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Nutrition Distribution LLC v. Juggernaut Nutrition LLC

United States District Court, D. Arizona

September 14, 2018

Nutrition Distribution LLC, Plaintiff,
v.
Juggernaut Nutrition LLC, et al., Defendants.

          ORDER

          JAMES A. TEIILBORG, SENIOR UNITED STATES DISTRICT JUDGE.

         Pending before the Court is Defendant Juggernaut Nutrition, LLC's (“Defendant”) Motion to Dismiss the First Amended Complaint. (Doc. 23). Plaintiff Nutrition Distribution, LLC has responded, (Doc. 25), and Defendant has replied, (Doc. 27).

         I. Background

         Plaintiff, an Arizona limited liability company, and Defendant, a Florida limited liability company, are competitors in the dietary supplement market. (Doc. 17 at 1-2). Defendant sells products that contain the chemical DMAA. (Id. at 2). Plaintiff sells a similar product that does not contain DMAA that was specifically designed “to fill the market void left by the eventual absence of soon-to-be illegal DMAA.” (Id. at 3-4). In 2012, the FDA sent warning letters to manufacturers whose products contained DMAA “questioning DMAA's safety and challenging [the manufacturers'] claims that the ingredient even qualifies as a dietary supplement.” (Id.) Following receipt of this letter, usage of DMAA receded, which allowed Plaintiff's DMAA-free product to obtain commercial success. (Id.) In 2016, however, DMAA returned to the market, which has, according to Plaintiff, negatively affected Plaintiff's business. (Id.)

         Plaintiff contends that DMAA is a dangerous and illegal chemical and that Defendant has engaged in false advertising under the Lanham Act by: (1) not disclosing the adverse health effects of DMAA; (2) implying that DMAA is a naturally occurring chemical; and (3) not disclosing that numerous professional sports associations have banned DMAA, which is particularly egregious in light of Defendants' practice of marketing its products to athletes who compete in competitions run by those associations. (Id. at 2-3). By doing so, Plaintiff argues, Defendant has lured consumers who would otherwise buy Plaintiff's products if they were aware of the material misstatements and omissions in Defendant's advertising, which has harmed Plaintiff's business. (Id. at 9). Defendant has moved to dismiss Plaintiff's suit for lack of personal jurisdiction. (Doc. 23).

         II. Governing Law

         Generally, a federal court has personal jurisdiction over non-resident domestic defendants to the extent allowed by the state in which the court sits. Fed.R.Civ.P. 4(e), (k); Walden v. Fiore, 134 S.Ct. 1115, 1121 (2014). Arizona law provides for personal jurisdiction to the extent allowed by the Constitution of the United States. See Ariz. R. Civ. P. 4.2. The Due Process Clause of the Fourteenth Amendment limits a state's power to grant personal jurisdiction over a defendant to a tribunal. Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 923 (2011).

         Due process requires that a defendant “have certain minimum contacts with . . . [the forum] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.'” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). This minimum contacts framework gives rise to two forms of jurisdiction: general jurisdiction and specific jurisdiction. Bristol-Myers Squibb Co. v. Superior Ct. of Cal., S.F. Cty., 137 S.Ct. 1773, 1779-80 (2017). Under specific jurisdiction, a court can hear claims related to a defendant's voluntary in-state activities. Id. at 1780. Under general jurisdiction, a court can hear any claim against a defendant who can be “fairly regarded as at home” in the state. Goodyear, 564 U.S. at 919.

         Where a defendant moves to dismiss a case for lack of personal jurisdiction, the plaintiff bears the burden of establishing personal jurisdiction. Dole Food Co., Inc. v. Watts, 303 F.3d 1104, 1108 (9th Cir. 2002). Where a court resolves the issue of personal jurisdiction solely by reference to the parties' moving papers and filed documents, a plaintiff satisfies this burden by making “only a prima facie showing of jurisdictional facts to withstand the motion to dismiss.” Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 (9th Cir. 2006) (quoting Doe v. Unocal, 248 F.3d 915, 922 (9th Cir. 2011)). In such a case, uncontroverted statements in the plaintiff's complaint are taken as true, and conflicts between facts contained in affidavits are resolved in the plaintiff's favor. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004).

         III. Analysis

         Plaintiff does not argue that Defendant is subject to general jurisdiction in Arizona, (Doc. 25); accordingly, the Court will only consider Plaintiff's contention that Defendant is subject to specific jurisdiction.

         The specific jurisdiction inquiry “focuses on ‘the relationship among the defendant, the forum, and the litigation.'” Walden, 134 S.Ct. at 1121 (quoting Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 775 (1984)). This analysis is concerned with the defendant's contact-rather than a third party's-with the forum state itself, rather than with a person who resides there. Id. at 1122. Therefore, a defendant's mere contact with a plaintiff, without more, is insufficient to support specific jurisdiction. Id. at 1223.

         The minimum contacts sufficient to support specific jurisdiction exist where: “(1) the defendant has performed some act or consummated some transaction within the forum or otherwise purposefully availed himself of the privileges of conducting activities in the forum, (2) the claim arises out of or results from defendant's forum-related activities, and (3) the exercise of jurisdiction is reasonable.” Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1155 (9th Cir. 2006) (quoting Bancroft & Masters, Inc. v. Augusta Nat'l Inc., 223 F.3d 1082, 1086 (9th Cir. 2000)). The plaintiff has the burden of establishing the first two factors. Schwarzenegger, 374 F.3d at 802. If the plaintiff makes that showing, the burden shifts to the defendant to “‘present a compelling case' that the exercise of jurisdiction would not be reasonable.” Id. (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-78 (1985)). In performing a personal jurisdiction analysis, a court looks to purposeful availment where the cause of action lies in contract, and looks to purposeful direction where the cause of action lies in tort. Axiom Foods, Inc. v. Acerchem Int'l, Inc., 874 F.3d 1064, 1069 (9th Cir. 2017). Lanham Act claims sound in tort; accordingly, the purposeful direction test applies. See Liberty Ammunition, Inc. v. United States, 101 Fed.Cl. 581, 591 (Fed. Cir. 2011) (“Violations of the Lanham Act sound in tort”); Omega RV v. RV Factory, LLC, No. 1:16-CV-00204-EJL, 2017 WL 1943952, at *3-4 (D. Idaho May 10, 2017) (analyzing Lanham Act violation under the purposeful direction test); Warner Bros. Home Entm't, Inc. v. Shi, No. CV 12-07753 DMG (PLAx), 2013 WL 12116586, at *4 (C.D. Cal. Jan. 29, 2013).

         Plaintiff contends that two of Defendant's contacts with Arizona justify the exercise of personal jurisdiction. First, Plaintiff notes that Defendant operates a commercial website that is accessible in Arizona. (Doc. 25 at 5-7). Second, Plaintiff maintains that ...


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