Nature's Sunshine Products Inc v. SAAM Enterprise Inc

CourtDistrict Court, D. Utah
DecidedApril 22, 2025
Docket2:25-cv-00012
StatusUnknown

This text of Nature's Sunshine Products Inc v. SAAM Enterprise Inc (Nature's Sunshine Products Inc v. SAAM Enterprise Inc) is published on Counsel Stack Legal Research, covering District Court, D. Utah primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nature's Sunshine Products Inc v. SAAM Enterprise Inc, (D. Utah 2025).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH, CENTRAL DIVISION

NATURE’S SUNSHINE PRODUCTS, INC., a Utah corporation, Plaintiff, MEMORANDUM DECISION AND ORDER DENYING MOTION TO DISMISS vs. Case No. 2:25-cv-00012-TC Judge Tena Campbell SAAM ENTERPRISE INC., a New York corporation, SOMENDAR GAUTAM, an individual, and JOHN DOES 1–10, individually or as corporations/business entities, Defendants. Plaintiff Nature’s Sunshine Products, Inc. (NSP) brings this trademark action against Defendants SAAM Enterprise Inc. (SAAM), and Somendar Gautam. NSP asserts six claims: trademark infringement under the Lanham Act; unfair competition under the Lanham Act; common law trademark infringement; deceptive trade practices under Utah Code Ann. § 3-11a- 3; unfair competition under Utah Code Ann. § 13-5a-102; and tortious inference with contractual relations. These claims arise from the Defendants’ alleged misappropriation of NSP’s trademarks in connection with their internet sales of products bearing NSP’s trademarks. The Defendants ask the court to dismiss the claims because the court does not have general or specific personal jurisdiction. (ECF No. 14 at 2.) For the reasons set forth below, the court finds that it has jurisdiction over the case and can resolve NSP’s claims against both Defendants. FACTUAL BACKGROUND1 NSP is a company based in Lehi, Utah, that sources, manufactures, and sells encapsulated herbal supplements. (Compl., ECF No. 1 at ¶¶ 12, 14.) To protect its intellectual property, NSP

registered its trademarks with the United States Patent and Trademark Office. (Id. ¶¶ 18, 21.) NSP sells its products directly to consumers as well as through independent contractors called “Consultants” who are authorized and trained by NSP to market and sell NSP goods. All of NSP’s products, whether sold directly to consumers or through an NSP Consultant, come with a satisfaction guarantee, giving buyers 90 days to seek a refund or replacement if they are dissatisfied with the product. NSP imposes strict quality control and customer service standards on its Consultants’ secondary sales. (Id. ¶¶ 15–17.) For example, Consultants must inspect all NSP products for any damage, defects, evidence of tampering, and other non-conformance and remove all such

products from their inventory. (Id. ¶ 56.) Consultants are prohibited from tampering with or altering any NSP product, packaging, label, or accompanying literature without NSP’s consent. (Id. ¶ 58.) Consultants cannot sell damaged or defective products or sell to entities that they either know or should know will go on to resell the products. Consultants must report any defects to NSP. (Id.) If NSP discovers that a Consultant is failing to follow the NSP Rules, NSP has the right to stop selling its products to that Consultant and to terminate the Consultant’s

1 The court takes the facts from NSP’s Complaint (ECF No. 1) and Mr. Gautam’s declaration (ECF No. 14-2). See Wenz v. Memery Crystal, 55 F.3d 1503, 1505 (10th Cir. 1995) (requiring court to take allegations in plaintiff’s complaint as true to the extent defendant’s sworn statements do not controvert them). status as an authorized seller. (Id. ¶ 59.) On March 29, 2019, NSP permanently terminated Mr. Gautam’s status as an NSP Consultant. (Id. ¶ 69.) Around this time, NSP discovered that high volumes of products bearing its trademarks were being sold on Amazon.com through a storefront called “sparkle company,” an entity jointly operated by SAAM, a corporation based in Smithtown, New York, and by Mr.

Gautam, who resides in New York.2 (Id. ¶¶ 43–44, 65–67; see also Decl. Somendar Gautam, ECF No. 14-2 at ¶¶ 2–3.) Mr. Gautam is the sole corporate officer of SAAM. (Compl. ¶ 6.) Around this time, numerous consumers began to write negative Amazon reviews of NSP products that NSP alleges were sold by sparkle company, commenting that the products that they had received in the mail were tampered with, diluted, old, foul-smelling, unsealed, missing contents, expired, or showing signs of previous use. (Id. ¶¶ 45–49.)3 On September 11, 2019, counsel for NSP sent its first cease-and-desist letter to SAAM and Mr. Gautam. In the letter, which identified NSP as a Utah company, NSP accused SAAM and Mr. Gautam of operating the “sparkle company” Amazon storefront and explained that the

Defendants were infringing the NSP Trademarks through their unauthorized online sales. (Id. ¶ 10.) NSP’s letter also explained that its Consultants are not permitted to sell NSP Products on online marketplaces or to anyone who intends to resell NSP products, such as SAAM. (Id.) And in this letter, NSP demanded that the Defendants stop selling products bearing NSP’s trademarks

2 The “sparkle company” storefront can be accessed at https://www.amazon.com/sp?seller= A23LGCNS1YBSJ6. NSP also attaches screenshots of the storefront to its opposition briefing. (E.g., Sparkle Company Storefront, ECF No. 16-1; Sparkle Company Product Offerings, ECF No. 16-2.) 3 Amazon does not allow its consumers to identify the seller of the product subject to their review. (Compl. ¶ 51.) But given that the Defendants have sold a high volume of products bearing the NSP Trademarks on Amazon and are not subject to NSP’s quality controls, NSP plausibly alleges that at least some of these negative reviews were written by customers who purchased products bearing the NSP trademarks from the Defendants. (Id.) and that the Defendants disclose which Consultants had provided them with these products. (Id.) The Defendants did not respond to NSP’s September 11, 2019 letter or otherwise contact NSP. (Id. ¶ 69.) On August 18, 2020, NSP sent another cease-and-desist letter to SAAM and Mr. Gautam reiterating the demands from their September 11, 2019 letter and enclosing a draft complaint against the Defendants. (Id.)

After receiving these cease-and-desist letters, the Defendants temporarily stopped selling the NSP trademarked products. (Id. ¶ 70.) But the Defendants’ sales eventually began again. (Id. ¶ 94.) The Defendants do not deny that some of their sales of NSP trademarked products went to Utah consumers. Because NSP has not sold any products to Mr. Gautam since it terminated him as a Consultant in March 2019, NSP alleges that the Defendants must have instead purchased NSP products from other Consultants, thereby causing these Consultants to breach their contracts with NSP. On December 3, 2024, NSP sent its final cease-and-desist letter, reiterating its demands and warning that NSP would imminently file suit in Utah if the Defendants did not immediately

stop these sales. (Id. ¶ 71.) The Defendants never responded. In the meantime, the Defendants’ Amazon storefront has continued to advertise and sell products bearing the NSP trademarks, listing SAAM as the “Business Name” of the storefront’s operator. (Id. ¶ 72.) NSP’s monitoring software estimates that, since October 2023, the Defendants have sold more than 111,000 infringing products on Amazon, earning more than $450,000. (Id. ¶ 74.) NSP also claims that the Defendants began to profit off of their unauthorized sales of products bearing NSP’s trademarks as early as 2019. (Id. ¶ 74.) NSP alleges that it has suffered and will continue to suffer harm in Utah, including but not limited to loss of sales, damage to the value of their intellectual property, harm to their customer goodwill, and damage to their existing and potential business relationships. (Id. ¶ 100– 02.) NSP also contends that Mr.

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Nature's Sunshine Products Inc v. SAAM Enterprise Inc, Counsel Stack Legal Research, https://law.counselstack.com/opinion/natures-sunshine-products-inc-v-saam-enterprise-inc-utd-2025.