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Sioux Pharm, Inc., et al., v. Summit Nutritionals International, Inc.. IA Personal Jurisdiction
Summit Nutritionals International, Inc., is a New Jersey Corporation with its principal place of business in the Garden State. It had no office, agent, employees, or property in Iowa. However, its website stated incorrectly that it had a manufacturing facility in Sioux Center, Iowa, and listed that physical address. In fact, the facility at that address was owned and operated by Eagle Laboratories, Inc. Eagle Labs manufactures supplements in Iowa, and they are repackaged and sold by Summit.
Sioux Pharm, Inc., sued both Summit and Eagle in Iowa court. Summit moved to dismiss on the grounds that there was no personal jurisdiction. The district court, Sioux County, Judge Duane E. Hoffmeyer, held that there was personal jurisdiction, based upon the inaccurate statement on the website that the company had its manufacturing facility in Iowa. Summit then filed an interlocutory appeal, which was heard by the Iowa Supreme Court.
The state high court first concluded that the trial court had erred in basing jurisdiction on the inaccurate statement. It held that this erroneous statement was insufficient to confer general jurisdiction, since this contact was not so continuous and systematic as to render it "essentially at home in the forum state." It went on to hold that the erroneous statement did not amount to a waiver of jurisdiction, or jurisdiction based upon a theory of estoppel.
The court also looked at the totality of Summit's contacts with Iowa and concluded that they were insufficient to confer general jurisdiction.
Nonetheless, the court affirmed on the alternative ground of specific jurisdiction. It looked at Summitt's contacts with Iowa in the context of the unfair competition alleged in this case and concluded that they were sufficient to confer jurisdiction. In particular, the fact that the defendant was touting the Iowa facility as its own was an important factor, even though it would not confer general jurisdiction over an unrelated claim.
For these reasons, the Supreme Court affirmed the district court's ruling, albeit on an alternative ground.
No. 13-1756 (Iowa Jan. 30, 2015).
Update: I received an e-mail from someone claiming to be the "Director of Information Technology" of Summit Nutritionals International, Inc. He believed that my decision to include this case summary "represents a bias on [my] part." He requested that I remove it since it "conveys negative connotations towards the Summit Nutritionals International, Inc. company and brand."
I believe everything I reported here is a fair summary of the published decision of the Iowa Supreme Court, which is, of course, a public record which is freely available on the court's website. The decision is available elsewhere, such as Google Scholar. If it hasn't been already, it will be published soon by West in the Northwest Reporter.
This case summary is included as a service to attorneys, since the case represents an important rule regarding personal jurisdiction in the internet age. The e-mail asked me to remove this article "so as to avoid any communication between our attorneys."
I replied and let the sender know that I wouldn't be removing it. I don't think I reported anything incorrectly, but if I did, I offered to make any necessary corrections.
Update #2: On October 10, 2015, I was once again contacted by someone identifying himself as Summit's Director of Information Technology. He advised me that "Sioux Pharm has officially submitted a withdrawal of all claims & retracted all allegations against Summit Nutritionals International." He included a copy of a document in support this statement. Once again, he asked me to remove this page.
Again, this page is merely a summary of a public document that is freely available on the court's website, casetext.com, Google Scholar, findlaw.com, ecases.us, and probably many other places. The Iowa Supreme Court even posted the oral argument in the case on YouTube. The case is published and available at every law library in America at 859 N.W.2d 182.
Even though the underlying case has apparently been settled, the supreme court decision still remains an important precedent for attorneys in Iowa and other states. Therefore, I will not be deleting this page. Again, I don't believe that there are any errors in my summary of the case. If there are, I will be happy to correct them.
Please see the original opinion for the court's exact language.
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Richard P. Clem is an attorney and continuing legal education (CLE) provider in Minnesota. He has been in private practice in the Twin Cities for 25 years. He has a J.D., cum laude, from Hamline University School of Law in St. Paul and a B.A. in History from the University of Minnesota. His reported cases include: Asociacion Nacional de Pescadores a Pequena Escala o Artesanales de Colombia v. Dow Quimica de Colombia, 988 F.2d 559, rehearing denied, 5 F.3d 530 (5th Cir. 1993), cert. denied, 510 U.S. 1041 (1994); LaMott v. Apple Valley Health Care Center, 465 N.W.2d 585 (Minn. Ct. App. 1991); Abo el Ela v. State, 468 N.W.2d 580 (Minn. Ct. App. 1991).
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