Court Opinion

ID: 3016246
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Date Created: 2015-10-13 22:15:19.904031+00
Date Added: 2024-06-11T12:46:31.615337
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Opinions of the United
2005 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

4-14-2005

Wellness Publishing v. Barefoot
Precedential or Non-Precedential: Non-Precedential

Docket No. 03-3919

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Recommended Citation
"Wellness Publishing v. Barefoot" (2005). 2005 Decisions. Paper 1365.
http://digitalcommons.law.villanova.edu/thirdcircuit_2005/1365

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                                                       NOT PRECEDENTIAL

                UNITED STATES COURT OF APPEALS
                     FOR THE THIRD CIRCUIT

                              No. 03-3919

       WELLNESS PUBLISHING; HOLT M.D. CONSULTING, INC.;
          NATURE'S BENEFIT, INC.; STEPHEN HOLT, M.D.,

                                    Appellants

                                    v.

ROBERT R. BAREFOOT; DEONNA ENTERPRISES, INC.; HOPH MARKETING, INC.;
   SCOTT MILLER; KEVIN TRUDEAU; STEVEN D. RITCHEY; ALLEN STERN;
DONALD W. BARRETT, JR.; TRAID DIRECT RESPONSE MARKETING, INC.; KING
  MEDIA, INC.; DIRECT MARKETING CONCEPTS, INC.; SHOP-AMERICA, INC.;
               ADVANCED NUTRITIONAL INNOVATIONS, INC.

  ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE
                  DISTRICT OF NEW JERSEY

                      (Dist. Court No. 02-3773 (JAP))
              District Court Judge: Honorable Joel A. Pisano

                        Argued January 18, 2005

           Before: ALITO, MCKEE , and SMITH, Circuit Judges.

                     (Opinion Filed: April 14, 2005)
                                                        Counsel for Appellant
                                                        Alan L. Zegas (Argued)
                                                        Law Offices of Alan L. Zegas
                                                        552 Main Street
                                                        Chatham, NJ 07928

                                                        Keith N. Biebelberg
                                                        Biebelberg & Martin
                                                        374 Millburn Avenue
                                                        Millburn, NJ 07041

                                                        Counsel for Appellees
                                                        Robert J. Gilson (Argued)
                                                        Riker, Danzig, Scherer, Hyland &
                                                               Perretti LLP
                                                        One Speedwell Avenue
                                                        Morristown, NJ 07962

                                                        Daniel J. Hurtado (Argued)
                                                        Jenner & Block LLP
                                                        One IBM Plaza
                                                        Chicago, IL 60611

                                                        David E. DeLorenzi
                                                        Timothy S. Susanin
                                                        Gibbons, Del Deo, Dolan,
                                                              Griffinger & Vecchione
                                                        One Riverfront Plaza
                                                        Newark, NJ 07102

                               OPINION OF THE COURT

PER CURIAM:

       Stephen Holt and three companies associated with him, Wellness Publishing, Holt

MD Consulting, Inc. and Nature’s Benefit, Inc. (hereinafter “Holt”), filed an action in the

                                             2
United States District Court for New Jersey against several defendants, alleging breach of

contract, misappropriation of a copyrighted work, violations of the Lanham Act, common

law business torts, and tortious interference with a contract. All of these claims concern

the advertising, sale, and distribution of coral calcium supplements and related

promotional materials. The District Court dismissed the case for lack of personal

jurisdiction. The plaintiffs then settled with defendants Robert Barefoot, Deonna

Enterprises, Hoph Marketing, and Scott Miller, and the plaintiffs took the present appeal

to contest the dismissal of their claims with respect to the remaining defendants. For the

reasons stated below, we reverse the District Court’s order with regard to two groups of

defendants: (1) Kevin Trudeau and Shop America (hereinafter collectively “Shop

America”) and (2) Direct Marketing Concepts, Triad Direct Response Marketing, King

Media, Steven Ritchey, Allen Stern, and Donald Barrett, Jr. (hereinafter collectively

“DMC”). However, we affirm the District Court’s order with regard to Advanced

Nutritional Innovations, Inc. Because we write only for the parties, we proceed directly

to the substance of the jurisdictional issues.

                                                 I.

       Contrary to the argument of the appellees, we have jurisdiction to consider the

District Court’s order of June 30, 2003, which dismissed the complaint for lack of

personal jurisdiction, even though the notice of appeal states that the order being appealed

is the District Court’s order of August 27, 2003, which denied the plaintiffs’ motion to

                                                 3
amend the order of June 30, 2003. “We have appellate jurisdiction over orders not

specified in the notice of appeal if there is a connection between the specified and

unspecified order, the intention to appeal the unspecified order is apparent and the

opposing party is not prejudiced and has a full opportunity to brief the issues.” Williams

v. Guzzardi, 875 F.2d 46, 49 (3d Cir. 1989). Here, the requisite connection exists

between the order dismissing the case and the order denying the motion to amend that

order, and Holt’s intention to appeal the dispositive order is apparent from the issues

addressed in the brief. Finally, appellees have made no showing that they would be

prejudiced by the exercise of appellate jurisdiction. Therefore, the plaintiffs’ failure to

specify the proper order in his notice of appeal was harmless error, and jurisdiction is

proper. See United States v. Certain Land in the City of Paterson, 322 F.2d 866, 869-70

(3d Cir. 1963).

                                              II.

       A plaintiff bears “the burden of demonstrating [that the defendants’] contacts with

the forum state [are] sufficient to give the court in personam jurisdiction.” Mesalic v.

Fiberfloat Corp., 897 F.2d 696, 699 (3d Cir. 1990). These contacts must be shown “with

reasonable particularity.” Mellon Bank v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992). In

considering a motion to dismiss on the basis of affidavits, a District Court must resolve all

material factual disputes in favor of the plaintiffs. Pinker v. Roche Holdings, Ltd., 292
F.3d 361, 368 (3d Cir. 2002). Whether a given set of contacts is sufficient to create

                                              4
personal jurisdiction is a question of law, and therefore our review is plenary. Id. at 1221.

       Personal jurisdiction can be either general or specific. 1 Specific jurisdiction over a

defendant can be established when the claim is related to or arises out of the defendant’s

forum-related activities such that the defendant should reasonably anticipate being haled

into court there. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985); Imo

Industries, Inc. v. Kiekert AG, 155 F.3d 254, 259 (3d Cir. 1998). Once minimum

contacts are established, jurisdiction may be exercised when the court determines that to

do so would comport with traditional notions of fair play and substantial justice.

Vetrotex, 75 F.3d at 150-51.

                                             III.

       The District Court erred in its ruling that none of the defendants’ contacts with

New Jersey were related to plaintiffs’ causes of action. The discussion below addresses

the jurisdictional question with respect to the distinct groups of defendants remaining in

the case.

                                             A.

       The DMC defendant group is comprised of Steven Ritchey, Allen Stern, Donald

Barrett, Triad Marketing, King Media, and Direct Marketing Concepts.2 The affidavits

       1
        Given the limited scope of defendants’ contacts with New Jersey an analysis of
general jurisdiction is not necessary.
       2
       Given the state of the record, on remand the District Court may address the
question of whether the individual defendants Ritchey, Stern and Barrett are not subject to
personal jurisdiction because the relevant contacts were established in their roles as

                                              5
and depositions submitted are sufficient to support Holt’s claim that these corporations

worked in concert to produce and distribute an infomercial and to process telephone

orders for the calcium supplements and books promoted in that infomercial. Between

January 2002 and September 2002, the infomercial resulted in approximately 6,856 sales

to customers in New Jersey totaling over $820,000.00 worth of merchandise. (DMC

Brief at 11.)

         Holt claims that the promotion and distribution of the books The Calcium Factor

and Death by Diet infringe on his copyright to the book Barefoot on Coral Calcium.

These claims arise out of DMC’s activity in New Jersey because DMC distributed the

allegedly infringing books to New Jersey residents. There was nothing fortuitous about

the presence of these books in New Jersey–DMC advertised the books to New Jersey

customers, answered the phone when those customers called, and then arranged to have

the books shipped to New Jersey addresses.3 The misappropriation claims are clearly

related to the distribution of the infringing books, and because the books were knowingly

sent to New Jersey by DMC, DMC should expect to be subject to jurisdiction in that

state.

         Holt alleges that DMC violated the Lanham Act, 15 U.S.C. § 1125(a), and

corporate officers. See Educational Testing Service v. Katzman, 631 F. Supp. 550, 556-
59 (D.N.J. 1986).
         3
        The fact that the defendants forwarded processed orders to centers where the
advertised product was packaged and shipped does not reduce the significance of DMC’s
essential role.

                                             6
common law prohibitions on false advertising on the basis of statements made in Coral

Calcium I. These claims are related to DMC’s activity in New Jersey because the

broadcasts which form the basis of the claims were viewed in New Jersey. It is true that

an advertising campaign with national scope does not by itself give rise to general

jurisdiction in a state where it is broadcast. See, e.g., Gehling v. St. George’s Sch. of

Med., Ltd.. 773 F.2d 539 (3d Cir. 1985); Giangola v. Walt Disney World Co., 753
F. Supp. 148 (D.N.J. 1990). That principle is inapplicable to this case, however. First,

those precedents involve injuries unrelated to the broadcast of the advertisement in the

forum state, and therefore are inapplicable to a specific-jurisdiction inquiry. A claim of

false advertising, and the injury that results from false advertising, are inextricably related

to the broadcast of the allegedly false advertisement. Second, the advertisement in this

case induced viewers to establish direct contact with DMC by calling its toll-free phone

number to place orders. This inducement destroys any semblance of the passive

advertising addressed in Giangola, 153 F. Supp. at 155-56, which expressly distinguished

advertisements in the form of direct mail solicitations. For purposes of jurisdictional

analysis, an infomercial broadcast that generates telephone customers is the equivalent of

an interactive web-site through which a defendant purposefully directs its commercial

efforts towards residents of a forum state. See Toys “R” Us, Inc. v. Step Two, S.A., 318
F.3d 446, 452 (discussing Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119

(W.D.Pa. 1997)). Under these circumstances, it is both reasonable and fair for the DMC

                                               7
defendants to appear in a New Jersey court to answer charges related to the broadcast of

this infomercial.

       Finally, Holt alleges that DMC tortiously interfered with a contract existing

between Holt and Robert Barefoot by featuring Barefoot in the coral calcium infomercial

and otherwise using Barefoot to promote their product. This claim calls for an

application of the “effects” analysis set forth in Calder v. Jones, 465 U.S. 783 (1984);

Remick v. Manfredy, 238 F.3d 248, 260 (3d Cir. 2001). In Remick, this court held that

because the beneficiary of a contract resided and worked in Pennsylvania, “the effects of

any intentional conduct by the defendants designed to interfere with . . . contractual

relations . . . necessarily would have been felt in Pennsylvania.” Remick, 238 F.3d at

260. Holt, as a resident of New Jersey, suffered the alleged injury resulting from DMC’s

intentional conduct in New Jersey. In this sense, although DMC’s business strategy may

not have targeted New Jersey, with regard to Holt’s contract with Barefoot, DMC’s

alleged intentional interference was expressly aimed at the forum.

       Because the District Court determined that minimum contacts did not exist, no

ruling was made on whether the exercise of personal jurisdiction over the DMC

defendants would comport with substantial justice. It is apparent from the record,

however, that considerations of substantial justice do not counsel against jurisdiction in

this case. Although receipts from New Jersey customers were a small percentage of

DMC’s total business, those receipts were substantial in absolute terms and reflected the

                                             8
size of the state’s economy relative to the national market. Furthermore, New Jersey has

a substantial interest in protecting its general population from allegedly misleading

advertising and also in vindicating Holt’s rights.

                                             B.

       The Shop America defendant group is comprised of Shop America L.L.C. and

Kevin Trudeau. Trudeau and Shop America worked in concert to produce a second

infomercial featuring Robert Barefoot and to process telephone orders for the calcium

supplements and books promoted in that infomercial. That infomercial resulted in at least

22,352 orders from New Jersey customers representing approximately $1.14 million of

merchandise. (Shop America Brief at 011.)

       Holt brings the same allegations of copyright infringement, false advertising and

tortious interference against Shop America as he alleges against the DMC defendants.

While the contacts of Shop America are entirely distinct from the DMC group, and must

be independently sufficient in order to support personal jurisdiction, the same legal

analysis applies to both groups. Like DMC, however, Shop America distributed copies of

The Calcium Factor and Death By Diet in New Jersey, used Robert Barefoot to promote

their coral calcium product, produced an infomercial viewed in New Jersey and processed

orders for merchandise from New Jersey customers. Because the nature and scope of

Shop America’s contacts with New Jersey, Dr. Holt, and the litigation at hand are

substantially the same as those explored above relating to the DMC group, we hold that

                                              9
personal jurisdiction over the Shop America defendants is proper.

                                             C.

       The District Court found no personal jurisdiction over Advanced Nutritional

Innovations, Inc. (“ANI”). Although Holt states in his complaint that ANI made false

statements to some of Holt’s New Jersey customers, this allegation does not serve as the

basis of any claim made against ANI, nor was it the subject of discovery, nor did Holt

otherwise substantiate this allegation before the District Court. ANI had no role in the

production or distribution of the infomercials that serve as the centerpiece of this

litigation, nor is there any connection between Robert Barefoot and ANI. With regard to

this defendant, Holt did not meet his burden of pleading jurisdictional facts with

reasonable particularity.

                                             IV.

       For the above reasons, we affirm the order of the District Court with regard to

Advanced Nutritional Innovations, Inc. and reverse with regard to Kevin Trudeau, Shop

America, Direct Marketing Concepts, Triad Direct Response Marketing, King Media,

Steven Ritchey, Allen Stern, and Donald Barrett.