Utah Division of Consumer Protection v. Stevens, 398 F.Supp.3d 1139

Background

Utah Division of Consumer Protection sued Real Estate Workshop (REW) and associated individuals/companies alleging deceptive seminar-sales practices and telemarketing violations, including pressuring seminar attendees into paid trainings and follow-up calls to sell additional services.
State alleged misrepresentations about guaranteed income, skills acquisition, and mentor access; alleged refund conditions requiring purchasers to withdraw complaints.
State asserted a federal claim under the Telemarketing Act (15 U.S.C. § 6101 et seq.) and Utah statutory claims; defendants moved to dismiss for lack of jurisdiction and failure to state a claim.
Defendants represented REW has no past or current Utah customers; the State did not dispute that representation and did not allege any concrete injury to Utah residents from defendants’ conduct.
The court considered Article III standing, parens patriae doctrine, statutory text of § 6103, and prior authority; it dismissed the federal claim for lack of parens patriae standing and for failure to satisfy § 6103, and dismissed state-law claims for lack of supplemental jurisdiction.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Utah has Article III parens patriae standing to sue under the Telemarketing Act	Utah claims quasi-sovereign interests (consumer protection, business reputation, honest marketplace) and may sue to protect residents and future consumers	Defendants argue Utah lacks standing because it has not alleged any Utah resident was contacted, sold to, or harmed; REW has no Utah customers	Held: Utah lacks parens patriae standing—State must allege concrete injury to its citizens and it did not do so
Whether § 6103 of the Telemarketing Act authorizes the State to sue absent injury to state residents	Utah contends Congress authorized AGs to sue as parens patriae to protect state interests generally	Defendants argue § 6103’s repeated focus on bringing suit “on behalf of its residents” requires allegation of threatened or actual injury to state residents	Held: § 6103 requires suits on behalf of injured residents; Utah’s federal claim also fails under the statute because it alleged no resident injury
Whether the court may decide standing based on factual record	Utah relied on special solicitude for states; defendants contended jurisdictional facts are lacking	Parties presented declarations and hearing argument; facts undisputed (no Utah victims)	Held: Court resolved standing using record; no presumption of jurisdiction where Article III requirements are unmet
Whether Utah's state-law claims may proceed after dismissal of the federal claim	Utah sought to keep state claims in federal court	Defendants moved to dismiss state claims following dismissal of federal claim	Held: Court dismissed state-law claims for lack of federal subject-matter jurisdiction and declined supplemental jurisdiction

Key Cases Cited

Lexmark International, Inc. v. Static Control Components, 572 U.S. 118 (2014) (standing and scope of statutory causes of action)
Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (Article III injury-in-fact, traceability, redressability requirements)
Massachusetts v. EPA, 549 U.S. 497 (2007) (States entitled to special solicitude but must satisfy Article III)
Alfred L. Snapp & Son, Inc. v. Puerto Rico, 458 U.S. 592 (1982) (parens patriae and quasi-sovereign interests)
DaimlerChrysler Corp. v. Cuno, 547 U.S. 332 (2006) (plaintiff bears burden to demonstrate standing for each claim)
Table Bluff Reservation v. Philip Morris, 256 F.3d 879 (9th Cir. 2001) (sovereign must allege injury in fact to citizens when asserting parens patriae)
Satsky v. Paramount Communications, 7 F.3d 1464 (10th Cir. 1993) (parens patriae requires a quasi-sovereign interest beyond individual private injuries)