Leachman Cattle of Colorado, LLC v. American Simmental Ass'n

66 F. Supp. 3d 1327, 2014 U.S. Dist. LEXIS 120908, 2014 WL 4458893
CourtDistrict Court, D. Colorado
DecidedAugust 29, 2014
DocketCivil Action No 14-cv-01040-RBJ
StatusPublished
Cited by2 cases

This text of 66 F. Supp. 3d 1327 (Leachman Cattle of Colorado, LLC v. American Simmental Ass'n) is published on Counsel Stack Legal Research, covering District Court, D. Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Leachman Cattle of Colorado, LLC v. American Simmental Ass'n, 66 F. Supp. 3d 1327, 2014 U.S. Dist. LEXIS 120908, 2014 WL 4458893 (D. Colo. 2014).

Opinion

ORDER

R. BROOKE JACKSON, United States District Judge

This matter is before the Court on Defendant’s Motion to Dismiss First Amended Complaint for Lack of Personal Jurisdiction or in the Alternative to Transfer Venue [ECF No. 30], The plaintiffs assert that the Court has subject matter jurisdiction over the federal claims pursuant to 28 U.S.C. § 1331 and supplemental jurisdiction over the state law claims pursuant to 28 U.S.C. § 1367.1 The plaintiffs do not contend that the Court has diversity jurisdiction over the state law causes of action.

The Court held a hearing on the motion on August 11, 2014. The parties were notified ahead of time that the hearing would be their opportunity to present evidence on the jurisdictional questions. None of the parties submitted additional evidence. Upon review of the record and the arguments of counsel, the Court concludes that it has no personal jurisdiction over the defendant for the alleged patent infringement or Lanham Act violations, even though it has subject matter jurisdiction over both claims. Further, while the Court may have had personal jurisdiction over the defendant for the alleged torts that took place within Colorado, there is no [1331]*1331independent subject matter jurisdiction over these state law claims. As such, all claims must be dismissed.

BACKGROUND

This case appears to present a more difficult question than it actually does. Because the parties agree that the Court can only assert original jurisdiction over the federal law causes of action, the Court must first consider only the facts giving rise to the federal claims. If those facts would support personal jurisdiction over the defendant, the Court can maintain this action. If they would not, the Court must dismiss the federal law claims, and, in turn, dismiss the state law claims that only could have been heard pursuant to supplemental jurisdiction.

Before we delve into the facts, it is worth distinguishing between the state law claims and the federal law causes of action. The plaintiffs bring the following state law claims against the defendant: (1) trade secret misappropriation; (2) intentional interference with prospective business relations; and (3) misappropriation of business value.2 These claims are based on conduct that allegedly occurred in the summer and fall of 2013. The plaintiffs assert the following federal law claims: (1) infringement of the '888 Patent; (2) infringement of the '557 Patent; and (3) Lanham Act violations. These claims are based on conduct that allegedly occurred in 2014. The two distinct time periods are worth keeping in mind as we discuss the background .of this case.

Since we are at the pleading stage, the Court considers true the plaintiffs’ factual assertions that are plausible on their face. However, because this is a motion to dismiss for lack of personal jurisdiction, “[t]he allegations in the complaint must be taken as true [only] to the extent they are uncontroverted by the defendant’s affidavits.” Kennedy v. Freeman, 919 F.2d 126, 128 (10th Cir.1990) (citation and quotation marks omitted).

Plaintiff Leachman Cattle of Colorado, LLC (“Leachman Cattle”) is a Colorado limited liability company with its principal place of business in Wellington, Colorado. Plaintiff Verified Beef, LLC (“Verified Beef’) is a Montana limited liability company with its principal place of business in Bozeman, Montana. Defendant American Simmental Association (“ASA”) is a Montana nonprofit corporation with its principal place of business in Bozeman, Montana.

According to the plaintiffs, Leachman Cattle developed an innovative method for determining the relative economic value of a group of existing commercial calves and reporting that value to the owners and potential buyers of that group. First Amended Complaint [ECF No. 28] at ¶ 8. The plaintiffs have developed commercial products embodying this calculation method, including the Reputation Feeder Cattle® and the Genetic Merit Scorecard® programs (collectively the “Programs”). Id. It is unclear when this method was developed. However, on or around March 19, 2013 the plaintiffs distributed introductory press releases and marketing materials concerning their Programs. Id. at ¶ 9. These materials invited ranchers, feed yards, and buyers in the cattle industry to contact the plaintiffs for further information. Id.

Facts Giving Rise to State Law Claims: Summer & Fall 2013

On or about April 12, 2013 the plaintiffs met with representatives from ASA to dis[1332]*1332cuss the Programs.3 Id. at ¶ 10. Only publicly available information was shared with ASA at this meeting. About a month later, on May 10, 2013, representatives of the parties met at the offices of Verified Beef in Montana to discuss the potential of entering into a business relationship. Id. at ¶ 12. During the meeting, Verified Beef (and not Leachman Cattle) and ASA entered into a confidentiality and non-disclosure agreement (“Confidentiality Agreement”). The Confidentiality Agreement assured that the parties would keep confidential any information shared at that meeting, and that they would only use said information “for the purposes of discussion of potential business relationship and will not disclose or disseminate such confidential information except upon written consent of The Parties.” [ECF No. 28-1]. Once the Confidentiality Agreement was executed, the plaintiffs disclosed the Programs to ASA along with their business, financial, and technical information. First Amended Complaint [ECF No. 28] at ¶ 12.

Around the same time, the plaintiffs met with another cattle breed association, the American Gelbvieh Association (“AGA”), to discuss the Programs and the possibility of entering into a business relationship. Id. at ¶ 14. AGA entered into a confidentiality and non-disclosure agreement with the plaintiffs on May 20, 2013, and met with the plaintiffs at AGA’s headquarters in Colorado on May 22, 2013. Id. The Complaint does not allege that the parties entered into a business relationship at this time but instead states that the plaintiffs presented the Programs “as part of efforts to structure a business relationship with [AGA].” Id.

On or about June 7, 2013, the plaintiffs once again met with ASA representatives at the offices of Verified Beef in Montana. According to the plaintiffs, the purpose of the meeting was to “formalize a business relationship whereby ASA would promote Plaintiffs’ Programs.” Id. at ¶ 15. Confidential and proprietary information was once again shared at this meeting pursuant to the terms of the Confidentiality Agreement. Id. The plaintiffs allege that prior to and during each of its meetings with l&SA, the defendant’s agents represented that ASA had no interest in pursuing a feeder calf valuation program of its own. Id. at ¶ 16.4 The plaintiffs also contend that during these meetings they informed ASA of the existence of pending patent applications concerning the plaintiffs’ methods and systems.

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66 F. Supp. 3d 1327, 2014 U.S. Dist. LEXIS 120908, 2014 WL 4458893, Counsel Stack Legal Research, https://law.counselstack.com/opinion/leachman-cattle-of-colorado-llc-v-american-simmental-assn-cod-2014.