United States District Court, D. Arizona
DOMINIC W. LANZA UNITED SLATES DISTRICT JUDGE.
before the Court are three motions: (1) Defendant Aztec
Secret Health and Beauty Ltd.'s (“Aztec”)
Motion to Dismiss under 12(b)(6) (Doc. 17), (2) Plaintiff T
& T Enterprises LLC's (“T&T”) Motion
to Expedite Hearing on Its Declaratory Judgment Claim (Doc.
10), and (3) Defendant Oceanside Health Products, LP's
(“Oceanside”) Motion to Dismiss for Lack of
Personal Jurisdiction (Doc. 14). As explained below, the
Court will deny Aztec's Motion to Dismiss, deny
T&T's Motion to Expedite, and grant Oceanside's
Motion to Dismiss.
is an Arizona limited liability company with its primary
place of business in Lake Havasu City, Arizona. (Doc. 26
¶ 1.) Aztec is a Nevada corporation. (Id.
¶ 2.) Oceanside is a California limited partnership.
(Id. ¶ 3.)
sells products from its brick-and-mortar store located in
Lake Havasu City, Arizona, and on online marketplaces.
(Id. ¶ 7.) T&T predominantly uses
Amazon.com (“Amazon”) as its online marketplace.
(Id.) Among the products T&T sells on Amazon is
Aztec Secret Indian Healing Clay (“Healing
Clay”), which T&T purchased from Aztec.
(Id. ¶¶ 8, 10, 15.)
November 2016, T&T received a “counterfeit
notice” from Amazon regarding one of the Aztec products
it was selling. (Id. ¶ 15.) In response,
T&T asked Aztec for help in resolving the issue.
(Id.) Aztec's office manager, in turn, provided
a letter authorizing T&T to sell Aztec products on Amazon
(“authorization letter”). (Id.
¶¶ 15, 16; id. at Ex. 2.) The
authorization letter stated, in relevant part: “It has
been brought to our attention that you require verification
that T&T Enterprises, LLC dba Our Pampered Home, is
authorized to sell our products listed below in the United
States, including on the site www.Amazon.com. We
grant full permission to T&T Enterprises, LLC dba Our
Pampered Home to sell our product in the United States and
their inventory is provided to them directly from our
stock.” (Id. ¶ 16; id. at Ex.
2.) The issue with Amazon was quickly resolved. (Id.
August 26, 2018, T&T received another counterfeit notice
from Amazon related to an Aztec product it was trying to
sell. (Id. ¶ 19.) Again, T&T asked Aztec to
help resolve the issue with Amazon. (Id. ¶ 20.)
This time, an unspecified Aztec employee directed T&T to
contact “Paul” to resolve the issue.
(Id. ¶ 20.) “Paul” is Paul Baeyens,
a general partner of Oceanside, which claims to be a
“contract manufacturer” for Aztec. (Id.
¶¶ 20, 9.) T&T notified Baeyens that T&T
had received the counterfeit notice (id. ¶ 21),
and Baeyens retracted the counterfeit claim after confirming
that T&T's inventory levels of Healing Clay were not
greater than that which T&T had purchased from Aztec
(id. ¶¶ 23, 30).
however, explained in the email exchange that T&T would
no longer be able to sell Healing Clay on Amazon.
(Id. ¶ 24.) Mr. Baeyens represented that Aztec
had enrolled in an Amazon program called “Transparency,
” which “requires Aztec Secret products to be
packaged in a new manner.” (Id. ¶ 24.)
Because the Healing Clay in T&T's possession would
not have been packaged in accordance with the
“Transparency” standards, any Healing Clay that
T&T sent to Amazon for sale would be “set aside and
marked as defective.” (Id.)
then stated in an email: “[i]f you have additional
pallets of new product that you want us to buy back from you,
please let me know and we can arrange that so you do not have
inventory you cannot sell stuck at your warehouse.”
(Id. ¶ 25; id. at Ex. 3.) Further,
Baeyens stated: “You mentioned you had 10 pallets of 1
lb. clay and 4 pallets of 2 lb. clay that you purchased from
Aztec in May but have not sent to Amazon that is still in
your warehouse, so if you want us to take those back now is
the time to arrange that.” (Id.)
emailed back that “it believed it had approximately 29
pallets, based on a quick count, to return to Aztec, but that
it had ‘estimated it could be upwards of
50.'” (Id. ¶ 27; id. at Ex.
3.) Baeyens “responded with ‘Got it' and
asked for further clarification on the product so that the
parties could ‘discuss logistics and payment
terms.'” (Id. ¶ 28; id. at
Ex. 3.) The parties continued to exchange emails regarding
the amount of Healing Clay that T&T had purchased.
(Id. ¶ 29; id. at Ex. 3.) Baeyens
further stated that T&T would receive payment on the same
day that inventory was received and that Oceanside's
driver would be able to pick up the Healing Clay.
(Id. ¶ 31; id. at Ex. 3.) Finally,
Baeyens offered to sign a buy back contract with T&T.
September 5, 2018, Baeyens sent a draft of the buy back
agreement to T&T and explained that Oceanside would be
buying back the Healing Clay on Aztec's behalf.
(Id. ¶ 34; id. at Ex. 7.) The draft
provided that Oceanside would buy back 24 pallets of Healing
Clay. (Id. ¶ 35; id. at Ex. 7.) In
addition, the draft buy back agreement included other terms,
such as a choice of law provision, which T&T and Baeyens
had not previously discussed. (Id. ¶ 35;
id. at Ex. 7.) T&T objected to the draft buy
back agreement and counsel for T&T and Oceanside became
involved after the parties could not resolve their dispute.
(Id. ¶¶ 35, 36; id. at Ex. 7.)
September 14, 2018, counsel for Oceanside sent T&T's
counsel a revised buy back agreement, again “offering
to purchase only 24 of the 36 to 37 pallets of [Healing Clay]
currently in T&T's warehouse” and noting that
this was Oceanside's “last and final offer.”
(Id. ¶¶ 38, 39; id. at Ex. 8.) In
response, counsel for T&T stated that T&T
“would continue to sell the [Healing Clay] on
Amazon.com[.]” (Id. ¶ 40; id. at
Ex. 8.) In turn, Oceanside stated that if T&T continued
selling product on Amazon, Oceanside would notify
Amazon's Seller Central. (Id. ¶ 41.) A
notification to Amazon's Seller Central “could
result in a number of very serious consequences for T&T,
up to and including closing T&T's Amazon.com
account.” (Id. ¶ 42.)
initiated this lawsuit on September 21, 2018. (Doc. 1.) The
complaint does not specifically identify any causes of action
or legal theories that would entitle T&T to relief. The
Prayer for Relief requests only declaratory
relief-specifically, a declaration (1) “that T & T
is authorized to sell, on Amazon.com, the Aztec Secret
products purchased in good-faith reliance on being able to
sell these products on Amazon.com”; or (2) “that
in the event T & T cannot sell its product on Amazon due
to Aztec Secret's enrollment in the Amazon
‘Transparency' program or through other
interference by Aztec or Oceanside, Aztec, or its designee,
must buy back all of the Aztec Secret products T & T
purchased from Aztec and has not yet sold through Amazon.com
at the cost T & T paid for the products, including the
original and return shipping costs, as well as costs to
package/prepare the product for return shipping.” (Doc.
26 at 13.)
September 25, 2018, T&T filed a motion to expedite,
asking the Court to order a “speedy hearing” on
its declaratory judgment action so it can “sell Aztec
Secret product before that product expires[.]” (Doc. 10
October 24, 2018, Oceanside filed a motion to dismiss
pursuant to Rule 12(b)(2), asserting that the Court lacks
personal jurisdiction over it. (Doc. 14.)
October 31, 2018, the matter was transferred to a new judge.
November 2, 2018, Aztec moved to dismiss under Rule 12(b)(6).
November 9, 2018, the Court ordered T&T to amend its
complaint to properly allege diversity jurisdiction. (Doc.
November 15, 2018, T&T filed an amended complaint to
comply with the Court's order. (Doc. 26.)
November 16, 2018, the parties stipulated that “for
each of the motions, responses and replies currently pending
before the Court . . . all references to the Verified
Complaint at Docket Entry 1 shall be read as referring to the
Verified Amended Complaint at Docket Entry 26.” (Doc.
December 17, 2018, the Court held oral argument on the three