NASDAC Group Management Consultancies v. Club Swan
2:23-cv-00569
| D. Utah | Dec 31, 2024Background
- NASDAC Group Management Consultancies (NASDAC), seeking a compliant Visa/Mastercard platform, entered into a relationship with AU Card Ltd. (AU Card) via an LOI with expectations of a branded payment solution.
- NASDAC paid AU Card $200,000 as part of the agreement, with a refund provision if a full agreement was not executed within 90 days.
- The parties failed to finalize the main agreement due to significant, undisclosed terms being added, and AU Card never provided the promised product or a refund.
- NASDAC and Jones Broadcasting sued various AU Card-affiliated entities and individuals in Utah for breach of contract and alter ego liability.
- Defendants moved to dismiss for lack of subject matter and personal jurisdiction; Plaintiffs sought jurisdictional discovery to uncover facts about contacts with Utah and the interrelationship of the entities.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Subject Matter Jurisdiction | All parties are diverse per §1332, with sufficient citizenship allegations. | There is incomplete diversity; Plaintiffs have not sufficiently alleged Jones' citizenship. | Court holds complete diversity exists based on the pleaded facts. |
| Personal Jurisdiction | Defendants' Utah connections and alter ego theory justify jurisdictional discovery. | Defendants do not have sufficient minimum contacts with Utah; AU Card is not present in Utah. | Factual disputes exist—jurisdictional discovery is warranted. |
| Jurisdictional Discovery | Discovery is needed to fairly resolve jurisdictional facts. | Discovery request is an unnecessary fishing expedition. | Discovery granted to resolve jurisdictional facts. |
| Motion to Dismiss/Motion to Amend | Motions should be deferred until jurisdictional facts are explored. | Motions should be granted immediately due to lack of jurisdiction. | Both motions denied without prejudice, subject to refiling after discovery. |
Key Cases Cited
- Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365 (diversity jurisdiction requires complete diversity of citizenship)
- Daimler AG v. Bauman, 571 U.S. 117 (general personal jurisdiction standard for foreign corporations)
- Int’l Shoe Co. v. State of Wash., 326 U.S. 310 (minimum contacts standard for personal jurisdiction)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (specific personal jurisdiction based on purposeful direction/contacts)
- Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (standard for general jurisdiction over corporations)