Def. Distributed v. Grewal

• Decision Date: 19 August 2020
• Docket Number: No. 19-50723,19-50723
• Citation: 971 F.3d 485
• Parties: DEFENSE DISTRIBUTED ; Second Amendment Foundation, Incorporated, Plaintiffs - Appellants v. Gurbir S. GREWAL, Attorney General of New Jersey, in his official capacity, Defendant - Appellee
• Court: U.S. Court of Appeals — Fifth Circuit

971 F.3d 485

DEFENSE DISTRIBUTED ; Second Amendment Foundation, Incorporated, Plaintiffs - Appellants

v.Gurbir S. GREWAL, Attorney General of New Jersey, in his official capacity, Defendant - Appellee

No. 19-50723

United States Court of Appeals, Fifth Circuit.

FILED August 19, 2020

Chad Flores, Esq., Beck Redden, L.L.P., Houston, TX, for Plaintiffs-Appellants.

Jeremy M. Feigenbaum, Esq., Glenn Moramarco, Assistant Attorney General, Office of the Attorney General for the State of New Jersey, Trenton, NJ, Alexander Hardiman, Esq., Attorney, Pillsbury Winthrop Shaw Pittman, L.L.P., New York, NY, Ronald Casey Low, Pillsbury Winthrop Shaw Pittman, L.L.P., Austin, TX, for Defendant-Appellee.

Before JONES, ELROD, and HIGGINSON, Circuit Judges.

EDITH H. JONES, Circuit Judge:

This appeal arises from the ongoing efforts of New Jersey's Attorney General Gurbir Grewal and several of his peers to hamstring the plaintiffs’ distribution of materials related to the 3D printing of firearms. To defend against their efforts, the plaintiffs filed this lawsuit, alleging, inter alia , infringement of their First Amendment rights and state law claims. Grewal countered with a motion to dismiss for lack of personal jurisdiction. The district court, relying principally on this court's decision in Stroman Realty, Inc. v. Wercinski , 513 F.3d 476 (5th Cir. 2008), granted Grewal's motion. Stroman , however, is distinguishable from this case and does not compel dismissal. Based on well-established principles of personal jurisdiction, we conclude that Grewal is subject to the jurisdiction of Texas courts. We REVERSE and REMAND for further proceedings.

I

Plaintiff Defense Distributed is a Texas company operated for the purpose of promoting popular access to firearms. To carry out this purpose, it produces and makes accessible information related to the 3D printing of firearms and publishes and distributes such information to the public. Plaintiff Second Amendment Foundation, Inc. ("SAF") is a nationwide, nonprofit membership organization that "promotes the right to keep and bear arms by supporting education, research, publications, and legal efforts about the Constitution's right to privately own and possess firearms and the consequences of gun control." Across the nation, SAF members seek the digital firearms information created by Defense Distributed, circulate their own digital firearms information by utilizing Defense Distributed's facilities, and republish digital firearms information independently.

Defense Distributed began distributing files related to the 3D printing of firearms in December 2012. It did so by publishing files to its defcad.org and defcad.com websites and letting visitors freely download them. It also distributed digital firearms information via mail and at a brick-and-mortar public library in Austin, Texas. Defense Distributed's efforts were initially met with opposition from the United States Department of State.¹ But, after a period of litigation, the parties reached a settlement agreement that granted Defense Distributed a license to publish its files.

Shortly thereafter, nine Attorneys General, including New Jersey Attorney General Grewal, filed suit on behalf of their respective states in the Western District of Washington to enjoin the State Department from authorizing the release of Defense Distributed's files. They argued that the State Department's license to Defense Distributed constituted an ultra vires about-face that violated the Administrative Procedure Act and jeopardized the states’ statutory and regulatory schemes for firearms. The Western District of Washington quickly issued a temporary restraining order, followed closely by a nationwide preliminary injunction.²

Just before the Attorneys General sued in Washington, Defense Distributed and SAF brought the instant action in the Western District of Texas challenging select enforcement actions taken by the state Attorneys General. Of relevance to this appeal, plaintiffs alleged these actions by Grewal: (1) sending a cease-and-desist letter threatening legal action if Defense Distributed published its files; (2) sending letters to third-party internet service providers based in California urging them to terminate their contracts with Defense Distributed; (3) initiating a civil lawsuit against Defense Distributed in New Jersey;³ and (4) threatening Defense Distributed with criminal sanctions at a live press conference. Further, these actions, coupled with the injunctive orders issued in the Washington litigation, have caused Defense Distributed to cease publication of its materials. The plaintiffs asserted, inter alia , that these actions infringed the exercise of their First Amendment freedoms and constituted tortious interference with the State Department's settlement agreement.

Grewal moved to dismiss for lack of personal jurisdiction.⁴ The plaintiffs, meanwhile, sought a preliminary injunction. After holding a hearing and considering the parties’ arguments, the court granted Grewal's motion and dismissed the action without prejudice.

The district court's order addressed two primary issues: judicial estoppel and minimum contacts. The plaintiffs had argued that Grewal should be judicially estopped from challenging the court's jurisdiction because, in the Washington litigation, Grewal asserted that Defense Distributed had minimum contacts with Washington, and that argument was inconsistent with the position taken in Grewal's motion to dismiss. The court disagreed, concluding that Grewal's position in the Washington case "is in no way inconsistent with [his] argument here that [he] ha[s] no minimum contacts with Texas."

Next, the court determined that the plaintiffs failed to establish that Grewal had "minimum contacts with the State of Texas." The court found most instructive this court's decision in Stroman , in which it was held that sending a cease-and-desist letter into Texas was, by itself, insufficient to exercise personal jurisdiction over an out-of-state defendant. Just as in Stroman , the court explained, Grewal did not "purposefully avail [himself] of the benefits of Texas law like someone actually ‘doing business’ in Texas" when he demanded that Defense Distributed cease publication of its materials. See Stroman , 513 F.3d at 484. "It follows that [Grewal] could not have reasonably anticipated being haled into federal court in Texas to defend [the enforcement of his state's laws]." The court rejected the plaintiffs’ attempt to distinguish Stroman based on Grewal's additional alleged contacts, finding that they were either the plaintiffs’ own contacts with Texas or were contacts not "expressly aimed at Texas." The district court also rejected the plaintiffs’ invocation of the "effects test" pronounced in Calder v. Jones , 465 U.S. 783, 104 S. Ct. 1482, 79 L.Ed.2d 804 (1984), because it believed only the plaintiffs—and not Texas more generally—were affected by Grewal's enforcement activities. Grewal's relationship to Texas, in other words, was a "mere fortuity."

The plaintiffs’ motion to alter or amend the judgment was denied, and they timely appealed.

II

In this court, the plaintiffs continue to press the arguments that the doctrine of judicial estoppel bars Grewal from arguing against personal jurisdiction, and Grewal has established sufficient minimum contacts with Texas to subject him to the jurisdiction of Texas's courts. We agree with the second argument and thus need not address the judicial estoppel claim.

"We review the district court's dismissal for lack of personal jurisdiction de novo ." Monkton Ins. Servs., Ltd. v. Ritter , 768 F.3d 429, 431 (5th Cir. 2014). At the motion to dismiss stage, the plaintiffs bear the burden of presenting sufficient evidence to support a prima facie case of jurisdiction. Kelly v. Syria Shell Petroleum Dev. B.V. , 213 F.3d 841, 854 (5th Cir. 2000). We "accept the plaintiff's uncontroverted, nonconclusional factual allegations as true and resolve all controverted allegations in the plaintiff's favor." Panda Brandywine Corp. v. Potomac Elec. Power Co. , 253 F.3d 865, 868 (5th Cir. 2001).

Personal jurisdiction exists where the forum state's long-arm statute extends to the nonresident defendant and the exercise of jurisdiction comports with due process. Carmona v. Leo Ship Mgmt., Inc. , 924 F.3d 190, 193 (5th Cir. 2019). "Because Texas's long-arm statute is coextensive with the Due Process Clause of the Fourteenth Amendment, the two inquiries merge." Id. Though personal jurisdiction can be general or specific, this case implicates only the latter. Texas's long-arm statute permits the exercise of specific jurisdiction over any defendant "doing business" in the state, including defendants who "commit[ ] a tort in whole or in part in th[e] state." TEX. CIV. PRAC. & REM. CODE § 17.042.

"The constitutional requirement for specific jurisdiction is that the defendant has ‘minimum contacts’ with the forum state such that imposing a judgment would not ‘offend traditional notions of fair play and substantial justice.’ " Stroman , 513 F.3d at 484 (quoting Int'l Shoe Co. v. State of Wash., Office of Unemployment Comp. & Placement , 326 U.S. 310, 316, 66 S. Ct. 154, 158, 90 L.Ed. 95 (1945) ). This court has framed the inquiry as a three-step analysis: "(1) whether the defendant has minimum contacts with the forum state, i.e., whether it purposely directed its activities toward the forum state or purposefully 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." Seiferth v. Helicopteros Atuneros, Inc. , 472 F.3d 266, 271 (5th Cir. 2006) (quoting Nuovo Pignone, SpA v. STORMAN ASIA M/V , 310 F.3d 374, 378 (5th Cir. 2002) ).

The issue on appeal is whether Grewal has established sufficient minimum contacts with Texas. The parties’...