PHILIP A. BRIMMER, Chief District Judge.
This matter is before the Court on Defendants' R.D. Offutt Company, R.D. Offutt Farms Co., and R.D. Offutt Company-Northwest Joint Motion to Dismiss for Lack of Personal Jurisdiction Pursuant to Fed. R. Civ. P. 12(b)(2) [Docket No. 23]. The court has subject matter jurisdiction over this matter pursuant to 28 U.S.C. § 1332.
On or about April 20, 2016, plaintiff became ill after consuming frozen vegetables grown, processed, packaged, and distributed by defendants CRF Frozen Foods, LLC, Costco Wholesale Corporation, R.D. Offutt Company, and R.D. Offutt Company-Northwest. Docket No. 4 at 6, ¶¶ 34-39. On April 23, 2016, CRF Frozen Foods LLC issued a recall of several types of frozen vegetables potentially contaminated by Listeria. Id. at 4, ¶ 9. After additional medical testing, doctors determined that plaintiff's symptoms were the result of a Listeria infection. Id. at 6, ¶ 40.
Plaintiff filed this lawsuit in the District Court for Boulder County, Colorado on May 10, 2018. Docket No. 1-2 at 2. The complaint asserts seven claims against defendants CRF Frozen Foods LLC ("CRF"), Costco Wholesale Corporation ("Costco"), R.D. Offutt Company ("RDO Company"), R.D. Offutt Company — Northwest ("RDO Northwest"), R.D. Offutt Farms Co. ("RDO Farms"), and Does 1-25: (1) breach of express warranty; (2) breach of implied warranty for a particular purpose; (3) breach of implied warranty of merchantability; (4) violation of the Colorado Consumer Protection Act, Colo. Rev. Stat. § 6-1-101 et seq.; (5) strict product liability; (6) negligent product liability; and (7) negligence. Docket No. 4 at 7-14. On June 6, 2018, defendants CRF, RDO Company, RDO Northwest, and RDO Farms removed the case to this Court on the basis of diversity jurisdiction. Docket No. 1 at 3, ¶ 10.
The purpose of a motion to dismiss under Rule 12(b)(2) is to determine whether the Court has personal jurisdiction over a defendant. The plaintiff bears the burden of establishing personal jurisdiction. Rambo v. Am. S. Ins. Co., 839 F.2d 1415, 1417 (10th Cir. 1988). The plaintiff can satisfy its burden by making a prima facie showing. Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1070 (10th Cir. 2008).
"In determining whether a federal court has personal jurisdiction over a defendant, the court must determine (1) whether the applicable statute potentially confers jurisdiction by authorizing service of process on the defendant and (2) whether the exercise of jurisdiction comports with due process." Niemi v. Lasshofer, 770 F.3d 1331, 1348 (10th Cir. 2014); Trujillo v. Williams, 465 F.3d 1210, 1217 (10th Cir. 2006) (quoting Peay v. BellSouth Med. Assistance Plan, 205 F.3d 1206, 1209 (10th Cir. 2000)). The Colorado long-arm statute, Colo. Rev. Stat. § 13-1-124, has been construed to extend jurisdiction to the full extent permitted by the Constitution, so the jurisdictional analysis here reduces to a single inquiry of whether jurisdiction offends due process. See Pro Axess, Inc. v. Orlux Distrib., Inc., 428 F.3d 1270, 1276 (10th Cir. 2005); Archangel Diamond Corp. v. Lukoil, 123 P.3d 1187, 1193 (Colo. 2005). Personal jurisdiction comports with due process where a defendant has minimum contacts with the forum state and where those contacts are such that assuming jurisdiction does not offend "traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Wash., 326 U.S. 310, 316 (1945). Minimum contacts may be established under the doctrines of general jurisdiction or specific jurisdiction. Where general jurisdiction is asserted over a nonresident defendant who has not consented to suit in the forum, minimum contacts exist if the plaintiff demonstrates that the defendant maintains "continuous and systematic general business contacts" in the state. OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1091 (10th Cir. 1998).
Specific jurisdiction is present only if the lawsuit "aris[es] out of or relat[es] to the defendant's contacts with the forum." Bristol-Myers Squibb Co. v. Superior Court of Calif., San Francisco Cty., 137 S.Ct. 1773, 1780 (2017). The specific jurisdiction analysis is two-fold. First, the Court must determine whether a defendant has such minimum contacts with Colorado that the defendant "should reasonably anticipate being haled into court" here. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). Within this inquiry, the Court must determine whether the defendant purposefully directed its activities at residents of the forum, Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985), and whether plaintiff's claim arises out of or results from "actions by . . . defendant . . . that create a substantial connection with the forum State." Asahi Metal Indus. Co. v. Superior Court of Cal., 480 U.S. 102, 109 (1987) (internal quotations omitted). Second, if defendant's actions create sufficient minimum contacts, the Court must consider whether the exercise of personal jurisdiction over defendant offends "traditional notions of fair play and substantial justice." Id. at 105.
The parties' dispute in this case focuses on the "minimum contacts" requirement. The RDO defendants are a group of related entities involved in the production and distribution of agricultural products. See Docket No. 4 at 3, ¶¶ 4-5; Docket No. 23-1 at 1, ¶ 3 (stating that RDO Company is the parent company of RDO Northwest); Docket No. 23-2 at 2, ¶ 4 (stating that RDO Farms is a parent company of RDO Northwest); Docket No. 23-3 at 1, ¶ 3 (stating that RDO Northwest is a subsidiary of RDO Company and RDO Farms). According to declarations submitted by the RDO defendants, the RDO defendants are not registered to do business in Colorado, do not maintain a physical presence in Colorado, do not maintain agents for service of process in Colorado, and do not have any employees in Colorado. Docket No. 23-1 at 2, ¶¶ 9-13; Docket No. 23-2 at 2, ¶¶ 10-14; Docket No. 23-3 at 2-3, ¶¶ 12-17.
Plaintiff asserts that RDO Company "built a seed potato operation in Colorado City, Colorado around 2006 called CSS Farms," which grew seeds for Frito-Lay, a company whose "products [are] widely distributed to Colorado consumers." Docket No. 31 at 4.
Docket No. 31-2 at 2. Defendants respond that the minimum contacts between CSS Farms, "a farming company Ron Offutt once held a partial interest in," subsidiaries of RDO Farms, and Colorado residents do not "even remotely relate to the events that gave rise to this litigation." Docket No. 32 at 5. Defendants also submit a declaration from Loren Stahl, Director of Risk Management for RDO Company, clarifying the relationship between the various RDO defendants and CSS Farms. See Docket No. 32-2. According to the declaration, the only connection between the RDO defendants and CSS Farms is the fact that Ron Offutt once held an ownership interest in CSS Farms. See id. at 3-4.
The Court finds that plaintiff has failed to make a prima facie showing of either general or personal jurisdiction based on the RDO defendants' relationship with CSS Farms. Though not clear, the Court interprets plaintiff's response as asserting three theories of personal jurisdiction based on RDO Company's relationship with CSS Farms: (1) a direct availment theory, under which RDO Company has sufficient direct contacts with Colorado because it "built" CSS Farms; (2) an agency theory, under which CSS Farms' contacts with Colorado as agent for RDO Company can be imputed to RDO Company; and (3) an alter ego theory, under which all of CSS Farms' contacts with Colorado can be imputed to RDO Company. The Court does not find any of these theories persuasive.
In support of a direct availment theory, plaintiff suggests that RDO Company "built" CSS Farms in 2006. Docket No. 31 at 4. Plaintiff relies on the internet article from Agweek, which states that "[t]he company . . . built a seed potato operation in Colorado City." Docket No. 31-2 at 2. However, the article does not draw a clear distinction between Mr. Offutt and RDO Company or provide any detailed information regarding the ownership structure of CSS Farms. As a result, the article is insufficient to contradict defendants' evidence showing that CSS Farms was built by Mr. Offutt, not RDO Company. See Docket No. 32-2 at 4; Weisler v. Comm. Health Sys., Inc., 2012 WL 4498919, at *6 (D.N.M. Sept. 27, 2012) (finding "unverified, uncertified newspaper article" insufficient to demonstrate purposeful availment where "[t]he article . . . provide[d] absolutely no information about the ownership structure of the Hospital, the role of Defendants with respect to the Hospital, or how Plaintiff's claims purportedly arose out of Defendants' alleged contact with New Mexico"); see also Steinbuch v. Cutler, 518 F.3d 580, 589 (8th Cir. 2008) (finding newspaper articles that "referred to Hyperion/Disney as publisher of The Washingtonienne" insufficient to show that "Disney control[led] Hyperion").
Plaintiff's allegations and evidence also do not support an agency theory of jurisdiction. To succeed under this theory, plaintiff would have to show that CSS Farms had actual or apparent authority to act on behalf of RDO Company. See Tripoli Mgmt., LLC v. Waste Connections of Kansas, Inc., No. 09-cv-01767-CMA-KLM, 2010 WL 845927, at *6 (D. Colo. Mar. 9, 2010); see also Daimler AG v. Bauman, 571 U.S. 117, 135 n.13 (2014) (noting that "[a]gency relationships . . . may be relevant to the existence of specific jurisdiction" in that "a corporation can purposefully avail itself of a forum by directing its agents or distributors to take action there"). Plaintiff has made no such showing. The mere fact that Mr. Offutt may have held an ownership interest in both entities at some point in the past does not demonstrate that CSS Farms was an agent of RDO Company for purposes of personal jurisdiction.
Finally, plaintiff has not provided any basis for imputing CSS Farms' Colorado contacts to the RDO defendants under an alter ego theory. Plaintiff has not established that there is any corporate relationship between the RDO defendants and CSS Farms. According to Mr. Stahl, the RDO defendants and CSS Farms are distinct corporate entities. See Docket No. 32-2 at 4. Even assuming RDO Company could be considered the parent corporation of CSS Farms, plaintiff has made no showing that CSS Farms was "doing the business of the parent." Warad West, LLC v. Sorin CRM USA Inc., 119 F.Supp.3d 1294, 1298 (D. Colo. 2015) (internal quotation marks omitted). In deciding whether to pierce the corporate veil to exercise jurisdiction over a non-resident parent corporation based on the forum contacts of its subsidiary, courts consider a number of factors, including whether
Griffith v. SSC Pueblo Belmont Operating Co. LLC, 381 P.3d 308, 313 (Colo. 2016) (internal quotation marks and bracket omitted); see also BASF Corp. v. Willowood, LLC, No. 18-cv-00268-CMA-STV, 2019 WL 186406, at *4 (D. Colo. Jan. 14, 2019) (stating that "facts concerning the amount of control exercised by the corporate parent over its subsidiary are relevant" to an alter ego theory of personal jurisdiction).
Plaintiff also seeks to establish jurisdiction based on the RDO defendants' relationship with Farm Fresh Direct, LLC and Growers Sales and Marketing, LLC d/b/a Fresh Direct of America, stating that RDO Company "is an owner of Farm Fresh Direct and utilizes the entity to ship its potatoes throughout the United States." Docket No. 31 at 4. However, plaintiff does not provide any evidence or well-pled allegations to support this assertion. The article on which she relies indicates that RDO Company's "O'Neill, NE, and Winnemucca, NV, potato operations" merged with Farm Fresh Direct to create Farm Fresh Direct of America. Docket No. 31-3 at 1; see also Docket No. 31-5 at 1. According to Mr. Stahl's declaration, the O'Neill and Winnemucca "operations" are actually Winnemucca Farms LLC and Elkhorn Farms LLC — separate subsidiaries of RDO Farms. Docket No. 32-2 at 3, ¶¶ 7-8. There is thus no direct affiliation between the RDO defendants — RDO Company, RDO Farms, and RDO Northwest — and Farm Fresh Direct. See id. at 4; see also Benton v. Cameco Corp., 375 F.3d 1070, 1081 (10th Cir. 2004) (stating, for purposes of personal jurisdiction, that a "holding or parent company has a separate corporate existence and is treated separately from the subsidiary in the absence of circumstances justifying disregard of the corporate entity" (internal quotation marks and bracket omitted)).
As with CSS Farms, plaintiff also has not presented any evidence or allegations demonstrating that Farm Fresh Direct is the mere agent or alter ego of the RDO defendants. To the extent that the article discussing the Farm Fresh Direct merger suggests a close relationship between RDO Farms, Winnemucca Farms LLC, and Elkhorn Farms LLC, see Docket No. 31-5 at 1 (quoting RDO Company's CEO as stating that "[t]he partnership with Farm Fresh . . . will greatly enhance these two operations' future potential"); Docket No. 32 at 10 (acknowledging that statements in article may "suggest a close connection between R.D. Offutt Company (now R.D. Offutt Farms Co.) and its subsidiaries"), it does not provide any specific facts regarding "the amount of control exercised by [RDO Farms] over its subsidiar[ies]." BASF Corp., 2019 WL 186406, at *4. Accordingly, the article does not establish a prima facie case of personal jurisdiction under an agency or an alter ego theory.
Plaintiff's attempt to show direct contacts between the RDO defendants and Colorado by virtue of their relationship with Farm Fresh Direct is also unavailing. Plaintiff cites the "regular and continuous" communications between RDO Company, Farm Fresh Direct, and Farm Fresh Direct of America in Colorado related to the Farm Fresh merger agreement. Docket No. 31 at 5. These communications allegedly included "[m]eetings and discussions regarding the merger and contracts between the companies," which took place in Colorado. Id. However, plaintiff's description of these communications is not supported by allegations in the complaint or by any evidence submitted in opposition to defendants' motion. More importantly, there has been no showing that any contacts between the RDO defendants and Colorado in relation to the merger agreement were so "continuous and systematic as to render [the RDO defendants] essentially at home in" the state for purposes of general jurisdiction. Daimler AG, 571 U.S. at 139 (internal quotation marks omitted); Old Republic Ins. Co., 877 F.3d at 904 (noting that "courts impose a more stringent minimum contacts test" for general jurisdiction); cf. Sea Eagle Ford, LLC v. Texas Quality Well Serv., LLC, No. 17-cv-02141-PAB-KMT, 2018 WL 4352011, at *3 (D. Colo. Sept. 12, 2018) (finding that communications sent by defendant to plaintiff in Colorado in connection with contractual relationship did not "rise to the level of continuing and wide-reaching contacts with Colorado that [could] support [specific] personal jurisdiction" (internal quotation marks omitted)). Nor has plaintiff established the requisite connection between the Farm Fresh merger agreement and the Listeria outbreak to support an exercise of specific jurisdiction. See Docket No. 32-2 at 3, ¶¶ 14-16 (stating that "Farm Fresh Direct of America is engaged in the sales and marketing of fresh potatoes" but "did not supply products to CRF Frozen Foods LLC"); see also Old Republic Ins. Co., 877 F.3d at 904 (noting that a "plaintiff's injuries must arise out of the defendant's forum-related activities" (internal quotation marks and bracket omitted). As a result, plaintiff has not made a prima facie case of personal jurisdiction based on the RDO defendants' relationship with Farm Fresh Direct.
Plaintiff argues that this Court has personal jurisdiction over the RDO defendants because they used CRF to distribute their products in Colorado. Docket No. 31 at 5. The Court finds this argument unsupported. According to Mr. Stahl, RDO Northwest is a member of CRF; however, the two companies are operated as distinct business entities with separate records, finances, and insurance policies. Docket No. 23-3 at 2, ¶¶ 6-10. Mr. Stahl further states that none of the RDO defendants has ever controlled the management of CRF's operations, including its manufacturing, processing, and distribution of frozen vegetables. Docket No. 23-1 at 2, ¶ 7; Docket No. 23-2 at 2, ¶ 8; Docket No. 23-3 at 2, ¶ 11.
Plaintiff attempts to show that the RDO defendants exercised control over CRF by citing a joint venture between J.R. Simplot and RDO Company to re-purpose a processing facility previously owned by CRF. See Docket No. 31 at 5. She makes the speculative assertion that CRF's processing facility would not have been transferred to J.R. Simplot and RDO Company if the companies were truly independent and accords significant weight to the fact that RDO Company and J.R. Simplot did not purchase CRF in conjunction with the "transfer" of the processing facility. Docket No. 31 at 5-6 (arguing that, if there was true interdependence between the companies, CRF's "business and assets would have been sold to the highest bidder" rather than transferred to J.R. Simplot and RDO Company's joint venture). However, plaintiff does not clearly explain how this fact demonstrates control. In any event, the article upon which plaintiff relies does not support her assertion that the processing facility was merely "transferred" to J.R. Simplot and RDO Company. See Docket No. 31-6 at 2 ("Even though J.R. Simplot is taking over the CRF's building, it did not buy the company during the 25-acre property sale." (emphasis added)). Plaintiff therefore has not shown that the RDO defendants' relationship with CRF supports the exercise of personal jurisdiction.
The RDO defendants request an award of attorney's fees under Colo. Rev. Stat. § 13-17-201. Docket No. 23 at 9.
Colo. Rev. Stat. § 13-17-201. Thus, the statute requires an award of reasonable attorney's fees "when two conditions are met: (1) the action lies in tort; and (2) the action is dismissed pursuant to Rule 12(b)." Building on Our Best LLC v. Sentinel Ins. Co. Ltd., No. 15-cv-00669-RBJ, 2016 WL 1756488, at *2 (D. Colo. May 3, 2016).
The Court finds that the RDO defendants are entitled to an award of reasonable attorney's fees under § 13-17-201. Because four out of seven of the claims asserted against the RDO defendants allege torts under Colorado law, see Docket No. 4 at 10-13 (asserting claims for strict product liability, negligent product liability, negligence, and violation of the CCPA); Building on Our Best LLC, 2016 WL 1756488, at *3 (finding that a "claim alleging a violation of the CCPA is a tort claim" under Colorado law), the "`essence of the action' is tortious in nature." Gagne, 338 P.3d at 1168; see also US Fax Law Ctr., Inc., v. Henry Schein, Inc., 205 P.3d 512, 518 (Colo. App. 2009) (holding that case was primarily a tort action where three of the four counts alleged torts under Colorado law); Dubray, 192 P.3d at 607 (upholding award of attorney's fees under Colo. Rev. Stat. § 13-17-201 where six out of eight claims asserted against the defendants were pleaded as tort claims). Additionally, all claims against the RDO defendants are subject to dismissal under Fed. R. Civ. P. 12(b)(2). See Torres v. Am. Family Mut. Ins. Co., 606 F.Supp.2d 1286, 1287 (D. Colo. 2009) (noting that § 13-17-201 "permit[s] an award of fees in circumstances where all claims against a single defendant are dismissed on Rule 12 grounds, even though claims continue against other defendants").
For the foregoing reasons, it is
