Page v. Response Marketing Group, LLC

Background

Sally Page alleged that she attended a two-and-a-half-day investment seminar in San Jose, California, taught by Mark Broberg. After the seminar, Broberg continued communicating with his California students about investment opportunities. Page alleged that Broberg recommended a leveraged precious-metals investment program operated by Treasure Coast Bullion Group, described it as safe, and failed to disclose material information, including alleged sanctions involving Treasure Coast representatives and his own referral payment.

Page alleged that she invested more than $3 million in retirement funds and later lost approximately $2.7 million in markups, fees, interest, and commissions. She brought claims for constructive fraud, unjust enrichment, negligent misrepresentation, and fraud.

Personal-Jurisdiction Standard

Broberg moved to dismiss under Federal Rule of Civil Procedure 12(b)(2), which permits dismissal when the court lacks personal jurisdiction over a defendant. Because the court decided the motion without an evidentiary hearing, Page needed to make only a preliminary showing of facts supporting jurisdiction. The court accepted unrebutted allegations as true and drew reasonable inferences in Page’s favor, but did not have to accept merely conclusory allegations.

Personal jurisdiction may be general or specific. General jurisdiction permits a defendant to be sued on claims unrelated to the defendant’s forum activities. Specific jurisdiction applies when the claims arise from or relate to the defendant’s contacts with the forum.

General Jurisdiction

The court held that it lacked general jurisdiction over Broberg. The opinion states that Broberg was a Utah resident, was not registered to do business in California, did not pay California taxes, did not maintain California bank accounts, and did not advertise in California. Page did not respond to Broberg’s arguments concerning general jurisdiction, and the court treated her silence as a concession that she could not establish it.

Specific Jurisdiction

The court held that it had specific jurisdiction over Broberg. The applicable test required Page to show that Broberg purposefully directed activities toward California, that her claims arose from or related to those activities, and that exercising jurisdiction would be reasonable and fair.

For the purposeful-direction requirement, the court applied the three-part effects test: an intentional act, expressly aimed at the forum state, that causes harm the defendant knows is likely to occur there. The court found that Broberg’s emails, texts, seminar teaching, and investment-related communications were intentional acts. It also found that his conduct was expressly aimed at California because he had taught investment seminars there 15 times over five years, specifically reached out to California seminar students, and sent Page numerous communications while she was in California about the precious-metals opportunity.

The court further found that Page plausibly alleged harm in California. She alleged that she would not have invested without Broberg’s advice and that the investment caused losses to her life savings, tax penalties, and jeopardized ownership of her California home.

The court determined that Page’s claims arose from Broberg’s California-related activities under a “but for” causation analysis. Broberg had taught the California seminar, communicated with former California students about investments, and advised Page by email and text about the Treasure Coast program. Page alleged that she would not have invested but for that advice.

Finally, the court concluded that exercising jurisdiction was reasonable. It found that four reasonableness factors favored jurisdiction, two were neutral, and Broberg had not shown that defending the case in California would be so burdensome as to violate due process. Among other considerations, Broberg had traveled to California regularly, and his counsel were located in California.

Disposition

The court denied Defendant’s motion to dismiss under Federal Rule of Civil Procedure 12(b)(2). The order did not decide whether Page would prevail on her fraud, misrepresentation, unjust-enrichment, or constructive-fraud claims; it decided only that the case could proceed against Broberg in this court for purposes of personal jurisdiction.