Fintech Fund, FLP v. Horne, Civil Action No. H–18–1125

CourtUnited States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
Writing for the CourtSIM LAKE, UNITED STATES DISTRICT JUDGE
Citation327 F.Supp.3d 1007
Parties FINTECH FUND, FLP, Plaintiff, v. Ralph HORNE, Defendant.
Decision Date06 July 2018
Docket NumberCivil Action No. H–18–1125

327 F.Supp.3d 1007

FINTECH FUND, FLP, Plaintiff,
v.
Ralph HORNE, Defendant.

Civil Action No. H–18–1125

United States District Court, S.D. Texas, Houston Division.

Signed July 6, 2018


327 F.Supp.3d 1014

Christina Elise Ponig, Brett Solberg, DLA Piper, LLP, Houston, TX, for Plaintiff.

Laurence Eliot Stuart, Elise Susanne Miller, Stuart, PC, Houston, TX, for Defendant.

MEMORANDUM OPINION AND ORDER

SIM LAKE, UNITED STATES DISTRICT JUDGE

Plaintiff, Fintech Fund, FLP ("Fintech," "FTF," or "Plaintiff"), filed this action on April 10, 2018, against defendant, Ralph

327 F.Supp.3d 1015

Horne ("Horne" or "Defendant"), asserting claims for violations of the Defend Trade Secrets Act, 18 U.S.C. § 1839 and the Computer Fraud and Abuse Act, 18 U.S.C. § 1030 et seq. 1 Pending before the court is Defendant Ralph Horne's 12(b)(2) Motion to Dismiss for Lack of Personal Jurisdiction and Subject Thereto, 12(b)(1) and 12(b)(3) Motion to Dismiss for Lack of Subject Matter Jurisdiction and Improper Venue ("Defendant's Motion to Dismiss") (Docket Entry No. 18). For the reasons stated below, the court concludes that the Defendant's Motion to Dismiss should be granted.

I. Background

Marcus Andrade is the founder of several technology companies in the biometric, data cross sharing, blockchain, and digital currency market2 and Plaintiff is a financial technology company. Andrade is a limited partner of Plaintiff and is responsible for its management.3 One of Andrade's companies licensed Plaintiff to enter into sublicenses for use of the technology. Plaintiff licensed its technology to its affiliate, CrossVerify Limited ("CrossVerify"), a United Kingdom ("UK") company of which Plaintiff owns the controlling shares.4 CrossVerify is a biometric authentication company that uses blockchain technology to create an authentication utility that complies with anti-money laundering and know-your-customer regulations across industries.5 Defendant Ralph Horne is a citizen of the UK who works and lives in the UK.6 He became CrossVerify's Chief Executive Officer in May of 2017.7 Defendant signed a Non–Disclosure, Confidentiality, Inventions, and Non–Solicitation Agreement ("Agreement"), which governs Defendant's responsibilities regarding Plaintiff's confidential information and trade secrets.8 Plaintiff alleges that in November of 2017 Defendant deceived Plaintiff into giving Defendant access to Plaintiff's U.S. server by falsely telling Mr. Andrade that he needed the login credentials so that a vendor could perform a security audit.9 Plaintiff alleges that in March of 2018 Defendant, or people acting in concert with him, gained access to Plaintiff's servers and downloaded confidential and proprietary information.10 Plaintiff immediately

327 F.Supp.3d 1016

terminated its license with CrossVerify, and Defendant resigned on April 9, 2018.11

Defendant moves to dismiss this action arguing that the court lacks personal jurisdiction over him and lacks subject matter jurisdiction because the parties' dispute is subject to mandatory arbitration in London, England.12 On May 22, 2018, Fintech filed Plaintiff's Response. Defendant filed a reply and Plaintiff filed a surreply.13

II. Motion to Dismiss for Lack of Personal Jurisdiction

Defendant argues that the court lacks personal jurisdiction over him.14 Plaintiff responds that the court has personal jurisdiction over Defendant either under the traditional minimum contacts analysis or under Federal Rule of Civil Procedure 4(k) (2).15

A. Standard of Review

Dismissal for lack of personal jurisdiction is governed by Federal Rule of Civil Procedure 12(b)(2). When a foreign defendant moves to dismiss for lack of personal jurisdiction under Rule 12(b)(2), "the plaintiff 'bears the burden of establishing the district court's jurisdiction over the defendant.' " Quick Technologies, Inc. v. Sage Group PLC, 313 F.3d 338, 343 (5th Cir. 2002), cert. denied, 540 U.S. 814, 124 S.Ct. 66, 157 L.Ed.2d 29 (2003) (quoting Mink v. AAAA Development LLC, 190 F.3d 333, 335 (5th Cir. 1999) ). "When the district court rules on a motion to dismiss for lack of personal jurisdiction 'without an evidentiary hearing, the plaintiff may bear his burden by presenting a prima facie case that personal jurisdiction is proper.' " Id. (quoting 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) ). "In making its determination, the district court may consider the contents of the record before the court at the time of the motion, including 'affidavits, interrogatories, depositions, oral testimony, or any combination of the recognized methods of discovery.' " Id. at 344 (quoting Thompson v. Chrysler Motors Corp., 755 F.2d 1162, 1165 (5th Cir. 1985) ). The court must accept as true the uncontroverted allegations in the plaintiff's Complaint and must resolve in favor of the plaintiff any factual conflicts. Guidry v. United States Tobacco Co., Inc., 188 F.3d 619, 625 (5th Cir. 1999). However, the court is not obligated to credit conclusory allegations, even if uncontroverted. Panda Brandywine Corp. v. Potomac Electric Power Co., 253 F.3d 865, 869 (5th Cir. 2001). "Absent any dispute as to the relevant facts, the issue of whether personal jurisdiction may be exercised over a nonresident defendant is a question of law to be determined ... by th[e] Court." Ruston Gas Turbines, Inc. v. Donaldson Co., Inc., 9 F.3d 415, 418 (5th Cir. 1993).

B. Applicable Law

1. Personal Jurisdiction Under the 14th Amendment

A federal district court may exercise personal jurisdiction over a nonresident

327 F.Supp.3d 1017

defendant if "(1) the forum state's long-arm statute confers personal jurisdiction over that defendant; and (2) the exercise of personal jurisdiction comports with the Due Process Clause of the Fourteenth Amendment." McFadin v. Gerber, 587 F.3d 753, 759 (5th Cir. 2009), cert. denied, 562 U.S. 827, 131 S.Ct. 68, 178 L.Ed.2d 23 (2010). Since the Texas long-arm statute extends as far as constitutional due process allows, the court considers only the second step of the inquiry. Id.

Exercise of personal jurisdiction over a nonresident defendant comports with federal due process guarantees when the nonresident defendant has established minimum contacts with the forum state, and the exercise of jurisdiction "does not offend 'traditional notions of fair play and substantial justice.' " International Shoe Co. v. State of Washington, Office of Unemployment Compensation and Placement, 326 U.S. 310, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 61 S.Ct. 339, 343, 85 L.Ed. 278 (1940) ). Once a plaintiff satisfies these two requirements, a presumption arises that jurisdiction is reasonable, and the burden of proof and persuasion shifts to the defendant opposing jurisdiction to present "a compelling case that the presence of some other considerations would render jurisdiction unreasonable." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 2185, 85 L.Ed.2d 528 (1985). "The 'minimum contacts' inquiry is fact 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, 587 F.3d at 759.

"There are two types of 'minimum contacts': those that give rise to specific personal jurisdiction and those that give rise to general personal jurisdiction." Lewis v. Fresne, 252 F.3d 352, 358 (5th Cir. 2001). Because the parties agree that the court does not have general jurisdiction over Defendant, the relevant inquiry is whether the court can exercise specific jurisdiction over Defendant.16

A court may exercise specific jurisdiction when the alleged injuries arise from or are directly related to the nonresident defendant's contacts with the forum state. Gundle Lining Construction Corp. v. Adams County Asphalt, Inc., 85 F.3d 201, 205 (5th Cir. 1996) (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 104 S.Ct. 1868, 1872 n.8, 80 L.Ed.2d 404 (1984) ); and Quick Technologies, 313 F.3d at 344. To determine whether specific jurisdiction exists, a court must "examine the relationship among the defendant, the forum, and the litigation to determine whether maintaining the suit offends traditional notions of fair play and substantial justice." Gundle Lining, 85 F.3d at 205. Even a single contact can support specific jurisdiction if the defendant " 'purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.' " Burger King, 105 S.Ct. at 2183. "The non-resident's 'purposeful availment' must be such that the defendant 'should reasonably anticipate being haled into court' in the forum state." Ruston Gas, 9 F.3d at 419 (citing World–Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980) ).

There are three parts to a purposeful availment inquiry. First, only the defendant's contacts with the forum are

327 F.Supp.3d 1018...

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5 practice notes
  • The Naughtys LLC v. Does, Civil Action 4:21-CV-492-0
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Northern District of Texas
    • March 3, 2022
    ...contacts analysis in the assertion of specific jurisdiction-but the United States is the relevant forum." Fintech Fund, FLP v. Home, 327 F.Supp.3d 1007, 1022 (S.D.Tex. 2018). The plaintiff has the initial burden to "plead and prove the requisite contacts with the United States and plead Rul......
  • Thomas v. Grundfos, Civil Action No. 4:18-CV-0557
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
    • November 5, 2018
    ...to plead and prove the requisite contacts with the United States and plead Rule 4(k)(2)'s applicability."); Finch Fund, FLP v. Horne, 327 F. Supp. 3d 1007 (S.D. Tex. 2018), appeal docketed, No. 18-20449 (5th Cir. July 18, 2018) ("The plaintiff has the initial burden to plead and prove the r......
  • Competitive Golf Advantage LLC v. Elite Golf Tech., Civil Action H-21-3091
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
    • January 3, 2022
    ...to create the ‘minimum contacts' necessary to establish personal jurisdiction in the forum state.”); cf. Fintech Fund, FLP v. Horne, 327 F.Supp.3d 1007, 1020 (S.D. Tex. 2018) (the court had personal jurisdiction over a claim brought by a Texas company when the defendant made telephone calls......
  • Fintech Fund, F.L.P. v. Horne, No. 18-20449
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • November 10, 2020
    ...circumstances set forth in 5TH CIR. R. 47.5.4. 1. 18 U.S.C. § 1030(g). 2. 18 U.S.C. § 1836(b)(1). 3. Fintech Fund, FLP v. Horne, 327 F. Supp. 3d 1007, 1021-23 (S.D. Tex. 2018). 4. Id. at 1026. 5. Id. at 1028. 6. Clemens v. McNamee, 615 F.3d 374, 378 (5th Cir. 2010) (citing Felch v. Tranport......
  • Request a trial to view additional results
5 cases
  • The Naughtys LLC v. Does, Civil Action 4:21-CV-492-0
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Northern District of Texas
    • March 3, 2022
    ...contacts analysis in the assertion of specific jurisdiction-but the United States is the relevant forum." Fintech Fund, FLP v. Home, 327 F.Supp.3d 1007, 1022 (S.D.Tex. 2018). The plaintiff has the initial burden to "plead and prove the requisite contacts with the United States and plead Rul......
  • Thomas v. Grundfos, Civil Action No. 4:18-CV-0557
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
    • November 5, 2018
    ...to plead and prove the requisite contacts with the United States and plead Rule 4(k)(2)'s applicability."); Finch Fund, FLP v. Horne, 327 F. Supp. 3d 1007 (S.D. Tex. 2018), appeal docketed, No. 18-20449 (5th Cir. July 18, 2018) ("The plaintiff has the initial burden to plead and prove the r......
  • Competitive Golf Advantage LLC v. Elite Golf Tech., Civil Action H-21-3091
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
    • January 3, 2022
    ...to create the ‘minimum contacts' necessary to establish personal jurisdiction in the forum state.”); cf. Fintech Fund, FLP v. Horne, 327 F.Supp.3d 1007, 1020 (S.D. Tex. 2018) (the court had personal jurisdiction over a claim brought by a Texas company when the defendant made telephone calls......
  • Fintech Fund, F.L.P. v. Horne, No. 18-20449
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • November 10, 2020
    ...circumstances set forth in 5TH CIR. R. 47.5.4. 1. 18 U.S.C. § 1030(g). 2. 18 U.S.C. § 1836(b)(1). 3. Fintech Fund, FLP v. Horne, 327 F. Supp. 3d 1007, 1021-23 (S.D. Tex. 2018). 4. Id. at 1026. 5. Id. at 1028. 6. Clemens v. McNamee, 615 F.3d 374, 378 (5th Cir. 2010) (citing Felch v. Tranport......
  • Request a trial to view additional results

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