Head v. Las Vegas Sands, LLC

Decision Date27 March 2018
Docket NumberCIVIL ACTION NO. 7:17–CV–00426
Citation298 F.Supp.3d 963
Parties Sheri W. HEAD, et al, Plaintiffs, v. LAS VEGAS SANDS, LLC ; dba the Venetian Resort Hotel Casino/the Palazzo Resort Hotel Casino, et al, Defendants.
CourtU.S. District Court — Southern District of Texas

Dennis A. Longoria, Jr., Pro Hac Vice; Edmundo O. Ramirez, Erick Gustavo Holguin, Minerva Inez Zamora, Ellis Koeneke et al, Emily Ann Gearhart, Ellis Koeneke and Ramirez LLP, McAllen, TX, for Plaintiffs.

John A. Guerra, Alyssa Paige Wickern, Brock Person Guerra Reyna, P.C., San Antonio, TX, Jaime Arturo Saenz, Colvin Chaney et al, Elizabeth Ferguson Herrera, Colvin, Saenz, Rodriguez & Kennamer, L.L.P., Brownsville, TX, Victor Rodriguez, Jr., Victor Rodriguez Law Firm, Daniel K. Worthington, Ramon Worthington, PLLC, McAllen, TX, for Defendants.

OPINION

Micaela Alvarez, United States District JudgeThe Court now considers Las Vegas Sands, LLC d/b/a the Venetian Resort Hotel Casino/the Palazzo Resort Hotel Casino (the "Venetian");1 MGM Grand Hotel, LLC ("MGM Hotel");2 MGM Resorts International Inc., ("MGM Resorts"),3 Desert Palace, Inc., d/b/a/ Caesar's Palace ("Caesar's Palace");4 Desert Palace LLC ("Desert Palace");5 Harvey's Tahoe Management Company, Inc., d/b/a Harrah's Casino Hotel Lake Tahoe ("Harrah's"); and Caesars Entertainment Corporation's ("Caesars Entertainment")6 (collectively "Defendants") motions to dismiss for lack of personal jurisdiction.7 The Court also considers Sheri and Haylee Head's ("Plaintiffs") responses,8 and Defendants' replies.9 After duly considering the record and relevant authorities, the Court GRANTS Defendants' motions, and DISMISSES the case WITHOUT PREJUDICE for lack of personal jurisdiction over Defendants.

I. BACKGROUND

This case arises because William Washington Head Jr. ("Decedent")—a high-stakes Las Vegas gambler—tragically committed suicide after plunging into debt.10 Plaintiffs allege that Defendants lured Decedent into debt (and thus into psychological distress and ultimately suicide) by enticing him to gamble in Las Vegas and extending large lines of credit for him to use in the process.11 The alleged enticements included: over $1 million dollars of "customer retention" rebates,12 free first-class travel, luxurious accommodations, luxury items, vacations, food, and beverages.13 Allegedly, Defendants "were aware of the amount of money [Decedent] had received in casino credit and were aware of his huge gambling losses, and they continued to extend additional credit to him, pushing him further into a never ending spiral of debt."14

Decedent's estate entered probate in the Hidalgo County Probate Court.15 Defendants thereafter "filed suit in the pending probate case seeking to enforce their alleged claims on [Decedent's] estate."16 In response, Plaintiffs—Decedent's heirs—filed the instant suit against Defendants in the Hidalgo County Probate Court, alleging wrongful death and intentional infliction of emotional distress ("IIED"), employing the Texas survival statute as a vehicle for relief.17 Defendants subsequently removed18 and filed the instant motions to dismiss for lack of personal jurisdiction.19 Plaintiffs responded,20 and Defendants replied,21 rendering the motions ripe for review. The Court now turns to its analysis.

II. PRELIMINARY MATTERS

The Court first addresses some preliminary matters concerning the ripeness of the instant motions, as well as the scope of the Court's personal jurisdictional analysis.

A. Plaintiffs' request for jurisdictional discovery

Embedded within Plaintiffs' responses to the instant motions are requests for jurisdictional discovery.22 In the Rule 12(b)(2) context, a Court has discretion to permit a party to conduct jurisdictional discovery.23 However, the movant must make a "preliminary showing of jurisdiction" which includes "factual allegations that show with reasonable particularity the possible existence of [personal jurisdiction]."24 Furthermore, the movant must "[1] identify the discovery needed, [2] the facts expected to be obtained thereby, and [3] how such information would support personal jurisdiction."25

Here, for reasons further discussed below, Plaintiffs fail to make a preliminary showing of jurisdiction. Moreover, their requests for jurisdictional discovery contain no rationale or accompanying explanation as to what facts are likely to be discovered which would meaningfully support personal jurisdiction. Plaintiffs' briefing does contain certain unsupported jurisdictional allegations, but—as further discussed below—they are of no consequence, even if they were to be supported by future discovery. For these reasons, Plaintiffs' requests for jurisdictional discovery are DENIED . Consequently, the instant motions are ripe for review.

B. Defendants' motions to strike Sheri Head's affidavit

Sheri Head's two-page affidavit is Plaintiffs' only evidence supporting personal jurisdiction.26 Defendants present objections to this affidavit and move to strike it.27 Specifically, Defendants contend that the affidavit does not comply with Federal Rule of Civil Procedure 56, and that certain statements contained within it are substantively inadmissible hearsay, conclusory, and inadmissible under (uniquely) applicable state evidence rules.28

Defendants each cite a single Fifth Circuit case— Johnston v. Multidata Sys. Int'l Corp.29 —for the proposition that a plaintiff's personal jurisdiction evidence must meet Rule 56 standards.30 However, Johnston simply does not support this proposition. The Court cannot otherwise find any cases within the Fifth Circuit supporting this proposition. Importantly, the instant motions were filed under Rule 12(b)(2), not Rule 56. Thus, Rule 56 evidentiary standards do not directly apply to Plaintiffs' evidence, and Defendants' Rule 56 –based objections to Sheri Head's affidavit are unavailing.

Moreover, the general rules of evidence concerning admissibility (e.g. , the rule against hearsay etc.) do not apply in the Rule 12(b)(2) context. Case law within the Fifth Circuit is very scant on this issue, but the only district court which appears to have directly addressed it held that a plaintiff's supporting evidence does not need to be admissible to be considered at the Rule 12(b)(2) stage: "Whether the evidence submitted...will ultimately be admissible at the trial is not relevant at this stage of the proceedings."31 The underlying rationale is two-fold. First , where, as here, the Rule 12(b)(2) motion is ruled on without an evidentiary hearing, the plaintiff only needs to set forth a prima facie case of personal jurisdiction.32 This is less than a preponderance of the evidence.33 Second , and more importantly, Rule 12(b)(2) movants can ultimately hold the plaintiff to his/her burden of establishing personal jurisdiction by a preponderance of the evidence (and subject to the Federal Rules of Evidence) at trial.34

One district case has applied the Federal Rules of Evidence to a plaintiff's Rule 12(b)(2) evidence.35 However, that court launched into the objections to the plaintiff's Rule 12(b)(2) evidence without addressing the predicate question of whether the Federal Rules of Evidence apply.36 That court cited no authority or rationale for this approach, and it ignored persuasive authority to the contrary. It did cite a Fifth Circuit opinion for the proposition that "the court may consider admissible affidavits and other materials"37 in the 12(b)(2) context. However, the cited authority does not itself indicate that a plaintiff's Rule 12(b)(2) evidence must be admissible.

The Fifth Circuit has indicated that in the Rule 12(b)(2) context, a plaintiff's hearsay statements contained within an affidavit may not be considered, so long as those statements are "directly contradicted by defendants' affidavits."38 However, Defendants have not submitted any affidavits directly contradicting relevant hearsay statements contained within Sheri Head's affidavit. Thus, those hearsay statements may still be considered consistent with Fifth Circuit precedent. Nevertheless, the Court need not consider any of Plaintiffs' conclusory statements, even if uncontroverted.39 Except insofar as this may be the case (the Court will make it clear when and if it is), Defendants' objections and motions to strike Sheri Head's affidavit are DENIED . The Court now turns to the legal standard governing the instant motions.

III. LEGAL STANDARD
A. General framework

Rule 12(b)(2) authorizes dismissal based on the defense that a court lacks jurisdiction over the defendant.40 The plaintiff bears the burden of establishing personal jurisdiction over foreign defendants,41 but need only establish a prima facie showing of personal jurisdiction to survive a motion to dismiss when there is no evidentiary hearing.42 A prima facie showing is less demanding than proof by a preponderance of the evidence.43 Such a showing can be made using any recognized discovery method.44 Absent a hearing, the court must accept as true any non-conclusory jurisdictional allegations in the plaintiff's complaint and resolve all factual conflicts presented by the parties' submitted evidence in the plaintiff's favor.45 However, courts should not countenance vague, overgeneralized, or otherwise conclusory allegations.46

Two conditions must be met to establish personal jurisdiction: "(1) the forum state's long-arm statute [must confer] personal jurisdiction over that defendant; and (2) the exercise of personal jurisdiction [must] compl[y] with the due process requirements of the Fourteenth Amendment of the United States Constitution."47 The first step in the analysis can generally be ignored in Texas federal courts because the Texas long-arm statute is purportedly co-extensive with Fourteenth Amendment Due Process.48 Thus, if the exercise of personal jurisdiction complies with the due process requirements of the Fourteenth Amendment, which it must, then the analysis is complete because personal jurisdiction...

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