43 F. Supp. 3d 1036
C.D. Cal.2014Background
- Tatung Company, Ltd. sues twenty-eight defendants including the Houng Family, Operational Defendants, and various entities, alleging a complex cross-border scheme to defraud creditors and siphon assets through a network led by the Houng Family Defendants.
- The court considers three motions to dismiss: (1) Houng Family Movants (Dkt. 109), (2) Chin-Ying Hsu (Dkt. 58), and (3) Westinghouse Digital LLC (WD).
- The alleged scheme is described as the “Sham Enterprise” involving Westinghouse Digital Electronics (WDE), Nexis, Li Fu Investments, and various offshore entities to undercapitalize WDE while transferring profits and assets to unrelated entities.
- Tatung asserts multiple claims including RICO, fraud, civil conspiracy, fraudulent transfers, and alter ego liability, with arid prior arbitration and bankruptcy history informing the dispute.
- The court grants in part and denies in part the motions, allowing Tatung to amend, and dismisses certain RICO, conspiracy, and fraudulent transfer claims without prejudice while addressing venue, personal jurisdiction, and service issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction over Houng Family Movants | Tatung shows intentional acts aimed at California with direct effects | Movants contest jurisdiction based on lack of targeted contact | Jurisdiction denied for some movants; denied across the board for Houng Family Movants |
| Venue vs. Houng Family Movants | Venue proper due to California-based activities and jurisdictional reach | Venue improper under 28 U.S.C. § 1391(b)(1) | Venue not dismissed; denial of improper venue denied with possibility to renew later |
| Forum non conveniens | Taiwan as alternative forum; forum non conveniens should apply | Alternative forum exists; balance of private/public interests unfavorable to U.S. forum | Motion denied; forum non conveniens not warranted |
| Insufficient service of process | Substantial compliance with Rule 4; summons not attached to amended complaint | Defects in service invalidate service | Service deemed substantial; motion denied |
| Civil RICO and related claims against Chin-Ying Hsu | Claims grounded in fraud; sufficient to plead theory with direct involvement | Rule 9(b) pleading standards require specific allegations tied to individual defendants | RICO claims dismissed without prejudice; Civil Conspiracy dismissed without prejudice |
Key Cases Cited
- Pebble Beach Co. v. Caddy, 453 F.3d 1151 (9th Cir. 2006) (prima facie jurisdiction standard and long-arm analysis)
- Dole Food Co. v. Watts, 303 F.3d 1104 (9th Cir. 2002) (specific jurisdiction and Calder v. Jones standard for express aiming)
- Ziegler v. Indian River Cnty., 64 F.3d 470 (9th Cir. 1995) (calculus of minimum contacts and forum state's reach)
- Keeton v. Hustler Magazine, Inc., 465 U.S. 770 (U.S. 1984) (residence not required for jurisdiction based on contacts)
- Jobe v. ATR Marketing, Inc., 87 F.3d 751 (5th Cir. 1996) (distinguishability on long-arm statute grounds (cited for but-for reasoning))
- Shute v. Carnival Cruise Lines, 897 F.2d 377 (9th Cir. 1990) (but-for nexus test for tying forum contacts to claims)
- Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003) (Rule 9(b) pleading requirements for fraud claims)
- Swartz v. KPMG LLP, 476 F.3d 756 (9th Cir. 2007) (need for particularized allegations against each defendant)
- Branch v. Tunnell, 14 F.3d 449 (9th Cir. 1994) (incorporation by reference doctrine and judicial notice)
- Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (U.S. 1947) (forum non conveniens public/private interest balancing)