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Northstar Alarm Services, LLC v. Alder Home Protection

United States District Court, D. Utah

November 5, 2019

NORTHSTAR ALARM SERVICES, LLC, a Utah limited liability company, Plaintiff,
v.
ALDER HOME PROTECTION, d/b/a ALDER HOLDINGS, LLC, a Utah limited liability company, Defendant. ALDER HOLDINGS, LLC, a Utah limited liability company, Counterclaim Plaintiff,
v.
NORTHSTAR ALARM SERVICES, LLC, a Utah limited liability company, and MX SECURITY, LLC, a South Carolina limited liability company, Counterclaim Defendants.

          Paul M. Warner Magistrate Judge

          MEMORANDUM DECISION AND ORDER DENYING MX SECURITY'S MOTION FOR CERTIFICATION AND STAY OF ACTION PURSUANT TO 28 U.S.C. § 1292(B)

          DAVID NUFFER UNITED STATES DISTRICT JUDGE.

         Counterclaim Defendant MX Security, LLC (“MX”), has filed a motion (“Motion”)[1]asking the court to certify for interlocutory appeal the Memorandum Decision and Order Denying MX Security's Motion to Dismiss (“Order”), [2] and to stay the proceedings here while MX pursues such appeal. The Motion is DENIED.

         DISCUSSION

         Pursuant to 28 U.S.C. § 1292(b), a district court may certify “an order not otherwise appealable” for interlocutory appeal if three elements are met: (1) the “order involves a controlling question of law”; (2) there exists a “substantial ground for difference of opinion” on the matter of the controlling question of law; and (3) “an immediate appeal from the order may materially advance the ultimate termination of the litigation[.]”[3] “The three factors should be viewed together as the statutory language equivalent of a direction to consider the probable gains and losses of immediate appeal.”[4] “Among the categories of rulings that may be obviously suited for interlocutory appeal within the general criteria of the statute are those rejecting . . . challenges to . . . personal jurisdiction, ” but “[o]f course not every ruling regarding even such [a] fundamental matter[] is worthy of appeal; the rules that bar routine interlocutory appeal continue to hold sway.”[5]

         MX Does Not Satisfy All Elements Necessary for a Section 1292(b) Interlocutory Appeal.

         MX states a controlling question of law.

         The first element of Section 1292(b) requires that a controlling question of law exist. “There is no doubt that a question is ‘controlling' if its incorrect disposition would require reversal of a final judgment, either for further proceedings or for a dismissal that might have been ordered without the ensuing district-court proceedings.”[6] The parties correctly agree that personal jurisdiction is a controlling question of law.[7]

         MX has not stated a substantial ground for difference of opinion.

         The second element of Section 1292(b) requires that the order involve “a controlling question of law as to which there is substantial ground for difference of opinion[.]”[8]

The level of uncertainty required to find a substantial ground for difference of opinion should be adjusted to meet the importance of the question in the context of the specific case. If proceedings that threaten to endure for several years depend on an initial question of jurisdiction, limitations, or the like, certification may be justified at a relatively low threshold of doubt.[9]

         MX has not shown even “a relatively low threshold of doubt.”[10] MX criticizes the Order on two grounds, saying (1) “[t]he Court misstated the facts alleged by both Alder [Holdings, LLC (‘Alder')] and MX, ”[11] and (2) “this Court made an argument that the principal-agent relationship between Northstar [Alarm Services, LLC (‘NorthStar')] and MX Security was sufficient to show that MX Security purposefully directed its activities at Utah.”[12]

         The latter point mistakes a single tree for the forest. Contrary to MX's suggestion, its status as an agent for NorthStar-a Utah-based entity-was never stated to be, and is not considered, determinative of the jurisdictional question. Rather, the Order identified several facts showing “that MX purposefully directed its activities at Utah.”[13]

Specifically, MX: (1) holds itself out to the public as being NorthStar-an entity formed and headquartered in Utah; (2) is an agent of NorthStar and subject to NorthStar's control from Utah; (3) sends its sales representatives to Utah to receive instruction, training, and recognition regarding the sale of NorthStar's products and services (specifically to customers of competitors); (4) regularly sends customer account information to NorthStar in Utah; [(5)] has expressly agreed that its relationship and dealings with NorthStar are governed by Utah law; [(6)] intentionally engages in tortious activities outside of Utah aimed at damaging Alder in Utah; [(7)] knowingly makes deceptive telephone calls to Alder in Utah in furtherance of such activities; and [(8)] receives compensation from Utah for its actions. The harm resulting from MX's actions has been felt ...

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