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PURE REBUTTAL
Pure Inc., website reveals a strong agenda to damage the World Wide Association of Specialty Programs and Schools.
We believe that recent court documents expose Pure Inc's, motives and methods. See the following:
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| PURE's statements about the World Wide Association Of Specialty Programs is inconsistent with the postive experinces and results of Thousands of parents and students. |
 Click Here To View World Wide Schools Parent Satisfaction Rate |
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Click Here - PURE's Inaccurate Press Release 
This matter is before the court on the motion of defendants Pure, Inc., and Sue S (referred to collectively as “PURE”) to quash service of summons for lack of personal jurisdiction. Plaintiff World Wide Association of Specialty Schools ("WWASP") has responded alleging sufficient contacts for personal jurisdiction. On September 26, 2002, the court heard oral argument on this matter. Mr. James Seaman represented PURE, and Mr. Spence Sibers represented WWASP. After argument, the court ordered supplemental briefing which was completed by October 25, 2002. Having heard arguments and reviewed the brief, the court DENIES the motion to quash service.11/15/02 by:
Deputy Clerk
The facts surrounding this issue appear to be largely uncontested. WWASP is a Utah corporation comprised of an association of residential treatment programs for troubled and at-risk teens. The various programs that WWASP refers to are located inside and outside of the United States. WWASP provides marketing support and referral services for its associated programs and deals directly with parents, governmental agencies, other residential treatment facilities, and industry professionals. WWASP's headquarters are in St. George, Utah. WWASP does not manage any of the programs, but maintains an extensive network of relationships and contracts with them. WWASP refers teens to programs based in Southern Utah.
In 2000, Sue S placed her daughter in a residential treatment facility recommended by WWASP, the Carolina Springs Academy ("CSA") in North Carolina. In November 2000, Ms. S sent notice to CSA that she wished to withdraw from the program within 60 days. In this letter she stated that she believed in CSA and credited it with helping her daughter. A copy of this letter was sent to Jennifer, "billing for WWASP," and St. George, Utah is listed in the heading of the letter. After her daughter left CSA, Ms. S sent communications to CSA expressing her satisfaction of the program. In November 2000, Sue S sent an extensive email to a list of individuals regarding her ideas of how to deal with teens. She referred favorably to Teen Help (an organization to which WWASP referred clients) in the email, and sent a copy if the email to Ken Kay expressing her "dedication" to the program.
At some later point, however, Ms. S's opinion of WWASP changed. This change of opinion coincided with her establishment of her own referral service for troubled teens, PURE, Inc., based in Florida. Like WWASP, PURE refers teens to programs based in southern Utah.
Dr. Lon Woodbury operated an internet "chatroom" dedicated to these residential treatment facilities. The chat room was based in Idaho, but parents from all over the United States used the chat room as an informal, influential source of information concerning various teen programs.
According to an affidavit filed by Mr. Ken Kay of WWASP, in December 2001 a series of messages were posted in the chat room, disparaging the services of WWASP. In an attempt to identify who was making the statements, Dr. Woodbury obtained a computer "fingerprint" and determined that six ostensibly different "posters" were. In fact, all operating from the same computer in Florida. On December 27, 2001, Dr. Woodbury revealed his findings to the participants in the chat room. The six ostensible posters were "Mark D.W.", "Lara", "Deb C.", "Tracy Brittany Reese", Sue S, and "Hilda." Mr. Woodbury concluded the posters were fairly well informed about the internal workings of WWASP. Jeff B also had a relationship with Sue S and posted comments in the chat room. Sue S responded to Mr. Woodbury’s “outing” of the posters by indicating these individuals were working in her office.
I have a good source of (insider leak) at Teen Help in their office in Utah, that states all the “Sales Reps” are very disgruntled. Something political with WWASP/Teen Help Administration. I understand even one of their best sales people is very dissati[s]fied with the way the operation is going (financially) and has threatened to leave. Pay is going down parents…..hmmmmm wonder why? This leak also stated, “the seminars are very satanic, but hey the parents love them and it keeps the business growing……”
The same day “Deb C.” from Florida supporting the statements of "Lara."
Jeff B also entered into the discussion further questions regarding WWASP’s financial stability. “Hilda” from Florida, also weighed in with comments indicating WWASP used “less than ethical” tactics. “Deb C.” weighed one more time on that day with further negative comments.
On December 5, 2001, “Lara” responded to “Deb C.’s” message, and “Deb C.” responded again expressing negative comments about a WWASP posting. “Lara” again responded in the chat room on December 6, 2001. On December 7, 2001, “Tracy Brittany Reese,” purportedly from Springfield, Illinois, opined in the chat room regarding her negative experiences with WWASP.
On December 8, 2001, Jeff B, a parent that supported Sue S and PURE, indicated he believed WWASP was an “abusive” program. “Lara” responded that same day criticizing a chat room participant that supported WWASP. Jeff B weighed in later that day comparing the WWASP tactics with the Symbionese Liberation Army tactics of the 1970’s.
On December 9, 2001, Jeff B again criticized WWASP and alleged they maintained physical control over the youth in their programs. “Tracy Brittany Reese” responded again, criticizing a chat room participant that supported WWASP and again alleging abuse by WWASP.
On December 12, 2001, a thread of discussion in the chat room started regarding a positive experience a parent had at Cross Creek, a WWASP facility in Utah, by someone outside of the PURE posters. “Lara,” “Deb C.,” and “Tracy Brittany Reese” all quickly responded with negative statements about WWASP programs and schools.
On December 16, 2001, “Deb C.” weighed in on a discussion of a WWASP facility calling it a “children’s prison,” and discussed a grandmother who fought to get her child out of a facility and “won.”
On December 17, 2001, “Mark D.W.” from New York posted a message alleging abuse of a child at a WWASP facility. He responded later in the day indicating his daughter was at a non-WWASP program in Utah and wrote that the director of that program confirmed a boy that had been abused at a WWASP facility was brought to his daughters’ facility in Utah. “Lara” responded the same day expressing “they don’t care if a child dies at the hands of WWASP,” among other comments. “Mark D.W.” responded again that he did not report the child abuse, but the “Dr. did in Utah….” “Lara,” “Tracy Brittany Reese,” Jeff B, and Sue S all weighed in with anti-WWASP comments.
On December 18, 2001, the thread of ant-WWASP sentiment continued as “Tracy Brittany Reese,” “Lara,” and “Mark D.W.” all weighed in with their comments against WWASP. “Lara” sent two messages, “Mark D.W.” another message, and “Hilda” sent two messages all expressing negative information about WWASP. On December 19, 2001, the thread continued as “Lara” weighed in again and Dr. Woodbury reported that the allegedly abused boy that “Mark D.W.” had reported two weeks earlier did not in fact exist.
On December 20, 2001, “Mark D.W.” again mentioned the allegedly abused boy at his daughter’s facility in Utah. He denied Mr. Woodbury’s report and posted two more comments in the chat room, as did “Lara.”
On December 21, 2001, a parent requested information about a treatment facility named Tranquility Bay, and discussed speaking to individuals at an “office in Utah.” Jeff B immediately responded offering to get her additional information. Mr. B sent this parent a lengthy private email making various negative statements about WWASP and about Dr. Woodbury for his defense of WWASP.
On December 27, 2001, Mr. Woodbury identified the participants in Ms. S’s scheme and banned them from posting on the site. Sue S responded to Mr. Woodbury’s “outing” of her group by entering the chat room under a new name “Suzanne Lisa.” On December 27, 2001 she responded and reasserted her complaints about WWASP.
On December 29, 2001, a parent in the chat room sought information about WWASP and was informed by Lon Woodbury that it was an association of specialty schools with headquarters in St. George, Utah. The same question was asked by a different poster on December 30, 2001, with the same response from Lon Woodbury. Jeff B responded on the same day by referring individuals in the chat room to the PURE websites.
In January 2002, WWASP filed suit in this court alleging intentional interference with prospective economic advantage, defamation, civil conspiracy, unfair business practices, and sought injunctive relief and damages. PURE responded in February 2002, filing a motion to quash based on a lack of personal jurisdiction.
Standard of Review
To obtain personal jurisdiction over a nonresident defendant in a diversity action, a plaintiff must show that jurisdiction is legitimate under the laws of the forum state and that the exercise of jurisdiction does not offend the due process clause of the Fourteenth Amendment.(1) Here the forum state is Utah, and thus Utah law governs the exercise of personal jurisdiction over PURE subject to the constitutional constraints of the Fourteenth Amendment. The plaintiff, WWASP, bears the burden of establishing personal jurisdiction over the defendant.(2) In response to a Rule 12(b)(2) motion to dismiss, Worldwide need only make a prima facie showing of personal jurisdiction to defeat the motion.
(3)
The Ken Kay Affidavit
Sue S and PURE first contend that Ken Kay’s affidavit was not based on personal knowledge. But, Ken Kay’s affidavit was based on reading the series of emails that anyone who visited Lon Woodbury’s chat room could read. He certainly had personal knowledge of the contents of these emails, as he himself had read them. On this issue, the court will accept the affidavit only for the limited purpose of recounting what was said in the emails. Mr. Kay also had personal knowledge of the influence of this website in his industry, based on his experience in the industry. Finally, he also had personal knowledge of the business events that affected WWASP, as he is the President of WWASP and, in that capacity, talked to his staff and prospective customers who had seen the statements. The affidavit is therefore admissible.
Specific Jurisdiction
The evaluation of specific jurisdiction in Utah requires a three-part inquiry: 1) the defendant’s acts or contracts must implicate Utah under the Utah long-arm statute; 2) a ‘nexus’ must exist between the plaintiff’s claims and the defendant’s acts or contracts; and 3) application of the Utah long-arm statute must satisfy the requirements of federal due process.(4) Utah’s long-arm statute provides in pertinent part as follows:
Any person… who in person or through an agent does any of the following enumerated acts, submits himself to the jurisdiction of the courts of this state as to any claim arising out of or related to:
1) the transaction of any business within this state;
2) contraction to supply services or goods in this state;
3) the causing of any injury within this state whether tortuous or by any breach of warranty;(5)
The legislature has declared that the long-arm statute must be interpreted broadly “so as to assert jurisdiction over nonresident defendants to the fullest extent permitted by the due process clause of the Fourteenth Amendment to the United States Constitution.”(6) The Utah Supreme Court frequently makes a due process analysis first, because any set of circumstances that satisfies due process will also satisfy the long-arm statute.(7) Accordingly, the court will proceed to determine whether the exercise of personal jurisdiction over WWASP meets federal due process standards.
The Due Process Clause protects an individual’s liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful “contacts, ties, or relations.”(8) The “minimum contacts” necessary for specific personal jurisdiction are established if the defendant has “purposefully directed” his activities at residents of the forum and the litigation results from the alleged injuries that “arise out of or relate to” those activities.(9)
If the defendant’s activities create sufficient minimum contacts the court then considers “whether the exercise of personal jurisdiction over the defendant offends traditional notions of fair play and substantial justice.”(10)
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(1)Far West Capitol, Inc. v. Towne, 46 F3d 1071, 1074(10th Cir. 1995).
(2)OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1091 (10th Cir. 1998), quoting Rambo v. American Southern Ins. Co., 839 F2d. 1415, 1417 (10th Cir. 1988).
(3)OMI Holdings, Inc., 149 F.3d at 1091.
(4)Soma Medical Intern v. Standard Chartered Bank, 196 F.3d 1292 (10th Cir. 1999) quoting National Petroleum Marketing, Inc. v. Phoenix Fuel Co., Inc., 902 F. Supp. 1459, 1465 (D. Utah 1995).
(5)Utah Code Ann. 78-27-23.
(6)Utah Code Ann. 78-27-22
(7)See SII MegaDiamond, Inc. v. American Superabrasives Corp., 969 P.2d 430, 433 (Utah 1998); See also Far West Capital, Inc., 46 F.3d at 1075; See also Soma Medical, 196 F.3d at 1298.
(8)See Soma Medical, 196 F.3d at 1298, quoting Burger King Corp v. Rudzewicz, 471 U.S. 462, 471-72(1985).
(9)OMI Holdings, Inc. 149 F.3d at 1091, quoting Burger King Corp., 471 U.S. at 472.
(10)Id.
Minimum Contacts
In judging minimum contacts, a court properly focuses on the relationship among the defendant, the forum, and the litigation.(11) In Burt v. Board of Regents of the University of Nebraska,(12) a physician at the University of Nebraska sent a single letter to Colorado allegedly defaming a Dr. Burt. Relying on the Supreme Court’s decision in Calder v. Jones,(13) the Tenth Circuit held that the intentional nature of the defendants’ conduct and its calculated injurious effect in the forum state provided sufficient minimum contacts for personal jurisdiction. The Circuit quoted the following Calder language in support of its ruling:
Here, Lon Woodbury’s chat room provided a forum for parents of troubled teens to share their thoughts and ideas with each other. Parents and families shared comments in the chat room regarding specific youth programs. In the threads of emails submitted to the court, parents often expressed very emotional pleas for help for their troubled children. The site was exclusively dedicated to discussions of the issues affecting troubled teens and was a very influential website in this industry.
PURE sent over 30 negative emails about WWASP into Lon Woodbury’s chat room. Sue S’s six posters to Lon Woodbury’s chat room specifically referred to St. George, Utah, and to “sales reps” working at WWASP’s headquarters, which was located in Utah. The emails also implied that WWASP was in financial difficulties, difficulties that would presumably have arisen at its headquarters in Utah. The emails refer to at least two different teen programs in Utah. The emails discuss the fact that WWASP is a Utah based company, and specifically mention “Ken,” the director of WWASP in St. George, Utah.
In light of these facts, the court finds a clear allegation that PURE and its agents targeted their allegedly defamatory statements into Utah knowing that the brunt of those statements would be felt by WWASP in Utah. The comments were in an internet chat room and specifically and repeatedly mentioned WWASP’s Utah headquarters in their messages. Further compounding the adverse effect in Utah, the emails refer to two different teen programs located in Utah.
The Utah connection was well known to PURE. Sue S herself had her daughter in a WWASP program and sent correspondence to WWASP in St. George, Utah. For her to claim she did not address her “letter” or email to a Utah resident parses things too finely. Though no letter with postage was sent to Utah, every communication Sue S and her agents sent within Lon Woodbury’s chat room directly affected WWASP based in St. George, Utah.
WWASP correctly analogizes this case to Berrett v. Life Insurance Company of the Southwest.(15) There, this court found jurisdiction proper due to the defendant purposefully directing his actions into Utah by making defamatory phone calls into the state.(16) Sue S and her company likewise made defamatory statements that were purposefully directed at Utah, via the twenty-first century functional equivalent of telephone calls: posting in an internet chat room.
PURE further argues the posting in a chat room are not “commercial distribution” sufficient to meet the standards of Keeton v. Hustler Magazine, Inc.(17) Keeton, however, does not set some standard that all defamation claims must meet, but simply considered whether jurisdiction was proper in that matter (it was). Moreover, in this case PURE’s postings had a tightly targeted aim at the WWASP customer base. Indeed, if anything, the PURE comments are more harmful than those found sufficient to sustain jurisdiction in Keeton because the comments were directly specifically at WWASP rather than published in a magazine of general distribution.
Finally, PURE tries to make much of the fact that this is an “internet” case and that PURE maintains a purely “passive website.” This misses the point of the lawsuit. The defamatory comments that form the basis of WWASP’s complaint have little to do with PURE’s passive website; rather, they were made in an internet chat room. Moreover, this is not a case involving alleged “links” to defamatory websites.(18) Instead, it involves defamatory statements allegedly made by the plaintiff. Finally, it is relevant to emphasize that this case involves a very specific, information-oriented chat room, not a website available to a large group of individuals about general subjects. Indeed, this chat room was dedicated to creating an independent forum for discussing the reputation of various schools and businesses that worked with troubled teens so that (among other things) potential customers could make an informed judgment about which program to use. In such a unique context, allegations of defamatory impact must be given special attention.
Finally, PURE argues that the name “World Wide” in WWASP’s name implies that the company has presence larger than the State of Utah and that this somehow bars WWASP from claiming harm in Utah. At this preliminary stage of the proceedings, it appears that WWASP is a Utah Corporation, with a principal place of business in Utah, with its employees in St. George, Utah. Whether or not it also does some business elsewhere is irrelevant for jurisdictional purposes.
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(11)Burt v. Board of Regents of the University of Nebraska, 757 F.2d 242, 244 (10th Cir. 1985); Keeton V. Hustler Magazine, Inc., 104 S. Ct. 1473, 1486 (1984) and Calder v. Jones, 104 S. Ct. 1473, 1486 (1984)
(12)757 F.2d at 244-245.
(13)See 104 S.Ct 1482.
(14)Burt, 757 F.2d at 245.
(15)623 F. Supp. 946 (D.Utah 1985)
(16)Id.
(17)See 104 S.Ct. 1473(1984)
(18)See Barrett v. Catacombs Press, 44 F.Supp. 2d. 717 (E.D. Pa. 1999).
Fairness
Having found sufficient minimum contacts, the court must also consider whether application of the Utah long-arm statute satisfies the requirements of federal due process.(19)
WWASP asserts the gravamen of a defamation action is injury to reputation.(20) Taking WWASP’s allegations as true, as the court must on a motion to dismiss, no due process notions of fairness are violated by requiring one who intentionally defames another to answer for the truth of her statements in the state where the defamation causes harm to the victim and, indeed, was known to have caused harm to the victim.(21) To the extent that WWASP’s finances and reputation have been damaged, the damage has occurred in Utah. WWASP alleges that its business reputation and goodwill with staff, parents, programs and government agencies have all suffered from the defamatory statements. The unique nature of this industry, involving parents placing the care of their children in the hands of a third party, no doubt makes industry reputation vitally important. Personal jurisdiction is therefore proper under the Due Process clause and, thus, under Utah’s long arm statute.
Because the court finds personal jurisdiction over this matter based on the internet postings described above, the court need not reach WWASP’s contentions that there are other grounds for finding jurisdiction.
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(19)Soma Medical Intern., 196 F.3d. 1292, quoting National Petroleum Marketing, 902 F. Supp. At 1465.
(20)Russell v. Thomson Newspapers, Inc., 842 P. 2d. 896,905(Utah 1992)
(21)Burt, 757 F.2d. at 245.
Nexus
The court finds personal jurisdiction proper under the due process clause, however, the nexus remaining element under the long-arm statute merits brief comment. As set forth above, the systematic postings in the chat room were intended to harm WWASP in Utah. The postings caused harm in Utah, and all of WWASP’s claims arise directly from these postings. Under Utah law the nexus requirement for personal jurisdiction has been satisfied.(22)
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(22)Frontier Federal Sav. & Loan Ass’n v. National Hotel Corp., 675 F. Supp. 1293, 1298 (D. Utah 1987).
CONCLUSION
PURE, Inc. motion to dismiss the affidavit of Ken Kay is DENIED. PURE, Inc.’s motion to quash service of summons for lack of personal jurisdiction is DENIED.
SO ORDERED.
Dated this 14th day of November 2002.
BY THE COURT:
Judge Paul G. Cassell
United States District Court Judge
| Original Complaint Filed By World Wide Association Of Specialty Programs |
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FRED R. SILVESTER (3862) DENNIS J. CONROY (0712) SPENCER SIEBERS (8320) SILVESTER & CONROY, L.C. 230 South 5th East, Suite 590 Salt Lake City, Utah 84102 Telephone (801) 532-2266
Attorneys for Plaintiff
IN THE UNITED STATES DISTRICT COURT IN AND FOR
THE DISTRICT OF UTAH
WORLD WIDE ASSOCIATION OF SPECIALTY PROGRAMS, a Utah corporation,
Plaintiff,
vs.
PURE, INC., PURE FOUNDATION, INC., SUE S, JEFF B, BARBE STAMP, DONNA HEDRICK and DOES 1 THROUGH 10,
Defendants. : : : : : : : : : : : : : : :
FIRST AMENDED COMPLAINT AND JURY DEMAND
Civil No. 2:02 CV 0010
Honorable Paul G. Cassell
COMES NOW plaintiff World Wide Association of Specialty Programs, by and through undersigned counsel, and hereby complains against defendants as follows:
PARTIES 1. Plaintiff World Wide Association of Speciality Programs ( hereinafter “World Wide”) is an association of residential programs which provide education and behavior modification for troubled teenagers.2. World Wide is a corporation, organized under the laws of the State of Utah, with its principal place of business in St. George, Utah.3. World Wide provides marketing support, including internet information, newsletters, and program information packets to parents on behalf of its member programs. World Wide is paid by its member programs to provide such support based in part on the number of enrollees in member programs.4. Defendant, Parents Universal Resource Experts, Inc. and its successor, PURE Foundation, Inc. (hereinafter “PURE”) are corporations licensed under the laws of the State of Florida with its principle place of business in Broward County Florida, and is the alter ego of defendant Sue S.5. Defendant Sue S is an owner and manager of PURE.6. Defendant Jeff B is a resident of Pennsylvania.7. Defendant Barbe Stamp is a resident of California and operates an organization dubbed Teen Advocates USA.8. Defendant Donna Hedrick is a resident of Maine and sponsor of the “intrepidnet.com” website.9. Defendants DOES 1-10 are individuals affiliated with S and PURE, or under their direction, whose true identities are not presently known to plaintiff, who have used the names Mark D.W., Lara, Deb C., Tracy Brittany Reese, Sue, Zeta M., Stewart, Mercy, Heidi R. and Hilda.10. PURE, S, B, Stampe, Hendrick and DOES 1-10 shall be referred to hereinafter as “Defendants.”JURISDICTION 11. Defendants have transacted business in the State of Utah by offering their services over the internet in Utah, by communicating with Utah residents through internet postings, and by contacting programs for troubled teenagers in Utah.12. Defendants have caused injury to World Wide in Utah through their false, misleading and defamatory statements published over the internet.13. Defendants are subject to personal jurisdiction in Utah pursuant to Utah Code Ann. § 78-27-24 and 26 because the acts complained of resulted directly from defendants’ transaction of business in Utah, and defendants caused injury in Utah.14. Defendants have violated and are in violation of 15 U.S.C. § 1125(a).15. The amount in controversy exceeds $75,000 exclusive of costs.16. Jurisdiction is proper in this court pursuant to 28 USC § 1331 and 1332.17. Venue is proper in this court pursuant to 28 U.S.C. § 1391.GENERAL ALLEGATIONS 18. Defendant Sue S had a child enrolled in a member program of World Wide in South Carolina.19. Ms. S was very pleased with the program and authored many favorable letters and reports of the program and World Wide.20. In January 2001, however, Ms. S determined to start PURE, Inc., a teen services referral business to compete with World Wide.21. Since that time, Ms. S and the other Defendants have engaged in a continuous course of conduct designed to disparage the business reputation and goodwill of World Wide while diverting customers to programs affiliated with or sponsored by PURE.22. Defendants do business on the internet, encouraging parents to use the services of PURE to determine residential treatment programs for their troubled teenagers.23. Defendants, in promoting the business of PURE, have posted information on the PURE “helpyourteens.com” website, on Hendrick’s “intrepidnet.com”, and on “struggling teens.com” and have provided information directly to parents defaming World Wide and its member programs.24. Defendants have assumed false identities, including Mark D.W., Lara, Deb C., Tracy Brittany Reese, Sue, Zeta M., Stewart, Mercy, Heidi R., Hilda, and TeenAdvocatesUSA and have conspired to create an impression among parents visiting these websites that World Wide and its affiliated programs have committed criminal acts against teen age enrollees, have physically and sexually abused teen age enrollees, and have failed to operate programs lawfully. Defendants Jeff B, Barbe Stamp and Donna Hedrick have falsely and deceptively declared themselves “experts” in the behavior modification industry in order to attack World Wide.25. Defendants know World Wide is a Utah business with offices in St. George, Utah and each have distributed false and misleading information through the internet to residents of Utah, with the intent to harm World Wide in Utah.26. Defendants have posted statements on websites, and on information and belief have given information to parents over the telephone and through the mail, accusing World Wide and its member programs of abuse, neglect, negligent homicide, and brainwashing for the sole purpose of causing financial damage to World Wide and its member programs, and to divert business from World Wide to PURE.27. Defendants intended to and have caused damage in Utah to World Wide.28. Defendants have conducted business in Utah by soliciting business from Utah residents through their internet site, www.helpyourteens.com.29. Defendants have falsely claimed in internet postings, and on information and belief in telephone and mail communications, that certain programs for troubled teens which experienced operational problems were members of the World Wide association, for the sole purpose of discrediting World Wide, knowing the information was false.FIRST CAUSE OF ACTION Intentional Interference with Prospective Economic Advantage 30. World Wide hereby incorporates by this reference all preceding paragraphs of this complaint as though fully set forth herein.31. World Wide is in the business of promoting enrollment in its member programs.32. Defendants are in the business of promoting enrollment in programs competing with World Wide members.33. Defendants intentionally and willfully published false and/or misleading information over the internet, and on information and belief, through the mail and in phone communications to potential clients of World Wide member programs.34. Such false and misleading information included claims World Wide member programs physically and sexually abused enrollees, committed negligent homicide and operated without proper governmental authority.35. Defendants published false information on internet sites, and on information and belief, distributed false information through the mail and in phone conversations claiming World Wide member programs in St. George, Utah were shut down by governmental authorities for abusing teen age enrollees.36. Defendants knew the information published was false and fabricated the information or acted recklessly in not determining the truth of the information.37. Defendants published such false and misleading information with the intent to damage the reputation of World Wide and its member programs, and to redirect clients of World Wide and its member programs to the PURE network of programs.38. The false and misleading information published by defendants has caused and continues to cause damage to World Wide as is set forth hereinafter.SECOND CAUSE OF ACTION Defamation 39. World Wide hereby incorporates by this reference all preceding paragraphs of this complaint as though fully set forth herein.40. Defendants published to customers, referrers, public officials, media representatives and other third parties statements falsely accusing World Wide and its member organizations of criminal conduct, dishonesty, deceptive advertising, and other unconscionable business practices including the abuse and neglect of children, negligent homicide, false imprisonment, interference with lawful parental custody and operating contrary to law.41. Defendants published the false information knowing it was false or in reckless disregard of the truth and with the expressed intent of damaging World Wide and its member programs by directing parents away from World Wide member programs.42. Defendants published the false information on internet sites, and on information and belief, in letters and through conversations and telephone conversations with parents of troubled teenagers, public officials and representatives of the media.43. Defendants published the false information without privilege, with the intent to harm the business reputation of World Wide and its member programs.44. As a direct and proximate result of the defamatory statements published by defendants, World Wide and its member programs have suffered damage to their reputations, as well as economic loss and costs associated with disseminating corrections of the false and misleading statements.45. Defendants continue to publish the defamatory statements and World Wide is entitled to have such actions enjoined pursuant to Utah Code Ann.§ 76-9-404.46. World Wide is entitled to general, special and punitive damages as set forth hereinafter.Civil Conspiracy 47. World Wide hereby incorporates by this reference all preceding paragraphs of this complaint as though fully set forth herein.48. Defendants have engaged and continue to engage in an agreed upon course of action to disparage the business reputation and goodwill of World Wide in order to divert business and customers from World Wide to other organizations affiliated with or sponsored by PURE.49. Between December 17 and December 19, 2001, Defendants conspired to disparage the business reputation and goodwill of World Wide by disseminating false statements about World Wide.50. On December 17, 2001, John Doe known as “Mark D.W.” posted a statement in the Struggling Teens Interactive Forum entitled “Absolute Disgust.” Mark claimed to be in his office in New York. Mark stated World Wide was responsible for the abuse, torture and near fatality of a child in a facility named High Impact in Mexico.51. The same day, within an hour of each other, three more persons posted responses to Mark’s statements. These persons, known as “Deb C.”, “Lara”, and “TracyBrittanyReese”, claimed to be responding to Mark in New York from Florida and Illinois. All repeated Mark’s libelous and false statements concerning child abuse attributable to World Wide.52. The postings continued through December 18 and December 19, 2001. On December 19, TracyBrittanyReese confirmed, “This Forum is about Casa [a World Wide member school] going down.”53. On December 19, 2001, the Website administrator, Lon Woodbury, posted a message that he had sought to confirm the details of “Mark D.W.’s” initial posting and had been unable to do so, Mr. Woodbury therefore notified the audience that he was shutting down that particular string of postings.54. On December 27, 2001, Mr. Woodbury posted another message that six persons who had participated in the previous string would no longer be allowed to post statements on the site consequent to an investigation he conducted after shutting the string down the week before. Mr. Woodbury found that the postings were in fact sent from a single computer during a single online session and not from various persons geographically dispersed and unknown to each other in New York, Florida and Illinois.55. Defendant Sue S admitted the postings were sent from a single computer by herself and some “business associates.” Defendants failed to disclose this fact to the audience addressed by the postings and failed to inform the audience that the postings were being submitted by the principals of a competing business of World Wide.56. The overt and illegal acts set forth herein constitute a civil conspiracy to disparage the business reputation and goodwill of World Wide.57. Defendants PURE, Sue S, Jeff B, Barbe Stampe and Donna Hedrick have engaged and continue to engage in a civil conspiracy through a course of conduct as set forth herein through postings over the internet, e-mails, telephone calls, letters and other publications to World Wide customers, referrals, public officials and others with the intent to disparage the business reputation and good will of World Wide and divert business and customers from World Wide to other organizations affiliated with or sponsored by PURE.Unfair Business Practices 58. World Wide hereby incorporates by this reference all preceding paragraphs of this complaint as though fully set forth herein.59. Defendants have engaged and continue to engage in a pattern of false advertising directed against World Wide and intended to divert customers from World Wide to other organizations affiliated with or sponsored by PURE.60. Defendants' false and misleading statements, and material omissions, contained in defendants’ advertising is likely to influence parents’ decisions in selecting a program or referral service.61. Defendants' false and misleading statements, and material omissions, contained in defendants’ advertising has injured World Wide in lost goodwill, lost sales, lost profits and lost business opportunities.62. The false and misleading statements, and material omissions, contained in Defendants’ advertising were placed into the stream of interstate commerce.63. Defendants' false and misleading statements, and material omissions, contained in defendants’ advertising violate Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a).64. In accordance with Section 43(a), World Wide is entitled to compensatory damages for its lost goodwill, lost sales, lost profits and lost business opportunities caused by Defendants’ false advertising.65. In accordance with Section 43(a), World Wide is further entitled to PURE’s profits during the time period of Defendants’ illegal and unfair conduct.66. In accordance with Section 43(a), World Wide is further entitled to an accounting of PURE’s profits during the time period of Defendants’ illegal and unfair conduct.67. In accordance with Section 43(a), World Wide is further entitled to its costs and attorneys fees incurred in this action caused by Defendants’ willful and wanton illegal and unfair conduct.68. In accordance with Section 43(a), World Wide is further entitled to a permanent injunction enjoining Defendants from further engaging in illegal and unfair conduct against World Wide and its member programs.69. In accordance with Section 43(a), World Wide is further entitled to a mandatory injunction requiring Defendants to issue corrective statements in favor of World Wide and its member programs.THIRD CAUSE OF ACTION Injunction 70. World Wide hereby incorporates by this reference all preceding paragraphs of this complaint as though fully set forth herein.71. As a direct and proximate result of defendants intentional interference with World Wide’s prospective economic relationships, and defendants’ defamatory statements and intent to drive World Wide and its member programs out of business, World Wide is suffering immediate and irreparable injury and damage.72. The immediate and irreparable damage and injury to its business relationships and reputations cannot be completely and adequately compensated by money damages.73. Defendants should be immediately enjoined from further false, misleading and defamatory statements regarding World Wide and its member programs and should be permanently enjoined from statements, publications or any defamatory comments about World Wide and its member programs. In addition, World Wide is entitled to injunctive relief pursuant to the provisions of Utah Code Ann. § 76-9-406.FOURTH CAUSE OF ACTION Damages 74. World Wide hereby incorporates by this reference all preceding paragraphs of this complaint as though fully set forth herein.75. World Wide has been damaged in its reputation and business relationships by the false and defamatory statements published by defendants.76. Defendants’ defamatory and false statements entitle World Wide to compensatory damages for direct economic loss and for general damages for damage to its reputation.77. Defendants’ defamatory and false statements were made willfully, maliciously, and with intent to harm World Wide, entitling World Wide to punitive and exemplary damages to punish defendants’ conduct and to deter others from such behavior.NOW, WHEREFORE, plaintiff World Wide prays for its general and special damages, for a temporary and permanent injunction, for costs and attorneys’ fees as provided by law.
JURY DEMAND Plaintiff hereby demands trial by jury of each cause of action set forth herein. DATED this ___ day of December, 2002. SILVESTER & CONROY, L.C.
__________________________________ Fred R. Silvester Attorneys for Plaintiff
C:\MyFiles\Worldwide\PURE\amend.complaint CERTIFICATE OF SERVICE
I hereby certify that on the ___ day of December, 2002, a true and correct copy of the foregoing FIRST AMENDED COMPLAINT AND JURY DEMAND was served by mailing the same via first-class U.S. Mail, postage prepaid to: C. Richard Henriksen, Jr. James E. Seaman HENRIKSEN & HENRIKSEN, P.C. Attorneys for Defendants 320 South 500 East Salt Lake City, UT 84102
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