United States District Court, D. Utah
MEMORANDUM DECISION AND ORDER
WADDOUPS UNITED STATES DISTRICT JUDGE.
the court is Defendant Commercial M s Company's Motion to
Dismiss, in which Commercial M s asserts that this court
lacks personal jurisdiction over it and that the District of
Utah is not the proper venue for this action. (Dkt. No. 8.)
Because Plaintiff Franklin Covey does not allege the court
has general personal jurisdiction and there are no facts in
the record that would support such a conclusion, the court
addresses only whether specific personal jurisdiction exists.
(Dkt. Nos. 2 ¶¶ 5-7 & 15 p. 10.) Having
considered the arguments set forth in the briefs and during a
hearing on August 10, 2017, the court determines that
Franklin Covey has not met its burden of proving a prima
facie case of personal jurisdiction and DISMISSES this action
for lack of jurisdiction.
Covey, a Utah corporation with its principal place of
business in Salt Lake City, Utah, brings this action for
copyright infringement under 28 U.S.C. § 1338(a) and 17
U.S.C. § 501. (Dkt. No. 2 ¶¶ 1 & 3.) In
its complaint, Franklin Covey alleges that Commercial M s, a
Delaware corporation with its principal place of business in
Texas, used Franklin Covey's copyright-protected content
in employee training sessions without authorization to do so.
(Id. ¶¶ 4 & 40.) The following factual
allegations are based upon the complaint and declarations
submitted by the parties. The court accepts them as true only
for the purposes of this motion.
M s is a global m manufacturing, recycling, and trading
company that makes steel beams for construction. (Dkt. No. 8,
p. 7-8.) It is headquartered in, and all of its high level
management is located in, Irving, Texas. (Dkt. No. 8-1 ¶
4.) Commercial M s has 7, 871 employees in twenty-six states.
(Id. ¶¶ 6 & 8.) And it has an
international presence. (Id. ¶ 8.) In Utah,
Commercial M s has one location and seventeen employees.
(Id. ¶¶ 5-7.) The Utah employees make up
0.2% of Commercial M s's United States work force.
(Id.) Commercial M s occasionally provides training
seminars for its employees in various locations across the
United States. (Dkt. No. 8, p. 8.) During those seminars,
employees attend lectures and use corresponding workbooks.
(Id.) Franklin Covey alleges that Commercial M
s's employees are instructed in management and
“prioritization” strategies. (Dkt. No. 2
Covey is a global, public company that helps organizations
and individuals enhance performance in the categories of
leadership, execution, productivity, trust, sales
performance, customer loyalty, and education. (Dkt. No. 2
¶ 9.) It has copyrighted several products aimed at
teaching its clients in these areas, including The 5
Choices: The Path to Extraordinary Productivity and
associated training materials, The Time Matrix model, The
7 Habits of Highly Effective People and other related
products, and The 4 Disciplines of Execution. (Dkt.
No. 2 ¶¶ 18-19, 26, 33-37, 39.)
Thompson is the Manager of Learning and Development for
Commercial M s. (Dkt. No. 15-1 ¶ 6.) Prior to joining
Commercial M s, Mr. Thompson worked for a different company
where, in approximately 2013, he had occasion to meet Peter
Montgomery, who is the Client Partner for Franklin Covey.
(Id. ¶¶ 2 & 7.) At that time the two
men worked together, and Mr. Thompson purchased Franklin
Covey's products for his then-employer. (Id.
¶¶ 8-9.) During their past interactions, Mr.
Montgomery communicated that Franklin Covey is located in
Utah. (Id. ¶ 10.) On July 15, 2016, after Mr.
Thompson had begun working for Commercial M s, the two men
met at its office in Irving, Texas to discuss Commercial M s
purchasing Franklin Covey's services. (Id.
¶ 12.) Mr. Thompson informed Mr. Montgomery that
Commercial M s did not need Franklin Covey's services or
products because it had a workbook of its own. (Id.
¶¶ 13-15.) According to Mr. Montgomery, Mr.
Thompson showed him a workbook, entitled “Essentials of
Management, ” that contained materials related to
Franklin Covey's products. (Id. ¶ 15.) He
also asserts that Mr. Thompson had copies of Franklin
Covey's products on his shelf. (Id. ¶ 15.)
Mr. Thompson reported to Mr. Montgomery that the materials
were used in employee training seminars. (Id.
¶¶ 13-14, 19.) Based on this encounter Mr.
Montgomery notified Mr. Thompson on July 22, 2016, that he
believed the materials infringed Franklin Covey's
copyrights and that Commercial M s needed a license to use
them; Mr. Thompson denied this. (Id. ¶¶
on his interactions with Mr. Thompson and knowledge of how
Franklin Covey's products work, Mr. Montgomery states in
a declaration to the court that he “believe[s]”
Commercial M s's employees attend seminars where they
receive copies of the workbooks and are instructed on how to
use the concepts. (Id. ¶¶ 23-28.) He
further believes that Commercial M s “instructed and
expected its employees to apply, implement, and exploit the
training materials.” (Id. ¶ 32.) This is
at least in part because of his understanding that Franklin
Covey's materials are only valuable to organizations
using them if they are implemented beyond the training
sessions. (Id. ¶ 31.) Mr. Montgomery offers no
further foundation to support that he has personal knowledge
of the facts he asserts.
Thompson declares that the materials Mr. Montgomery saw were
created in Texas and that no seminars ever occurred in Utah;
Franklin Covey does not dispute these facts. (Dkt. No. 8-1,
¶¶ 10-11.) At least two supervisors based in
Commercial M s's Utah location attended training seminars
in Arizona. (Id. ¶ 12; Dkt. No. 22-2
¶¶ 8-9.) In his declaration attached to the reply
brief in support of this motion, Mr. Thompson states that the
Utah supervisors attended the seminar on September 21, 2016,
and September 23, 2016, and that the seminar they attended
used different materials than those Mr. Montgomery saw on
July 15, 2016. (Dkt. No. 22-2 ¶¶ 9-10, 12.) Mr.
Thompson also declares that Commercial M s never instructed
its employees to use the training materials in their offices
or to otherwise instruct their employees based on what they
learned at the seminar, but that the employees “are
free to do as they please with the training materials.”
(Id. ¶¶ 14-18.) Franklin Covey offers no
supportable evidence to contradict Mr. Thompson's
motion to dismiss for lack of jurisdiction, “the
plaintiff need only make a prima facie showing of personal
jurisdiction to defeat the motion.” AST Sports
Sci., Inc. v. CLF Distrib. Ltd., 514 F.3d 1054, 1057.
Franklin Covey may satisfy its burden “by
demonstrating, via affidavit or other written materials,
facts that if true would support jurisdiction over the
defendant.” Emp'rs Mut. Cas. Co. v. Bartile
Roofs, Inc., 618 F.3d 1153, 1159 (10th Cir. 2010)
(citation and internal quotation marks omitted). And
“[a]ll factual disputes are resolved in favor of the
plaintiff when determining the sufficiency of this showing,
” Rusakiewicz v. Lowe, 556 F.3d 1095, 1100
(10th Cir. 2009), so long as the plaintiff's facts are
“well-pled (that is, plausible, non-conclusory, and
non-speculative), ” Dudnikov v. Chalk &
Vermilion Fine Arts, Inc., 514 F.3d 1063, 1069 (10th
considering whether personal jurisdiction is proper in a
federal question case, federal courts “must determine
(1) whether the applicable statute potentially confers
jurisdiction by authorizing service of process on the
defendant and (2) whether the exercise of jurisdiction
comports with due process.” Peay v. BellSouth Med.
Assistance Plan, 205 F.3d 1206, 1209 (10th Cir. 2000).
Where the statute under which the plaintiff has sued does not
provide for nationwide service of process, as is the case
with the Copyright Act, the court looks to Federal Rule of
Civil Procedure 4(k)(1), which governs service and instructs
courts to “appl[y] the forum state's personal
jurisdiction rules.'” Fort Knox Music Inc. v.
Baptiste, 203 F.3d 193, 196 (2d Cir. 2000) (quoting
PDK Labs, Inc. v. Friedlander, 103 F.3d 1105, 1108
(2d. Cir. 1997)); see also Daimler AG v. Bauman, 134
S.Ct. 746, 753 (2014) (“Federal courts ordinarily
follow state law in determining the bounds of their
jurisdiction over persons.”). The Utah legislature, in
effort to “ensure maximum protection to citizens of
this state, ” has said Utah's long-arm statute
extends jurisdiction “to the fullest extent permitted
by . . . due process.” Utah Code Ann. § 78B-3-201.
Thus, the proper inquiry here is whether it would offend due
process for the court to exercise jurisdiction over
Commercial M s. See Walden v. Fiore, 134 S.Ct. 1115,
1121 (2014) (applying the Nevada long-arm statute, which also
reaches to the broadest extent of due process).
process permits a court to exercise personal jurisdiction if
the defendant has “certain minimum contacts . . . 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) (citations and internal quotation marks omitted). In
other words, jurisdiction is proper where “defendant
has ‘minimum contacts' with the forum state such
‘that he should reasonably anticipate being haled into
court there.'” AST Sports Sci., 514 F.3d
at 1057 (quoting World-Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286, 297 (1980)). Thus, the court must