Utah Supreme Court Grants Certiorari to Decide Whether Sending One E-Mail Can Create Personal Jurisdiction
March 21, 2005. The Supreme Court of the State of Utah granted certiorari in Fenn v. MLeads Enterprises, a case regarding whether a state court can exercise personal jurisdiction, in a case brought under a state anti-spam statute, over an out of state defendant, based solely upon the defendant having contracted with an agent who sent one unsolicited e-mail to a person within the state.
The Utah District Court (a trial court) dismissed the case for lack of personal jurisdiction. The Utah Court of Appeals (an intermediate appellate court) reversed. The Supreme Court of Utah granted certiorari on March 17, 2005. However, it did not mail out the order until March 21.
Various courts, federal and state, and U.S. and foreign, have begun to grapple with the issue of what internet based activities give a forum personal jurisdiction over an out of forum defendant. Some cases are in conflict. The U.S. Supreme Court has not yet weighed in. The Court of Appeals of Utah wrote in its November 12, 2004 split opinion that "This issue is a matter of first impression in Utah and, as far as our research has revealed, in all of the United States." Soon, the Utah Supreme Court will rule on this issue.
Brittney Fenn, the plaintiff, is a resident of Utah. MLeads Enterprises, Inc., the defendant, is an Arizona corporation that is based in Arizona. It is a mortgage lead company. These companies typically develop collections of data on consumers seeking mortgages, and then sell data to mortgage lenders. One method that these companies use to obtain data is to send bulk unsolicited e-mail. MLeads contracted with a marketing agent to advertise MLeads's services to consumers. MLeads' agent sent an e-mail to Fenn.
Fenn filed a complaint in District Court in Utah against MLeads and ten John Doe defendants. Fenn also seeks to sue on behalf of others similarly situated.
The District Court did not develop a full factual record before dismissing. The Court of Appeals wrote that "Because the trial court disposed of this case at an early stage, some important facts remain unresolved. Specifically, the parties dispute whether Fenn had consented to receive the email in a previous visit to the website of a related entity and whether MLeads or its marketing agent had any means to discover the physical location or residency of the recipients of its email. The record also contains no information as to the nature of the agreement between MLeads and its marketing agent. We similarly have no information on whether an automated system or an employee generated the email."
Nevertheless, the District Court dismissed for lack of personal jurisdiction over MLeads.
A three judge panel of the Court of Appeals reversed, in a 2-1 split. The majority concluded that the exercise of jurisdiction over MLeads is authorized by the Utah long arm jurisdiction statute, and is consistent with the due process protections articulated by the U.S. Supreme Court in International Shoe v. Washington, 326 U.S. 310 (1945), and its progeny.
The Court of Appeals of Utah concluded that "Sending one email to a resident of Utah is sufficient ``contact´´ to satisfy the long-arm statute and the minimum contacts requirement of due process for a statutory claim arising from the sending of that email. Additionally, the state's and Fenn's interests in this case trump the burdens imposed upon MLeads. Thus, we hold that the district court ruled incorrectly in dismissing this case on summary judgment for lack of personal jurisdiction."
The Court explained that Utah applies a four part due process analysis. First, the court considers whether the defendant purposefully availed itself of the privilege of conducting activities in the forum state, Utah. Second, the court considers whether the claim arose out of the defendant's Utah activity. Third, the court considers whether the defendant should have been able to reasonably anticipate being haled into court in Utah. Fourth, the court considers the state's interest and fairness to the parties.
The Court reasoned that the purposeful availment prong is met simply if the defendant causes an e-mail to be sent to someone in the forum state. The Court also reasoned that sending an e-mail is purposeful conduct, and hence, the sender should reasonably anticipate being haled into court in the recipient's state.
Finally, the Court considered the state's interest and fairness to the parties. The Court, of course, noted that states have an interest in enforcing their statutes. But, the Court also found that it is pertinent that "Utah benefits from its attorneys earning fees".
Judge Norman Jackson wrote the opinion of the Court of Appeals, in which Judge Gregory Orme joined. Judge Russell Bench dissented, without writing a separate opinion. However, he, in effect, wrote a dissent to the majority opinion in the present case in a later related case.
The related case is Amanda Weaver v. DirectLink Media Group, LLC. This is also a civil action brought in the state of Utah alleging violation of Utah's anti-spam statute. The District Court dismissed the action for lack of personal jurisdiction over the defendant. The same three judge panel of the Court of Appeals reversed. The Court of Appeals wrote in its opinion that "this case is factually identical to our recent case, Fenn v. MLeads Enterprises, Inc. ..." That opinion is also published at 2004 UT App 471.
Judge Bench wrote in Weaver that "I dissented in Fenn because I do not believe that a single email can vest Utah with personal jurisdiction over the defendant-sender where the plaintiff-recipient alleges no injury resulting from the transmission of the email. In order to satisfy the jurisdictional inquiry, due process requires that a nonresident defendant ``purposefully avail itself of the privilege of conducting activities within the forum state.´´ ... This ``requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of . . . 'attenuated' contacts.´´ " (Citations omitted.)
He continued that "It is difficult to imagine a more attenuated contact than the one presented here: a single email message sent to a lone Utah recipient", and that "The single email rule established by Fenn therefore improperly ignores the ``'quality and nature'´´ of the defendant's contact, vesting jurisdiction based solely on a single contact within Utah, however trivial".
The present case is Brittney Fenn v. MLeads Enterprises, Inc., Supreme Court of the State of Utah, Sup. Ct. No. 20041072-SC, a petition for writ of certiorari to the Court of Appeals. The Court of Appeals case number is 20030948-CA. Its opinion is reported at 2004 UT App 412 and 103 P.3d 156. The case was filed in the District Court, Third District, Sandy Department, Judge Denise Lindberg presiding. Its case number is 030400108.
MLead is represented by Jill Dunyon, of Snow, Christensen and Martineau in Salt Lake City, Utah, and Derek Newman and Venkat Balasubramani of Newman & Newman in Seattle, Washington.
The plaintiffs in both cases are represented by Daniel Garriott and Denver Snuffer of Sandy, Utah, and Jesse Riddle of Draper, Utah.
The is another noteworthy case in Utah, Brittney Fenn v. Redmond
Venture, Inc. The plaintiff is the same as in
Fenn v. MLeads. The claim is also violation of Utah's anti-spam statute.
The District Court granted summary judgment to Redmond on that grounds that
Redmond could not be held liable for the actions of its independent contractors
that sent the unsolicited e-mail. The Court of Appeals affirmed. See,