Berry dba Clov-Lan Farms v. Ulrich Hereford Ranch, Inc. et al
MEMORANDUM AND ORDER granting 18 Motion to Dismiss for Lack of Jurisdiction; granting 27 Motion to Dismiss for Lack of Jurisdiction; granting 29 Motion to Dismiss; granting 31 Motion to Dismiss for Lack of Jurisdiction. All claims against defendants are dismissed without prejudice. Signed by District Judge J. Thomas Marten on 07/24/2017. (aa)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
RICHARD BERRY d/b/a CLOV-LAN FARMS,
Case No. 17-2109-JTM
ULRICH HEREFORD RANCH, INC., et. al.,
MEMORANDUM AND ORDER
Plaintiff Richard Berry, doing business as Clov-Lan Farms, purchased nine heads
of cattle from defendant Peter Ulrich at an auction in Alberta, Canada. Plaintiff alleges
that the cattle were sick and unhealthy and is suing to recover damages from the
The court now takes up the following motions: Defendants Lilybrook Herefords,
Inc., Andy Schuepbach, and Hans Ulrich’s, (Lilybrook, Schuepbach, and Hans Ulrich
are collectively referred to as “Lilybrook Defendants”) Motion to Dismiss Plaintiff’s
Complaint for Failure to Establish Personal Jurisdiction Pursuant to Federal Rule of
Civil Procedure 12(b)(2)
(Dkt. No. 31); defendant Claresholm Veterinary Services,
(“CVS”) Motion to Dismiss Plaintiff’s Complaint for Failure to Establish
Personal Jurisdiction Pursuant to Federal Rule of Civil Procedure 12(b)(2) (Dkt. No. 18);
and defendant Balog Auction Services, Inc.’s (“Balog”) Motion to Dismiss Plaintiff’s
Complaint for Failure to Establish Personal Jurisdiction Pursuant to Federal Rule of
Civil Procedure 12(b)(2) (Dkt. No. 29). For the following reasons, the court grants the
Plaintiff, Richard Berry d/b/a Clov-Lan farms, is a Kansas resident who
purchased nine bulls at a live cattle auction on February 23, 2016. Before this purchase,
approximately eighteen emails, with Schuepbach. Plaintiff, Lilybrook Herefords, and
Schuepbach ultimately agreed to purchase Lilybrook cattle. Plaintiff made a $10,000
down payment on December 23, 2014. The parties subsequently rescinded the contract
and plaintiff was refunded the down payment. During this series of events, Schuepbach
told Berry about Ulrich Hereford Ranch cattle.
The details of the conversation between plaintiff and Schuepbach are disputed.
Plaintiff contends Schuepbach made assurances of quality that induced him to purchase
cattle from Peter Ulrich and Ulrich Hereford Ranch; Schuepbach contends he informed
plaintiff that Ulrich’s cattle descended from the same cowherd as Lilybrook’s animals
and categorically denies he ever made any representations about the quality, health,
soundness, or merchantability of Ulrich’s cattle. For the purposes of resolving the
motion to dismiss, the court assumes Berry’s recitation is correct.
Lilybrook is a Canadian corporation that raises and sells purebred Hereford
cattle with its principal place of business in Claresholm, Alberta, Canada. Both
Schuepbach and Hans Ulrich are Canadian citizens who reside in Claresholm, Canada.
Neither Schuepbach nor Hans Ulrich own or lease any real or personal property in
Kansas, have bank accounts or lines of credit in Kansas, owe or paid taxes in Kansas, or
have a mailing address or telephone listing in Kansas. Additionally, Lilybrook has
never registered to do business in Kansas, had a registered agent in Kansas for service
of process, had any offices or employees outside of Canada, maintained an office,
facility, or location in Kansas, had any employees, agents, sales people, personnel, or
representatives that worked or lived in Kansas, done business in Kansas as a partner or
joint venture’ purposefully directed any mass solicitations or advertisements to Kansas,
or leased any property in Kansas.
During 2015 and 2016, Peter Ulrich requested CVS to look over his cattle in
Alberta, Canada. The inspection was conducted in Alberta and an invoice was sent to
Peter Ulrich for the services. CVS is a small and large animal clinic based in Claresholm,
Alberta, Canada. CVS regularly does business with Peter Ulrich and Ulrich Hereford
Balog is a resident of Alberta, Canada, with its primary place of business in
Lethbridge, Alberta, Canada. Balog proclaims itself as “one of the most successful
Purebred Livestock Auctioneer’s [sic] on the Continent.” It sells items through its
auction service to five Canadian Provinces and thirteen States in the United States of
America. Every Thursday, Balog conducts a live video cattle auction on the website
“dmls.ca.” Direct Livestock Marketing Services, (“DLMS”) is a Canadian-registered
website that is owned by a third-party that is neither a subsidiary nor a company
related to Balog.
While using DLMS’s website during an auction, a buyer is able to hear and
watch the auction in real time, to read specific weight, age, gender, breed, and breeder
information about each cattle sold, make bids in real time, and to watch as other
buyers bid on the cattle. Balog’s goal is “to bring the entire world into your corral.”
Prior to the February 23, 2016 auction, DLMS was retained by Ulrich Hereford Ranch to
assist with the auction.
On that date, Ulrich Hereford Ranch sold fifty bulls through Balog. Plaintiff was
unable to personally attend, so he attempted to place bids through the DLMS owned
website. Plaintiff was unsuccessful in making any bids through the DLMS website, and
at the time, Balog was unaware of plaintiff’s failed attempt. Plaintiff, still trying to bid,
called DLMS on the telephone. Whitney Bosovich, a DLMS employee, was present at
the auction and took plaintiff’s call. Plaintiff directed DLMS to place bids on cattle and
Peter Ulrich approved this procedure.
Plaintiff was able to successfully bid by telephone and was the highest bidder on
nine bulls. Payment for the bulls was to be made directly to Peter Ulrich or Ulrich
Hereford Ranch. Balog was not involved in any way with payment. Balog first spoke
with plaintiff nine months after the auction when plaintiff called to complain about the
livestock he had purchased. Plaintiff alleges that Balog endorsed the cattle sold by Peter
Ulrich and Ulrich Hereford Ranch, Inc. in widely distributed advertising material which
stated that the cattle are “high quality performance cattle,” “a powerful set of bulls,”
and “will make a difference and move your program to a higher bracket.”
Lilybrook Defendants did not receive any money or any other benefit from the
sale of cattle by Peter Ulrich or Ulrich Hereford Ranch. Additionally, Ulrich Hereford
Ranch, Inc., Peter Ulrich, and the Lilybrook Defendants had not agreement regarding
the sale of cattle to plaintiff. Plaintiff did not ask for CVS to perform any services. Each
animal was subjected to an inspection where a veterinarian was required to certify,
among other things, that the vet had personally inspected each animal in the shipment
and that each was “free from any evidence of communicable disease.” Dr. Connie
Fancy, on behalf of CVS, inspected each shipment of cattle Peter Ulrich and Ulrich
Hereford Ranch, Inc. sent to Clov-Lan.
CVS contends it never believed the inspection of cattle in Alberta, Canada would
require defending a court case in Kansas; plaintiff, however, contends that each
veterinary health certificate completed for every shipment of cattle from Peter Ulrich
and Ulrich Hereford Ranch, Inc. to Clov-Lan indicated that the cattle were being sent to
Clov-Lan in Pomona, Kansas. For the purposes of resolving the motion to dismiss, the
court assumes that the latter is correct.
Plaintiff does not convert that CVS is not registered to do business in Kansas,
does not conduct business in Kansas, has never applied for a certificate of authority to
conduct business in Kansas, does not maintain a registered agent for service of process
in Kansas, does not pay taxes in Kansas, does not have any offices in Kansas, does not
have any employees, agents, distributors, bank accounts, property, advertise, market or
supply any goods in Kansas.
Plaintiff accuses Lilybrook Herefords, Inc., Andy
Schuepbach, and Hans Ulrich of fraud and negligent misrepresentation by making
assurances concerning the quality of Peter Ulrich Hereford Ranch, Inc.’s cattle, thereby
inducing plaintiff to purchase the cattle. Plaintiff further claims CVS negligently
inspected the cattle and made negligent misrepresentations about their health. Finally,
misrepresentations as to the health of the cattle.
II. Conclusions of Law
A. Personal Jurisdiction Over Lilybrook Herefords, Inc., Andy Schuepbach, Hans Ulrich,
Claresholm Veterinary Services, LTD., and Balog Auction Services, Inc.
1. Legal Standard
The standard governing a Rule 12(b)(2) Motion to Dismiss for Lack of Personal
Jurisdiction is well established. The plaintiff bears the burden of establishing personal
jurisdiction over the defendants. Edison Trust Number One v. Patillo, No. 10-1159, 2010
WL 5093831, at *1 (D. Kan. Dec. 8, 2010) (quotations omitted). The plaintiff must show
that under the laws of the forum state jurisdiction is proper, and that exercising
jurisdiction would not offend traditional notions of fair play and substantial justice. Id.
The extent of the burden depends on the stage at which the court considers the
jurisdictional issue. Id. at 1. The plaintiff’s burden in the preliminary stages of litigation
is light and the plaintiff must make a prima facie showing. Dudnikov v. Chalk &
Vermillion Fine Arts, 514 F.3d 1063, 1069 (10th Cir. 2008); Hutton & Hutton Law Firm, LLC
v. Girardi & Keese, 96 F. Supp. 3d 1208, 1215 (D. Kan. Mar. 31, 2015). This prima facie
showing may be made by an affidavit or other written materials, that, if taken as true,
support jurisdiction over the defendant. TH Agric. & Nutrition, LLC v. Ace European Grp.
Ltd., 488 F.3d 1282, 1286 (10th Cir.2007); Shophar v. Kansas, 2017 U.S. Dist. LEXIS 42390,
*9 (D. Kan. Mar. 23, 2017). The defendant may defeat the plaintiff’s prima facie showing
of personal jurisdiction by presenting a “compelling case demonstrating ‘that the
presence of some other considerations would render jurisdiction unreasonable.’” AST
Sports Sci., Inc. v. CLF Distrib. Ltd., 514 F.3d 1054, 1056 (10th Cir.2008) (quoting Burger
King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985)). In cases of a Motion to Dismiss for
Lack of Personal Jurisdiction, all well-pled factual allegations in the plaintiff’s petition
that are uncontroverted are accepted as true and viewed in light most favorable to the
plaintiff. Wenz v. Memery Crystal, 55 F.3d 1503, 1505 (10th Cir. 1995). If affidavits
conflict, factual disputes must be resolved by the court in the plaintiff’s favor, and a
prima facie showing by the plaintiff, notwithstanding a contrary presentation by the
moving party, is sufficient. Ryan Transp. Servs., Inc. v. Fleet Logistics. L.L.C., Nos. 04-2445CM, 04-2497-CM, 2005 U.S. Dist. LEXIS 24554, at *10 (D. Kan. Oct. 21, 2005) (quoting
Behagen v. Amateur Basketball Ass'n, 744 F.2d 731, 733 (10th Cir. 1984)). Well-pled facts,
as opposed to mere conclusory allegations, must be accepted as true. Wenz, 55 F.3d at
The test for personal jurisdiction first requires asking if any applicable statute
authorizes service of process on the defendants. Dudnikov v. Chalk & Vermilion Fine Arts,
514 F.3d 1063, 1070 (10th Cir. 2008). The second question is whether exercising statutory
jurisdiction comports with the Fourteenth Amendment’s constitutional due process
demands. Id. Kansas law authorizes service of process pursuant ot a “long-arm”
statute.1 The statute corresponds directly with the intent of constitutional limitations
Kan. Stat. Ann. ' 60-308(b) provides in part:
(1) Any person, whether or not a citizen or resident of this state, who in person
or through an agent or instrumentality does any of the following acts,
thereby submits the person and, if an individual, the individual’s
representative, to the jurisdiction of the courts of this state for any claim for
relief arising from the act:
(A) Transacting any business in this state;
(B) committing a tortious act in this state;
(C) owning, using or possessing real estate located in this state;
(D) contracting to insure any person, property or risk located in this state at
the time of contracting;
(E) entering into an express or implied contract, by mail or otherwise, with
a resident of this state to be performed in whole or in part by either
party in this state;
(F) acting in this state as director, manager, trustee or other officer of any
corporation organized under the laws of or having a place of business in
this state or as executor or administrator of any estate in this state;
(G) causing to persons or property in this state an injury arising out of an
act or omission outside this state by the defendant if, at the time of the
(i) The defendant was engaged in solicitation or service activities in
this state; or
(ii) products, materials or things processed, serviced or manufactured
by the defendant anywhere were used or consumed in this state in
the ordinary course of trade or use;
(I) serving as insurer of a person at the time of an act by the person which
is the subject of an action in a court of competent jurisdiction in this
state which results in judgment being taken against the person;
(K) entering into an express or implied arrangement, whether by contract,
tariff or otherwise, with a corporation or partnership residing or doing
imposed by the Fourteenth Amendment. Federated Rural Elect Ins. Corp. v. Kootenai Elec.
Coop., 17 F.3d 1302, 1305 (10th Cir. 1994); Jenkins-Dyer v. Drayton, 2014 U.S. Dist. LEXIS
148130, *7-8 (D. Kan. Oct. 16, 2014). More precisely, if jurisdiction is consistent with due
process, the long-arm statute of Kansas grants jurisdiction over a nonresident
defendant. Jenkins-Dyer, 2014 U.S. Dist. LEXIS 148130, at *8.
The Fourteenth Amendment’s Due Process Clause grants personal jurisdiction
over a nonresident defendant when: (1) the defendant has such “minimum contacts”
with the forum state that they reasonably should anticipate being haled into court there;
and (2) if minimum contacts is established with the forum state, defending a lawsuit in
the forum would not “offend traditional notions of fair play and substantial justice.”
Dudnikov, 514 F.3d at 1070. If jurisdiction is found to be lacking at any stage of the
proceeding, the court must dismiss the case. Scott v. Home Choice, Inc., 252 F. Supp. 2d
1129, 1132 (D. Kan. 2003) (citing Castaneda v. I.N.S., 23 F.3d 1576, 1580 (10th Cir. 1994)).
business in this state under which the corporation or partnership has
supplied transportation services or communication service or
equipment, including telephonic communication services, for a business
or commercial user when the services supplied to the user are managed,
operated or monitored in this state, provided that the person is given
reasonable notice that arranging or continuing the transportation
services or communication services may result in jurisdiction under this
(L) having contact with this state which would support jurisdiction
consistent with the constitutions of the United States and of this state.
(2) A person submits to the jurisdiction of the courts of this state for a claim for
relief which did not arise in this state if substantial, continuous and
systematic contact with this state is established which would support
jurisdiction consistent with the constitutions of the United States and of this
KAN. STAT. ANN. 60-308(b) (2016).
2. Minimum Contacts; General Jurisdiction
The exercise of personal jurisdiction over a nonresident defendant complies with
due process “so long as there exists ‘minimum contacts’ between the defendant and the
forum State.” World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980) (quoting
Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). Personal jurisdiction may be either
general or specific, depending upon the defendant’s contacts with the forum state.
Bristol-Myers Squibb Co. v. Superior Court, No. 16-466, 2017 U.S. LEXIS 3873, at *10 (June
19, 2017). For a court to exercise general jurisdiction, the defendant’s contacts with the
forum state must be “’so continuous and systematic as to render [it] essentially at home
in the forum State.’” Fireman’s Fund Ins. v. Thyssen Mining Constr. of Can., 703 F.3d 488,
493 (10th Cir. 2012) (quoting Goodyear Dunlop Tires Operations v. Brown, 131 S.Ct. 2846,
2851 (2011). See also Hutton & Hutton Law Firm, LLC v. Girardi & Keese, 96 F. Supp. 3d
1208, 1217 (D. Kan. 2015). The court may maintain general personal jurisdiction over a
defendant based solely on the defendant’s business contacts with the forum state, even
if the defendant’s forum-related activities would not otherwise give rise to jurisdiction
by the court. Id.
When determining general jurisdiction, courts consider the following four
factors: “(1) whether the corporation solicits business in the state through a local office
or agent; (2) whether the corporation sends agents into the state on a regular basis to
solicit business; (3) the extent to which the corporation holds itself out as doing business
in the forum state, through advertisements, listings or bank accounts; and (4) the
volume of business conducted in the state by the corporation.” Trierweiler v. Croxton &
Trench Holding Corp., 90 F.3d 1523, 1533 (10th Cir. 1996). See also Macedo v. Green Valley
Chem. Corp., No. 11-2666-EFM, 2013 U.S. Dist. LEXIS 59197, at *13-14 (D. Kan. Apr. 25,
Pllaintiff’s allegations do not show that the Lilybrook Defendants, CVS, or Balog
do business in Kansas. All three are Canadian citizens without ties to Kansas. The
Lilybrook Defendants, CVS nor Balog solicit business in Kansas through a local office or
agents, send agents into Kansas on a regular basis to solicit business, hold themselves
out as doing business in the forum state, through advertisement, listings, or bank
accounts, or have much, if any, volume of business conducted in Kansas. Simply put,
none of these three defendants could be considered “at home” in Kansas. See Hutton &
Hutton Law Firm, 96 F. Supp. 3d at 1217.
Although there is a widely-disseminated advertisement containing a photograph
of Hans Ulrich, Pete Ulrich, and comments by CVS, this is not enough to confer general
jurisdiction. Several courts have found much more than a widely-disseminated
advertisement insufficient to confer general jurisdiction. See, e.g., Nichols v. G.D. Searle &
Co., 991 F.2d 1195, 1198-1200 (4th Cir. 1993) (finding no general jurisdiction over
defendant employing 13 sales representatives and one district manager, which held
district meetings three times a year, held regional meetings twice a year, and sold $9 to
$13 million in products to forum residents); Glater v. Eli Lilly & Co., 744 F.2d 213, 216-17
(1st Cir. 1984) (finding no general jurisdiction over defendant who advertised,
employed eight sales representatives, and sold products in the forum state); Ratliff v.
Cooper Labs., Inc., 444 F.2d 745, 748 (4th Cir. 1971) (finding no general jurisdiction over
defendant who limited its activities in the forum state to selling and advertising). See
also Doering ex rel. Barrett v. Copper Mountain, Inc., 259 F.3d 1202, 1210 (10th Cir. 2001)
(“[T]he mere placement of advertisements in nationally-distributed publications cannot
be regarded as ‘continuous and systematic’ in nature.”). The advertisement plaintiff
cites to here is not sufficient to support general jurisdiction. In the absence of general
jurisdiction the court must analyze whether Kansas may properly exercise specific
jurisdiction over defendants.
3. Minimum Contacts; Specific Jurisdiction
For a court to exercise specific jurisdiction over a defendant, the suit must “arise
out of or relate to the defendant’s contacts with the forum.” Bristol-Myers, 2017 U.S.
LEXIS 3873, at *11. For a court to be able to exercise specific jurisdiction over a claim,
there must be an “affiliation between the forum and the underlying controversy,
principally, [an] activity or an occurrence that takes place in the forum State.” Id. at 13.
If the affiliation is lacking, specific jurisdiction is lacking, regardless of any of the
defendant’s unconnected activities in the State. Id. The defendant’s relationship alone
with a third party is not enough to convey jurisdiction. Id. at 15.
The Tenth Circuit uses a three-part test to determine if specific jurisdiction is
warranted: (1) the out-of-state defendant must have “purposefully directed” its
activities toward the resident of the forum state; (2) the plaintiff’s injuries must “arise
out of” the defendant’s forum-related activities; and (3) exercise of personal jurisdiction
over the out-of-state defendant must be “consistent with traditional notions of fair play
and substantial justice.” Gov't Benefits Analysts, Inc. v. Gradient Ins. Brokerage, Inc., 2012
U.S. Dist. LEXIS 71482, *23 (D. Kan. May 23, 2012). Parts one and two of the three-part
test determine if the plaintiff demonstrates minimum contacts. Id.
A plaintiff must show “purposeful activities” in one of two ways: “purposeful
direction” or “purposeful availment.” Shipp v. Int'l Auto Grp. of S. Fla., Inc., 2016 U.S.
Dist. LEXIS 94973, *5 (D. Utah July 20, 2016). “Purposeful availment” is used most often
in contractual suits and purposeful direction is most often used in tort suits. Dudnikov,
514 F.3d at 1071. Regardless of which one is used, the Supreme Court holds that the
goal of the doctrine is to prevent out-of-state defendants from being bound to appear
before the court for merely “random, fortuitous, or attenuated contacts” with the forum
state. Id. (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985)). “Purposeful
availment” analysis hinges on whether the “defendant’s contacts are attributable to his
own actions or solely to the actions of the plaintiff . . . [and generally] requires . . .
affirmative conduct by the defendant which allows or promotes the transaction of
business within the forum state.” Rambo v. Am. S. Ins., Co., 839 F.2d 1415, 1420 (10th Cir.
1988) (quotations omitted). Minimum contacts must be demonstrated for each
defendant over which the court exercises jurisdiction. Calder v. Jones, 465 U.S. 783, 790
In Walden v. Fiore, the Supreme Court clarified that Calder v. Jones illustrates that a
“mere injury to a forum resident is not a sufficient connection to the forum. Regardless
of where a plaintiff lives or works, an injury is jurisdictionally relevant only insofar as it
shows that the defendant has formed a contact with the forum State.” 134 S. Ct. 1115,
1125 (2014). The appropriate question is, “whether the defendant’s conduct connects
him to the forum in a meaningful way,” not where the plaintiff suffered the injury. Id.
Walden does not do away with the Calder effects test; it limits the holding by noting that
foreign acts with foreseeable effects in the forum state will not always create specific
jurisdiction. United States v. Swiss Am. Bank, Ltd., 274 F.3d 610, 623 (1st Cir. 2001).
To be consistent with due process, for jurisdiction to lie, the defendant’s suitrelated conduct create a substantial connection with the forum State.
Thompson, 136 F. Supp. 3d 1300, 1308 (D. Kan. 2015). The due process limits principally
protect nonresident defendant’s liberties. It is not for the convenience of plaintiffs or
even third parties. Id. Regardless of how significant the plaintiff’s contacts with the
forum may be, the defendant’s contacts are the only decisive contacts when
determining whether the defendant’s due process rights are violated. Id. The plaintiff
“cannot be the only link between the defendant and the forum” Id. at 1308-09.
a. Lilybrook Defendants – Schuepbach, Lilybrook Herefords, and Hans Ulrich
Schuepbach, Lilybrook Herefords, and Hans Ulrich do not have sufficient
“minimum contacts” with Kansas necessary for this court to exercise jurisdiction over
them. The first step, as noted above, is whether the out-of-state defendant purposefully
directed their activities at the resident of the forum state. Gov't Benefits Analysts, Inc.,
2012 U.S. Dist. LEXIS 71482, *23. The court agrees with plaintiff that the correct measure
of specific jurisdiction in this case is purposeful direction because this a tortious claim
dispute. See Dudnikov, 514 F.3d at 1071.
Purposeful direction consists of: “(a) an
intentional action . . . that was (b) expressly aimed at the forum state . . . with (c)
knowledge that the brunt of the injury would be felt in the forum state.” JCM 082763,
LLC v. Deterding, No. 15-1167-EFM-GLR, 2016 U.S. Dist. LEXIS 6597, at *17 (D. Kan. Jan.
Plaintiff contends that Niemi v. Lasshofer, 770 F.3d 1331 (10th Cir. 2014) and the
present case are factually similar. In Niemi, plaintiff worked with the defendants to
obtain a loan of $200-220 million dollars for helping fund a large-scale development
project in Breckenridge, Colorado. Id. at 1338. Plaintiff authorized a formal loan request
after negotiations requiring numerous emails, phone calls, and meetings. Id. Defendant
Burgess sent dozens of emails explaining why the loan hadn't been released and
claimed he was discussing the issue with co-defendant Lasshofer. Id. Eventually,
plaintiff and Burgess traveled to Europe to meet with Lasshofer. Id. Lasshofer and
Burgess entered into a Joint Venture Agreement. The money used to commit the wire
fraud was through a company associated with Lasshofer. Id. at 1339. Lasshofer did not
contest that his actions were intentional. Id. at 1348. The court thus moved to the next
Mr. Lasshofer and his Innovatis group knew unquestionably from the
documents, from his interaction with Burgess, and from his meetings and
conversations with Mr. Niemi that Innovatis was participating or was alleged to
have committed to participate in loans to entities in Colorado for the purpose of
developing a resort at Breckenridge, Colorado. He was, beyond any question,
aware of Mr. Niemi being a Colorado individual; one of his partners being a
Colorado resident as well; the project being in Colorado; the loan funds were to
be extended to and used in Colorado.
Id. The court held that Lasshofer was a primary participant in wrongdoing intentionally
directed at residents of Colorado (the forum state). Id. at 1349-50, i.e., Lasshofer
purposefully directed his activities at the forum state. Id. at 1350.
The court in Niemi did find that the fraud was “expressly aimed at the forum
state.” However, Burgess and Lasshofer stood to profit from their relationship together
and the perpetuation of the fraud. Further, Lasshofer did not contend his actions were
not intentional, he knew of the interactions with Burgess, and he knew of the Colorado
destination and plaintiff’s Colorado residency. In short, Lasshofer knew there was fraud
and knew a Colorado citizen would be harmed in Colorado. In the present case,
plaintiff contends that Lilybrook Defendants and co-defendants Peter Ulrich and Ulrich
Hereford worked together. While the defendants all had specific limited roles in the
chain of events that lead to plaintiff’s purchase of the cattle, their actions, individually
and collectively, are insufficient ot establish farud of any kind, let alone fraud directed
at the forum state of Kansas.Unlike Niemi, there is no assertion that the Lilybrook
Defendants would profit from their representations. Lilybrook did not receive any
money or benefit (financial or otherwise) from the sale of cattle to plaintiff and there is
not a contention to the contrary.
Plaintiff contends that the defendants knowingly worked with Peter Ulrich and
Ulrich Hereford Ranch to sell cattle to Clov-Lan that were in poor health claiming
defendants directed Clov-Lan to purchase more cattle from Ulrich Hereford Ranch,
these making making assurances concerning the quality of the cattle. As noted above,
the court must determine if the defendant’s conduct substantially connects the
Lilybrook defendants to the Kansas. Plaintaiff claims he had a telephone with
Schuepbach after a contract between the two fell through, which provides one
connection to Kansas. Second, plaintiff asserts a widely-disseminated advertisement
representations could give rise to a law suit; however, this type of foreseeability is
inadequate to support personal jurisdiction. A possibility of litigation, without more,
would not give rise to a reasonable anticitpation of being haled into court there. WorldWide Volkswagen Corp. v. Woodson, 444 U.S. 286, 295-96 (1980); Shrader v. Biddinger, 633
F.3d 1235, 1244 (10th Cir. 2011); Jenkins-Dyer v. Drayton, 2014 U.S. Dist. LEXIS 148130,
*9-10 (D. Kan. Oct. 16, 2014); Eaves v. Pirelli Tire, LLC, 2014 U.S. Dist. LEXIS 64866, 2014
WL 1883791 (D. Kan. May 12, 2014). For a defendant to intentionally direct its conduct
at the forum state, there must be more than an allegation of an intentional tort. Far West
Capital, Inc. v. Towne, 46 F.3d 1071, 1077-78 (10th Cir. 1995). Plaintiff does not allege any
further contacts with Kansas by any of the Lilybrook Defendants. The contacts plaintiff
alleges here do not support personal jurisdiction over the Lilybrook Defendants.
b. Claresholm Veterinary Services
This court does not have jurisdiction over CVS. Plaintiff contends that when CVS
inspected the cattle, it did so negligently knowing the cattle would end up in Kansas,
which is sufficient to establish personal jurisdiction over the defendant in Kansas.
Plaintiff urges the court to reach a holding in accord with Fullington v. Union Pac. Fruit
Express Co., 1989 U.S. Dist. LEXIS 2391 (D. Kan. Feb. 1, 1989). For the following reasons,
this court declines to do so.
Plaintiff avers that an inspection of goods by someone from one state resulting in
harm to a person in another state knowing that the goods will be shipped to the
receiving state is sufficient to support jurisdiction in the receiving state. While citing
Fullington, plaintiff overlooks Haley v. Champion Int’l Corp., No. 99-2256-JWL, 2000 WL
1472880, at *3 (D. Kan. Apr. 21, 2000), which has more recently been followed in the the
District of Kansas. Auxier v. BSP Warehouse & Distrib., No. 11-2249-RDR, 2011 U.S. Dist.
LEXIS 99600 (D. Kan. Sep. 6, 2011).
The facts in both Fullington and Haley are similar. In Fullington, the defendant
inspected rail cars engaged in interstate travel. It negligently inspected the door, which
fell and injured a Kansas citizen in Kansas. The defendant knew the train traveled
through Kansas, but was not the ultimate destination). In Haley a defendant negligently
supervised the loading of a tractor-trailer. The tractor-trailer overturned in Kansas,
where plaintiff was injured The defendant knew the tractor-trailer would be going
through Kansas but was not the ultimate destination. As previously mentioned above,
foreseeability alone is not enough to suffice personal jurisdiction under the Due Process
Clause. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 295, 100 S. Ct. 559, 566
(1980). The possibility that a product may cause an injury in Kansas is not enough to
support a finding of personal jurisdiction. Auxier, No. 11-2249-RDR, 2011 U.S. Dist.
LEXIS 99600, at *12 (D. Kan. Sep. 6, 2011). Although the cattle may have been
intentionally inspected by CVS, this is not provide a sufficient basis to exercise personal
c. Balog Auction
Nor does Balog does not have sufficient minimum contacts with Kansas for this
court to exercise personal jurisdiction. Plaintiff contends that Balog purposefully
directed its cattle auction services to Kansas over the Internet sufficiently to allow this
court to exercise personal jurisdiction.
A website may form the basis of personal jurisdiction. In deciding the
jurisdiction issue, the court must look to the level and type of website activity. Payless
Shoesource, Inc. v. Genfoot Inc., 2004 U.S. Dist. LEXIS 19127, *9 (D. Kan. Sept. 21, 2004).
The Tenth Circuit has adopted the analysis from the Western District of Pennsylvania’s
decision in Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F.Supp. 1119 (W.D. Pa. 1997). See
Toytrackerz LLC v. Koehler, 2009 U.S. Dist. LEXIS 44869 (D. Kan. May 28, 2009); see also
Capitol Fed. Sav. Bank v. E. Bank Corp., 493 F. Supp. 2d 1150 (D. Kan. June 29, 2007). In
2 Plaintiff has submitted a Surreply (Dkt. 69) claiming that recent discovery referencing
telephone calls between plaintiff and CVS as to the health of the cattle. Plaintiff claims that this
newly-discovered evidence scontradicts representations in CVS’s motion. The court rejects this
argument for two reasons. First, the court finds that the cited calls are not newly-discovered
evidence which would support a surreply. All the calls involved either plaintiff of his
designated expert; plaintiff should have been aware of the calls at the time of his May 27, 2017
response to CVS’s motion. More importantly, the calls do not contradict the representations in
CVS’s motion that its only involvement in the sale of the cattle was to complete the certificate in
Canada and that after the sale they reponded to calls from the plaintiff. (Dkt. 28, at 1, 4, 6-7).
Because the calls occurred after the sale of the cattle, they are not relevant to the issue of
whether CVS is subject to jurisdiction in Kansas. See Schlumberger Tech. v. Greenwhich Metals,
2008 WL 4758589, *4 (D. Kan. Oct. 28, 2008) (finding no purposeful availment on the basis of
“after-the-fact communications [which] did not give rise to the cause of action”).
Zippo, the court departed from the traditional rules of personal jurisdiction for internet
cases in favor of a sliding scale approach. 952 F. Supp. at 1124. On one end of the scale,
there is a passive website where the defendant merely posts information to the website
and it is accessible to others from another jurisdiction. Id. A passive website is not
enough to confer personal jurisdiction over the defendant. Id. On the other end of the
spectrum, the defendant clearly does business through the internet by entering into
contracts knowingly and repeatedly. Id. In the middle of the scale dwell websites allow
the exchange of information through a host computer, and jurisdiction turns on the
level of interactivity and the commercial nature of the exchange of goods that occurs on
the website itself. Id.
Courts may exercise personal jurisdiction over a party outside of the forum when
that party : “(1) directs electronic activity into the State, (2) with the manifested intent of
engaging in business or other interactions within the State, and (3) that activity creates,
in a person within the State, a potential cause of action cognizable in the State's courts.”
Shrader v. Biddinger, 633 F.3d 1235, 1240-1241 (10th Cir. 2011). An auction seller does not
have control over the ultimate winner of the auction, maintenance of the website, or
control over the targeted audience. United Cutlery Corp. v. NFZ, Inc., 2003 U.S. Dist.
LEXIS 21664, 20003 WL 22851946 at *4 (D. Md. Dec. 1, 2003); Miche Bag, LLC v. Cook, No.
2:09-CV-166TC, 2009 U.S. Dist. LEXIS 51673, at *7 (D. Utah June 17, 2009).
Plaintiff urges the court to follow Dedvukaj v. Maloney, 447 F. Supp. 2d 813 (E.D.
Mich. 2006), an ionternet auction case, to a finding of jurisdiction. In Dedvukaj, the
plaintiff, a resident of Michigan, successfully bid on paintings in an auction through the
website “eBay.” 447 F. Supp. 2d 813, 817 (E.D. Mich. 2006). Upon winning, plaintiff
communicated with defendants through emails, phone calls, verified payment terms,
and sent a check for $649.20 to defendants at the listed address in Syracuse, New York.
The payment was accepted. Id. The court reasoned that defendant transacted business
in Michigan by: communicating through email and telephone; accepting the plaintiff’s
bid during the auction; sending notice and confirmation of the winning bid; confirming
shipping charges for two items; and accepting payment. Id. at 818-19. The court held
that on these facts, plaintiff presented a prima facie case that extended personal
jurisdiction to the defendants under Michigan law. Id. at 819.
Unlike Dedvukaj, plaintiff did not communicate with Balog through emails,
phone calls, verify payment terms, or even accept any money. The auction at issue took
place in Canada, and plaintiff was in Kansas, so he attempted to place a bid through the
auction website but was unsuccessful. Instead, DLMS, who is a third party retained for
the auction, assisted plaintiff over the telephone by placing bids on cattle with the help
of DLMS employee Whitney Bosovich, who was present at the auction. There was not
any communication between plaintiff and any Balog employees until December 2016,
well after the auction had concluded. Further, plaintiff did not discuss payment terms
with Balog, but rather payment was through Peter Ulrich or Ulrich Hereford Ranch
directly. Balog never received or accepted money from plaintiff, again because this was
to be handled directly by Peter Ulrich or Ulrich Hereford Ranch. Because the facts of
this case are distinguishable in the most significant respects from those in Dedvukaj, the
court declines to reach the same outcome.
Next, plaintiff contends that Balog, through the use of DMLS’s website, is a
highly interactive website that allows buyers to “hear live audio of the auctions, watch
live video of the cattle, read specific weight, age, gender, and breed information about
each of the cattle sold, make live bids, and watch as other buyers bid.” Several courts
from other districts, including the District of Utah, have held that the interactive selling
of goods over Internet auction sites does not, in and of itself, subject the defendant to
the jurisdiction of the purchasers. See, e.g., United Cutlery v. NFZ, Inc., 2003 U.S. Dist.
LEXIS 21664 (D. Md. Dec. 1, 2003); Machulsky v. Hall, 210 F. Supp. 2d 531 (D.N.J. 2002);
Winfield Collection, Ltd. v. McCauley, 105 F. Supp. 2d 746 (E.D. Mich. 2000); Shamsuddin v.
Vitamin Research Prods., 346 F. Supp. 2d 804, 810 (D. Md. Nov. 30, 2004); see Miche Bag,
2009 U.S. Dist. LEXIS 51673, at *6. This court finds the analysis from these courts to be
persuasive and declines to find that Balog’s website gives rise to jurisdiction.
Finally, plaintiff contends that Balog claims that it is “the most successful
Purebred Livestock Auctioneer’s [sic]” in North America and that by claiming it sells
cattle across the United States, that this is enough to find Balog purposefully directs
activities at Kansas. For personal jurisdiction in the internet context, the court places an
emphasis on “the internet user or site intentionally directing his/her/its activity or
operation at the forum state rather than just having the activity or operation accessible
there.” Tomelleri v. Medl Mobile, Inc., No. 2:14-CV-02113-JAR, 2015 U.S. Dist. LEXIS
55943, at *22 (D. Kan. Apr. 29, 2015).
In Tomelleri, a Kansas resident filed suit against a California corporation which
developed software applications (apps) for smart phones and mobile devices. No. 2:1422
CV-02113-JAR, 2015 U.S. Dist. LEXIS 55943, at *3 (D. Kan. Apr. 29, 2015). Defendant
maintained a website that was accessible worldwide. Id. The app allowed for
individuals to access a catalogue of information about various fish species located in the
United States, including Kansas. Id. at 4. The app contained images that plaintiff had
copyrighted; defendant did not have permission to use the images. Id. at 5. Plaintiff
produced an exhibit showing that the app had been downloaded in Kansas on 6,663
occasions. Id. at 6. The court reasoned that plaintiff did not specify how defendant
directed electronic activity into Kansas because plaintiff did not allege that defendant
engaged in communications or other interactions with Kansas users, and although the
app had been downloaded, plaintiff did not contend that any Kansas resident had
purchased a copy of the app. Id. at 24-25. Further, there was no manifestation of intent
to do business in Kansas because nothing on the website specified Kansas. Id. at 25-26.
Because there was not anything to suggest that defendant purposefully directed its
activity at the forum state, the court held that it could not exercise specific jurisdiction
over defendant. Id. at 26.
In the present case, defendant Balog used a third party website to reach a
potentially worldwide audience, but plaintiff, as in Tomelleri, could not specify how
Balog directed electronic activity into Kansas. Balog does state that it sells cattle across
the United States, but nothing further shows any directing of activity at Kansas, that
any business is or has been conducted in Kansas, or even that Kansas was a location in
which Balog was trying to do business. Because plaintiff could not show that Balog,
through its website, purposefully directed electronic activity in Kansas, this court may
not exercise jurisdiction over Balog in this case.
This court lacks personal jurisdiction over Lilybrook Herefords, Andy
Schuepbach, Hans Ulrich, Claresholm Veterinary Services, and Balog Auction Services
and, thus, need not consider the arguments concerning due process and notions of fair
play and substantial justice. The court dismisses the aforementioned defendants
IT IS ACCORDINGLY ORDERED this 24th day of July 2017, that defendants
Lilybrook Herefords, Andy Schuepbach, Hans Ulrich, Claresholm Veterinary Services,
and Balog Auction Services’s Motions to Dismiss for Lack of Personal Jurisdiction (Dkt.
18, 27, 29, and 31) are granted. All claims against defendants are dismissed without
___s/ J. Thomas Marten_____
J. THOMAS MARTEN, JUDGE
The court dismisses plaintiff’s claims without prejudice. Thus, plaintiff may refile in a district
that has personal jurisdiction over defendants. See Arocho v. Nafziger, 367 Fed. App’x 942, 951
n.10 (10th Cir. 2010) (“[W]hen a court lacks jurisdiction over a party, the proper disposition is
dismissal without prejudice to permit refiling where personal jurisdiction may be exercised”)
(citing Hollander v. Sandoz Pharm. Corp., 289 F.3d 1193, 1216 (10th Cir. 2002)).
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