Opinion
No. SA-03-CA-832-RF.
September 24, 2004
ORDER DENYING DEFENDANT MEDELA AG'S MOTION TO DISMISS
BEFORE THE COURT is Defendant Medela AG's Motion to Dismiss for Lack of Personal Jurisdiction or, alternatively, for Failure to State a Claim and for Partial Summary Judgment (Docket No. 23), filed on October 24, 2003. Plaintiffs responded on November 10 and Medela AG replied on December 3, 2003. The cause was transferred and then returned to this Court, and in light of the delay, the Court granted leave to file a supplemental reply. On April 24, 2004, the Court entered an Order permitting limited discovery on the issue of the Court's personal jurisdiction over Defendant Medela AG, and staying the motion to dismiss during this time period. On July 1, 2004, the Court granted parties' joint motion extending discovery and holding Defendant Medela AG's motion to dismiss in abeyance until September 10, 2004, when it was permitted to re-urge its motion to dismiss. Defendant Medela AG did re-urge its motion (Docket No. 56), and raises again the issue of the Court's in personam jurisdiction over it. Upon due consideration, the Court finds that it enjoys personal jurisdiction over Medela AG and that the motion should accordingly be DENIED.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiffs and Defendants are designers, distributers, manufacturers, and researchers of specialty therapeutic medical devices. Plaintiff Kinetic Concepts, Inc. ("KCI") is also a Medicare participating supplier, providing medical equipment to Medicare beneficiaries throughout the United States. Plaintiffs complain that Defendants (1) breached a contract between the parties related to numerous prior settlement agreements; (2) knowingly and intentionally infringed Plaintiffs' patents by the manufacturing and sale of the Versatile 1 System; (3) diluted Plaintiffs' trademarks by the use of the mark "Vacuum Assisted Closure" or "V.A.C.," and in so doing violated both Texas state and federal law; (4) falsely advertised; (5) competed unfairly in violation of the Lanham Act; (6) infringed Plaintiffs' trademarks in violation of the Lanham Act and the common law; (7) disparaged Plaintiffs' product; and (8) made statements constituting trade libel.Several Defendants are related entities: Medela Holding AG, Medela AG, and Medela, Inc. The parent company is Medela Holding AG. Both Medela Holding AG and Medela AG are Swiss corporations, headquartered in Baar, Switzerland. Subsidiaries of Medela Holding AG include both Medela AG, the moving party, and Medela, Inc., a Delaware corporation with its place of business in McHenry, Illinois. Medela AG, the moving party, manufactures "breast pumps, medical pumps and other medial equipment and sells these products throughout the world." Medela AG sells products to the United States via its sole and exclusive U.S. distributor, Medela, Inc. At least two United States trademarks are registered to Medela AG: Bilibed® and Lactina®.
D's App., Decl. of Urs Tanner, at 1.
Id. The website www.medela.com/ further describes Medela, Inc. as a distribution subsidiary of Medela AG (Plf's App., Ex. D), a representation disputed by Medela AG, which claims that Medela, Inc. is not a subsidiary of Medela AG.
Plf's App., Ex. E-F.
Medela AG moves to dismiss the causes of action against it for lack of personal jurisdiction, or in the alternative to dismiss for failure to state a claim or for partial summary judgment. Plaintiffs oppose the motion, arguing that this Court may properly exercise personal jurisdiction over Medela AG and that their claims against the entity should not be dismissed under Rule 12(b)(6). Plaintiffs also oppose entry of judgment against them under Rule 56. The Court begins its analysis with the issue of the Court's jurisdiction over Medela AG.
DISCUSSION
I. Rule 12(b)(2) Motion to Dismiss for Lack of Personal Jurisdiction
Plaintiffs bear the burden of demonstrating that the court enjoys personal jurisdiction over a nonresident defendant who has brought that jurisdiction into question. The court may rule upon a defendant's motion to dismiss for lack of subject matter jurisdiction without an evidentiary hearing when the plaintiff has made a prima facie showing that personal jurisdiction is proper. In resolving a jurisdictional issue, the court may review pleadings, affidavits, interrogatories, depositions, oral testimony, exhibits, any part of the record, and any combination thereof. The requirement of a prima facie case does not require the court to credit conclusory allegations, even if uncontroverted.
Wilson v. Belin, 20 F.3d 644, 648 (5th Cir. 1994), cert. denied, 513 U.S. 930 (1994).
Id. See also Pieczenik v. I.C. Technologies America, Inc., 265 F.3d 1329, 1334 (Fed. Cir. 2001).
Command-Aire Corp. v. Ontario Mech. Sales Serv., Inc., 963 F.2d 90, 95 (5th Cir. 1992).
Panda Brandywine Corp. v. Potomac Elec. Power, 253 F.3d 865, 868 (5th Cir. 2001).
Here, because the federal question at issue — patent infringement — does not provide for service of process, the court "can use a state long-arm statute only to reach those parties whom a court of the state could also reach under it." The Texas long-arm statute permits service of process to the extent that personal jurisdiction comports with the due process requirements of the U.S. Constitution; therefore, the only question here is whether the exercise of personal jurisdiction over Medela AG would offend the due process clause of the Fifth Amendment.
Burstein v. State Bar of Cal., 693 F.2d 511, 514 (5th Cir. 1982).
Electrosource, Inc. v. Horizon Battery Tech., Inc., 176 F.3d 867, 871 (5th Cir. 1999).
See Burstein, 693 F.2d at 514 ("In a federal question case in federal court, the relevant constitutional provision is the due process clause of the fifth amendment. . . ."). See also Redwing Shoe Company, Inc. v. Hocker-Halberstadt, Inc., 148 F.3d 1355, 1358 (Fed. Cir. 1998).
This Court may exercise personal jurisdiction over Defendant Medela AG, a nonresident corporation, if the company has had sufficient "minimum contacts" with Texas and the exercise of jurisdiction does not offend traditional notions of substantial justice and fair play. This two-part test embodies the controlling due process principle that a defendant must have "fair warning" that a particular activity may subject it to the jurisdiction of a foreign sovereign. In making this determination, all undisputed allegations by the Plaintiffs, who here seek to assert personal jurisdiction, will be accepted as true and all conflicts between the parties will be resolved in favor of Plaintiffs.
See Burstein, 693 F.2d at 517-18; Redwing Shoe, 148 F.3d at 1358.
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985).
Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1564 (Fed. Cir. 1994).
A nonresident defendant's contacts with Texas may give rise to either general or specific jurisdiction. When the nonresident defendant's contacts are systematic and continuous, then the forum's jurisdiction is general. When the defendant's contacts are less substantial, but the claim arises out of the defendant's more limited contacts with the forum, then the forum enjoys specific jurisdiction. Medela AG is a Swiss corporation and claims that it is subject to neither general, nor specific, jurisdiction of this Court. Plaintiffs argue that this Court enjoys personal jurisdiction over Medela AG under either general or specific jurisdiction theories, or under an alter ego theory.
Jackson v. FIE Corp., 302 F.3d 515, 530-31 (5th Cir. 2002).
Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408 (1984).
A. General Jurisdiction
In support of its claim that the Court has no general jurisdiction over it, Medela AG claims that it has no employees, property or agent for service of process in Texas. Medela AG also claims it has no contracts with Texas residents and does not sell or deliver products into Texas. Medela AG further contends that it does not advertise or promote its products or services in Texas. Plaintiffs assert that Medela AG is a leading manufacturer of medical pumps and other equipment and submit evidence that these devices are available in significant quantity in Texas. Plaintiffs submit evidence that Medela AG warrants its medical equipment to Texas residents who use it. They claim both that Medela AG transacts significant business in Texas and that Medela AG's business with the Plaintiffs alone supports a finding of general jurisdiction.
Plf's. Resp. to Def. Medela AG's Mot. to Dismiss, at Ex. C.
In support of this contention, Plaintiffs produce evidence showing that Urs Tanner, CEO of Medela Holding AG and a director of both Medela AG and Medela, Inc., has attended trade shows in Texas. Their evidence further shows that Mr. Tanner has at times represented each of the Medela entities and has traveled to Texas to foster a business relationship between Plaintiffs, the Swiss Medela entities, and Medela, Inc. Plaintiffs also allege that Mr. Tanner, while holding himself out as CEO of Medela AG, contacted Plaintiffs and subsequently met with them in San Antonio, Texas, in July 2001 to discuss a possible supply arrangement between Medela AG and KCI.
Plaintiffs also offer evidence that late in 2001 Mr. Tanner contacted Plaintiffs, inviting KCI president Dennert Ware to visit Medela AG's Swiss headquarters to further discuss a potential supply arrangement between KCI and Medela AG, and that Mr. Ware then met with Medela AG at its Swiss headquarters. Plaintiffs also allege that Mr. Tanner again contacted Plaintiffs and arranged another meeting with KCI, at Medela, Inc.'s Illinois facilities.
Despite evidence of a business relationship between them and Medela AG or Mr. Tanner, Plaintiffs have not shown that Medela AG has other systematic or continuous contacts with Texas sufficient to confer general personal jurisdiction over the Swiss corporation on this Court. The Court declines to rule that a nonresident defendant's business contacts with one entity in Texas will per se justify general personal jurisdiction.
See Jackson, 302 F.3d at 530 (there must be evidence of continuous and systematic contacts to support jurisdiction) (citing Bearry v. Beech Aircraft Corp., 818 F.2d 370, 374 (5th Cir. 1987) ("When the cause of action does not arise from or relate to the foreign corporation's purposeful conduct within the forum state, due process require that there be continuous and systematic contacts between the State and the foreign corporation to support an exercise of `general' personal jurisdiction by that forum.").
Plaintiffs also point to evidence — in the form of a Medela website — of Medela AG's attempts to increase the availability of their breast pumps throughout the world, the United States, and Texas. However, the maintenance of a passive website for advertising purposes does not subject a foreign company to a forum's jurisdiction absent additional contacts. Moreover, the identity of the website at issue is a fact contested in the parties' submissions to the Court, and it appears in any event that the website in question is run by Medela, Inc. rather than Medela AG.
See Mink v. AAAA Development LLC, 190 F.3d 333, 336-37 (5th Cir. 1999).
Plaintiffs also argue that Medela AG has registered two trademarks in the United States, Lactina® and Bilibed®, and that these products are available for sale and distribution within the state of Texas. Further, Plaintiffs argue that Texas consumers may rely on Medela AG warranties with respect to these products. However, this Court is unaware of precedent holding that such warranties support a finding of general personal jurisdiction. Without supporting authority, the Court finds this argument inadequate to sustain a finding that Medela AG engaged in continuous and systematic contacts with Texas outside of those involved here sufficient to create general personal jurisdiction. Plaintiffs fail to meet their burden of showing that Medela AG engaged in continuous and systematic contacts with Texas unrelated to the claims alleged in Plaintiffs' Amended Complaint.
B. Alter Ego
Plaintiffs also argue in response to Medela AG's motion to dismiss that Medela AG and Medela, Inc. are "alter egos" of one another. Generally, a foreign corporation is not subject to the jurisdiction of a forum state merely because its subsidiary is present or doing business there — the mere existence of a parent-subsidiary relationship is usually not sufficient to warrant the assertion of jurisdiction over the foreign parent. However, personal jurisdiction may exist over a nonresident defendant if the relationship between the foreign corporation and a parent corporation that does business in Texas is one that would allow the court to impute the parent corporation's "doing business" to the subsidiary. When "the parent corporation exerts such domination and control over its subsidiary `that they do not in reality constitute separate and distinct corporate entities but are one and the same corporation for purposes of jurisdiction,'" then jurisdiction is proper. To "fuse" the parent company and its subsidiary for jurisdictional purposes, the plaintiffs must prove the parent controls the internal business operations and affairs of the subsidiary. The shorthand developed to describe this interrelationship is the "alter ego" concept.
2 J. MOORE J. LUCAS, MOORE'S FEDERAL PRACTICE ¶ 4.25[6], at 4-272 (2d ed. 1982).
Hargrave v. Fibreboard Corp., 710 F.2d 1154, 1159 (5th Cir. 1983).
Id. (citing MOORE'S FEDERAL PRACTICE, supra, at 4-273).
Id. at 1160.
See Walker v. Newgent, 583 F.2d 163, 166 (5th Cir. 1978). See also 4 CHARLES A. WRIGHT ARTHUR R. MILLER, FEDERAL PRACTICE PROCEDURE § 1069, at 255-57 (1969).
The essence of Plaintiffs' argument is that Medela AG and Medela, Inc. are not really separate corporations, but merely `alter egos' of a unitary "Medela" entity. For support, Plaintiffs point to evidence that Mr. Tanner did substantial work on behalf of Medela, Inc., including serving as interim president. As acting president, Mr. Tanner ran Medela, Inc. for close to eighteen months during 1997 and 1998. Mr. Tanner also currently spends between 10 and 30 percent of his time handling the affairs of Medela, Inc. Plaintiffs submit other testimony indicating that one of Medela, Inc.'s officers reports directly to Mr. Tanner at Medela AG, and that Medela AG has in various instances represented to third parties that it is the parent company for Medela, Inc.
For example, the Medela website claims that Medela AG sells medical devices through its U.S. subsidiary. See www.medela.com/. Further, Mr. Tanner has claimed in letters to the U.S. Departments of Justice and Homeland Security that Medela AG is the Swiss parent of Medela, Inc., and that Medela, Inc. is a "wholly owned subsidiary of Medela AG." Plf.'s Resp. at Ex. A, B. Medela AG argues in reply that Mr. Tanner's representations to the government were the result of confusion or carelessness. It contends that Mr. Tanner was mistaken when he indicated that Medela AG was the corporate parent of Medela, Inc, and attributes the confusion to Mr. Tanner's lack of familiarity with English.
Defendant Medela AG counters that the relationship between itself and Medela, Inc. is nothing more than the typical working relationship between affiliate companies, and that this type of relationship does not support an alter ego finding. Defendant Medela AG argues that Plaintiffs failed to meet their burden of demonstrating that Medela AG controls the internal business operations and affairs of Medela, Inc. and that Medela AG's degree of control is greater than that normally associated with common corporate ownership and directorship. In particular, Medela AG argues that even if all of Plaintiffs' factual claims were true, they would be insufficient as a matter of law to find that Medela AG and Medela, Inc. are alter egos of one another.
Def.'s Reply in Support of Mot. to Dismiss at 3 (citing Gardemal v. Westin Hotel Co., 186 F.3d 588, 593-94 (5th Cir. 1999).
The Court is thus presented with a close question of whether Plaintiffs meet their burden of showing that Medela AG exercised the type of control over Medela, Inc.'s internal business operations that would make a finding of specific jurisdiction proper under the alter ego cases. The Court looks to the Supreme Court's historic resolution of a similar issue in Cannon Manufacturing. In Cannon, the Supreme Court addressed a case in which a North Carolina plaintiff brought suit against the Alabama subsidiary of the defendant, a Maine corporation, and stated:
Cannon Mfg. Co. v. Cudahy Packing Co., 267 U.S. 333 (1925).
Through ownership of the entire capital stock and otherwise, the defendant dominates the [subsidiary] corporation, immediately and completely, and exerts its control both commercially and financially in substantially the same way, and mainly through the same individuals, as it does over those selling branches or departments of its business not separately incorporated which are established to market the [Defendant's] products in other states. The existence of the Alabama company as a distinct corporate entity is, however, in all respects observed.
Id. at 335.
In Cannon, the Supreme Court refused to hold that the activities of a subsidiary corporation could be imputed to the parent for the purposes of showing that the parent was doing business in the forum, supporting the proposition that so long as a parent and subsidiary maintain separate and distinct corporate entities, the presence of one in a forum state may not be attributed to the other. Absent clear evidence that one party controlled the other, courts presume the institutional independence of related corporations.
See also Hargrave, 710 F.2d at 1160.
Dickson Marine, Inc. v. Panalpina, Inc., 179 F.3d 331, 338 (5th Cir. 1999); Walker, 583 F.2d at 167.
On the facts before this Court, Plaintiffs have failed to meet the standard enunciated in Cannon and followed by the Fifth Circuit that companies must exercise control over the internal actions of their counterparts in order to be considered alter egos. The Fifth Circuit is very clear that 100 percent stock ownership and commonality of officers and directors standing alone are insufficient to fuse two companies. Without evidence that Medela AG directs the internal workings of Medela, Inc., or other evidence that the corporate relationship is merely a sham, Plaintiffs fail to meet their burden of showing that the companies are alter egos for jurisdictional purposes.
Hargrave, 710 F.2d at 1160; Walker, 583 F.2d at 167.
C. Specific Jurisdiction
Medela AG also claims that it is not subject to this Court's specific personal jurisdiction because none of the relevant requirements are met on the facts pleaded. Medela AG is subject to specific jurisdiction if it purposefully directed its activities at residents of Texas and the litigation results from injuries arising from or relating to those activities. Medela AG argues that it is not subject to the specific jurisdiction of the Court as to any of the counts alleged by Plaintiffs and that Plaintiffs do not even allege a prima facie case for specific jurisdiction.
Alpine View Co. Ltd. v. Atlas Copco AB, 205 F.3d 208, 215 (5th Cir. 2000) (quoting Burger King, 471 U.S. at 472); Genetic Implant Systems, Inc. v. Core-Vent Corp., 123 F.3d 1455, 1458 (Fed. Cir. 1997); The Akro Corp. v. Luker, 45 F.3d 1541, 1545-46 (Fed. Cir. 1995).
Plaintiffs contend that the Court has specific jurisdiction over Medela AG because of their claims for patent infringement and inducement of patent infringement against Medela AG, the results of which are felt in Texas. These claims make up Count Two of Plaintiffs' Amended Complaint. Plaintiffs cite authority holding that foreign sellers of products that infringe domestic patents who sell the apparatus knowing it will reach domestic markets can be liable for the harm caused by this infringement in the United States. There is certainly support for the position that knowing acts of inducement may subject an infringement inducer to long-arm jurisdiction based upon the in-state tort. Plaintiffs argue that Medela AG is committing infringement of Plaintiffs' patents within the state of Texas, giving rise to the Court's specific jurisdiction over Medela AG.
Inducement also gives rise to normal infringer liability. 35 U.S.C. § 271(b).
See, e.g., Honeywell, Inc. v. Metz Apparatewerke, 509 F.2d 1137, 1142 (7th Cir. 1975) ("active inducement may be found in events outside the United States if they result in direct infringement here").
Clinton H. Neagley, In Personam Jurisdiction over Foreign Inducers of Infringement, 58 J. PATT OFF. SOC'Y 712, 720 (1976).
Plaintiffs submit evidence that, while disputed in part by Defendant Medela AG, supports their arguments about inducement of infringement. Plaintiffs allege that Medela AG knew of their patents and directly encouraged the infringement plead in their Amended Complaint, which supports their argument for the Court's jurisdiction over these claims. Plaintiffs also allege that Mr. Tanner knew of and authorized the sale of Medela AG suction pumps to Defendant BlueSky for wound treatment purposes, actions which would likely be found to be or contribute to infringement of Plaintiffs' patents. Plaintiffs further claim in Count One of their Amended Complaint that these actions violated the parties' earlier settlement agreements. Plaintiffs submit other evidence that Medela AG actively works with Defendant BlueSky — the alleged direct infringer here — in ways that bear directly on the disputed patents and alleged infringements underlying this action.
Beverly Hills Fan Co., 21 F.3d at 1566.
Although not binding authority on this Court, other courts have held that when a foreign defendant's marketing strategy involves the creation of a subsidiary to serve the U.S. market, the defendant directly engages in marketing efforts in the United States. Also, in general, when a foreign defendant designs products for the U.S. market or advertises in the forum state, courts may assert specific personal jurisdiction over the foreign entity under the Supreme Court's plurality decision in Asahi. Even under a "stream of commerce plus" theory, as long as the manufacturer in the stream of commerce is aware that the final product is being marketed in the forum State, the possibility of a lawsuit there cannot come as a surprise. In any event, in a jurisdiction that continues to follow the "stream of commerce" approach taken by the Supreme Court in World-Wide Volkswagen, Medela AG's contacts with Texas would be sufficient to confer specific personal jurisdiction over it on this Court.
See, e.g., Seltzer Sister Bottling Co. v. Source Perrier S.A., 19 U.S.P.Q.2d (BNA) 1898, 1903 (N.D. Cal. 1991) (finding jurisdiction over a French company because its product was distributed in the United States by subsidiaries created and controlled by the French manufacturer); DeMoss v. City Market, Inc., 762 F. Supp. 913, 919 (D. Utah 1991) (when foreign company indirectly enters the U.S. market through an exclusive distribution deal with a subsidiary, it has minimum contacts with the forum and is subject to its jurisdiction). See also Benitez-Allende v. Alcan Aluminio do Brasil, S.A., 857 F.2d 26, 29 (1st Cir. 1988) (subjecting Brazilian manufacturer who used sales agents to sell its products in Puerto Rico to jurisdiction there), cert denied, 489 U.S. 1018 (1989).
See, e.g., Vermeulen v. Renault, U.S.A., Inc., 985 F.2d 1534, 1549-50 (11th Cir.) (defendant's actions in engaging in a nationwide marketing and ad campaign and creating a nationwide distribution system allowed for constitutional assertion of jurisdiction), cert denied, 113 S.Ct. 2334 (1993).
Vermeulen, 985 F.2d at 1547.
World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980).
See Irvin v. Owens-Corning Fiberglass Corp., 864 F.2d 383, 386 (5th Cir. 1989) (because the Supreme Court's "splintered view of minimum contacts in Asahi provides no clear guidance" on issue of what constitutes minimum contacts, the Fifth Circuit employs the stream of commerce theory adopted in World-Wide Volkswagen).
Plaintiffs have thus met their burden of showing that Medela AG has minimum contacts with Texas sufficient to confer specific personal jurisdiction over this Defendant. Courts may properly assert jurisdiction when the cause of action arises out of or relates to the contacts a party has with the forum state, even when those contacts are isolated and sporadic. In fact, even a single act can support specific personal jurisdiction, and Plaintiffs have clearly alleged more than one act by Defendant Medela AG. Plaintiffs allege that Defendant has actively worked with Defendant BlueSky in ways that, if proven, could establish infringement of Plaintiffs' patents in Texas. Plaintiffs allege that Medela AG has traveled to Texas to meet with KCI to explore the potential to supply the pumps whose patents KCI now claims are being infringed by Medela AG. They also allege that Medela AG took affirmative actions to facilitate BlueSky's alleged infringement on Plaintiffs' patents. Further, they allege that Medela AG did so with specific knowledge of Plaintiffs' patents, which if proved would amount to intentional inducement of infringement. Plaintiffs allege both direct and attenuated contacts with Texas that bear directly on the infringement cause of action at issue here.
Red Wing Shoe Co., 148 F.3d at 1359 (quoting Burger King, 471 U.S. at 472-73).
Id.; Burger King, 471 U.S. at 475 n. 18; McGee v. Int'l Life Ins. Co., 355 U.S. 220, 223 (1957).
In sum, Plaintiffs establish a prima facie case establishing the specific personal jurisdiction of this Court over Defendant Medela AG with regard to Count Two. The Court also has discretion to assert jurisdiction over Defendant Medela AG with regard to Plaintiffs' other claims as well under the doctrine of pendant personal jurisdiction. Once a district court has jurisdiction over a defendant for one claim, it may "piggyback" onto that claim other claims over which it lacks independent personal jurisdiction, provided that all the claims arise from the same nucleus of material fact as the claim over which it has proper personal jurisdiction. The doctrine provides district courts with discretion to exercise personal jurisdiction over related claims to the limits of the case or controversy clause in Article III, and has been adopted by every circuit court addressing the subject. For this reason, the Court finds that it enjoys personal jurisdiction over all of Plaintiffs' claims arising out of the same core facts as those contained in Count Two.
See 4A CHARLES A. WRIGHT ARTHUR R. MILLER, FEDERAL PRACTICE PROCEDURE § 1069.7 (3d ed. 2002).
See United States v. Botefuhr, 309 F.3d 1263, 1272 (10th Cir. 2002).
13 CHARLES A. WRIGHT, ARTHUR R. MILLER, EDWARD H. COOPER, FEDERAL PRACTICE PROCEDURE § 3523.1 at 143 (2d ed. Supp. 2001).
See Oetiker v. Jurid Werke, G.m.b.H., 556 F.2d 1, 4-5 n. 10 (D.C. Cir. 1977); IUE AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1056 (2d Cir. 1993); Robinson v. Penn Cent. Co., 484 F.2d 553, 555-56 (3d Cir. 1973); ESAB Group, Inc. v. Centricut, Inc., 126 F.3d 617, 628-29 (4th Cir. 1997); Robinson Eng'g Co. Ltd. Pension Plan Trust v. George, 223 F.3d 445, 449 (7th Cir. 2000); Travis v. Anthes Imperial Ltd., 473 F.2d 515, 529-30 (8th Cir. 1973); Action Embroidery Corp. V. Atlantic Embroidery, Inc., 368 F.3d 1174, 1181 (9th Cir. 2004); Botefuhr, 309 F.3d at 1273. See also 4A WRIGHT MILLER, supra, § 1069.7, at 228.
At this stage, Plaintiffs are not required to prove the jurisdictional facts by a preponderance of the evidence; instead, they merely need to make a prima facie showing of jurisdictional facts in order to survive the motion to dismiss for lack of jurisdiction. Eventually Plaintiffs must establish jurisdiction by a preponderance of the evidence, either at a pretrial evidentiary hearing or at trial. However, for the time being, Plaintiffs have adequately alleged a prima facie case establishing this Court's jurisdiction over Medela AG. Because of this finding, the Court will deny Defendant Medela AG's motion to dismiss for lack of subject matter jurisdiction. However, the question of the Court's specific personal jurisdiction over Medela AG is not a closed issue, and it is one that Plaintiffs will have the burden of proving by a preponderance of the evidence at trial in this case.
Travelers Indem. Co. v. Calvert Fire Ins. Co., 798 F.2d 826, 831 (5th Cir. 1986).
Id. (citing Marine Midland Bank, N.A. v. Miller, 664 F.2d 899, 904 (2d Cir. 1981); Forsythe v. Overmyer, 576 F.2d 779, 781 (9th Cir.), cert. denied, 439 U.S. 864 (1978)).
Both parties focus their arguments on the first prong of the personal jurisdiction test: whether Medela AG had sufficient `minimum' contacts with Texas. Neither party discussed the second prong of the Due Process test for personal jurisdiction: whether asserting jurisdiction comports with "traditional notions of fair play and substantial justice." The considerations discussed in Burger King and International Shoe can affect the court's determine of the personal jurisdiction question by providing arguments about the fairness or foreseeability of asserting jurisdiction. However, since these factors were not raised by the parties, the Court does not discuss them further here.
Burger King, 471 U.S. at 476-77 (citing International Shoe Co. v. Washington, 326 U.S. 310, 320 (1945)).
Id. (citing, e.g., Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 780 (1984)).
Because Plaintiff did not show that Medela AG engaged in systematic and continuous contacts with Texas outside of those described in relation to its claims here, the Court finds that it does not enjoy general personal jurisdiction over Medela AG. The Court also finds that Plaintiffs fail to submit evidence of Medela AG's control over Medela, Inc. sufficient to support jurisdiction under an alter ego theory. Finally, the Court finds that it enjoys specific personal jurisdiction over Medela AG. It has specific personal jurisdiction as to the claims raised in Count Two — the patent infringement claims — directly since these claims arise out of contacts Plaintiffs allege. The Court will exercise pendant personal jurisdiction over Plaintiffs' remaining claims that arise out of the same nucleus of operative fact. For these reasons, the Court will deny the motion to dismiss for lack of personal jurisdiction over Medela AG.
See Religious Technology Center. v. Liebreich, 339 F.3d 369, 375 (5th Cir. 2003) (citing Burger King, 471 U.S. at 472).
Because of the Court's resolution of these questions, it need not reach the alternative grounds for dismissal for failure to state a claim. For this reason, the Court denies Medela AG's motion for partial summary judgment asserted in the alternative in its initial motion to dismiss.
CONCLUSION
For the foregoing reasons, it is hereby ORDERED that Defendant Medela AG's Motion to Dismiss (Docket No. 23) is DENIED. This Order extends to Defendant Medela AG's Motion to Re-Urge and Restate its earlier Motion to Dismiss (Docket No. 56), which is similarly DENIED.
It is further ordered that Defendant Medela AG's Motion for Summary Judgment (Docket No. 23) is similarly DENIED.