# Opinion

> District Court, W.D. Arkansas · February 23, 2026

URL: https://www.frixlaw.com/law-library/cases/11266155

## Case

- **Full name:** Mountain Meadows Pet Products, Inc. v. NT Consulting, LLC; Nathan Thomas; and Seth Kaufman
- **Court:** District Court, W.D. Arkansas
- **Decided:** February 23, 2026
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
FAYETTEVILLE DIVISION

MOUNTAIN MEADOWS PET PRODUCTS, INC. PLAINTIFF

V. CASE NO. 5:24-CV-5200

NT CONSULTING, LLC; NATHAN
THOMAS; and SETH KAUFMAN DEFENDANTS

V.

GARY TURCO THIRD-PARTY DEFENDANT

MEMORANDUM OPINION AND ORDER

TABLE OF CONTENTS
I. FACTS ........................................................................................................................ 2
II. MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION ....................... 6
A. Legal Standard ..................................................................................................... 6
B. Discussion ............................................................................................................ 8
III. MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM .................................. 16
A. Legal Standard ................................................................................................... 16
B. Discussion .......................................................................................................... 17
IV. CONCLUSION ........................................................................................................ 22

Now before the Court are Third-Party Defendant Gary Turco’s Motion to Dismiss
for Lack of Personal Jurisdiction (Doc. 85) and Plaintiff Mountain Meadows Pet Products’
and Gary Turco’s joint Motion to Dismiss for Failure to State a Claim (Doc. 87). For the
reasons that follow, the Motion to Dismiss for Lack of Personal Jurisdiction (Doc. 85) is
GRANTED and the Motion to Dismiss for Failure to State a Claim (Doc. 87) is GRANTED
IN PART AND DENIED IN PART.
I. FACTS
This is a dispute about proprietary pet food ingredients. Mountain Meadows Pet
Products (“MMPP”) is a pet food manufacturer. It is wholly owned by a single shareholder,
Gary Turco, who is also MMPP’s President and CEO. (Doc. 79, ¶ 5). MMPP is
incorporated and headquartered in Montana, and Mr. Turco is domiciled in Utah. Id. ¶¶

4–5.
NT Consulting is an Arkansas limited liability company whose sole member is
Nathan Thomas, an Arkansas domiciliary. Id. ¶¶ 1–2. Mr. Thomas is a pet product
formulator. Id. ¶ 10. Seth Kaufman, an Illinois domiciliary, works in marketing in the pet
care industry. Id. ¶¶ 3, 11. Mr. Thomas and Mr. Kaufman met while working in the pet food
industry in 2008, and in 2010 they decided to strike out on their own to formulate pet food
ingredients. Id. ¶ 15. Mr. Thomas had previously worked with Mr. Turco and brought him
on board, too. Id. ¶¶ 13, 16. At that time, both Mr. Thomas and Mr. Kaufman lived in
Arkansas. Mr. Kaufman moved to Illinois in July 2011.

NT Consulting, Thomas, and Kaufman (collectively, “NT Defendants”) say that in
2011 they reached an agreement with Turco under which Mr. Thomas and Mr. Kaufman
would develop pet food ingredient formulas, MMPP would manufacture and distribute pet
foods containing these ingredients, and each of the three men would own “a personal,
one-third ownership right” in the formulas. Id. ¶¶ 17–18. MMPP would have the exclusive
right to use the formulas and would pay Thomas and Kaufman (via NT Consulting) a
licensing fee for the use of the formulas. Id. ¶ 18. When this case was filed in Montana,
Mr. Thomas and Mr. Kaufman filed sworn declarations that they “developed proprietary
technical ingredient formulas in Utah, Arkansas, and Illinois.” (Doc. 5-1, ¶ 13 (Kaufman
decl.); Doc, 5-2, ¶ 12 (Thomas decl.)). They also declared that they went to Utah “on
several occasions to test formula samples with Gary [Turco].” (Doc. 5-1, ¶14; Doc. 5-2,
¶ 13). After the case was transferred to this Court, Mr. Kaufman filed a new declaration
swearing that the formulas were “developed and created in Arkansas” and “all that work
was completed by Mr. Thomas in Arkansas.” (Doc. 93-1, ¶¶ 4, 6). Mr. Thomas did not file

a new declaration contradicting his previous declaration or claiming that he worked on the
formulas exclusively in Arkansas as Mr. Kaufman now claims.
Mr. Thomas and Mr. Kaufman finished developing and began licensing their first
ingredient formula to MMPP in 2014. (Doc. 79, ¶ 21). They have now developed seven
proprietary ingredient formulas which MMPP uses in the pet foods it manufactures. Id.
¶ 68. In parts of their third-party complaint and counterclaim (as amended), NT
Defendants assert that the licensing fee was set on a per-pound-of-end-product-sold (not
per-pound-of-formula-used) basis and ranged from $0.46 to over $2.00 per pound for
different products. Id. ¶¶ 23–24. In other parts of their complaint, they allege that the
agreed fee was actually the entire profit from pet food sold, “with two-thirds of the profits

distributed to NT Consulting and one-third to Mr. Turco.” Id. ¶ 39.
In April 2016, the three men started another business venture together, Blue Sky
Mining Partners, LLC (“BSM Partners”), an Arkansas limited liability company that would
provide consulting services in the pet care industry and market MMPP’s products to its
clients. Id. ¶¶ 27–28.
With respect to the formulas, the parties never committed the purported “Licensing
Agreement” to writing. From 2016 through 2022, attempts were made to do so, but no
contract was ever signed. Id. ¶ 30. “In December 2016, the parties discussed setting up
a new entity called ‘NewCo’ to collect the licensing fees from Mountain Meadows, and the
parties negotiated a written agreement” which, NT Defendants allege, memorialized the
existing Licensing Agreement. Id. ¶ 32. Mr. Kaufman sent Mr. Turco an email for proposed
definitions including a definition for “License Fees” to which Mr. Turco responded, “OK.”
(Doc. 79-1). Mr. Kaufman also sent Turco and Thomas an “Intellectual Property License

and Royalty Agreement,” which purportedly also described the existing Licensing
Agreement but which they concede Mr. Turco never signed. (Doc. 79, ¶ 34; Doc. 79-2).
In 2017, Mr. Turco’s son Adam began working as an accountant for MMPP. (Doc.
79, ¶ 36). After Adam started working for MMPP, “the frequency of the monthly summaries
provided to Mr. Thomas and Mr. Kaufman of sales volumes and weight of the Mountain
Meadows Products utilizing each of the NT Formulas began to decrease.” Id. ¶ 37. Prior
to June 2018, MMPP provided the monthly summaries in Excel spreadsheets which
included sales weight information and formulas for how the monthly licensing fees were
calculated. Id. ¶ 38. “However, in June 2018, Mountain Meadows began providing the
monthly summaries in PDF format, which did not include any formulas for the calculations

or any other meta data.” Id.
In December 2018, the parties again discussed a transaction to restructure MMPP,
Turco, and NT Defendants’ business relationship. (Doc. 79-4). Mr. Turco signed a
Nondisclosure Agreement in his individual capacity as part of this discussion. (Doc. 79,
p. 9 n.3). Mr. Turco’s letter discussing this transaction was written on his personal
letterhead. (Doc. 79-4). This transaction, too, was never finalized. (Doc. 79, ¶ 47).
In April 2019, Adam Turco sent an email to Mr. Kaufman asserting that the
payments from MMPP to NT Consulting were commission payments, not licensing fees;
Mr. Kaufman responded and disagreed with this characterization. Id. ¶¶ 53, 55; Doc. 79-
5. In May 2019, MMPP provided the last monthly summary listing pounds of products
sold. Id. ¶ 41. Mr. Thomas and Mr. Kaufman repeatedly requested monthly summaries
with sales weights in pounds, but MMPP refused to provide them. Id. ¶ 44. The omitted
information, NT Defendants say, was “necessary to confirm that the licensing payments

to NT Consulting were calculated in accordance with the Licensing Agreement.” Id. ¶ 97.
They allege that MMPP “unilaterally and materially changed the way it calculates the
licensing payments due to NT Consulting around this time.” Id.
The payments from MMPP to NT Consulting “declined each year from 2020 to
2023” although sales of products utilizing the formulas “were as high or higher than they
had ever been.” Id. ¶¶ 57, 59. MMPP continued refusing to provide information about the
weight of product sold. Id. ¶ 57. Mr. Thomas and Mr. Kaufman attempted, unsuccessfully,
“to discuss the decline in payments with Mr. Turco.” Id. ¶¶ 60–61. At an October 2023
meeting between the three men, Mr. Turco told Mr. Thomas and Mr. Kaufman that, on
Adam’s recommendation, MMPP had switched from calculating the licensing fees on a

per-pound-of-end-product-sold basis to a profit basis. Id. ¶ 66. MMPP made its final
payment to NT Consulting in October 2023 for August 2023 sales. Id. ¶ 62. After October,
Mr. Thomas and Mr. Kaufman attempted to discuss the relationship with Mr. Turco and
Adam, but their efforts were unsuccessful, so on February 14, 2024, counsel for NT
Consulting sent MMPP and Turco a cease-and-desist letter. Id. ¶ 71. Mr. Turco responded
on February 27, 2024, with an email purporting to terminate the licensing agreement
between the parties. Id. ¶ 72. MMPP filed this litigation the next day. Id. ¶ 73. MMPP
continues to sell products that use the formulas at issue. Id. ¶ 76.
NT Defendants assert breach of contract and related counterclaims against MMPP
and also charge MMPP with misappropriation of trade secrets. They bring the same
claims against Mr. Turco individually as a third-party defendant because, they contend,
he is MMPP’s alter ego. Id. ¶¶ 77–89. Mr. Turco moves to dismiss the third-party complaint

against him for lack of personal jurisdiction under Rule 12(b)(2). MMPP and Mr. Turco
jointly move to dismiss NT Defendants’ claims for failure to state a claim under Rule
12(b)(6).
II. MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION
Third-Party Defendant Gary Turco moves to dismiss NT Defendants’ third-party
claims against him because he is not subject to personal jurisdiction in Arkansas in this
case. (Doc. 85).
A. Legal Standard
A plaintiff must state enough facts in a complaint to support a reasonable inference
that the defendant is subject to the jurisdiction of the forum. “When personal jurisdiction
is challenged by a defendant, the plaintiff bears the burden to show that jurisdiction

exists.” Fastpath, Inc. v. Arbela Tech. Corp., 760 F.3d 816, 820 (8th Cir. 2014). “[T]he
plaintiff's prima facie showing must be tested, not by the pleadings alone, but by the
affidavits and exhibits presented with the motions and in opposition thereto.” Dever v.
Hentzen Coatings, Inc., 380 F.3d 1070, 1072 (8th Cir. 2004) (internal quotation marks
omitted).
“Federal courts apply the long-arm statute of the forum state to determine the
existence of personal jurisdiction over the parties,” subject to the dictates of due process.
Kaliannan v. Liang, 2 F.4th 727, 733 (8th Cir. 2021) (quoting Whaley v. Esebag, 946 F.3d
447, 451 (8th Cir. 2020)). Arkansas's long-arm statute permits personal jurisdiction to the
full extent permitted by the Fourteenth Amendment, so the due process analysis is
dispositive. Ark. Code Ann. § 16-4-101; Yanmar Co., Ltd. v. Slater, 2012 Ark. 36, *5. “[T]he
due process analysis depends on whether personal jurisdiction is alleged to be general
or specific.” Kendall Hunt Publ'g Co. v. Learning Tree Publ'g Corp., 74 F.4th 928, 930 (8th

Cir. 2023) (quotation marks and citation omitted). Here, no one contends the Mr. Turco is
subject to general personal jurisdiction in Arkansas.
“In analyzing whether specific jurisdiction comports with due process,” the court
“must decide whether the defendant has certain minimum contacts with the forum state
and whether the plaintiffs’ claims ‘arise out of or relate to the defendant’s contacts.’”
Kaliannan, 2 F.4th at 733 (quoting Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct., 592 U.S.
351, 359 (2021)). The inquiry focuses on “the defendant’s contacts with the forum [s]tate
itself, not the defendant’s contacts with persons who reside there.” Kaliannan, 2 F.4th at
733 (alteration in original) (quoting Walden v. Fiore, 571 U.S. 277, 284 (2014)). “[T]he
defendant’s conduct and connection with the forum State (must be) such that he should

reasonably anticipate being haled into court there.” Mountaire Feeds, Inc. v. Agro Impex,
S.A., 677 F.2d 651, 654-55 (8th Cir. 1982) (quoting World-Wide Volkswagen Corp. v
Woodson, 444 U.S. 286, 295, 297 (1977)). “The unilateral activity of those who claim
some relationship with a nonresident defendant cannot satisfy the requirement of contact
with the forum State.” Mountaire Feeds, Inc., 677 F.2d at 654 (quoting Hanson v. Denckla,
357 U.S. 235, 253); see Walden, 571 U.S. at 286 (“[A] defendant’s contacts with the forum
State may be intertwined with his transactions or interactions with the plaintiff or other
parties. But a defendant’s relationship with a plaintiff or third party, standing alone, is an
insufficient basis for jurisdiction.”).
The Eighth Circuit analyzes specific personal jurisdiction under a five-factor
totality-of-the-circumstances test with the first three factors being of “primary importance”:
“(1) the nature and quality of [the nonresident’s] contacts with the forum state; (2) the
quantity of such contacts; (3) the relation of the cause of action to the contacts; (4) the

interest of the forum state in providing a forum for its residents; and (5) convenience of
the parties.” Kaliannan, 2 F.4th at 733 (quoting Whaley, 946 F.3d at 452). “The third factor
speaks to the particular question of specific jurisdiction,” akin to the Supreme Court's
arise-out-of-or-relate-to requirement, Whaley, 946 F.3d at 452, while the fourth and fifth
factors “are not determinative” in the analysis. Mountaire Feeds, 677 F.2d at 654 (quoting
Aaron Ferer & Sons Co. v. American Compressed Steel Co., 564 F.2d 1206, 1210 n.5
(8th Cir. 1977)).
B. Discussion
With respect to the first two factors, Mr. Turco asserts that he has few contacts with
Arkansas, that most of these contacts were undertaken in his corporate capacity as

President/CEO of MMPP, and that, with respect to third factor, any individual capacity
contacts are not related to this litigation. NT Defendants assert that Mr. Turco was
MMPP’s alter ego and that all MMPP’s contacts via Mr. Turco should be imputed to him
for personal jurisdiction purposes but that in any event, he also has sufficient contacts in
his individual capacity to justify specific jurisdiction.
In regard to Mr. Turco’s individual capacity contacts with Arkansas, NT Defendants
allege the following: (1) Mr. Turco entered into the Licensing Agreement with NT
Defendants in his individual capacity, at least one party to the Agreement (Thomas) was
an Arkansas resident, and the object of the Agreement was intellectual property at least
partly developed in Arkansas; (2) Mr. Turco entered into a Nondisclosure Agreement, one
of the parties to the Agreement was an Arkansas resident, and the Agreement was made
in contemplation of a transaction with an Arkansas resident undertaken by Mr. Turco in
his individual capacity; and (3) Mr. Turco was a member of an Arkansas limited liability
company, BSM Partners, which provided consulting services and marketed the pet foods

at issue to its clients.
To start, “[m]erely entering into a contract with a forum resident does not provide
the requisite contacts between a (nonresident) defendant and the forum state.” Id.
(quoting Iowa Elec. Light & Power Co. v. Atlas Corp., 603 F.2d 1301, 1303 (8th Cir. 1979));
see also K-V Pharm. Co. v. Uriach & CIA, S.A., 648 F.3d 588, 593 (8th Cir. 2011) (“A
contract between a plaintiff and an out-of-state defendant is not sufficient in and of itself
to establish personal jurisdiction over the defendant in the plaintiff’s forum state.”). When
looking to a contractual relationship to “determine[e] whether the defendant purposefully
established minimum contacts within the forum,” the Supreme Court has “emphasized
. . . a ‘highly realistic’ approach that” focuses on “the real object of the business

transaction,” and considers “factors [such as] prior negotiations and contemplated future
consequences, along with the terms of the contract and the parties’ actual course of
dealing.” K-V Pharm Co., 648 F.3d at 593 (quoting Burger King Corp. v. Rudzewicz, 471
U.S. 462, 478–79 (1980)).
Here, the Licensing Agreement entitled Mr. Turco individually to one-third of the
licensing fees owed under the Agreement. The formulas licensed under the Agreement
were purportedly developed in Arkansas (among other places), but the basis for the fees
was MMPP’s sale of products using the formulas. The products were manufactured in
Montana and sold and distributed nationwide. Entry into a contract to receive licensing
fees for use of proprietary formulas originally developed in Arkansas, but manufactured
and sold elsewhere, is not enough to establish that Mr. Turco “purposefully established
minimum contacts” in Arkansas. K-V Pharm Co., 648 F.3d at 593 (quoting Burger King,
471 U.S. at 478-79).

The Nondisclosure Agreement was signed by Mr. Turco in contemplation of a
transaction that never materialized. The discussion of such transaction was undertaken
by Mr. Turco in his individual capacity as owner of MMPP. The transaction did not happen,
and entry into the Nondisclosure Agreement as part of failed negotiations is not related to
claims for breach of an entirely separate contract. This contact cannot satisfy the third
factor for specific personal jurisdiction.
With respect to both Agreements, the underlying proprietary information is
connected with Arkansas insofar as NT Defendants now assert that the formulas were
developed in Arkansas. But the geographic provenance of a trade secret is not, to the
Court’s knowledge, the kind of information that businesses are generally expected to

know. It cannot, therefore, create a connection with a state “such that [a defendant] should
reasonably anticipate being haled into court there.” Burger King, 471 U.S. at 474 (citation
omitted). Nor was NT’s development of formulas in Arkansas contractually mandated—
instead, Mr. Thomas unilaterally decided to develop the formulas in Arkansas, or, if his
own declaration is to be believed, in Arkansas, Illinois, and Utah. (Doc. 5-2, ¶ 11).
Finally, Mr. Turco’s membership in BSM Partners likely constitutes purposeful
availment “of the privilege of conducting activities within the forum State, thus invoking
the benefits and protections of its laws.” Burger King, 471 U.S. at 475. However, NT
Defendants have not identified a relationship between Mr. Turco’s activities as a member
of BSM Partners and MMPP’s failure to pay licensing fees. Because “the third factor . . .
distinguishes between specific and general jurisdiction,” with “specific jurisdiction
refer[ing] to jurisdiction over causes of action arising from or related to a [party’s] actions
within the forum state,” Mr. Turco’s contacts with Arkansas through BSM Partners cannot

support a finding of specific personal jurisdiction over Mr. Turco to adjudicate NT
Defendants’ unrelated breach of contract and trade secret claims. Burlington Indus., Inc.
v. Maples Indus., Inc., 97 F.3d 1100, 1103 (1996) (citation omitted).
Taken together, Mr. Turco’s contacts with Arkansas are insufficient to establish
specific personal jurisdiction. The Eighth Circuit’s decision in Mountaire Feeds is
instructive. There, an out-of-state buyer purchased animal feed from an Arkansas seller.
677 F.2d at 652. After several shipments, “a dispute arose concerning the quality of the
feed,” and the buyer refused to pay. Id. All communications between buyer and seller had
occurred “by mail or telephone,” and the buyer had never “visit[ed] Arkansas to negotiate
or execute the transactions.” Id. The Eighth Circuit concluded that the buyer was not

subject to personal jurisdiction in Arkansas. Id. at 655.
Here, too, “[a]lthough the [formulas] did apparently originate in Arkansas” and “the
parties did make telephone calls [and] exchange correspondence” about the licensing of
the formulas and potential transactions concerning the formulas, the Agreement “did not
require performance in Arkansas,” Mr. Turco did not “enter[ ] Arkansas in connection with
the . . . contract[ ] at issue,” and Mr. Turco did not “supervise [NT Defendants’]
performance in Arkansas.” Id. at 655–56. In short, Mr. Turco’s contacts tie him to NT
Defendants “but not to Arkansas.” Id. at 655. His contacts with NT Defendants are not of
the nature, quality, or quantity necessary to establish specific personal jurisdiction in
Arkansas in this matter.
The fourth and fifth factors “carry less weight and are not dispositive.” Kaliannan,
2 F.4th at 733 (citation modified). They cannot overcome NT Defendants’ failure to show

a constitutionally adequate basis for the Court’s exercise of personal jurisdiction. But, in
keeping with the Eighth Circuit’s dictate, the Court nonetheless considers them. The
fourth factor—the interest of Arkansas in establishing a forum for its residents—weighs in
favor of exercising jurisdiction, at least with respect to NT Consulting and Mr. Thomas,
who are Arkansas residents. The fifth factor—the convenience of the parties—is neutral
because trial in Arkansas would be convenient for NT Consulting and Mr. Thomas, but
inconvenient for everyone else, while trial outside Arkansas would be inconvenient for Mr.
Thomas. Under the totality of the circumstances, NT Defendants have failed to show that
Mr. Turco has sufficient individual contacts with Arkansas to subject him to specific
personal jurisdiction in this case.

NT Defendants also argue that Mr. Turco and MMPP are alter egos, so all of
MMPP’s contacts should be imputed to Mr. Turco for personal jurisdiction purposes. The
Eighth Circuit applies state law “to determine whether and how to pierce the corporate
veil.” Epps v. Stewart Info. Servs. Corp., 327 F.3d 642, 649 (8th Cir. 2003). Under
Arkansas law,1 “[i]t is a nearly universal rule that a corporation and its stockholders are
separate and distinct entities, even though a stockholder may own the majority of the
stock.” Quinn-Matchet Partners, Inc. v. Parker Corp., 85 Ark. App. 143, at 148 (2004)

1 Both parties argue Arkansas law in their briefing, so the Court does not consider whether
the alter ego law of a different state like Montana, MMPP’s state of incorporation, should
apply.
(citing First Com. Bank v. Walker, 333 Ark. 100 (1998)). However, “[i]n special
circumstances,” courts may “disregard the corporate facade when the corporate form has
been illegally abused to the injury of a third party.” Anderson v. Stewart, 366 Ark. 203, at
206 (2006) (citation omitted). “The doctrine of piercing the corporate veil is grounded in

equity and is applied when the facts warrant its application to prevent an injustice.” Id. at
207 (citation omitted). “Piercing the fiction of a corporate entity should be applied with
great caution.” Id. (citation omitted).
“The conditions under which the corporate entity may be disregarded or looked
upon as the alter ego of the principal stockholder vary according to the circumstances of
each case.” Id. at 206–07 (citation omitted). “Common instances where the corporate
form may be disregarded include when the entity attempted to hinder, delay, or defraud
creditors, evade a contract obligation, or perpetuate fraud and injustice generally.”
AgriFund, LLC v. Regions Bank, 2020 Ark. 246, at 8 (2020).
Here, NT Defendants have failed to allege facts supporting the application of the

alter-ego doctrine. Something more than sole ownership and control of a closely held
corporation is required to establish personal jurisdiction under an alter ego theory. Epps,
327 F.3d at 650. Beyond Mr. Turco’s ownership and control of MMPP, NT Defendants
allege that Mr. Turco once proposed a transaction (never consummated) using his
personal letterhead and that he “commingled his personal funds and the funds of
Mountain Meadows by . . . receiving, transferring, depositing, and/or routing the licensing
fee payments intended for him personally (as one-third ownership right in the NT
Formulas) by and through Mountain Meadows without regard to corporate or legal
formalities.” (Doc. 79, ¶¶ 84, 87). NT Defendants point to no other instances in their
decade-plus relationship with Mr. Turco and MMPP where Mr. Turco failed to observe
corporate formalities.
The principal issue with NT Defendants’ argument is that they have made no
showing that the alter-ego doctrine must be applied to prevent an injustice. NT

Defendants assert that, as sole owner of MMPP, Mr. Turco personally profited from MMPP
sales made in violation of the Licensing Agreement, so “allowing Mr. Turco to evade
personal liability while reaping the rewards [of the alleged violations] is the exact type of
injustice the alter-ego doctrine is purposed to prevent.” Id. ¶ 86. But that cannot be what
“injustice” means in this context. NT’s formulation would render the clearly erroneous
result that courts may disregard the corporate form every time a single owner, closely
held corporation is accused of breach of contract. See Quinn-Matchet Partners, 85 Ark.
App. at 146, 149–50 (no veil-piercing to reach “sole shareholder, officer and director” in
breach of contract action). They do not assert that MMPP is undercapitalized such that it
would be unable to pay a judgment should NT prevail. They do not allege that Mr. Turco

misused MMPP to evade contractual obligations imposed on him individually, or vice
versa. They do not accuse Mr. Turco of taking assets out of MMPP to his benefit and the
corporation’s detriment. In fact, they allege the opposite—that Mr. Turco contributed his
personal funds to MMPP’s treasury.
Moreover, while they claim that MMPP fraudulently abused the corporate form by
refusing to provide the sales figures necessary for NT to determine how much money it
was owed under the Licensing Agreement, that refusal was out in the open, not concealed
by falsified sales numbers that could be characterized as fraud. NT Defendants went over
five years without receiving this information and still did not file suit. “Such a delay militates
against a finding of injustice.” Id. at 150 (citing Padgett v. Haston, 279 Ark. 367 (1983)).
Finally, NT Defendants argue that it would be inefficient for the Court to dismiss
their claims against Mr. Turco because they will then be forced to consider parallel

litigation in a different federal court. While “the interstate judicial system's interest in
obtaining the most efficient resolution of controversies” is a proper consideration, the
inefficiency of parallel litigation rests squarely at NT Defendants’ feet. Burger King, 471
U.S. at 477 (citation omitted). “[E]ven if the forum State is the most convenient location
for litigation,” or the most efficient, “the Due Process Clause, acting as an instrument of
interstate federalism, may sometimes act to divest the State of its power to render a valid
judgment.” World-Wide Volkswagen, 444 U.S. at 294.
NT Defendants also ask the Court to order jurisdictional discovery instead of
dismissing their third-party claims. Jurisdictional discovery may be warranted in cases
where “facts necessary to resolving the jurisdictional inquiry are either unknown or

disputed.” Viasystems, Inc. v. EBM-Papst St. Georgen GmbH & Co., KG, 646 F.3d 589,
598 (8th Cir. 2011) (citation omitted). “Courts look to decisions under Rule 56 for guidance
in determining whether to allow discovery on jurisdictional facts.” Johnson v. United
States, 534 F.3d 958, 965 (8th Cir. 2008). “To request discovery under Rule 56(f), a party
must file an affidavit describing,” among other things, “what facts are sought.” Id. NT
Defendants have not done so. Even accepting their allegations as true to the extent they
are not contradicted by Thomas and Kaufman’s earlier declarations, they have failed to
state facts from which the Court could reasonably infer that Mr. Turco is subject to
personal jurisdiction in Arkansas.
Accordingly, the Court concludes that it lacks specific personal jurisdiction over Mr.
Turco in this case. His Motion to Dismiss (Doc. 85) is GRANTED, and Defendants’ third
party claims against him (Counts II, IV, VI,VIII, X, and XIII2) are DISMISSED WITHOUT
PREJUDICE.

III. MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM
MMPP also moves to dismiss NT Defendants’ counterclaims for failure to state a
claim under Rule 12(b)(6). (Doc. 87). NT Defendants assert counterclaims against MMPP
for breach of contract (Count I), violation of the Arkansas Trade Secrets Act (Count III),
misappropriation of trade secrets under the Federal Defend Trade Secrets Act (Count V),
unjust enrichment/quantum meruit (Count VII), promissory estoppel (Count IX),
declaratory judgment (Count XI), and violation of the Montana Uniform Trade Secrets Act
(Count XII). (Doc. 79). MMPP primarily challenges these claims on the ground that they
are time-barred.
NT Defendants agree that the statute of limitations for each of their claims is three

years. (Doc. 92, p. 8). NT Defendants’ claims were first raised in their Answer,
Counterclaim, and Third-Party Complaint (Doc. 29) filed November 8, 2024, so claims
that accrued before November 8, 2021, would ordinarily be time-barred. The parties
disagree about when NT Defendants’ claims accrued and whether the limitations period
should be tolled based on fraudulent concealment.
A. Legal Standard
To survive dismissal under Rule 12(b)(6), the “complaint must contain sufficient
factual matter, accepted as true, to state a claim to relief that is plausible on its face.”

2 NT Defendants’ pleading has two claims labeled as Count XII, likely accidentally. The
Court will refer to the second Count XII which begins on page 53 as Count XIII.
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quotation marks omitted). In ruling, the Court
must “accept as true all facts pleaded by the non-moving party and grant all reasonable
inferences from the pleadings in favor of the nonmoving party.” Gallagher v. City of
Clayton, 699 F.3d 1013, 1016 (8th Cir. 2012) (quotation marks omitted). However, “courts

‘are not bound to accept as true a legal conclusion couched as a factual allegation.’” Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Papasan v. Allain, 478 U.S. 265,
286 (1986)). A claim is plausible on its face when “the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Iqbal, 556 U.S. at 678.
“As a general rule, the possible existence of a statute of limitations defense is not
ordinarily a ground for Rule 12(b)(6) dismissal unless the complaint itself establishes the
defense.” Joyce v. Armstrong Teasdale, LLP, 635 F.3d 364, 367 (8th Cir. 2011) (citation
modified).

B. Discussion
In their breach of contract counterclaim, NT Defendants assert that MMPP
“materially breached the terms of the Licensing Agreement by failing to pay licensing fees
for the seven NT Formulas . . . in accordance with the weight and sales volume of each
Mountain Meadows Product sold from at the latest, 2022 to present” and “by failing to pay
any licensing fees whatsoever from November 2023 to present.” (Doc. 79, ¶¶ 107, 109).
Beginning around May 2019, MMPP “stopped providing the weight and sales volume
information necessary to confirm that the licensing payments to NT Consulting were
calculated in accordance with the Licensing Agreement.” Id. ¶ 97. NT Defendants allege
that MMPP “unilaterally and materially changed the way it calculates the licensing
payments due to NT Consulting around this time.” Id. They contend that this change
resulted in underpayments for some period before payments stopped in 2023, but that
they cannot determine when the underpayments began without the sales weight
information MMPP stopped providing. They plead alternative quasi-contract claims for
unjust enrichment/quantum meruit and promissory estoppel in the event the Court finds

no enforceable contract exists.
NT Defendants also assert trade secret claims under federal and Arkansas law (or,
in the alternative, Montana law) based on MMPP’s use of the formulas “without the
payment of the agreed upon compensation.” (Doc. 79, ¶ 155). Finally, they ask for a
declaratory judgment that the contract between the parties was a licensing agreement,
that the payments to NT Consulting were licensing fees, not commissions, and that Mr.
Kaufman and Mr. Thomas are two-thirds owners of the NT Formulas. Id. ¶ 312–18.
The statute of limitations for oral contract and quasi-contract claims in Arkansas is
three years. Ark. Code Ann. § 16-56-105(1), (3). The statute of limitations for contract and
quasi-contract claims “begins to run when there is a complete and full cause of action,

and in the absence of concealment or wrong, when the injury occurs, not when it is
discovered.” Quality Optical of Jonesboro, Inc. v. Trusty Optical, L.L.C., 365 Ark. 106, 110
(2006) (citations omitted). MMPP asserts that the breach, as alleged by NT Defendants,
occurred in 2019 when MMPP stopped providing sales weights, well outside the
limitations period. NT Defendants say each monthly underpayment or nonpayment of
licensing fees constitutes a new breach, and “they only assert claims from 2022 to
present.” (Doc. 92, p. 10).
With respect to NT Defendants’ breach of contract claim, the Court agrees that
Pennington v. BHP Billiton Petroleum (Fayetteville), LLC, 2021 Ark. 179 (2021), is directly
on point. There, the Arkansas Supreme Court concluded that each monthly
underpayment of oil-and-gas royalties based on “improper deductions of costs”
“constituted a separate cause of action for breach of contract.” Id. at 5–6. “The existence
of monthly underpayments of royalties outside the limitations period does not bar recovery

for underpayments within the limitations period under Arkansas law.” Id. at 6.
Here, the Licensing Agreement is equivalent in all material respects to the royalty
agreement at issue in Pennington. The “alleged breach happened during the monthly
calculation and payment remittance. The damage element of breach of contract would
have been established monthly and, potentially, in a different amount each month.” Id.
The Court therefore concludes that each monthly underpayment or nonpayment
constitute “separate and singular breaches under Arkansas law,” so claims based on
underpayment or nonpayment on or after November 8, 2021, are not time-barred. Id.
Accordingly, MMPP’s Motion (Doc. 87) is DENIED with respect to Count I.
The Court is not persuaded, however, that NT Defendants’ quasi-contract claims

fall within the Pennington rule. Arkansas law does not recognize continuing torts as a
basis for extending the statute of limitations—the clock starts when the wrong giving rise
to the claim first occurs, even if the alleged violation is continuing and the damages from
that claim are increasing over time. Graham v. Catamaran Health Sols. LLC, 940 F.3d
401, 408–09 (8th Cir. 2017); Quality Optical, 365 Ark. at 373 (“[T]here is no dispute that
this [wrongful use of information] first occurred more than three years prior to the filing of
the action, and despite the fact that the information is continuing to be used, this [implied
contract] cause of action is also barred by the applicable three year statute of
limitations.”); Hampton v. Wells Fargo Bank, N.A., 2022 WL 798120, at *11–12 & n.218
(E.D. Ark. Mar. 15, 2022). Here, NT Defendants allege that MMPP “unilaterally and
materially changed the way it calculate[d] the licensing payments due to NT Consulting
around” 2019, resulting in the alleged underpayments. (Doc. 79, ¶ 244). NT Defendants’
right to commence an action based on their quasi-contract claims came into being at that

time, two years outside the limitations period, and their unjust enrichment and promissory
estoppel claims are now time barred.
NT Defendants assert that the statute of limitations should be tolled based on
fraudulent concealment. To toll the statute of limitations on the ground of fraudulent
concealment, NT Defendants “[a]re required to show something more than a continuation
of a prior nondisclosure.” Martin v. Arthur, 339 Ark. 149, 154 (1999) (citation omitted).
They must allege “some positive act of fraud, something so furtively planned and secretly
executed as to keep the plaintiff's cause of action concealed, or perpetrated in a way that
it conceals itself.” Id. at 155. Here, NT Defendants have not alleged any positive act of
fraud. They have alleged that MMPP stopped providing information necessary for the

calculation of the licensing fees owed—an action that NT Defendants were aware of and
complained about to MMPP at that time. The allegations that MMPP failed “to inform or
disclose” do not “rise to the level of a positive act of fraud.” Id. NT Defendants’ pleading
fails to state facts that raise their claim for tolling based on fraudulent concealment beyond
mere speculation. Accordingly, the Motion (Doc. 87) is GRANTED with respects to NT
Defendants’ unjust enrichment (Count VII) and promissory estoppel (Count IX) claims,
and they are DISMISSED WITHOUT PREJUDICE.3

3 MMPP asks the Court to dismiss NT Defendants’ claims with prejudice. It is possible
that, in the course of discovery on their remaining claims, NT Defendants may discover
some positive act of fraud that could entitle them to tolling, so the Court declines to do so.
The trade secret claims are also subject to a three-year statute of limitations. Ark.
Code Ann. § 4-75-603; 18 U.S.C. § 1836(d); Mont. Code Ann. § 30-14-407. But unlike
contract claims, trade secret claims are subject to the “discovery” rule—they accrue when
the misappropriation “is discovered or, by the exercise of reasonable diligence, should

have been discovered.” Ark. Code Ann. § 4-75-603; 18 U.S.C. § 1836(d); Mont. Code
Ann. § 30-14-407. MMPP asserts that NT Defendants knew or should have known about
MMPP’s alleged misappropriation of the formulas by mid-2019 at the latest. At that point,
NT Defendants were aware that MMPP was not providing sales weight information and
that MMPP was claiming the payments were commissions, rather than licensing fees.
NT Defendants assert that they could not have discovered the misappropriation
until 2022 when payments declined drastically but, in any event, “due diligence in the
statute of limitations context is ordinarily a question of fact.” (Doc. 92, p. 13 (quoting Klehr
v. A.O. Smith Corp., 87 F.3d 231, 235 (8th Cir. 1996), aff'd, 521 U.S. 179 (1997))). “Where
the evidence leaves no room for reasonable minds to differ on the issue, however, the

court may properly resolve the issue as a matter of law.” Klehr, 87 F.3d at 235. The Court
will not resolve the question of when NT Defendants should have discovered the alleged
misappropriation on a 12(b)(6) motion without the benefit of such evidence. The Motion
(Doc. 87) is accordingly DENIED with respect to NT Defendants’ trade secret claims
(Counts III, V and XII).
Finally, MMPP asks the Court to dismiss NT Defendants’ declaratory judgment
claim (Count XI). MMPP is correct that “[a] claim for declaratory judgment is not a
separate cause of action but a remedy for a viable underlying cause of action.” Allied
Servs., LLC v. Smash My Trash, LLC, 153 F.4th 600, 610 (8th Cir. 2025). Count XI is
therefore DISMISSED. As requested in their prayer for relief, NT Defendants may of
course continue to seek a declaratory judgment with respect to their underlying claims.
IV. CONCLUSION
For these reasons, Mr. Turco’s Motion to Dismiss for Lack of Personal Jurisdiction
(Doc. 85) is GRANTED, and Counts Il, IV, VI, VIll, X and XIII of the Second Amended
Counterclaim and Second Amended Third-Party Complaint (Doc. 79) are DISMISSED
WITHOUT PREJUDICE. MMPP'’s Motion to Dismiss for Failure to State a Claim (Doc.
87) is GRANTED IN PART AND DENIED IN PART, and Counts VII and IX are
DISMISSED WITHOUT PREJUDICE.
IT IS SO ORDERED on this 23" day of February, 2026.

CHIEF UNITED STATES DISTRICT JUDGE

22

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11266155. Public record. Not legal advice.