United States District Court, D. Arizona
ORDER
HONORABLE JENNIFER G. ZIPPS UNITED STATES DISTRICT JUDGE
Pending
before the Court is Defendants' Motion to Dismiss for
Lack of Personal Jurisdiction, pursuant to Federal Rule of
Civil Procedure 12(b)(2). (Doc. 8.) The motion has been fully
briefed. Having fully considered the matter, the Court will
grant the motion as to Defendant Katherine Daniels. The Court
will deny the motion as to Defendants Your Story, Inc., and
Donna Zucker.
BACKGROUND
AND FACTUAL ALLEGATIONS
The
factual allegations pertinent to personal jurisdiction are as
follows. Plaintiffs Pamela Lancaster and Thomas Frank reside
and conduct business in Pima County, Arizona. (Doc. 1, ¶
1.) Lancaster is an internationally recognized sound healing
specialist, life coach, and licensed body therapist.
(Id. at ¶ 11.) Frank is a naturopathic
physician and shaman who integrates master-level massage and
acupuncture with ceremonial practices for restorative
wellness. (Id.) Plaintiffs provide their services to
guests at Miraval Arizona Resort and Spa, in Tucson, Arizona
(the Resort) both by individual treatment and
regularly-scheduled retreats. (Id.)
Plaintiffs'
relationship with the Resort is that of independent
contractor. (Id. at ¶ 12.) Plaintiffs'
business success depends primarily on the marketing of their
retreats and services through the Resort website, from their
reputation as practitioners, and from client or patient
referrals. (Id. at ¶ 13.)
In
2014, Plaintiffs decided that having a book would be an
effective means of engaging with and educating existing and
prospective clients or patients. (Id. at ¶ 14.)
Having become aware sometime between February and June of
2014 that Donna Zucker was a writer, Plaintiffs contacted
Zucker to write a book about their practice. (Doc 13-1,
¶¶ 5-8.) Zucker is a resident of New York and her
business, Your Story Inc., is a corporation created under the
laws of New York. (Doc. 1, ¶ 2; Doc. 8, p. 2.)
On
August 28, 2014, Plaintiffs and Zucker entered into three
agreements: a three page “Your Story, Inc. Contract,
” a two-page “Contract for Book Outline Scope of
Services, ” and a two-page “Book Proposal.”
(Doc. 1, ¶ 15.) Under the terms of the Contract, Zucker
would deliver a book outline and a manuscript to Plaintiffs
by February 15, 2015. (Id. at ¶ 16; Doc. 1-2,
Ex. A, p. 5.) The Contract specified: “all ideas,
plans, improvements, or inventions (the
‘Materials') developed by [Zucker] shall, subject
to payment as provided herein, belong to [Plaintiffs].”
(Doc. 1, ¶ 17; Doc. 1-2, Ex. A, p. 3.) For their part,
Plaintiffs agreed to pay Zucker for reasonable expenses and
specifically, Zucker's travel expenses “including
flight and lodging from White Plains, NY to Tucson, AZ for
the purpose of Conducting Interviews; Attending
“Awakening the Divine Self” at Miraval Resort
& Spa, January 2-6, 2015.” (Doc. 1-2, Ex. A; p. 2.)
The Contract provided signature lines for acceptance for each
Plaintiff and for “Donna Zucker, President, Your Story,
Inc.” (Id., Ex. A.) The parties agreed that
New York law would govern the Contract. (Doc. 1, ¶ 6;
Doc. 1-2, p. 4; Doc. 8, p. 2.)
Zucker
presented Plaintiffs with the first draft of the Manuscript
in mid-February 2015. (Doc. 1, ¶ 18). Plaintiffs
rejected the draft as unsatisfactory. (Doc. 1, ¶ 19.)
Plaintiffs subsequently provided Zucker with additional
materials and in-person coaching. (Doc. 1, ¶ 20.)
Plaintiffs also hosted Zucker at one of Plaintiffs'
four-day intensive immersion retreats at the Resort. (Doc. 1,
¶ 21.)
Zucker
completed and delivered a final product of the Manuscript in
August 2015. (Doc. 1, ¶ 20-22.) The Manuscript included
a story recounting Zucker's personal experiences that
came to be known as “Ana's Story.” (Doc. 1,
¶ 23.) Believing Zucker's work to be completed, on
August 15, 2015, Plaintiffs paid Zucker the sum of $17, 500
in full and final payment for the Manuscript. (Doc. 1, ¶
24.)
Thereafter,
Zucker sought to revoke Plaintiffs' use of Ana's
Story and volunteered to re-write the manuscript to remove
the story without any fee or cost to Plaintiffs. (Doc. 1,
¶ 25.) Plaintiffs accepted the offer. (Doc. 1, ¶
26.) However, on April 14, 2016, after Zucker had failed to
deliver an updated manuscript, Plaintiffs notified Zucker
formally of the termination of their relationship. (Doc. 1,
¶ 27.) In May 2016, Plaintiffs received from Zucker a
revised manuscript with Ana's Story removed. (Doc. 13-1,
Thomas Frank Aff., ¶ 15.) According to Plaintiffs, by
this point, they had incorporated their own contributions to
the Manuscript and had incorporated the Manuscript into their
course materials at the Resort. (Doc. 1, ¶ 29.) Some of
these materials were published on the Resort's website to
promote Plaintiffs' services. (Doc. 8, pp. 3-4.)
Zucker
and Your Story dispute that Plaintiffs paid all that was
owed. (Doc. 8, p. 3.) Zucker asserts that Plaintiffs owe
Zucker and Your Story approximately $75, 000 for the
additional work and revisions requested by Plaintiffs, and
that Plaintiffs have failed to pay despite Zucker's
requests for payment. (Id.)
Defendant
Kathleen Daniels is an attorney licensed to practice in the
state of New York. (Doc. 8, p. 2.) Daniels is copyright
counsel to Zucker and Your Story. (Id.) On December
5, 2017, Daniels, on behalf of Zucker, sent a letter to
Steven Rudnitsy, the President and Chief Executive Officer of
the Resort, at the Resort's address in Tucson Arizona,
threatening legal action in response to the Resort's use
of the Manuscript. (Doc. 1., p. 30 and Ex. B.) The letter
alleged that “publishing . . . excerpts of the
Manuscript without authorization from” Zucker
constituted “copyright infringement in violation of
federal law.” (Doc. 1, ¶ 31, Ex. B.) The letter
stated that although Plaintiffs had hired Zucker to write the
Manuscript, copyright ownership in the Manuscript remained
with Zucker until receipt of full payment from Plaintiffs,
which had not yet occurred. (Doc. 1, ¶¶ 32, 46, 47,
57) According to Plaintiffs, after receiving Daniels's
letter, the Resort suspended Plaintiffs' ability to
continue offering its regular, immersive retreats, causing
Plaintiffs to suffer damages. (Doc 1. ¶¶ 49, 58,
59.)
On
about February 5, 2018, it came to Defendant Zucker's
attention that excerpts of the Manuscript were again or still
being used on the Resort website to promote Lancaster and
Frank's “Awakening the Divine Self” retreats.
(Doc. 8, p. 4.) On March 7, 2018, Defendant Daniels sent an
email demanding that the infringing excerpts be removed to
David Moorhead, Chicago-based Vice President and Assistant
General Counsel for Marketing and Intellectual Property for
Hyatt Hotels Corporation, the Resort's parent company.
(Doc. 8, p. 4; Doc. 8-1, Ex. B, ¶¶ 9, 11.) On March
16, 2018, Moorhead telephoned Daniels to inform her that the
material had been taken down. (Doc. 8-1, Ex. B, ¶ 15.)
On
March 9, 2018, Plaintiffs filed the pending action. (Doc. 1.)
Plaintiffs assert three claims against Zucker and Your Story:
breach of contract (Count 1); tortious interference with
contract (Count 2); and defamation per se (Count 4); and one
claim -tortious interference with contract, against Daniels
(Count 3). Plaintiffs further seek declaratory judgment in
their favor for copyright ownership of the Manuscript.
ANALYSIS
A.
Legal Standard for Specific Jurisdiction
Arizona's
long-arm statute permits courts to exercise personal
jurisdiction over nonresident litigants to the maximum extent
allowable by the United States Constitution. A. Uberti
& C. v. Leonardo, 892 P.2d 1354, 1358 (Ariz. 1995).
A federal court may exercise personal jurisdiction over a
defendant consistent with due process if the defendant has
“certain minimum contacts” with the relevant
forum “such that the maintenance of the suit does not
offend traditional notions of fair play and substantial
justice.” International Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945). Plaintiffs do not
argue that any Defendant's contacts are so substantial,
continuous, and systematic that the Court may exercise
general jurisdiction over them. (See Doc. 13.)
Therefore, the Court need only decide whether it may exercise
specific jurisdiction over each Defendant based on the
relationship between the Defendant's forum contacts and
the Plaintiffs' claims. See Yahoo! Inc. v. La Ligue
Contre Le Racisme Et L'Antisemitisme, 433 F.3d 1199,
1205 (9th Cir. 2006).
A
district court may exercise specific jurisdiction over a
defendant if: (1) the nonresident purposefully directs her
activities or consummates some transaction with the forum or
resident thereof; or performs some act by which she
purposefully avails herself of the privilege of conducting
activities in the forum, thereby invoking the benefits and
protections of its laws; (2) the claim arises out of or
relates to the defendant's forum-related activities; and
(3) the exercise of jurisdiction is reasonable. See,
e.g., Picot v. Weston,780 F.3d 1206, 1211 (9th
Cir. 2015). “The plaintiff bears the burden of
satisfying the first two prongs of the test.”
Schwarzenegger v. Fred Martin Motor Co., 374 F.3d
797, 802 (9th Cir. 2004). In evaluating whether the plaintiff
has met this burden, the Court takes as true uncontroverted
allegations in the ...