In JTS Choice Enterprises Inc. v. E.I. Du Pont De Nemours and Co. et al., Colorado District Court Judge William J. Martinez denied motions to dismiss filed by DuPont Co. and Metro Paint Supplies Inc. in an antitrust suit filed by JTS Choice Enterprises Inc., accusing DuPont of using its market power to wrongfully divert business from JTS to Metro. In its suit, JTS claims that DuPont forced a Denver-area DuPont paint dealer to allow Metro to purchase it and then turned a blind eye when Metro began soliciting JTS customers in breach of an agreement DuPont has with its “jobbers” – who sell DuPont paints to auto body repair shops or retailers – prohibiting them from stealing each other’s customers.
DuPont moved to dismiss JTS’ suit, claiming that since JTS sold its entire business to National Coating & Supplies Inc. a year and a half before JTS filed its suit, it must also have transferred any causes of action it had held before the sale. The court rejected DuPont’s argument, holding that although the contracts documenting JTS’ sale to National did not explicitly mention the claims in the DuPont suit, JTS’ intention not to transfer the claims was made clear in court filings indicating a JTS co-owner had notified National’s president before the sale of his plans to sue.
Defendant Metro also moved to dismiss the suit, arguing that the Colorado court did not have jurisdiction to hear the case against it because the actions alleged were undertaken by its co-defendant and subsidiary, Automotive Coatings & Equipment LLC (“ACS”). The court disagreed and held that due to Metro and ACS’ common ownership, shared marketing materials, websites, and employees, there is enough evidence to prove that Metro held over ACS the “degree of control” necessary for the court to exercise jurisdiction over Metro. According to the court, it is undisputed that ACS is a subsidiary of Metro that was created for the purpose of segregating Metro’s business in the Midwest from ACS’ Colorado dealings, so under either an agency or alter ego theory, the court has personal jurisdiction over Metro.