Boon Global Limited v. Usdc-Caoak
923 F.3d 643
9th Cir.2019Background
- Randy Dobson developed the Morfit App; Parkridge (Dobson CEO) contracted with Indyzen (Narra CTO) to develop/license software under a 2015 Agreement naming Indyzen ("Company") and Parkridge ("Customer").
- Parkridge and Mak sued Indyzen in 2016; Indyzen successfully compelled arbitration under the Agreement; Indyzen then counterclaimed in arbitration and added four foreign entities affiliated with Dobson (the Third Parties).
- The arbitrator dismissed the Third Parties for lack of authority to bind nonsignatories and left the question to the district court or the parties.
- Indyzen petitioned the district court to compel the Third Parties to arbitrate; the Third Parties moved to dismiss. The district court compelled them to arbitration and asserted personal jurisdiction, reasoning they were "closely associated" with Dobson (who signed the Agreement).
- The Third Parties sought mandamus relief from the Ninth Circuit to vacate the district court order; the Ninth Circuit found the district court used incorrect legal tests and failed to analyze jurisdiction individually, but denied mandamus because the district court’s ruling was not clearly erroneous and other Bauman factors weighed against mandamus.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether district court had personal jurisdiction over each foreign Third Party before compelling arbitration | Indyzen: Third Parties are bound via equitable estoppel/alter ego and are sufficiently connected to Dobson/Parkridge to permit jurisdiction | Third Parties: Foreign corporations lacked minimum contacts with California and were never parties to Agreement | Court: District court applied wrong tests and failed individualized analysis, but its ultimate jurisdictional finding was not clearly erroneous; mandamus denied |
| Whether Dobson could be subjected to personal jurisdiction by virtue of signing Agreement as Parkridge CEO | Indyzen: Dobson was the "guiding spirit" and had contacts supporting jurisdiction | Dobson: Signed only in representative capacity; corporate-officer signature alone insufficient for personal jurisdiction | Court: Signature as CEO does not automatically confer personal jurisdiction; district court erred but not clearly erroneous given unresolved theory (tort vs contract) |
| Whether alter ego doctrine or veil-piercing supported jurisdiction over Third Parties | Indyzen: Entities are sham companies, commingled and controlled by Dobson/Parkridge | Third Parties: Maintain formalities, separate finances; no evidence of commingling, undercapitalization, or fraud | Court: Indyzen’s evidence insufficient on unity of interest and injustice; district court failed to analyze both alter-ego prongs properly |
| Whether mandamus was appropriate to vacate the district court’s arbitration order | Third Parties: Mandamus warranted because district court lacked jurisdiction and arbitration compels costly foreign proceedings | Indyzen/District Court: Error not clear; mandamus extraordinary and other remedies (appeal after final judgment) suffice | Court: Mandamus denied—clear-error prong unmet and other Bauman factors (adequate alternative remedies; no irreparable prejudice shown) |
Key Cases Cited
- Ex parte Fahey, 332 U.S. 258 (granting mandamus is an extraordinary remedy)
- In re Van Dusen, 654 F.3d 838 (mandamus standards and Bauman factors)
- Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S. 422 (court must have personal jurisdiction before ruling on merits)
- Int’l Shoe Co. v. Washington, 326 U.S. 310 (minimum contacts due process standard)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (officer’s signature in representative capacity insufficient alone for jurisdiction)
- Walden v. Fiore, 571 U.S. 277 (jurisdictional focus on defendant’s contacts with the forum state)
- Ranza v. Nike, Inc., 793 F.3d 1059 (alter ego standard for extending personal jurisdiction)
- Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797 (jurisdictional pleading/prima facie standard)
- Mavrix Photo, Inc. v. Brand Technologies, Inc., 647 F.3d 1218 (website/targeting and jurisdiction)
- In re Henson, 869 F.3d 1052 (mandamus clear-error requirement)