Driving Force Techs., Inc. v. Panda Distrib., Inc.
| Decision Date | 10 May 2012 |
| Docket Number | CIVIL ACTION NO. 4:10-cv-24 |
| Parties | DRIVING FORCE TECHNOLOGIES, INC., Plaintiff, v. PANDA DISTRIBUTION, INC., d/b/a PANDA SECURITY USA, PANDA SECURITY S.L., d/b/a PANDA SECURITY INTERNACIONAL Defendants. |
| Court | U.S. District Court — Eastern District of Texas |
(consolidated 4:10cv25)
Panda Security S.L. has filed a Motion to Dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2) and alternatively a Motion to Dismiss Driving Force Technologies'(DFT) claim against it pursuant to Federal Rule of Civil Procedure 12(b)(6) (Dkt. 137). These two consolidated cases contain similar issues arising out of separate contracts. In a separate report to be filed contemporaneously with this one, the Court has recommended that partial summary judgment be granted, leaving only claims as to intentional interference as to External Technology (ET) and breach of contract and injunctive relief as to DFT.
As to the DFT claim, Panda USA and DFT entered into a contract. According to DFT, the contract was supplemented. The contract attached clearly indicates that the agreement was with Panda USA. A complaint will survive a motion to dismiss if its facts, accepted as true, "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007). A court's analysis generally should focus exclusively on whatappears in the complaint and its proper attachments. Fin. Acquisition Partners LP v. Blackwell, 440 F.3d 278, 286 (5th Cir. 2006). A plaintiff "must allege facts that support the elements of the cause of action in order to make out a valid claim." City of Clinton v. Pilgrim's Pride Corp., 632 F.3d 148, 152-53 (5th Cir. 2010). There are no allegations as to a contract between Panda Spain and DFT only that USA is the alter ego of Spain. For the reasons noted below, DFT has failed to state a claim as to Panda Spain notwithstanding whether Panda Spain should be amendable to jurisdiction.
When the district court rules on the motion to dismiss before holding an evidentiary hearing, the court must accept as true all uncontroverted allegations in the complaint and must resolve any factual disputes in favor of the plaintiff. See Stripling v. Jordan Prod. Co., 234 F.3d 863, 869 (5th Cir. 2000). When a nonresident defendant moves to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing the district court's jurisdiction over the nonresident. Wilson v. Belin, 20 F.3d 644, 648 (5th Cir.), cert. denied, 513 U.S. 930, 115 S. Ct. 322, 130 L.Ed.2d 282 (1994); Gardemal v. Westin Hotel Co., 186 F.3d 588, 592 (5th Cir. 1999). In making its determination, the court may consider affidavits, interrogatories, depositions, oral testimony, or any combination of recognized discovery methods. Allred v. Moore & Peterson, 117 F.3d 278, 281 (5th Cir.1997), cert. denied, 522 U.S. 1048, 118 S. Ct. 691, 139 L. Ed. 2d 637 (1998); Thompson v. Chrysler Motors Corp., 755 F.2d 1162, 1165 (5th Cir.1985).
A federal district court may exercise personal jurisdiction over a nonresident defendant if (1) the long-arm statute of the forum state permits the exercise of personal jurisdiction over the defendant; and (2) the exercise of such jurisdiction by the forum state is consistent with due process under the United States Constitution. Revell v. Lidov, 317 F.3d 467, 469 (5th Cir. 2002). Becausethe Texas long-arm statute confers jurisdiction to the limits of the federal constitution, Access Telecom, Inc. v. MCI Telecomms. Corp., 197 F.3d 694, 716 (5th Cir.1999), cert. denied, 531 U.S. 917 (2000); Hall v. Helicopteros Nacionales de Colombia, S.A., 638 S.W.2d 870, 872 (Tex. 1982), rev'd on other grounds, 466 U.S. 408, 104 S .Ct. 1868, 80 L. Ed. 2d 404 (1984), the Court need only concern itself with the federal due process inquiry. Latshaw v. Johnston, 167 F.3d 208, 211 (5th Cir.1999); Wilson, 20 F.3d at 647 n. 1; see also Tex. Civ.Prac.&Rem.Code Ann. § 17.041 et seq. (Texas long-arm statute).
To satisfy due process, (1) the nonresident must have some minimum contact with the forum that results from an affirmative act on its part such that the nonresident defendant could anticipate being haled into the courts of the forum state; and (2) it must be fair or reasonable to require the nonresident to defend the suit in the forum state. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-78, 105 S.Ct. 2174, 85 L. Ed. 2d 528 (1985); Gulf Consol. Servs., Inc. v. Corinth Pipeworks, S.A., 898 F.2d 1071, 1073 (5th Cir.), cert. denied, 498 U.S. 900, 111 S.Ct. 256, 112 L. Ed. 2d 214 (1990). The Due Process Clause ensures that persons have a "fair warning that a particular activity may subject [them] to the jurisdiction of a foreign sovereign." Burger King, 471 U.S. at 472 (quoting Shaffer v. Heitner, 433 U.S. 186, 218, 97 S. Ct. 2569, 53 L. Ed. 2d 683 (1977) (Stevens, J., concurring)).
To establish minimum contacts with the forum, a nonresident defendant must do some act by which it "purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Id. at 474-75 (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228, 2 L. Ed. 2d 1283 (1958)). In determining whether the exerciseof jurisdiction is appropriate, the Supreme Court has focused less on presence in the forum state as a means to establish jurisdiction and looked increasingly to whether a defendant's contacts with the forum state make it reasonable to require the defendant to defend the particular suit in that forum. Quill Corp. v. North Dakota, 504 U.S. 298, 307, 112 S. Ct. 1904, 119 L. Ed. 2d 91 (1992). "[T]he constitutional touchstone remains whether the defendant purposefully established 'minimum contacts' in the forum [s]tate." Burger King, 471 U.S. at 474 (quoting Int. Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 90 L. Ed. 95 (1945)). The "purposeful availment" requirement "ensures that a defendant will 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 a third person.'" Id. at 475 (citations omitted). A plaintiff must establish a substantial connection between the nonresident defendant and the forum state. Jones v. Petty-Ray Geophysical, Geosource, Inc., 954 F.2d 1061, 1068 n.9 (5th Cir.), cert. denied, 506 U.S. 867, 113 S.Ct. 193, 121 L. Ed. 2d 136 (1992); Bearry v. Beech Aircraft Corp., 818 F.2d 370, 374 (5th Cir.1987) (citing Burger King, 471 U.S. at 475 n. 18; McGee v. Int. Life Ins. Co., 355 U.S. 220, 223, 78 S. Ct. 199, 2 L. Ed. 2d 223 (1957)).
The minimum contacts requirement is satisfied by either: (1) contacts that give rise to general personal jurisdiction or (2) contacts that give rise to specific personal jurisdiction. Wilson, 20 F.3d at 647. General jurisdiction exists when the nonresident's contacts with the forum state are unrelated to the cause of action but are "continuous and systematic." Id.
In contrast, specific jurisdiction exists if the cause of action is related to, or arises from, the defendant's contacts with the forum state. Id. A single act can be sufficient to establish personaljurisdiction over a nonresident defendant. See Lewis v. Fresne, 252 F.3d 352, 358-59 (5th Cir. 2001). However, when relying on a single instance of contact, the plaintiff's cause of action must "result[ ] from alleged injuries that arise out of or relate to" that instance of contact. Cent. Freight Lines Inc. v. APA Transp. Corp., 322 F.3d 376, 380 (5th Cir. 2003) (citing Burger King, 471 U.S. at 472).
If the minimum contacts test is met, the court must also decide whether the exercise of personal jurisdiction "comport[s] with fair play and substantial justice." Burger King, 471 U.S. at 476. In making this determination, the Supreme Court has set forth a number of factors that courts must use in making this determination. A court must consider the burden on the defendant, the interests of the forum state, and the plaintiff's interest in obtaining relief. It must also weigh in its determination the interstate judicial system's interest in obtaining the most efficient resolution of controversies; and the shared interest of the several states in furthering fundamental substantive social policies. Asahi Metal Indus. Co. v. Superior C. of California, Solano County, 480 U.S. 102, 113, 107 S. Ct. 1026, 94 L. Ed. 2d 92 (1987) (internal quotations omitted).
Relying on Cont. Bank N.A. v. Meyer, 10 F.3d 1293 (7th Cir. 1993), ET contends that Panda Security S.L. waived it jurisdictional defense by participating in a Court-ordered mediation. The question squarely presented is whether Panda Security S.L. proceeded in a manner inconsistent with its right to contest personal jurisdiction.
The parties were ordered by the Court to proceed to mediation. They had no choice. Panda Security S.L. has always maintained it was not subject to personal jurisdiction. By analogy, where a party objects to arbitrability but nevertheless participates in the arbitration proceedings, waiver ofthe challenge to arbitral jurisdiction will not be presumed. Kaplan v. First Options of Chicago, Inc., 19 F.3d 1503, 1510 (3d Cir.1994), aff'd, 514 U.S. 938, 115 S. Ct. 1920, 131 L. Ed. 2d 985; see also Pa. Power Co. v. Local Union # 272, IBEW, 886 F.2d 46, 50 (3d Cir.1989). The Court thus finds that there was no waiver of Panda Security S.L.'s motion to dismiss. Taking Plaintiffs' argument to the extreme, responding to discovery or participating in depositions would operate as a waiver. See also Kawasaki Heavy Indus. Ltd. v. Bombardier Recreational Prod., 660 F.3d 988 (7th Cir. 2011) () See also Brokerwood Intern. (U.S.), Inc. v. Cuisine Crotone, Inc., 104 Fed. App'x. 376 (5th...
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