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Arrow Electronics, Inc. v. Deco Lighting, Inc.

United States District Court, D. Colorado

February 26, 2019

Arrow Electronics, Inc., Plaintiff,
v.
Deco Lighting, Inc., a division of Deco Enterprises, Inc., Defendant.

          ORDER

          Raymond P. Moore Judge

         This is a diversity matter alleging breach of contract and related recovery theories. Before the Court is Deco Lightning, Inc.'s motion to dismiss for lack of personal jurisdiction or transfer venue to the Central District of California (Motion, ECF No. 8; Reply, ECF No. 13), to which Arrow Electronics, Inc. responded (Response, ECF No. 9). The Court referred the Motion to Magistrate Judge Kristen Mix, who recommended that it be denied in full. (Recommendation, ECF No. 29.) Deco timely objected (Objection, ECF No. 30) and Arrow responded. (Objection Response, ECF No. 34.)

         The Objection does not debate the facts or overarching legal principles as set out by the magistrate judge. Instead, Deco objects that the Recommendation (1) improperly viewed Arrows alleged Colorado injury as “arising from” Deco's omissions in California in finding personal jurisdiction; and (2) misapprehended the relative weight to be afforded each factor under venue-transfer analysis. The Court disagrees and affirms the Recommendation.

         I. BACKGROUND

         The Recommendation pulled the following facts from the Complaint and attachments. (ECF No. 1.)[1] Arrow is a New York Corporation with its principal place of business in Colorado. (Compl. ¶ 6.) It is a global provider of products, services, and solutions to industrial and commercial users of electronic products, components, and enterprise computing solutions. (Id. ¶ 12.) Deco is a California company organized and existing under the laws of California and has its principal place of business there. (Id. ¶ 7.) The parties entered into a Logistic Services Agreement (the “Agreement”) dated February 15, 2016. (Id. ¶ 1.)

         Under the Agreement, Deco appointed Arrow to provide logistic services in support of Deco's business of manufacturing and distributing various lighting products (“Products”). (Id. ¶ 2.) Deco ordered the Products; Arrow then acquired them and facilitated their movement from Chinese factories to Deco's customers. (Id. ¶ 3.) The Agreement required Arrow to pay for and acquire title to the Products Deco ordered. (Agreement ¶¶ 10, 13, ECF No. 1-1.) Arrow would then arrange to deliver the Products from China to its warehouse in Reno, Nevada via Los Angeles. (Id. ¶¶ 1-2, 4, 13.) Arrow stored the Products there until Deco requested Arrow to deliver them to Deco's customers, at which point Arrow invoiced Deco in accordance with the Agreement. (Id. ¶ 10.) Deco agreed to pay Arrow for these logistics services no later than ninety days from receipt of invoices. (Id. ¶¶ 7, 10.)

         Arrow alleges that in 2017, Deco began to default on its obligation under the Agreement to pay for products and services, and Arrow refused to provide further services without advance payment. (Compl. ¶ 35.) On February 27, 2018, Arrow notified Deco of its overdue debt of approximately $5, 159, 000. (Id. ¶ 37.) Arrow further alleges that despite Deco's obligations under the Agreement and notice of the outstanding balance, Deco has refused to pay for and take delivery of the Products. (Id. ¶ 47.)

         As a result, Arrow commenced this action on May 8, 2018, asserting claims sounding in breach of contract (Id. ¶¶ 42-52), promissory estoppel (Id. ¶¶ 53-59), and unjust enrichment (Id. ¶¶ 60-66). Arrow asks the Court for damages, plus applicable fees, costs, and statutory interest (or restitution). (Id. ¶ 67.) In response, Deco filed the Motion, which seeks dismissal for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2) or, in the alternative, to transfer venue to the Central District of California pursuant to Fed.R.Civ.P. 12(b)(3).

         II. ANALYSIS

         Although there is some suggestion by Arrow to the contrary, the Court reviews the Recommendation de novo. Fed.R.Civ.P. 72(b)(3). Arrow correctly notes that where a party fails to make sufficiently specific objections-or where it raises new theories in those objections-the same may be waived. See Summers v. State of Utah, 927 F.2d 1165, 1167 (10th Cir. 1991) (“In the absence of timely objection, the district court may review a magistrate's report under any standard it deems appropriate.”). Arrow insinuates, in several places, that Deco has pushed forth novel arguments in the Objection which the Court should not entertain. (See, e.g., Objection Response at 16 (noting the presence of a “separate, broad argument, offered now” that the magistrate judge improperly elevated a single consideration over the others).) The Court does not agree that treating Deco's Objection arguments as novel is appropriate under the circumstances. Viewed as a whole, the Objections do not provide fresh legal or factual theories so much as they ask this Court to re-evaluate, reassign, and shift the weight the magistrate judge assigned to the relevant legal considerations-an argument it was impossible for Deco to make before having the benefit of reading and considering the Recommendation.[2] Therefore, the Court examines the Recommendation de novo.

         a. The Court has personal jurisdiction over Deco.

         The Recommendation provided a correct summary of the legal hurdles a plaintiff must overcome for the Court to have personal jurisdiction over a defendant. (Recommendation at 4- 5.) Colorado's long-arm statute requirements must be met: Under it, exercise of personal jurisdiction is appropriate “to the fullest extent permitted by the [D]ue [P]rocess [C]lause of the United States Constitution, ” Mr. Steak, Inc. v. Dist. Court In & For Second Judicial Dist., 574 P.2d 95, 96 (Colo. 1978), which demands that a defendant must have “certain minimum contacts with [the forum] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotation omitted). The “minimum contacts” standard is usually met in terms of “general” or “specific” jurisdiction. See, e.g., Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (U.S. 2011).

         All parties and the magistrate judge agree that Arrow is not invoking general personal jurisdiction. (See Recommendation at 6, 8; Objection at 7; Response at 5 n.3.) A court may assert specific jurisdiction over a nonresident defendant “if the defendant has ‘purposefully directed' his activities at residents of the forum, and the litigation results from alleged injuries that ‘arise out of or relate to' those activities.” OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1090-91 (10th Cir. 1998) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472

         (1985). This “‘purposeful availment' requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of ‘random,' ‘fortuitous,' or ‘attenuated' contacts, or of the ‘unilateral activity of another party or a third person[, but] where the contacts proximately result from actions by the defendant himself that create a ‘substantial connection' with the forum State.” Burger King Corp, 471 U.S. at 475 (quoting Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774 ...


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