Shawgo v. Counter Brands LLC
0:24-cv-00556
D. MinnesotaMar 31, 2025Background
- Plaintiffs were Minnesota-based independent contractors who sold Beautycounter products under contracts with various Beautycounter entities (LLC, INC), later terminated between 2022 and 2023.
- The Beautycounter enterprise is a multilevel-marketing operation, with succession in entity ownership and restructuring (Counter Brands, LLC; Counter Brands, Inc.; G2G Newco, Inc.; The Carlyle Group Inc.; Susan Gregg Renfrew).
- Plaintiffs sued after their contracts were terminated and after Beautycounter indicated it would enforce post-termination non-solicitation clauses.
- After an adverse temporary restraining order in a related California litigation, Creditor-forced liquidation of LLC assets (“ABC” proceeding) occurred, with G2G acquiring some assets, and LLC ceased operations.
- Plaintiffs added several entities and Renfrew as defendants, asserting fraudulent transfer and other claims arising from the ABC and G2G’s acquisition of LLC assets.
- Defendants, except for the now-defunct LLC, moved to dismiss for lack of personal jurisdiction or to compel arbitration; the court addressed personal jurisdiction first.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal Jurisdiction over LLC | LLC consented by registering in MN; also has sufficient contacts | Not contested (LLC is defunct and defaulted) | Court has general and specific jurisdiction over LLC (but it's defunct) |
| Personal Jurisdiction over INC | Claimed "seamless" business with LLC; contracts with plaintiffs | INC is just a holding company, no MN contacts | No general or specific jurisdiction over INC |
| Personal Jurisdiction over Carlyle | Direct/indirect MN business contacts; fraudulent transfer "targeted MN" | Carlyle not at home or uniquely directed conduct at MN | No general or specific jurisdiction over Carlyle |
| Jurisdiction over Renfrew & G2G | "Inherited" LLC jurisdiction; fraud left LLC judgment proof | Cannot inherit jurisdiction; no MN-directed acts | No jurisdiction over Renfrew or G2G; successor/"mere continuation" theory fails |
Key Cases Cited
- Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (general jurisdiction for corporations)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (personal jurisdiction due process analysis)
- Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct., 592 U.S. 351 (specific jurisdiction; claims must relate to forum contacts)
- Calder v. Jones, 465 U.S. 783 ("effects test" for intentional torts and specific jurisdiction)
- Walden v. Fiore, 571 U.S. 277 (injury to forum resident alone insufficient for jurisdiction)
- Panther Pumps & Equip. Co. v. Hydrocraft, Inc., 566 F.2d 8 (successor liability and jurisdictional inheritance)