Gdhi Mktg. LLC v. Antsel Mktg. LLC

416 F.Supp.3d 1189

GDHI MARKETING LLC, Plaintiff,

v.ANTSEL MARKETING LLC, THM Management LLC, Claire Lindsay, Annie Mullen, Barbara Robles, Ellen Smith, The Home Mag Holding Co. LLC, Campbell Wiener Inc., and The Home Improver LLC, Defendants.

Civil Action No. 18-CV-2672-MSK-NRN

United States District Court, D. Colorado.

Signed September 20, 2019

Brett Marshall Godfrey, James Elliot O'Donnell, Jeffrey Steven Vail, Godfrey Johnson PC, Englewood, CO, Lily E. Nierenberg, Sutton Booker PC, Denver, CO, for Plaintiff.

Ellie Lockwood, James D. Kilroy, Snell & Wilmer, LLP, Thomas Baker Quinn, Heather Marie Gwinn Pabon, Gordon & Rees LLP, Jacqueline Raquel Guesno, Jackson Lewis PC, Denver, CO, for Defendants.

MEMORANDUM OPINION AND ORDER ON MOTIONS TO DISMISS

Marcia S. Krieger, Senior United States District Judge THIS MATTER comes before the Court on the Defendants' Motions to Dismiss (## 38–42 ), the Plaintiff's combined Responses (## 56–57 ), and the Defendants' Replies (## 60–64 ). For the reasons that follow, the Motions are granted.

I. JURISDICTION

The Court has subject-matter jurisdiction to hear this case under 28 U.S.C. § 1331. The parties dispute whether the Court can exercise personal jurisdiction over certain Defendants.

II. BACKGROUND¹

In brief summary, this case is a dispute between two publishers of magazines marketing the services and products of home-improvement contractors in Denver. The Plaintiff, often referred to as GoDabo, is a Colorado limited liability company that began publishing its magazine in January 2018. Before that date, only one magazine was published in Denver — "TheHomeMag" — published by Antsel Marketing LLC, the Colorado franchisee of the TheHomeMag system. The franchisor of the system was a Florida limited liability company, THM Management LLC. In this action, GoDabo alleges that Antsel Marketing, THM Management, and the other Defendants² engaged in a campaign to drive GoDabo out of the market. For purposes of consideration of the pending motions, the Court will refer to the Plaintiff as GoDabo, Antsel Marketing LLC as the Colorado Franchisee, and THM Management LLC as the National Franchisor.

The Amended Complaint (# 21 ) alleges that, as part of a campaign to drive GoDabo out of the market, the Defendants made false statements were made about it and its operation. One source was a July 5, 2018, email sent by the Individual Defendants to GoDabo's and the Colorado Franchisee's customers. It stated:

It has been brought to our attention that GoDabo has not yet mailed the issue that was supposed to be in homes June 25th. He [Greg Harline of GoDabo] claims it was to be mailed July 2nd, but to our knowledge that has not happened either. He is claiming a delay at the printers but we believe the problem is that he has not paid the Post Office, and they will not mail unless they have been paid in full in advance. As a valued client, I wanted you to be sure you are not being ripped off by this guy, and would highly recommend you NOT pay for the June 25th issue until you have been provided a verified PROOF OF MAILING statement from the United States Postal Service.

(# 21 ¶ 23 .) GoDabo contends that these statements were false because GoDabo had paid postage nine days earlier, and that as a result, numerous contractors subsequently ended their advertising relationship with GoDabo.

Another source was an email dated August 31 sent by Krystal Toner, the office manager for the Colorado Franchisee that stated:

[w]e do NOT saturate zipcodes. We handpick every single home that receives TheHomeMag & HomeImproved....

It would save us a ton of money to flood ZIP codes with thousands of magazines like 95% of our competitors, however, we would not be doing the best job for you if we did this,...

[h]ere's an easy tip for you to check if a magazine or flyer is being bulk mailed to everyone, including renters, business parks, and other homes that cannot afford your product or services... if the Home Owner's name does not appear on the address portion of the Magazine, instead it says ‘Current Homeowner,’ or ‘Resident,’ this is being saturation mailed.

(# 21 ¶¶ 35–36 .) In addition, the Amended Complaint alleges that the Colorado Franchisee's media kit contained false statements about the franchisee's own product. (# 21 ¶ 37 .)

Based on these allegedly false statements and other alleged acts, the Amended Complaint (# 21 ) asserts eleven claims for relief enumerated as follows:³

Claims Based on Federal Law

(1) monopolization of the Denver Market in violation of the Sherman Act ( 15 U.S.C. § 2 ) against THM Front Range (Claim 1);

(2) attempted monopolization of the Denver Market in violation of the Sherman Act ( 15 U.S.C. § 2 ) against THM Front Range (Claim 2);

(3) conspiracy to monopolize the Denver Market in violation of the Sherman Act ( 15 U.S.C. § 2 ) against THM Front Range, THM Holding, THM Franchisor, and the Individual Defendants (Claim 3);

(4) allocation of the National Market in violation of the Sherman Act ( 15 U.S.C. § 1 ) against THM Front Range, THM Holding, THM Franchisor, THM Ventura, and The Home Improver (Claim 4);

(5) monopolization of the National Market in violation of the Sherman Act ( 15 U.S.C. § 2 ) against THM Front Range, THM Holding, THM Management, THM Ventura, and The Home Improver (Claim 5);

(6) attempted monopolization of the National Market in violation of the Sherman Act ( 15 U.S.C. § 2 ) against THM Front Range, THM Holding, THM Ventura, and The Home Improver (Claim 6);

(7) conspiracy to monopolize the National Market in violation of the Sherman Act ( 15 U.S.C. § 2 ) against THM Front Range, THM Holding, THM Ventura, and The Home Improver (Claim 7); (8) false advertising in violation of the Lanham Act ( 15 U.S.C. § 1125(a) ) against THM Holding, THM Management, THM Ventura, and the Individual Defendants (Claim 8);

Claims Based on State Law

(9) use of deceptive trade practices in violation of the Colorado Consumer Protection Act against THM Front Range and the Individual Defendants (Claim 9);

(10) intentional interference with contractual relationship (or prospective relationship) against THM Front Range and the Individual Defendants (Claim 10); and

(11) defamation against THM Front Range and the Individual Defendants (Claim 11).

The Defendants have moved to dismiss all claims (## 38–42 ) on multiple grounds. Home Mag Holding, Ventura, and The Home Improver challenge the Court's personal jurisdiction over them. In addition, the Defendants challenge the adequacy of the allegations to support an "antitrust injury" necessary for antitrust standing. Although this doctrine shares a name and overlapping concepts with Article III standing, it is not jurisdictional, and such challenges will be reviewed under Rule 12(b)(6). See Hartig Drug Co. v. Senju Pharm. Co. , 836 F.3d 261, 270–72 (3d Cir. 2016).

III. PERSONAL JURISDICTION

When the Court's jurisdiction over a defendant is challenged pursuant to Rule 12(b)(2), the plaintiff bears the burden of establishing that personal jurisdiction exists. Soma Medical Int'l v. Standard Chartered Bank , 196 F.3d 1292, 1295 (10th Cir. 1999) ; OMI Holdings Inc. v. Royal Ins. of Canada , 149 F.3d 1086, 1091 (10th Cir. 1998). A court may elect to resolve the jurisdictional question immediately, by conducting an evidentiary hearing on the issue, or may defer resolution of the jurisdictional question until trial, requiring the plaintiff to make only a prima facie showing of jurisdiction at the pretrial phase. Wenz v. Memery Crystal , 55 F.3d 1503, 1505 (10th Cir. 1995). A court may receive affidavits and other evidentiary material to assist in resolving the issue, but it must resolve any disputed facts in the light most favorable to the plaintiff. Id.

The Court's jurisdiction over certain defendants works differently depending on the claim alleged. Because the claims under the Sherman Act are subject to a more liberal standard than the other claims alleged, the Court begins there.

In cases where subject-matter jurisdiction is based on a federal question, the personal-jurisdiction inquiry is grounded in the Due Process Clause of the Fifth Amendment, not the Fourteenth Amendment. See Peay v. BellSouth Med. Assistance Plan , 205 F.3d 1206, 1211 (10th Cir. 2000). Though the Supreme Court has never announced a standard for personal jurisdiction under the Fifth Amendment, the two Amendments are virtually identical and both protect individuals from the same forms of government infringement. Id. (citing Mathews v. Eldridge , 424 U.S. 319, 331–32, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976) (collecting Fourteenth Amendment cases to define the Fifth Amendment's conception of procedural due process)). Nevertheless, the Tenth Circuit does not apply the familiar test for personal jurisdiction evaluating both minimum contacts with the forum state and notions of fair play and substantial justice. Klein v. Cornelius , 786 F.3d 1310, 1318 (10th Cir. 2015).

Instead, these inquiries have been collapsed into a single question — whether the "chosen forum will make litigation so gravely difficult and inconvenient that [the defendant] unfairly is at a severe disadvantage in comparison to his opponent." Peay , 205 F.3d at 1212 (quoting Burger King Corp. v. Rudzewicz , 471 U.S. 462, 478, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) ). To answer this question, the Court considers the following factors: (1) the extent of contact with the forum state, (2) the inconvenience of having to litigate in a foreign jurisdiction, (3) judicial economy, (4) the probable situs of discovery proceedings, and (5) the nature of the defendant's activities and [their] impact beyond his state's borders. Klein , 786 F.3d at 1318. Only "highly unusual cases" will inconvenience "rise to a level of constitutional concern." Peay , 205 F.3d at 1212. The defendant has the burden to establish such "constitutionally significant inconvenience". Id. And even if the defendant is successful, jurisdiction can still comport with due process if "the...