United States District Court, W.D. Texas, Austin Division
THEODORE R. WINDECKER
HANG WEI, et al.
HONORABLE LEE YEAKEL UNITED STATES DISTRICT JUDGE.
REPORT AND RECOMMENDATION OF THE UNITED STATES
W. AUSTIN UNITED STATES MAGISTRATE JUDGE.
the Court are Defendants' Motion to Dismiss (Dkt. No. 6),
Plaintiff's Response (Dkt. No. 12), Defendants' Reply
(Dkt. No. 17), and Plaintiff's Sur-Reply (Dkt. No. 38).
The District Court referred the above motion to the
undersigned for a report and recommendation pursuant to 28
U.S.C. § 636(b) and Rule 1(c) of Appendix C of the Local
Theodore Windecker brings several causes of action against
Defendants Hang Wei, China Vast International, LTD
(“Windecker China”), and Windecker Aircraft, Inc.
(“Windecker USA”). Plaintiff's claims arise
from the sale of his ownership interest in a company owning
certain assets and intellectual property to Windecker China
pursuant to a Unit Purchase Agreement (“UPA”) and
Plaintiff's subsequent employment with Windecker USA as
its Chief Technology Officer under the terms of an Employment
Agreement. Plaintiff alleges, in part, that Windecker China
refused to make payments due upon the achievement of
milestones related to developing the aircraft assets
purchased, and to transfer ownership interests owed pursuant
to the UPA; that all Defendants acted to prevent Plaintiff
from achieving the milestone payments; and that all
Defendants forced Plaintiff to modify the UPA and the
Employment Agreement under economic duress. Plaintiff brings
claims for declaratory judgment, separate breach of contract
claims for the UPA and the Employment Agreement, and a
negligent misrepresentation claim. Windecker China and
Windecker USA now move to dismiss the declaratory judgment
and negligent misrepresentation claims under Rule 12(b)(6),
and Windecker USA additionally moves to dismiss the suit
against it as a whole for lack of personal jurisdiction,
pursuant to Rule 12(b)(2).
Rule of Civil Procedure 12(b)(6) allows a party to move to
dismiss an action for failure to state a claim upon which
relief can be granted. Fed.R.Civ.P. 12(b)(6). In deciding a
Rule 12(b)(6) motion to dismiss for failure to state a claim,
“[t]he court accepts all well-pleaded facts as true,
viewing them in the light most favorable to the
[nonmovant].” In re Katrina Canal Breaches
Litig., 495 F.3d 191, 205 (5th Cir. 2007) (internal
quotation marks omitted), cert. denied, 552 U.S.
1182 (2008). While a complaint attacked by a Rule 12(b)(6)
motion does not need detailed factual allegations in order to
avoid dismissal, the plaintiff's factual allegations
“must be enough to raise a right to relief above the
speculative level.” Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 555 (2007). The Supreme Court has
explained that a court need not accept as true conclusory
allegations or allegations stating a legal conclusion.
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A
complaint must contain sufficient factual matter “to
state a claim to relief that is plausible on its face.”
Id. (quoting Twombly, 550 U.S. at 570).
“A claim has facial plausibility when the [nonmovant]
pleads factual content that allows the court to draw the
reasonable inference that the [movant] is liable for the
misconduct alleged.” Id.
a non-resident defendant may move to dismiss for lack of
personal jurisdiction under Rule 12(b)(2). “If . . .
the court rules on personal jurisdiction without conducting
an evidentiary hearing, the plaintiff bears the burden of
establishing only a prima facie case of personal
jurisdiction.” Sangha v. Navig8 Ship Management
Private Ltd., 882 F.3d 96, 101 (5th Cir. 2018).
“The district court is not obligated to consult only
the assertions in the plaintiff's complaint in
determining whether a prima facie case for
jurisdiction has been made. Rather, the district court may
consider the contents of the record at the time of the
motion. . . .” Id. (internal quotations and
citations omitted). “Although jurisdictional
allegations must be accepted as true, such acceptance does
not automatically mean that a prima facie case for
[personal] jurisdiction has been presented.”
Id. The plaintiff must prove that the court has
jurisdiction over the defendant with regard to each claim.
Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d
266, 275 (5th Cir. 2006).
federal court sitting in diversity may exercise personal
jurisdiction over a non-resident defendant if (1) the
state's long-arm statute permits an exercise of
jurisdiction over that defendant, and (2) an exercise of
jurisdiction would comport with the requirements of the Due
Process Clause of the Fourteenth Amendment. Sangha,
882 F.3d at 101; McFadin v. Gerber, 587 F.3d 753,
759 (5th Cir. 2009), cert. denied, 131 S.Ct. 68
(2010). Because the requirements of Texas's long-arm
statute are coextensive with the requirements of the Due
Process Clause, the sole inquiry is whether this Court's
exercise of personal jurisdiction over the Defendants would
be consistent with due process. Id. The Supreme
Court has articulated a two-part test to determine whether a
federal court sitting in diversity may properly exercise
personal jurisdiction over a nonresident defendant: (1) the
nonresident must have sufficient “minimum
contacts” with the forum state, and (2) subjecting the
nonresident to jurisdiction in the forum state must not
offend traditional notions of “fair play and
substantial justice.” McFadin, 587 F.3d at 759
(citing Int'l Shoe Co. v. Wash., 326 U.S. 310,
316 (1945)). A defendant's “minimum contacts”
may give rise to either specific or general personal
jurisdiction, depending on the nature of the suit and
defendant's relationship to the forum state. Jackson
v. Tanfoglio Giuseppe, S.R.L., 615 F.3d 579, 584 (5th
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 & Assocs., Inc. v.
Coastal Power Prod. Co., 517 F.3d 235, 243 (5th Cir.
2008). The touchstone of specific-jurisdiction analysis is
“whether the defendant's contact shows that it
reasonably anticipates being haled into court.”
McFadin, 587 F.3d at 759. 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). Specific jurisdiction “focuses on the
relationship among the defendant, the forum, and the
litigation.” Sangha, 882 F.3d at 103 (quoting
Monkton Ins. Servs. v. Ritter, 768 F.3d 429, 432-33
(5th Cir. 2014). 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, 286 (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.
Rule 12(b)(6) motion
their 12(b)(6) motion, Windecker China and Windecker USA
argue that the negligent misrepresentation claim should be
dismissed for several reasons, including the fact that it is
barred by Texas' economic loss rule. They also ask that
the Court dismiss the Plaintiff's economic duress claim
as time barred.