BHL Boresight, Inc. v. Geo-Steering Solutions, Inc.
| Decision Date | 26 June 2017 |
| Docket Number | CIVIL ACTION NO. 4:15-CV-00627 |
| Parties | BHL BORESIGHT, INC., et al, Plaintiffs, v. GEO-STEERING SOLUTIONS, INC., et al, Defendants. |
| Court | U.S. District Court — Southern District of Texas |
Pending in the above-referenced cause are the following Defendants' Motions to Dismiss: Statoil Gulf Services LLC ("Statoil") and Alfonso Zaza's ("Zaza"), Doc. 230; Geo-Steering Solutions, Inc. and Geo-Steering Solutions USA, Inc. (collectively, "GSSI"), Doc. 232; Pleasant Solutions, Doc. 246; Neil Tice ("Tice"), Doc. 259; Darrell Joy ("Joy"), Doc. 317; and Byron Molloy ("Molloy"), Docs. 333, 334. Molloy's Opposed Motion to Strike Arguments from BHL Boresight's Sur-Reply is also pending. Doc. 357. After considering the Motions, the Court denies Molloy's Motion to Strike, and grants in part and denies in part Defendants' Motions to Dismiss for the reasons that follow.
Because the facts of this case have been extensively recited in this court's prior Opinion and Order, Doc. 140, the Court only recites what is necessary to understand the context in which the present motions arose.
The parties in this case dispute the source of Defendant GSSI's geosteering software, Geo-Direct. Plaintiff BHL contends that Defendants unlawfully used its proprietary software to develop Geo-Direct. As a result, BHL initiated this suit against Defendants GSSI and Statoil on March 10, 2015. Doc. 1.
In its Original Complaint, BHL asserted claims against Statoil and GSSI for violations of the Computer Fraud and Abuse Act ("CFAA"), Electronic Communications Privacy Act ("ECPA") (Counts I-III), unjust enrichment (Count V), and civil conspiracy (Count VIII). Id. ¶¶ 28-51, 60-64, 77-80. BHL also alleged misappropriation of trade secrets (Count IV) and civil theft (Count VII) against GSSI and breach of contract (Count VI) against Statoil. Id. ¶¶ 52-59, 65-76. GSSI responded by asserting counterclaims against BHL for: request for declaratory judgment of independent creation of the GSSI software (Count I), request for declaratory judgment that the GSSI software is an original work (Count II), request for declaratory judgment that GSSI did not copy BHL's software in creating GSSI's software (Count III), Lanham Act violation (Count IV), common law unfair competition (Count V), state antitrust violation (Count VI), tortious interference with existing contract (Count VII), and tortious interference with prospective business relationships (Count VIII). Doc. 19 at ¶¶ 10-56. The parties filed cross motions to dismiss and on March 29, 2016, this Court dismissed BHL's ECPA and unjust enrichment claims and GSSI's state antitrust, tortious interference with existing contract, and tortious interference with prospective business relationships counterclaims without prejudice. Doc. 140.
After receiving permission from the Court, BHL filed its First Amended Complaint ("FAC") on August 29, 2016, in which it amended its claims and added additional Defendants Pleasant Solutions, Joy, Tice, Molloy, and Zaza. Doc. 209-1. All Defendants responded by filing the pending Motions to Dismiss. Docs. 230, 232, 246, 259, 317, 334. These Motions are now ripe for consideration.
Two Defendants, Molloy and Pleasant Solutions, attack their inclusion in this suit withtheir Motions to Dismiss for Lack of Personal Jurisdiction pursuant to Federal Rule 12(b)(2). Because jurisdictional matters must be resolved first, the Court begins with these Motions. See, e.g., United States v. Tex. Tech Univ., 171 F.3d 279, 285 n.9 (5th Cir. 1999) ().
The Due Process Clause of the Fourteenth Amendment precludes a federal court from assuming personal jurisdiction over a nonresident defendant "unless the defendant has meaningful 'contacts, ties, or relations' with the forum state." Luv N' Care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 469 (5th Cir. 2006) (citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 319, 66 S. Ct. 154, 90 L. Ed. 95 (1945)). Such contacts can give rise to either general or specific jurisdiction. Id. Where a defendant has "continuous and systematic general business contacts" with the forum state, the court may exercise "general" jurisdiction over any action brought against that defendant. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-15 & n.9, 104 S. Ct. 1868, 80 L. Ed. 2d 404 (1984). Where contacts are less pervasive, the court may still exercise "specific" jurisdiction "in a suit arising out of or related to the defendant's contacts with the forum." Id. at 414 n.8. This case presents only the question of specific jurisdiction.
The Fifth Circuit has reduced the specific-jurisdiction inquiry into a three-step analysis: "'(1) whether the defendant . . . purposely directed its activities toward the forum state or purposely availed itself of the privileges of conducting activities there; (2) whether the plaintiff's cause of action arises out of or results from the defendant's forum-related contacts; and (3) whether the exercise of personal jurisdiction is fair and reasonable.'" Id. (quoting Nuovo Pignone v. STORMAN ASIA M/V, 310 F.3d 374, 378 (5th Cir. 2002)). "The 'minimum contacts' inquiry isfact intensive and no one element is decisive; rather the touchstone is whether the defendant's conduct shows that it 'reasonably anticipates being haled into court.'" McFadin v. Gerber, 587 F.3d 753, 759 (5th Cir. 2009) (citing Luv N' Care, 438 F.3d at 470). Thus, a defendant may not be haled into a jurisdiction "solely as a result of 'random,' 'fortuitous,' or 'attenuated' contacts, or of the 'unilateral activity of another party or third person.'" Id. (citing Electrosource, Inc., v. Horizon Battery Techs., Ltd., 176 F.3d 867, 871-72 (5th Cir. 1999)).
In addition to meeting due-process requirements, a federal court's exercise of personal jurisdiction must satisfy the requirements of the forum state's "long-arm" statute. Clemons v. McNamee, 615 F.3d 374, 378 (5th Cir. 2010) (citing Latshaw v. Johnston, 167 F.3d 2008, 2011 (5th Cir. 1999)). Texas's long-arm statute, however, is coextensive with the Due Process Clause. Id.
When faced with a motion to dismiss for lack of personal jurisdiction, the court may consider admissible affidavits and other materials. Thompson v. Chrysler Motors Corp., 755 F.2d 1162, 1165 (5th Cir. 1985). In the absence of a full and fair evidentiary hearing, however, a plaintiff need only make a prima facie showing of jurisdiction through its own affidavits and supporting material. Cooper v. McDermott Int'l, Inc., 62 F.3d 395, 1995 WL 450209, at *5 (5th Cir. 1995) (unpublished) (citing Thompson, 755 F.2d at 1165). "Prima facie" means "[s]ufficient to establish a fact or raise a presumption unless disproved or rebutted." Black's Law Dictionary 1310 (9th ed. 2009).
"To decide whether a prima facie case exists, [the court] must accept as true [the plaintiff's] 'uncontroverted allegations, and resolve in its favor all conflicts between the facts contained in the parties' affidavits and other documentation.'" Nuovo Pignone, 310 F.3d at 378 (quoting Kelly v. Syria Shell Petroleum Dev. B.V., 213 F.3d 841, 854 (5th Cir. 2000)). Thisgeneral rule of resolving conflicts in favor of the plaintiff only applies to affidavits and other admissible evidence, however, not merely allegations. Cooper, 62 F.3d 395 (citing Fernandez-Montes v. Allied Pilots Assoc., 987 F.2d 278, 284 (5th Cir. 1993)).
As the law makes clear, the procedural posture of the case is important; at this early stage, the Court need not decide whether BHL has proven its contentions, only whether, resolving conflicts in the affidavits in its favor, it has made a prima facie case for personal jurisdiction. See Campbell Pet Co. v. Miale, 542 F.3d 879, 888 (Fed. Cir. 2008). Before the Court may do so, however, it must address a number of objections to the parties' declarations.
In this case, both parties submitted materials to support their positions. BHL objects to Molloy's Declaration and Pleasant Solutions CEO Thomas Stachura's Affidavit on the grounds that both contain assertions that are irrelevant, hearsay, conclusory, have little probative value, and/or go beyond the issue of personal jurisdiction. Docs. 278, 347. The Court addresses the objected-to submissions in turn.
Specifically, BHL argues that the Stachura Declaration should be disregarded because Stachura lacks personal knowledge about communications between Pleasant Solutions employees and GSSI, making his statements about interactions between GSSI and Pleasant Solutions hearsay. Doc. 278 at 12-13. BHL further argues that Stachura's Declaration has little probative value because he is an interested witness offering conclusory statements. Id. at 14-15. While BHL requests that the Court disregard the Affidavit in its entirety, BHL only identifies four allegedly problematic statements:
The Court sustains BHL's objections to the first statement, although it fails to see what strategic advantage BHL gains thereby. BHL argues that the first statement is a "conclusory and legalistic argument that is no substitute for...
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