Fenn v. Mleads Enterprises, Inc.

2006 UT 8, 137 P.3d 706, 545 Utah Adv. Rep. 7, 2006 Utah LEXIS 8, 2006 WL 306645
CourtUtah Supreme Court
DecidedFebruary 10, 2006
Docket20041072
StatusPublished
Cited by22 cases

This text of 2006 UT 8 (Fenn v. Mleads Enterprises, Inc.) is published on Counsel Stack Legal Research, covering Utah Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fenn v. Mleads Enterprises, Inc., 2006 UT 8, 137 P.3d 706, 545 Utah Adv. Rep. 7, 2006 Utah LEXIS 8, 2006 WL 306645 (Utah 2006).

Opinion

WILKINS, Associate Chief Justice:

T1 In this case, we are asked to consider whether due process permits a Utah court to exert personal jurisdiction over a defendant who sends an email without knowledge of the residence of the recipient or the location at which the recipient will retrieve the message. The court of appeals concluded that Utah may exert jurisdiction under the given circumstances in this case. We disagree and reverse.

*709 FACTUAL AND PROCEDURAL BACKGROUND

A. FACTUAL BACKGROUND

T2 When determining whether the trial court correctly granted a motion to dismiss, we " 'accept the factual allegations in the complaint as true and consider them, and all reasonable inferences to be drawn from them, in the light most favorable to the nonmoving party'" 1 Mleads is an eight-employee closely-held corporation located in Arizona. It contracts with third-party marketing companies who advertise Mleads's services to customers through email solicitations. Recipients of those emails may complete an application requesting more information from Mleads regarding particular loans. Mleads subsequently provides the applicant with an appropriate institution for further financial assistance with home loans and mortgages. Mleads maintains an office solely in Arizona and conducts most of its business in Arizona, although business activity within Utah produces approximately 1% of its revenue. Mleads is not licensed to conduct business in Utah nor does it employ any Utah-based employees or agents. Mleads does not recruit employees or agents in Utah and does not advertise in any Utah newspapers, magazines, or other forms of Utah-based media. Its advertisement to Utahns has been strictly through unsolicited email over the Internet. Mleads has no bank accounts in Utah and is not subject to taxation in Utah.

T3 Brittney Fenn, a Utah resident, received an unsolicited email advertisement from Mleads that she opened while living in Utah. On January 8, 2004, Fenn filed a two-page complaint, alleging that Mleads had violated the Unsolicited Commercial and Sexually Explicit Email Act (the Act), which required the characters "ADV" in the subject line of unsolicited commercial email. 2 The Utah Act permitted recipients of non-complying emails to recover the lesser of $10 per email or $25,000 per day and reasonable attorney fees and costs. 3 Fenn's complaint presented only facts regarding this particular email sent to Fenn and failed to discuss the details of Mleads's general business contacts with Utah.

{4 One month after Fenn filed her complaint, the Utah Legislature passed a bill to repeal the Act because the federal government had passed "Controlling the Assault of Non-golicited Pornography and Marketing" (CAN-SPAM), which preempted the Utah Act* 4

B. PROCEDURAL BACKGROUND

15 The district court dismissed the case for lack of specific personal jurisdiction, finding "that there [were] insufficient minimum contacts between Defendant and this forum to warrant exercise of personal jurisdiction over Defendant." The district court further explained that the "complaint's sole allegation with respect to jurisdiction is that 'Defendant sent, or caused to be sent, to plaintiff an unsolicited commercial e-mail, which, according to Plaintiff establishes this Court's jurisdiction under Utah Code Ann. § 13-36-101 (Supp.2002)." The court observed that although Fenn argued for personal jurisdiction over Mleads, Fenn failed to claim and provide evidence that the court could exercise general personal jurisdiction over Mleads. Rather, Fenn alleged that "the Act itself, as well as Utah's long-arm statute, provide a basis for specific personal jurisdiction over Defendant."

16 The court of appeals also correctly understood Fenn's arguments to be based on *710 specific jurisdiction, noting that "[the plaintiff bears the burden of establishing personal jurisdiction over the defendant. Fenn does not allege that Utah could exercise general personal jurisdiction over Mleads. Thus, we consider only whether Fenn established that the court could exercise specific personal jurisdiction." 5 Applying the specific jurisdiction analysis, the court of appeals held that sending one email to a resident of Utah satisfies both the Utah long-arm statute and the minimum contacts required by due process. Accordingly, the court of appeals vacated the dismissal and remanded to the district court.

ANALYSIS

T7 The question before this court is whether the court of appeals erred in reversing the district court's dismissal for lack of personal jurisdiction. An appeal from a pretrial jurisdictional decision made only on documentary evidence presents legal questions which we review for correctness. 6

18 Onee a defendant raises lack of personal jurisdiction as a defense, the plaintiff must establish personal jurisdiction with adequate evidence. 7 To meet this burden, the plaintiff must demonstrate either specific or general jurisdiction. 8 Here, where Plaintiff Fenn relies on specific jurisdiction, personal jurisdiction is only proper if we determine that (1) the Utah long-arm statute extends to defendant's acts or contacts, (2) plaintiff's claim arises out of those acts or contacts, and (8) the exercise of jurisdiction satisfies the defendant's right to due process under the United States Constitution. 9

9 Both parties agree that the Utah long-arm statute 10 extends to Mleadsg's actions in this case and that the Plaintiff's claim arises out of those acts or contacts. Hence, we granted certiorari only to review the due process analysis of the court of appeals in regards to the email sent to Fenn. Mleads contends that due process prohibits the exercise of personal jurisdiction for two reasons: (1) Mleads lacks minimum contacts with Utah and (2) an exercise of jurisdiction based on one email would be unfair and unreasonable. We agree and reverse.

*711 I. THE ASSERTION OF JURISDICTION VIOLATES THE DUE PROCESS REQUIRED BY THE CONSTITUTION

110 The Due Process Clause of the Fourteenth Amendment declares that no state shall "deprive any person of life, liberty, or property, without due process of law." 11 In determining whether a state's exercise of jurisdiction over a non-resident defendant comports with due process, so as not to deprive the party of life, liberty, or property, the United States Supreme Court has determined that

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Bluebook (online)
2006 UT 8, 137 P.3d 706, 545 Utah Adv. Rep. 7, 2006 Utah LEXIS 8, 2006 WL 306645, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fenn-v-mleads-enterprises-inc-utah-2006.