United States District Court, W.D. Texas, Austin Division
REPORT AND RECOMMENDATION OF THE UNITED STATES
HIGHTOWER, UNITED STATES MAGISTRATE JUDGE.
HONORABLE LEE YEAKEL UNITED STATES DISTRICT JUDGE.
the Court is a Motion to Dismiss for Lack of Personal
Jurisdiction or, in the Alternative, Under the Doctrine of
Forum Non Conveniens, filed by Defendant Green Shield Canada
on June 3, 2019 (Dkt. No. 15). Plaintiff Actian Corporation
filed a Response (Dkt. No. 18) and Defendant filed a Reply (Dkt.
No. 21). The District Court referred the above motions to the
undersigned Magistrate Judge for Report and Recommendation
pursuant to 28 U.S.C. § 636(b)(1), Federal Rule of Civil
Procedure 72, and Rule 1 of Appendix C of the Local Rules of
the United States District Court for the Western District of
parties do not dispute the underlying facts. Plaintiff Actian
Corporation (“Actian”) is a Delaware Corporation
with a principal place of business in California and an
office in Texas. (Orig. Pet., Dkt. 1-2 ¶ 2). Defendant
Green Shield Canada (“Green Shield”) is a
Canadian company with a principal place of business in
Ontario, Canada. (Orig. Pet., Dkt. 1-2 ¶ 3). Green
Shield has no presence in the United States. (Rondinone
Decl., Dkt. 15-1 ¶ 2). Green Shield is a not-for-profit
benefits carrier incorporated under a Federal Act of the
Parliament of Canada to provide drug, dental, extended
healthcare, vision, hospital, and travel benefits to Canadian
individuals and companies. (Id. ¶ 3). Its
customers and offices are located exclusively in Canada.
(Id.). It has no agent for service of process in the
United States and was served in this action through the Hague
Convention. (Id. ¶ 4; Orig. Pet, Dkt. 1-2
is the successor in interest to a series of companies that
have licensed software to Green Shield for the past 17 years.
(Orig. Pet., Dkt. 1-2 ¶ 2; Mot. Dismiss, Dkt. 15 ¶
5). In 2002, Green Shield first licensed data integration
software (“the Software”) from an Austin-based
company called Pervasive Software (“Pervasive”).
(Org. Pet., Dkt. 1-2, ¶¶ 6-9; Rondinone Decl., Dkt.
15-1 ¶ 5). Pervasive upgraded the Software periodically
and licensed it to Green Shield under several different
names, including Data Junction, Data Integrator, and
DataConnect. (Id.; see also Bradberry
Decl., Dkt. 18-1 ¶ 8). Green Shield paid an initial
license fee of approximately $50, 000 in 2002, with
subsequent annual license fees increasing from approximately
$5, 000 to $15, 000. (See Rondinone Decl., Dkt. 15-1
¶ 6). In 2013, Actian acquired Pervasive and continued
to provide maintenance and support services from Austin.
(Id. ¶ 6; Resp., Dkt. 18, at 3
n.2). Green Shield used the Software to enroll
individuals in benefit plans and process their benefit
claims. (Mot. Dismiss, Dkt. 15, at 5). The Software
translates customer enrollment data into a format that Green
Shield's internal systems can process. (Id.
terms of all the licenses and services Green Shield purchased
from Actian and its predecessors were set by end user license
agreements (the “License Agreements”), which are
governed by Texas law. (Mot. Dismiss, Dkt. 15, at 3; Resp.,
Dkt. 18, at 4). The License Agreements, however, contain
no clauses designating a venue, consenting to jurisdiction in
any venue, or setting a means of dispute resolution. (Mot.
Dismiss, Dkt. 15-1, at 3).
September 28, 2018, Actian sent a letter to Green Shield
advising that it had come to Actian's attention that
Green Shield was using the Software “outside the scope
of the software license agreement” by using the
Software “to benefit third parties.” (Notice
Letter, Dkt. 15-1, at 28 (citing License Agreement, §
2)). Actian proposed technology “upgrades” for a
one-time cost of $900, 000 and $300, 000 annually.
(Id. at 29). After Green Shield declined, Actian
filed this action in Texas state court on April 10, 2019.
(Orig. Pet, Dkt. 1-2, at 1). Green Shield timely removed to
this Court. (Not. Removal, Dkt. 1). Green Shield now moves to
dismiss this action for lack of personal jurisdiction under
Rule 12(b)(2) or, in the alternative, under the doctrine of
forum non conveniens. (Dkt. No. 15). The Court considers each
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). Where, 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. Trois v. Apple Tree
Auction Ctr., Inc., 882 F.3d 485, 488 (5th Cir. 2018).
“Proof by a preponderance of the evidence is not
required.” Halliburton Energy Servs., Inc. v.
Ironshore Specialty Ins. Co., 921 F.3d 522, 539 (5th
Cir. 2019) (quoting Johnston v. Multidata Sys. Int'l
Corp., 523 F.3d 602, 609 (5th Cir. 2008) (internal
may consider “not only the well-pleaded allegations of
the complaint . . . but also factual showings made by way of
depositions [and] affidavits.” Trois, 882 F.3d
at 488 (quoting Simon v. United States, 644 F.2d
490, 497 (5th Cir. 1981)). “When a trial court rules on
a motion to dismiss for lack of personal jurisdiction without
holding an evidentiary hearing . . . it must resolve any
factual conflicts in favor of the plaintiff.” Lewis
v. Fresne, 252 F.3d 352, 356 (5th Cir. 2001) (citing
Stripling v. Jordan Prod. Co., 234 F.3d 863, 869
(5th Cir. 2000)). 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).
diversity case, a federal court has jurisdiction if
“(1) the state's long-arm statute allows it; and
(2) exercising jurisdiction would not violate the Due Process
Clause of the Fourteenth Amendment.”
Halliburton, 921 F.3d at 539 (quoting Cycles,
Ltd. v. W.J. Digby, Inc., 889 F.2d 612, 616 (5th Cir.
1989) (internal quotation marks omitted)). “Because the
Texas long-arm statute extends to the limits of federal due
process, the two-step inquiry reduces to only the federal due
process analysis.” Id. (quoting Johnston
v. Multidata Sys. Int'l Corp., 523 F.3d 602, 609
(5th Cir. 2008)).
due process requires a plaintiff to prove two things.
Halliburton, 21 F.3d at 539. “First, the
plaintiff must show that the non-resident defendant
‘purposely availed himself of the benefits and
protections of the forum state by establishing minimum
contacts with the state.'” Id. (quoting
Walk Haydel & Assocs., Inc. v. Coastal Power Prod.
Co., 517 F.3d 235, 243 (5th Cir. 2008) (internal
citation omitted)). “Second, the plaintiff must show
that the ‘exercise of jurisdiction . . . does not
offend traditional notions of fair play and substantial
justice.'” Id. Courts reach this second
prong only “after establishing the defendant's
minimum contacts with the forum state.” Id. at
are two types of ‘minimum contacts': those that
give rise to specific personal jurisdiction and those that
give rise to general personal jurisdiction.”
Id. at 539 (quoting Lewis, 252 F.3d at
358). Because Actian asserts that Green Shield is subject to
only this Court's specific jurisdiction, ...