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Haas Outdoors, Inc. v. Dryshod International, LLC

United States District Court, W.D. Texas, Austin Division

July 12, 2019

HAAS OUTDOORS, INC., Plaintiff,
v.
DRYSHOD INTERNATIONAL, LLC, and JAMES K. DONOHUE, Defendants. DRYSHOD INTERNATIONAL, LLC, and JAMES K. DONOHUE, Plaintiffs,
v.
HAAS OUTDOORS, INC.; TOXEY HAAS; and WILLIAM SUGG; Defendants.

          ORDER

          ROBERT PITMAN UNITED STATES DISTRICT JUDGE

         Before the Court is a motion to dismiss filed in the consolidated case, 1:18-CV-596, by Defendants Toxey Haas (“Haas”) and William Sugg (“Sugg”). (Dkt. 127). Plaintiffs Dryshod International, LLC (“Dryshod”) and James Donohue (“Donohue”) (together, “Plaintiffs”) filed a response. (Dkt. 132). Having considered the parties' briefs, the record, and the relevant law, the Court will grant the motion.

         I. BACKGROUND

         Haas and Sugg are executive officers of codefendant Haas Outdoors, Inc. (“Haas Outdoors”), which designs and manufactures camouflage patterns, clothing, and accessories. (Haas Am. Compl., Dkt. 126, at 3). Donohue founded Dryshod to design and source footwear, including camouflage boots. (Am. Compl., Dkt. 123, at 4-5). Rather than license one of Haas Outdoors' camo designs, Dryshod designed its own. (Id. at 19; Resp., Dkt. 132, at 4-5). Haas Outdoors, believing that Dryshod's designs infringed the copyrights for its own, sued Plaintiffs in this Court in 2018, voluntarily dismissed that action, and refiled in the Northern District of Mississippi. (Resp., Dkt. 132, at 5). That action is back before this Court, now consolidated with this action after being transferred from the federal district court in Mississippi. Haas Outdoors, Inc. v. Dryshod Int'l, LLC, 1:18-CV-978-RP (W.D. Tex.).

         Meanwhile, Plaintiffs sued Haas Outdoors in this district seeking declarations that they are not infringing its copyrights or trademarks. (Am. Compl., Dkt. 123, at 24-26). Plaintiffs also assert a series of claims against Haas and Sugg: tortious interference with existing business relations; illegal restraint of trade in violation of Texas Business and Commerce Code § 15.05(a) and (b); and defamation. (Id. at 27-29). Haas and Sugg now ask the Court to dismiss the claims against them because their alleged conduct does not subject them to this Court's jurisdiction. (Mot., Dkt. 127).

         II. LEGAL STANDARDS

         The Federal Rules of Civil Procedure allow a defendant to assert lack of personal jurisdiction as a defense to suit. Fed.R.Civ.P. 12(b)(2). On such a motion, “the plaintiff bears the burden of establishing the district court's jurisdiction over the nonresident.” Stuart v. Spademan, 772 F.2d 1185, 1192 (5th Cir. 1985). The court may determine the jurisdictional issue “by receiving affidavits, interrogatories, depositions, oral testimony, or any combination of the recognized methods of discovery.” Id.

         But when, as here, the Court rules on the motion without an evidentiary hearing, the plaintiff need only present a prima facie case that personal jurisdiction is proper; proof by a preponderance of the evidence is not required. Walk Haydel & Assocs., Inc. v. Coastal Power Prod. Co., 517 F.3d 235, 241 (5th Cir. 2008). Uncontroverted allegations in a plaintiff's complaint must be taken as true, and conflicts between the facts contained in the parties' affidavits must be resolved in the plaintiff's favor. Id. Nevertheless, a court need not credit conclusory allegations, even if uncontroverted. Panda Brandywine Corp. v. Potomac Elec. Power Co., 253 F.3d 865, 869 (5th Cir. 2001) (per curiam).

         III. DISCUSSION

         Because Haas and Sugg are not Texas residents, (see Am. Compl., Dkt. 123, at 2), Plaintiffs have the burden to establish a prima facie case for this Court's personal jurisdiction over them. Lewis v. Fresne, 252 F.3d 352, 358 (5th Cir. 2001). A federal district 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, 562 U.S. 827 (2010). Because Texas's long-arm statute extends as far as constitutional due process allows, the two-step inquiry “collapses into one federal due process analysis.” Sangha v. Navig8 ShipManagement Private Ltd., 882 F.3d 96, 101 (5th Cir. 2018).

         Exercising personal jurisdiction over a nonresident defendant is compatible with due process when “(1) the defendant has purposefully availed himself of the benefits and protections of the forum state by establishing minimum contacts with the forum state, and (2) the exercise of jurisdiction over that defendant does not offend traditional notions of fair play and substantial justice.” Walk Haydel, 517 F.3d at 243 (cleaned up). 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, 252 F.3d at 358. Plaintiffs argue only that Haas and Sugg are subject to this Court's specific jurisdiction. (Resp., Dkt. 132, at 8).

         In this circuit, specific personal jurisdiction is a claim-specific inquiry; a plaintiff bringing multiple claims that arise out of different forum contacts must establish specific jurisdiction for each claim. McFadin, 587 F.3d at 759. Specific jurisdiction applies when a nonresident defendant “has purposefully directed its activities at the forum state and the litigation results from alleged injuries that arise out of or relate to those activities.” Walk Haydel, 517 F.3d at 243. Conduct unrelated to a plaintiff's claims is irrelevant to the exercise of specific personal jurisdiction. See Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 274-75 (5th Cir. 2006) (stating that the Due Process Clause bars the exercise of specific jurisdiction over claims that do not arise out of the defendant's forum contacts); see also Jackson v. FIE Corp., 302 F.3d 515, 530 (5th Cir. 2002) (stating that personal jurisdiction exists only if a cause of action arises from or relates to the defendant's conduct “in or vis-à-vis the forum”). The touchstone of specific-jurisdiction analysis is “whether the defendant's conduct shows that it reasonably anticipates being haled into court.” McFadin, 587 F.3d at 759 (cleaned up). Even a single contact can support specific jurisdiction if it creates a “substantial connection” with the forum. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 n.18 (1985).

         That said, specific jurisdiction “focuses on the relationship among the defendant, the forum, and the litigation.” Sangha, 882 F.3d at 103. Due process requires that specific jurisdiction be based on more than the “random, fortuitous, or attenuated” contacts a defendant makes by interacting with people affiliated with the forum state. Walden v. Fiore, 571 U.S. 277, 285 (2014). The plaintiff thus “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 that is the basis for its jurisdiction over him.” Id. at 285.

         Here, because specific personal jurisdiction is a “claim-specific inquiry, ” McFadin, 587 F.3d at 759, the relevant conduct is that which is related to Plaintiffs' claims against Haas and Sugg for tortious interference, restraint of trade, and defamation. (Am. Compl., Dkt. 123, at 27-29).[1] The first two of those claims arise out of Haas Outdoors' litigation against Plaintiffs, which they characterize as “sham lawsuits” filed simply to bully the smaller Dryshod into licensing Haas Outdoors' camo rather than compete with Dryshod's own designs. (Am. Compl., Dkt. 123, at 21-24). According to Plaintiffs, Haas and Sugg knew that their company's lawsuit against Dryshod was baseless when it was filed but approved it anyway because they knew that the lawsuit would financially stress the smaller company and damage its reputation with retailers. (Id.; see also Resp., Dkt. 132, at 4-5 (emphasizing that the record demonstrates that Haas and Sugg “at least approved” of the lawsuit against Plaintiffs)). For the defamation claim, Plaintiffs allege that Haas Outdoors salespeople have been contacting Dryshod customers and ...


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