Health Care Service Corporation, et al., Respondents,

This opinion is nonprecedential except as provided by
Minn. R. Civ. App. P. 136.01, subd. 1(c).

STATE OF MINNESOTA
IN COURT OF APPEALS
A22-0219

Health Care Service Corporation, et al.,
Respondents,

vs.

Albertsons Companies, LLC, et al.,
Appellants,

SuperValu, Inc.,
Defendant.

Filed September 6, 2022
Affirmed
Wheelock, Judge

Dakota County District Court
File No. 19HA-CV-21-213

Vincent J. Moccio, Bennerotte & Associates, P.A., Eagan, Minnesota; and

Kelly Hibbert (pro hac vice), Crowell & Moring LLP, Washington, District of Columbia
(for respondents)

David M. Aafedt, Christianna L. Finnern, Olga Tymouch, Winthrop & Weinstine, P.A.,
Minneapolis, Minnesota; and

William L. Roberts (pro hac vice), Ropes & Gray LLP, Boston, Massachusetts (for
appellants)

Considered and decided by Wheelock, Presiding Judge; Reyes , Judge; and
Klaphake, Judge.
*

* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, § 10.
2
NONPRECEDENTIAL OPINION
WHEELOCK, Judge
Appellant-defendants appeal from the district court’s order denying their motion to
dismiss, for lack of personal jurisdiction, respondent-plaintiffs’ complaint alleging that
appellants fraudulently overcharged respondents for prescription drugs via reimbursement
claims processed in Minnesota. We affirm.
FACTS
Respondents Health Care Service Corporation, BCBSM Inc., and HMO Minnesota
are insurers that offer, administer, and underwrite health plans for their insureds. Health
Care Service Corporation has its principal place of business in Illinois, while the other two
respondents have their principal places of business in Minnesota. Appellants Albertsons
and Safeway are grocery-store and pharmacy companies. Neither appellant is incorporated
or headquartered in Minnesota.
In January 2021, respondents brought this civil action against appellants, alleging
that appellants overcharged respondents for prescription drugs they sold and dispensed to
respondents’ insureds. Respondents allege that appellants were required to report the
drugs’ “usual and customary price,” which is “the cash price charged to a member of the
general public paying for a prescription drug without using health plan benefits.”
Respondents would then reimburse appellants in an amount based on either a negotiated
price or the usual and customary price.
According to respondents, appellants reported inflated usual and customary prices,
causing respondents to pay hundreds of millions of dollars more than they should have on
3
tens of millions of claims. Based on the alleged overpayment, respondents asserted claims
for fraud, fraudulent nondisclosure, negligent misrepresentation, unjust enrichment, and
violation of the Minnesota Prevention of Consumer Fraud Act, Minn. Stat. § 325F.69,
subd. 1 (2020), and the Minnesota Uniform Deceptive Trade Practices Act, Minn. Stat.
§ 325D.44 (2020).
In their complaint, respondents allege that the basis for specific personal jurisdiction
over appellants is appellants transacting business within Minnesota and committing acts in
Minnesota that caused the claimed damages. Respondents allege that all of appellants’
reimbursement claims were processed by Prime Therapeutics LLC (Prime), a pharmacy
benefit manager headquartered in Eagan, Minnesota.
Appellants moved to dismiss the complaint for, among other reasons not contested
on appeal, lack of personal jurisdiction. Appellants argued that they lacked sufficient
minimum contacts with Minnesota for the district court to exercise personal jurisdiction
over them. In support of their motion to dismiss, appellants submitted an affidavit as well
as the pharmacy participation agreements between them and Prime. Appellants argued that
the affidavit from the vice president of Albertsons’ pharmacy services undermined the
allegations in the complaint and that the pharmacy participation agreements established
that there is no evidence showing that Prime actually processed the claims in Minnesota.
The district court denied appellants’ motion to dismiss, determining that it could
exercise personal jurisdiction over appellants. The district court emphasized Minnesota’s
liberal pleading standard and highlighted a recent case from the U.S. District Court for the
District of Minnesota with “a very similar procedural challenge” and “remarkably similar
4
causes of action” in which the federal court concluded that it could exercise personal
jurisdiction over the defendants. See Blue Cross & Blue Shield of N.C. v. Rite Aid Corp., 519 F. Supp. 3d 522 (D. Minn. 2021). The district court reasoned that the allegations in
the complaint giving rise to respondents’ claims are based on appellants “having had some,
or all, of the alleged fraudulent or otherwise actionable activity with Prime as the
intermediary.” The district court also explained that “[w]hile it may be murky now as to
how many of the over 60 million reimbursement requests are attributable to each
[appellant] or how many give rise to the fraud claimed by [respondents], there is enough
to establish at this pleading stage that they [meet the minimum-contacts test].” In addition
to determining it could exercise specific personal jurisdiction, the district court also
determined that “the sheer scale of [appellants’] transactions all taking place here in
Minnesota . . . satisfies the general jurisdiction requirements.”
This appeal follows.
DECISION
Appellants challenge the district court’s order denying their motion to dismiss for
lack of personal jurisdiction. Whether personal jurisdiction exists is a question of law,
which we review de novo. Juelich v. Yamazaki Mazak Optonics Corp., 682 N.W.2d 565,
569 (Minn. 2004). We conclude that respondents have shown that a prima facie case of
specific personal jurisdiction over appellants exists.1

1 Respondents argue for the first time on appeal that Safeway consented to jurisdiction
when it registered an agent for service of process in Minnesota. Not only is their argument
forfeited, Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988), but we need not address it

5
The Due Process Clause of the Fourteenth Amendment to the United States
Constitution limits a state’s ability to exercise jurisdiction over nonresident defendants.
Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct., 141 S. Ct. 1017, 1024 (2021); World-Wide
Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980). In accordance with this
principle, Minnesota’s long-arm statute lists the circumstances in which Minnesota courts
may exercise personal jurisdiction over nonresident individuals. Minn. Stat. § 543.19,
subd. 1 (2020). The Minnesota Supreme Court has interpreted the state’s long-arm statute
as extending personal jurisdiction to the full extent allowed by the Due Process Clause.
Valspar Corp. v. Lukken Color Corp., 495 N.W.2d 408, 411 (Minn. 1992). Minnesota
courts may therefore apply federal caselaw when analyzing most questions of personal
jurisdiction. Id. Due process allows Minnesota to exercise personal jurisdiction over a
nonresident defendant when the nonresident “has sufficient ‘minimum contacts’ with the
forum state so that maintaining jurisdiction does not offend ‘traditional notions of fair play
and substantial justice.’” Viking Eng’g & Dev., Inc. v. R.S.B. Enters., 608 N.W.2d 166,
169 (Minn. App. 2000) (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)),
rev. denied (Minn. May 23, 2000).
There are two kinds of personal jurisdiction: general and specific. Ford, 141 S. Ct.
at 1024; Daimler AG v. Bauman, 571 U.S. 117, 127 (2014). General personal jurisdiction
exists when a nonresident defendant’s contacts with the forum state are so substantial and
of such a continuous and systematic nature that the state may assert jurisdiction over the

because we have already determined that a prima facie case of specific personal jurisdiction
over appellants exists.
6
defendant even for causes of action unrelated to the defendant’s contacts with the forum
state. Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 415-16 (1984).
Specific personal jurisdiction exists when the defendant’s contacts with the forum state are
limited yet connected with the plaintiff’s claim such that the claim arises out of or relates
to the defendant’s contacts with the forum. See Ford, 141 S. Ct. at 1024-25; Burger King
Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985). We address only whether specific personal
jurisdiction exists in this case.2
Minnesota courts apply a five-factor test to determine whether the exercise of
specific personal jurisdiction over a nonresident defendant is consistent with due process.
Juelich, 682 N.W.2d at 570; see also Hardrives, Inc. v. City of LaCrosse, 240 N.W.2d 814,
817 (Minn. 1976) (first adopting the five -factor test to determine whether plaintiff has
made a prima facie showing of sufficient Minnesota-related contacts). The five factors are:
“(1) the quantity of contacts with the forum state; (2) the nature and quality of those
contacts; (3) the conne ction of the cause of action with these contacts; (4) the interest of
the state providing a forum; and (5) the convenience of the parties.” Juelich, 682 N.W.2d
at 570. The first three factors are primary factors, and the last two are secondary factors.
Marquette Nat’l Bank of Minneapolis v. Norris, 270 N.W.2d 290, 295 (Minn. 1978).
Once a defendant challenges the exercise of personal jurisdiction, the plaintiff has
the burden to prove that the defendant has sufficient contacts with the forum state. Id. at

2 Because we conclude that respondents have shown that a prima facie case of specific
personal jurisdiction over appellants exists, we do not address whether respondents have
shown that a prima facie case of general personal jurisdiction over appellants also exists.
7
569-70. In determining whether the plaintiff has met its burden to show personal
jurisdiction, the district court takes “all the factual allegations in the complaint and
supporting affidavits as true.” Rilley v. MoneyMutual, LLC, 884 N.W.2d 321, 326 (Minn.
2016). But if the defendant denies allegations in the complaint about their contacts with
the forum state, the plaintiff “cannot rely on general statements for a prima facie showing
of personal jurisdiction”; instead, the plaintiff must allege specific evidence. Id. at 334;
see also Hoff v. Kempton, 317 N.W.2d 361, 363 n.2 (Minn. 1982) (“[I]f a motion to dismiss
is supported by affidavits, the nonmoving party cannot rely on general statements in his
pleading . . . .” (quotation omitted)). “[I]n doubtful cases, doubts should be resolved in
favor of retention of jurisdiction.” Hardrives, 240 N.W.2d at 818.
Appellants first contend that because their purported denial of respondents’
allegations is supported by the affidavit and the pharmacy partic ipation agreements,
respondents were required to and failed to allege specific evidence showing personal
jurisdiction. See Hoff , 317 N.W.2d at 363 n.2. We are not persuaded by appellants’
contention.
The documents that appellants submitted do not actually refute respondents’
allegations regarding personal jurisdiction. And raising questions about the allegations in
the complaint is not the same as denying those same allegations. In the affidavit, the vice
president averred that he is “not aware of any of Prime’s claims-processing pursuant to that
contract, or other performance by Prime as alleged in this litigation, occurring in
Minnesota.” He also attested that appellants do not own or operate any grocery stores or
pharmacies in Minnesota, nor do they have any offices in Minnesota. The pharmacy
8
participation agreements provide that appellants will submit all claims “electronically
on-line to Prime . . . for adjudication of such claims.” Appellants argue that these
documents show that there is no evidence establishing where Prime adjudicated the claims
because an inference cannot be drawn that Prime’s headquarters location is where Prime
processed the claims.
But whether the vice president knew where Prime processed its claims does not
decide the issue. Nor was it improper for the district court to infer that, without any
contrary allegations, all claims submitted to Prime would be processed at Prime’s location
in Minnesota. Any doubts of where the claims were processed should be resolved in favor
of retaining jurisdiction at this point in the litigation. Hardrives, 240 N.W.2d at 818.
Moreover, appellants’ motion to dismiss included the following in its statement of facts:
“At all relevant times, [respondents] used Prime to adjudicate claims for them, including
all claims originating at [appellants’] stores,” citing to specific paragraphs in respondents’
complaint, and they did not dispute that Prime is a Minnesota-based company. Appellants’
reliance on the affidavit and the pharmacy participation agreements to shift the burden to
respondents to allege specific evidence is misplaced and fails to convince us that
respondents did not m eet their burden to show a prima facie case of specific personal
jurisdiction on that basis.
Accordingly, we now look to the complaint, accepting its allegations as true, and
consider the five personal-jurisdiction factors.
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A. Quantity of Contacts
No threshold number of contacts is necessary to exercise personal jurisdiction over
an out-of-state party; indeed, even a “single, isolated transaction between a nonresident
defendant and a resident plaintiff can be a sufficient contact to justify exercising personal
jurisdiction.” Marquette Nat’l Bank, 270 N.W.2d at 29 5 (citing McGee v. Int’l Life Ins.
Co., 355 U.S. 220 (1957)). Respondents allege that appellants submitted over 23 million
reimbursement claims to Prime, prompting respondents to overpay by hundreds of millions
of dollars. We conclude that the quantity of appellants’ relevant contacts strongly favors
the exercise of jurisdiction.
B. Nature and Quality of Contacts
Appellants argue that they directed no conduct toward Minnesota. This factor
considers whether appellants “purposefully availed” themselves of the benefits and
protections of the forum state. Dent-Air, Inc. v. Beech Mountain Air Serv., Inc.,
332 N.W.2d 904, 907 (Minn. 1983). Personal jurisdiction exists when an out-of -state
defendant “purposefully directs” activities at the forum state. Rilley, 884 N.W.2d at 327-28
(quotation omitted). Out-of-state defendants direct activities at the forum state when they
“purposefully ‘reach[ ] out beyond’ their State and into another by, for example, entering
a contractual relationship that ‘envisioned continuing and wide-reaching contacts’ in the
forum State.” Walden v. Fiore, 571 U.S. 277, 285 (2014) (quoting Burger King, 471 U.S.
at 479-80).
Appellants argue that their contractual relationship with Prime does not mean that
they purposefully availed themselves of the benefits and protections of Minnesota, because
10
respondents unilaterally decided that Prime would be the pharmacy benefit manager, and
jurisdiction must be based on appellants’ contacts with the forum state. See, e.g. ,
Mountaire Feeds, Inc. v. Agro Impex, S.A., 677 F.2d 651, 655 (8th Cir. 1982) (“Merely
entering into a contract with a forum resident does not provide the requisite contacts
between a [nonresident] defendant and the forum state.” (alteration in original) (quotation
omitted)). But appellants entered into a contract with respondents that expressly named
Prime as the intermediary. And they also entered into individual pharmacy participation
agreements that governed their relationship with Prime, thereby creating “continuing
obligations” between themselves and Prime. Marshall v. Inn on Madeline Island ,
610 N.W.2d 670, 675-76 (Minn. App. 2000) (“When a defendant deliberately engages in
significant activities in a state or creates continuing obligations between itself and residents
of the state, the defendant purposefully avails itself of the protections of the law, as required
to support the exercise of personal jurisdiction under the Due Process Clause.” (quotation
omitted)). Appellants are alleged to have engaged in significant activities in Minnesota—
all of respondents’ claims that appellants committed fraud related to the usual and
customary prices for prescription drugs were based on appellants submitting over 23
million reimbursement claims to Prime at its Minnesota headquarters, causing hundreds of
millions of dollars in overpayments. Because appellants’ contacts with Prime were
“continuing and wide-reaching,” the nature and quality of appellants’ contacts with Prime
and Minnesota is significant and purposefully directed at Minnesota. Walden, 571 U.S. at
285.
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Appellants also argue that the fact that Prime performs services in Minnesota for
appellants cannot confer personal jurisdiction over them. Generally, someone who sells
services or goods to a Minnesota residen t may reasonably expect to be “haled into court”
in Minnesota to defend an action by a Minnesota resident. Walker Mgmt., Inc. v. FHC
Enters., 446 N.W.2d 913, 915 (Minn. App. 1989), rev. denied (Minn. Dec. 15, 1989). But
a nonresident who purchases services from a Minnesota resident that are worked on in
Minnesota, but provided outside Minnesota, may not share that expectation. See id. (stating
that there is a distinction between purchasers of services from Minnesota residents and
sellers of services to Minnesota residents).
The paramount consideration, however, when evaluating the nature and quality of
appellants’ contacts with Minnesota is whether they purposefully availed themselves of
Minnesota law. Dent- Air, Inc., 332 N.W.2d at 907 (“In reviewing the nature and quality
of the contacts, we are attempting to ascertain whether the nonresidents purposefully
availed themselves of the benefits and protections of Minnesota law.” (quotation omitted)).
And here, it is particularly persuasive that appellants entered into contracts with Prime and
submitted tens of millions of claims over the last decade in furtherance of the underlying
alleged fraudulent scheme. The sheer number of alleged fraudulent transactions and the
length of time over which those transactions took place distinguish this case from the cases
on which appellants rely. Cf. Walker Mgmt., 446 N.W.2d at 916 (holding that Minnesota
lacked jurisdiction over an Illinois corporation even though it had a contractual relationship
with a Minnesota corporation for over a year); Schaefer v. Archdiocese of St. Paul &
Minneapolis, No. A15-1700, 2016 WL 6076608, at *5 (Minn. App. Oct. 17, 2016) (holding
12
that Minnesota lacked jurisdiction over a California nonprofit corporation because the
plaintiff alleged only one contact between the nonprofit corporation and Minnesota while
the nonprofit corporation investigated a complaint made about the plaintiff).
3 On this
record, we are satisfied that respondents have made a prima facie showing that appellants
could reasonably expect to be haled into court in Minnesota based on their relationship
with Prime. We therefore conclude that the nature and quality of appellants’ contacts with
Minnesota favor its exercising personal jurisdiction over appellants.
C. Connection Between Cause of Action and Contacts
Appellants argue that this factor favors them because Prime is a third party, and thus
the connection between the causes of action and their contacts is too remote. In support of
their position, appellants cite Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773
(2017). There, the Supreme Court held that California courts lacked personal jurisdiction
over the claims of individual plaintiffs who alleged personal injuries caused by a
pharmaceutical drug manufactured by Bristol-Myers Squibb. Bristol-Myers Squibb,
137 S. Ct. at 1777. None of the plaintiffs resided in California; they “were not prescribed
[the drug] in California, did not purchase [the drug] in California, did not ingest [the drug]
in California, and were not injured by [the drug] in California.” Id. at 1781; but see Ford,
141 S. Ct. at 1032 (holding that specific jurisdiction existed when company extensively
promoted, sold, and serviced defective products in forum state despite product involved in
dispute not being manufactured, sold, or serviced there). Therefore, “a connection between

3 We consider nonprecedential opinions only for their persuasive value and not as binding
precedent. Dynamic Air, Inc. v. Bloch, 502 N.W.2d 796, 800 (Minn. App. 1993).
13
the forum and the specific claims at issue” was “missing.” Id. But here, there is a
connection between Minnesota and respondents’ claims. Respondents allege that
appellants directed millions of fraudulent reimbursement claims to Prime in Minnesota
over the course of a decade. They allege that these Minnesota-directed fraudulent claims
caused their injuries. Because the causes of action arise directly out of the alleged
fraudulent transactions, this factor favors exercising personal jurisdiction.
As pleaded, appellants’ contacts with Minnesota were numerous, they were
purposeful and targeted, and they are integral to the causes of action. Thus, the three
primary factors of the five-factor test each weigh in favor of a conclusion that personal
jurisdiction here is consistent with due process. We conclude that respondents have made
a prima facie showing of sufficient minimum contacts to support the exercise of personal
jurisdiction over appellants.
D. Minnesota’s Interest in Providing a Forum
The fourth factor is Minnesota’s interest in providing a forum, which is a secondary
factor. When a case involves an alleged injury to a Minnesota resident, both the resident
and Minnesota have an interest in resolving the dispute in Minnesota courts. C.H.
Robinson Worldwide, Inc. v. FLS Transp., Inc., 772 N.W.2d 528, 538 (Minn. App. 2009),
rev. denied (Minn. Nov. 24, 2009). Appellants argue that Minnesota’s interest in providing
a forum is minimal when, as here, the dispute has minimal connection to the state. We
disagree. This case involves substantial alleged fraud committed against Minnesota
companies that was perpetrated through a Minnesota-based company. This factor favors
exercising personal jurisdiction over appellants.
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E. Convenience of the Parties
The convenience of the parties, like Minnesota’s interest in providing a forum, is
also a secondary factor. Dent-Air, Inc., 332 N.W.2d at 907. There is a strong presumption
in favor of the plaintiff’s choice of forum. Bergquist v. Medtronic, Inc., 379 N.W.2d 508,
511 (Minn. 1986). Courts recognize that “[w]hen minimum contacts have been
established, often the interests of the plaintiff and the forum in the exercise of jurisdiction
will justify even the serious burdens placed on the alien defendant.” Asahi Metal Indus.
Co. v. Super. Ct., 480 U.S. 102, 114 (1987); see also Multi-Tech Sys., Inc. v. VocalTec
Commc’ns, Inc., 122 F. Supp. 2d 1046, 1052 (D. Minn. 2000) (“[D]efeats of otherwise
constitutional personal jurisdiction are limited to the rare situation in which the plaintiff ’s
interest and the state’s interest in adjudicating the dispute in the forum are so attenuated
that they are clearly outweighed by the burden of subjecting the defendant to litigation
within the forum.” (emphasis omitted) (quotation omitted)). California and Idaho are not
so far away that requiring appellants to travel to Minnesota makes jurisdiction
unreasonable or unduly burdensome, especially when we acknowledge that appellants are
two large national corporations with retail locations across the country. See Volkman v.
Hanover Invs., Inc., 843 N.W.2d 789, 797 (Minn. App. 2014) (noting that requiring the
defendant to travel from Maryland to Minnesota did not make jurisdiction unreasonable).
This case does not present the rare situation in which appellants’ convenience clearly
outweighs respondents’ interest in adjudicating the dispute in Minnesota, and, in any event,
appellants do not argue that Minnesota is an inconvenient forum.
15
We conclude that the final two factors support the exercise of jurisdiction under the
five-factor test because exercising jurisdiction here does not offend traditional notions of
fair play and substantial justice. See Juelich, 682 N.W.2d at 570. Respondents have made
a prima facie showing that Minnesota courts have specific personal jurisdiction over
appellants under the five-factor test.4 The district court therefore did not err by denying
appellants’ motion to dismiss for lack of personal jurisdiction.5
Affirmed.

4 Appellants argue that Calder v. Jones, 465 U.S. 789 (1984), is essential to the
jurisdictional analysis and deprives Minnesota courts of jurisdiction. The Calder effects
test is an alternative route to establish personal jurisdiction over a defendant in intentional
tort cases. See IMO Indus., Inc. v. Kiekert AG, 155 F.3d 254, 265-66 (3d Cir. 1998). But
because we conclude that a prima facie case of specific personal jurisdiction over
appellants exists based on the five- factor test, we need not apply the Calder effects test
here.

5 Appellants argue that the district court should not have relied on Rite Aid because, in
doing so, the district court overlooked a key difference in this case —the lack of extrinsic
evidence “weighed heavily” on Rite Aid’s holding. 519 F. Supp. 3d at 537 n.4. We observe
first that appellants’ argument about extrinsic evidence is largely the same argument they
made earlier about the district court applying the incorrect evidentiary burden. They argue
that because they introduced the affidavit and pharmacy participation agreements,
respondents needed to allege specific evidence to meet their burden and that under this
heightened burden, the district court could not rely on the general statements in the
pleadings that the court in Rite Aid found sufficient. Cf. id. at 538 (“If Rite Aid persists in
raising the defense, then Plaintiffs eventually will have to prove personal jurisdiction ‘by
a preponderance of the evidence’ at an evidentiary hearing or trial.” (quoting Epps v.
Stewart Info. Servs. Corp., 327 F.3d 642, 647 (8th Cir. 2003))). But as we explained above,
the affidavit and agreements did not undermine respondents’ assertion that personal
jurisdiction existed, and respondents alleged specific facts supporting a prima facie
showing that the exercise of specific personal jurisdiction over appellants was appropriate.
We therefore conclude that the district court did not err in relying on Rite Aid.