NexGen HBM, Inc. et al v. ListReports, Inc. et al .
REDACTED PUBLIC VERSION of 151 SEALED ORDER granting 33 Motion to Dismiss for Lack of Jurisdiction or, In the Alternative, to Transfer. This action is TRANSFERRED to the United States District Court for the Central District of California. See Order for more information. (Written Opinion. Redactions Approved by Judge Susan Richard Nelson on 09/12/2017. (SMD)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
NexGen HBM, Inc., and Home Buyers
Case No. 16-cv-3143 (SRN/FLN)
FILED UNDER SEAL
ListReports, Inc., Ajay Shah, Randy
Shiozaki, and Esther Yang,
Michael M. Lafeber and Scott M. Flaherty, Briggs & Morgan, PA, 80 South 8th St., Ste.
2200, Minneapolis, MN 55402 for Plaintiffs.
Matthew B. Kilby, Randall E. Kahnke, and Lauren W. Linderman, Faegre Baker Daniels
LLP, 90 South 7th St., Ste. 2200, Minneapolis, MN 55402 for Defendants.
SUSAN RICHARD NELSON, United States District Judge
This matter is before the Court on Defendants’ Motion to Dismiss for Lack of
Personal Jurisdiction or, In the Alternative, to Transfer (“Mot. to Dismiss”) [Doc. No. 33].
For the reasons set forth below, Defendants’ Motion to Dismiss is granted.
A. Factual Background
1. Plaintiffs and Their Products
Plaintiffs NexGen HBM, Inc. and Home Buyers Marketing, Inc. (collectively,
“HBM”) are Minnesota corporations with their principal places of business in Minnesota.
(Compl. at ¶¶ 1–2 [Doc. No. 1].) HBM provides products and services that help mortgage
lenders “increase their productivity and business origination . . . .” (Id. at ¶ 11.) In relevant
part, HBM created Home Scouting, a web-based program that allows users to search for
available homes, compare homes for sale, obtain property tax records, view data about
individual properties, obtain realtor remarks, and communicate with realtors and lenders,
along with other interactive features and targeted search capabilities. (Id. at ¶¶ 15–16.)
HBM explains that “[w]hile other companies provide analogous search services to potential
home buyers,” Home Scouting is unique because it is designed to be offered by lenders to
home buyers and/or realtors and contains nearly all MLS property listings. (See id. at ¶¶
12–13, 18–22, 26.)
HBM also sells other related technologies, such as Sold Home Alert—a web-based
program that alerts home buyers to open houses matching their interests, new listings, and
price changes—and a Customer Relationship Management platform (collectively with
Home Scouting, “HBM’s Proprietary Products”). (See id. at ¶¶ 11, 17, 22–24.) HBM’s
Proprietary Products are used by customers nationwide, including in Minnesota. There is
no evidence in the record identifying what percentage of HBM’s business is done in
Minnesota or involves customers based here.
HBM spent many years and invested millions of dollars to develop, market, and
support its Proprietary Products. (Id. at ¶¶ 11, 20.) The Proprietary Products are not
publicly available, but instead may only be used by lenders, realtors, and home buyers who
are given access to them. (See id. at ¶ 27; Decl. of Jeff Colville in Opp. to Mot. to Dismiss
(“Colville Decl.”) at ¶ 5 [Doc. No. 54].) For instance, to log in to Home Scouting, a HBM
client must first provide the user with a unique link or code.1 (Colville Decl. at ¶ 4.)
Products. (Decl. of Matthew B. Kilby in Support of Mot. to Dismiss (“First Kilby Decl.”)
Proprietary Products “is only for your personal, non-commercial use as a bona fide
prospective buyer of such property, and may not be used commercially or disclosed, copied,
retransmitted or distributed to any other person.” (Id. at 2.) Later, the user must again agree
any information which is proprietary to or owned by HBM II relating to the
Home Scouting Report, now existing or reasonably foreseeable, whether in a
Defendants dispute whether these authorization codes are closely held, claiming that
they can be found through a simple Google search. (Defs.’ Reply at 17 [Doc. No. 58].)
They argue that because access to HBM’s Proprietary Products is essentially public,
Plaintiffs cannot claim that Defendants “hacked” their website or that the information on
those sites is proprietary and confidential. (See id. at 13–15; Defs.’ Mem. in Supp. at 13–
14 [Doc. No. 34].) However, the Court need not address those issues here as they go to
the substance of Plaintiffs’ misappropriation claims, not the issue of personal jurisdiction.
written, electronic, verbal, or other form, and includes, without limitation, the
following: (a) all websites designed, created and developed by HBM II or its
affiliated companies, including all passwords, text, content, color schemes,
images, graphics, information, look and feel, layout, methodology, metrics,
graphical interfaces and functionality for each website; (b) information and
materials comprising or relating to any current, future or proposed products or
services; (c) analyses, factual evaluations and/or summaries of real estate
listings, compilations, data bases, studies or other printed or electronic
documents prepared by anyone in connection with the review or evaluation of
any information developed by or pertaining to HBM II; (d) copyrights,
patents, patents pending, electronic records, computer processes, computer
systems, computer hardware configurations, software source codes and
software owned, developed or acquired by HBM II; and (d) other information
relating to HBM II that is not commonly known to persons or other sources
outside of HBM, whether or not specifically marked or identified as
“confidential” or “trade secret” by HBM II.
Limitations on Use of Trade Secrets. You agree that you will not: (a)
disclose, reveal, divulge, disseminate or deliver (collectively, “Disclose”) any
Trade Secrets to any third party; (b) use, utilize, employ, lecture upon,
publish, rewrite, reproduce or reverse engineer (collectively, “Use”) any
Trade Secrets, for your benefit or for the benefit of any other person or entity;
or (c) authorize or permit any third person or entity to Disclose or Use any
Miscellaneous. If you are found to be in violation of the terms of this Terms
of Use, your access to this website may be temporarily or permanently
disabled and you may be held liable for all expenses and damages, including
court costs and attorneys’ fees, incurred by HBM II, or any of its Affiliated
Companies, caused by your failure to abide by the terms and conditions of
listings that match your search criteria on your free Home Scouting Report
website. By clicking on the “I Accept” button below you (1) agree to the
collected with the real estate broker and loan officer who may have referred
clause, nor do they mention HBM’s geographic location in Minnesota.
HBM’s Proprietary Products are hosted on servers located in Minnesota. (Colville
Decl. at ¶ 21.) When a user selects the “Contact Us” tab of the Home Scouting website, a
telephone number containing a “952” area code associated with Minnesota appears. (Id.,
Ex. C [Doc. No. 54-3].)
2. Defendants and Their Business
Defendant ListReports, Inc. (“ListReports”) is a California corporation with its
headquarters in California. (Decl. of Ajay Shah in Supp. of Defs.’ Mot. to Dismiss (“First
Shah Decl.”) at ¶ 5 [Doc. No. 41].) ListReports has no offices or employees in Minnesota,
is not registered to do business in Minnesota, nor does it pay taxes or own any property in
Minnesota. (Id.) The company is a relatively recent start up and originally developed and
sold products designed to help lenders and realtors create flyers and websites related to
home sale events like open houses and property listings. (Compl. at ¶ 28; see Suppl. Decl.
of Michael M. Lafeber (“Third Lafeber Decl.”) [Doc. No. 119], Ex. A at PM-0121902 [Doc.
No. 120].) As described below, ListReports later expanded its product offerings.
Defendant Ajay Shah (“Shah”) is the co-founder and CEO of ListReports. (First
Shah Decl. at ¶ 1.) Shah is a resident of California, has never lived in or visited Minnesota,
and owns no property in Minnesota. (Id. at ¶ 4.) Defendant Randy Shiozaki (“Shiozaki”) is
the co-founder and Head of Design for ListReports. (Decl. of Randy Shiozaki in Supp. of
Defs.’ Mot. to Dismiss (“Shiozaki Decl.”) at ¶ 1 [Doc. No. 37].) He is a resident of
California, has never lived in Minnesota or visited (other than perhaps for a layover at the
For all exhibits that contain them, the Court cites to the Bates numbers as they appear in
the lower right hand corner of the document.
airport), and owns no property in Minnesota. (Id. at ¶ 4.) Defendant Esther Yang (“Yang”)
is a Designer at ListReports. (Decl. of Esther Yang in Supp. of Defs.’ Mot. to Dismiss
(“Yang Decl.”) at ¶ 1 [Doc. No. 38].) She is a resident of California, has never lived in or
visited Minnesota, and owns no property in Minnesota. (Id. at ¶ 4.)
3. Relevant Third Parties
Matt Duffy (“Duffy”) is a co-founder of ListReports and occupies a management
position at the company, although his exact role is unclear. (See, e.g., Decl. of Michael M.
Lafeber (“Second Lafeber Decl.”) [Doc. No. 88], Ex. B at LR000614 [Doc. No. 92].) Duffy
is involved with marketing, selling, and supporting ListReports’ products around the
country. (See id. at LR000614, 1258, 1765, 1945, 2424, 5265–66.) There is no evidence
regarding where Duffy resides.
Sondra Jovel (“Jovel”) is the Director of Sales for ListReports. (Second Lafeber
Decl., Ex. A at LR001152 [Doc. No. 90].) Jovel is also involved with marketing, selling,
and supporting ListReports’ products around the country. (See id. at LR001152, 2171,
4312, 5691.) There is no evidence regarding where Jovel resides.
Prospect Mortgage, LLC (“Prospect”) is a Delaware limited liability corporation
with its principal place of business in California. (Kilby Decl., Ex. 6 [Doc. No. 35-6].)
Prospect does business in many states and is a registered lender in Minnesota. (See id.) The
record contains no evidence regarding what percentage of Prospect’s business, if any, is
conducted in Minnesota. Until May of 2016, Prospect was a longtime HBM customer who
used HBM’s Proprietary Products. (See Compl. at ¶ 34; Colville Decl. at ¶¶ 10–12.)
Skyline Home Loans (“Skyline”) is a longtime HBM customer who uses HBM’s
Proprietary Products. (See Compl. at ¶¶ 38–39; Colville Decl. at ¶ 18.) The record implies
that Skyline does business in many states, but there is no evidence whether that includes
Minnesota, and if so, the extent of Skyline’s business there.
4. The Alleged Misappropriation
From April of 2015 through early 2016, ListReports worked to create a program that
would compete with HBM’s Proprietary Products.
Beginning in April of 2015 and
continuing for nearly a year thereafter, Shiozaki and Yang repeatedly logged into Home
Scouting using access codes provided to them by Prospect and Skyline. (Compl. at ¶¶ 30–
32; Colville Decl. at ¶¶ 13–14.) In doing so, they had to—and in fact did—agree to HBM’s
54-1, 54-2].) In total, Shiozaki accessed Home Scouting at least forty-four times while
Yang accessed it at least ten times. (Colville Decl. at ¶¶ 13–14.) Shah also admits that he
“viewed portions” of Home Scouting “likely in the first half of 2015,” but does not recall
“creating a username or account.” (Decl. of Michael M. Lafeber (“First Lafeber Decl.”)
[Doc. No. 72], Ex. C (“Defs.’ Ans. to Interrogs.”) at 93 [Doc. No. 72-1].)
HBM alleges that Shiozaki and Yang used these accesses to copy or otherwise
misappropriate HBM’s Proprietary Products in their efforts to reverse-engineer a competing
product. (Compl. at ¶¶ 30, 34.) Shiozaki and Yang do not deny accessing Home Scouting,
but claim that they did so in their capacity as ListReports employees and while physically
For this exhibit, the Court cites to the ECF page numbers as they appear in the upper
right hand corner of the document.
located in California. (Shiozaki Decl. at ¶ 5; Yang Decl. at ¶ 5.) There is no evidence that
Shiozaki or Yang had a “proper” purpose for their accesses (e.g., they were personally
involved with buying or selling a home, or that ListReports was a contractor, partner, or
client of HBM).
In December of 2015, members of ListReports—including Shah and Duffy—met
with members of Prospect in California. (Third Lafeber Decl., Exs. C, D [Doc Nos. 122,
123].) After this meeting, Shah emailed the Prospect team thanking them for the meeting
and stating that he was “really looking forward to working with [Prospect] on a significant
partnership.” (Third Lafeber Decl., Ex. E [Doc Nos. 124].) That same day, Shah emailed a
Prospect employee to schedule a time for a “req’s gathering session” so that ListReports
could provide Prospect with “fully completed specs and designs and timelines before the
end of the year . . . .” (Third Lafeber Decl., Ex. F [Doc. No. 125].)
On December 21, 2015, Shah emailed Prospect with “some of the designs we’ve
been thinking about” attached. (Third Lafeber Decl., Ex. G at PM-011070 [Doc No. 126].)
The attachment contained a PowerPoint presentation listing Shah and Shiozaki as the
contacts for any questions. (Id. at PM-011086.) An overview slide explained that the
presentation contained “preliminary designs for discussion as we move forward with our
partnership.” (Id. at PM-011072.) In relevant part, the slide stated that the proposed
designs covered “Home Search (aka HBM Replacement)” and that “finalizing designs is a
major first step in accelerating development and launch.” (Id.)
On March 15, 2016, Shah sent Prospect a letter stating that ListReports was thirty
days away from “delivering all key deliverables” including “all components that are
currently supplied by HBM within your organization.” (Third Lafeber Decl., Ex. H [Doc
No. 127].) Days later, ListReports employees exchanged emails with Prospect—with Shah
and Shiozaki copied—aimed at scheduling a product development call. (Third Lafeber
Decl., Ex. I [Doc No. 128].) These emails proposed “action items” for ListReports and
Prospect. (Id. at PM-008362–63.) Prospect would “provide [a] spreadsheet inclusive of all
features that HBM has to ensure HBM replacement product covers the bases.” (Id. at PM008362.)
ListReports would share a “Google Doc” with two Prospect employees
“displaying all [the] main features that are being accounted for during Gen 1 launch of
HBM replacement product. This can be used to compare against required HBM features.”
(Id. at PM-008363.) In a “General Notes” section, the email stated that “[p]rior to launch of
HBM replacement, both sides to be mindful of [Prospect’s] priority list of Transitioning
current HMB [sic] consumers, Transitioning Agents, Transitioning LO’s . . . .” (Id.)
Also in March of 2016, Duffy wrote to a Minnesota-based lender to inquire if it used
HBM’s Proprietary Products.
(Second Lafeber Decl., Ex. D [Doc. No. 96].)
expressed his belief that HBM was “based near” the Minnesota lender. (Id.) Duffy also
explained that ListReports was “looking to build a product with some similar functionality”
to HBM’s Proprietary Products and wanted to know if the Minnesota lender was in an
“enterprise arrangement” with HBM. (Id.) The lender said it was not using HBM’s
Proprietary Products and did not expressly confirm Duffy’s suspicion that HBM was
located in Minnesota. (Id.)
Presumably, “LO” stands for “loan officer.”
ListReports’ efforts culminated with the launch of its “Nest.Me” product and related
services in mid-2016. (Compl. at ¶ 35.) HBM alleges that Nest.Me is a “knock-off” of its
Proprietary Products that contains many of the same “hallmarks, functionality and features .
. . .” (Id. at ¶ 36; see Colville Decl. at ¶ 17.) Moreover, HBM claims that Nest.Me “was
built and developed specifically to allow for the accessing, importation and downloading of
HBM’s confidential and proprietary databases, including, without limitation, HBM’s private
consumer real estate search activity and information databases.” (Compl. at ¶ 37.)
5. Marketing Nest.Me and the Alleged Misrepresentations
Since the launch of Nest.Me—and immediately prior to that launch—ListReports
has actively marketed, sold, and supported the product nationwide. Relevant here are
ListReports’ activities in Minnesota. ListReports does not specifically target Minnesota
with advertising or other solicitations. (First Shah Decl. at ¶ 6.) However, according to
ListReports, it currently has approximately 95 clients who “may be located or reside in
Minnesota and who may use the Nest.Me product at issue.” (Defs.’ Ans. to Interrogs. at 3,
7–9.) These customers make up less than five percent of ListReports’ revenue. (First Shah
Decl. at ¶ 6.)
Although ListReports does not specifically target Minnesota with advertisements and
solicitations, it has marketed, sold, and supported its Nest.Me product to Minnesota-based
lenders (or lenders with offices and employees in Minnesota).5 (See, e.g., First Lafeber
Defendants dispute whether many of these lenders are actually located in Minnesota.
The Court has carefully sorted through the voluminous record and cites to those
communications where it is clear that the lender has, at a minimum, Minnesota-based
loan officers. Moreover, the lenders cited here correspond with Defendants’ own list of
Decl., Ex. A at LR000065, LR000089–90, LR000098–100, LR000103, LR000460, LR
001250, LR001621, LR002642; Second Lafeber Decl., Ex. A at LR004325, LR004888,
For instance, in September of 2016, Jovel travelled to
Minnesota for three days to “educate” Minnesota-based employees of a lender
) about ListReports’ products, including Nest.Me. (Defs.’ Ans. to Interrogs.
at 4.) ListReports employees exchanged numerous training, support, and marketing emails
related to Nest.Me with
. (See, e.g., First Lafeber Decl., Ex. A at LR000174–78,
LR000614–15, LR001621, LR002319 [Doc. No. 73].)
There is some evidence that Shah was aware of—and at times involved with—the
marketing and support for Nest.Me in Minnesota. For instance, an email from Duffy to
, with Shah copied, mentions that Shah “connected” with
contract for Nest.Me that would give
partial exclusivity to the product in the
Minneapolis market. (Second Lafeber Decl., Ex. F at LR005592–93 [Doc. No. 100].) Shah
was also involved in training and supporting
’s use of Nest.Me. (First Lafeber
Decl., Ex. A at LR00568; Second Lafeber Decl., Ex. B at LR005265–67.) Shah also
provided the counter-signed agreement allowing another lender with Minnesota-based loan
officers to use Nest.Me. (Id. at LR007343.)
Evidence of Shiozaki’s and Yang’s involvement with Minnesota customers is more
limited. Shiozaki received, or was forwarded by other ListReports employees, several
emails from Minnesota clients regarding Nest.Me billing and design/technical support
lenders who may be located in Minnesota and may use Nest.Me. (See Defs.’ Ans. to
Interrogs. at 7–9.)
issues. (Second Lafeber Decl., Ex. C at LR002832–33, LR007371–72, LR007438 [Doc.
No. 94].) Shiozaki was also copied on an email from ListReports to a Minnesota lender
thanking it for its business. (Id. at LR007689.) As far as the Court can discern, the record
contains a single email connecting Yang to a Minnesota client. The email appears to be a
technical support request from a Minnesota lender, forwarded to Yang by Duffy. (First
Lafeber Decl., Ex. A at LR002541.)
In May of 2016, shortly after the launch of Nest.Me, Prospect terminated its
contractual relationship with HBM and adopted Nest.Me. (Colville Decl. at ¶ 12; Compl. at
¶ 44.) There is no evidence in the record that any of HBM’s Minnesota-based customers
have abandoned the company in favor of ListReports and Nest.Me. Similarly missing is
any evidence as to what percentage of HBM’s business involves clients who operate in
Minnesota as opposed to elsewhere in the country.
HBM alleges that Shah made false and deceptive misrepresentations in an effort to
convince Skyline to abandon HBM’s Proprietary Products and adopt Nest.Me. (Compl. at
¶¶ 38–41, 44; Colville Decl. at ¶¶ 18–19.)
Specifically, HBM contends that Shah
represented that Nest.Me contained the same real estate data as HBM’s Proprietary Products
when it in fact did not. (Compl. at ¶¶ 41–43; Colville at ¶ 18.) Shah also allegedly told
Skyline that Prospect terminated its relationship with HBM because very few of Prospect’s
loan officers were adopting HBM’s Proprietary Products when this was not true. (Colville
Decl. at ¶¶ 10, 19; Compl. at ¶ 44.) Finally, HBM claims that Shah used its confidential
pricing information in an attempt to convince Skyline to switch to Nest.Me. (Compl. at ¶
39.) Shah does not deny that he spoke with Skyline, but avers that the employees he spoke
with were not located in Minnesota and that he spoke with them while he was in California.
(First Shah Decl. at ¶ 7.) HBM was only able to retain Skyline as a client by reducing its
prices and the duration of their contractual relationship. (Colville Decl. at ¶ 20.)
B. Procedural History
HBM brought thirteen claims against Defendants. (See Compl. at ¶¶ 45–139.) HBM
asserts each claim against ListReports, but only some of its claims individually against
Shah, Shiozaki, and Yang (collectively, the “Individual Defendants”). (See id.) HBM’s
claims, and the Defendants they are asserted against, are as follows:
1. Federal-law misappropriation of trade secrets (all Defendants)
2. State-law misappropriation of trade secrets (all Defendants)
3. State-law misappropriation of confidential information (all Defendants)
4. Federal Lanham Act violations (false and misleading representations)
(ListReports and Shah)
5. State-law business defamation (ListReports and Shah)
6. State-law product disparagement (ListReports and Shah)
7. State-law unfair competition and false advertising (all Defendants)
8. State-law deceptive trade practices (ListReports and Shah)
9. State-law tortious interference with contractual relations (all Defendants)
10. State-law tortious interference with economic advantage (all Defendants)
11. State-law breach of contract (ListReports, Shiozaki, and Yang)
12. State-law unjust enrichment (all Defendants)
13. State-law conversion (all Defendants)
HBM alleges that the Court has federal question, diversity, and supplemental subject matter
jurisdiction over these claims. (Compl. at ¶¶ 7–8.)
Following the filing of Defendants’ Motion to Dismiss, and at the request of HBM,
Magistrate Judge Noel allowed limited written discovery on the issue of personal
That discovery was incorporated into affidavits and declarations
accompanying the motion papers. The Court considers that factual record on a Rule
A. Legal Standard
The parties disagree about HBM’s burden of proof in establishing that personal
jurisdiction exists over Defendants. As described above, the parties have engaged in limited
written jurisdictional discovery, but there have been no depositions, evidentiary hearings, or
broader discover related to the substance and merit of HBM’s claims. Defendants argue
that to survive their Motion to Dismiss, HBM must “prove” facts supporting personal
jurisdiction, including the substance of its claims (e.g., that Defendants misappropriated
HBM’s confidential and trade secret information). (See Defs.’ Reply in Supp. (“Defs.’
Reply”) at 2 [Doc. No. 58]; Defs.’ Second Suppl. Br. in Supp. (“Defs.’ Second Suppl. Br.”)
at 1 n.1, 2, 9–10 [Doc. No. 110]; Defs. Third Suppl. Br. in Supp. (“Defs.’ Third Suppl. Br.”)
at 3, 4–5, 6, 8–10 [Doc. No. 141].) However, Defendants overstate HBM’s burden of proof
at this early stage of the litigation.
In general, to survive a motion to dismiss for lack of personal jurisdiction, “a
plaintiff must make a prima facie showing that personal jurisdiction exists, which is
accomplished by pleading sufficient facts to support a reasonable inference that the
defendant can be subjected to jurisdiction within the state.” K-V Pharm. Co. v. J. Uriach &
CIA, S.A., 648 F.3d 588, 591–92 (8th Cir. 2011) (citation and alterations omitted). This
evidentiary standard is “minimal,” although the pleadings may be “tested” with affidavits
and exhibits supporting and opposing a Rule 12(b)(2) motion to dismiss for lack of personal
jurisdiction. Id. at 592. “We must view the evidence in the light most favorable to the
plaintiff and resolve all factual conflicts in its favor in deciding whether the plaintiff made
the requisite showing.” Id.
The burden of proof can change somewhat when the parties engage in full blown
jurisdictional discovery and submit evidence in support and in opposition to a motion to
[W]here . . . the parties submit affidavits to bolster their positions on the
motion, and the district court relies on the evidence, the motion is in
substance one for summary judgment. The plaintiff bears the burden of proof
on the issue of personal jurisdiction, and must establish jurisdiction by a
preponderance of the evidence at trial or when the court holds an evidentiary
Creative Calling Sols., Inc. v. LF Beauty Ltd., 799 F.3d 975, 979 (8th Cir. 2015) (citations
omitted). However, even on a more developed record, a court must resolve all factual
conflicts in the plaintiff’s favor. Fastpath, Inc. v. Arbela Techs. Corp., 760 F.3d 816, 820
(8th Cir. 2014). “[T]he action should not be dismissed for lack of jurisdiction if the
evidence, viewed in the light most favorable to [the plaintiff], is sufficient to support a
conclusion that the exercise of personal jurisdiction over [the defendant] is proper.”
Creative Calling Sols., 799 F.3d at 979.
Here, the parties have engaged in limited written discovery on the issue of personal
jurisdiction, but there has been no broader discovery on personal jurisdiction or on HBM’s
claims, or any evidentiary hearings. Thus, the more lenient prima facie standard controls.
See Pope v. Elabo GmbH, 588 F. Supp. 2d 1008, 1013–14 (D. Minn. 2008) (“When
personal jurisdiction is contested, the plaintiff must ultimately prove, by a preponderance of
the evidence, facts establishing that the court has personal jurisdiction over the defendant.
But the plaintiff need not do so until trial or until the court holds an evidentiary hearing.
When a district court considers only affidavits or other written evidence in connection with
a Rule 12(b)(2) motion, the plaintiff need only make a prima facie showing of
B. Personal Jurisdiction
At its core, the personal jurisdiction analysis requires the Court to consider two
issues: (1) whether the forum state’s (here, Minnesota) long-arm statute permits the exercise
of personal jurisdiction and (2) if the exercise of personal jurisdiction comports with the
Due Process Clause of the Fourteenth Amendment. See Creative Calling Sols., 799 F.3d at
979. “These two inquiries collapse into one, however, because Minnesota’s long-arm
statute extends jurisdiction to the outer limits of the Due Process Clause.”
Conveyor Corp. v. Hyde, No. 16-cv-3835 (RHK/HB), __ F. Supp. 3d. __, 2017 WL 708713,
at *2 (D. Minn. Feb. 22, 2017); see Rilley v. MoneyMutual, LLC, 884 N.W.2d 321, 327
(Minn. 2016), cert. denied, 137 S. Ct. 1331 (2017) (“We have held that Minnesota’s longarm statute extends the personal jurisdiction of Minnesota courts as far as the Due Process
Clause of the federal constitution allows.” (citations and alteration omitted)). “The primary
focus of our personal jurisdiction inquiry is the defendant’s relationship to the forum State.”
Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco Cty., 137 S. Ct.
1773, 1779 (2017).
Personal jurisdiction is found where the defendant has “certain
minimum contacts [with the forum] . . . such that the maintenance of the suit does not
offend traditional notions of fair play and substantial justice.” Walden v. Fiore, 134 S. Ct.
1115, 1121 (2014) (quoting Int’l Shoe Co. v. State of Wash., Office of Unemployment Comp.
& Placement, 326 U.S. 310, 316 (1945)).
1. General Personal Jurisdiction
There are two types of personal jurisdiction: general and specific. Bristol-Myers
Squibb Co., 137 S. Ct. at 1780. “A court with general jurisdiction may hear any claim
against that defendant, even if all the incidents underlying the claim occurred in a different
State.” Id. (emphasis original). However, “only a limited set of affiliations with a forum
will render a defendant amenable to [general] jurisdiction there.” Daimler AG v. Bauman,
134 S. Ct. 746, 760 (2014).
For an individual, the paradigm forum for the exercise of general jurisdiction
is the individual’s domicile; for a corporation, it is an equivalent place, one in
which the corporation is fairly regarded as at home. With respect to a
corporation, the place of incorporation and principal place of business are
paradigm bases for general jurisdiction.
Id. (citations and alternations omitted). A corporate defendant’s state of incorporation and
principal place of business are not the exclusive forums for general personal jurisdiction. Id.
But, the mere fact that a corporate defendant does even “substantial, continuous, and
systematic” business in a forum—where it also does “sizable” business in other forums—
does not allow for general personal jurisdiction. Id. at 761–62.
Specific personal jurisdiction, on the other hand, “is very different.” Bristol-Myers
Squibb, 137 S. Ct. at 1780. “In order for a state court to exercise specific jurisdiction, the
suit must arise out of or relate to the defendant’s contacts with the forum.” Id. (emphasis
original, citations, and alternations omitted). “For this reason, ‘specific jurisdiction is
confined to adjudication of issues deriving from, or connected with, the very controversy
that establishes jurisdiction.’” Id. (quoting Goodyear Dunlop Tires Operations, S.A. v.
Brown, 564 U.S. 915, 919 (2011)).
Initially, HBM only argued that the Court had specific personal jurisdiction over
Defendants. (See Pls.’ Mem. in Opp. to Defs.’ Mot. to Dismiss (“Pls.’ Mem. in Opp.”) at 1
[Doc. No. 53].) However, after completing jurisdictional discovery, HBM suggested that
there was evidence that supported asserting general personal jurisdiction. (See Pls.’ Suppl.
Mem. in Opp. (“Pls.’ First Suppl. Br.”) at 2–4 [Doc. No. 70].) At the hearing on the Motion
to Dismiss, the Court inquired whether HBM was claiming general personal jurisdiction, to
which counsel responded that HBM would not “rely” on general jurisdiction, but would
instead “focus on specific jurisdiction.”
To the extent HBM argues that the Court has general personal jurisdiction over any
of the Defendants, this contention is easily dispatched.
ListReports is a California
corporation with its principal place of business in that state. See supra Part I.A.5. Although
it does business in Minnesota, that business accounts for roughly five percent of its annual
revenue. Id. To find that this “level” of in-forum business allowed for general personal
jurisdiction “would scarcely permit out-of-state defendants to structure their primary
conduct with some minimum assurance as to where that conduct will and will not render
them liable to suit.” Daimler, 134 S. Ct. at 761–62 (citations omitted). The Individual
Defendants are also all residents of California and have no personal connection to
Minnesota. See supra Part I.A.2.
Simply put, there is no evidence that any of the
Defendants have the sort of “continuous and systematic” affiliations with Minnesota that
would render them “essentially at home” here. See Daimler, 134 S. Ct. at 761.
C. Specific Personal Jurisdiction
The Eighth Circuit has identified five factors for courts to consider when deciding
whether to exercise personal jurisdiction:
(1) the nature and quality of the contacts with the forum state; (2) the quantity
of the contacts; (3) the relationship of the cause of action to the contacts; (4)
the interest of [Minnesota] in providing a forum for its residents; and (5) the
convenience or inconvenience to the parties.
Johnson v. Arden, 614 F.3d 785, 794 (8th Cir. 2010). “The first three factors are primary
factors, and the remaining two factors are secondary factors. The third factor distinguishes
whether the jurisdiction is specific or general.” Id. (citation omitted). However, the fivefactor test “is not to be mechanically applied.” Pangaea, Inc. v. Flying Burrito LLC, 647
F.3d 741, 746 n.4 (8th Cir. 2011) (citation omitted).
Specific personal jurisdiction requires “an affiliation between the forum and the
underlying controversy, principally, an activity or an occurrence that takes place in the
forum State.” Bristol-Myers Squibb Co., 137 S. Ct. at 1781 (citations and alterations
omitted). The focus is on “the relationship among the defendant, the forum, and the
litigation.” Walden, 134 S. Ct. at 1121. The defendant’s “suit-related conduct must create a
substantial connection with the forum State.” Id. The contacts to be considered are those
between the defendant and the forum, not the defendant’s contacts with the plaintiff or third
parties. Id. at 1122. “To be sure, a defendant’s contacts with the forum State may be
intertwined with his transactions or interactions with the plaintiff or other parties. But a
defendant’s relationship with a plaintiff or third party, standing alone, is an insufficient basis
for jurisdiction.” Id. at 1123.
In addition to these considerations, the Calder effects test—derived from Calder v.
Jones, 465 U.S. 783 (1984)—is especially relevant here. This test is applied in cases
involving intentional torts (e.g., misappropriation, tortious interference, and defamation).
Walden, 134 S. Ct. at 1123. The crux of the test is whether the effects of the defendant’s
tortious conduct connect him/her to the forum and “not just the plaintiff.” See id. at 1123–
24. For instance, not only is the reputational injury of libel felt where the slanderous
statement is publicized, but the tort is actually committed when and where the slanderous
statement is made. See id. at 1124. Thus, a defendant who publishes a slanderous article
should reasonably expect to be haled into court where the article relates to the plaintiff’s
activities in the forum, the plaintiff’s reputation is centered in the forum, and the article is
published in the forum. See id.
However, the mere fact that a plaintiff resides in the relevant forum and thus
experiences the injury of a tort there is not enough to satisfy the Calder effects test. The
Eighth Circuit construes the Calder effects test narrowly, holding that “absent additional
contacts, mere effects in the forum state are insufficient to confer personal jurisdiction.”
Johnson, 614 F.3d at 794. Thus, a plaintiff must show that “the defendant’s acts (1) were
intentional, (2) were uniquely or expressly aimed at the forum state, and (3) caused harm,
the brunt of which was suffered-and which the defendant knew was likely to be suffered-[in
the forum state].” Id. at 796 (citation omitted, alterations in original). The Supreme Court
recently explained that “[r]egardless 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. The proper question is not where the plaintiff experienced a particular
injury or effect but whether the defendant’s conduct connects him to the forum in a
meaningful way.” Walden, 134 S. Ct. at 1125.
What impact, if any, a defendant’s use of the internet to commit an intentional tort
has on specific personal jurisdiction and the Calder effects test has not been directly
addressed by the Supreme Court or the Eighth Circuit. Rather, the Supreme Court declined
to address how the Calder effects test should operate where an intentional tort is committed
using the internet or other electronic means. Walden, 134 S. Ct. at 1125 n.9. Specifically,
the Court left “for another day” the questions of “whether and how a defendant’s virtual
‘presence’ and conduct translate into ‘contacts’ with a particular State.”
Id.; but see
Erickson v. Nebraska Mach. Co., No. 15-CV-01147-JD, 2015 WL 4089849 at *4 (N.D. Cal.
July 6, 2015) (“the fact that [Walden] held that it would be a violation of the defendant’s
due process rights to be forced to submit to personal jurisdiction based merely on his or her
knowledge of the plaintiff’s location suggests that the high court’s holding cannot be
cabined to torts committed in the non-virtual world”).
Following Walden, several district courts have grappled with employing the Calder
effects test where the defendants allegedly used the internet to commit offenses like
misappropriation of trade secrets, copyright, trademark, or patent infringement, defamation,
“hacking,” and other torts involving the unauthorized access of computer data. See, e.g.,
Christie v. Nat’l Inst. for Newman Studies, No. CV 16-6572 (FLW), __ F. Supp. 3d. __,
2017 WL 2798250 (D.N.J. June 28, 2017) (finding specific personal jurisdiction); Caracal
Enterprises LLC v. Suranyi, No. 16-CV-05073-RS, 2017 WL 446313 (N.D. Cal. Feb. 2,
2017) (finding no specific personal jurisdiction); Blizzard Entm’t, Inc. v. Bossland GmbH,
No. SACV161236DOCKESX, 2017 WL 412262 (C.D. Cal. Jan. 25, 2017) (finding specific
personal jurisdiction); Strabala v. Zhang, 318 F.R.D. 81 (N.D. Ill. 2016) (finding specific
personal jurisdiction for claims of defamation, but not for claims of tortious interference);
Erickson, 2015 WL 4089849 (finding no specific personal jurisdiction). Importantly here,
where specific personal jurisdiction was found in these cases, the courts relied on evidence
and allegations that the defendants expressly aimed their tortious conduct at the forum and
not the fact that the plaintiffs simply suffered their injuries in their respective forums by
virtue of residing there. See Christie, 2017 WL 2798250 at *8; Blizzard Entm’t, 2017 WL
412262 at *5–6; Strabala, 318 F.R.D. at 109–11. Thus, even when addressing tortious
conduct involving the internet, “the jurisdictional inquiry should focus on where a defendant
intended to direct its tortious conduct and whether that defendant knew, or should have
known, its activities would be felt in that forum State.” Christie, 2017 WL 2798250 at *6.
Since specific personal jurisdiction hinges on the connection between the defendant
and the forum, the analysis must be specific to each defendant. See Calder, 465 U.S. at 790
(“Each defendant’s contacts with the forum State must be assessed individually.”); Select
Comfort Corp. v. Kittaneh, 161 F. Supp. 3d 724, 731 (D. Minn. 2014) (holding that each
defendant’s forum contacts must be considered independently). For instance, ListReports’
contacts with Minnesota that did not involve the Individual Defendants may not be
attributed to them for the purpose of finding specific personal jurisdiction. See Calder, 465
U.S. at 790 (“Petitioners are correct that their contacts with [the forum] are not to be judged
according to their employer’s activities there.”). HBM argues that the Court may exercise
specific personal jurisdiction over all Defendants, but often fails to distinguish between each
Defendant’s conduct. The Court is careful to consider each Defendant individually.
1. The Individual Defendants
HBM alleges that the Individual Defendants were directly involved with
misappropriating HBM’s trade secrets and confidential information and selling Nest.Me to
Minnesota-based lenders. However, as just described, the key consideration is whether
there is evidence that the Individual Defendants expressly aimed their conduct at Minnesota
and knew that the brunt of the harm would be felt there.
Johnson offers a useful comparison to this case. There, the plaintiffs alleged that the
defendant (“Heineman”)—who was the plaintiffs’ former business associate, but not a
forum resident—posted a defamatory comment about them on a website for consumer
complaints and infringed on their trademark by using it on her own website. Johnson, 614
F.3d at 788–89, 795–96. The defamatory comment attributed to Heineman specifically
stated that plaintiffs were located in Missouri (the relevant forum). Id. at 796. Plaintiffs did
business in Missouri, but also in other states, whereas Heineman did business in others
states, but there was no evidence that she sold to—or had interactions with—customers in
Missouri. Id. at 788–89, 797–98.
The Eighth Circuit held that “the inclusion of ‘Missouri’ in the posting was
incidental and not ‘performed for the very purpose of having their consequences’ felt in
Missouri. There is no evidence that the . . . website [where the comment was posted]
specifically targets Missouri, or that the content of Heineman’s alleged postings specifically
targeted Missouri.” Id. at 796 (quoting Dakota Indus. v. Dakota Sportswear, Inc., 946 F.2d
1384, 1391 (8th Cir.1991)). Despite the fact that Heineman knew that the plaintiffs were
located and did business in Missouri, the Eighth Circuit concluded that “[p]osting on the
internet from Colorado an allegedly defamatory statement including the name ‘Missouri’ in
its factual assertion does not create the type of substantial connection between Heineman
and Missouri necessary to confer specific personal jurisdiction.” Id. at 797. Similarly, the
fact that Heineman allegedly infringed on the plaintiffs’ trademark by using it on her own
website did not allow for specific personal jurisdiction. Id. at 797–98. The plaintiffs and
Heineman both did business in numerous forums—but there was no evidence Heineman did
business in Missouri—and the Eighth Circuit found that Heineman’s website was not
“uniquely or expressly aimed at Missouri . . . .” See id.
Here, there is evidence that the Individual Defendants targeted HBM with their
alleged tortious conduct, but no evidence that they expressly aimed their conduct at
Minnesota or knew that the brunt of the resulting harm would be felt here. Each of the
Individual Defendants accessed or viewed HBM’s Proprietary Products, but there is no
evidence that in doing so they were aware that HBM is based in Minnesota. HBM’s Terms
of Use gave no indication of a Minnesota connection nor did they contain a forum-selection
or choice-of-law clause. See In re: RFC & ResCap Liquidating Tr. Litig., No. 13-cv-3451
(SRN/HB), 2017 WL 1483374, at *4–5, 11 (D. Minn. Apr. 25, 2017) (holding that a valid
and enforceable forum-selection clause in a contract allowed for specific personal
jurisdiction over even the individual defendants, who were officers of the corporate
defendant, but who otherwise had insufficient contacts with the forum). HBM’s website
merely lists a phone number with a Minnesota area code in the “Contact Us” section. There
is no indication that the Individual Defendants knew that HBM’s Proprietary Products were
stored or hosted on servers in Minnesota.
Furthermore, HBM’s Proprietary Products are sold and used nationwide. There is no
evidence that HBM does a significant portion of its business in Minnesota, or if it does, that
the Individual Defendants were aware of this fact. Similarly, there is no evidence that the
Individual Defendants were involved in luring away any of HBM’s Minnesota-based
In fact, there is no evidence that HBM lost any of its Minnesota-based
customers to Nest.Me. See supra Part I.A.3, 5 (the only clients HBM lost—or was forced to
offer a discount to—are Prospect and Skyline, but there is little, if any, evidence that either
company operates in Minnesota). Moreover—to the extent that the Individual Defendants
are involved with marketing and supporting Nest.Me—it is clear that these efforts are
national in scope, meaning that they were not uniquely aimed at Minnesota.
The Court finds that the Individual Defendants’ conduct related to Minnesota was
“incidental and not performed for the very purpose of having their consequences felt in
[Minnesota].” See Johnson, 614 F.3d at 796.
Even assuming that the Individual
Defendants knew HBM was located in Minnesota, that fact “would not allow plaintiffs to
Evidence of Shiozaki’s and Yang’s knowledge of or involvement with the marketing
and support of Nest.Me in Minnesota is particularly scarce. See supra Part I.A.5.
satisfy the Calder test because ‘personal jurisdiction analysis must focus on the defendant’s
contacts with the forum state, not the defendant’s contacts with a resident of the forum.’”
See Caracal Enterprises, 2017 WL 446313 at *3 (quoting Picot v. Weston, 780 F.3d 1206,
1214 (9th Cir. 2015)); Walden, 134 S. Ct. at 1122 (holding that courts must consider “the
defendant’s contacts with the forum State itself, not the defendant’s contacts with persons
who reside there” and that “the plaintiff cannot be the only link between the defendant and
the forum”); see also Viracon, Inc. v. J & L Curtain Wall LLC, 929 F. Supp. 2d 878, 886
(D. Minn. 2013) (holding that the Calder effects test “requires more than knowledge that a
Minnesota company will suffer consequences from the conduct”); In re: RFC & ResCap
Liquidating, 2017 WL 1483374 at *11 (“Although the Complaint certainly suggests that the
Individual Defendants acted as they did to harm a Minnesota company, it is bereft of
allegations from which the Court could conclude that the effects of those actions were
meant to be felt in this forum specifically.” (emphasis original)). The mere fact that HBM
will suffer the effects (i.e. damages) of the Individual Defendants’ alleged misappropriation
in Minnesota also does not satisfy the Calder test. See Viasystems, Inc. v. EBM-Papst St.
Georgen GmbH & Co., KG, 646 F.3d 589, 594 (8th Cir. 2011) (holding that the Calder
effects test was not met despite the fact that the plaintiff would suffer the effects of the
defendant’s deliberate refusal to pay in the forum); Carpenter v. All Am. Games, No. CV1601768-PHX DGC, 2017 WL 1090706, at *2 (D. Ariz. Mar. 23, 2017) (“[E]ffects in a forum
State, even if foreseeable, are not sufficient for specific personal jurisdiction without some
defendant-initiated contact with the State.”); Erickson, 2015 WL 4089849 at *4 (“any injury
that [the defendant’s] alleged copyright infringement caused is not localized in California,
apart from the fact that plaintiffs are based there”). Simply put, the Court cannot find that
the Individual Defendants’ conduct creates a “substantial connection” with Minnesota or
“connects [them] to the forum in a meaningful way.” See Walden, 134 S. Ct. at 1121, 1125.
Considering Shah’s additional tortious conduct in allegedly defaming HBM to
Skyline and interfering with HBM’s business relations with Skyline and Prospect does not
alter the outcome. None of this conduct was directed at or carried out in Minnesota, and
neither Skyline nor Prospect is located in Minnesota, distinguishing this from other
See Strabala, 318 F.R.D. at 109–11 (finding specific personal
jurisdiction where the defendants knew that the plaintiff was based out in Illinois and sent
defamatory emails to the plaintiff’s clients, who were also based in Illinois, thereby
“purposefully aim[ing] their conduct at Illinois where the e-mail recipients were located”);
Calder, 465 U.S. at 788–89 (finding specific personal jurisdiction where the defendants
published a libelous story in California, which concerned the plaintiff’s activities and
television career in California, and was based on California sources). The only connection
between Shah’s conduct and Minnesota is the fact that HBM felt the negative effects of it
here, but this is not enough for specific personal jurisdiction. See Carpenter, 2017 WL
1090706 at *2 (holding that the Calder test was not satisfied by the defendant’s defamatory
email, sent to hundreds of individuals and affiliates nationwide, because the only clear
connection to the forum was the fact that the plaintiff felt the effects of the email there).
Whether there is specific personal jurisdiction over ListReports is a closer call
because the Court may consider all of the forum-related conduct of ListReports’
employees—including Duffy and Joval.7 As a result, there is more “direct” evidence
connecting ListReports’ conduct to Minnesota. For instance, there is limited evidence that
ListReports—through its co-founder and employee, Duffy—knew that HBM was located in
Minnesota. See supra Part I.A.4. Similarly, ListReports has contacts with Minnesota in
that it markets and supports Nest.Me to Minnesota-based lenders, most notably by sending
its employees to Minnesota to educate clients about Nest.Me.
See supra Part I.A.5.
However, even these forum connections do not satisfy the Calder effects test because they
do not establish that ListReports uniquely or expressly aimed its conduct at Minnesota, or
that it knew the brunt of the resulting harm would be felt in Minnesota.
ListReports’ knowledge that HBM was based in Minnesota does not satisfy the
Calder effects test because it “improperly attributes a plaintiff’s forum connections to the
defendant and makes those connections ‘decisive’ in the jurisdictional analysis.” See
Walden, 134 S. Ct. at 1125; Christie, 2017 WL 2798250 at *4; Caracal Enterprises, 2017
WL 446313 at *3; Erickson, 2015 WL 4089849 at *4. The distinction between this case
and Walden is that here, ListReports knew HBM resided in Minnesota and it allegedly
misappropriated trade secrets and confidential information from HBM that were stored on
servers located in Minnesota. See Walden, 134 S. Ct. at 1124–25 (noting that the property
seizure and other conduct underlying the plaintiffs’ claims occurred entirely outside of the
forum). However, even this more direct connection between ListReports’ conduct and
Although the forum contacts/conduct of an employer are generally not attributed to its
employees and officers, Calder, 465 U.S. at 790, the forum contacts/conduct of employees
are often attributable to their employers for the purpose of establishing specific personal
jurisdiction over the employer. See Daimler, 134 S. Ct. at 759 n.13. ListReports has not
challenged such attribution.
Minnesota is not enough for specific personal jurisdiction.
Cases where courts found the Calder effects test was met based on the defendants’
intentional tortious conduct over the internet are distinguishable in important ways from the
present matter. For instance, one court found specific personal jurisdiction where the
defendants knew the plaintiff resided in New Jersey (because the plaintiff was a former
employee, informed the defendants of his residence in New Jersey, and the defendants
regularly contacted him in New Jersey), hacked into his computer, and deleted personal
emails related to an ongoing employment dispute between the parties. Christie, 2017 WL
2798250 at *7. Based on these allegations, the court held that “Defendants expressly aimed
tortious conduct at Plaintiff in New Jersey and knew that Plaintiff would feel the brunt of
the harm in New Jersey.” Id. at *8. However, the court noted that “an act performed over
the Internet—without specifically targeting a forum—cannot confer nationwide
“Rather, where a tortious act is expressly aimed, or affirmatively
calculated to be felt, and where the brunt of the harm occurs, make up the appropriate
Here, there is no evidence that ListReports expressly targeted Minnesota or
affirmatively calculated that its conduct would be primarily felt here. ListReports’ alleged
misappropriation targeted HBM and did not involve any contact with Minnesota besides the
incidental fact that HBM’s Proprietary Products are hosted on servers based in Minnesota.8
Although ListReports’ conduct was not “projected aimlessly into cyberspace,” it also was
Although there is limited evidence to suggest that ListReports was aware of HBM’s
geographic location in Minnesota, there is no evidence that it understood the Proprietary
Products were hosted there.
not deliberately aimed at Minnesota. See id. at *9 (distinguishing between the sort of
“aimless” internet-based conduct that does not satisfy the Calder test and more “deliberate”
conduct, like hacking the plaintiff’s personal email account, that does); Walden, 134 S. Ct.
at 1121–23 (holding that specific personal jurisdiction requires that the defendant’s suitrelated conduct must create a “substantial connection” with the forum and that the plaintiff,
or the defendant’s contacts with the plaintiff, cannot be the sole link between the defendant
and the forum). In short, like with the Individual Defendants, ListReports’ tortious conduct
was not “performed for the very purpose of having their consequences felt in [Minnesota],”
but was “incidental” to ListReports’ efforts to compete with HBM nationwide.
Johnson, 614 F.3d at 796.
Moreover, there is no evidence that ListReports “took” one of HBM’s Minnesotabased customers, or specifically targeted Minnesota with its Nest.Me sales and marketing.
Instead, ListReports’ competitive efforts were nationwide and generated numerous
customers, some of whom are located in Minnesota. The fact that HBM feels the effects of
losing customers to ListReports in Minnesota because it resides here does not allow for
specific personal jurisdiction. See Viasystems, 646 F.3d at 594; Carpenter, 2017 WL
1090706 at *2; Erickson, 2015 WL 4089849 at *4.
The path to specific personal jurisdiction through the Calder effects test is quite
narrow. The defendant’s conduct must connect it to the forum—not just the plaintiff— in a
substantial and meaningful way, and the defendant’s relationship with the plaintiff alone
cannot serve as the basis for finding specific personal jurisdiction. See Walden, 134 S. Ct. at
1122–25. This test is especially difficult to satisfy when the tortious conduct at issue
involves the internet and where the parties are competitors who operate at arm’s-length
online and in many forums. The result is that some plaintiffs—like HBM—will have to
pursue their claims in the forum where the alleged tortfeasor resides. Reasonable minds can
debate about the fairness of this result, but it is what the Supreme Court found the due
process limitations of the Constitution require so as not to “offend traditional notions of fair
play and substantial justice.” See id. at 1121 (citation omitted). The Court holds that there
is no specific personal jurisdiction over ListReports.
Defendants aver that personal jurisdiction exists over each of them in the Central
District of California. (Defs.’ Mem. in Supp. at 17 [Doc. No. 34].) Even where a court
lacks personal jurisdiction, it retains the ability to transfer the case to a district where the
case could have been brought. 28 U.S.C. § 1631; Superior Edge, Inc. v. Maricopa Cty.
Cmty. Coll. Dist., 509 F. Supp. 2d 786, 795 (D. Minn. 2007) (“Where, as here, a district
court lacks personal jurisdiction over the defendant, the court may dismiss the action or
transfer it to a district where it could have been brought.”). A transfer is appropriate “if it
is in the interest of justice . . . .” 28 U.S.C. § 1631. “Generally, transfer will be in the
interest of justice because normally dismissal of an action that could be brought
elsewhere is time-consuming and justice-defeating.” Sec. Alarm Fin. Enterprises, L.P. v.
Nebel, 200 F. Supp. 3d 976, 987 (N.D. Cal. 2016) (citation omitted). An exception to this
general presumption in favor of transfer is if the claims to be transferred are frivolous or
were filed in bad faith. Amity Rubberized Pen Co. v. Mkt. Quest Grp. Inc., 793 F.3d 991,
996 (9th Cir. 2015).
Although neither party raised the issue, the Court finds that transferring this case to
the Central District of California serves the interests of justice. Defendants aver that
personal jurisdiction exists over each of them in that district and thus there is no question
that HBM’s claims could be pursued there. (See Defs.’ Mem. in Supp. at 17 [Doc. No.
34].) Furthermore, there is no evidence that HBM’s claims are frivolous or in bad faith.
Based on the foregoing, and all the files, records, and proceedings herein, IT IS
HEREBY ORDERED that:
1. Defendants’ Motion to Dismiss for Lack of Personal Jurisdiction or, In the
Alternative, to Transfer (“Mot. to Dismiss”) [Doc. No. 33] is GRANTED as
a. The Court holds that it lacks personal jurisdiction over each of the
b. This action is TRANSFERRED to the United States District Court for
the Central District of California;
c. The Clerk of Court is directed to transfer this action as just described.
2. This Order is filed under seal. Within fourteen days of the date of this
Order, the parties are ORDERED to show cause as to why the Order should
remain under seal, and if so, which portions of the Order should remain sealed
and for how long. The parties will submit briefs, each no longer than seven
pages, on this subject. Each party will also submit a copy of this Order
showing its proposed redactions. If the parties agree on these issues, they may
submit a joint brief and/or proposed redacted order. The parties will not file
these briefs and proposed orders on CM/ECF, but will instead submit them to
the chamber’s email.
Dated: August 25, 2017
s/ Susan Richard Nelson
SUSAN RICHARD NELSON
United States District Judge
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