United States District Court, D. Utah
MEMORANDUM DECISION AND ORDER GRANTING IN PART AND
DENYING IN PART MOTION FOR DEFAULT JUDGMENT
N. PARRISH UNITED STATES DISTRICT COURT JUDGE
matter is before the court on the Motion for Default Judgment
(ECF No. 49) against defendant DG International (“DG
International”) filed by Plaintiff ZooBuh, Inc.
(“ZooBuh”) pursuant to Fed.R.Civ.P. 55(b)(2).
ZooBuh seeks statutory damages and treble damages against DG
International for its alleged violations of the Controlling
the Assault of Non-Solicited Pornography and Marketing Act of
2003 (CAN-SPAM Act), 15 U.S.C. § 7701 et seq. After
reviewing the motion for Default Judgment, the court issued
an order requesting that ZooBuh submit additional briefing on
the issue of damages. ZooBuh thereafter filed its
Supplemental Brief Regarding Statutory Damages Calculation
(“Supplemental Brief”, ECF No. 71). The court now
rules on ZooBuh's motion.
is a Utah corporation with its principal place of business in
Utah County, Utah. ZooBuh provides email services to its
customers, and it owns all of the servers, routers, and
switches on its network. Every ZooBuh email account is
registered, hosted, and serviced through ZooBuh's
International is a foreign company located in Basseterre, St.
Kitts. DG International contracted with DG International
Limited, LLC (“DGI LLC”), a Delaware limited
liability company, to send emails to persons on DG
International's customer lists. The customer list at
issue in this case contained email addresses for persons who
had supposedly registered for the dating website xdating.com.
DGI LLC used the platform of Savicom, Inc., dba Mindshare
Design (“Mindshare”) to send email advertisements
to the email addresses associated with the xdating.com
alleges that it and its customers have received thousands of
email advertisements for xdating.com. All of these emails
arrived on Zoobuh's email servers, which are located in
Utah. The emails contain links to a registration page for
xdating.com. Many of the emails contain misleading
information: they purport to identify people registered on
xdating.com, but in reality the people identified in the
emails do not exist and are not users of xdating.com. Rather,
the emails are sent from “virtual cupids”: fake
users created by DGI LLC and/or DG International who
communicate with users in the same way actual users would. As
xdating.com's terms and conditions explain:
THIS SITE USES FANTASY PROFILES CALLED “ONLINE
FLIRT®” In order to enhance your amusement
experience, to stimulate you and others to use our Services
more extensively, and to generally sprinkle some sparkle and
excitement into the Services of XDATING.COM, we may post
fictitious profiles, generate or respond to communications by
means of automated programs or scripts that simulate or
attempt to stimulate your intercommunication with another
real human being (though none really exists and any dialog is
generated by programming) . . . .
the emails at issue are tailored to the recipient's
location, in this case, Utah. Some of the emails state,
“Hey there [username], these are few [sic] members
we've selected for you near Salt Lake City.” The
emails identify supposed members of xdating.com living in
Salt Lake City, Ogden, Sandy, West Jordan, Cedar Valley, West
Valley City, Provo, Midvale, Spanish Form, Orem, and
Murray-all cities in Utah. But the members identified whose
usernames range from “bigbootylicious” to
“sassyhottie37, ” appear to be virtual cupids
only. Many images are reused with different usernames and
to ZooBuh, neither it nor its customers elected to receive
email advertisements for xdating.com. Rather, ZooBuh believes
that its customers are being opted-in to receive emails from
xdating.com when, in actuality, the customers are attempting
to unsubscribe from xdating.com's email list.
Specifically, ZooBuh has an auto-unsubscribe feature that
does not distinguish between unsubscribe links and marketing
links. As such, the auto-unsubscribe “follows all
links.” This, according to ZooBuh, has inadvertently
resulted in ZooBuh customers being added to the xdating.com
alleges that all of the emails at issue violate at least one
or more provisions of CAN-SPAM. ZooBuh alleges that it has
suffered harms to its business, including financial harm,
lost time, and server crashes. ZooBuh regularly receives
customer complaints concerning spam email, and some customers
have stopped using ZooBuh because of the spam emails.
International was served March 29, 2018. See ECF No. 44. DG
International did not file an answer or otherwise respond,
and the clerk of court subsequently issued a certificate of
default as to DG International. ECF No. 48. ZooBuh originally
sought a judgment in the amount of $15, 705.400 against DG
International for an alleged 84, 024 violations of 15 U.S.C.
§ 7704(a)(1) and for an alleged 73, 030 violations of 15
U.S.C. § 7704(a)(1)(A) pursuant to 15 U.S.C. §
7704(g)(3). After ZooBuh filed its motion for default
judgment, on June 8, 2018, the court dismissed ZooBuh's
second cause of action seeking damages for violations of 15
U.S.C. § 7704(a)(1)(A). The court then requested
supplemental briefing on how to calculate statutory damages
under 15 U.S.C. § 7706(g). On August 17, 2018, Zoobuh
filed its Supplemental Memorandum wherein it claims $12, 603,
600.00 in damages for the 84, 024 alleged violations of 15
U.S.C. § 7704(a)(1).
moves the court pursuant to Fed.R.Civ.P. 55(b)(2) to enter a
default judgment against DG International for its violations
15 U.S.C. § 7704(a)(1). ZooBuh has obtained a default
certificate against DG International as required by DUCivR
55-1(a). The court now must address first whether it has
jurisdiction over this case and second whether ZooBuh
is entitled to the relief it seeks.
court has subject matter jurisdiction over the case under 15
U.S.C. § 1331 (federal question doctrine) and 15 U.S.C.
§ 7706(g)(1) (authorizing original jurisdiction), but
the court must still address whether it may exercise personal
jurisdiction over DG International before it may enter a
default judgment against it.
alleges that the court has personal jurisdiction over all the
defendants “because each of them has purposefully
availed themselves of the privileges of conducting commercial
activity in the forum state.” Am. Compl. ¶ 7.
ZooBuh alleges that there is personal jurisdiction over DG
International specifically because it “transacts or has
transacted business in this district sufficient to subject it
to the jurisdiction of this Court.” Id. at
¶ 4. What is more, ZooBuh alleges that “the
exercise of jurisdiction is reasonable since Defendants
should have known that they would be subject to the
jurisdiction and laws of the forum state when they sent, or
had commercial emails sent to customers of an email service
provider located in Utah.” Id. at ¶ 7.
the court has already held that it may exercise personal
jurisdiction over DGI LLC, DG International is a separate
foreign entity whose contacts with the state of Utah were not
addressed in the court's Memorandum Decision and Order
granting in part and denying in part Sauvicom and DGI
LLC's Motion to Dismiss (“Order on Motion to
Dismiss”), ECF No. 50. But the analysis is essentially
the same because DG International is alleged to have acted
concurrently with DGI LLC in sending the infringing emails.
The court therefore incorporates the Order on the Motion to
Dismiss herein, but briefly addresses the issues as applied
to DG International. See Or. Mot. Dismiss at 4-17.
CAN-SPAM does not provide for nationwide service of process,
so Rule 4(k)(1)(A) instructs this court to apply the law of
the state in which the court sits. Zoobuh, Inc. v.
Williams, No. 2:13-CV-791-TS, 2014 WL 7261786, at *2 (D.
Utah Dec. 18, 2014) (applying Utah's long-arm statute to
analyze personal jurisdiction because CAN-SPAM does not
authorize nationwide service of process). Consequently, Utah
law governs personal jurisdiction in this case. See id.
Utah's long-arm statute extends jurisdiction over
defendants “to the fullest extent permitted by the due
process clause of the Fourteenth Amendment.” Utah Code
Ann. § 78B-3-201(3). As such, the personal jurisdiction
analysis in this case involves a single inquiry: whether the
exercise of jurisdiction over the defendant comports with the
due process clause. See Old Republic Ins. Co. v.
Cont'l Motors, Inc., 877 F.3d 895, 903 (10th Cir.
2017) (holding that personal jurisdiction analysis required a
single due process inquiry because Colorado's long-arm
statute extends jurisdiction to the Constitution's full
extent). Under the due process clause, a court may exercise
jurisdiction over a defendant so long as: (1) the defendant
purposefully established “minimum contacts” with
the forum state, and (2) the assertion of personal
jurisdiction comports with fair play and substantial justice.
Id. A defendant's contacts, depending on their
quality and quantity, may give rise to either general or
specific jurisdiction. Id.
may exercise general jurisdiction when an entity's
contacts with the forum state are “so ‘continuous
and systematic' as to render [it] essentially at home in
the forum State.” Goodyear Dunlop Tires Operations,
S.A. v. Brown, 564 U.S. 915, 919 (2011) (quoting
Int'l Shoe Co. v. Washington, 326 U.S. 310, 317
(1945)). A corporation is considered “at home” in
its place of incorporation and its principal place of
business. Id. at 924. But this is a “high
burden” and one that ZooBuh has failed to meet. See Or.
Mot. Dismiss at 6-7 (quoting Benton v. Cameco Corp.,
375 F.3d 1070, 1081 (10th Cir. 2004)).
absence of general jurisdiction, the court may exercise
specific jurisdiction over the defendant if due process will
be satisfied. This requires analyzing the due process factors
of 1) “whether the plaintiff has shown that the
defendant has minimum contacts” with the forum and 2)
whether “the defendant has presented a
‘compelling case'” that the exercise of
jurisdiction does not comport with fair play ...