United States District Court, N.D. Texas, Dallas Division
FINDINGS, CONCLUSION, AND RECOMMENDATION OF THE
UNITED STATES MAGISTRATE JUDGE
HARRIS TOLIVER UNITED STATES MAGISTRATE JUDGE
before the Court for findings and a recommended disposition
is Defendant Allsec Technologies, Ltd. Motion to
Dismiss Under Fed. R. Civ. P. 12(b)(2) for Lack of
Personal Jurisdiction, Doc. 11; see
also Doc. 35 (District Judge Scholer's order of
reference). As stated here, the motion should be
filed their Amended Complaint in October 2018,
alleging Defendants violated the Fair Labor Standards Act.
Doc. 9. Specifically, Plaintiffs, who perform
“Anti-Money Laundering [AML] Services” duties in
Defendants' Irving, Texas offices, contend that
Defendants improperly classified them and other similarly
situated workers as independent contractors and paid them an
hourly rate. Doc. 9 at 5-8. Plaintiffs aver that Defendants
failed to pay them overtime compensation at the appropriate
rate for hours worked in excess of 40 per week. Doc. 9 at
7-8. Defendant Allsec Technologies, Ltd. (“ATL”),
which operates out of India, now moves to dismiss the case
against it for lack of personal jurisdiction.
jurisdiction is “an essential element” of
district court jurisdiction, “without which the court
is powerless to proceed to an adjudication.”
Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 584
(1999) (internal quotation marks omitted). To exercise
personal jurisdiction over a non-resident defendant in Texas,
the Court must determine whether jurisdiction is authorized
under the state's long-arm statute and if the exercise of
jurisdiction would comport with the Due Process Clause of the
Fourteenth Amendment. Panda Brandywine Corp. v. Potomac
Elec. Power Co., 253 F.3d 865, 867 (5th Cir. 2001). The
Texas long-arm statute authorizes the exercise of personal
jurisdiction to the extent allowed by federal constitutional
law. Id. Thus, to determine whether it has personal
jurisdiction, the Court need only consider whether its
exercise of jurisdiction in this case would comport with
federal due process requirements.
the federal constitutional test of due process, a plaintiff
must overcome two hurdles to justify the exercise of
jurisdiction over a nonresident defendant. The first prong of
the analysis is the “minimum contacts”
test. A non-resident defendant establishes
minimum contacts with the forum state by (1) purposely
availing itself of the benefits of conducting activities in
the forum state; or (2) purposely directing its activities at
residents in the forum state and “litigation results
from alleged injuries that ‘arise out of or relate to
those activities'” such that it “should
reasonably anticipate being haled into court” there.
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472,
474-76 (1985) (quotation omitted). Parties who
“deliberately” engage in significant activities
within the forum state or reach out beyond their state and
create “continuing relationships and obligations with
citizens of another state” are subject to suit in the
forum state for the consequences of their activities.
Id. at 473 (quoting Travelers Health Assn. v.
Virginia, 339 U.S. 643, 647 (1950)). In conducting the
minimum contacts analysis, the court must look to the
defendant's contacts with the forum state itself, not the
defendant's contacts with persons who reside there.
Walden v. Fiore, 571 U.S. 277, 284-85 (2014). Thus,
“the plaintiff cannot be the only link between the
defendant and the forum. Rather, it is the defendant's
conduct that must form the necessary connection with the
forum state . . . . ” Id. at 285.
minimum contacts analysis has been further refined by the
Supreme Court into specific and general jurisdiction.”
Specific personal jurisdiction normally requires a showing
that: (1) the non-resident defendant purposefully directed
its activities to the forum state; (2) the plaintiff's
cause of action arises out of or results from the
defendant's forum-related contacts; and (3) the
forum's exercise of personal jurisdiction in the
particular case is reasonable (i.e., comports with
“fair play and substantial
justice.”). Burger King Corp. v. Rudzewicz ,
471 U.S. 462, 472-73, 476 (1985). Agency relationships also
may be relevant to establish specific jurisdiction.
See Daimler AG v. Bauman, 571 U.S. 117, 135
n.13 (2014) (stating that “a corporation can
purposefully avail itself of a forum by directing its agents
or distributors to take action there.”).
as here, a non-resident defendant challenges personal
jurisdiction with a motion filed pursuant to Rule 12(b)(2) of
the Federal Rules of Civil Procedure, the plaintiff need only
present prima facie evidence to support its burden
of demonstrating facts sufficient to support jurisdiction.
Revell v. Lidov, 317 F.3d 467, 469 (5th Cir. 2002).
To that end, the “court must accept the plaintiff's
‘uncontroverted allegations, and resolve in its favor
all conflicts between the facts contained in the parties'
affidavits and other documentation.'” Id.
(quotation omitted). In doing so, the court may consider
affidavits, interrogatories, depositions, oral testimony, or
any combination of recognized discovery methods. Id.
(citation omitted). Nevertheless, a court need not credit
conclusory allegations even if they are uncontroverted.
Panda Brandywine Corp. v. Potomac Elec. Power Co.,
253 F.3d 865, 868 (5th Cir. 2001).
contends that it was formed, operates, and has its principal
place of business in India, and is thus not subject to
personal jurisdiction in Texas. Doc. 11 at 1-2. ATL further
avers that it is not subject to specific jurisdiction in
Texas because Plaintiffs have not shown that their claims
arise out of or relate to any contacts that ATL had with
Texas. Doc. 11 at 3-4. In particular, ATL asserts that it did
not recruit, hire, pay, or supervise Plaintiffs despite the
blanket claims in their complaint against all of the Allsec
entities, which were made on “information and
belief.” Doc 11 at 3-5.
support of its motion, ATL has submitted the declaration of
Sam Moses, an associate director of Defendant Allsectech,
Inc. (“Allsectech”) who states that he helped
manage the projects that are the subject of this case. Doc.
12 at 3. Moses asserts that neither Defendant Allsec
Financial nor Allsectech are operated by ATL, as: (1) Allsec
Financial and/or Allsectech hired Plaintiffs as independent
contractors; (2) Plaintiffs performed their services for
Allsec Financial and/or Allsectech; (3) Plaintiffs were paid
by either Allsec Financial and/or Allsectech depending on the
terms of their agreements; (4) Plaintiffs were not recruited
by any of the defendants; and (5) ATL is not involved in the
day-to-day performance of Plaintiffs' services. Doc. 12
respond that because ATL owns 100 percent of Defendants
Retreat Capital Management (“Retreat”) and
Allsectech, over whom the Court has personal jurisdiction,
the same bases for jurisdiction may be imputed to ATL. Doc.
26 at 1-3, 5-6. Even in the absence of imputed
jurisdiction, Plaintiffs assert that ATL has sufficient
minimum contacts with Texas for jurisdictional purposes. Doc.
26 at 7-8. To that end, Plaintiffs have submitted evidence
showing that: (1) ATL is the parent company of Retreat and
Allsectech, Doc. 26-2 at 5-6 (Moses Dep.); (2) Retreat,
Allsectech, and ATL share a common website, which is
available for viewing in the United States, Doc. 26-2 at 6
(Moses Dep.) & Doc. 13 at 3 (Defts. Answer); (3)
Defendants utilize the website “to market and inform of
products and services offered by the Allsec Entities or their
subsidiaries, ” Doc. 13 at 3 (Defts. Answer); (4) ATL
records the AML income derived from its Retreat and
Allsectech subsidiaries as its own income, Doc. 26-3 at 5
(ATL Annual Report); (5) ATL had some Allsectech workers in
Texas remotely conduct interviews of prospective employees in
India, who were ultimately hired to work in India, Doc. 26-4
at 3-4 (Decl. of Norman Love); (6) throughout the project at
issue, Retreat and Allsectech utilized ATL's timekeeping
system and employee handbook, which includes instructions on
how workers are expected to clock in and out each workday,
Doc. 26-2 at 7-8 (Moses Dep.); (7) ATL sent some of its
employees from India to Texas on a three-month rotation to
train people employed through Retreat and Allsectech,
instruct them how to perform their duties and show them how
the project was to be done, Doc. 26-5 at 3 (Decl. of Farrukh
Khawaja) & Doc. 26-6 at 3 (Decl. of Isaac Hasty); (8) in
2016, ATL's Chief Executive Officer traveled to Texas
specifically to speak with the entire Texas team and told
them about ATL's efforts to find new business for the
Texas site, Doc. 26-7 at 3 (Decl. of Janice Barnes
[unsigned]); and (9) Moses previously was informed by a
senior vice president in India that Moses was going to be
deposed in connection with a prior FLSA case,  Doc. 26-2 at 9-10