Cline v. Dan-Bunkering (America), Inc.
3:24-cv-02081
S.D. Cal.Apr 23, 2025Background
- William Cline sued his former employer, Dan-Bunkering (America), Inc., seeking a declaration that a non-compete clause in his employment agreement is unenforceable and alleging defamation.
- Cline worked for Dan-Bunkering in Texas from 2014 to 2024, then moved to California for new employment in the same industry.
- Dan-Bunkering is incorporated and based in Texas but does generate about 5% of revenue from customers who receive products at California ports, though operations and employees are based elsewhere.
- Cline claims Dan-Bunkering unlawfully restricts his ability to work through an overly broad non-compete, which he alleges applies nationwide, including California, and also claims defamation based on statements allegedly made by a company employee.
- Dan-Bunkering moved to dismiss for lack of personal jurisdiction; Cline opposed, arguing the company does business in California and targets the market there.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| General Jurisdiction | Not asserted | Dan-Bunkering is neither incorporated nor headquartered in California | No general jurisdiction |
| Specific Jurisdiction | Company solicits, services, and does business at CA ports, targets CA market | No employees, facilities, or directed marketing in CA; revenue from CA is minimal and customer-initiated | No specific jurisdiction; contacts insufficient |
| Connection of Claims to Forum | Claims arise out of/relate to CA activities since non-compete restricts CA work and alleged defamation affects reputation in CA | Claims stem from employment in Texas and are not caused by or related to CA contacts | Claims do not arise from/relate to forum contacts |
| Jurisdictional Discovery | Not requested | Not warranted | Not necessary |
Key Cases Cited
- International Shoe Co. v. Washington, 326 U.S. 310 (leading case on minimum contacts and due process for personal jurisdiction)
- Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (general jurisdiction requires defendant be "at home" in forum state)
- Ford Motor Co. v. Montana Eighth Jud. Dist. Ct., 592 U.S. 351 (explains "arise out of or relate to" test for specific jurisdiction)
- Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797 (Ninth Circuit three-part test for specific personal jurisdiction)
- Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218 (plaintiff bears burden to make prima facie showing of jurisdictional facts)
- Core-Vent Corp. v. Nobel Industries AB, 11 F.3d 1482 (jurisdiction in diversity cases follows forum state's long-arm statute)