Puravai et al v. Blue Can
Filing
36
MEMORANDUM DECISION AND ORDER: It is therefore ORDERED that Defendant's 26 Motion to Dismiss for Lack of Personal Jurisdiction is GRANTED. Signed by Judge Dee Benson on 10/17/2018. (mas)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
PURAVAI, LLC, a Utah limited liability
company; SAGAN LIFE LLC dba SAGAN
INDUSTRIES, a Utah limited liability
company; COLDSTREAM OUTDOOR
L.P., a California limited partnership; RBM
TAHOE LLC, a California limited liability
company; and BE READY, INC., a
California corporation,
MEMORANDUM DECISION AND
ORDER
Case No. 2:18-cv-00255-DB-EJF
Plaintiffs,
v.
District Judge Dee Benson
BLUE CAN dba BLUE CAN WATER, a
Nevada corporation,
Defendant.
This matter is before the Court on Defendant’s Motion to Dismiss for Lack of Personal
Jurisdiction, filed on July 23, 2018. (Dkt. No. 26.) On August 20, 2018, Plaintiffs filed a timely
memorandum in opposition to Defendant’s motion. (Dkt. No. 29.) On September 18, 2018,
Defendant submitted a reply to Plaintiffs’ opposition. (Dkt. No. 34.) Pursuant to civil rule 7-1(f)
of the United States District Court for the District of Utah Rules of Practice, the Court elects to
determine the motion on the basis of the written memoranda and finds that oral argument would
not be helpful or necessary. DUCivR 7-1(f).
BACKGROUND
In reviewing a case’s factual background, the Court is mindful that “the allegations in the
[plaintiff’s] complaint must be taken as true to the extent they are uncontroverted by the
defendants’ affidavits.” Behagen v. Amateur Basketball Ass’n, 744 F.2d 731, 733 (10th Cir.
1984). If there is conflicting evidence, the Court is to “resolve all factual disputes in favor of the
plaintiff in determining whether plaintiff has made a prima facie showing that establishes
jurisdiction.” Far West Capital v. Towne, 46 F.3d 1071, 1075 (10th Cir. 1995). With these
standards in mind, the Court considers the facts and allegations of this case.
Defendant Blue Can Water (“Blue Can”) is a Nevada corporation with its principal place
of business in Los Angeles County, California. (Dkt. No. 26 at 3.) It conducts business
primarily in California, is not registered to conduct business in Utah, and has no corporate
operations in Utah. It has no offices, property, employees, or records in Utah, and has no Utah
agent for service of process. (Id. at 14.) Plaintiffs Puravai, LLC (“Puravai”) and Sagan Life
LLC dba Sagan Industries (“Sagan”) are based in Utah, while Plaintiffs Be Ready, Inc. (“Be
Ready”), Coldstream Outdoor L.P. (“Coldstream”), and RBM Tahoe LLC (“RBM”) are based in
California. (Id. at 4-5). Puravai manufactures and sells prepackaged storage water designed for
use in emergency and disaster relief circumstances. (Dkt. No. 9, FAC ¶11.) Blue Can also
manufactures and sells prepackaged emergency storage water, and maintains that its high-tech
filtration process allows the water to be safely consumed for up to 50 years. (Id. ¶19.)
In May 2015, Plaintiff Be Ready entered into an agreement with Blue Can to be the
master distributor of Blue Can’s products. (Id. ¶20.) In or around August 2016, Dennis
Clements, a principal of Plaintiff Sagan, noticed that several cans of Blue Can that had been
purchased from Be Ready in April 2016 appeared defective. (Dkt. No. 29 at 5.) Plaintiffs allege
that Sagan’s CEO Rick Muir then sent a case of those cans to BCS Labs in Florida to be tested
for bacteria content, and that on August 22, 2016 BCS determined that each of the samples had a
significant quantity of heterotrophic bacteria (the “8-2016 Test Results”). (FAC ¶26.)
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In October 2016, Blue Can terminated its distributor agreement with Be Ready after
learning from another distributor that Be Ready was working with another party to develop a
competing emergency water company. (Id. ¶21; Dkt. No. 26 at 6.) In January 2017, Plaintiffs
then formed a competing emergency water company, Puravai, LLC. (FAC ¶27).
In mid-2017, Puravai initiated a marketing campaign emphasizing the bacteria-free
nature of its water product and, according to Defendant, specifically disparaged Blue Can on
social media pages and sent misleading emails to Blue Can’s customers in California in an effort
to draw business away from Blue Can. (Id. ¶28; Dkt. No. 26 at 7.) As part of Puravai’s
campaign, an informational video (the “Informational Video”) was placed on its website that
included a picture that Mr. Muir received from BCS of a petri dish labeled “Blue Can B” with
bacteria on it. (FAC ¶29.) Puravai also posted this same video on YouTube and embedded the
video as a link on a reseller’s website. (Dkt. No. 26 at 7.) Blue Can alleges that this is
misleading to consumers because “only certain types of bacteria are the least bit harmful to
consumers” and because the BCS test did not meet scientific protocol such as a chain of custody.
(Id. at 7.)
On or around May 18, 2017, Blue Can sent a cease and desist letter to Puravai accusing
Puravai of defamation and demanding that Puravai remove the video from its website and all
other online locations where it was embedded. (FAC ¶30.) Puravai agreed to edit and remove
the “Blue Can B” label from the video from Puravai’s website (Id. ¶31), but denied publishing
false or disparaging statements. (Dkt. No. 29 at 8.) Defendant alleges that the original video
with Blue Can’s name depicted on the petri dish is still viewable on YouTube and many other
websites, including Plaintiff Coldstream’s website. (Dkt. No. 26 at 8.) In June 2017, Puravai
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through its manager Marcello Surjopolos sent emails to several of Plaintiff’s potential and
current customers and resellers to persuade them to stop carrying Blue Can. (Id. at 9.)
Two of Puravai’s potential customers (one from Utah and one from California) sent their
own samples of Blue Can water to BCS for bacteria testing. (FAC ¶33.) The results for both
tests allegedly showed varying levels of heterotrophic bacteria in the samples. (Id. ¶33.) Soon
thereafter, Puravai entered into an agreement with J.J. Johnson dba Reality Survival in Wyoming
to produce another video (the “Johnson Video”) comparing Blue Can Water to Puravai Water,
and referencing the 8-2016 Test Results. (Id. ¶37.) This video still appears on Puravai’s website.
(Id.)
On February 10, 2018, Blue Can sent a second cease and desist letter to Plaintiffs, and
accused Plaintiffs of defamation by continuing to reference the August 2016 test results in the
Informational Video and by posting the Johnson Video. (Dkt. No. 29 at 9.) Blue Can also
accused Plaintiffs of conspiring together to defame Blue Can in an effort to unfairly compete, as
well as of interference with contractual relations and prospective economic advantage. (Id. at
10.) As with the May 2017 Letter, Blue Can specifically noted in the February 2018 Letter that
it would be filing its claims against Plaintiffs in California. (Dkt. No. 26 at 3.) After receiving
this letter, Sagan purchased one case of Blue Can on Amazon.com and shipped it to Ultimate
Labs in California for testing. (Dkt. No. 29 at 10-11.) This report also showed high levels of
heterotrophic bacteria. (Id.) Puravai asserts that evidence pertaining to each of these test results
are stored at its Utah headquarters. (Id. at 11.)
On March 22, 2018, Plaintiffs filed this suit for a declaratory judgment that Plaintiffs
have not engaged in unfair competition, and affirmatively claiming that Blue Can falsely
advertised its products in violation of the Lanham Act and the Utah Truth in Advertising Act.
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(Id.) In the motion now before the Court, Defendant moves for dismissal for lack of personal
jurisdiction, arguing that Blue Can is not at home in Utah, and that there is no meaningful
connection between Blue Can’s alleged Utah-related activities and the purported false
advertising claim.
Plaintiffs’ opposition to the motion alleges that Blue Can’s contacts and activities in Utah
collectively make the Court’s exercise of personal jurisdiction over Defendant proper. (Id. at 2.)
In particular, Plaintiffs allege that Blue Can both maintains and holds itself out to the public on
its website as maintaining three authorized dealers located in Utah through which Blue Can sells
its products in Utah. (Id. at 2, 15.) They also assert that Blue Can holds contracts with both the
Utah-based Intermountain Healthcare (IHC) and the University of Utah, has advertised its
products and solicited sales at emergency preparedness fairs in Utah (id.), and that Blue Can
water has been advertised at least once in the Deseret News, a Utah publication. (Id. at 4.)
Plaintiffs argue that Blue Can’s misleading claims and false advertising cause Puravai to lose
sales and customers, thus harming it as a competitor. (Id. at 17.)
In its reply to Plaintiffs’ opposition, Defendant provides evidence that two of the Utah
locations (Honeywell #1 and #2) that resell Blue Can water 1) obtained their products directly
from its prior distributor, Be Ready, 2) had no contact with Blue Can, and 3) were only put on
Blue Can’s website per Be Ready’s request. (Dkt. No. 34 at 1-2; Suppl. Skylar Decl., ¶2.) Blue
Can’s third Utah reseller (Kimball Ready) has an online presence only, with no brick and mortar
store in Utah, and has not purchased any Blue Can product in over 18 months. (Dkt. No. 34 at 2;
Suppl. Skylar Decl., ¶3.) Blue Can also asserts that it never instructed or directed Plaintiff Be
Ready to go to or perform any specific act in Utah. (Dkt. No. 34 at 7.) It also never attended an
emergency preparedness fair in Utah; rather, it was Be Ready, by and through its principal Alden
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Cabacungan, who attended these fairs at his own behest to showcase numerous other products in
addition to Blue Can products. (Id. at 1, 7.) Further, it was Be Ready that placed an
advertisement for Blue Can products in the Deseret News, without instruction or direction from
Blue Can. (Id. at 7.) While Blue Can does not dispute that it held contracts with IHC and the
University of Utah, it claims that neither of these has purchased any Blue Can product since
February 2017. (Id. at 11.) Blue Can’s income from Utah sales was less than 5% prior to 2015,
reached 9% at its highest point in 2016, and has dropped off to nearly 0% since this dispute
arose. (Id. at 4, 9.)
DISCUSSION
When a defendant challenges a court’s jurisdiction under Federal Rule of Civil Procedure
12(b)(2) on the basis of the complaint and affidavits, plaintiffs bear the burden of establishing
that jurisdiction over the defendant is proper. Kuenzle v. HTM Sport-Und Freizeitgerate AG,
102 F.3d 453, 456 (10th Cir. 1996). Plaintiffs must “only make a prima facie showing of
personal jurisdiction” by demonstrating through affidavit or other written materials, facts that if
true would support jurisdiction over the defendant. Dudnikov v. Chalk & Vermilion Fine Arts,
Inc., 514 F.3d 1063, 1070 (10th Cir. 2008); OMI Holdings, Inc. v. Royal Ins. Co., 149 F.3d 1086,
1091 (10th Cir. 1998).
“To obtain personal jurisdiction over a nonresident defendant in a diversity action, a
plaintiff must show that jurisdiction is legitimate under the laws of the forum state and that the
exercise of jurisdiction does not offend the due process clause of the Fourteenth Amendment.”
Soma Med. Int’l v. Standard Chartered Bank, 196 F.3d 1292, 1295 (10th Cir. 1999) (quoting Far
W. Capital, Inc. v. Towne, 46 F.3d 1071, 1074 (10th Cir. 1995)). Utah’s long arm statute applies
“to the fullest extent permitted by the due process clause of the Fourteenth Amendment.” Utah
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Code Ann. § 73B-3-201(3). Therefore, it is prudent to “undertake the due process analysis first,
because any set of circumstances that satisfies due process will also satisfy the long-arm statute.”
Sys. Designs, Inc. v. New Customward Co., 248 F. Supp. 2d 1093, 1097 (D. Utah 2003).
“The Due Process Clause protects an individual's liberty interest in not being subject to
the binding judgments of a forum with which he has established no meaningful ‘contacts, ties, or
relations.’” Burger King, 471 U.S. at 471-72 (quoting International Shoe Co. v. Washington, 326
U.S. 310, 319 (1945)). Thus, a “court may exercise personal jurisdiction over a nonresident
defendant only so long as there exist ‘minimum contacts' between the defendant and the forum
state.” World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980).
There are two ways to satisfy this minimum contacts requirement for personal
jurisdiction. First, a court may assert specific jurisdiction over a nonresident defendant where
“the defendant has ‘purposefully directed’ his activities at residents of the forum, and the
litigation results from alleged injuries that arise out of or are related to those activities.” Burger
King, 471 U.S. at 472. Second, if no such nexus exists between a defendant’s forum-related
activities and the injury sustained, the Court may nevertheless exercise general jurisdiction over
the defendant when the defendant's contacts are “so pervasive that personal jurisdiction is
conferred by the ‘continuous and systematic’ nature of the defendant's in-state activities.” OMI
Holdings, 149 F.3d at 1090-91. If the defendant’s activities do create sufficient minimum
contacts, we must also consider “whether the exercise of personal jurisdiction over the defendant
offends traditional notions of fair play and substantial justice.” Id.
I.
General Jurisdiction
A court may assert general jurisdiction over a defendant if the defendant’s activities in
the state are “so continuous and systematic as to render [it] essentially at home in the forum
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state.” Daimler AG v. Bauman, 571 U.S. 117, 127 (2014). Courts have long held that a different
analysis applies for general jurisdiction than specific jurisdiction: “[f]or general jurisdiction, the
defendant's contacts with the state must be greater than those required for specific jurisdiction.”
Doe v. National Medical Servs., 974 F.2d 143, 146 (10th Cir.1992); Kuenzle 102 F.3d at 458.
“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 . . . [where] the corporation is fairly regarded
at home.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 924 (2011).
Exercising general jurisdiction is not limited, however, to these paradigm forums; in an
“exceptional case, a corporate defendant's operations in another forum may be so substantial and
of such a nature as to render the corporation at home in that State.” BNSF Ry. Co. v. Tyrrell, 137
S. Ct. 1549, 1558 (2017) (internal quotation marks omitted).
Plaintiffs have not alleged sufficient facts to establish general jurisdiction over the
nonresident defendant Blue Can. Most significantly, Blue Can was incorporated in Nevada, and
its only office and principal place of business is in California. It conducts business primarily in
California, and has no corporate operations in Utah. In fact, it has no offices, property,
employees, or records in Utah, and has no Utah agent for service of process. Additionally, Blue
Can’s income from Utah sales was less than 5% prior to 2015, remained below 10% since then,
and has since dropped off to nearly 0% after this dispute arose. Plaintiffs have not contested
these facts. Instead, Plaintiffs contend that Blue Can should be subject to general jurisdiction
because it allegedly conducts business continuously and systematically within Utah.
In support of this contention, Plaintiffs argue that Blue Can’s website identifies and holds
itself out as maintaining three separate Utah locations where its products are sold by authorized
dealers. They also assert that the University of Utah and Intermountain Healthcare are Blue
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Can’s “primary customers,” further demonstrating a continuous relationship with Utah residents.
(Dkt. No. 29 at 14.) In support of their allegation that Blue Can’s activities have yielded
“continuous sales revenue for Blue Can from Utah citizens,” Plaintiffs argue that Blue Can has
attended emergency preparedness fairs in Utah to solicit, advertise, display, and sell its products,
and that its product was also advertised in the Deseret News. (Id. at 15.) Yet many of these
allegations appear to be conclusory or unsupported, while some of Blue Can’s purported direct
contacts with the state of Utah have been controverted or seriously cast into doubt by Blue Can’s
affidavit and other evidence.
Even supposing that all of Plaintiffs’ alleged contacts and transactions were taken as true,
however, they still would not rise to the level of being “so substantial . . . as to render [this]
corporation at home” in the state of Utah. See, e.g., Daimler AG, 134 S.Ct. at 761-62 (holding
that even the largest supplier of luxury vehicles to the California market with multiple
California-based facilities was not subject to general jurisdiction simply because their sales were
sizable there). The inquiry is not simply whether Blue Can’s sales and other business dealings in
Utah rise to the level of “continuous and systematic;” it is whether its “affiliations are so
continuous and systematic as to render it essentially at home in the forum State.” Id. (emphasis
added). Otherwise, “the same global reach would presumably be available in every other
State” in which Blue Can’s advertising and sales are sizable. Id. Thus as in Daimler, Utah’s
exercise of general jurisdiction here would be “exorbitant” because it “would scarcely permit
out-of-state defendants to structure their primary conduct with some minimal assurance as to
where that conduct will and will not render them liable to suit.” Id.
In sum, Plaintiffs have not met their burden of establishing that this is the “exceptional
case” where the nonresident Defendant should be subject to general jurisdiction in the state of
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Utah. Blue Can’s operations and activities in the state of Utah fall short of the “continuous,”
“systematic,” and highly “substantial” level necessary to be fairly regarded at home in this
forum.
II.
Specific Jurisdiction
The Court’s specific jurisdiction inquiry is two-fold. First, the Court must determine
whether the defendant has such “minimum contacts” with the forum state that it “should
reasonably anticipate being haled into court there.” World-Wide Volkswagen, 444 U.S. at 297.
Second, if the defendant’s activities create sufficient minimum contacts, then the Court must
consider “whether the exercise of personal jurisdiction over the defendant offends “traditional
notions of fair play and substantial justice.” See Asahi Metal Indus. Co. v. Superior Court of
California, 480 U.S. 102, 113 (1987).
“[T]he Supreme Court has instructed that the ‘minimum contacts’ standard requires, first,
that the out-of-state defendant must have ‘purposefully directed’ its activities at residents of the
forum state, and second, that the plaintiff's injuries must ‘arise out of’ defendant's forum-related
activities.” Dudnikov, 514 F.3d at 1071 (quoting Burger King, 471 U.S. at 472.) “In all events,
the shared aim of ‘purposeful direction’ doctrine has been . . . to ensure that an out-of-state
defendant is not bound to appear to account for merely random, fortuitous, or attenuated contacts
with the forum state.” Id. In the context of Internet activities, a defendant must have directed
actionable “electronic activity into the state . . . with the manifested intent of engaging in
business or other interactions within the State . . . .” Shrader v. Biddinger, 633 F.3d 1235, 1240
(10th Cir. 2011). Accordingly, “[m]ere placement of [national advertisements] does not rise to
the level of purposeful contact with a forum required by the Constitution in order to exercise
personal jurisdiction over the advertiser.” See Federal Rural Elec. Ins. Corp. v. Kootenai Elec.
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Coop., 17 F.3d 1302, 1305 (10th Cir. 1994) (internal quotations omitted). Purposeful direction
further requires “an intentional action [by the defendant] . . . expressly aimed at the forum state .
. . with knowledge that the brunt of the injury would be felt in the forum state.” Dudnikov, 514
F.3d at 1072. The forum state should thus be the “focal point both of the story and of the harm
suffered.” See Walden v. Fiore, 134 S.Ct. 1115, 1123 (2014).
Purposeful direction by a defendant is insufficient to assert specific jurisdiction unless the
plaintiff’s alleged injury also “arises out of” those forum-related activities. The Tenth Circuit
has identified two possible tests to satisfy this causation requirement: 1) the “but for” test or 2)
the “proximate cause” test. Dudnikov, 514 F.3d at 1078. Both tests require a “true causal
element between a defendant’s forum contacts and the litigation.” Younique, LLC v. Youssef,
No. 2:15-cv-00783-JNP-DBP, 2016 WL 6998659, at *4 (D. Utah Nov. 30, 2016) (unpublished);
see also Shrader, 633 F.3d at 1246 n.8 (showing the Tenth Circuit’s rejection of “a loose
‘substantial connection’ test and insisting on . . . a true causal element” between a defendant’s
forum activities and the alleged injury). Accordingly, “the requirement that the claim arises out
of or results from the forum-related activities, is . . . not satisfied when the plaintiff would have
suffered the same injury even if none of the [defendant's forum] contacts had taken place.”
Kuenzle, 102 F.3d at 456–57.
A. Purposeful Direction
While Plaintiffs have plausibly argued that Blue Can purposefully directed some
intentional actions toward the state of Utah (primarily by entering into contracts with the
University of Utah and IHC, and targeting the Utah market on its website by listing three Utah
locations for purchasing Blue Can products), they have failed to argue how Defendant acted
“with knowledge that the brunt of the injury” from its alleged false advertisements would be felt
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specifically in the state of Utah. Put another way, Plaintiffs have not shown a specific instance
or transaction where Blue Can purposefully engaged in false advertising that was specifically
directed at, or with knowledge that the brunt of its injurious effects would be experienced in, the
forum state. Instead, they have simply contended that Defendant generally put false
advertisements into the stream of commerce (primarily online), and then asked the Court to link
that wrongful act to all of its subsequent ordinary business activities in the state of Utah. Contra.
Asahi, 480 U.S. at 105 (foreign defendant’s “mere awareness...that the components it
manufactured, sold, and delivered outside the United States would reach the forum state in the
stream of commerce” was insufficient to establish purposeful direction or minimum contacts
with California). The Court rejects this approach, which would stretch and distort the meaning
of purposeful direction, potentially subjecting Blue Can to personal jurisdiction in any states with
which it intentionally had business contacts of any kind, so long as they occurred subsequent to
its alleged false advertising. These are exactly the kinds of “attenuated contacts” with forum
states that jurisprudence protects defendants from being haled into those states’ courts. Utah is
not the “focal point” of this false advertising story.
Plaintiffs also allege that Be Ready was Blue Can’s agent, that Be Ready clearly had
minimum contacts with Utah (including advertising Blue Can’s products at emergency fairs and
in the Deseret News), and that Be Ready’s actions were expressly aimed at the forum state.
While true that “a principal may be subject to jurisdiction of the court because of the activities of
its agent within the forum state,” Taylor v. Phelan, 912 F.2d 429, 433 (10th Cir. 1990), the party
asserting a principal-agent relationship “bears the burden of establishing its existence” (including
the factual element of control) “by clear and satisfactory evidence.” Branding Iron Motel, Inc. v.
Sandlian Equity, Inc., 798 F.2d 396, 401 (10th Cir. 1986). Plaintiffs have not met their burden of
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alleging a requisite degree of control to establish an agency relationship between Blue Can and
Be Ready. Instead, the facts presented suggest that the relationship between these parties is, as
Defendant contends, a “standard distribution agreement” more analogous to an independent
contractor relationship than an employer-employee relationship. (Dkt. No. 34 at 8.) And the
bare fact that a party “contracted with a [forum] distributor is not enough to establish personal
jurisdiction in the State.” Bristol-Myers Squibb Co. v. Superior Court of California, San
Francisco City, 137 S. Ct. 1773, 1777 (2017).
Plaintiffs further argue that Blue Can “intentionally directed the May 2017 and February
2018 Letters to Puravai in Utah threatening to sue Puravai . . .”, and that these contacts provide
additional evidence that Blue Can “undertook intentional actions that were expressly aimed at
Utah.” (Dkt. No. 29 at 17.) However, when Defendant sent these demand letters to Plaintiffs in
Utah, it was not purposefully availing itself of the benefits of doing business in Utah, nor was it
purposefully directing any false or misleading advertisement toward Utah. As Defendant
correctly observes, the demand letters “do not form the actual controversy upon which to base
the claim for declaratory relief, but are merely evidence that a controversy between the parties
exist.” Dkt. No. 34 at 2; see also Soma Med. Int’l v. Standard Chartered Bank, 196 F.3d 1292,
1299 (10th Cir. 1999) (“It is well-established that phones calls and letters are not necessarily
sufficient in themselves to establish minimum contacts”).
Lastly, in support of Utah’s exercise of jurisdiction over Defendant, Plaintiffs argue that
their declaratory judgment claim “addresses [defamation] accusations directed by Blue Can to
Puravai in Utah and implicates statements and information published by Puravai to its website
and elsewhere from Puravai’s Utah location.” (Dkt. No. 29 at 19.), citing Dudnikov to support
this contention. However, Blue Can’s threatened suit against Puravai for defamation is not the
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case before the Court, and Dudnikov does not require the Court to rely on the facts underlying
Blue Can’s separately threatened claim against Puravai simply because they are related to the
instant claim. To hold otherwise would mean that any future plaintiff could simply defame an
out-of-state defendant competitor from the plaintiff’s home forum, and then hale the defendant
into that court (without any meaningful contacts with the forum) for declaratory relief in
response to the defendant’s threat to sue. All based on the plaintiff’s actions that took place in
the forum state, and without regard to the defendant’s “contacts, ties, or relations” to it. Instead,
the Court opts to limit its consideration to Plaintiffs’ false advertising claim brought before it,
and the facts material to that claim.
B. Causation
Additionally, Plaintiffs must allege that their injuries “arise out of defendant's forumrelated activities.” In this declaratory judgment claim, Plaintiffs solely allege that as Blue Can’s
competitor, Puravai “is harmed in Utah by lost sales and lost customers caused by the misleading
advertisements” made on its “website and elsewhere,” and as a result of “Blue Can’s commercial
contacts with Utah through its authorized dealers, the University of Utah and Intermountain
Healthcare, and its appearances at emergency preparedness fairs in Utah . . . .” (Dkt. No. 29 at
17-18, 22.)
In addition to being sparse, Plaintiffs’ allegations here are merely conclusory. To satisfy
the causation requirement, they need to put forward actual evidence of injury and plausibly argue
how Puravai’s purported injury arose from Blue Can’s Utah contacts, rather than simply
asserting it. Thus under either the “but for” or “proximate cause” tests, Plaintiffs’ “claim for
declaratory relief here does not arise out of the commercial contacts” alleged by Plaintiffs. See
Younique 2016 WL 6998659, at *4. Because Plaintiffs have not shown how this litigation relates
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to Blue Can’s contacts with the state of Utah, much less that there is a “true causal element”
between its contacts and the alleged injuries (which also appear questionable), Plaintiffs’
allegations have not satisfied either the “but for” or “proximate cause” requirements.
CONCLUSION
For the forgoing reasons, the Court concludes that Plaintiffs have failed to show
sufficient minimum contacts to support specific jurisdiction over Defendant. They have also not
met their burden of establishing that Utah has general jurisdiction over Defendant. As a result,
the Court need not consider whether exercising jurisdiction over Defendant would offend
traditional notions of fair play and substantial justice, or whether venue is proper here. It is
therefore ORDERED that Defendant’s Motion to Dismiss for Lack of Personal Jurisdiction is
GRANTED.
DATED this 17th day of October, 2018.
BY THE COURT:
Dee Benson
United States District Judge
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