Edias Software International, L.L.C. v. Basis International Ltd.

947 F. Supp. 413, 1996 U.S. Dist. LEXIS 18279, 1996 WL 700063
CourtDistrict Court, D. Arizona
DecidedNovember 21, 1996
DocketCIV 96-0932 PHX PGR
StatusPublished
Cited by22 cases

This text of 947 F. Supp. 413 (Edias Software International, L.L.C. v. Basis International Ltd.) is published on Counsel Stack Legal Research, covering District Court, D. Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Edias Software International, L.L.C. v. Basis International Ltd., 947 F. Supp. 413, 1996 U.S. Dist. LEXIS 18279, 1996 WL 700063 (D. Ariz. 1996).

Opinion

ORDER

ROSENBLATT, District Judge.

BACKGROUND

EDIAS and BASIS contracted in March 1995 for EDIAS to distribute BASIS’ software products abroad in Germany, Austria, Belgium, Denmark, Greece, the Netherlands, Luxembourg, and Switzerland. EDIAS, the *415 Plaintiffs in this action, is a company with offices in Arizona, Germany, and the Netherlands. The New Mexico Defendant company, BASIS, has no offices in Arizona. The two companies signed the contract in New Mexico and the contract provides that New Mexico law governs the contract.

After the signing of the March 1995 contract, BASIS became dissatisfied with its relationship with EDIAS and elected to terminate its agreement with the company. BASIS informed its regular European customers and BASIS employees of the decision via personal e-mail messages. The messages contained a “Question and Answer Sheet” stating,

1. Why did EDIAS lose its Authorized Distributor Status? BASIS requires all of its distributors to sign agreements to ensure that they will provide their customers with BASIS’ products at a fair price, complete technical support, and product information. EDI-AS is unwilling to sign such an agreement to renew its distributor contract, so BASIS chose not to renew EDIAS’ Distributor status.

BASIS additionally posted a “Press release” message on its CompuServe Web page and in a CIS forum. The message stated,

“BASIS decided long ago that all its distributors should commit to sell BASIS’ products at a fair price, provide complete technical support, and distribute product information to their customers,” says George Hight, President of BASIS. “When we were unable to get a signed commitment on these principles of fairnéss and customer service from the upper management at EDIAS, our relationship with that company had to change.”

EDIAS filed a complaint with this Court on April 18, 1996, against BASIS for breach of contract and “the covenant of good faith and fair dealing.” Additionally, EDIAS alleges that the e-mail, CompuServe Web page, and forum message give rise to claims for libel, defamation, tortious interference with contract and prospective advantage, and violation of the Lanham Act, 15 U.S.C. Section 1125(a).

BASIS filed a timely motion to dismiss EDIAS’ complaint for lack of personal jurisdiction on May 9, 1996 to which EDIAS responded on May 28, 1996. EDIAS argues that BASIS has sufficient contacts with Arizona to warrant both general and specific jurisdiction over BASIS, but concedes that the main issue in this case concerns specific jurisdiction. BASIS filed its reply on July 17, 1996, controverting many of EDIAS’ factual claims. EDIAS filed an additional motion for leave to file a supplemental response, with a memorandum, on July 12, 1996. BASIS filed an opposition to the supplemental response on July 29, 1996, arguing that they brought up no new issues in the reply to give cause for such a sur-response. This court granted EDIAS’ motion to supplement on November 14,1996.

Both parties agree that phone calls, fax, and e-mail communications occurred between them after EDIAS established an Arizona address and during the business relationship. Both parties agree that BASIS sold approximately $858,000 worth of products to Arizona customers: $808,000 worth to EDIAS for distribution abroad and about $50,000 worth to other Arizona customers. The parties also agree that EDIAS did not have an Arizona office prior to 1994. Finally, the parties agree that on April 10, 1996 a message appeared in certain e-mail and fax communications from BASIS to its customers, and on BASIS’ CompuServe Web page and CIS forum about EDIAS.

EDIAS supports its arguments in favor of jurisdiction with an affidavit from Anton A. Langelaar, the president of EDIAS Software International, L.L.C., 1 Edias Software International GmbH, 2 and EDIAS Software International B.V. 3 According to the affidavit, EDIAS Software International, L.L.C. (hereinafter EDIAS) keeps its principle place of *416 business in Prescott, Arizona. The March 1995 contract supports this claim, stating that EDIAS’ “principle place of business” is in Prescott. Copies of fax and e-mail communications also indicate that BASIS communicated with EDIAS at its Arizona address.

BASIS, on the other hand, through affidavits of John Rose, BASIS’ vice-president, contends that Mr. Langelaar keeps only a vacation home in Prescott where BASIS has often reached him by phone, fax, or e-mail. Furthermore, where EDIAS asserts that EDIAS established the Arizona address in early 1994, BASIS asserts that Mr. Langel-aar “unilaterally” established the address in late 1994. The affidavit says that EDIAS has no commercial office space in Arizona, no directory assistance listing of the company, and no Arizona employees other than Lan-gelaar’s wife. The affidavit alleges that EDIAS, instead, does all of its business in Europe.

EDIAS contends that the phone calls, fax, and e-mail communications between EDIAS and BASIS contributed to the negotiation of the March 1995 contract. Additionally, EDI-AS asserts that BASIS’ employees visited Arizona to participate in the negotiations. In particular, EDIAS highlights a non-disclosure agreement that refers to conversations held at the Phoenix Sky Harbor airport, a fax from BASIS to Mr. Langelaar detailing an expected arrival in Prescott, and Mr. Langelaar’s affidavit which states that Thom Olsen, BASIS’ former president and CEO visited him at least three times regarding EDIAS’ and BASIS’ relationship. Langel-aar’s affidavit also highlights visits by BASIS’ employees to Arizona customers other than EDIAS.

Mr. Rose’s affidavit for BASIS states that no negotiations took place in Arizona; rather, the visits to Arizona were either social or unrelated to the March 1995 contract. In support of this contention, Rose’s affidavit points out that a full year lapsed between the last alleged negotiation and the contract signing. Finally, Rose’s affidavit explains that BASIS’ employees only rarely visit Arizona customers and that BASIS’ sales to customers other than EDIAS represent only .75% of BASIS’ total sales and have no relationship to EDIAS. 4

EDIAS, finally, contends that the defamatory messages that appeared in the e-mail messages and on the CompuServe Web page and forum by themselves serve to establish specific personal jurisdiction as defamation per se, directed at Arizona. Additionally, in its sur-response EDIAS includes copies of a CompuServe Buyer’s Guide, with no address on it, and a CompuServe Directory sent to a Chandler resident including BASIS’ product listings, to show not only that BASIS knew its Internet message would reach Arizona, but that BASIS advertised in Arizona. BASIS insists that none of their activities were “directed at” Arizona.

DISCUSSION

Arizona federal courts exercise personal jurisdiction over nonresident litigants to the full extent allowable under the constitution. Uberti v.

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947 F. Supp. 413, 1996 U.S. Dist. LEXIS 18279, 1996 WL 700063, Counsel Stack Legal Research, https://law.counselstack.com/opinion/edias-software-international-llc-v-basis-international-ltd-azd-1996.