2006 UT 8
This opinion is subject to revision before final
publication in the Pacific Reporter.
IN THE SUPREME COURT OF THE STATE OF UTAH
----oo0oo----
Brittney Fenn, on behalf of
No. 20041072
herself and all others similarly
situated,
Plaintiff and Respondent,
v.
Mleads Enterprises, Inc.; and
John Does one through ten whose
F I L E D
true names are unknown,
Defendants and Petitioner.
February 10, 2006
---
Third District, Sandy
The Honorable Denise P. Lindberg
No. 030400108
Attorneys: Denver C. Snuffer, Jr., Sandy, Jesse L. Riddle,
Draper, for plaintiff
Jill L. Dunyon, Salt Lake City, Derek A. Newman,
Roger M. Townsend, Venkat Balasubramani, Seattle,
WA, for defendants
---
On Certiorari to the Utah Court of Appeals
WILKINS, Associate Chief Justice:
¶1
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.
FACTUAL AND PROCEDURAL BACKGROUND
A. FACTUAL BACKGROUND
¶2
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.
¶3
Brittney Fenn, a Utah resident, received an unsolicited
email advertisement from Mleads that she opened while living in
Utah. On January 3, 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-solicited
1 MFS Series Trust III v. Grainger, 2004 UT 61, ¶ 6, 96 P.3d
927 (quoting Krouse v. Bower, 2001 UT 28, ¶ 2, 20 P.3d 895).
2 Utah Code Ann. § 13-36-103 (2002) (repealed 2004).
3 Id. § 13-36-105(2) (2002) (repealed 2004).
No. 20041072
2
Pornography and Marketing" (CAN-SPAM), which preempted the Utah
Act.4
B. PROCEDURAL BACKGROUND
¶5
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."
¶6
The court of appeals also correctly understood Fenn's
arguments to be based on specific jurisdiction, noting that
"[t]he 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.
4 15 U.S.C. § 7701 (2005). CAN-SPAM addresses the problems
associated with the rapid growth and abuse of unsolicited
commercial email and accordingly recognizes the substantial
government interest in regulating commercial email on a
nationwide basis. CAN-SPAM prohibits commercial email from
misleading recipients as to the source or content and protects
recipients' rights to decline reception of commercial emails.
Ultimately, CAN-SPAM permits states to press criminal charges and
recipients to file civil suits when the sender violates the CAN-
SPAM provisions. See 15 U.S.C. §§ 7701, 7706.
5 Fenn v. Mleads, 2004 UT App 412, ¶ 13, 103 P.3d 156.
3
No. 20041072
ANALYSIS
¶7
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
¶8
Once 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,
6 See MFS Series Trust III v. Grainger, 2004 UT 61, ¶ 7, 96
P.3d 927.
7 See Provident Nat'l Bank v. Cal. Fed. Savs. & Loan Ass'n,
819 F.2d 434, 437 (3d Cir. 1987); Neways, Inc. v. McCausland, 950
P.2d 420, 423 (Utah 1997); see also NW. Healthcare Alliance, Inc.
v. Healthgrades.com, Inc., 2002 U.S. App. LEXIS 21131 (9th Cir.
October 7, 2002); Padcom Inc. v. Netmotion Wireless, Inc., 2004
U.S. Dist. LEXIS 9658 (D. Del. May 24, 2004).
8 See Provident Nat'l, 819 F.2d at 437; Neways, 950 P.2d at
423. We recognize that the legal analysis for personal
jurisdiction cases differs depending on whether the plaintiff
asserts specific or general jurisdiction. Courts exercise
specific jurisdiction "only with respect to the claims arising
out of the particular activities . . . in the forum state."
Phone Directories Co. v. Henderson, 2000 UT 64, ¶ 11, 8 P.3d 256.
General personal jurisdiction, on the other hand, permits a court
to assert "power over a defendant without regard to the subject
of the claim asserted." Id. Such jurisdiction only exists when
the defendant conducts "substantial and continuous local activity
in the forum state." Id. Of course, our conclusion in this case
does not impact the possibility of a Utah court properly
asserting personal jurisdiction over a foreign resident based on
a single email when that foreign resident otherwise has
"continuous and systematic" contacts with Utah sufficient to
establish general jurisdiction. See Int'l Shoe Co. v.
Washington, 326 U.S. 310, 317 (1945). However, since neither
Fenn nor Mleads presented a general jurisdiction argument, based
on the 1% revenue Mleads earns in Utah, to either the district
court or the court of appeals, our analysis focuses only on
whether Utah may exert specific personal jurisdiction over
(continued...)
No. 20041072
4
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 (3)
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 statute10
extends to Mleads'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.
I. THE ASSERTION OF JURISDICTION VIOLATES THE DUE PROCESS
REQUIRED BY THE CONSTITUTION
¶10
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
8(...continued)
Mleads.
9 See Phone Directories, 2000 UT 64, ¶ 12.
10 Although the court of appeals addressed Utah's long-arm
statute, we deem that analysis unnecessary in this opinion for
two reasons: (1) Plaintiff Mleads did not raise the long-arm
statute on appeal and (2) the validity of this particular
exercise of jurisdiction under Utah's long-arm statute hinges on
whether due process permits the exercise of jurisdiction: "The
provision of the act, to ensure maximum protection to citizens of
this state, should be applied so as to assert jurisdiction over
non-resident defendants to the fullest extent permitted by the
due process clause of the Fourteenth Amendment to the United
States Constitution." Utah Code Ann. § 78-27-22 (2005). Thus,
our analysis focuses on the due process clause.
11 U.S. Const. amend. XIV, § 1.
5
No. 20041072
deprive the party of life, liberty, or property, the United
States Supreme Court has determined that
due process requires only that in order to
subject a defendant to a judgment in
personam, if he be not present within the
territory of the forum, he have certain
minimum contacts with it such that the
maintenance of the suit does not offend the
"traditional notions of fair play and
substantial justice."12
Thus, a Utah state court may assert specific personal
jurisdiction over a foreign defendant only if (1) the defendant
has minimum contacts with Utah and (2) the assertion of
jurisdiction would not offend the traditional notions of fair
play and substantial justice.13
A. Mleads Lacks Sufficient Minimum Contacts Arising Out of This
Claim
¶11
We first review whether Mleads's act of sending this
one email to Fenn established minimum contacts between Mleads and
Utah. Mleads argues that it did not, and we agree. The activity
that gave rise to this claim, namely the sending of an
unsolicited email advertisement, created an insubstantial contact
with Utah under the federal due process analysis.
¶12
A Utah court may not exert jurisdiction unless the
defendant's contacts create a "`substantial connection' with the
12 Int'l Shoe, 326 U.S. at 316; see also MFS Series Trust
III v. Grainger, 2004 UT 61, ¶ 10, 96 P.3d 927; Starways, Inc. v.
Curry, 1999 UT 50, ¶ 8, 980 P.2d 204 (concluding that sufficient
evidence of minimum contacts and reasonableness permitted
exertion of specific personal jurisdiction over California
residents who conducted marketing services for a Nevada
corporation with its principle place of business in Utah);
Neways, 950 P.2d at 423 (considering minimum contacts, purposeful
availment and reasonableness to uphold specific personal
jurisdiction over non-resident defendant).
13 See MFS Series Trust, 2004 UT 61, ¶ 10; see also Phone
Directories, 2000 UT 64, ¶ 12.
No. 20041072
6
forum state."14 The fact that the contact with Utah occurred via
the Internet does not change the analysis. "Traditionally, when
an entity intentionally reaches beyond its boundaries to conduct
business with foreign residences, the exercise of specific
jurisdiction is proper,"15 and "[d]ifferent results should not be
reached simply because business is conducted over the
Internet."16 Nevertheless, "[t]he `minimum contacts' standard is
not susceptible of mechanical application, and instead, involves
an ad hoc analysis of the facts,"17 particularly when dealing
with the Internet because emails and websites present unique and
complicated problems for jurisdictional analysis. The main
complication is that a defendant, like Mleads, is generally
unaware of the geographic location to which it sends an email
because that information is not necessarily provided with the
email address. With this in mind, courts have applied a variety
of tests in Internet jurisdiction cases. Thus, a defendant may
establish a substantial connection with Utah in a number of ways.
¶13
First, a defendant may purposefully avail itself of the
benefits of conducting business in Utah.18 Generally, a party
purposefully avails itself of the benefits of conducting business
in a state by deliberately engaging in significant activities
14 MFS Series Trust, 2004 UT 61, ¶ 10 (quoting Asahi Metal
Indus. Co. v. Super. Ct. of Cal., 480 U.S. 102, 109 (1987)).
15 Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119,
1124 (W.D. Pa. 1997) (referring to Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 475 (1985)). Zippo remains one of the
most influential cases involving personal jurisdiction and the
Internet.
16 Zippo, 952 F. Supp. at 1124; see also Gorman v.
Ameritrade Holding Corp., 293 F.3d 506, 509-13 (D.C. Cir. 2002);
16 James Wm. Moore et al., Moore's Federal Practice § 108.44 (3d
ed. 2005).
17 Rocky Mountain Claim Staking v. Frandsen, 884 P.2d 1299,
1301 (Utah Ct. App. 1994); see also LAK, Inc. v. Deer Creek
Enters., 885 F.2d 1293, 1301 (6th Cir. 1989) (quoting Stuart v.
Spademan, 772 F.2d 1185, 1194 (5th Cir. 1985)).
18 See Rocky Mountain, 884 P.2d at 1301.
7
No. 20041072
within the state19 or by creating "`continuing obligations'
between himself and residents of the forum."20 Courts often
determine purposeful availment by considering whether the
defendant "deliberately" created "some relationship with the
forum state that would serve to make that state's potential
exercise of jurisdiction foreseeable."21 Nevertheless, the
question of purposeful availment is irrelevant when the nature
and quality of the contact creates an insubstantial connection
with the forum.22 Furthermore, even if a defendant has
purposefully availed itself of the benefits of conducting
business in a forum so that the exercise of jurisdiction is
foreseeable, a court may still be restrained from the assertion
if doing so violates the traditional notions of fair play and
substantial justice.23
¶14
Second, some courts have also upheld jurisdiction in
Internet cases under the Calder v. Jones "effects test."24 In
applying the Calder test, the court examines the degree to which
defendants knew or should have known that their actions may
affect a given plaintiff in the forum.25 The defendants in
Calder were not intending to avail themselves specifically of the
benefits of conducting business in California. But the court
concluded that because they had knowledge that their defamatory
19 See Burger King, 471 U.S. at 475-76.
20 Id. at 476 (quoting Travelers Health Ass'n v. Virginia,
339 U.S. 643, 648 (1950)).
21 First Mortgage Corp. v. State St. Bank & Trust Co., 173
F. Supp. 2d 1167, 1173-74 (D. Utah 2001) (citing Burger King, 471
U.S. at 475-76); see also Intercon, Inc. v. Bell Atl. Internet
Solutions, Inc., 205 F.3d 1244, 1247-48 (10th Cir. 2000)
(concluding that defendant had purposefully directed its contact
after it received notice that it was routing customer's emails,
albeit inadvertently, through plaintiff's email server).
22 See First Mortgage, 173 F. Supp. 2d at 1174 (referring to
Asahi Metal Indus. Co. v. Super. Ct. of Cal., 480 U.S. 102, 108-
09 (1987)).
23 MFS Series Trust, 2004 UT 61, ¶ 10.
24 465 U.S. 783, 785-87 (1984).
25 Id. at 786-90.
No. 20041072
8
acts could injure a particular California-based company,
California courts could properly exercise jurisdiction.
Likewise, in applying the "effects test" to Internet activity,
the Ninth Circuit, in Panavision International v. Toeppen,
concluded that California may exercise personal jurisdiction over
an Illinois defendant who registered other companies' trademarks
as Internet domain names with the intention of later selling
those domain names to the trademark owners.26 Because Panavision
was headquartered in California, the court determined that the
defendant must have known his actions would have the effect of
injuring the plaintiff in California.27
¶15
Third and more generally, one could establish
sufficient minimum contacts, even without purposeful availment or
knowledge of a potential effect, when the nature and quality of
the activity is generally of such a degree to support the
exercise of jurisdiction.28 Such an analysis is particularly
relevant in Internet cases because "[c]ourts determining personal
jurisdiction primarily on the basis of Internet activity
generally focus on the nature and quality of activity that a
defendant conducts over the Internet."29 We have similarly
stated that "[d]ue process is only satisfied based on the
`quality and nature of the activity' for each individual
defendant."30
26 141 F.3d 1316, 1322 (9th Cir. 1998).
27 Id.
28 See In re W.A., 2002 UT 127, 63 P.3d 607 (holding that
parental status provides the state a strong enough interest in
the matter to make minimum contacts irrelevant); see, e.g.,
Verizon Online Servs., Inc. v. Ralsky, 203 F. Supp. 2d 601, 616
(E.D. Va. 2002) (asserting jurisdiction based on the nature and
quality of the conduct); Zippo Mfg. Co. v. Zippo Dot Com, Inc.,
952 F. Supp. 1119 (W.D. Pa. 1997) (disregarding purposeful
availment and looking rather to the level of activity involved
with the contact).
29 Verizon Online, 203 F. Supp. 2d at 616.
30 MFS Series Trust III v. Grainger, 2004 UT 61, ¶ 11, 96
P.3d 927; see also Shaffer v. Heitner, 433 U.S. 186 (1977); Int'l
Shoe, Co. v. Washington, 326 U.S. 310, 318 (1945) ("[A]lthough
the commission of some single or occasional acts . . . has not
(continued...)
9
No. 20041072
¶16
One approach to the nature and quality inquiry has been
to apply a "sliding scale" in extending the jurisdictional
analysis to Internet situations.31 The sliding scale approach,
introduced in Zippo Manufacturing Company v. Zippo Dot Com,
Inc.,32 advocates exercising jurisdiction over corporations that
clearly do business over the Internet.33 To make this
determination in the context of websites, Zippo and its progeny
look to whether the defendant corporation actually engages in
"knowing and repeated transmission of computer files over the
Internet."34 If so, the Internet activity is "active" under the
due process analysis and satisfies minimum contacts.35 For
instance, repeatedly sending contracts via email satisfies the
minimum contacts required by due process because the defendant
corporation is clearly doing business in the forum-state.36
However, at the opposite end of the sliding scale are websites
where a defendant has merely posted information accessible to
users in foreign jurisdictions. Courts term these websites as
"passive" and generally determine jurisdiction to be improper.
"The middle ground is occupied by interactive Web sites where a
user can exchange information with the host computer. In these
cases, the exercise of jurisdiction is determined by examining
the level of interactivity and commercial nature of the exchange
of information that occurs on the Web site."37 Thus, when the
level of activity falls in the middle ground and is
30(...continued)
been thought to confer upon the state authority to enforce it[;]
other such acts, because of their nature and quality and the
circumstances of their commission, may be deemed sufficient to
render the corporation liable to suit.").
31 See Moore et al., supra note 16, § 108.44 (3d ed. 2005)
(citing 3d, 4th, 5th, 6th, 8th, 9th, and 10th Circuit cases which
apply a "sliding scale" analysis to Internet contacts).
32 952 F. Supp. 1119, 1124-25 (W.D. Pa. 1997).
33 See id. at 1124.
34 Id.
35 See id.
36 See id.
37 Id.
No. 20041072
10
"interactive," we focus specifically on the nature and quality of
the activity, meaning the type of activity and the level of
exchange that occurs over the Internet. And implicit in this
analysis is the sender's purpose in sending the email and its
effect on the recipient.
¶17
Furthermore, we recognize that certain types of emails,
merely through their nature and quality, may rise to a level that
creates a substantial connection between the defendant and Utah.
It is conceivable, for example, that sending mass emails into
Utah, or even a threatening or otherwise tortious individual
email, may result in a substantial connection between the
defendant and Utah if the nature and quality is such as to have a
meaningful impact on Utah and its citizens.
¶18
In applying the nature and quality test for determining
minimum contacts, some courts have asserted specific personal
jurisdiction over defendants based solely on nationwide Internet
advertisements.38 These courts have relied on the law regarding
personal jurisdiction over corporations that advertise in
magazines. For example, in Haelan Products, Inc. v. Beso
Biological, the United States District Court for the Eastern
District of Louisiana held that the forum court could properly
exercise jurisdiction over a corporation for trademark
infringement on the Internet.39 The court relied on a four-
factor test which the Fifth Circuit had applied to determine
whether advertisements in a nationally-circulated trade magazine
were sufficient minimum contacts under the due process analysis:
(1) Whether the publications defendant
advertised in circulated in the forum state;
(2) Whether the defendant advertised in these
publications frequently, regularly, or
occasionally;
(3) What amount of business was obtained from
the advertisements; and
38 See, e.g., Axxess Techs., Inc. v. Keycards Int'l Inc.,
1998 U.S. Dist. LEXIS 23223 (D. Ariz. March 27, 1998); Haelan
Prods. Inc. v. Beso Biological, 1997 U.S. Dist. LEXIS 10565 (D.
La. July 11, 1997).
39 1997 U.S. Dist. LEXIS 10565 (D. La. July 11, 1997).
11
No. 20041072
(4) Whether the defendant attempted to limit
the states in which its product was
marketed.40
The Beso court affirmed the assertion of specific personal
jurisdiction for the trademark infringement that occurred over
the Internet because the defendant advertised in four nationally-
distributed publications which circulated in the state,
maintained a nationwide toll-free number that it published in at
least one trade magazine, and its Internet address and website
were used to advertise and solicit business in the forum state.
¶19
In summary, under a minimum contacts analysis for
Internet activity, "[p]roper inquiry must not focus on the mere
quantity of contacts, but rather upon the quality and nature of
those contacts as they relate to the claims asserted."41 We do
not intend to permit corporations to hide behind the excuse of
ignorance in not knowing where they or their agents send email
advertisements. However, before asserting jurisdiction arising
out of those emails, a plaintiff must demonstrate a substantial
connection to Utah created by the one email contact.
Specifically, the plaintiff must establish that the corporation
purposefully availed itself of the benefits of conducting
business in Utah, knew its email may injure persons in Utah, or
the nature and quality of the sent email supports the exercise of
personal jurisdiction in Utah. One way, but not necessarily the
only way, a plaintiff may establish that the nature and quality
of the activity supports jurisdiction is to demonstrate that the
defendant's conduct created an active or interactive relationship
with Utah. However, we do not limit jurisdiction under the
general "nature and quality" to the active/passive test.
¶20
In this case, the record is devoid of any evidence
illustrating a substantial connection between Mleads and Utah
arising out of this one email. Mleads lacked knowledge of the
exact location to which its marketing agency would send the
email. The record indicates, without any controverted evidence,
that Mleads's marketing agency possessed the email address but
not the geographic location to which the email would be sent or
at which it would be retrieved. Thus, it is difficult in this
particular case to rely on purposeful availment to satisfy
minimum contacts.
40 Loumar v. Smith, 698 F.2d 759, 763 (5th Cir. 1983).
41 Starways, Inc. v. Curry, 1999 UT 50, ¶ 8, 980 P.2d 204.
No. 20041072
12
¶21
However, even if Mleads, by sending this email through
an agent, had purposefully availed itself of the benefits of
conducting business in Utah, the contact does not provide the
required minimum contacts. First, under the Zippo analysis,
while the email Mleads sent was not clearly passive activity, it
is also not the type of active contact that warrants automatic
assertion of jurisdiction. Because the activity falls in the
middle ground known as "interactive," we must focus on the nature
and quality of the activity and the level of exchange it
established between Mleads and Fenn. The email did not create an
actual business transaction between Mleads and Fenn. The email
contained, for example, no contract. It merely provided Fenn
with information. Furthermore, although Mleads intended to
solicit a business relationship with Fenn, the email is not
reflective of an actual relationship or exchange between the two
parties. And implicit in "interactive" activity is the exchange
of information between parties. Fenn never responded to the
email nor did she contact Mleads through any other means.
Although the possibility existed for an exchange to occur,
because it did not, these facts fall under the type of
interactive activity for which the exercise of personal
jurisdiction is improper.
¶22
Finally, analogizing to our analysis of magazine
advertisement cases in Haelan Products, the fact that Mleads
earns 1% of its revenue in Utah but does not engage in widespread
advertising in the state suggests its contacts are at best
insubstantial. In our past personal jurisdiction cases dealing
with corporate advertisement, the record generally reflected
additional contacts-telephone or fax communications, business
transactions, or the like--within the state. For instance, we
upheld the assertion of specific personal jurisdiction when a
corporation advertised in Utah and its brokers regularly spoke on
the phone with representatives and other contacts in Utah.42 We
also viewed advertisement in Utah as a substantial contact when
the contact included direct oral communications between the
parties.43 However, we have never held, nor are we prepared to
hold now, that a claim arising out of one email advertisement,
brought by one party under a specific jurisdiction claim, without
direct communications between the parties or proof of offense or
42 See Utah State Univ. of Agric. & Applied Sci. v. Sutro &
Co., 646 P.2d 715 (Utah 1982).
43 See Lee v. Frank's Garage & Used Cars, Inc., 2004 UT App
260, 97 P.3d 717.
13
No. 20041072
injury to the recipient, establishes a substantial connection to
Utah under the federal due process analysis. Accordingly, we
hold that minimum contacts are not satisfied with this one email.
B. The Exercise of Jurisdiction is Unreasonable
¶23
Even if minimum contacts were satisfied, the assertion
of jurisdiction over Mleads would still violate the due process
clause because it fails to comport with "the traditional notions
of fair play and substantial justice."44 In other words, the
exercise of jurisdiction must be fair and reasonable. Generally,
under the reasonableness factor, a court weighs and balances a
variety of interests, including the inconvenience to the
plaintiff and to the defendant, the regulatory concerns of the
forum state, and the location of the witnesses and evidence.45
¶24
Adopting a blanket "one-email rule" imposes a
substantial burden on corporations. Practically speaking,
companies would be required to know the laws of each state and to
be prepared to litigate in all fifty of them. Precisely because
of this complication, the federal government preempted the Act
and those similar in other states with CAN-SPAM, which states:
"[t]here is a substantial government interest in regulation of
commercial electronic mail on a nationwide basis."46 The federal
statute goes on to explain that state legislation regarding spam
has been ineffective, "in part because, since an electronic mail
address does not specify a geographic location, it can be
extremely difficult for law-abiding businesses to know with which
of these disparate statutes they are required to comply."47 In
sum, even if Utah maintains a strong interest in regulating spam,
the burden on businesses remains substantial.
¶25
We accordingly conclude that the reasonableness inquiry
also requires us to reverse the court of appeals's holding.
Exercising specific personal jurisdiction under these particular
circumstances is unreasonable and violative of the traditional
44 MFS Series Trust III v. Grainger, 2004 UT 61, ¶ 10, 96
P.3d 927 (citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 316)
(1945).
45 See generally Moore et al., supra note 16, § 108.42.
46 15 U.S.C. § 7701(b)(1) (2005).
47 Id. § 7701(a)(11).
No. 20041072
14
notions of fair play and substantial justice sustained by the
federal due process clause.
CONCLUSION
¶26
Asserting jurisdiction over Mleads violates due
process. Mleads lacked sufficient minimum contacts with Utah
because the nature and quality of this particular email
advertisement failed to establish a substantial connection to
Utah. Moreover, the exercise of jurisdiction is unreasonable
under these circumstances. We reverse.
---
¶27
Chief Justice Durham, Justice Durrant, Justice Parrish,
and Justice Nehring concur in Associate Chief Justice Wilkins'
opinion.
15
No. 20041072