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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 and JOHN DOE BORODKIN, husband and wife; RAYMOND MOBREZ and ILIANA LLANERAS, husband and wife; DANIEL BLACKERT and JANE DOE BLACKERT, husband and wife; ASIA ECONOMIC INSTITUTE, LLC, a California limited liability company; DOES 1-10, inclusive, Defendants.

CASE NO.: CV-11-1426-PHX-GMS DEFENDANTS MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION PURSUANT TO F.R.C.P. 12(B)2; AND A STAY OF PROCEEDINGS PENDING OUTCOME OF THIS MOTION (Oral Argument Requested) [Motion to Dismiss for Improper Venue; Or In the Alternative to Transfer For Improper Venue (28 USC 1406(a)); Or In the Alternative to Transfer for Convenience (28 USC 1404(a)); Declarations of Raymond Mobrez, Iliana Llaners, and Hartwell Harris filed concurrently herewith]

Defendants hereby move pursuant to Federal Rule of Civil Procedure 12(b)(2) for dismissal for lack of personal jurisdiction over them. This motion is supported by the following Memorandum of Points and Authorities, the declarations of Raymond Mobrez, Iliana Llaneras, and Hartwell Harris filed and served herewith, and upon the papers, records and pleadings on file herein. Filed concurrently herewith is a Motion to Dismiss

MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION

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for Improper Venue, in the Alternative to Transfer for Improper Venue (28 USC 1406(a)); Or In the Alternative to Transfer for Convenience (28 USC 1404(a)). If the Court the question of venue in favor of Defendants, it will not need to assess the question of personal jurisdiction addressed in this motion. I. INTRODUCTION Defendants hereby move the Court for an Order dismissing Plaintiffs Complaint with prejudice on the grounds that the Court lacks personal jurisdiction over Defendants. Plaintiff has not, and cannot, allege any facts to support the conclusion that Defendants, all residents of California, are subject to jurisdiction in an Arizona forum. Plaintiff has not and cannot plead that any of the defendants have the requisite contacts with Arizona to allow a court in Arizona to exercise personal jurisdiction over them. Accordingly, this Court should dismiss the Complaint pursuant to Arizonas long-arm statute, Arizona Rule of Civil Procedure 4.2(a). II. BACKROUND Plaintiffs Complaint asserts abuse of process claims against Asia Economic Institute LLC (AEI), Raymond Mobrez, and Iliana Llaneras (collectively referred to herein as Defendants) as well as the two lawyers who represented Defendants in the underling matter litigated in the Central District of California. (AEI v. Xcentric Ventures, LLC, Case no. 2:10-cv-01360-SVW-PJW). The Complaint lists two tort causes of action arising out of that litigation: Wrongful Initiation of Civil Proceedings and Wrongful Continuation of Civil Proceedings. A. PARTIES

Plaintiff Xcentric Ventures, LLC (Xcentric) is an Arizona company based in Arizona. (Complaint (Compl.) at 3). Plaintiff claims to operate a consumer information and advocacy website at www.ripoffreport.com (Ripoff Report), where consumers and other visitors to the website can post complaints regarding companies.

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(Compl. at 12). Non-party Ed Magedson is the manager of Xcentric and was a defendant in the underlying action. (Compl. at 9). Defendant AEI is a California limited liability company, with its principal place of business in California. (See Declaration of Raymond Mobrez (Mobrez Decl.) at 6). The company operated from 2000 June 2009 as a free, online, non-governmental publication of current news and events. (Id. at 7). AEI has effectively been a defunct entity since 2009 after false postings on Xcentrics website put it out of business. Id. AEI was owned and operated by its principals Mobrez and Llaneras. AEI has never conducted any business in Arizona or solicited any business in Arizona. AEI has never done any business with the Plaintiff. AEI has no contracts with the Plaintiff or with any Arizona companies. AEI does not own any assets in Arizona, have any offices in Arizona, or have any agents in Arizona, and AEI does not conduct any business in Arizona. (Id. at 8). Defendant Raymond Mobrez is a married man and a resident of the State of California and has been a resident of the State of California for approximately 35 years. (Id. at 3). He has never resided in the State of Arizona. He has never owned property in Arizona. He has never employed agents or employees in Arizona. (Id. at 5). Defendant Iliana Llaneras is a married woman and a resident of the State of California and has been a resident of the State of California for approximately 40 years. (See Declaration of Iliana Llaneras (Llaneras Decl.) at 3). She has never resided in the State of Arizona. She has never owned property in Arizona. She has never employed agents or employees in Arizona. (Id. at 5). B. Plaintiffs Allegations Regarding Jurisdiction

Defendants Mobrez and Llaneras are a married couple residing in California and were the principals of AEI. (Complaint at 5-6) Plaintiff alleges that it is an Arizona limited liability company. Based on these allegations and an alleged amount in

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controversy exceeding $75,000, Plaintiff asserts that this Court has subject matter jurisdiction is over this matter. Next, Plaintiff alleges that this Court has personal jurisdiction of Defendants in a conclusory fashion without any specific factual allegations: Defendants, and each of them, have knowingly, intentionally and deliberately engaged in tortious activity directed at and within the State of Arizona and intentionally directed at Xcentric and Xcentrics principals, officers, agents and employees including non-party Edward Magedson (Magedson), both residents of the State of Arizona. As more specifically alleged herein, Defendants actions were specifically intended to cause harm to Plaintiff within the State of Arizona and, in fact, Defendants actions had the intended effect of actually causing substantial harm to Plaintiff within the State of Arizona. Defendants, and each of them, are therefore properly subject to personal jurisdiction within the State of Arizona. (Compl. at 9.) As outlined herein, none of these alleged facts, even if true, would support this Courts exercise of jurisdiction over these Defendants. The Complaint contains no other allegations that purport to support this Courts jurisdiction over these Defendants. Indeed, Plaintiff cannot allege facts to establish this Courts jurisdiction over these Defendants. III. ARGUMENT Federal due process requires that a nonresident defendant have minimum contacts with the forum state such that the exercise of personal jurisdiction does not offend traditional notions of fair play and substantial justice. International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). To avoid dismissal, a plaintiff must make a prima facie showing of jurisdictional facts. Lake v. Lake, 817 F.2d 1416, 1420 (9th Cir. 1987). Plaintiff has not met its burden of showing a prima facie case of personal jurisdiction. A federal court sitting in Arizona in a diversity proceeding applies Arizonas longarm statute to determine whether it has personal jurisdiction over a defendant. Ariz. R.
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Civ. P. 4(e)(2). Arizonas long-arm statute grants Arizona courts jurisdiction coextensive with the limits of federal due process. Batton v. Tennessee Farmers Mut. Ins. Co., 736 P.2d 2, 4 (Ariz. Ct. App. 1987). Where a defendants activities within the forum state are not so systematic or pervasive as to allow the exercise of general jurisdiction, a court may assert specific jurisdiction, depending on the nature and quality of the defendants contact with the forum state. Lake, 817 F.2d at 1421. Plaintiff has not alleged that any of the Defendants have had systematic or pervasive contacts with Arizona; thus Plaintiff has not alleged that this Court has general jurisdiction over Defendants. A. The Complaint Should Be Dismissed Because Plaintiffs Failed to Meet Their Burden of Proof in Establishing a Prima Facie Case for Personal Jurisdiction. Plaintiff has also failed to plead the necessary minimum contacts with Arizona as to each Defendant to establish specific jurisdiction. Plaintiff has failed to allege that defendants Llaneras and AEI have had any contacts with Arizona, so both should be dismissed forthwith. The only contacts that Plaintiff pleads in its Complaint are attributed to Mobrezseven telephone callscontacts that are far too attenuated to satisfy due process. Plaintiff seems to allege that because Defendants allegedly committed an intentional tort with intended effects in Arizona, the Arizona district court may exercise personal jurisdiction over them. But these contacts are too attenuated a connection to support personal jurisdiction. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 294 (1980); accord Wallace v. Herron, 778 F.2d 391, 395 (7th Cir. 1985) (intentional tort of malicious prosecution allegedly committed against resident of forum state was insufficient to establish personal jurisdiction over defendants), cert. denied, 475 U.S. 1122 (1986)). Courts in the Ninth Circuit traditionally have applied a three-part analysis to determine whether specific jurisdiction exists: (1) the defendant purposefully directs
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activity at the forum state or performs some act by which he or she has availed himself or herself of the privileges of conducting activities in the forum, thus invoking the benefits or protections of the forum states laws; (2) the claim arises out of or relates to defendants forum-related activities; and (3) the exercise of personal jurisdiction comports with fair play and substantial justice. Brainerd v. Governors of Univ. of Alberta, 873 F.2d 1257, 1259 (9th Cir. 1989). The plaintiff must satisfy the first two prongs of the test otherwise personal jurisdiction is not established in the forum state. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004). If plaintiff succeeds, however, the defendant must then show the exercise of jurisdiction would be unreasonable. Id. 1. Defendants Did Not Target Arizona Nor Purposefully Avail Themselves of This Forum When a case involves tort claims, the court uses the effects doctrine to examine whether the defendant purposefully availed himself or herself of the jurisdiction. Panavision Intl v. Toeppen, 141 F.3d 1316, l32l (9th Cir. l998). Under the effects doctrine, jurisdiction may attach if the defendants conduct is aimed at or has an effect in the forum state. Panavision, l41 F.3d at 1321; see also Ziegler, 64 F.3d at 473. Personal jurisdiction, under the effects doctrine, can be based upon: (1) intentional actions (2) expressly aimed at the forum state (3) causing harm, the brunt of which is suffered - and which the defendant knows is likely to be suffered - in the forum state. Panavision, 141 F.3d at l32l; see also Core-Vent Corp. v Nobel Indus. AB, 11 F.3d 1482, 1486 (9th Cir. l993). Defendants did not purposefully avail themselves of Arizona. Defendants filed their lawsuit against Xcentric in California courts and did not direct its lawsuit at Arizona. The lawsuit focused on the harm that Xcentric and Magedson caused Mobrez, Llaneras, and AEI in California. Moreover, Plaintiffs have not alleged what effects it felt in Arizona, if any. Even though Plaintiffs Complaint alleges facts centered around the conduct of Ed Magedson, any effects felt by Magedson are irrelevant because he is not
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a party to this action; plus, he likely lives in California. (See Mobrez Decl. at 10, Ex. A). Defendants actions that allegedly give rise to this abuse of process lawsuit arise out of Defendants actions solely conducted in the state of California. The entire matter was litigated in California. 2. Plaintiff Did Not and Cannot Allege Any Forum-Based Activities

In addition to meeting this prong of the test, Plaintiff must also meet the second prong of the test. If either of the prongs is not met, then no personal jurisdiction attaches to these Defendants. In a specific jurisdiction inquiry, we consider the extent of the defendants contacts with the forum and the degree to which the plaintiffs suit is related to those contacts. A strong showing on one axis will permit a lesser showing on the other. Menken v. Emm, 503 F. 3d 1050, 1058 (9th Cir. 2007). For this Court to have specific jurisdiction over a nonresident, Plaintiffs claims must arise out of Defendants particular activities in the forum state. Bancroft & Masters, Inc. v. Augusta Nat. Inc., 223 F. 3d 1082, 1087 (9th Cir. 2000) (emphasis added). This requirement is satisfied if Plaintiff would not have been harmed but for Defendants conduct in Arizona. See Rio Props., Inc. v. Ro Intl Interlink, 284 F.3d 1007, 1017, 1021 (9th Cir. 2002). The Complaint, however, is replete with factual allegations of Defendants conduct in California. The Complaint alleges that Defendants decided to file suit, to perform legal research, and to formulate a litigation strategy presumably in California where they reside. (Compl. at 23-25.) The matter originated in Los Angeles Superior Court. (Compl. at 28) All the hearings took place in the Central District of California (Compl. at 31, 54, 61-62). Most importantly, all the declarations were made in California. Since Plaintiff founds the bulk of its allegations on these declarations, the fact that the declarations were executed in California dictates against personal jurisdiction. (Compl. at 32-40, 49-50). The only conduct alleged by Plaintiff that could arguably be Arizona-related would be

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seven telephone calls from Mobrez to Arizona. (Compl. at 26). Plaintiff, however, makes no claim that these are the contacts on which it alleges specific jurisdiction. Finally, Plaintiffs personal jurisdiction allegations are found in 9 cited in full above. It is axiomatic that Plaintiffs bear the burden to establish that jurisdiction exists. But Plaintiff bore no burden at all by including boilerplate jurisdiction allegations in its Complaint. Plaintiff cannot make a prima facie showing of jurisdiction to avoid dismissal by resting on the bare allegations of [its] Complaint. Amba Mktg. Sys. Inc. v. Jobar Intl, Inc., 551 F.2d 784 (9th Cir. 1977). 3. Subjecting Defendants to Jurisdiction in Arizona for California Litigation is Unreasonable Even if Plaintiff has met the pleadings standards of both prongs above, the exercise of jurisdiction is reasonable if it does not offend traditional notions of fair play and substantial justice. International Shoe, 326 U.S. at 316. The reasonableness prong exists to protect defendants from unfairly inconvenient litigation. World-Wide Volkswagen, 444 U.S. at 292. Courts balance seven factors to determine the reasonableness of exercising jurisdiction: (1) the extent of the defendants purposeful interjection into the forum states affairs; (2) the burden on the defendant of defending in the forum; (3) the extent of conflict with the sovereignty of the defendants state; (4) the forum states interest in adjudicating the dispute; (5) the most efficient judicial resolution of the controversy; (6) the importance of the forum to the plaintiffs interest in convenient and effective relief; and (7) the existence of an alternative forum. Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985). 1. Defendants Purposeful Interjection into Arizona was De Minimis. Plaintiff has alleged no interjection into Arizona by Defendants Llaneras and AEI. The only other purposeful interjections alleged by Plaintiff are seven phone calls to Arizona by Mobrez. Considering how small these interjections are, this factor weighs in favor of Defendants.
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2. Defending This Action in Arizona Would Be a Heavy Burden on Defendants. Defendants would be unfairly burdened if they are haled into court in Arizona. Defendants are two individuals and a defunct company; the expenses of litigating in a foreign forum would be significant. On the other hand, this type of litigation is a cost of doing business for Xcentric. In fact, Ed Magedson brags in an email to Mobrez: Weve spent over 3.4 million in legal fees never lost a case people know, we DO NOT RMEOVE [sic] REPORTS You can file a rebuttal No amount of money can change this. Even if you were the pope,. [sic] It would not make a difference. The pope has access to a computer Im sure. (Ex. A to Mobrez Decl.) This factor weighs in favor of Defendants. 3. Jurisdiction in an Arizona Forum Significantly Conflicts with the Sovereignty of California. This factor is critical for this Court to consider. Plaintiff admits in its Complaint that it was secretly taping telephone conversations between Magedson and Mobrez: Unbeknownst to Defendants MOBREZ and LLANERAS, all of Defendant MOBREZs calls to the Ripoff Report website were automatically recorded by Xcentrics phone system. (Compl. at 41). The allegations in Plaintiffs Complaint depend heavily on these recorded conversations. These recordings, though, violate California penal law, and such tapes are inadmissible as evidence at trial in California. Arizonas laws differ. Their admissibility was a contentious issue in the underlying action. Since this is a case based solely on diversity and does not include any federal question, 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). The statute outlawing secretly taping conversations embodies a state substantive interest in the privacy of California citizens from exposure of their confidential conversations to third
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parties. We also note that the California Constitution expressly guarantees a right to privacy. Id. at 667. Furthermore, the Hon. Stephen V. Wilson stated on page 22 lines 4-10 in his 7/19/10 Order issued in the underlying case: Furthermore, even though the recordings complied with the laws in the forum state in which the recordings were made (Arizona), if the Court were to engage in a choice-of-law analysis between Arizona and California law, the Court undoubtedly would apply California law, given Californias strong public interest in protecting the confidentiality of certain communications. (Ex. D to Harris Decl.). This factor weighs in favor of Defendants. 4. Arizona Has No Interest in Adjudicating this Dispute. Arizona has no interest in adjudicating an abuse of process lawsuit where the alleged abuse did not occur in its jurisdiction; the underlying case occurred in California. On the other hand, California has a substantial interest in adjudicating this dispute. First, the underlying litigation and the alleged abuse of the system occurred in California. Second, as described above, the admissibility of recorded conversations is at issue, and California has substantial interest in protecting its citizens privacy rights and the state constitution. This factor weighs in favor of Defendants. 5. Jurisdiction in California is the Most Efficient Judicial Resolution. In evaluating this factor, courts primarily focus on where the witnesses and the evidence are located. CoreVent Corp. v. Nobel Indus. AB, 11 F.3d 1482, 1489 (9th Cir. 1993). California is a more convenient forum because all of the Defendants named in this action are residents of California and will likely be witnesses at trial as well as deposed in this matter. Importantly, Ed Magedson who was a defendant in the underlying action but not a party in this action is likely a resident of California. (Ex. A to Mobrez Decl.). Furthermore, as evidenced by the underlying action, Plaintiff has already shown that it can easily litigate in California. Plus, it did not object to personal jurisdiction during that

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matter evidencing that litigation in California was not a substantial hardship on it. This factor weighs in favor of Defendants. 6. The Importance of Arizona to the Plaintiffs Interest in Convenient and Effective Relief is Minor. [I]n this circuit, the plaintiffs convenience is not of paramount importance. Dole Food Co. Inc. v. Watts, 303 F.3d 1104, 1116 (9th Cir. 2002). Again, Plaintiff has already shown that it can easily litigate in California. Plus, in the underlying matter, it did not object to personal jurisdiction or move to transferevidencing that litigation in California was not a substantial hardship on it. This factor weighs in favor of Defendants. 7. The Central District of California is the Preferred Alternative Forum. This action could have been brought and should have been brought in the Central District of California. In fact, it is the preferred forum under federal statute. This factor is fully explored in Defendants Motion to Dismiss for Improper Venue filed concurrently herewith. IV. CONCLUSION Plaintiffs Complaint should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction over all defendants. DATE: Sept. 30, 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 September 30, 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 Gringais Gingras Law Office, PLLC 3941 E. Chandler Blvd., #106-243 Phoenix, AZ 85048 Lisa J. Borodkin Iverson, Yoakum, Papiano & Hatch 633 W. 5th Street, Suite 6400 Los Angeles, CA 90071 Daniel Blackert P.O. Box 2092 Los Angeles, CA 90078 And a courtesy copy of the foregoing delivered to: HONORABLE G. MURRY SNOW United States District Court Sandra Day OConnor U.S. Courthouse Suite 622 401 West Washington Street, SPC 80 Phoenix, AZ 85003-215 __/s/ Hartwell Harris_________

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