United States District Court, E.D. Virginia, Richmond Division
BHR RECOVERY COMMUNITIES, INC., d/b/a BROAD HIGHWAY RECOVERY, Plaintiff,
TOP SEEK, LLC, et al., Defendants.
A. GIBNEY, UNITED STATES DISTRICT JUDGE.
plaintiff, BHR Recovery Communities, Inc. d/b/a Broad Highway
Recovery ("Broad Highway"), operates an addiction
recovery business in Richmond, Virginia. Broad Highway
alleges that Top Seek, LLC ("Top Seek"), and
numerous unidentified defendants tried to steal some of Broad
Highway's customers. Allegedly, the defendants secretly
changed the phone number on Broad Highway's Google
business listing. This nefarious change detoured Broad
Highway's customers to a different road to recovery. Top
Seek has moved to dismiss Broad Highway's six-count
amended complaint for lack of personal jurisdiction and
failure to state a claim.
Court grants in part and denies in part Top Seek's
motion. Specifically, the Court finds that it can exercise
personal jurisdiction over Top Seek. Count 1 fails because
non-binding authority persuades the Court that Virginia's
unauthorized use of a name statute protects only natural
persons, not entities like Broad Highway. Broad Highway fails
to plead detrimental reliance, a necessary element of a
Virginia Consumer Protection Act ("VCPA") claim, so
Count 2 also fails. As to Count 3, Broad Highway does not
plead business conspiracy with the requisite particularity.
Conversely, Broad Highway adequately pleads the elements of a
Lanham Act claim, so the Court will deny Top Seek's
motion to dismiss Count 4. Similarly, because Broad Highway
pleads the elements for violations of Virginia Code
§§ 18.2-214 and 18.2-216, Counts 5 and 6 will
FACTS ALLEGED IN THE AMENDED COMPLAINT
Highway operates as an intervention program and sober living
facility in Virginia. Broad Highway initially sued Life
Solutions, Inc. ("Life Solutions"); Best Drug
Rehabilitation, Inc. and Best Drug Rehabilitation Holdings,
Inc. (collectively, "Best Drug"); Serenity Point
Recovery, Inc. ("Serenity"); A Forever Recovery,
Inc. ("A Forever Recovery"); and Tony Logue, the
intake coordinator for Life Solutions. Best Drug, Serenity,
and A Forever Recovery operate substance abuse treatment
facilities in Michigan. Life Solutions operates a call center
that attempts to place people seeking treatment in these
Michigan facilities, among others. After the Court allowed
limited jurisdictional discovery, Broad Highway dismissed all
of these defendants and sued Top Seek in an amended
September 2, 2015, Top Seek entered into a contract to
generate sales leads for Life Solutions. Essentially, Top
Seek promised to generate leads so that Life Solutions could
route clients seeking substance abuse treatment to the
Michigan facilities. On December 9, 2016, Top Seek contracted
with Century Interactive/Call Box, Inc. ("Call
Box"), to set up a unique phone number to track sales
that Top Seek generated. Through Call Box, Top Seek
established a number with an "804" area code (the
"804 number") to forward calls to Life Solutions in
Michigan. The 804 area code "is Virginia specific."
(Am. Compl., at 4.)
February 23, 2017, Top Seek caused Google to change the phone
number on Broad Highway's Google business
listing from a toll-free "855" number to
the 804 number. Top Seek took certain measures to hide its
identity when changing the phone number. For instance, Top
Seek used a Gmail account with a fake name and a recovery
e-mail account hosted by a Hungarian proxy provider called
Your Own Protection Mail ("YOPmail"). To set up the
Gmail account, Top Seek also used a Canadian telephone number
from an internet-based provider named Text-Me. Additionally,
a company called Sophidea, Inc., masked the IP address of the
computer that Top Seek used to switch Broad Highway's
phone number. Through social media and its contacts in the
treatment community, Broad Highway discovered that its Google
listing contained the incorrect phone number on March 2,
noticing the wrong phone number, Broad Highway's owner,
Sam Davis, called the 804 number, and someone with
"Treatment Services" answered. When Davis asked why
he had been connected to Treatment Services and requested to
speak to a supervisor, the recipient terminated the call.
Another person, seemingly affiliated with Broad Highway, then
called the 804 number and was directed to a Michigan facility
called, "Serenity." Soon thereafter, Tony Logue
called the Broad Highway caller back to discuss Life
Solutions' rehabilitation programs.
then sent an e-mail to the caller providing information about
a Life Solutions facility called "A Forever
Recovery." Someone had registered the e-mail address
that Logue used with Domain by Proxy, LLC, to shield the
registrant's identity. The next day, on March 3, 2017,
Logue e-mailed a financial agreement for Serenity to the
caller. It proposed a $29, 000 down payment. On March 22,
2017, Top Seek terminated the 804 number with Call Box. Top
Seek and Life Solutions renewed their contract on July 26,
amended complaint alleges six counts: (1) unauthorized use of
a name; (2) VCPA violation; (3) business conspiracy; (4)
Lanham Act violation; (5) violation of Va. Code §
18.2-214; and (6) violation of Va. Code § 18.2-216.
court can exercise personal jurisdiction over a non-resident
defendant if the defendant has certain minimum contacts with
the forum state such that the suit does not offend
"traditional notions of fair play and substantial
justice." Walden v. Fiore, 134 S.Ct. 1115, 1121
(2014) (citing Int'l Shoe Co. v. Washington, 326
U.S. 310, 316 (1945)). In this case, the Court must determine
whether it can exercise specific personal jurisdiction by
examining three factors: (1) whether the defendant
purposefully availed itself of conducting activities in
Virginia; (2) whether the plaintiffs claim arose out of those
activities directed at Virginia; and (3) whether the exercise
of personal jurisdiction would be constitutionally
reasonable. Perdue Foods LLC v. BRF S.A., 814 F.3d
185, 189 (4th Cir. 2016).
case involves internet contacts, a sliding scale test
determines whether a "defendant purposefully availed
itself of the privilege of conducting activities in the
[s]tate." ALS Scan, Inc. v. Digital Serv.
Consultants, Inc., 293 F.3d 707, 712-13 (4th Cir. 2002).
At one end of the scale, a defendant actively does business
over the internet, like entering into contracts with
residents of foreign jurisdictions and repeatedly
transmitting internet files. Id. at 713. At the
other, passive end of the scale, a defendant simply posts
information online. Id. at 713-14. Within the middle
ground, a defendant might have an interactive website.
Id. at 714.
the sliding scale, a court may exercise jurisdiction over a
foreign entity that "(1) directs electronic activity
into the State, (2) with the manifested intent of engaging in
business or other interactions within the State, and (3) that
activity creates, in a person within the State, a potential
cause of action cognizable in the State's courts."
Id. In other words, "specific jurisdiction in
the Internet context may be based only on an out-of-state
person's Internet activity directed at [Virginia] and
causing injury that gives rise to a potential claim
cognizable in [Virginia]." Id. Under this test,
a federal court in Virginia had jurisdiction over a defendant
who transmitted spam e-mails through servers in Virginia when
the plaintiffs claims stemmed directly from that activity.
Verizon Online Servs., Inc. v. Ralsky, 203 F.Supp.2d
601, 620-21 (E.D. Va. 2002).
Highway's amended complaint satisfies the ALS
Scan test. First, Broad Highway claims that Top Seek
directed electronic activity into Virginia by changing the
phone number for a Virginia business' Google listing.
Second, Broad Highway alleges that Top Seek intentionally
used the "804" area code to target "a Virginia
audience," Young v. New Haven Advocate, 315
F.3d 256, 263 (4th Cir. 2002), and to forward Virginia
callers to Broad Highway's competitors in Michigan.
Finally, and as set forth in this Opinion, Top Seek's
actions created potential causes of action cognizable in
Virginia's courts. Like in Verizon, Top
Seek's connection with Virginia stems from Broad
Highway's claims themselves. 203 F.Supp.2d at 620. The
amended complaint alleges that Top Seek did more than simply
"place information on the Internet." ALS
Scan, 293 F.3d at 712. Instead, Top Seek targeted a
Virginia company and attempted to usurp Virginia clients
using a phone number with a Virginia area code. For these
reasons, the Court can constitutionally exercise personal
jurisdiction over Top Seek.
Count 1: Unauthorized Use of a Name (Va. ...