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Vivint Inc. v. Alert Holdings Group, Inc.

United States District Court, D. Utah

October 30, 2019

VIVINT, INC., a Utah corporation, Plaintiff,
v.
ALERT HOLDINGS GROUP, INC. dba ALERT ALARM HAWAII, a Hawaii corporation, and JOHN DOES 1-10, Defendants.

          MEMORANDUM DECISION AND ORDER DENYING MOTION TO DISMISS

          Clark Waddoups United States District Judge.

         Before the court is the Motion to Dismiss (ECF No. 6) by Defendant Alert Holdings Group, Inc. dba Alert Alarm (“Alert”). The motion has been fully briefed, and the court heard argument on the same on October 23, 2019. Having reviewed the pleadings and materials submitted and considered the arguments of counsel, the court DENIES Alert's motion.

         BACKGROUND

         Vivint, Inc. (“Vivint”) and Alert both provide home security services in the state of Hawaii. While Alert's business is isolated to Hawaii, Vivint operates in a number of states and is headquarter, and has its principal place of business, in Utah. (ECF No. 2, at ¶¶ 1-2). At some point in 2017, Alert allegedly reached out to Kai Goldstein, who was a former employee of Alert but was then working for Vivint at its headquarters in Utah, and offered to “make it worth [his] while” if he would access, and turn over to Alert, information on Vivint's customers in Hawaii. (ECF No. 2, at ¶¶12-19; ECF No. 16, at 2-4). Alert allegedly used this information throughout 2017 and 2018 in order to target and solicit Vivint customers in Hawaii. (ECF No. 2, at ¶¶12- 19).

         On April 1, 2019, Vivint filed a complaint against Alert, asserting causes of action against it for Unfair Competition, Misappropriation of Trade Secrets, Tortious Interference with Contracts, Tortious Interference with Prospective Business Relations, and Violations of the Federal Trade Secrets Act. (ECF No. 2, at ¶¶26-46). Vivint's complaint also seeks to enjoin Alert “from making false and misleading statements, engaging in illegal contracting practices, tortuously interfering with Vivint's contractual and prospective relationships, and misappropriating Vivint's trade secrets.” (ECF No. 2, at ¶¶47-52).

         Alert moves to dismiss Vivint's complaint under Rule 12(b)(2) of the Federal Rule of Civil Procedure on the basis that it is not subject to personal jurisdiction of the court and under Rule 12(b)(3) because this court is not the proper venue in which to hear Plaintiff's claims. In the alternative, Alert requests the court to transfer venue to the District of Hawaii. Each of Alert's requests will be discussed in turn.

         ANALYSIS

         I. The court has personal jurisdiction over Alert.

         When jurisdiction is contested, the plaintiff has the burden of proving that proper jurisdiction exists. See Far West Capital, Inc. v. Towne, 46 F.3d 1071, 1075 (10th Cir. 1995). Plaintiff need only make a prima facie showing of personal jurisdiction at this preliminary stage of litigation. Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1070 (10th Cir. 2008) (citing Wenz v. Memery Crystal, 55 F.3d 1503, 1505 (10th Cir. 1995)). “‘A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.'” Free Speech v. Fed. Election Comm'n, 720 F.3d 788, 792 (10th Cir. 2013) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). In determining whether a plaintiff has made such a showing, the court accepts the allegations in the complaint as true and resolves all factual disputes in the plaintiff's favor. See Rambo v. American Southern Ins. Co., 839 F.2d 1415, 1417 (10th Cir. 1988).

         To show that personal jurisdiction exists over a defendant, a plaintiff must establish first, that jurisdiction is authorized under Utah law and second, that the exercise of jurisdiction does not offend the due process clause of the Fourteenth Amendment. See Far West Capital, 46 F.3d at 1074. The Tenth Circuit has recognized that the “jurisdictional inquiry in Utah diversity cases is reduced to a single question: did the defendants have sufficient ‘minimum contacts' with the state of Utah to establish personal jurisdiction over them?” Rusakiewicz v. Lowe, 556 F.3d 1095, 1100 (10th Cir. 2009) (citation omitted).

         A. Alert has minimum contacts with the State of Utah.

         A defendant is held to have minimum contacts with a forum where he “has purposefully directed his activities at residents of the forum, and the litigation results from alleged injuries that arise out of or relate to those activities.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985) (internal quotation marks and citations omitted). However, “the plaintiff cannot be the only link between the defendant and the forum. Rather, it is the defendant's conduct that must form the necessary connection with the forum State that is the basis for its jurisdiction over him.” Walden v. Fiore, 571 U.S. 277, 285-86 (2014) (citing Burger King Corp., 471 U.S. at 478). While a defendant's contacts with the forum State “may be intertwined with his transactions or interactions with a plaintiff, ” their relationship with the plaintiff, standing alone, “is an insufficient basis for jurisdiction.” Id. at 286. In order to authorize jurisdiction, a defendant's conduct in a state “must have a broader effect on the forum itself-something beyond the effect felt by the plaintiff alone.” Younique, L.L.C. v. Youssef, No. 2:15-cv-783, 2016 WL 6998659, at *7 (D. Utah Nov. 30, 2016) (emphasis in original).

         Alert's contacts with Utah are minimal. It is a Hawaii company with its principal place of business in Hawaii that only provides services in Hawaii, and it only used the client information that it obtained from Vivint in Hawaii. Thus, as Vivint succinctly states in its opposition to Alert's motion to dismiss, “Alert's Motion to Dismiss presents a simple issue: Can a defendant who steals property from a company located in Utah to the harm and detriment of that company avoid having to answer for that theft in a Utah court by utilizing the stolen property outside of Utah?” (ECF No. 16 at 1). Tenth Circuit precedent establishes that it cannot.

         “The minimum contacts test for specific jurisdiction encompasses two distinct requirements: (i) that the defendant must have purposefully directed its activities at residents of the forum state, and (ii) that the plaintiff's injuries must arise out of [the] defendant's forum-related activities.” Old Republic Ins. Co. v. Cont'l Motors, Inc., 877 F.3d 895, 904 (10th Cir. 2017) (quotations and citations omitted). In a tort case, the first requirement may be established “when an out-of-state defendant's intentional conduct targets and has substantial harmful effects in the forum state.” Id. at 907 (emphasis added) (citing Calder v. Jones, 465 U.S. 783, 790-91 (1984)). This requires that three elements be met: “(a) an ...


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