contacts analysis." Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain Co., 284 F.3d 1114, 1126 (9th Cir. 2002) (citations omitted). Rule 4(k)(2) allows a federal court to exercise personal jurisdiction over a foreign defendant if the following requirements are met: (1) the "claim against the defendant must arise under federal law"; (2) "the defendant must not be subject to the personal jurisdiction of any state court of general jurisdiction"; and (3) "the federal court's exercise of personal jurisdiction must comport with due process." Holland Am. Line, Inc., 485 F.3d at 461 (citations omitted).
Because Plaintiff sues under federal copyright law, the first Rule 4(k)(2) requirement is met. For the second requirement, Plaintiff is not required to establish a lack of jurisdiction in every other state; rather, the second requirement is met if Defendants fails to select another state where jurisdiction is appropriate. See id. at 461-62. Imba Tech does not argue that there is another state where jurisdiction would be proper. Therefore, the second requirement of Rule 4(k)(2) is also met.
The third requirement's due process analysis is "nearly identical to traditional personal jurisdiction analysis with one significant difference: rather than consider the contacts between the" defendants and the forum state, the Court must consider "the contacts with the nation as a whole." Id. at 462 (citing Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1159 (9th Cir. 2006)). Accordingly, the Court uses the United States as the relevant forum. To determine whether Imba Tech has had sufficient "minimum contacts" with the United States to satisfy the requirements of due process, the following three requirements must be met: (1) the defendant has performed some act or consummated some transaction within the forum or otherwise purposefully availed himself of the privileges of conducting activities in the forum, (2) the claim arises out of or results from the defendant's forum-related activities, and (3) the exercise of jurisdiction is reasonable. Pebble Beach Co., 453 F.3d at 1155 (quoting Bancroft & Masters, Inc. v. Augusta Nat'l Inc., 223 F.3d 1082, 1086 (9th Cir. 2000)). "If any of the three requirements is not satisfied, jurisdiction in the forum would deprive the defendant of due process of law." Omeluk v. Langsten Slip & Batbyggeri A/S, 52 F.3d 267, 270 (9th Cir. 1995) (citation omitted). "The plaintiff bears the burden of satisfying the first two prongs of the test." Schwarzenegger, 374 F.3d at 802 (citation omitted).
1. Purposeful Direction
"The exact form of our jurisdictional inquiry depends on the nature of the claim at issue." Picot v. Weston, 780 F.3d 1206, 1212 (9th Cir. 2015). For claims sounding in contract, courts "generally apply a 'purposeful availment' analysis and ask whether a defendant has 'purposefully avail[ed] [itself] of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Id. (quoting Schwarzenegger, 374 F.3d at 802). For claims sounding in tort, courts "instead apply a 'purposeful direction' test and look to evidence that the defendant has directed his actions at the forum state, even if those actions took place elsewhere." Id. (quoting Schwarzenegger, 374 F.3d at 802-03). The purposeful direction test is used for Copyright claims. See Mavrix Photo, Inc., 647 F.3d at 1228 (applying purposeful direction test to plaintiff's copyright claims).
The purposeful direction test derives from Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984). Axiom Foods, Inc. v. Acerchem Int'l, Inc., 874 F.3d 1064, 1069 (9th Cir. 2017). To find purposeful direction under the Calder Test, the defendant allegedly must have (1) committed an intentional act, which was (2) expressly aimed at the forum state or, alternatively, the United States, and (3) caused harm that the defendant knows is likely to be suffered in the forum state. See Pebble Beach Co., 453 F.3d at 1156 (applying Calder test to minimum contacts analysis under Rule 4(k)(2)). Failing to sufficiently plead any one of these three elements is fatal to Plaintiff's attempt to show personal jurisdiction. See id. However, "[j]urisdiction may be constitutionally maintained [under the Calder Test] even if the defendant never set foot in the forum state, [as long as] the defendnat's contacts with the forum state are out-of-state acts that had an effect in the forum." See Burri Law PA v. Skurla, 35 F.4th 1207, 1213 (9th Cir. 2022) (citations omitted)
i. Intentional Act
Under the Calder Test, an "intentional act" is "an external manifestation of the actor's intent to perform an actual, physical act in the real world." Wash. Shoe Co. v. A-Z Sporting Goods Inc., 704 F.3d 668, 674 (9th Cir. 2012) (internal quotations omitted). Ninth Circuit case law demonstrates that the "threshold of what constitutes an intentional act is relatively low" including "engaging in sales transactions outside the forum state, CE Distribution, LLC v. New Sensor Corp., 380 F.3d 1107, 1111 (9th Cir.2004); advertising a product outside the forum, Schwarzenegger, 374 F.3d at 806; or selling an allegedly infringing product outside the forum, Washington Shoe Co., 704 F.3d at 674." AirWair Int'l Ltd. v. Schultz, 73 F. Supp. 3d 1225, 1233 (N.D. Cal. 2014).
According to the complaint and documents submitted in support of Plaintiff's Opposition, Google Play Store names Imba Tech as the "seller" of I Am Hero and Apple App Store names Imba Tech as its developer. (Compl. ¶¶ 13(a)); (ECF No. 33-1 ¶¶ 2-3, Exs. 1-2). Both stores contain links to Imba Tech's privacy policy, which states, "we store information on servers located in the United States via Amazon Web Services." (ECF No. 33-1 ¶ 21, Ex. 20). In addition, Google Play Store and Apple App Store contain links to the "official" website for I Am Hero, which includes the game's Terms of Service. (Id. ¶ 22, Ex. 21). The Terms of Service for I Am Hero provide in pertinent part: "[i]f you are a resident of the United States, these Terms of Service and any dispute arising out of or relating to it or Privacy Policy or the Service shall be governed in all respects by California law, without regard to conflict of law provisions." (Id.). Each United States end user that installs and plays the game agrees to the governing law provision. (Compl. ¶ 13(f); (ECF No. 33-1 ¶ 22, Ex. 21). Further, the complaint alleges and supporting documents show that Imba Tech advertises, markets, and distributes I Am Hero within the United States, provides technical support to these customers, and conducts extensive, on-going business with these customers, including through in-game purchases in U.S. dollars made by the customers within the United States and California. See (Compl. ¶¶ 13(a), (b), (e)); (ECF No. 33-1 ¶¶ 2-5, 8, 14-17, 19-20, 26-27). Imba Tech disputes these accusations using the Do and Truong Declarations. See (ECF No. 27-3 ¶¶ 5-6). However, "[c]onflicts between parties over statements contained in affidavits must be resolved in the plaintiff's favor." Schwarzenegger, 374 F.3d at 800 (citations omitted). The Court thus finds that Plaintiff has established the first Calder requirement. See Blizzard Entm't, Inc. v. Joyfun Inc., Case No. SACV 19-1582 JVS (DFMx), 2020 WL 1972284, at *6 (C.D. Cal. Feb. 7, 2020) (citing Goes Int'l, AB v. Dodur Ltd., No. 3:14-cv-05666-LB, 2015 WL 5043296, at *9 (N.D. Cal. Aug. 26, 2015)) (finding defendant's "distributing the Infringing Game on platforms such as the Google Play store and Microsoft App store, selling virtual currency to American customers, and advertising the Infringing Game via platforms like Facebook" to be intentional acts).
ii. Expressly Aimed at the Forum State
Under the second prong, the Court considers whether the relationship between the defendant, the forum, and the litigation arose out of contacts Defendant deliberately created with the forum, and whether Defendant's contacts were with the forum rather than merely with persons residing in the forum. See Morrill v. Scott Fin. Corp., 873 F.3d 1136, 1143 (9th Cir. 2017) (citing Walden v. Fiore, 571 U.S. 277, 291, 134 S.Ct. 1115, 188 L.Ed.2d 12 (2014)).
Plaintiff alleges that Imba Tech engaged in multiple contacts expressly aimed at the United States. For example, Plaintiff alleges that Imba Tech: (1) designed I Am Hero in a way that ensures its content would be appealing and accessible to United States-based consumers, see (Compl. ¶¶ 3, 13(c), 28-39); (2) advertised and marketed I Am Hero directly to United States-based consumers by using content written in English, launching promotional campaigns aligned with United States-recognized holidays, advertised in-game purchase prices with American dollars, and partnered with at least one American streamer to expose the game to potential American buyers, see (Compl. ¶¶ 23-27); (ECF No. 33-1 ¶¶ 2-5, 13-20, Exs. 1-4, 12-19); (3) tailored its Terms of Service for American consumers, see (ECF No. 33-1 ¶ 22, Ex. 21); (4) purchased and/or leased U.S.-based servers to host I Am Hero, see (id. ¶ 21, Ex. 20); and (5) maintained a dedicated Discord server and 24/7 tech support service to communicate with American players. See (Compl. ¶ 26); (ECF No. 33-1 ¶¶ 15, 26-27, Exs. 14, 25-26).
Again, Defendants contradict these assertions Do Declaration. See (Do Decl. ¶¶ 5-6). For reasons already discussed, the Court resolves this conflict in Plaintiff's favor and thus finds the second Calder requirement satisfied. See, e.g., Joyfun Inc., 2020 WL 1972284, at *6 (finding defendant "expressly aimed" conduct into the United States because defendant engaged in "promotions . . . designed to coincide with U.S. holidays such as Labor Day and St. Patrick's Day," listing in-game currency prices in U.S. dollars, and communicating "with players using California-based Discord, which is a platform through which individuals can participate in public or private text or voice chats."); Wargaming.Net Lmtd. v. Blitzteam LLC, Case No.: CV 20-02763-CJC(MRWx), 2021 WL 3619956, at *3 (C.D. Cal. Jan. 20, 2021) (finding expressly aimed conduct by video game developer-defendant because it "chose to make its game, Battle Prime, available to the United States through Apple's and Google's App stores," "ran advertisements specifically targeted at the United States" on Facebook, resulting in 300,000 downloads, and "Defendant's terms of service are the same for all customers except for United States residents.").
iii. Causing Harm Defendant Knows is Likely to Be Suffered in the Form
Under the third prong of the Calder test, the plaintiff must demonstrate that the defendant's conduct caused harm that it knew was likely to be suffered in the forum. Dole Food Co. v. Watts, 303 F.3d 1104, 1111 (9th Cir. 2002) (citations omitted). "The importance of this requirement is not the magnitude of the harm, but rather its foreseeability." Entrepreneur Media v. Entrepreneur, 8:21-cv-00390-JVS-ADS, 2021 WL 4497891, at *8, 2021 U.S. Dist. LEXIS 190868, at *25 (C.D. Cal. July 14, 2021) (citing Yahoo! Inc. v. La Ligue Contre Le Racisme, 433 F.3d 1199, 1206 (9th Cir. 2006)). The Ninth Circuit has held that specific jurisdiction exists where a plaintiff files suit in its home state against an out-of-state defendant and alleges that defendant intentionally infringed its intellectual property rights knowing was located in the forum state. See Panavision Intern., L.P. v. Toeppen, 141 F.3d 1316, 1321 (9th Cir. 1998); Columbia Pictures Television v. Krypton Broadcasting of Birmingham, Inc., 106 F.3d 284, 289 (9th Cir. 1997); see also Amini Innovation Corp. v. JS Imports, Inc., 497 F. Supp. 2d 1093, 1106 (C.D. Cal. 2007).
Plaintiff alleges that Imba Tech willfully infringed its copyrights when it developed I Am Hero. In particular, Plaintiff accuses Ima Tech of knowingly creating rip-off versions of dozens of LoL champions. See (Compl. 14-29). For this assertion, Plaintiff includes numerous side-by-side comparisons of characters and character icons between LoL and I Am Hero in the complaint. (Id.). Plaintiff also attaches several social media screenshots demonstrating that Imba Tech employees were not only knowledgeable of LoL, but they also played LoL and commonly used LoL hashtags in promotional social media posts. See (ECF No. 33-1 ¶¶ 13-14, Exs. 12-13). Finally, Plaintiff attaches a screenshot showing Imba Tech admitting that its characters were "similar" to LoL characters in response to a reviewer accusing the game of "ripping off" LoL. See (Compl. ¶ 38).
The combination of this evidence, along with the fact that Plaintiff is a well-known videogame developer of LoL based in the United States, demonstrate that Defendant knew that harm was likely to be suffered in the United States. See, e.g., Blizzard Entm't, Inc. v. Bossland GmbH, Case No. SA CV 16-1236-DOC (KESx), 2017 WL 412262, at *4 (C.D. Cal. Jan. 25, 2017) ("Bossland had to anticipate that Blizzard, a company well known to be based in the United States, would suffer loss in the United States as a result of Bossland's software."); 3DO Co. v. Poptop Software, Inc., No. C-98-4023 SC., 1998 WL 962202, at *4 (N.D. Cal. Oct. 27, 1998) (finding foreseeable harm because "[t]he computer game industry is primarily located in California. Therefore, Defendants' conduct is likely to have an effect in the forum state."); Wargaming.net Lmtd., 2021 WL 3619956, at *4 ("Because hundreds of thousands of United States' consumers play Plaintiff's games, it was foreseeable that Defendant's infringement would cause Plaintiff to suffer" harm in the forum).
With all three Calder prongs satisfied, the Court finds that Imba Tech purposefully directed its activities into the United States.
2. Arises Out of or Results from Defendant's Forum-Related Activities
To determine whether Plaintiff's Copyright claim arises out of or results from Imba Tech's activities, the Court must apply a "but for" test. See Panavision Int'l, L.P., 141 F.3d at 1322 (citation omitted). In other words, the Court must determine if Plaintiff would not have suffered Copyright injury "but for" Defendant's conduct directed towards the United States. See id. Here, Imba Tech's conduct directed at the United States is a but-for cause of Plaintiff's claims. "But players in the U.S. would not have downloaded and played the Infringing Game but for" Imba Tech's role in the distribution and marketing of the infringing game within the United States. Joyfun Inc., 2020 WL 1972284, at *7 (citation omitted). Therefore, the Court finds that Plaintiff's Copyright claim arises out of or results from Imba Tech's forum-related activities.
3. Exercise of Jurisdiction is Reasonable
With the first two requirements satisfied, "the burden then shifts to [Defendant] to 'present a compelling case' that the exercise of specific jurisdiction would not be reasonable." Schwarzenegger, 374 F.3d at 802 (quoting Burger King Corp., 471 U.S. at 476-78, 105 S.Ct. 2174). The Court considers seven factors when assessing reasonableness: "(1) the extent of a defendant's purposeful interjection; (2) the burden on the defendant in defending in the forum; (3) the extent of conflict with the sovereignty of the defendant's state; (4) the forum state's interest in adjudicating the dispute; (5) the most efficient judicial resolution of the controversy; (6) the importance of the forum to the plaintiff's interest in convenient and effective relief; and (7) the existence of an alternative forum." Panavision Int'l, L.P., 141 F.3d at 1323 (citation omitted). "No one factor is dispositive; a court must balance all seven." Id. (citing Core-Vent Corp. v. Nobel Indus. AB, 11 F.3d 1482, 1488 (9th Cir. 1993)). Under the seventh prong:
it is not enough that the [defendant] demonstrate that some other forum is more reasonable than [the forum], [defendant] must show a due process violation; [defendant] must show that jurisdiction in [the forum] would make the litigation 'so gravely difficult and inconvenient that a party unfairly is at a severe disadvantage in comparison to its opponent.'Sher, 911 F.2d at 1365 (quoting Burger King Corp., 471 U.S. at 478, 105 S.Ct. 2174). Further, in the "rare situation in which the plaintiff's interest and the state's interest in adjudicating the dispute in the forum are so attenuated that they are clearly outweighed by the burden of subjecting the defendant to litigation within the forum," specific jurisdiction may be denied. Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1568 (Fed. Cir. 1994) (citing Burger King Corp., 471 U.S. at 477, 105 S.Ct. 2174; Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774-75, 104 S.Ct. 1473, 79 L.Ed.2d 790 (1984).
i. Extent of Defendant's Purposeful Interjection
"Even if there is sufficient 'interjection' into the [forum] to satisfy the purposeful availment prong, the degree of interjection is a factor to be weighed in assessing the overall reasonableness of jurisdiction under the reasonableness prong." Core-Vent Corp. v. Nobel Indus. AB, 11 F.3d 1482, 1488 (9th Cir. 1993) (quoting Ins. Co. of N. Am. v. Marina Salina Cruz, 649 F.2d 1266, 1271 (9th Cir. 1981)). Imba Tech argues that this factor disfavors the exercise of specific jurisdiction because "[t]here are no allegations or facts from which one could infer that . . . Imba Tech ever injected [itself] into California at all." (Mot. at 14). For this assertion, Imba Tech relies, again, on the single-page Do Declaration. See (Do Decl.). For reasons already discussed, the record demonstrates that Imba Tech developed I Am Hero, hosted the game on American servers, promoted the game to American consumers, distributed the game on Google Play Store and Apple App Store, entered into contracts with American consumers, provided technical support to American players, and included links across various social media platforms to ensure that said buyers could find and download I Am Hero. Thus, the Court finds that this factor favors jurisdiction. See, e.g., Joyfun Inc., 2020 WL 1972284, at *12 (finding first factor favoring jurisdiction because "[t]he Court has already found that Joyfun purposefully injected itself in the forum via its various forms of support for the operation and monetization of the Infringing Game.").
ii. Burden on Defendant in Defending in the Forum
"Unless [the] inconvenience is so great as to constitute a deprivation of due process," the defendant's burden of defending itself in the forum will not "overcome clear justifications for the exercise of jurisdiction." See Roth v. Garcia Marquez, 942 F.2d 617, 623 (9th Cir. 1991) (quoting Hirsch v. Blue Cross, Blue Shield, 800 F.2d 1474, 1481 (9th Cir. 1986)). Here, because Imba Tech is a Vietnamese company located outside of the United States, this burden is demonstrated. See Bossland GmbH, 2017 WL 412262, at *6 ("[T]he Court concludes the fact that Bossland is a German company weighs against jurisdiction." (citation omitted)). However, this factor is not dispositive, and the Ninth Circuit recognizes that "[m]odern advances in communications and transportation have significantly reduced the burden of litigating in another country." Dole Food Co. v. Watts, 303 F.3d 1104, 1115 (9th Cir. 2002) (quoting Sinatra v. Nat'l Enquirer, Inc., 854 F.2d 1191, 1199 (9th Cir. 1988)). Therefore, this factor slightly disfavors jurisdiction.
iii. Extent of Conflict with the Sovereignty of the Defendant's State
"Although not a dispositive consideration, a foreign nation presents a higher sovereignty barrier than another state within the United States." FDIC v. British-American Ins. Co., 828 F.2d 1439, 1444 (9th Cir. 1987) (citation omitted). "Great care and reserve should be exercised when extending our notions of personal jurisdiction into the international field." Asahi Metal Indus. Co. v. Superior Court of Cal., 480 U.S. 102, 115, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987) (internal quotations omitted). However, Imba Tech does not explain why the exercise of jurisdiction by a United States court would impinge upon the sovereignty of Vietnam or Singapore in a case involving American Copyright law. See (Mot. at 14-15). For this reason, the Court weighs this factor neutrally.
iv. Forum State's Interest in Adjudicating the Dispute
"The United States has an interest in the enforcement of its copyright laws." Dish Network, LLC v. Jadoo TV, Inc., Case No. CV 18-9768 FMO (KSx), 2020 WL 6536659, at *9, 2020 U.S. Dist. LEXIS 209819, at *30 (C.D. Cal. Mar. 16, 2020) (citing Microsoft Corp. v. Very Competitive Comput. Prods. Corp., 671 F. Supp. 1250, 1256 (N.D. Cal. 1987)). The United States has a particularly "significant interest in resolving disputes of United States copyright law involving infringement by foreign defendants." AMA Multimedia LLC v. Sagan Ltd., No. CV-16-01269-PHX-DGC, 2016 WL 5946051, at *7 (D. Ariz. Oct. 13, 2016). For these reasons, the Court finds that this factor favors jurisdiction.
v. The Most Efficient Judicial Resolution of the Controversy
"This factor focuses on the location of the evidence and witnesses." Panavision, 141 F.3d at 1323 (citation omitted). Because the evidence of Imba Tech's actions are likely to be located mostly in Vietnam or Singapore, the efficient resolution of the controversy weighs against jurisdiction in this Court. See Dish Network, LLC, 2020 WL 6536659, at *9, 2020 U.S. Dist. LEXIS 209819, at *30 (citing Panavision Int'l, 141 F.3d at 1323). For this reason, the Court finds that this factor disfavors jurisdiction.
vi. Importance of the Forum to the Plaintiff's Interest in Convenient and Effective Relief
Plaintiff has an interest in seeking relief in the United States because the United States is its home forum. See CE Distrib., LLC v. New Sensor Corp., 380 F.3d 1107, 1112 (9th Cir. 2004) ("Litigating in one's home forum is obviously convenient."). At the same time, Plaintiff is a global corporation and this factor is generally not given much weight in the overall analysis. See Dole Food Co., 303 F.3d at 1116 (citation omitted). For these reasons, the Court finds that this factor weighs slightly in favor of jurisdiction.
vii. Existence of an Alternative Forum
Plaintiff bears the burden of proving the unavailability of an alternative forum and has made no such showing. Therefore, this factor disfavors the exercise of specific jurisdiction.
In all, only three of the seven prongs disfavor the exercise of specific jurisdiction. Under the circumstances, the Court finds that Imba Tech has failed to present a "compelling case" for why this Court should not exercise specific jurisdiction over the matter. As a result, the Court also finds that Plaintiff has raised a prima facie showing and therefore, the Court may exercise specific jurisdiction over Imba Tech under the federal long-arm statute. The motion to dismiss for lack of personal jurisdiction as to Imba Tech is therefore DENIED.
Because the Court has determined that it has personal jurisdiction over Imba Tech under the federal-long arm statute, the Court does not address whether personal jurisdiction also exists based on an alter ego or agency theory.
B. Personal Jurisdiction Over Suga
Plaintiff argues that this Court can assert personal jurisdiction over Suga, the parent company of Imba Tech, see (ECF No. 33-1 ¶¶ 6, 9-10, Exs. 5, 8-9), because the Defendants "are so closely intertwined that they are alter egos or agents of each other." (Opp. at 26). The Court disagrees.
It is a fundamental principle of corporate law that a parent and its subsidiary are separate legal entities. See United States v. Bestfoods, 524 U.S. 51, 61, 118 S.Ct. 1876, 141 L.Ed.2d 43 (1998). This principle of corporate separateness generally "insulates a parent corporation from liability created by its subsidiary, notwithstanding the parent's ownership of the subsidiary." Ranza v. Nike, Inc., 793 F.3d 1059, 1070 (9th Cir. 2015) (citation omitted). However, when the corporate form is used to perpetrate a fraud or accomplish some other inequitable purpose, a court may disregard the corporate form and impute the acts of a subsidiary to the parent under the theory that the subsidiary is an "alter ego" of the parent. Sonora Diamond Corp. v. Superior Court, 83 Cal. App. 4th 523, 538, 99 Cal.Rptr.2d 824 (2000). The alter ego doctrine prevents a parent corporation from escaping liability for wrongful acts committed by a subsidiary that is, in effect, a sham corporation. Id. at 538, 99 Cal.Rptr.2d 824; see also Hennessey's Tavern, Inc. v. Am. Air Filter Co., 204 Cal. App. 3d 1351, 251 Cal.Rptr. 859 (1988) ("The purpose behind the alter ego doctrine is to prevent defendants who are the alter egos of a sham corporation from escaping personal liability for its debts." (citation omitted)).
Federal courts "apply the law of the forum state in determining whether a corporation is an alter ego" of a party. Towe Antique Ford Foundation v. I.R.S., 999 F.2d 1387, 1391 (9th Cir. 1993).
For a Court to extend personal jurisdiction over a parent company using alter ego liability, the plaintiff need only make a prima facie showing. See Am. Te. & Tel. Co. v. Compagnie Bruxelles Lambert, 94 F.3d 586, 591 (9th Cir. 1996). Under California law, plaintiff is required to show: (1) "that there is such unity of interest and ownership that the separate personalities no longer exist" and (2) "that failure to disregard their separate identities would result in fraud or injustice." Id. at 591 (quoting Flynt Distrib. Co. v. Harvey, 734 F.2d 1389, 1393 (9th Cir. 1984)). However, finding alter ego liability "is an extreme remedy, sparingly used." Hasso v. Hapke, 227 Cal. App. 4th 107, 155, 173 Cal.Rptr.3d 356 (2014). "Conclusory allegations of 'alter ego' status are insufficient to state a claim. Rather, a plaintiff must allege specifically both of the elements of alter ego liability, as well as facts supporting each." Neilson v. Union Bank of California, N.A., 290 F. Supp. 2d 1101, 1116 (C.D. Cal. 2003) (listing cases).
The unity of interest and ownership prong requires Plaintiff to show that the "parent controls the subsidiary to such a degree as to render the latter the mere instrumentality of the former." Ranza, 793 F.3d at 1073 (quoting Unocal Corp., 248 F.3d at 926) (internal quotations omitted). "This test envisions pervasive control over the subsidiary, such as when a parent corporation 'dictates every facet of the subsidiary's business — from broad policy decisions to routine matters of day-to-day operation.' " Id. (quoting Unocal, 248 F.3d at 926). To the extent that Plaintiff claims such a unity exists between Imba Tech and Suga, Plaintiff argues:
They share offices, phone numbers, employees, and owners. Suga recruits and hires Imba Tech staff and employees. It refers to Imba as its central (and sole) "brand" or "division" of the company in
the gaming industry. It claims to be in the business of game development by way of Imba Tech, and even touts the Infringing Game as among its catalog of games.(ECF No. 33 at 27). Plaintiff cites RAE Systems, Inc. v. TSA Systems, Ltd. for the proposition that these allegations are sufficient. See (Opp. at 27 (citing No. C 04-2030 FMS., 2005 WL 1513124, at *3-*4 (N.D. Cal. June 24, 2005)). The Court disagrees.
First, "[t]otal ownership and shared management personnel are alone insufficient to establish the requisite level of control" to meet the first prong for Alter Ego liability. Ranza, 793 F.3d at 1073 (citing Harris Rutsky & Co. Ins. Servs. v. Bell & Clements Ltd., 328 F.3d 1122, 1135 (9th Cir. 2003)). Second, the facts of RAE Systems are not similar to this case. There, the Northern District found the first prong satisfied because the parent company and its subsidiary had the same president and chairman of the board, the subsidiary was created under the parent company's explicit direction, the subsidiary was funded by the parent company's president, and the subsidiary was managed by a former employee of the parent company in conjunction with the parent company's president. See RAE Systems, Inc., 2005 WL 1513124, at *4. Suga and Imba Tech, on the other hand, are helmed by different CEOs, see (Truong Decl.; Do Decl.), and there are no allegations that Suga PTE has complete control over Imba Tech or that Suga PTE funds Imba Tech. Therefore, the current evidentiary record does not demonstrate that Suga has sufficient control over Imba Tech to justify the use of alter ego liability. For this reason, Plaintiff cannot extend jurisdiction over Suga under this theory. The Court GRANTS Defendants' Motion to dismiss for lack of personal jurisdiction as to Suga.
C. Jurisdictional Discovery
Plaintiff has requested jurisdictional discovery if the Court denies jurisdiction over either Imba Tech or Suga. (Opp. at 27-28). "Discovery is available in federal court to establish the presence of personal jurisdiction in that court." Gibson v. Chrysler Corp., 261 F.3d 927, 948 (9th Cir. 2001) (citations omitted). Jurisdictional discovery is particularly appropriate when "pertinent facts bearing on the question of jurisdiction are controverted or where a more satisfactory showing of the facts is necessary." Boschetto v. Hansing, 539 F.3d 1011, 1020 (9th Cir. 2008) (quoting Data Disc, Inc., 557 F. 2d at 1285 n.1. On the other hand, "where a plaintiff's claim of personal jurisdiction appears to be both attenuated and based on bare allegations in the face of specific denials made by the defendants, the Court need not permit even limited discovery . . . ." Pebble Beach Co., 453 F.3d at 1160 (quoting Terracom v. Valley Nat'l Bank, 49 F.3d 555, 562 (9th Cir. 1995)) (internal quotations omitted).
Plaintiff's claims regarding Suga are not attenuated. The declaration and exhibits filled in support of Plaintiff's Opposition demonstrate a close relationship between the Defendants. In particular, the record suggests that Defendants share employees and ownership and that Imba Tech is either a subsidiary or division of Suga. However, while Plaintiff only needs to present a prima facie case for alter ego liability, the record is not yet sufficiently developed to demonstrate Plaintiff has satisfied this requirement. Because the Court believes further discovery on this issue may demonstrate facts sufficient to constitute a basis for jurisdiction, see Harris Rutsky & Co. Ins. Servs., Inc. v. Bell & Clements Ltd., 328 F.3d 1122, 1135 (9th Cir. 2003), the Court grants Plaintiff's request to conduct limited jurisdictional discovery as to Plaintiff's alter ego liability theory.
IV. CONCLUSION
For the foregoing reasons, the Court DENIES the Motion as to Imba Tech but GRANTS the Motion as to Suga. Plaintiff's action is DISMISSED without prejudice as to Suga. The Court GRANTS Plaintiff's request for jurisdictional discovery on its alter ego liability theory as it relates to Suga. Plaintiff may conduct discovery to support its alter ego theory for 90 days from the issuance of this Order. Plaintiff's failure to file an Amended Complaint after 90 days of jurisdictional discovery will result in dismissal with prejudice as to Suga. IT IS SO ORDERED