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proceed.

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Young Jevity is a California company.

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They specialize in selling dietary supplements, related health products.

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In this lawsuit, they're suing their competitor, Innovative Nutrition and Innovative Sparing Company, La Cour Enterprises, for unlawful advertising, and also for unlawful conduct under California's unfair competition law.

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The district court below dismissed the entire lawsuit for lack of personal jurisdiction,

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was decided after the district court decided your case.

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So we've directed everyone to defendants argue that direct computer

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consider is the product sold by business is the product sold to consumers nationally and here the answer to all those factors is yes just like the defendant in herbal brands innovative nutrition operates an interactive website marketing its products equally to consumers all

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and governs the situation here.

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Well, the district court, I think if we find that herbal brands

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ourselves.

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Sure.

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Well, that issue was fully briefed before the district court as well, even though the district court did not reach it.

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And it was fully briefed here on appeal.

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Both sides argued under all the factors.

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Obviously, the defendants and appellees argued that jurisdiction would be unreasonable.

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But all seven factors here, we have a lay in favor of finding jurisdiction reasonable.

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And this court has an adequate record to make that decision.

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You know, counsel, you always do better when arguing to a district court to say the district court didn't have the

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and say, because the Ninth Circuit frankly has been pretty difficult to follow in this area, hasn't it?

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I agree with that, Your Honor.

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I have a case on the other side where we lost this argument because of herbal brands during the same time.

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that you're going to be sued, that you could be sued wherever you sell and ship that product.

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Let me ask you about LaCour Enterprises.

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What would you seek if it was remanded for jurisdictional discovery?

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Because the district court looked through all of the evidence that you had submitted.

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actually read the order the district court instead just found that there's no jurisdiction over innovative there's no jurisdiction over the core enterprises and therefore no jurisdictional discovery is appropriate

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through which the testimony says that La Cour enterprise has provided certain management or activities.

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Now at the 12b2 stage, right, that evidence should have been construed in favor of the plaintiff, especially where defendants could have just produced the agreement if it was as benign as they claim.

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So the services agreement would be something that should definitely be produced during jurisdictional discovery.

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The other agreement that was mentioned but not produced was an agreement through which

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to sell the products giving rise to this lawsuit from an unnamed Texas-based entity.

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We don't know who that is.

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If it was in the defendant's favor, presumably they would have produced that, right?

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If it was some independent third party and the core enterprises was not involved, presumably they would have produced that.

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By failing to identify even who the agreement was with, I think

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Another issue would be the co-mingling of the office space in Texas.

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Innovative has no employees in Texas.

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That's the testimony from the defendants.

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So these are all different types of facts.

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Does it matter as long as they're honoring corporate formalities?

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Absolutely, Your Honor.

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So after Williams, which the Ninth Circuit decided in 2017, the test for the principal-agent relationship is whether the core enterprise substantially controls innovative.

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And if they have the same office, right, with no employees there,

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across the country but they have only one employee.

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Certainly at their office in Texas there is decisions being made.

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We don't know the extent of those decisions by LaCour Enterprises in Texas as the pair, as at least the majority owner, with the sole director being the sole director for both companies.

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So these are all types of issues that we would need to get discovery and

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sorry, a alter ego relationship.

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The standard is necessarily lower than if we were to establish liability, right?

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It's only the burden on the plaintiff here is only prima facie.

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We've already induced very strong facts showing a very close relationship between the two entities without the benefit of any

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in the 2022 case.

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Do you want to save the balance of your time?

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My apologies.

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Thank you, Your Honors.

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Do you have a question?

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All right, we're ready to hear from Innovative.

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Good morning.

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Good morning, Your Honors.

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I represent Appellees, Innovative, and LaCour Enterprises.

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As we just discussed, I'll be taking eight minutes of our time to discuss personal jurisdiction as to Innovative, and Mr. Compasso will be taking the remainder to discuss personal jurisdiction as to LaCour Enterprises.

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The District Court correctly held that California does not have personal jurisdiction over Appellees.

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I think that Oboe Brand's case is factually very distinct from the case at hand.

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It's because Innovative uses promoters predominantly as its sales method.

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It's not disputed that you do have an interactive website, right?

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Herbal Brands seems to say, as long as you sell and deliver one item, that's enough for personal trip for Express Aiming.

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Actually, I think I would like to point, Your Honors, to a specific quote from Herbal Brands.

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And I think Herbal Brands actually expressly did not address that situation at hand.

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In a quote, it says, we also need not and do not answer the question of whether

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said, sold to a third party with no knowledge of that third party's intent to sell into a particular forum.

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So while there was direct sales, the 6% is total sales that includes direct and promoters.

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And as a business, Innovative in its regular course of business really makes money through its promoters as a network marketing company.

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And so any sales that

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six percent.

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Yeah, I think that we should focus on the two factors that Oberbrand's focused on which is not present here.

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The first is that the sell must occur as a part of the defendant's regular course of business.

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Well, I don't think, you know, I don't

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without a website I mean I don't think any it's not and more and more you know we have younger law clerks then you know the people less and less shop in person or go to promoters or whatever they go to they got a websites and you can order directly on that website even we're doing it now

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You couldn't do this, but that's all that's huge now and the idea of siloing yourself in one state is totally different with the internet, isn't it?

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Yes, that's very correct and I think if we do end up following the herbal grounds we're learning and apply it to this case, then that would subject any

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to buy on your website so that satisfies the first step and then you get to the to determine if an activity is within the ordinary course of business yes that's correct your honor and it is our position that innovators regular ordinary course of business is itself through promoters innovative has over 25,000 promoters nationwide and only

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that the interactive website isn't in the ordinary course of business.

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Are you saying it isn't because you do less business on the website?

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Both actually, both because we do business, we do way less business on the website and the second factor which is more important is that we rely heavily on the promoters

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And so, the second factor discussed in herbal brands is that defendants must exercise some level of control over the ultimate distribution.

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sufficient day-to-day control over innovative and there's just simply not sufficient facts alleged in the complaint even there was no agency allegations

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chicken and egg thing was going to come up.

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Yes, that's, I don't think they need any more evidence because... What if the discovery shows that there isn't any observation of corporate formalities and in fact that the dealings of LaCour and

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of standards.

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Of course.

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So the service agreement that my opponent actually discussed is actually an indication of observing corporate formalities.

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Because if the two entities actually didn't care about observing corporate formalities, why would they spend the time, waste the time in drafting up a service agreement?

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I think that's actually a very specific piece of evidence that's in our favor.

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So, yes, and then I think I have 30 seconds left on the clock and I would like to yield the rest of my time to my colleagues.

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three of the record.

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Fifty-one percent common ownership does not mean identical ownership.

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So we do not have a situation of identical ownership.

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Well, the district court found that it wasn't, they didn't meet the alter ego, right?

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Correct.

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Correct.

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So they're asking us to, you're asking us to affirm that.

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I am.

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They're asking us to say, well, they need additional discovery.

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The standard is abuse of discretion, and I don't believe they've shown that.

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The court analyzed the issue and found that there's nothing to hang their hat on.

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They've alleged hardly anything in the complaint.

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Alter ego and agency are afterthoughts.

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In the opposition to the motion to dismiss, they made allegations about substantial control based merely on one page of a website.

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That's on the record at page 196.

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Identical ownership failure to maintain adequate corporate records solely

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None of those are present.

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There's absolutely no evidence on any of those subjects that would give rise to jurisdictional discovery.

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There is simply nothing there.

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If a court would allow jurisdictional discovery, it would be based merely on speculation since they say, well, we don't know, therefore we need evidence on that.

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That is not how you get jurisdictional

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I submit, I did not abuse.

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But let me find out if my colleagues have questions.

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No questions, thank you.

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Okay.

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So wrap it up.

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I appreciate it.

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Thank you very much for your time and attention.

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Thank you.

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Thank you, Your Honors.

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There's no reason not to produce that.

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Responding to Council's statement on the District Court's decision on jurisdictional discovery at ER 23 says the Corps finds that the discovery plaintiff seeks to support its arguments on alter ego or agency theories would not change the jurisdictional analysis because it has not shown that either innovative or the Corps enterprises has sufficient contacts with California.

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Of course now, given herbal brands, if innovative,

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erroneous conclusion is what you're saying.

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Yes.

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I don't think we were to say that than to factor that into deciding.

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Correct, Your Honor.

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If this court were to affirm and find the innovative did not expressly in its conduct at California despite herbal brands, then I would agree with the district court.

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However, if this court overturns on that point that at the very

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relationship between the two entities.

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If the court doesn't have any further questions.