Deprag, Inc. v. Mine Shield, LLC.
| Decision Date | 03 January 2014 |
| Docket Number | CIVIL ACTION NO. 4:12-cv-320 |
| Parties | DEPRAG, INC., Plaintiff, v. MINE SHIELD, LLC., Defendant. |
| Court | U.S. District Court — Eastern District of Texas |
The following motion, response, reply and surreply are pending before the court:
1. Mine Shield, LLC's motion to dismiss for lack of personal jurisdiction and/or improper venue, or alternatively to transfer on forum non conveniens grounds (docket entry #25).
2. Deprag, Inc.'s response to Mine Shield, LLC's motion to dismiss for lack of personal jurisdiction and/or improper venue, or alternatively to transfer on forum non conveniens grounds (docket entry #28).
3. Mine Shield, LLC's reply to Deprag, Inc.'s response to Mine Shield, LLC's motion to dismiss for lack of personal jurisdiction and/or improper venue, or alternatively to transfer on forum non conveniens grounds (docket entry #31).
4. Deprag, Inc.'s surreply to Mine Shield, LLC's reply to Deprag's response to Mine Shield, LLC's motion to dismiss for lack of personal jurisdiction and/or improper venue, or alternatively to transfer on forum non conveniens grounds (docket entry #33).Having considered the Defendant's motion to dismiss for lack of personal jurisdiction and/or improper venue, or, alternatively to transfer on forum non conveniens grounds, the court is of the opinion that the motion should be denied.
On April 26, 2012, Deprag, Inc. ("Deprag") filed its original petition against Mine Shield, LLC ("Mine Shield") in the 431st Judicial District court of Denton County, Texas. Mine Shield removed the action to this court based on diversity of citizenship. Thereafter, on June 22, 2012, Deprag filed an amended complaint. On July 6, 2012, Mine Shield filed an amended answer and amended counterclaim. On January 18, 2013, Deprag filed its original answer to Mine Shield's amended counterclaim.
Deprag is a Texas corporation with its principal place of business in Lewisville, Texas. Pl. Resp. To Mine Shield's Mtn. to Dismiss, p. 1, ¶ 1. Mine Shield is a Kentucky limited liability corporation that manufactures underground mine shelters with its principal place of business in Lancaster, Kentucky. Mine Shield's Mtn. to Dismiss (Memorandum of Mine Shield), p. 2.
On or about March 22, 2011, Terry Huffman ("Huffman"), Mine Shield's Vice President for Marketing, was exploring new options for underground mine shelter air motors and came across Deprag's web site. Id. Huffman then contacted Lori Logan ("Logan"), Marketing Manager for Deprag in Lewisville, Texas, in order to discuss the possibility of Deprag producing air motors for Mine Shield. Id. Deprag forwarded Mine Shield's request to its German parent company, Deprag Shulz GMBH u. Co. ("Deprag Germany"), who designed and manufacturedthe air motor prototype. Mine Shield's Mtn. to Dismiss (Memorandum of Mine Shield), p. 2; Pl. Resp. to Mine Shield's Mtn. to Dismiss, p. 2, ¶ 4. After Mine Shield tested the prototype air motor, it sent a purchase order to Deprag for the purchase of 200 air motors. Mine Shield's Mtn. to Dismiss (Memorandum of Mine Shield), p. 4; Pl. Resp. to Mine Shield's Mtn. to Dismiss, p. 3, ¶ 7.
After shipment of a portion of the air motors, Mine Shield's Quality Manager, Justin Conner ("Conner"), notified Deprag via email that problems with the air motors were discovered during testing and inspection. Mine Shield's Mtn. to Dismiss (Memorandum of Mine Shield), p. 5; Pl. Resp. to Mine Shield's Mtn. to Dismiss, p. 3-4, ¶ 10. Lori Logan of Deprag directed Conner to return the motors to Deprag's Lewisville office, where Logan forwarded the fans to Deprag Germany for testing. Mine Shield's Mtn. to Dismiss (Memorandum of Mine Shield), p. 5. After receiving Deprag Germany's testing results, Mine Shield sent Deprag a letter, on or about March 23, 20121, notifying it that Mine Shield would no longer accept products or services from Deprag. Id. The letter further requested reimbursement for costs incurred on the building of the prototype. Id.
On April 26, 2012, Deprag filed suit against Mine Shield in Texas state court, alleging breach of oral contract, quantum meruit, and attorney fees. Id. at 6. Mine Shield removed the action to this court and filed an answer and counterclaim, citing lack of personal jurisdiction and improper venue. Id. Mine Shield then filed a motion to dismiss for lack of personal jurisdiction and/or improper venue, or alternatively to transfer on forum non conveniens grounds. Id.
In determining whether there is personal jurisdiction over a non-resident defendant, a two-step analysis is conducted. Ham v. La Cienega Music Co., 4 F.3d 413, 415 (5th Cir. 1993). First, the court must determine whether the long-arm statute of the forum state permits the exercise of jurisdiction, provided that there is not a controlling federal statute regarding service of process. Id. Second, it must be determined whether such exercise of jurisdiction comports with due process. Id. The Texas long-arm statute has the same scope as the Constitution. Alpine View Co. Ltd. v. Atlas Copco AB, 205 F.3d 208, 214 (2000); see also Tex. Civ. Prac. & Rem. Code Ann. §§ 17.041-17.045 (West 2008). As a result, the determination of a non-resident's amenability to personal jurisdiction under the Texas long-arm statute is a federal style inquiry as to whether jurisdiction comports with federal constitutional guarantees. Bullion v. Gillespie, 895 F.2d 213, 216 (5th Cir. 1990). To satisfy due process clause requirements, the non-resident must have some minimum contacts with the forum which result from an affirmative act or acts, and it cannot be unfair or unreasonable to require the non-resident to defend the suit in the forum state. D.J. Investments, Inc. v. Metzeler Motorcycle Tire Agent Gregg, Inc. , 754 F.2d 542, 545 (5th Cir. 1985).
Specific jurisdiction exists where the plaintiff alleges a cause of action which grows out of or relates to a contact between the defendant and the forum state. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 8 (1984). Elements which must exist for the court to exercise specific jurisdiction are: (1) the foreign defendant must purposefully direct his activities at residents of the forum, and (2) the cause of action must arise from or be connected with such activities. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472-73 (1985).
Conversely, general jurisdiction occurs when "a State exercises personal jurisdiction over a defendant in a suit not arising out of or related to the defendant's contacts with the forum . . . ." Helicopteros, 466 U.S. at 414 n. 9. General jurisdiction exists only when the defendant's contacts with the State constitute "continuous and systematic" general contacts with the forum. Id. at 416. It can hardly be said that a defendant who has continuous and systematic contacts within a given state has not purposefully availed itself of the privileges and benefits of the laws of the state.
After a non-resident defendant files a motion to dismiss for lack of personal jurisdiction, the burden of establishing the district court's jurisdiction lies with the party seeking to invoke the court's jurisdiction. Alpine, 205 F.3d at 215. When, as here, no evidentiary hearing is conducted, "the party seeking to assert jurisdiction must present sufficient facts as to make out only a prima facie case supporting jurisdiction." Id. (citation omitted). When considering the motion to dismiss, the court must accept as true the plaintiff's uncontroverted allegations and resolve all factual disputes in favor of the plaintiff. Id. (citations omitted).
Under the forum non conveniens doctrine, a court may decline jurisdiction and actually dismiss a case, even when the case is properly before the court, if it is more convenient to try the case in another forum. In re: Volkswagen of America, Inc., 545 F.3d 304, 313 (5th Cir. 2008) (citation omitted). Under 28 U.S.C. § 1404(a), the party seeking a transfer of venue must "clearly demonstrate that a transfer is for the convenience of parties and witnesses, in the interest of justice." Id. at 315. Here, Mine Shield refers to the common law doctrine of forum non conveniens, but ultimately asks for a transfer of this case under 28 U.S.C. § 1404(a) to the United States District court for the Eastern District of Kentucky.
When weighing the motion to transfer venue under § 1404(a), the court considers the private interest factors: (1) the relative ease of access to sources of proof; (2) the availability of compulsory process to secure the attendance of witnesses; (3) the cost of attendance for willing witnesses; and (4) all other practical problems that make trial of a case easy, expeditious and inexpensive. Id. The court also considers the four public interest factors: (1) administrative difficulties caused by court congestion; (2) local interest in adjudicating local disputes; (3) unfairness of burdening citizens in an unrelated forum with jury duty; (4) avoidance of unnecessary problems in conflict of laws. Id.
Mine Shield argues that it does not have sufficient minimum contacts with the State of Texas. Mine Shield asserts that it "merely entered into a contract...
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