Honduran Company Cannot Be Forced to Litigate in California

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 Diaz, Reus, & Targ, LLP appeared on the defendants’ behalf and moved to dismiss Global’s lawsuit


August 23, 2017

The Eastern District of California, Judge Nunley, ruled that a Honduran company, Beneficio de Arroz Choloma, S.A. (Bachosa), and its husband and wife owners, Sady Andonie (Andonie) and Joyce Jarufe (Jarufe), cannot be forced to litigate in California.  Judge Nunley issued his Order late last week.

The Order stems from a well-publicized dispute between the three defendants and Sacramento-area-based Global Commodities Trading Group, Inc. (Global), a commodities broker that claims it sold several tons of rice and corn to Bachosa without being paid.  Global filed its $9 million lawsuit based on three contracts Global claims the parties agreed to long after the purported delivery of the rice and corn.  The rice and corn at issue arrived after the purchasers no longer had import licenses under the Central American Free Trade Agreement, resulting in a scandal that came to be known throughout Honduras as El Arrozazo II.  Because of the lack of licenses at the time the goods arrived, Bachosa and Andonie, a well-known Honduran businessman, suffered weeks of negative press in Honduras.  The former Honduran President, Porfirio Lobo Sosa, even weighed in on the matter.

The law firm of Diaz, Reus, & Targ, LLP appeared on the defendants’ behalf and moved to dismiss Global’s lawsuit on the grounds that the Eastern District of California did not possess jurisdiction over the defendants and that Honduran court system was a more appropriate forum to resolve the dispute.  The defendants noted that all of the negotiations had taken place from outside California and none of them had ever been in California on business.  In fact, Jarufe denied ever even signing the Guaranty for which she was sued.  Global, for its part, insisted Andonie had gone to Global’s offices in California to discuss this very commodities deal and that the defendants had agreed to perform certain acts in the state of California.

Last week, Judge Nunley agreed that, even assuming Andonie’s visit was for business purposes, that single visit was insufficient to confer jurisdiction over the defendants.

“We are very pleased to have achieved a dismissal for our clients,” commented Chad S. Purdie, a partner with the firm and lead California counsel.  “They simply had no business being sued in California, a place they have never come for any reason other than tourism.  We were always confident that Global had made a strategic error trying to sue on its home court.”

Bachosa, Andonie, and Jarufe are represented by Chad S. Purdie, Richard Wiedis, and Fausto Sanchez of Diaz, Reus, & Targ, LLP.

Global is represented by Brian M. Taylor of Boutin Jones, Inc.

Case: Global Commodities Trading Group, Inc. et al. v. Beneficio de Arroz Choloma, S.A. et al., Case No.: 2-16-CV-01045-TLN-CKD in the Eastern District of California.

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