Faber v. Townsend Farms, Inc. et al

Filing 55

ORDER: 25 Motion to Dismiss for Lack of Jurisdiction is GRANTED. by Judge R. Brooke Jackson on 6/26/14.(jdyne, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge R. Brooke Jackson
Civil Action No 13-cv-02423-RBJ
SUZANNE FABER, on behalf of herself and all others similarly situated,
Plaintiff,
v.
TOWNSEND FARMS, INC., an Oregon corporation doing business in Colorado and
PURELY POMEGRANATE, INC.,
Defendants.

ORDER

Plaintiff is one of many people allegedly exposed to Hepatitis A after consuming a fruit
product called Townsend Farms Organic Antioxidant Blend (“antioxidant blend”). Townsend
Farms, an Oregon corporation, is the manufacturer of the antioxidant blend and one of the
defendants in this case. The other defendant is Purely Pomegranate, Inc., a California
corporation and the company that arranged for the importation of the pomegranate seeds from a
supplier in Turkey. Purely Pomegranate argues that this Court lacks personal jurisdiction over it.
I agree and grant its motion to dismiss. [ECF No. 25.]
I.

Background
In the spring and summer of 2013, state and federal public health officials were

confronted with an outbreak of Hepatitis A across the United States, sickening people in ten
states. Ultimately the Centers for Disease Control and Prevention (“CDC”) traced the outbreak
to pomegranate seeds imported from Turkey. [ECF No. 30, Ex. 1.] The virus was tracked

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specifically to Townsend Farms Organic Antioxidant Blend, and reportedly at least 25 people in
Colorado became ill from the disease. [ECF No. 30, Ex. 3] Investigators apparently narrowed
the source of the contaminated seeds even further, concluding that the “vehicle for the hepatitis
A virus was a common shipment of pomegranate seeds from Goknur Foodstuffs Import Export
Trading to Purely Pomegranate.” [ECF No. 30 at 3 (citing Ex. 2).] In other words, Purely
Pomegranate, for a fee, arranged for Goknur (in Turkey) to ship the seeds to Townsend (in
Oregon).
Once Townsend received the allegedly contaminated seeds, it used them to manufacture
its antioxidant blend, which was then distributed nationally including to supermarkets in
Colorado. It is possible that other manufacturers received portions of the same shipment from
Turkey. [See, e.g., ECF No. 30 at 4 referencing Scenic Fruit Company.] After the discovery of
the source of the contamination, the Federal Food and Drug Administration (“FDA”) placed the
Turkish supplier on a special alert, and Townsend Farms initiated a voluntary recall of its
antioxidant blend.
Because the matter is before the Court on a motion to dismiss for lack of personal
jurisdiction, some facts about Purely Pomegranate’s business will be helpful. Purely
Pomegranate is a California corporation with its principal place of business in Dana Point,
California. [Klein Decl., ECF No. 25, Ex. B ¶ 2.] The company maintains no offices in
Colorado, has no financial accounts in Colorado, has no employees or agents for service of
process in Colorado, does not own or rent any property in Colorado, pays no taxes in Colorado,
is not licensed to do business in Colorado, and did not ship the allegedly contaminated seeds to
Colorado. Id. ¶¶ 5-8. In short, it has hardly any connection to Colorado besides the facts that 1)
Townsend used Purely Pomegranate’s seeds in a product that Townsend distributed in Colorado,

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and 2) Purely Pomegranate has a single, former customer in Colorado who received three
shipments of a product not at issue in this litigation. Id. ¶ 8. The sales to the former customer
amounted to less than one percent of Purely Pomegranate’s “business” at the time. Id.
Neither party alleges that Purely Pomegranate ever physically took control or possession
of the pomegranate seeds or altered them in any way. And neither party alleges that Purely
Pomegranate shipped the allegedly contaminated seeds to Colorado or caused the seeds to be
shipped there. Ms. Faber does, however, argue that Purely Pomegranate knew or should have
known that its product would end up in many states across the country, including Colorado.
Plaintiff initially filed this case in state court on June 11, 2012. On July 23, 2013, she
filed her First Amended Complaint adding Purely Pomegranate as a defendant. Purely
Pomegranate then filed a notice of removal which was granted by this Court on October 30,
2013. Plaintiff filed her Second Amended Complaint on the same day. [ECF No. 23.]
Proceedings in this case were stayed briefly pending a decision of the United States Judicial
Panel on Multidistrict Litigation on whether to consolidate this case with several other similar
cases throughout the country. That stay was lifted on June 4, 2014 when the Panel denied the
transfer motion. [ECF No. 52.]
II.

Discussion
a. Standard of Review.
“The plaintiff bears the burden of establishing personal jurisdiction, but where, as here,

the issue is raised early on in litigation, based on the pleadings (with attachments) and affidavits,
that burden can be met with a prima facie showing.” Shrader v. Biddinger, 633 F.3d 1235, 1239
(10th Cir. 2011). The Court accepts as true all well pleaded, non-conclusory facts alleged in the
plaintiff’s complaint, and all factual disputes are resolved in the plaintiff’s favor. Id. However,

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the allegations in the complaint are only taken as true to the extent that they are uncontroverted
by defendant’s affidavits. Kennedy v. Freeman, 919 F.2d 126, 128 (10th Cir. 1990).
“To obtain personal jurisdiction over a nonresident defendant in a diversity action, a
plaintiff must show that jurisdiction is legitimate under the laws of the forum state and that the
exercise of jurisdiction does not offend the due process clause of the Fourteenth Amendment.”
Far W. Capital, Inc. v. Towne, 46 F.3d 1071, 1074 (10th Cir. 1995) (emphasis original). Both
the Tenth Circuit and the Colorado Supreme Court have held that “the Colorado long-arm statute
extends jurisdiction to the greatest extent permitted by due process . . . .” Grynberg v. Ivanhoe
Energy, Inc., 490 F. App’x 86, 91 (10th Cir. 2012). Thus, only one inquiry is required, because
“we necessarily address the requirements of the long-arm statute when we engage in
constitutional due process analysis.” Id. (quoting Archangel Diamond Corp. v. Lukoil, 123 P.3d
1187, 1193 (Colo. 2005)).
When analyzing whether a court has personal jurisdiction over a nonresident defendant, it
must consider whether the defendant has “‘minimum contacts’ with the forum state, such that
having to defend a lawsuit there would not ‘offend traditional notions of fair play and substantial
justice.’” Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1070 (10th Cir. 2008).
“In the tort context, we often ask whether the nonresident defendant ‘purposefully directed’ its
activities at the forum state.” Id. at 1071.
There are two types of personal jurisdiction: specific jurisdiction and general jurisdiction.
A forum state may exercise general jurisdiction when the nonresident defendant has “continuous
and systematic” contacts with the forum state. Helicopteros Nacionales de Colombia v. Hall,
466 U.S. 408, 414–16 (1984). These contacts must be “so ‘continuous and systematic’ as to
render [the defendant] essentially at home in the forum State.” Goodyear Dunlop Tires

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Operations, S.A. v. Brown, 131 S.Ct. 2846, 2851 (2011). In the absence of continuous and
systematic contacts the forum court may still exercise specific jurisdiction where the nonresident
“purposefully avail[ed] itself of the privilege of conducting activities within the forum state,” and
the action arises out of those activities. Hanson v. Denckla, 357 U.S. 235, 253 (1958).
The United States Supreme Court recently examined the concept of specific jurisdiction
in products liability cases, and a majority of the Justices rejected the idea that mere foreseeability
that a product will end up in a state, without purposeful targeting of that state, could constitute
“purposeful availment” of the forum. J. McIntrye Machiner, Ltd. v. Nicastro, 131 S. Ct. 2780,
2788-90 (2011) (plurality opinion) (“Here the question concerns the authority of a New Jersey
state court to exercise jurisdiction, so it is petitioner’s purposeful contacts with New Jersey, not
with the United States, that alone are relevant.”); id. at 2792 (Breyer, J., concurring) (“Here, the
relevant facts found by the New Jersey Supreme Court show no ‘regular . . . flow’ or ‘regular
course’ of sales in New Jersey; and there is no ‘something more,’ such as special state-related
design, advertising, advice, marketing, or anything else.”). Finally, when exercising general or
specific jurisdiction, the Court must also ensure that exercising jurisdiction does not offend
“traditional notions of fair play and substantial justice.” Int’l Shoe Co. v. State of Washington
Office of Unemployment Comp. and Placement, 326 U.S. 310, 323 (1945).
Neither party has requested an evidentiary hearing on this motion. For that reason and
because the relevant facts appear to be undisputed, the Court finds that an evidentiary hearing is
not necessary to a determination of the issues. 1 I now turn to the law’s application to the facts of
this case.

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Ms. Faber has requested additional discovery on the topic of personal jurisdiction over Purely
Pomegranate. She has not, however, suggested how additional discovery will be helpful on this issue.
She has pointed to no facts nor has she advanced any theories about Purely Pomegranate’s activities that
suggest there is additional, heretofore undisclosed evidence that could help her make out a prima facie

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b. Colorado’s Long-Arm Statute
As explained above, Colorado’s long-arm statute authorizes the state’s courts to exercise
personal jurisdiction to the maximum extent allowed by federal due process. Grynberg, 490 F.
App’x at 91; see also COLO. REV. STAT. § 13-1-124(1); Lichina v. Futura, Inc., 260 F. Supp.
252, 254 (D. Colo. 1966); Fleet Leasing, Inc. v. District Court of Denver, 649 P.2d 1074, 1078
(Colo. 1982). Ms. Faber argues that the basis for the Court’s personal jurisdiction over Purely
Pomegranate can be found in C.R.S. § 13-1-124(1)(b) which authorizes specific jurisdiction over
a person or agent engaging in “[t]he commission of a tortious act within this state.” She then
cites several cases from Colorado state courts purportedly holding that this long-arm statute
authorizes specific jurisdiction over non-residents committing acts in another state that cause
injury in Colorado. Many of these cases apply some variation of a “stream of commerce” theory
of personal jurisdiction. See, e.g., Found. for Knowledge in Dev. v. Interactive Design
Consultants, LLC, 234 P.3d 673, 678 (Colo. 2010) (finding personal jurisdiction over a
defendant who committed a tortious act outside Colorado causing injury in Colorado where the
defendant purposefully availed himself of the forum state through “hundreds of email and
telephone communications” among other transactions); Etchieson v. Cent. Purchasing, LLC, 232
P.3d 301, 307 (Colo. App. 2010) (finding personal jurisdiction where the foreign defendant did
“something more” than simply place its product in the stream of commerce by manufacturing,
packaging, and advertising the finished product that ended up in Colorado); Vogan v. Cnty. of
San Diego, 193 P.3d 336, 339 (Colo. Ct. App. 2008) (finding personal jurisdiction where
defendant availed itself of Colorado by attempting to garnish plaintiff’s wages in Colorado);
Marquest Med. Prods., Inc. v. Daniel, McKee & Co., 791 P.2d 14, 15 (Colo. Ct. App. 2004)

case of personal jurisdiction. Without something more to suggest the utility of discovery, the Court
declines to authorize it.

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(finding personal jurisdiction under the “doing business” section of the long-arm statute where
defendants “directed numerous representations” to plaintiff in Colorado).
Purely Pomegranate argues that all of these cases are distinguishable from the instant
case. Even accepting that there are some factual differences, the fact remains that each of these
cases arguably included evidence of purposeful availment that is completely lacking in the
instant case. Moreover, each of these cases was decided before the Supreme Court’s decision in
Nicastro.
In the end, whether these cases are on-point or not is a question this Court need not
answer. After all, a plaintiff’s burden of demonstrating personal jurisdiction includes
establishing both that “(1) jurisdiction is proper under the laws of the forum state and (2) the
exercise of jurisdiction does not offend due process.” Doering v. Copper Mountain, Inc., 259
F.3d 1202, 1209 (10th Cir. 2001). Therefore, while I may assume without deciding that
Colorado’s long-arm statute authorizes personal jurisdiction over a defendant who allegedly
engaged in a tortious act outside of Colorado but caused injury within Colorado, I must
nonetheless independently verify whether such an exercise of jurisdiction would comport with
federal due process standards. See Grynberg, 490 Fed. App’x at 99-100 (noting that “it is federal
law, not Colorado’s interpretation of it, that must ultimately determine whether the exercise of
personal jurisdiction comports with due process requirements”). It is to this second inquiry that I
now turn.
c. Federal Due Process Minimum Contacts
i. General Jurisdiction
The Court cannot exercise general jurisdiction over Purely Pomegranate. Ms. Faber’s
response to the motion to dismiss appears to be entirely focused on demonstrating specific

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jurisdiction, but she does make reference to a prior, unrelated interaction between Purely
Pomegranate and a Colorado consumer. It is theoretically possible that she included that
reference in an attempt to prove such continuous and systematic contacts as required for general
jurisdiction. In any event plaintiff’s proffer of a single, unrelated commercial interaction and the
fact that Purely Pomegranate should have known that the seeds it sold to Townsend might end up
in Colorado are insufficient to demonstrate such continuous and systematic contacts that the
defendant is essentially “at home” in Colorado. Cf. Goodyear, 131 S.Ct. at 2851.
ii. Specific Jurisdiction
While Purely Pomegranate’s connection to Colorado is too tenuous to give this Court
general jurisdiction over the company specific jurisdiction could exist if Purely Pomegranate
“purposefully directed its activities at the state’s residents, [and] if the cause of action arises out
of those activities.” Melea, Ltd. v. Jawer SA, 511 F.3d 1060, 1066 (10th Cir. 2007) (internal
quotation marks omitted). The Nicastro case is closely analogous to the facts at hand. In that
case, a UK-based manufacturer of machinery sold its wares to a distributer who then resold them
in several states including New Jersey. The plaintiff, Mr. Nicastro, worked at a New Jersey
business where he was injured by the equipment. Mr. Nicastro brought a personal injury action
in New Jersey’s state courts against the UK-based manufacturer. He based his theory of personal
jurisdiction on the fact that the manufacturer, while it might lack minimum contacts with New
Jersey, nevertheless tailored its products for the broader U.S. marketplace and should have
known that some of its machinery would end up in New Jersey. The U.S. Supreme Court, in a
divided opinion overturning the New Jersey Supreme Court, concluded that such a theory of
foreseeability cannot satisfy the minimum contacts analysis. A four-Justice plurality and two
Justices concurring agreed that even under a relatively relaxed stream of commerce theory of

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jurisdiction there must be some facts evincing purposeful availment or purposeful targeting of
the forum state. Nicastro, 131 S. Ct. at 2788-90 (plurality opinion); id. at 2792 (Breyer, J.,
concurring).
Ms. Faber made no attempt to distinguish Nicastro in her opposition to the motion to
dismiss. She offers an unsupported legal conclusion that “Pomegranate intentionally availed
itself of the channels of interstate commerce, seeking to distribute its product in a number of
states other than California, including Colorado.” [ECF No. 30 at 2.] Aside from that, the Court
can find no facts in the complaint or in the brief suggesting that Purely Pomegranate engaged in
a “regular flow” or “regular course” of dealing with Colorado or did anything else suggesting it
targeted Colorado. Purely Pomegranate has no offices or employees in Colorado, does not pay
taxes in Colorado, does not advertise in Colorado, and did not engage in any commercial
transactions with the plaintiffs in this case. Therefore the Court cannot find “something more”
suggesting that personal jurisdiction would be appropriate in this case. Nicastro, 131 S.Ct. at
2792 (Breyer, J., concurring). 2
III.

Conclusion
Therefore Purely Pomegranate’s motion to dismiss [ECF No. 25] is GRANTED.
DATED this 26th day of June, 2014.
BY THE COURT:

___________________________________
R. Brooke Jackson
United States District Judge

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Because Ms. Faber cannot demonstrate a factual basis for general or specific jurisdiction over Purely
Pomegranate, I do not need to address the additional requirement that jurisdiction comport with
traditional notions of fair play and substantial justice. Cf. Int’l Shoe, 326 U.S. at 323.

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