United States District Court, E.D. Texas, Sherman Division
WAPP TECH LIMITED PARTNERSHIP and WAPP TECH CORP.
MICRO FOCUS INTERNATIONAL, PLC
MEMORANDUM OPINION AND ORDER
L. MAZZANT, UNITED STATES DISTRICT JUDGE
before the Court is Defendant Micro Focus International,
PLC's Motion to Dismiss for Lack of Personal
Jurisdiction, Failure to Serve, and Improper Service of the
Complaint (Dkt. #12); Plaintiffs Wapp Tech Limited
Partnership and Wapp Tech Corp.'s Motion for Leave to
File Amended Complaint (Dkt. #63); Plaintiffs' Request
for Oral Argument on Plaintiffs' motion for leave (Dkt.
#73); and Plaintiffs' Corrected Request for Oral Argument
on Plaintiffs' motion for leave (Dkt. #74). Having
considered the motions and the relevant pleadings, the Court
finds Defendant's motion to dismiss should be granted
(Dkt. #12); Plaintiffs' motion for leave should be
granted (Dkt. #63); and Plaintiffs' requests for oral
argument should be denied as moot (Dkt. #73; Dkt. #74).
filed this suit on July 2, 2018, alleging patent infringement
of United States Patent Numbers 9, 971, 678, 9, 298, 864, and
8, 924, 192 (Dkt. #1). On October 17, 2018, Defendant filed the
motion at issue (Dkt. #12). Defendant moves the Court to
dismiss Plaintiffs' Complaint arguing (1) the Court lacks
personal jurisdiction over Defendant and (2) Plaintiffs
failed to properly serve Defendant. Plaintiffs filed a
response to Defendant's motion on November 1, 2018 (Dkt.
#15). Defendant filed a reply to the motion on November 8,
2018 (Dkt. #16).
careful review of Defendant's motion, the Court ordered
the parties to conduct jurisdictional discovery on December
20, 2018 (Dkt. #17). As the parties engaged in jurisdictional
discovery, a discovery dispute arose. Accordingly, on January
16, 2019, Defendant filed a Motion for Protective Order (Dkt.
#18). Defendant requested a protective order because it
believed Plaintiffs' jurisdictional discovery requests
were (1) improperly broad; (2) related to piercing the veil-a
theory not previously asserted by Plaintiffs; and (3) were
irrelevant as they related to the merits of the case, not to
jurisdiction (Dkt. #18 at pp. 12-18). The parties filed a
response and reply to the motion (Dkt. #19; Dkt. #22). The
Court disagreed with Defendant and denied Defendant's
motion for protective order finding, “Overall,
[Defendant] cannot argue that the contacts cited by
[Plaintiffs] are attributable only to its subsidiaries and
simultaneously contend that [Plaintiffs are] not entitled to
explore [Defendant's] relationship with these
subsidiaries.” (Dkt. #24 at p. 4). As a result, on
February 7, 2019, the Court ordered that:
The parties shall complete jurisdictional discovery with
twenty-one (21) days of this
order-February 28, 2019. The
parties shall amend or supplement the briefing related to
Micro Focus's motion to dismiss within eight
(8) days of completing jurisdictional
discovery-March 8, 2019.
(Dkt. #24 at pp. 4-5) (emphasis in original).
Amended Complaint, Supplemental Briefing, and Motion to
March 8, 2019, the parties filed supplemental briefing on
Defendant's motion to dismiss (Dkt. #30; Dkt. #32). On
the same day, without seeking leave of court, Plaintiffs
filed a First Amended Complaint adding five additional
parties-Seattle SpinCo Inc., EntIT Software LLC, EntCo
Interactive (Israel) Ltd., Entco Government Software LLC, and
Micro Focus (US) Inc. (Dkt. #28 ¶¶ 7-11).
March 12, 2019, without seeking leave of court, Defendant
filed a reply to Plaintiffs' supplemental briefing (Dkt.
#36). The next day, Plaintiffs moved to strike
Defendant's reply to Plaintiffs' supplemental
briefing and sought clarification concerning the Court's
Order denying Defendant's motion for protective order
(Dkt. #41). Defendant filed a response to Plaintiffs'
motion to strike the same day (Dkt. #42). On June 6, 2019,
the Court denied Plaintiffs' motion to strike
Defendant's reply (Dkt. #60). The Court also ordered
Plaintiffs to file a motion for leave to rectify
Plaintiffs' improper filing of the First Amended
Complaint without leave of court (Dkt. #60).
Motion for Leave to Amend Complaint and Oral Argument
to the Court's June 6 order, Plaintiffs filed a Motion
for Leave to File First Amended Complaint on June 10, 2019
(Dkt. #63). On June 21, 2019, Defendant filed a response to
Plaintiffs' motion for leave (Dkt. #67). Defendant argues
the Court should deny Plaintiffs' motion because it is
futile and there is evidence that Plaintiffs are acting in
bad faith. Plaintiffs filed a reply in support of their
motion on June 28, 2019 (Dkt. #69). Defendants filed a
sur-reply to the motion on July 5, 2019 (Dkt. #70).
18, 2019, Plaintiffs filed a Request for Oral Argument on
Plaintiffs' motion for leave (Dkt. #73). Plaintiffs
request a hearing on the motion because the briefing,
“made reference to statements by counsel for
[Defendant] pursuant to settlement discussion, but which were
not presented to the Court due to potential confidentiality
issues.” (Dkt. #73 at p. 1). In the Certificate of
Conference to the request, Plaintiffs state that
“[d]espite attempts from [Plaintiffs] to schedule a
telephonic conference for this Motion for Oral Argument,
[Defendant] did not provide any availability.” (Dkt.
#73 at p. 2). The next day, Plaintiffs filed a corrected
Request for Oral Argument (Dkt. #74). The only difference
between the original and corrected requests for oral argument
is that Plaintiffs allege in the Certificate of Conference to
the corrected request that “[d]espite efforts to do so,
[the parties] were unable to find a mutually available time
for a telephonic conference.” (Dkt. #74 at p. 2).
Rule of Civil Procedure 12(b)(2) enables a defendant to move
to dismiss a case for lack of personal jurisdiction. Courts
“apply Federal Circuit law when reviewing claims
‘intimately involved with the substance of the patent
laws' and the law of the regional circuit when reviewing
state law claims.” NexLearn, LLC v. Allen
Interactions, Inc., 859 F.3d 1371, 1375 (Fed. Cir. 2017)
(quoting Elecs. for Imaging, Inc. v. Coyle, 340 F.3d
1344, 1348 (Fed. Cir. 2003)); see also Apicore U.S. LLC
v. Beloteca, Inc., 2:19-CV-00077-JRG, 2019 WL 1746079,
at *3 (E.D. Tex. Apr. 18, 2019) (quoting Celgard, LLC v.
SK Innovation Co., Ltd., 792 F.3d 1373, 1377 (Fed. Cir.
2015)) (“Federal Circuit law governs personal
jurisdiction where ‘a patent question
the district court's determination of personal
jurisdiction is based on affidavits and other written
materials, and no jurisdictional hearing is conducted, the
plaintiff usually bears only a prima facie
burden.” Celgard, 792 F.3d at 1377 (citing
Coyle, 340 F.3d at 1349). The plaintiff also bears a
prima facie burden if the parties conduct
jurisdictional discovery, the parties dispute the
jurisdictional facts, and the court does not conduct a
jurisdictional hearing. Id.; accord Polar
Electro Oy v. Suunto Oy, 829 F.3d 1343, 1347 (Fed.
Cir. 2016) (citing Celgard, 792 F.3d at
1378).Under the prima facie standard,
courts “accept the uncontroverted allegations in the
plaintiff's complaint as true and resolve any factual
conflicts in the affidavits in the plaintiff's
favor.” Avocent Huntsville Corp. v. Aten Int'l
Co., 552 F.3d 1324, 1329 (Fed. Cir. 2008). In
determining whether a plaintiff has made a prima
facie showing of personal jurisdiction, courts ask
“‘whether a forum state's long-arm statute
permits service of process and whether assertion of personal
jurisdiction violates due process.'” NexLearn,
LLC, 859 F.3d at 1375 (quoting Autogenomics, Inc. v.
Oxford Gene Tech. Ltd., 566 F.3d 1012, 1017 (Fed. Cir.
2009)). “Because the Texas long-arm statute extends to
the limits of federal due process, the two-step inquiry
collapses into one federal due process analysis.”
Johnston v. Multidata Sys. Intern. Corp., 523 F.3d
602, 609 (5th Cir. 2008) (citing Wilson v. Belin, 20
F.3d 644, 647 (5th Cir. 1994)).
due process requires that an out-of-state defendant have
sufficient “minimum contacts” with the forum
state such that the suit does not offend “traditional
notions of fair play and substantial justice.”
Maxchief Invs. Ltd. v. Wok & Pan, Ind., Inc.,
909 F.3d 1134, 1137 (Fed. Cir. 2018) (citing
Bristol-Myers Squibb Co. v. Superior Court of Cal.,
___ U.S. ___, 137 S.Ct. 1773, 1785 (2017)). A defendant's
contacts are sufficient to meet the federal due process
requirements if the court may exercise general or specific
jurisdiction over the defendant. NexLearn, LLC, 859
F.3d at 1375. General jurisdiction exists only when the
defendant's contacts with the forum state are so
“‘continuous and systematic' as to render
them essentially at home in the forum State.”
Daimler AG v. Bauman, 571 U.S. 117, 127 (2014)
(quoting Goodyear Dunlop Tires Operations, S.A.
v. Brown, 564 U.S. 915, 919 (2011)). General
jurisdiction does not require the cause of action to relate
to the defendant's contacts with the forum.
Autogenomics, 566 F.3d at 1017 (citing Silent
Drive, Inc. v. Strong Indus., Inc., 326 F.3d 1194, 1200
(Fed. Cir. 2003)). In assessing whether the defendant's
contacts enable the court to exercise general jurisdiction,
courts assess the nature and number of the defendant's
contacts. M-I Drilling Fluids UK Ltd. v. Dynamic Air
Ltda., 890 F.3d 995, 1000 (Fed. Cir. 2018) (quoting
Synthes (U.S.A.) v. G.M. Dos Reis Jr. Ind. Com de Equip.
Medico, 563 F.3d 1285, 1297 (Fed. Cir. 2009)).
question of whether a court may exercise specific
jurisdiction over a defendant “focuses on ‘the
relationship among the defendant, the forum, and the
litigation.'” Walden v. Fiore, 571 U.S.
277, 283-84 (2014) (quoting Keeton v. Hustler Magazine,
Inc., 465 U.S. 770, 775 (1984)). Under a specific
jurisdiction analysis, “the defendant's
suit-related conduct must create a substantial connection
with the forum state.” Id. The determine
whether specific jurisdiction exists, the court asks whether
“(1) the defendant purposefully directed its activities
to the forum State; (2) the claims arise out of or relate to
those activities (collectively, the minimum contacts prong);
and (3) the assertion of jurisdiction is reasonable and
fair.” NexLearn, LLC, 859 F.3d at 1376 (citing
Avocent, 552 F.3d at 1332). “The plaintiff
bears the burden as to the first two requirements, and if
proven, the burden then shifts to the defendant to
‘present a compelling case that the presence of some
other considerations would render jurisdiction
unreasonable.'” M-I Drilling Fluids UK
Ltd., 890 F.3d at 1000 (citations omitted).
a trial court imposes a scheduling order, Federal Rules of
Civil Procedure 15 and 16 operate together to govern the
amendment of pleadings.” Tex. Indigenous Council v.
Simpkins, 544 Fed.Appx. 418, 420 (5th Cir. 2013). Rule
15(a) governs a party's request to amend its pleading
before a scheduling order's deadline to amend passes.
See Id. Rule 16(b)(4) governs a party's request
to amend its pleading after the deadline to amend passes.
Sapp v. Mem'l Hermann Healthcare Sys., 406
Fed.Appx. 866, 868 (5th Cir. 2010) (citing S&W
Enters., L.L.C. v. SouthTrust Bank of Ala., NA, 315 F.3d
533, 536 (5th Cir. 2003)).
15(a) provides that a party may amend its pleading once
without seeking leave of court or the consent of the adverse
party at any time before a responsive pleading is served.
After a responsive pleading is served, “a party may
amend only with the opposing party's written consent or
the court's leave.” Fed.R.Civ.P. 15(a)(1)(2). Rule
15(a) also instructs the court to “freely give leave
when justice so requires.” The rule
“‘evinces a bias in favor of granting leave to
amend.'” Jones v. Robinson Prop. Grp.,
L.P., 427 F.3d 987, 994 (5th Cir. 2005) (quoting
Lyn- Lea Travel Corp. v. Am. Airlines, Inc., 283
F.3d 282, 286 (5th Cir. 2002)); see also Dueling v. Devon
Energy Corp., 623 Fed.Appx. 127, 129 (5th Cir. 2015)
(quoting Mayeaux v. La. Health Serv. & Indem.
Co., 376 F.3d 420, 425 (5th Cir. 2004)) (“In other
words, ‘district courts must entertain a presumption in
favor of granting parties leave to amend.'”). But
leave to amend “is not automatic.” Matagorda
Ventures, Inc. v. Travelers Lloyds Ins. Co., 203
F.Supp.2d 704, 718 (S.D. Tex. 2000) (citing Dussouy v.
Gulf Coast Inv. Corp., 660 F.2d 594, 598 (5th Cir.
1981)). Whether to grant leave to amend “lies within
the sound discretion of the district court.” Little
v. Liquid Air Corp., 952 F.2d 841, 845-46 (5th Cir.
1992). A district court reviewing a motion to amend pleadings
under Rule 15(a) considers five factors: (1) undue delay; (2)
bad faith or dilatory motive; (3) repeated failure to cure
deficiencies by previous amendments; (4) undue prejudice to
the opposing party; and (5) futility of amendment. Smith
v. EMC, 393 F.3d 590, 595 (5th Cir. 2004) (citing
Foman v. Davis, 371 U.S. 178, 182 (1962)).
16(b)(4) provides that a scheduling order issued by the Court
“may be modified only for good cause and with the
judge's consent.” See Agredano v. State Farm
Lloyds, No. 5:15-CV-1067-DAE, 2017 WL 5203046, at *1
(W.D. Tex. July 26, 2017) (citing E.E.O.C. v. Serv. Temps
Inc., 679 F.3d 323, 333-34 (5th Cir. 2012)) (stating,
“a party seeking leave to amend its pleadings after a
deadline has passed must demonstrate good cause for needing
an extension.”). “The good cause standard
requires the ‘party seeking relief to show that the
deadlines cannot reasonably be met despite the diligence of
the party needing the extension.'” S&W
Enters., L.L.C., 315 F.3d at 535 (quoting 6A Charles
Alan Wright & Arthur R. Miller, Federal Practice and
Procedure § 1522.1 (2d ed. 1990)). In determining
whether good cause exists, courts consider a four-part test:
“(1) the explanation for the failure to [timely move
for leave to amend]; (2) the importance of the [amendment];
(3) potential prejudice in allowing the [amendment]; and (4)
the availability of a continuance to cure such