Professional Documents
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Flextronics v. AliphCom Dba Jawbone
Flextronics v. AliphCom Dba Jawbone
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Pla ntiff requests delayed
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Plaintiff,
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vs.
Case No.
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ALIPHCOM dba JAWBONE,
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Defendant.
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Flextronics Sales and Marketing, Asia Pacific I ,td. ("Flextronics" or "Plaintifr') brings this
Complaint for the sole purpose of obtaining a pre-judgment writ of attachment against Defendant
25 AliphCom dba Jawbon~ ("Jawbone" or "Ddt:ndant"). Flextronics does not waive, and expressly
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reserves, the right to seek further relief through arbitration as authorized by the parties' agreement,
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PARTIES
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Flcxtronics is a corporation organized under the laws of Mauritius and is, through
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its affiliates, in the business of, among other things, designing, manufacturing, and assembling
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in San Francisco, California and is in the business of, among other things, designing and selling
small consumer electronics products, including wireless headsets and personal activity tracking
devices.
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Jurisdiction and venue in this Court exist by virtue of California Code of Civil
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County and because this dispute arose, in whole or in part, in Santa Clara County.
SUMMARY OF CASE
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Jawbone has materially (and repeatedly) breached the terms of a clear and
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unambiguous contract between the parties- to the extent of over $20 million in goods received,
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but not paid for. In advance of an agreed-upon contractual arbitration process to confirm
!8 Jawbone's breaches of the parties ' contract, Flextronics seeks the Court's assistance in securing a
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writ of attaclunent to secure the amounts owed by Jawbone to Flextronics. Without the writ,
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remedy by the parties ' contract, Flextronics may lose the ability to secure repayment for
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significant goods and services already rendered due to Jawbone!s admitted precarious financial
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condition.
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Agreement (the "Agreement"), a true and accurate copy of which is attached hereto as Exhibit A.
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manufacture, assemble, and package certain personal activity tracking devices (the "Products") for
12334 0003/3392792.1
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Jawbone also agreed to provide forecasts of its annual and monthly needs fur the
Products, on which forecasts Flextronics developed the Prices and ensured that necessary
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Flextronics for specific volumes of Products, which Products Flextronics would then have
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Under the Agreement, payments were due to Flextronics from Jawbone within 60
The parties agreed that any late payments from Jawbone would be subject to a
Jawbone also agreed to be financiall y responsible for Materials and certain other
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Products, it became clear after the parties began operations under the Agreement that Jawbone was
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As of June 1, 2014, approximately 8 months into the Agreement, Jawbone had only
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Not only was Jawbone ordering an insufficient number of Products, but Jawbone
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failed to timely pay the Invoices for the Products that were shipped and for other costs incurred by
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After the Products were shipped, Flextronics issued over 225 Invoices for the
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f?) ArrnTTNT
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There are no outstanding quality issues with the Products and the Products shipped
4 $24.1 million, of which $16.5 million was overdue in accordance with the 60-day payment terms.
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6 terminate the Agreement due to Jawbone's material breach of the Agreement and demand for
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payment plan for the outstanding AIR under which Jawbone promised to submit the following
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payments to Flextronics:
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June 2014
$3 million
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July 15,2014
$5 million
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$5 million
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$5 million
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When it became clear that Jawbone did not intend to uphold its obligations under
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the Agreement by adhering to the payment plan, Flcxtronics informed Jawbone that it had no
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choice but to pursue its remedies in court, including a pre-arbitral writ of attaclunent.
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On August 1I, 2014 , Flextronics again attempted to work with Jawbone to resolve
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Jawbone's outstanding debt under the agreement by offering to Jawbone that Flextronics would
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not pursue a writ of attachment if Jawbone paid $2 million on or before August 14, 2014, at 2pm
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Pacific Time and provided an additional propo::;ed payment plan to repay the debt in full in weekly
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installments.
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Jawbone has again failed to make payment to Flextronics by the agreed deadline.
12334.0003/3392792.1
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COMPLAINT FOR WRJT OF ATTACHMENT ARISING FROM : (11 RRFAC"H CW
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Jawbone has fa iled to adhere to and is in breach of the payment plan and its
2 subsequent August 11, 2014 agreement with Flextronics and has only submitted approximately
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5 $19,814,801.45.
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7 August 7, 2014, and continues to accrue in accordance with the late payment terms set forth in the
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Agreement.
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Attached as Exhibit His a summary of the voluminous Orders and Invoices that are
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!2 overdue and for which Flextronics seeks the protections of a writ of attachment.
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Jawbone has acknowledged and does not dispute that it owes the above amounts to
Flextronics.
Though Flextronics has repeatedly demanded payment from Jawbone, Jawbone has
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1\gre~:mcnt
The Agreement provide::; that the parties would submit any disputes under the
to binding arbitration.
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However, the Agreement also specifically provides that a party "has the right to
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attachments."
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Further, the parties agreed that any dispute submitted to a court would be decided
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26 for the amounts owed by Jawbone under the Agreement, including additional tcnnination drunages
27 provided for by the Agreement and the costs of approximately 76,000 more fini shed Products, that
28 Jawbone ordered and Flextronics, through its affiliates, has manufactured but has not yet shipped
12334.0003/33 92792.1
coMPLAINT FOR WRIT oF
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A.T'TAcHMENTARi siNGT-R..oM:
to Jawbone due to Jawbone's breach of the Agreement - which together total an additional several
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million dollars.
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However, until such time as the arbitration proceeding has concluded, Flextronics
seeks a writ of attachment to protect Jawbone's assets necessary to repay only the current overdue
Flextronics does not seek the attachment in this case for any purpose other than to
Flextronics has no information or belief that Flextronics's claim in this case has
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Jawbone's financial condition is perilous and currently insufiicient to pay its debts.
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the real possibility that Jawbone's assets will be insufficient to satisfy the anticipated arbitration
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award.
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The allegations and causes of action set forth herein in support of the writ of
: 7 attachment that Flcxtronics seeks in this Complaint are not in lieu of the
stat~ment
of claim that
18 Flextronics intends to file with the American Arbitration Association pursuant to the lerrns of the
19 parties' Agreement; instead, Plextronics specifically reserves its right to make additional factual
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that is subject to attachment pursuant to subdivision (a) of Code of Civil Procedure Section
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487.010 .
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Pursuant to Code of Civil Procedure Section 483 .050, Flcxtronics further seeks
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delayed public disclosure of thi s proceeding, which is appropriate because Jawbone is not a
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12334.0003/3392792.1
(Breach of Contract)
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4 paragraphs 1 through 48, inclusive, and realleges them as if they were fully set forth herein.
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Flextronics has duly performed under the Agreement and/or has satisfied all
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Despite repeated requests that Jawbone do so, Jawbone has failed and refused, and
9 continues to fail and refuse, to make full and complete payment to Flextronics for the products and
10 services that Flextronics provided to Jawbone, thereby breaching the Agreement.
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12 has suffered damages currently no less than $20,733 ,322.45 and in a total amount that flextronics
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(Account Stated)
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l:let forth
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During the course of the parties' dealings under the Agreement, rlextronics
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submitted numerous invoil:es to Jawbone detailing the amounts due and owing for the products
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Flcxtronics has requested that Jawbone pay these sums. However, Jawbone has
failed and refused, and continues to fail and refuse, to pay Flextronics.
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Flextronics has suffered damages currently no less than $20,733,322.45 and in a total amount that
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12334.0003/3392792.1
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PRAYER
WHEREFORE, Plaintiff, Flextronics Sales and Marketing, Asia Pacific Ltd., demands
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A writ of attachment securing the full amount due and owing to Flextronics under
the parties' Interim Agreement, which at this time totals no less than $20,733,322.45;
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Such other and further relief as this Court may deem just and proper.
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By:
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12334.0003/3392792.1
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