Mountain Meadows Pet Products, Inc. v. NT Consulting, LLC et al

Filing 21

ORDER; Defendant's Motion to Dismiss #4 is GRANTED. Defendants Motion to Transfer the case to the Western District of Arkansas is GRANTED. Signed by Judge Brian Morris on 9/25/2024. (TLO) [Transferred from mtd on 9/25/2024.]

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
GREAT FALLS DIVISION

MOUNTAIN MEADOWS PET
PRODUCTS, INC.,

No. CV-24-22-GF-BMM

Plaintiff,

ORDER

vs.
NT CONSULTING, LLC, NATHAN
THOMAS, and SETH KAUFMAN,
Defendants.

INTRODUCTION
Plaintiff Mountain Meadows Pet Products, Inc. (“MMPP”), filed suit against
Defendants Seth Kaufman (“Kaufman”), Nate Thomas (“Thomas”), and NT
Consulting (“NT”) (collectively “Defendants”) for alleged interference with
contract and improper use of trade secrets. (Doc. 1.) MMPP asks the Court for the
following relief: 1) find that a valid oral contract existed between the parties for
sales commissions, not royalty or licensing; 2) enjoin defendants from alleged
misappropriation of trade secrets under Montana law; and 3) grant monetary relief
for tortious interference with business relations. (Id. at 11-12.)
MMPP entered into an oral agreement with NT through Thomas and
Kaufman in 2014. (Id. at 4; Doc. 8.) Gary Turco (“Turco”), who owns MMPP,
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alleges that MMPP paid NT Consulting $3.9 million from March 2018 to February
2024. (Doc. 9-1.) MMPP tendered payment to NT, which NT accepted at its place
of incorporation in Arkansas. (Doc. 5-2 at 4.)
Turco, Kaufman, and Thomas agree that discussions about an agreement to
start a pet food business started while Thomas, Kaufman, and Turco resided in
Arkansas, Illinois, and Utah, respectively. (Doc. 5 at 7.) MMPP and Turco, never
directly refute the fact that Turco lives in Utah. The only reference is that Turco
travels frequently to Montana to oversee operations of MMPP. (Doc. 9; Doc. 9-1.)
Kaufman and Thomas developed pet food formulas in Arkansas and Illinois. (Id. at
8.) Kaufman and Thomas sent pet food formulas for testing in Pennsylvania. (Id. at
9.) Kaufman and Thomas also tested formulas and sent them to Turco in Utah. (Id.)
NT claims that Turco unilaterally decided to manufacture pet food at MMPP in
Montana, using the pet food formulas that all three parties had developed out of
state. (Doc. 5-2.)
Kaufman resides in Illinois. (Doc. 5-1.) Thomas resides in Arkansas. (Doc.
5-2.) Turco resides in Utah. (Doc. 9-1.) MMPP is located in Lewistown, Montana.
(Doc. 1.) Defendants’ moved to dismiss Mountain Meadows’s Complaint for lack
of personal jurisdiction and improper venue pursuant to Fed. R. Civ. P. 12(b)(2)
and (3). (Doc. 4.) Defendants moved, in the alternative, to transfer venue pursuant

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28 U.S.C. §§ 1404 and 1406. (Id.) The Court held a motion hearing on August 28,
2024. (Doc. 20.)

LEGAL STANDARD
A court must possess personal jurisdiction over all parties in a case. Fed. R.
Civ. Pro. 12(b)(2). The plaintiff bears the burden of showing that personal
jurisdiction is appropriate. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d
797, 800 (9th Cir. 2004). When a defendant makes a motion to dismiss for lack of
personal jurisdiction and the motion is based on written materials rather than the
evidence presented, “the plaintiff need only make prima facie showing of
jurisdiction facts.” Id. (quoting Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir.
1990)).
The plaintiff may use the pleadings and declarations to support facts
warranting jurisdiction, but the plaintiff cannot use the allegations in the complaint
alone to meet the jurisdictional burden. Id. The Court accepts as true for purposes
of a challenge to personal jurisdiction any uncontroverted allegations of the
plaintiff. Isakson v. Roberts Markel Weinberg Butler Hailey PC, No. CV 23-139M-DWM, at 4 (D. Mont. Apr. 9, 2024). Controverted allegations are resolved in
favor of the plaintiff. LNS Enters. Ltd. Liab. Co. v. Cont'l Motors, Inc., 22 F.4th
852, 858 (9th Cir. 2022).

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Federal courts generally follow state law in determining personal jurisdiction
over persons. Walden v. Fiore, 571 U.S. 277, 283 (2014). Montana has authorized
its courts to exercise personal jurisdiction over persons so long as it does not
conflict with the U.S. Constitution and the notions of due process. Metropolitan
Life Ins. Co. v. Neaves, 912 F.2d 1062, 1065 (9th Cir. 1990).
General personal jurisdiction is satisfied if there exists a connection between
the defendant and the forum state. The defendant must engage in “continuous and
systematic general business contacts,” that equate to physical presence in the
forum state. Schwarzenegger, at 801. General personal jurisdiction proves difficult
to establish over nonresident defendants if they conduct most of their business out
of state. Conversely, specific personal jurisdiction only requires that the
nonresident defendant have “minimum contacts” with the forum. The specific
jurisdictional inquiry focuses on both the suit-related conduct and any conduct
arising under Montana’s long arm statute. Id. at 802.
Montana law provides that personal jurisdiction exists over a party only if 1)
Montana’s long-arm statute confers personal jurisdiction and 2) the exercise of
personal jurisdiction conforms with “the traditional notions of fair play and
substantial justice embodied in the due process clause” of the Fourteenth
Amendment to the U.S. Constitution. Milky Whey, Inc. v. Dairy Partners, LLC,

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342 P.3d 13, 17 (2015) (quoting Cimmaron Corp. v. Smith, 67 P.3d 258 (2003.)
(explaining Montana’s two-part test)).
Montana’s long-arm statute provides as follows:
All persons found within the state of Montana are subject to the
jurisdiction of Montana courts. Additionally, any person is subject to
the jurisdiction of Montana courts as to any claim for relief arising
from the doing personally, or through an employee or agent, of any of
the following acts:
(A) the transaction of any business within Montana;
(B) the commission of any act resulting in accrual within Montana of
a tort action; [or]
(C) the ownership, use, or possession of any property, or of any
interest therein, situated within Montana;
(D) contracting to insure any person, property or risk located within
this state at the time of contracting;
(E) entering into a contract for services to be rendered or for materials
to be furnished in this state by such person; or
(F) acting as a director, manager, trustee, or other officer of any
corporation organized under the laws of, or having its principal place
of business within this state, or as personal representative of any estate
within this state."

Mont. R. Civ. P. 4(b)(1)(A-F).
Venue is proper in 1) a judicial district in which any defendant
resides, if all defendants are residents of the State in which the district is
located; 2) a judicial district in which a substantial part of the events or
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omissions giving rise to the claim occurred, or a substantial part of property
that is the subject of the action is situated; or 3) if there is no district in
which an action may otherwise be brought as provided in this section, any
judicial district in which any defendant is subject to the court’s personal
jurisdiction with respect to such action. 28 U.S.C.S. § 1391(b)(1-3).
ANALYSIS
I.

This Court lacks personal jurisdiction over NT Consulting, Thomas,
and Kaufman because they have no connection to Montana, and do not
conduct business in Montana.
NT Consulting, Kaufman, and Thomas argue that the Court lacks general

and specific personal jurisdiction over all three parties. (Doc. 5 at 13-16.) The
district court applies the law of the state in which the district court sits where no
applicable federal statute governs personal jurisdiction. Fed. R. Civ. P. 4(k)(1)(A);
Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004)
(citing Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316, 1320 (9th Cir. 1998)).
A. General Personal Jurisdiction
The Court must first determine whether MMPP has made a showing of facts
that indicate Defendants’ conduct is so “continuous and systematic” that
Defendants are physically present in Montana. General personal jurisdiction
depends upon the defendant’s relationship to the forum state. Ford Motor Co. v.
Mont. Eighth Judicial Dist. Court, 443 P.3d 407, 412 (2019). The focus of the

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inquiry into general personal jurisdiction should be into the entirety of a
defendant’s activities, not isolated events or potential business relations in the
state. BNSF Ry. v. Tyrrell, 581 U.S. 402, 414, 137 S. Ct. 1549, 1559 (2017).
In Milky Whey, a Montana dairy company contracted with an out of state
dairy supply company, Dairy Partners, who would ship products to Salt Lake City,
UT for pick up by Milky Whey. Dairy Partners was not a Montana corporation,
never physically entered Montana, and did not purchase or sell product in
Montana. Milky Whey, Inc. v. Dairy Partners, Ltd. Liab. Co., 342 P.3d 13, 17
(2015). The only contact Dairy Partners had with Montana and Milky Whey was
receiving payments and communicating by telephone and electronic mail. Id. Dairy
Partner was found not to be physically present in Montana, and, thus, the court
lacked general personal jurisdiction. Id.
The parties have a similar relationship to the parties in Milky Whey. The
parties further agree that this Court lacks general personal jurisdiction. (Doc. 9;
Doc. 13.) NT’s principal place of business and place of incorporation are in
Arkansas. (Doc. 5-2.) Thomas and Kaufman are also located out of state in
Arkansas and Illinois respectively. (Doc. 5-2; Doc. 5-1.) Gary Turco lives out of
state in Utah and MMPP sends money out of state to Defendants. (Doc. 9-1.)
Defendants are not subject to the Courts general personal jurisdiction because
Plaintiff have presented no clear evidence that NT conducts any activity in
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Montana or that NT maintains “continuous and systematic” contacts with Montana.
MMPP has pointed to one isolated event where Thomas and Kaufman visited
Montana to inspect the manufacturing facility. (Doc. 9-2 at 4.) There are no
instances where Defendants shipped goods to Montana, sold products in Montana,
or solicited business in Montana. The only interactions seem to be remotely
conducted between Defendants and MMPP, and as in Milky Whey, the Court lacks
general personal jurisdiction based on these attenuated transactions. The Court will
then focus its analysis on specific personal jurisdiction.
B. Specific Personal Jurisdiction
Specific personal jurisdiction arises when the lawsuit itself “arises from the
specific circumstances set forth in Montana’s long-arm statute . . . and [when] the
defendant’s suit-related conduct create[s] a substantial connection with Montana.”
Ford Motor Co. at 484 (internal citations omitted.) Specific personal jurisdiction
requires a more careful inquiry into the nature of a defendant’s acts and the effects
that those acts have on the forum state. Montana’s long arm statute, as described
above, allows Montana courts to establish jurisdiction over persons in Montana if
they make transactions in the state, have performed acts that accrued as torts in
Montana, or have any property interests in the state. Mont. R. Civ. P. 4(b)(1).
Montana has developed a two-step test “to determine whether a Montana
court may exercise personal jurisdiction over a nonresident defendant.” Tackett v.
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Duncan, 334 P.3d 920 (2014). We first determine whether personal jurisdiction
exists under Mont. R. Civ. P. 4(b)(1). Specific personal jurisdiction may exist
under Rule 4(b)(1) if the claim for relief arises from any of the acts listed in Rule
4(b)(1)(A-G) and create specific jurisdiction for the purpose of litigating that
particular claim. Milky Whey, 342 P.3d at 17.
If specific personal jurisdiction exists under the first step of the test, the
court then determines whether the exercise of personal jurisdiction conforms with
“the traditional notions of fair play and substantial justice embodied in the due
process clause.” Cimmaron Corp. v. Smith, 67 P.3d 258 (2019) (citing Threlkeld v.
Colorado, 16 P.3d 359). “[I]f personal jurisdiction does not exist under the first
part of the test, further analysis under the second part of the test is unnecessary.”
Id. at 260.
MMPP relies on Grizzly Sec. Armored Express to show that Defendants’
activities constitute “transaction and business” within the state. (Doc. 9 at 8, 10.) In
Grizzly, a nonresident business had numerous business contacts in the state and
formed contracts with other businesses in Montana apart from Grizzly Security.
Grizzly Sec. Armored Express, Inc. v. Armored Grp., LLC, 255 P.3d 143, 149
(2011). The court exercised personal jurisdiction because of the nonresident
defendant’s numerous business contacts within Montana. Id. MMPP, on the other
hand, only contracts with NT, Thomas, and Kaufman to conduct business in
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Montana. Unlike the defendant in Grizzly Security, Defendants have no other
business contacts in Montana, and they do not form contracts with other Montana
entities. (Doc. 5-1; Doc. 5-2.)
MMPP also misplaces reliance on Spectrum Pool Products. Spectrum
“provided repair service to the Swimlift in Montana,” after MW Golden had
shipped the Swimlift back to Montana. Spectrum Pool Prods., Inc. v. MW Golden,
Inc., 968 P.2d 728, 730 (Mont. 1998). MW Golden failed to pay for repairs
conducted on the Swimlift in Montana, and the court found that by failing to pay
debts owed in Montana, MW Golden “purposefully availed itself of the
opportunity to conduct business within [Montana].” Id.
Defendants claim that they have never shipped any products to Montana.
Defendants also allege that they conduct no business in Montana. (Doc. 5 at 2;
Doc. 5-1; Doc. 5-2.) Unlike Spectrum Pool Products, where services and sales
were conducted within Montana, Defendants did not send any trademarked
information to Montana, and they did not solicit sales in Montana. MMPP asserts
that by paying Defendants, Defendants are transacting business with MMPP in
Montana. (Doc. 9 at 2.) As Defendants correctly point out, however “a nonresident does not subject himself to the jurisdiction of Montana by merely entering
into a contract with a resident of Montana.” (Doc. 13 at 7 (quoting Cimmaron
Corp. v. Smith, 67 P.3d at 260-61.)) The focus of a contractual inquiry is where
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Defendants would perform under the contract. Id. (concluding that personal
jurisdiction is not acquired through interstate [transactions] made pursuant to a
contract that is to be performed in another state). MMPP fails to allege any
connection to performance of the contractual terms in Montana.
MMPP relies on Nelson to establish that MMPP has an extensive contractual
relationship with Defendants that warrants the exercise of the Court’s jurisdiction.
(Doc. 9 at 9.) The Montana Supreme Court determined that the defendants had
interjected themselves into Montana by being involved in three different
contractual relationships with two different Montana residents. Nelson v. San
Joaquin Helicopters, 742 P.2d 447, 450 (Mont. 1987). One relationship involved
collecting a debt over a two-year period. Id. The debt collection efforts were
deemed to be extensive and affected both Montana businesses and individual
Montana residents. Id. MMPP alleges here that Defendants acted as sales
consultants for the Montana company. MMPP fails to allege, however, where the
business marketing efforts took place and the location of the advertising audience
targeted by MMPP. (Doc. 9-1 at 2.) Unlike in Nelson, MMPP negotiated the
contract with Defendants out of state. Defendants never sent physical products to
MMPP. Defendants have never attempted to collect a debt owed by MMPP. Id.
MMPP also cites to B.T. Metal Works to support its longstanding business
relationship with Defendants as a basis for assertion of personal jurisdiction. (Doc.
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9 at 10.) The Montana Supreme Court concluded that specific personal jurisdiction
existed in B.T. Metal Works because the defendants had shipped and sold products
on numerous occasions to the plaintiffs within Montana. B.T. Metal Works v.
United Die & Mfg. Co., 100 P.3d 127, 132 (Mont. 2004). This case proves
distinguishable. Defendants neither shipped products to Montana nor interjected
themselves into other ongoing business relationships in Montana. If Defendants
had shipped the “technical ingredients” to Montana or had exercised some control
over how that product had been manufactured within Montana, MMPP may have
been able to show that Defendants had at least minimum contacts to establish
jurisdiction. The fact that nonresident Defendants and MMPP’s contractual
relationship has lasted for over eight years cannot alone establish jurisdiction.
MMPP’s failure to establish jurisdiction on the first prong relieves the Court of the
need to analyze the second prong of whether the exercise of personal jurisdiction
would violate the traditional notions of fair play and substantial justice to conform
to due process.
II.

This Court lacks personal jurisdiction over NT Consulting, Thomas,
and Kaufman but transfer to the Western District of Arkansas Federal
Court would be proper.
A motion to transfer venue under 28 U.S.C. §§ 1404(a) requires a court to

weigh multiple factors when determining whether transfer is appropriate in a
particular case. Jones v. GNC Franchising, Inc., 211 F.3d 495, 498-99 (9th Cir.
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2000). For example, a court may consider: 1) the location where the relevant
agreements were negotiated and executed; 2) the state that is most familiar with the
governing law; 3) the plaintiff's choice of forum; 4) the respective parties’ contacts
with the forum; 5) the contacts relating to the plaintiff’s cause of action in the
chosen forum; 6) the differences in the costs of litigation in the two forums; 7) the
availability of compulsory process to compel attendance of unwilling non-party
witnesses; and 8) the ease of access to sources of proof. Id.
The parties negotiated the agreement from Arkansas, Illinois, and Utah.
(Doc. 5-2. at 2-3.) The parties executed the agreement between Kaufman, Thomas,
NT and Turco. NT, Thomas, and Kaufman are not located in Montana. None of
these parties solicit or conduct business in Montana. No clear connection exists
between the alleged acts and Montana. (Doc. 5-1.; Doc. 5-2.; Doc. 9-1.) MMPP
argues that Thomas and Kaufman are performing transactions in Montana for
purposes of jurisdiction by promoting the business and being paid. (Doc. 9.; Doc.
9-1.) MMPP fails to identify where any parties promote the business. MMPP
admits that NT is paid outside Montana. (Doc. 9 at 4.)
Arkansas, Illinois, and Utah represent states more likely to be familiar with
the law governing this dispute. Turco and Kaufman previously worked at
American Nutrition in Ogden, Utah. (Doc. 5-2 at 2.) Kaufman and Thomas worked
together at Simmons Foods in Siloam Springs, Arkansas. (Id.) The parties
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developed formulas for pet food formulas at separate locations in Utah, Arkansas,
and Illinois. (Id. at 3.) These states have corporations that develop these types of
technical ingredients. These states likely would be familiar with the law
surrounding these disputes.
The parties have presented no evidence of a forum selection clause chosen
by MMPP or Turco. The oral agreement remains vague and all attempts at
renegotiation have failed. (Doc. 5-2 at 5; Doc. 9-1 at 3-4.) Thomas lives in
Arkansas. (Doc. 5-2.) Seth Kaufman lives in Illinois. (Doc. 5-1.) NT Consulting is
incorporated in Arkansas and its principal place of business is located there. (Doc.
5-2 at 4.) Gary Turco lives in Utah but frequently travels to Montana. (Doc. 9-1 at
2.) Thomas asserts that formulas are developed in Arkansas, then sent to
Pennsylvania for testing. (Doc. 5-2 at 5.) The formulas are then sent to Turco in
Utah and used at the manufacturing facility in Montana. (Id.) The parties’ contacts
with Montana prove slim and weigh in favor of transferring the case elsewhere.
It remains unclear where the contacts that relate to MMPP’s allegations of
interference with customers occurred. The cost of litigation likely would be higher
in the other proposed venues than in Montana. Many of the other factors weigh in
favor of transferring the case to Arkansas. The Court finds that the case should be
resolved in the United States District Court for the Western District of Arkansas.

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CONCLUSION
MMMP’s Complaint should be dismissed because it lacks sufficient factual
allegations linking NT, Kaufman, and Thomas to Montana. The Complaint also
proves vague on where the alleged tortious interference took place and whether it
was directed at Montana customers. MMPP fails to satisfy this heightened pleading
standard in its failure to allege with any particularity the circumstances linking the
alleged trade secret infringement and NT’s, Kaufman’s, or Thomas’s conduct. This
Court therefore declines to exercise personal jurisdiction over Defendants.
ORDER
Accordingly, IT IS ORDERED:
1.) Defendant’s Motion to Dismiss (Doc. 4) is GRANTED.
2.) Defendants Motion to Transfer the case to the Western District of
Arkansas is GRANTED.
DATED this 25th day of September, 2024.

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