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Windecker v. Wei

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

January 16, 2020

THEODORE R. WINDECKER
v.
HANG WEI, et al.

          REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE

          ANDREW W. AUSTIN UNITED STATES MAGISTRATE JUDGE

         TO: THE HONORABLE LEE YEAKEL UNITED STATES DISTRICT JUDGE

         Before the Court are Defendant Hang Wei's 12(b)(5) Motion to Dismiss for Insufficient Service, 12(b)(2) Motion to Dismiss for Lack of Personal Jurisdiction, and 12(b)(6) Failure to State a Claim (Dkt. No. 27), the Response (Dkt. No. 30), Reply (Dkt. No. 34), and Sur-Reply (Exh. A to Dkt. No. 36).[1] The district judge referred the 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 Rules.

         I. BACKGROUND

         This is suit for breach of contract arising out of Theodore Windecker's sale of his ownership interest in a company to a Chinese company's American subsidiary (China Vast Int'l Ltd. and Windecker Aircraft Inc., respectively). The suit was originally filed in state court, and was subsequently removed to this Court. After removal, the Defendants filed a motion to dismiss, which the Court granted in part and denied in part. Specifically, the Court dismissed Windecker's negligent misrepresentation and economic duress claims against all Defendants for failure to state a claim, but denied the motion seeking to dismiss the claims against Windecker Aircraft Inc. for lack of personal jurisdiction. In this motion, Hang Wei, the sole owner of China Vast Int'l Ltd. (which in turn is the sole owner of the Windecker Aircraft), requests that the Court dismiss the case for: (1) insufficient service of process; (2) lack of personal jurisdiction; and (3) failure to state a claim.

         II. LEGAL STANDARDS

         Rule 12(b)(5) allows a defendant to seek dismissal when the method by which he was served is defective. Fed.R.Civ.P. 12(b)(5). Once the defendant objects to the method of service by identifying how the plaintiff's attempt at service was defective, the burden shifts to the plaintiff to establish that the method of service is proper. Freedom Watch, Inc. v. Org. of the Pet. Exporting Countries (OPEC), 766 F.3d 74, 78 (D.C. Cir. 2014). “The general rule is that ‘[a] signed return of service constitutes prima facie evidence of valid service, which can be overcome only by strong and convincing evidence.'” People's United Equip. Fin. Corp. v. Hartmann, 447 Fed.Appx. 522, 524 (5th Cir. 2011) (quoting O'Brien v. R.I. O'Brien & Associates, Inc., 998 F.2d 1394, 1398 (7th Cir. 1993)). Thus, if the plaintiff meets the burden of showing proper service, the burden shifts to the defendant to present strong and convincing proof of insufficient service. Id.

         A defendant who is not a resident of the suit's forum 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 ShipManagement 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).

         A 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 Cir. 2010).

         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 & 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.

         Finally, Rule 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 facts “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.

         III. ANALYSIS

         A. Service of Process

         Hang complains first that Windecker's service of the suit on him was deficient. Windecker served Hang by having a process server leave a copy of the petition and summons with Hang's wife, at a home in North Carolina owned by Hang and his wife. Windecker contends that this was sufficient under Rule 4(e)(2)(B), as he left “a copy of [the summons and complaint] at [Hang's] dwelling or usual place of abode with someone of suitable age and discretion who resides there [Hang's wife].” Fed.R.Civ.P. 4(e)(2)(B). Hang's primary contention is that Windecker could not serve him at the North Carolina house, but was instead required to serve him pursuant to the Hague Convention because Hang is a national of the Peoples Republic of ...


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