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Sre-Cheaptrips, Inc. v. Media Synergy Group

May 12, 2010

SRE-CHEAPTRIPS, INC., A DELAWARE CORP. PLAINTIFF,
v.
MEDIA SYNERGY GROUP, LLC, A VIRGINIA LIMITED LIABILITY COMPANY, CHARLES ANTON, AN INDIVIDUAL, AND JOHN DOES 1-25 DEFENDANTS.



The opinion of the court was delivered by: Honorable Edward J. Lodge U. S. District Judge

MEMORANDUM ORDER ON DEFENDANTS' MOTION TO DISMISS

Pending before this Court in the above titled matter is Defendants' motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2) and 12(b)(3). Defendants argue that this Court lacks personal jurisdiction and that venue is improper in Idaho. Plaintiff has responded to the motion asserting that both personal jurisdiction and venue are proper in Idaho. Having fully reviewed the record herein, the Court finds that the facts and legal arguments are adequately presented in the briefs and record. Accordingly, in the interest of avoiding further delay, and because the Court conclusively finds that the decisional process would not be significantly aided by oral argument, the motion shall be decided on the record before this Court without oral argument.

FACTUAL AND PROCEDURAL BACKGROUND

This case involves a contractual dispute between SRE-Cheaptrips, Inc. ("Cheaptrips"), a discount travel website company incorporated in Delaware with its principal place of business in Ketchum, Idaho, and Media Synergy Group, LLC ("Media"), a Virginia limited liability company that is in the business of providing telemarketing services, and Charles Anton ("Anton"), a citizen of Virginia and the president and CEO of Media Synergy. Cheaptrips and Media entered into a Memorandum of Understanding in November of 2008, which is now the subject of the current lawsuit. The agreement provided for a six week test period for outbound telemarketing services by Media to offer Cheaptrips' membership services to leads provided by Cheaptrips. Cheaptrips' president, John Ferry, alleges that Plaintiff started doing business with Defendants under this test agreement expecting to enter into a more expansive annual agreement after the test period. (Ferry Aff. ¶ 23).

Cheaptrips argues that between November 2008 through September 2009, Media wrongfully solicited and obtained hundreds of thousands of dollars in bad sales by intentionally misrepresenting terms of its sales offers and using improper sales techniques such as failing to provide full disclosure of the material terms of sales, charging multiple sales to the same credit card without authorization, and failing to follow scripts approved by Cheaptrips. Cheaptrips states that it informed Media of its growing concerns of complaints of bad sales coming from Media's call center. Cheaptrips also alleges that Media ignored its complaints and concerns and instead continued to submit bad sales to Cheaptrips for the purpose of fraudulently inducing Cheaptrips to pay Media commissions.

Cheaptrips filed a three-count complaint against Defendants alleging breach of contract, fraudulent misrepresentation, and unjust enrichment. Now before the Court is Defendants' motion to dismiss for lack of personal jurisdiction and improper venue.

DISCUSSION

I. Legal Standard for Motion to Dismiss Based on Lack of Personal Jurisdiction

Personal jurisdiction over both parties is required before a court may decide a case in controversy. U.S. CONST. Amend. XIV. In a Rule 12(b)(2) motion to dismiss, the plaintiff bears the burden of proof to show that jurisdiction is appropriate and that the Court has personal jurisdiction over the defendants. Doe v. Unocal Corp., 248 F.3d 915, 922 (9th Cir. 2001); National Union Fire Insurance Co. v. Aerohawk Aviation, Inc., 259 F. Supp. 2d 1096, 1101 (D. Idaho 2003). A plaintiff need only establish a prima facie showing of jurisdictional facts to withstand dismissal when, as here, a district court acts on a motion to dismiss without holding an evidentiary hearing. Id;see alsoBallard v. Savage, 65 F.3d 1495 (9th Cir. 1995). In addressing a defendant's motion to dismiss for lack of personal jurisdiction, the court must take the plaintiff's uncontroverted allegations in its complaint as true, and resolve factual disputes in affidavits in its favor. Dole Food Co. v. Watts, 303 F.3d 1104, 1108 (9th Cir. 2002). However, where a defendant offers evidence in support of its motion, a plaintiff may not simply rest on the bare allegations of its complaint. Amba Mktg. Sys., Inc. v. Jobar Int'l, Inc., 551 F.2d 784, 787 (9th Cir. 1977). Instead, the plaintiff must present facts, by affidavit or otherwise, in response to the defendant's version of the facts. Id.

II. Analysis of Motion to Dismiss for Lack of Personal Jurisdiction

Personal jurisdiction over a non-resident defendant is analyzed under a two-part test. Dow Chemical Co. v. Calderon, 422 F.3d 827, 830 (9th Cir. 2005). A court may exercise either general or specific jurisdiction over a non-resident defendant. The exercise of either type of personal jurisdiction must first, satisfy the requirements of the applicable state long-arm statute, and second, must comport with federal due process. Id. When no applicable federal statute governs personal jurisdiction, as here, the law of the state in which the district court sits shall apply. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004).

The Idaho long-arm statute, as it relates to this case, enables Idaho courts to exercise personal jurisdiction over any person or company who are engaged in the "transaction of any business within this state" or when a tortious act is committed within the state. Idaho Code §5-514. In adopting § 5-514, the Idaho Legislature intended to exercise all the jurisdiction available to the State of Idaho under the Due Process Clause of the United States Constitution. Houghland Farms, Inc. v. Johnson, 803 P.2d 978, 981 (Idaho 1990); see also Lake, 817 F.2d at 1420 (determining federal cases provide guidance in determining whether personal jurisdiction exists). Thus, the Court need only determine whether asserting personal jurisdiction complies with due process. M.A. Hanna Co., 819 F.Supp. 1464. The Due Process Clause requires a defendant have "certain minimum contacts with the relevant forum 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). Media argues that both Media and Anton should be dismissed from the suit for lack of personal jurisdiction. The Court will examine general and specific jurisdiction for Defendants Media and Charles Anton separately.

A. Media Analysis

1. General ...


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