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LAW OFFICE OF HARTWELL HARRIS Hartwell Harris (California Bar No. 241695) 1809 Idaho Avenue Santa Monica, California 90403 Telephone: (310) 497-8858 Facsimile: (310) 998-1167 hartwell@hartwellharris.com Attorney for Defendants RAYMOND MOBREZ ILIANA LLANERAS ASIA ECONOMIC INSTITUTE, LLC UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA

XCENTRIC VENTURES, LLC, an Arizona limited liability company, Plaintiff, vs. LISA JEAN BORODKIN, et al., Defendants.

CASE NO.: 11-CV-1426-PHX-GMS DEFENDANTS REPLY IN SUPPORT OF THEIR MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION PURSUANT TO F.R.C.P. 12(B)2

DEFENDANTS ASIA ECONOMIC COUNCIL INSTITUTE, LLC (AEI), RAYMOND MOBREZ, and ILLIANA MOBREZ (Defendants) submit this Reply to address arguments raised by Plaintiff in its Response to Defendants Motion to Dismiss for Lack of Personal Jurisdiction Pursuant to F.R.C.P. 12(b)2. MEMORANDUM OF POINTS AND AUTHORITIES Plaintiff defended the underlying matter in California; Plaintiff alleges that Californias judicial system was abused; Plaintiffs Complaint complains about Defendants actions that occurred in California; important California law regarding the
DEFENDANTS REPLY IN SUPPORT OF THEIR MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION

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admissibility of recorded conversations is at issue; and California has a high interest in protecting its judicial system. Plus, Plaintiff has not been able to locate and summon Daniel Blackert, a named defendant in this matter and the lead attorney in the underlying matter. By Defendants estimate, Plaintiff must locate and serve Mr. Blackert with summons by November 18, 2011. I. PERSONAL JURISDICTION OVER DEFENDANTS OFFENDS TRADITIONAL NOTIONS OF FAIR PLAY AND SUBSTANTIAL JUSTICE Assertion of personal jurisdiction over Defendants in this matter is reasonable only if it does not offend traditional notions of fair play and substantial justice. International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). The reasonableness test exists to protect defendants from unfairly inconvenient litigation. Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980). Courts balance seven factors to determine the reasonableness of exercising jurisdiction. Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985). The most critical factor in this case is the extent of conflict with the sovereignty of the defendants state. Plaintiff spends three pages of its Response arguing about the admissibility of recorded conversations it made of Defendant Mobrez without his knowledge. The fact that the Plaintiff is already posturing about the admissibility of these tapes proves Defendants pointthat the admissibility of these tapes will be a critical issue in this case. Since Arizona law regarding recorded conversations is less protective than Californias law, personal jurisdiction over Defendants conflicts substantially with the sovereignty of California. California has not only outlawed secretly recording conversations but has also criminalized it. The bulk of Plaintiffs case relies on recorded telephone calls. Plaintiff alleges in its Complaint that Defendants conspired to trap it in some kind of extortion plot and points to seven telephone calls made by Mobrez. (Complaint (Compl.) at 25-26). Plaintiff alleges that after the telephone calls, Defendants filed suit. (Compl. at 28).
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These telephone calls were recorded unbeknownst to Defendants. (Compl. at 41). Plaintiff details how Defendants described the contents of these conversations in declarations filed with the Central District of California. (Compl. at 32-39). Next Plaintiff alleges that these recordings show that Defendants lied in their declarations and that Defendants fabricated allegations against it. (Compl. at 42-43). Plaintiff bases its abuse of process claims largely on these factual allegations. These allegations and the admissibility of these recorded conversations are key to Plaintiffs burden of proof. A California court is more familiar with California law regarding unlawfully recorded conversations than another forum. Plaintiff relies on an order in the underlying action to support its contention that the recordings are admissible under federal law, but the underlying action included federal questions whereas the matter at hand does not. This case is based solely on diversity and does not include any federal questions; thus, the laws of the forum govern the admissibility of recorded conversations. Feldman v. Allstate Insurance Comp., 322 F.3d 660, 666-68 (9th Cir. 2003). In Feldman the Ninth Circuit held: The instant case is distinguishable, however, because it is a diversity action. In diversity cases, a federal court must conform to state law to the extent mandated by the principles set forth in the seminal case of Eric R.R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). Pursuant to Erie and its progeny, federal courts sitting in diversity apply state substantive law and federal procedural law. . . . We hold that California Penal Code 632, like the Nevada law at issue in Wray, is an exception to the general rule that the Federal Rules govern the admissibility of evidence in diversity cases. California Penal Code 632 both makes taping a confidential conversation a crime and limits the admissibility of illegally intercepted conversations. CAL. PENAL CODE 632(a), (d). The statute thereby embodies a state substantive interest in the privacy of California citizens from exposure of their confidential conversations to third parties. We also note that the California Constitution expressly guarantees a right to privacy, and that having ones personal conversations secretly recorded [and
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replayed] may well infringe upon the right to privacy guaranteed by the California Constitution. [citation omitted] For these reasons, we hold that Penal Code 632 is an integral component of Californias substantive state policy of protecting the privacy of its citizens, and is properly characterized as substantive law within the meaning of Erie. Id. at 667-68. The Ninth Circuit in Feldman recognizes that Californias law regarding the admissibility of recorded conversations is important to California law and thus its sovereignty. California has aggressively protected its citizens from an unlawful intrusion into their privacy by criminalizing secretly recording conversations. II. PLAINTIFF NEEDS TO ALLEGE SOMETHING MORE TO MAKE A PRIMA FACIE CASE OF PERSONAL JURISDICTION The Ninth Circuit said in Bancroft, that a foreign act with foreseeable effects in a foreign forum does not always give rise to specific jurisdiction. Bancroft & Masters, Inc. v. Augusta Nat. Inc., 223 F.3d 1082, 1088 (9th Cir. 2000); accord Bils v. Bils, 22 P.3d 38, 41 (2001) (Ariz.) (en banc) (We reject the argument . . . that an intentional tort that causes harm to an Arizona resident will always be sufficient to confer in personam jurisdiction on the Arizona courts. Under the Constitution of the United States, that is where the analysis begins, but is not where it ends.). Personal jurisdiction requires something more. The Ninth Circuit describes something more as express aiming at the forum state, which is a concept that in the jurisdictional context hardly defines itself. Bancroft, 223 F.3d at 1088. The Ninth Circuit then goes on to say that this express aiming requirement is met when the defendant is alleged to have engaged in wrongful conduct targeted at a plaintiff whom the defendant knows to be a resident of the forum state. Id. Importantly, the Ninth Circuit arrived at this decision by analyzing the available cases at that time. Bancroft was an intellectual property case. This case is a malicious prosecution case. Malicious prosecution and/or abuse of process cases are different than other types of cases, even other types of tort cases, because not only is the plaintiff an alleged victim but so is the judicial system that was allegedly abused. This should be an
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important consideration when determining personal jurisdiction in malicious prosecution cases. Based on Plaintiffs reasoning, any time a plaintiff sues an out-of-state defendant, plaintiff subjects himself to specific jurisdiction of that partys home state. The concept of personal jurisdiction is more complex than this. Moreover, because Californias judicial system was allegedly abused, it has a critical interest in hosting any abuse of process claims allegedly committed against it. III. WHITNEY DOES NOT APPLY IN THIS CASE.

Plaintiff argues that this Court has personal jurisdiction over Defendants like it did in another malicious prosecution case Plaintiff filed in this Court, Magedson v. Whitney Information Network, Inc., Case No. 2:08-cv-01715-DGC (Campbell, J.). Plaintiff knows that Whitney is not controlling but still encourages this Court to follow it because Whitney involved identical arguments, identical points of law, virtually identical facts, and at least one identical party. (Plaintiffs Response at p. 3, lines 21-23). In fact, the two cases are not identical nor are the legal arguments. In Whitney, there was no dispute over the admissibility of recorded conversations based on diametrically opposing evidentiary rules. Thus, in Whitney, the sovereignty of the laws of Florida, the forum of the underlying action, were not threatened. IV. CONCLUSION This Court should decline to assert personal jurisdiction over Defendants and dismiss this action. DATE: Oct. 19, 2011 LAW OFFICES OF HARTWELL HARRIS

By /s/ Hartwell Harris Hartwell Harris Attorney for Raymond Mobrez, Iliana Llaneras, and Asia Economic Institute, LLC.

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CERTIFICATE OF SERVICE I hereby certify that on October 19, 2011 I electronically transmitted the attached document to the Clerks Office using the CM/ECF System for filing, and for transmittal of a Notice of Electronic Filing to the following: David Gingras Gingras Law Office, PLLC 3941 E. Chandler Blvd., #106-243 Phoenix, AZ 85048 David Edward Funkhouser, III Quarles & Brady LLP 1 Renaissance Sq. 2 N Central Ave Phoenix, AZ 85004-2391 And a courtesy copy of the foregoing delivered to: HONORABLE G. MURRAY SNOW United States District Court Sandra Day OConnor U.S. Courthouse Suite 622 401 West Washington Street, SPC 80 Phoenix, AZ 85003 __/s/ Hartwell Harris_________

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