BlueRadios, Inc. v. Datacolor, Inc.

          REPORT AND RECOMMENDATION ON DEFENDANT'S MOTION TO DISMISS FOR LACK PERSONAL JURISDICTION (DKT. #1)

          N. REID. NEUREITER UNITED STATES MAGISTRATE JUDGE

         This matter comes before the Court on Defendant Datacolor Inc.'s (“Datacolor”) Motion to Dismiss for Lack of Personal Jurisdiction (Dkt. #1), filed on February 8, 2019 (the same date the case was removed to this Court from Colorado state court). Plaintiff BlueRadios, Inc. (“BlueRadios”) filed an Opposition to the Motion to Dismiss which attached an affidavit from BlueRadios' principal plus some additional e-mail exhibits (Dkt. #16 and #16-1.) Datacolor filed a Reply. (Dkt. #19.)

         I heard argument on the Motion to Dismiss on April 2, 2019 and took the matter under advisement. Having considered the argument of counsel, and having reviewed the briefs, the attached exhibits and the relevant caselaw, I recommend that Defendant Datacolor's Motion to Dismiss be DENIED.

         A. Procedure for Deciding a Personal Jurisdiction Challenge.

         Once a motion has been filed challenging personal jurisdiction over a defendant, “the plaintiff bears the burden to establish the court's jurisdiction, which normally is not a heavy one.” 5B Wright & Miller Federal Practice and Procedure: Civil 3d §1351 at 274 (3d ed. 2004). See also Wise v. Lindamood, 89 F.Supp.2d 1187, 1189 (D. Colo. 1999) (“The burden on the plaintiff is light.”). In considering a challenge to its jurisdiction, the Court has “considerable leeway” in deciding the methodology for deciding the motion. “The Court may receive and weigh the contents of affidavits and any other relevant matter submitted by the parties to assist it in determining the jurisdictional facts.” Wright and Miller, supra, at 305. See also Schramm v. Oaks, 352 F.2d 143, 149 (10th Cir. 1965) (“Certainly the trial court may gather evidence on the question of jurisdiction by affidavits or otherwise in an effort to determine the facts as they exist.”).

         When a judge restricts the review of the Rule 12(b)(2) motion solely to affidavits and other written evidence (without taking any testimony), the plaintiff need only make a prima facie showing of personal jurisdiction. Wright and Miller, supra, at 288; Wise, 89 F.Supp.2d at 1189 (holding that when the issue is raised before trial and decided on the basis of affidavits and other written materials, “a plaintiff need only make a prima facie showing”). “The plaintiff may make this prima facie showing by demonstrating, via affidavit or other written materials, facts that if true would support jurisdiction over the defendant.” OMI Holdings, Inc. v. Royal Ins. Of Canada, 149 F.3d 1086, 1091 (10th Cir. 1998). “In order to defeat a plaintiff's prima facie showing of jurisdiction, a defendant must present a compelling case demonstrating ‘that the presence of some other considerations would render jurisdiction unreasonable.'” Id. (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985)).

         In its Reply in Support of Motion to Dismiss, Datacolor argues that the exhibits attached to the affidavit submitted by BlueRadios (Dkt #16-1), consisting of e-mail communications, should not be considered in deciding the issue of personal jurisdiction. (Dkt. #19.) Datacolor suggests that I should be limited to considering only the allegations in the Complaint and documents referred to or attached to the Complaint. (Id.) (arguing that courts want to avoid situations where “a plaintiff with a deficient claim could survive a motion to dismiss simply by not attaching a dispositive document on which the plaintiff relied”).

         Datacolor is mistaken and appears to be confusing the procedure for a motion to dismiss for failure to state a claim under Rule 12(b)(6), with the procedure for deciding a motion to dismiss under Rule 12(b)(2) for lack of personal jurisdiction.

         Indeed, the two cases Datacolor cites for the proposition that I cannot consider exhibits provided for the first time in opposition to a motion to dismiss under 12(b)(2), Burns v. Mac, No. 13-cv-2109-WJM-KLM, 2015 WL 4051998 at *4 (D. Colo. July 1, 2015), and Illig v. Union Elec. Co., 652 F.3d 971, 976 (8th Cir. 2011), are cases involving motions to dismiss for failure to state a claim under Rule 12(b)(6). In the failure to state a claim scenario, the Court generally is limited to considering the complaint and documents referred to in the complaint. But, as noted above, the procedure for pretrial resolution of a motion to dismiss for lack of personal jurisdiction is different.

         At oral argument, counsel for Datacolor did not dispute the authenticity of the emails provided with BlueRadios' affidavit. Therefore, consistent with the Tenth Circuit's direction in OMI Holdings, Inc., I will consider both the affidavit submitted by BlueRadios and the attached e-mail documents in making this decision. 149 F.3d at 1091.

         In deciding whether BlueRadios has made out a prima facie case of personal jurisdiction, I must view the facts alleged in the Complaint and other materials, including affidavits submitted in opposition to any motion and attached documents, in the light most favorable to the plaintiff-the non-moving party. See Wright and Miller, supra, at 299 (explaining that courts will “take as true the allegations of the nonmoving party with regard to jurisdictional issues and resolve all factual disputes in his or her favor”); Wise 89 F.Supp.2d at 1189 (where jurisdictional facts are disputed, the court “must resolve all disputed facts and draw all reasonable inferences in the plaintiff's favor”).

         B. Background

         This is essentially a breach of contract/quasi-contract case involving BlueRadios, a procurer, supplier, and servicer of electrical components, based in Colorado, and Datacolor, the American subsidiary of a Swiss color instrument company, based in New Jersey. As explained at the motion hearing, BlueRadios is a Colorado-based wireless data communications company, specializing in hardware and software solutions allowing for use of Bluetooth wireless communication technology between and among a broad range of electronic devices. Datacolor is, for its part, the American operating company of its Swiss parent, providing customers in a variety of industries (such as photography and design, textile and apparel, paint and coatings, and plastics) with accurate color measurement instruments and algorithms to ensure color consistency worldwide.

         Because of the general high technology migration toward wireless communication between devices, Datacolor allegedly sought out BlueRadios' expertise and products, and allegedly asked BlueRadios to place orders for tens of thousands of wireless antennas and tens of thousands of Bluetooth 4.0 modules. After BlueRadios received this request and placed the orders, Datacolor allegedly cancelled its request without compensating BlueRadios.

         The gist of Datacolor's motion to dismiss is that it cannot be required to answer a breach of contract lawsuit filed in a Colorado court by a Colorado entity where Datacolor has no presence in Colorado and never physically came to Colorado in connection with the alleged contract. In short, Datacolor challenges the courts exercise of jurisdiction over it.

         C. Facts relevant to Datacolor's challenge to personal jurisdiction.

         Based on the allegations of the Complaint and the affidavit and exhibits submitted in opposition to the Motion to Dismiss, the following facts are relevant to the issue of personal jurisdiction:

1. BlueRadios is a Colorado corporation with its principal place of business in Douglas County. Compl. (Dkt. #4 ¶ 1).

2. Defendant Datacolor is the United States operating company of Datacolor AG, a Swiss company. Datacolor has its principal place of business in Lawrenceville, New Jersey. (Id. ¶ 2.)

3. NEOTech-On-Core (“Oncore”) is a contract manufacturer for and agent of Datacolor. (Id. ¶ 3.) As alleged in the Complaint, Datacolor uses Oncore as its agent to enter into purchase agreements on Datacolor's behalf. (Id. ¶ 4.)

4. Over several years prior to 2017, BlueRadios and Datacolor (and its agents) conducted business together and established a course of conduct whereby business was conducted (including the ordering and purchasing of products from BlueRadios) through email exchanges, purchase orders, and invoices. (Id. ¶ 8.)

5. In each instance of prior business between BlueRadios and Datacolor (or its agents), an order was initiated by Datacolor calling BlueRadios in Colorado by telephone. As early as 2012, Datacolor had been contacting BlueRadios in Colorado for technical support by phone and e-mail. As one example, Datacolor had requested a piece of hardware called BlueRadios Break-Out-Board (“BOB”), and BlueRadios provided Datacolor with guidance on the phone ...