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Vecron Exim Ltd. v. XPO Logistics, Inc.

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

May 8, 2019

VECRON EXIM LTD., Plaintiff,
v.
XPO LOGISTICS, INC.; XPO GLOBAL FORWARDING, INC.; AFIF BALTAGI; and PRODUCTION TIRE COMPANY, Defendants.

          MEMORANDUM OPINION AND ORDER

          SIM LAKE, UNITED STATES DISTRICT JUDGE

         Plaintiff Vecron Exim Ltd. ("Vecron" or "Plaintiff") filed this action against defendants XPO Logistics, Inc. and XPO Global Forwarding, Inc. (collectively, "XPO"), Afif Baltagi ("Baltagi"), and Production Tire Company (collectively, "Defendants")[1] alleging that Defendants (and others not parties to this action) engaged in a conspiracy to defraud Plaintiff through purchase and sale transactions for off-the-road mining tires ("Tires").[2] Plaintiff alleges that Jason Adkins ("Adkins"), the owner of Landash Corporation ("Landash"), approached Plaintiff seeking purchase order financing for a transaction between a buyer and seller for purchase of thirty-six Tires.[3] Adkins represented to Plaintiff that the seller was Mid America and the buyer was Production Tire.[4]Plaintiff alleges that Adkins was already the owner of the thirty-six Tires, and that the entire transaction (and accompanying fraudulent documents) was a sham orchestrated to defraud Plaintiff.[5]

         Pending before the court are Production Tire Company's Motion to Dismiss for Lack of Personal Jurisdiction ("Production Tire's Motion to Dismiss") (Docket Entry No. 17) and Defendant XPO's Amended Motion for Leave to Designate Responsible Third Parties ("XPO's Motion to Designate RTPs") (Docket Entry No. 51). For the reasons explained below, Production Tire's Motion to Dismiss will be denied and XPO's Motion to Designate RTPs will be granted.

         I. Production Tire's Motion to Dismiss

          Production Tire argues in its Motion to Dismiss that the court lacks both specific and general personal jurisdiction over it.[6]The court permitted Plaintiff to conduct jurisdictional discovery.[7] After deposing Production Tire's corporate representative, Hector Esquijerosa ("Esquijerosa"), and obtaining documents from Production Tire, Plaintiff filed its Amended Opposition to Production Tire's Motion to Dismiss on January 25, 2019.[8]Production Tire filed its Reply to Plaintiff's Amended Opposition on February 4, 2019.[9]

         A. Standard of Review

          Dismissal for lack of personal jurisdiction is governed by Federal Rule of Civil Procedure 12(b)(2). When a 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, 124 S.Ct. 66 (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, 115 S.Ct. 322 (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. ..." Ruston Gas Turbines, Inc. v. Donaldson Co., Inc., 9 F.3d 415, 418 (5th Cir. 1993).

         B. Applicable Law

         The court may exercise personal jurisdiction over a nonresident 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, 131 S.Ct. 68 (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, 66 S.Ct. 154, 158 (1945) (quoting Milliken v. Meyer, 61 S.Ct. 339, 343 (1940)). A plaintiff satisfying these two requirements raises a presumption that exercise of jurisdiction over the defendant is reasonable, and the burden shifts to the defendant to present "a compelling case that the presence of some other considerations would render jurisdiction unreasonable." Burger King Corp. v. Rudzewicz, 105 S.Ct. 2174, 2185 (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 [he] 'reasonably anticipate[d] being haled into court'" in the forum. 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).

         1. General Jurisdiction

         A court may exercise general jurisdiction over non-resident defendants "when their affiliations with the State are so * continuous and systematic' as to render them essentially at home in the forum State." Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S.Ct. 2846, 2851 (2011). "Establishing general jurisdiction is 'difficult' and requires 'extensive contacts between a defendant and a forum.'" Sangha v. Navig8 ShipManagement Private Limited, 882 F.3d 96, 101-02 (5th Cir. 2018) (quoting Johnston v. Multidata Systems International Corp., 523 F.3d 602, 609 (5th Cir. 2008)). Vague allegations "that give no indication as to the extent, duration, or frequency of contacts are insufficient to support general jurisdiction." Johnston, 523 F.3d at 610.

         2. Specific Jurisdiction

         A court may exercise specific jurisdiction when the alleged injuries arise from or are directly related to the non-resident 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, 104 S.Ct. 1868, 1872 n.8 (1984)); Quick Technologies. 313 F.3d at 344. To determine whether specific jurisdiction exists, the 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 [himself] 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, 100 S.Ct. 559, 567 (1980)).

         There are three parts to a purposeful availment inquiry. First, only the defendant's contacts with the forum are relevant, not the unilateral activity of the plaintiff or a third party. Sangha, 882 F.3d at 103 (citing Walden v, Fiore, 134 S.Ct. 1115, 1122 (2014) ("We have consistently rejected attempts to satisfy the defendant-focused 'minimum contacts' inquiry by demonstrating contacts between the plaintiff (or third parties) and the forum State.")). Second, the contacts relied upon must be purposeful rather than random, fortuitous, or attenuated. Id. (citing Walden, 134 S.Ct. at 1123) . Lastly, the defendant must seek some benefit, advantage, or profit by availing itself of the jurisdiction. Burger King, 105 S.Ct. at 2183. Since specific jurisdiction is claim specific, a plaintiff bringing multiple claims that arise out of different contacts of the defendant with the forum must establish specific personal jurisdiction for each claim. Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 274 (5th Cir. 2006) .

         C. ...


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