A ft erexami ni ng t he br i efs and appe l l at e r ecor d, t hi s panel has det erm i ned * unani m ous l yt hator al ar gum entw oul d notm at er i al l yas s i s tt he det erm i nat i on of th is a p p e a l. See F e d . R . A p p . P . 3 4 (a )(2 ); 1 0 th C ir. R . 3 4 .1 (G ). T h e c a se is th e re fo re o rd e re d su b m itt e d w ith o u t o ra l ar g u m e n t. T h is o rd e r a n d ju d g m e n t is notbi ndi ng pr ece dent , exce ptundert he doctr i nes of l aw of the ca s e, r es j udi cat a, and col l at er al es t oppel . T he courtgener al l ydi s favor s t he ci t at i on of or der s and j udgm ent s ; nevert hel es s , an or derand j udgm entm aybe ci t ed undert he t erm s and condi t i ons of 10th C i r . R . 36. 3. 

## F I LED United States C ourt of Appeals Tenth Circuit 

### Ju n e22,2006 Elisab eth A. Shumaker C l erk of C ourt UNI TED S TATES CO URT O F AP PEALS F O R T H E T E N T H C IR C U IT H E A L T H G R A D E S , IN C .,

P lain tiff-A p p e llan t, v. DEC ATU R M EM OR I AL H OSPI TAL,

D efe ndant - A ppel l ee. N o. 05- 1445 ( D. C. No . 0 4 - CV- 1 4 6 5 - LT B- P AC)

(D . C o lo .)

ORDE R AND J UDGM EN T * B efor e HENR Y , B RI S CO E , and M UR P HY , C i rcui tJudg es. T hi s appea l chal l enges a di s tr i ctcourtor derdi s m i s s i ng forl ack of per s onal j uri sdi ct i on and i m proper ven ue H eal th G rades, Inc. ’s (H G I’ s) com plai nt agai nst D eca turM emori al H os pi t al . H G I ar gues t hatt he di s tr i ctcourtei ther( 1) err ed beca us e D eca turcons ent ed t o j ur i s di ct i on and venue or( 2) abus ed i t s di s cr et i on in d e n y in g H G I a n o p p o rt u n ity to c o n d u c t d is c o v e ry o n th e ju ri s d ic tio n a l is s u e .- 2-

Per s uaded byt he s econd a l t ernat i ve, w e r ever s e and r emand forfur ther proceed i ng s. B AC KGROU ND H G I , a C ol or ado corpor at i on, i s a “W eb- bas ed hea l th i nform at i on r es our ce fo r th e d istrib u tio n o f f re e h e a lth c a re p ro v id e r ra tin g s a n d in fo rm a tio n .” A p lt. A pp. at18. V i s i t or s t o t he H G I w ebs i t e enc ount erH G I ’ s us eragr eementand ca n acc es s pr ovi derr at i ngs onl yaft ercl i cki ng an “I agr ee” i con di s pl ay ed w i th the u s e r a g re e m e n t. Id. a t 1 5 . T h e a g re e m e n t g o v e rn s “ a c c e ss to a n d u se o f th [ e ] S ite and the i nform at i on, m at er i al s and othercont entavai l abl e on ort hr ough t h[e] Si t e. ” Id. at18. A cce pt ance of the agr eementconfe r s a “l i cens e t o acc es s and v iew th [ e ] S ite a n d th e S ite M a ter ials , an d to c o p y , d o w n lo a d , sto re a n d /o r p rin t a s i ngl e copyof anySi t e M at er i al s , s ol el yfor. . . non- comm er ci al us e and notfor r es al e ordi s t r i but i on t o any one el s e. ” Id. at19. A ddi t i onal l y , t he agr eement s peci fi es t hat“[a ] nyact i on t o enfor ce thi s U s erA gr eementw i l l be br oughti n t he fede r al ors t at e court s pr es i di ng i n D enver , C ol or ado, U . S. A . , and both part i es expr es s l yagr ee t o be s ubj ectt o the j ur i s di ct i on of s uch court s . ” Id. at24. I l l i noi s - bas ed D eca turcont act ed H G I aboutus i ng i t s r at i ngs t o pr om ot e the hos pi t al . I n r es pons e, H G I vi ce- pr es i dentN or a Sugi nt as not i fi ed D eca turby emai l on O ct ober1, 2003, t hatD eca turw as “r anked #1 i n the s t at e of I l l i noi s for or t hopedi c s ervi ces . ” Id. at65. Sugi nt as offe r ed a l i cens e t o us e the r at i ng, as w el l as m arket i ng as s i s t ance and a qua l i tyas s es s m entr eport , fort he pr i ce of- 3-

$ 2 5 ,0 0 0 . S h e c a u tio n e d D e c a tu r th a t th is “ in fo rm a tio n m a yb e u til ize d o n lyw ith a s i gned and e xecut ed H eal t hG r ades agr eement . ” Id . D eca turdecl i ned.

“ In late -2 0 0 3 ,” D e c a tu r p o ste d o n its w e b site a n a rticle w ritten b yits pr es i dent , r evea l i ng t hatH G I had r anked D eca turnum berone i n or thopedi cs and h a d re q u e s te d $ 2 5 ,0 0 0 fo r u s e o f th e ra n k in g . Id. at55, 58. T he art i cl e cr i t i ci zed HGI fo ra n a l y z i n g p e r fo r ma n c e “ i n s e c r e twa y s u s i n g s e c r e td a t a , ” a n d s t a t e d , “ we don’ tknow how [H G I ] arr i ved atthei r[r anki ng] concl us i on, and I don’ tthi nk pay i ng t hem $25, 000 hel ps ourpat i ent s orcomm uni tyi n anyw ay . ” Id. at 58 . In J a n u a ry 2 0 0 4 , H G I d e m a n d e d th a t D e c a tu r r e m o v e th e a rt ic le f ro m its w e b s ite . A ft erD eca turr emoved the art i cl e, H G I s ued forcopyr i ghti nfr i ngementand br eac h of contr acti n J ul y2004. Fi ve mont hs l at er , on D ece m ber3, 2004, a D eca tur - aff i l i at ed s ur geon, D r . R onal d M eng, emai l ed var i ous i ndi vi dual s , pr ocl ai m i ng that “H eal t hgr ades . com has a nnounced . . . thatourcar di ac s ur gerypr ogr am her e at [D ec atur] is th e o n ly5 star pro g ram in ce n tr al an d so u thern [I]ll ino is fo r co ron ary bypas s s ur gery ! ” Id. at78- 79. D r . M eng “e ncl os ed . . . the [uni form r es our ce lo c a to r] fo r th e a n n o u n c e m e n t,” w h ich , w ith a m o u se c lick , w o u ld tak e th e e m a il re c ip ie n t to H G I’ s u s e r- a g re e m e n t p a g e . Id. a t7 9 . On De c e mb e r1 0 , 2 0 0 4 , HGI amended i t s compl ai ntt o i ncl ude D r . M eng’ s emai l as an i ns t ance of copyr i ght in f rin g e m e n t an d to a d d a c a u se o f a c tio n fo r tra d e m a rk in f rin g e m e n t.- 4-

O n D e c a tu r’s m o tio n , the d istric t co u rt d ism iss e d H G I’s c o m p lain t, r eas oni ng t hati tl acke d per s onal j ur i s di ct i on beca us e ( 1) D eca turhad notdi r ect ed i t s act i vi t i es t ow ar d C ol or ado r es i dent s ; ( 2) H G I fai l ed t o s how thatD eca tur acc ept ed the us eragr eement , orthati f D eca turempl oy ees had ac cept ed the a g re e m e n t, th a t th o se e m p lo y e e s h a d th e a u th o rityto b in d th e c o rp o ra tio n ; an d in anyevent( 3) exer ci s i ng j ur i s di ct i on overD eca turw oul d offe nd tr adi t i onal not i ons of fa i rpl ayand s ubs t ant i al j us t i ce. T he courtacknow l edged, butdi d not addr es s , H G I ’ s r eques tt o conductdi s coveryt o s how D eca tur ’ s acc ept ance of the user agreem ent. T he d i stri ctcou rtal so fou nd that H G I’ s fai l ure t o est abli sh personal j uri sdi ct i on defe at ed it s choice of ve nu e. H G I appeals . D I SC US SI ON W e r evi ew t he di s t r i ctcourt ’ s j ur i s di ct i onal and venue as s es s m ent s de n o v o , B el lHel i copt erTextr on, Inc. v. Hel i qw es tInt ’ l, Ltd. , 385 F. 3d 1291, 1296 (1 0 th C ir. 2 0 0 4 ); P i er ce v . Shor t y Sm al l 's of

B r ans on Inc. , 137 F. 3d 1190, 1191 ( 10t h C i r . 1998) , and i t s r efus al t o perm i tj ur i s di ct i onal di s coveryforan abus e of d is c re tio n , Siz ova v. Nat ’ lIns t . of Standar ds & Tec h. , 282 F. 3d 1320, 1326 (1 0 th C ir. 2 0 0 2 ). “W h e n , as in th is c a se , a d istric t co u rt g ra n ts a m o tio n to d ism iss fo r l ac k o f p erso n al j u ri sd ict ion w ith o u t con d u cti n g an ev iden ti ary hear i ng, t he pl ai nt i ff ne ed onl ym ake a pr i m a fa ci e s how i ng of per s onal j ur i s di ct i on t o defe att he mot i on. ” B enton v. C am eco Corp. , 375 F. 3d 1070, 1074 (1 0 th C ir . 2 0 0 4 ) ( q u o ta tio n o m itte d ), cer t . deni ed , 5 4 4 U .S . 9 7 4 (2 0 0 5 ). A llIn a d d iti o n to o th e r lo c a tio n s, v e n u e is a p p ro p ria te in a n yju d icia l d istric t in 1 w h ich th e c o rp o ra te d e fe n d a n t in a n in f rin g e m e n t ac tio n w o u ld b e su bjec t to p e rso n a l ju risd ictio n . 2 8 U .S .C . § 1 3 9 1 (b ) & (c ); i d. § 1 4 0 0 (a). W her e s uch “pr ovi s i ons have be en obt ai ned thr ough fr eel ynegot i at ed 2 agr eement s and ar e notunr eas onabl e and unj us t , t hei renfor cementdoes not offe nd due pr oces s . ” B urgerK i ng C or p. v. R udz ew i cz , 471 U . S. 462, 472 n. 14 (1 9 8 5 ) (q u o tatio n a n d c itatio n o m itt e d ). C o n se q u e n tly , the d istric t co u rt e rre d in cons i der i ng w hetherenfor ci ng H G I ’ s us eragr eementw oul d offe nd tr adi t i onal n o tio n s o f

fa irp la ya n d s u b s ta n tia l ju s tic e . See Do mi n i u m Au s t i n Pa r tn e rs , L . L . C. (c o n tin u e d ...)

- 5- fac tual di s put es m us tbe r es ol ved i n the pl ai nt i ff’ s favorw hen det erm i ni ng w h e th e r t h e p la in tiff

h a s m e t its b u rd e n . Id. “C ons i s t entw i t h due pr oces s , a courtm ayexer ci s e per s onal j ur i s di ct i on overa nonr es i dentdefe ndanti f m i ni m um cont act s exi s tbetw een the defendant and the forum s t at e s uch thatm ai nt enanc e of the l aw s ui tw oul d notoffe nd t r adi t i onal not i ons of fa i rpl ayand s ubs t ant i al j us t i ce. ” D oer i ng ex r el . B ar r et tv. C opperMountai n, Inc. , 259 F. 3d 1202, 1210 ( 10th C i r . 2001) ( quot at i ons om i t t ed) . B uts i nce the r equi r ementof per s onal j ur i s di ct i on r epr es ent s an

1 in d iv id u a l d u e p ro c e ss rig h t, th e “ p a rties to a c o n tra c t m a ya g re e in a d v a n c e to s ubm i tt o t he j ur i s di ct i on of a gi ven court . ” Ins . C or p. of Ir eland, Ltd. v. C ompagni e des B auxi t es de G ui nee , 456 U . S. 694, 704 ( 1982) ( quot at i on o m itt e d ). H G I d o e s n o t co n tes t th e d istric t co u rt’s r u lin g th a t D e c a tu r’s c o n tac ts w i t h C ol or ado w er e i ns uffi ci entt o confe rj ur i s di ct i on. C ons equent l y , ourr evi ew i s l i m i t ed t o t he effec tof H G I ’ s us eragr eementand i t s forum - s el ect i on pr ovi s i on. 2( . . . cont i nued) 2 v. E m ers on , 2 4 8 F .3 d 7 2 0 , 7 2 6 (8 th C ir. 2 0 0 1 ); C hrist i an Science B d. of D i rect ors v. R obi ns on , 1 2 3 F . S u p p . 2 d 9 6 5 , 9 7 2 (W .D .N .C . 2 0 0 0 ); P rovi den tMut. L i f e Ins. C o . o f P h ila d e lp h ia v . B ick e rs ta ff , 8 1 8 F . S u p p . 1 1 6 , 1 1 8 (E . D . P a. 19 9 3 ). D e c a tu r c o n ten d s H G I “ h a s c o n c e d e d th a t th e in fo rm a tio n in th e . . . artic le 3 [w r i t t en byD eca tur ’ s pr es i dent ] w as obt ai ned di r ect l yfr om [H G I ]

— notfr om t he [H G I ] w eb s i t e and thati tw as obt ai ned fr ee of anycons tr ai nt s of the cl i ckthro u g h U ser A g ree m en t. ” A p lee. B r. at 11 . B u t D ec atur o ffers n o rec o rd ci t at i on fors uch a c onces s i on, and H G I di s put es t he poi nt . M or eover , H G I ’ s us er agr eementpr ot ect s i nform at i on “ava i l abl e on ort hr ough” the w ebs i t e. A pl t . A pp. at18 ( emphasi s added) . D eca turdoes nots ugges tt hatt he r at i ng i t s pr es i dent r evea l ed w as notavai l abl e on the w ebs i t e. T hus , i f D eca turacc ept ed the us er a g re e m e n t, i ts u se o f

H G I’s ra tin g w o u ld a p p e a r to b e re stric ted n o m a tter h o w it l earned of the r at i ng.

- 6- H G I a rg u e s th a t itsu b m itt e d su fficie n t ev id e n c e sh o w in g th a t D e c a tu r is b o u n d b y th e u se r a g re e m e n t. S p e c ifica lly , H G I p o in ts to th e a ffid a v it o f its 3 dat abas e admi ni s t r at or , w ho t es t i fi ed thatfr om Sept ember2001 t hr ough D ece m ber2004, s om eone w i t h t he i nt ernetpr ot ocol ( I P) addr es s 207. 0. 246. 194 vi s i t ed H G I ’ s w ebs i t e fort y - s even t i m es and cons ent ed t o the t erm s of the us er a g re e m e n t. A c c o rd in g to th e a d m in istra to r, th is a d d re ss “ c lea rlyb e lo n g s to D eca tur ” bec aus e D eca tur ’ s dom ai n name, w w w . dm hcar es . or g, t r ans l at es i nt o t he i nt ernetpr ot ocol addr es s 207. 0. 246. 195, w hi ch i s onl yone di gi tdi ffe r entfr om t he vi s i t or ’ s addr es s . A pl t . A pp. at78. N everthel es s , t he di s tr i ctcourtr ej ect ed the a d m in istra to r’s o p in io n a s c o n c lu so ry . W e d isa g re e w ith th e d istric t co u rt. T h e a d m in istra to r w a s n o t re q u ire d to p ro v id e a d e taile d e x p lan a tio n fo r h is o p inion , g iven that the re lat ion sh ip o f th e a d d resse s is clear fro m the n u m b ers empl oy ed. D eca tur ’ s I P addr es s i s onl yone di gi tdi ffe r entfr om t he addr es s of the- 7-

re p e a t v isito r to H G I’s w e b site . O n lyth e a c tu a l n e tw o rk c o m p u ter s a re d iffe re n t: 194 and 195. T hus , H G I ’ s dat abas e admi ni s tr at orhad a s uffi ci entbas i s on w hi ch t o opi ne thatt he 194 addr es s bel onged t o D eca tur . W e dec l i ne H G I ’ s i nvi t at i on, how ever , t o pr ocee d fur t herand s i m pl y“i nferthats om e of the i ndi vi dual s w ho acc ept ed the U s erA gr eementfr om D eca tur ’ s I P addr es s had author i tyt o bi nd t he company . ” A pl t . B r . at11. “A n agentcan make hi s pr i nci pal r es pons i bl e forhi s act i ons i f he i s act i ng pur s uantt o ei t heractual orappar entauthor i ty , r egar dl es s of w hetherthe pr i nci pal has know l edge of

t he age nt ’ s conduct . ” Wi l l ey v . Mayer , 876 P. 2d 1260, 1264 (C o lo . 1 9 9 4 ) (fo o tn o te o m itt e d ). H G I c o n c e d e s th a t “o n lyD e c a tu r a n d its empl oy ees know w ho us es t he 194 addr es s , and w hetherthos e us i ng the 194 addr es s w er e ac t i ng w i t h author i tyw hen theyagr eed t o the U s erA gr eement . ” A p lt. B r. at 1 9 . D isc o v e rysh o u ld b e p e rm itt e d , H G I a ss e rts, to d e fin iti v e ly answ er the jur i sdi ct i on al i ssue. W e agree. “W hen a defend ant m ov es t o d i sm i ss forl ack of

j ur i s di ct i on, ei t herpartys houl d be al l ow ed di s coveryon the fa ctual i s s ues r ai s ed byt hatm ot i on. ” Siz ova , 2 8 2 F .3 d a t 1 3 2 6 (q u o ta tio n o m itte d ). W h ile th e d istric t co u rt h a s b ro a d d isc re tio n in d e ter m in in g w h e th e r to p e rm it j ur i s di ct i onal di s covery , a r efus al t o gr antdi s coverycons t i tut es an abus e of d iscreti o n if eith er the p erti n en t j u ri sd ict ion al fa cts are c o n tr o v erted o r a m o re s a tis fa c to ry sh o w in g o f th e fa c ts is n e c e s s a ry. Id . H er e, the di s tr i ctcourthad e v id e n c e th a t a D e c a tu r c o m p u ter w a s lik e lyu se d o n n u m e ro u s o c c a sio n s toW e not e thatH G I l i m i t s i t s r eques tforj ur i s di ct i onal di s coveryon the 4 a u th o rityiss u e to a c tu a l au th o rity . T h u s, H G I’s p u rp o rte d fa ilu re to “ sh o w th a t it re lied o n a n ya c t o r re p re se n tatio n o f D e c a tu r,” A p lee . B r. at 1 1 , is n o t re lev a n t, b e c a u s e re lia n c e is a re q u ir e m e n t fo r o n ly ap p a re n t a u th o ri ty, s ee Wi l l ey , 876 P. 2d at1264; R us h C r eekSol ut i ons , Inc. v. Ut e Mountai n Ut e Tr i be , 107 P. 3d 402, 407 (C o lo. C t. A p p . 2 0 0 4 ).

- 8- ac ce p t th e H G I ag ree m en t and that D ec atur’s D r. M en g h ad ac ce ssed H G I’s w ebs i t e r at i ngs and had i nvi t ed other s t o do s o. T he onl yj ur i s di ct i onal componentm i s s i ng w as evi dence thatthes e vi s i t or s t o H G I ’ s w ebs i t e had author i t y t o bi nd D eca tur t o t he us er agr eement . T he di s tr i ctcourtgave no 4 expl anat i on fori t s r efus al t o al l ow j ur i s di ct i onal di s covery , and bas ed on the e v id e n c e b e fo re it, w e c a n o n lyc o n c lu d e th a t th e d istric t co u rt a b u se d its di s cr et i on. T h e ju d g m e n t o f

th e d istric t co u rt is R E V E R S E D , an d th e c a se is R E M A N D E D fo r f

u rth e r p ro c e e d in g s c o n sis ten t w ith th is o rd e r a n d ju d g m e n t. E n tered fo r th e C o u rt M aryB eck Bri s coe C i r cui tJ udge