United States District Court, D. Colorado
ORDER MAKING ORDER TO SHOW CAUSE ABSOLUTE
WILLIAM J. MARTÍNEZ UNITED STATES DISTRICT JUDGE
Durango Merchant Services, LLC (“Plaintiff”)
brings this action against Defendant Flagship Merchant
Services, LLC (“Defendant”), for trademark
infringement. (ECF No. 1 at 5.) After Defendant failed to
respond, Plaintiff moved for entry of default (ECF No. 9) and
subsequently for entry of default judgment (ECF No. 15). The
Court then issued the Order to Show Cause (“OSC”)
as to why the Court should not dismiss the case for lack of
personal jurisdiction. (ECF No. 17.) Plaintiff timely
responded. (ECF No. 18.)
a district court may not dismiss an action sua
sponte for lack of personal jurisdiction. Williams
v. Life Sav. & Loan, 802 F.2d 1200, 1203 (10th Cir.
1986). The exception to this general rule is when a default
judgment is to be entered. Id.; see also Dennis
Garberg & Assocs., Inc. v. Pack-Tech Int'l
Corp., 115 F.3d 767, 772 (10th Cir. 1997) (“[A]
district court must determine whether it has jurisdiction
over the defendant before entering judgment by default
against a party who has not appeared in the case.”).
sole nexus to Colorado alleged in the complaint is that
Plaintiff is located in Durango, Colorado. (ECF No. 1 ¶
3.) This allegation alone is plainly insufficient to
establish general or specific jurisdiction because it has no
relation to Defendant's contacts with the forum state.
See Walden v. Fiore, 571 U.S. 277, 284 (2014)
(“We have consistently rejected attempts to satisfy the
defendant-focused ‘minimum contacts' inquiry by
demonstrating contacts between the plaintiff (or third
parties) and the forum State.”). Thus, to provide
Plaintiff an additional opportunity to demonstrate that the
Court had personal jurisdiction over the Defendant, the Court
issued the OSC.
response to the OSC added three factual allegations: (1)
Defendant's business is national or international and
thus it “routinely” promotes its services to
Colorado merchants; (2) “fact discovery would have
shown that many of [Defendant's] 100, 000 customers are
Colorado merchants”; and (3) Defendant's trademark
infringement caused damage to Plaintiff in Colorado. (ECF No.
18 at 1-2.)
plaintiff bears the burden of establishing personal
jurisdiction over a defendant. Behagen v. Amateur
Basketball Ass'n, 744 F.2d 731, 733 (10th Cir.
1984). A plaintiff need only make a prima facie
showing of personal jurisdiction. Dennis Garberg,
115 F.3d at 773. To obtain personal jurisdiction over a
nonresident defendant, the plaintiff “must show that
jurisdiction is legitimate under the laws of the forum state
and that the exercise of jurisdiction does not offend the due
process clause of the Fourteenth Amendment.” Benton
v. Cameco Corp., 375 F.3d 1070, 1075 (10th Cir. 2004)
(quoting Soma Med. Int'l v. Standard Chartered
Bank, 196 F.3d 1292, 1295 (10th Cir. 1999)).
Colorado's long arm statute confers the maximum
jurisdiction permitted by the due process clauses of the
United States and Colorado Constitutions. Archangel
Diamond Corp. v. Lukoil, 123 P.3d 1187, 1193 (Colo.
2005) (referring to Colo. Rev. Stat. § 13-1-124). Thus,
the Court need only address the constitutional question of
whether the exercise of personal jurisdiction over Defendant
comports with due process. Dudnikov v. Chalk &
Vermillion Fine Arts, Inc., 514 F.3d 1063, 1070 (10th
Cir. 2008) (the state jurisdictional analysis in Colorado
“effectively collapses into the second, constitutional,
may exercise personal jurisdiction over a nonresident
defendant provided there are minimum contacts between the
defendant and the forum state. OMI Holdings, Inc. v.
Royal Ins. Co. of Canada, 149 F.3d 1086, 1090 (10th Cir.
1998) (citing World-Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286 (1979)). The minimum contacts
standard may be met by showing general jurisdiction-based on
a defendant's general business contacts with the forum
state-or by asserting specific jurisdiction. Id. at
1090-91. “A court may . . . assert specific
jurisdiction over a nonresident defendant if the defendant
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.”
Id. at 1091 (internal quotation marks omitted).
General jurisdiction requires a showing of pervasive minimum
has failed to demonstrate that the Court has general
jurisdiction over Defendant. “A court may assert
general jurisdiction over foreign (sister-state or
foreign-country) corporations . . . when their affiliations
with the State are so continuous and systematic as to render
them essentially at home in the forum state.”
Goodyear Dunlop Tires Operations, S.A. v. Brown, 564
U.S. 915, 919 (2011) (internal quotation marks omitted).
General jurisdiction for an individual is appropriate where
the individual is domiciled; for a corporation, it is the
place the corporation is regarded as home, typically the
place of incorporation and principal place of business.
Id. at 924; see also Daimler AG v. Bauman,
571 U.S. 117, 137 (2014) (“[O]nly a limited set of
affiliations with a forum will render a defendant amenable to
all-purpose jurisdiction there.”). Nationwide
marketing, which incidentally targets Colorado residents, and
having customers in Colorado are not sufficient contacts to
render the Massachusetts-resident Defendant
“essentially at home” in Colorado. See
Daimler, 571 U.S. at 137-38.
has also failed to demonstrate that the Court has specific
jurisdiction over Defendant. “A specific jurisdiction
analysis involves a two-step inquiry.” Benton,
375 F.3d at 1075. First the Court “must consider
whether the defendant's conduct and connection with the
forum State are such that he should reasonably anticipate
being haled into court here.” Id. (internal
quotation marks omitted). “Second if the
defendant's actions create sufficient minimum contacts,
[the court] must then consider whether the exercise of
personal jurisdiction over the defendant offends
‘traditional notions of fair play and substantial
justice.'” OMI, 149 F.3d at 1091 (quoting
Asahi Metal Indus. Co., Ltd. v. Superior Court of
Cal., 480 U.S. 102, 113 (1987)).
Court only need to address the first step, the minimum
contacts analysis. The “‘minimum contacts'
standard requires, first, that the out-of-state defendant
must have ‘purposefully directed' its activities at
residents of the forum state, and second, that the
plaintiff's injuries must ‘arise out of'
defendant's forum-related activities.”
Dudnikov, 514 F.3d at 1071. In regard to the
“arise out of” part of the minimum contacts
analysis, the Tenth Circuit has explained that
“[s]pecific jurisdiction . . . is premised on something
of a quid pro quo: In exchange for
‘benefitting' from some purposive conduct directed
at the forum state, a party is deemed to consent to the
exercise of jurisdiction for claims related to those
contacts.” Dudnikov, 514 F.3d at 1078. The
relevant inquiry is “whether plaintiffs' injuries
‘arise out of' defendants' contacts with the
forum jurisdiction.” Id. at 1078.
marketing that merely incidentally reaches Colorado consumers
is not sufficient to show that Defendant purposefully
directed its activities at Colorado residents. Moreover, the
fact that Colorado merchants are customers of Defendant
similarly fails to show that Defendant directed its
activities at Colorado residents. Importantly, the complaint
and response to the OSC fail to assert any facts to suggest
that Plaintiff's trademark infringement claim arises out
of Defendant's limited contacts with Colorado. Plaintiff
does not cite or reference a single instance of a customer,
confused or misled by Defendant's allegedly wrongful use
of Plaintiff's mark, who then contracted with Defendant.
In short, Plaintiff fails to provide facts to demonstrate
that Defendant purposefully directed its activities at
Colorado or that Plaintiff's injuries arise out of
Defendant's contacts with Colorado. Plaintiff has thus
failed to present facts to show that this Court has specific
personal jurisdiction over Defendant.
record before the Court, the Court finds that Plaintiff has
failed to show that the Court may exercise in
personam jurisdiction over Defendant. Accordingly, the
Court's Order to Show Cause is MADE ABSOLUTE and the
above-captioned action is DISMISSED WITHOUT PREJUDICE
pursuant to Federal Rule of Civil Procedure 12(b)(2). It ...