Half Price Books Records Magazines Inc V Kuenstler et al

MOTION to Dismiss for Lack of Jurisdiction

N.D. Tex.September 23, 2016

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION HALF PRICE BOOKS, RECORDS, MAGAZINES, INCORPORATED, Plaintiff, vs. TODD KUENSTLER, Individually; MAGGIE KUENSTLER, Individually; GROUP 23, INC.; GROUP 523 LLC; GROUP 2323 LLC; GROUP 52323 LLC; CARTRIDGE WORLD NORTH AMERICA; and CARTRIDGE WORLD INTERNATIONAL, INC., Defendants. § § § § § § § § § § § § § § § § CIVIL ACTION NO. 3:16-cv-02658-C DEFENDANT CARTRIDGE WORLD INTERNATIONAL, INC.’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND BRIEF IN SUPPORT RODNEY H. LAWSON Texas State Bar No. 12059700 Email: rlawson@ccsb.com DEBRÁN L. O’NEIL Texas State Bar No. 24083497 Email: doneil@ccsb.com CARRINGTON, COLEMAN, SLOMAN & BLUMENTHAL, L.L.P. 901 Main Street, Suite 5500 Dallas, Texas 75202-3767 Telephone: 214/855-3000 Telecopy: 214/855-1333 Attorneys for Defendants Cartridge World North America and Cartridge World International, Inc. Case 3:16-cv-02658-C Document 6 Filed 09/23/16 Page 1 of 16 PageID 97 DEFENDANT CARTRIDGE WORLD INTERNATIONAL, INC.’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND BRIEF IN SUPPORT Page ii TABLE OF CONTENTS Introduction. .................................................................................................................................1 I. Facts ............................................................................................................................................1 II. CWI Is Not Subject to Personal Jurisdiction in Texas. ..............................................................4 III. Personal Jurisdiction Standard. ................................................................................4 A. CWI Is Not Subject to Specific Jurisdiction in Texas. ............................................6 B. CWI is Not Subject to General Jurisdiction in Texas. .............................................7 C. The Exercise of Personal Jurisdiction over CWI Would Offend Traditional D. Notions of Fair Play and Substantial Justice..........................................................10 PRAYER..................................................................................................................................11 IV. Case 3:16-cv-02658-C Document 6 Filed 09/23/16 Page 2 of 16 PageID 98 DEFENDANT CARTRIDGE WORLD INTERNATIONAL, INC.’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND BRIEF IN SUPPORT Page iii TABLE OF AUTHORITIES Page(s) Cases Able Fund v. Dobbins, No. 3:05-CV-2263-H, 2006 WL 1816430 (N.D. Tex. June 22, 2006) ......................................9 Am. Bank, F.S.B. v. Auto-Owners Mutual Fire & Casualty Ins. Co., No. 4:10-CV-331-A, 2010 WL 3784282 (N.D. Tex. Sept. 27, 2010) .......................................8 Bearry v. Beech Aircraft Corp., 818 F.2d 370 (5th Cir. 1987) .....................................................................................................8 Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) .............................................................................................................5, 10 Central Freight Lines, Inc. v. APA Transp. Corp., 322 F.3d 376 (5th Cir. 2003) .....................................................................................................5 Daimler AG v. Bauman, 134 S.Ct. 746 (2014) ..............................................................................................................5, 8 Gardemal v. Westin Hotel Co., 186 F.3d 588 (5th Cir. 1992) .....................................................................................................4 Goddard v. National Ass’n of Physician Recruiters, Inc., No. 3:04-CV-1424-H, 2005 WL 50871 (N.D. Tex. Jan. 11, 2005) .........................................10 Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408 (1984) ...............................................................................................................7, 8 International Shoe Co. v. Washington, 326 U.S. 310 (1945) ...................................................................................................................5 Johnston v. Multidata Sys. Int’l Corp., 523 F.3d 602 (5th Cir. 2008) .....................................................................................................7 Jones v. Petty-Ray Geophysical Geosources, Inc., 954 F.2d 1061 (5th Cir. 1992) ...................................................................................................5 Lewis v. Fresne, 252 F.3d 352 (5th Cir. 2001) .................................................................................................4, 6 Monkton Ins. Servs., Ltd. v. Ritter, 768 F.3d 429 (5th Cir. 2014) .....................................................................................................8 Case 3:16-cv-02658-C Document 6 Filed 09/23/16 Page 3 of 16 PageID 99 DEFENDANT CARTRIDGE WORLD INTERNATIONAL, INC.’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND BRIEF IN SUPPORT Page iv Panda Brandywine Corp. v. Potomac Elec. Power Co., 253 F.3d 865 (5th Cir. 2001) .....................................................................................................4 Stuart v. Spademan, 772 F.2d 1185 (5th Cir. 1985) .................................................................................................10 TV Azteca v. Ruiz, 490 S.W.3d 29 (Tex. 2016) ........................................................................................................5 Walden v. Fiore, 134 S.Ct. 1115 (2014) ................................................................................................................6 World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980) .............................................................................................................5, 10 Other Authorities FED. R. CIV. P. 12(b)(2) ...................................................................................................................1 Case 3:16-cv-02658-C Document 6 Filed 09/23/16 Page 4 of 16 PageID 100 DEFENDANT CARTRIDGE WORLD INTERNATIONAL, INC.’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND BRIEF IN SUPPORT Page 1 Pursuant to Fed. R. Civ. P. 12(b)(2), Defendant Cartridge World International, Inc. (“CWI”) files this Motion to Dismiss for Lack of Personal Jurisdiction and Brief in Support, and respectfully shows the Court as follows: INTRODUCTION. I. CWI is not a resident of the State of Texas. Cartridge World has not had continuous and systematic contacts with Texas sufficient to confer general jurisdiction in Texas. Nor has CWI had any contacts with Texas that gave rise to, or relate to, Plaintiff’s claims against it in this lawsuit that are sufficient to confer specific jurisdiction. For the reasons discussed below, CWI is not subject to general or specific in personam jurisdiction in Texas. Further, the exercise of personal jurisdiction over CWI in Texas would offend traditional notions of fair play and substantial justice. Accordingly, the claims against CWI should be dismissed for lack of personal jurisdiction. FACTS II. Plaintiff brought this lawsuit against eight defendants for damages allegedly incurred as the result of an alleged scheme to defraud Plaintiff in connection with a contract some of the defendants had entered into with Plaintiff to provide Plaintiff with toner cartridges. CWI did not have a direct contract with the other defendants, nor did it have a contract with the Plaintiff. CWI is simply the managing member of Cartridge World North America, LLC (“CWNA”), a Master Franchisor of Cartridge World stores in North America. (Pl.’s Org. Pet. at ¶¶ 13, 14) There are virtually no jurisdictional allegations relating to CWI in Plaintiff’s Original Petition (“Petition”). Rather, Plaintiff uses the generic term “Defendants” and makes sweeping allegations that fails to distinguish between the conduct of the eight defendants. (Pl.’s Org. Pet.) Plaintiff does, however, concede that CWI is organized under Delaware law with its home office Case 3:16-cv-02658-C Document 6 Filed 09/23/16 Page 5 of 16 PageID 101 DEFENDANT CARTRIDGE WORLD INTERNATIONAL, INC.’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND BRIEF IN SUPPORT Page 2 in Illinois, and that its only connection to this matter is its status as CWNA’s Managing Member. (Pl.’s Org. Pet. at ¶¶ 9, 13, 14) CWI did not commit any of the acts alleged in the Petition within the State of Texas, nor did it direct any such acts toward the State of Texas. (Affidavit of Steve Weeden (“Weeden Aff.”), App. 3 at ¶ 14) CWI is not a resident of Texas. (Weeden Aff., App. 2 at ¶ 2) CWI does not maintain, and has never maintained, a place of business, an office, or other facilities in Texas. (Weeden Aff., App. 2 at ¶ 3) It does not maintain, and has never maintained, a mailing address, bank account, or telephone listing in Texas, nor has it has ever owned real or personal property in Texas. (Weeden Aff., App. 2 at ¶¶ 4-5) CWI does not have, and has never had, any employees residing within Texas who are authorized to act on its behalf. (Weeden Aff., App. 2 at ¶ 7) CWI has never manufactured any products in Texas, nor has it ever sold any products in Texas. (Weeden Aff., App. 2 at ¶ 8) CWI is not registered to do business in Texas, nor is it required to register to do business in Texas. (Weeden Aff., App. 2 at ¶ 9) CWI does not maintain, and is not required to maintain, a registered agent for service of process in Texas. (Weeden Aff., App. 2 at ¶ 10) CWI does not pay, and has never been required to pay, taxes to the State of Texas or any of its localities, nor has CWI ever entered into any contracts in or with the State of Texas or any of its localities. (Weeden Aff., App. 2 at ¶¶ 6, 11) CWI has never committed a tort in whole or in part in Texas. (Weeden Aff., App. 2 at ¶ 12) CWI does not have continuing and systematic contacts with Texas that would justify the assumption of in personam general jurisdiction by this Court or any other court in Texas. (Weeden Aff., App. 2-3 at, ¶ 13) To the extent that CWI has any contacts with Texas, they are infrequent and completely unrelated to the allegations in this lawsuit. (Weeden Aff., App. 2-3 at ¶ 13) Indeed, Plaintiff’s Petition does not specifically allege that CWI has any connections to the State of Texas at all. Case 3:16-cv-02658-C Document 6 Filed 09/23/16 Page 6 of 16 PageID 102 DEFENDANT CARTRIDGE WORLD INTERNATIONAL, INC.’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND BRIEF IN SUPPORT Page 3 CWI has not purposefully established minimum contacts with Texas giving rise to or related to Plaintiff’s causes of action sufficient to justify specific jurisdiction over it in Texas. (Weeden Aff., App. 3 at ¶ 16) Plaintiff’s causes of action and claims asserted in the Petition against CWI do not arise from, are not related to, and are not connected with any purposeful acts or activity committed by CWI in Texas or directed by CWI toward Texas. (Weeden Aff., App. 3 at ¶ 16) CWI has not purposefully availed itself of the privileges and benefits of conducting business in Texas, nor has it invoked the benefits and protections of the laws of Texas. (Weeden Aff., App. 3 at ¶ 15) CWI has never had any contact or communications with Plaintiff and has never made any representations whatsoever to Plaintiff, much less any communications or representations regarding the toner cartridges and/or any other products at issue in this lawsuit. (Weeden Aff., App. 3 at ¶ 17) In fact, prior to the receipt of the Petition in this lawsuit, CWI was not aware of any of the conduct Plaintiff alleges the defendants committed in this case. (Weeden Aff., App. 3 at ¶ 18) CWI did not direct, instruct, or ratify any of the alleged conduct of Defendants Todd Kuenstler, Maggie Kuenstler, Group 23, Inc., Group 523 LLC, Group 2323 LLC, or Group 52323 LLC (collectively, the “Kuenstler Defendants”). (Weeden Aff., App. 3 at ¶ 18) Indeed, CWI has never had any direct contact or communications with the Kuenstler Defendants. (Weeden Aff., App. 3 at ¶ 18) CWI is not a party or signatory to the franchise agreements referenced in the Petition, nor has CWI entered into any contract by mail or otherwise with Plaintiff that is performable, in whole or in part, by either party in Texas. (Weeden Aff., App. 4 at ¶ 19) Even more, neither CWI, nor any of its authorized representatives, have ever traveled to Texas in connection with any of the alleged transactions referenced in the Petition. (Weeden Aff., App. 4 at ¶ 20) Case 3:16-cv-02658-C Document 6 Filed 09/23/16 Page 7 of 16 PageID 103 DEFENDANT CARTRIDGE WORLD INTERNATIONAL, INC.’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND BRIEF IN SUPPORT Page 4 Finally, CWI has no reason to travel to or be in Texas. (Weeden Aff., App. 4 at ¶ 21) Any travel to Texas in connection with this lawsuit would be a significant inconvenience and burden to any representative of CWI (Weeden Aff., App. 4 at ¶ 21), contrary to requirements of fair play and substantial justice. CWI IS NOT SUBJECT TO PERSONAL JURISDICTION IN TEXAS. III. CWI is not subject to personal jurisdiction in Texas because (1) it is a nonresident who does not engage in continuous and systematic activities in the State of Texas, and (2) it has not engaged in any purposeful activity in Texas that gave rise to or directly relates to Plaintiff’s claims. Therefore, whether under a general or specific jurisdictional analysis, Plaintiff cannot meet its burden of demonstrating that the exercise of personal jurisdiction over CWI comports with constitutional due process requirements. Personal Jurisdiction Standard. A. When a nonresident defendant files a motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing the existence of personal jurisdiction over each defendant. Lewis v. Fresne, 252 F.3d 352, 358 (5th Cir. 2001). The plaintiff must present a prima facie case for personal jurisdiction if the district court rules on the motion to dismiss without an evidentiary hearing. Gardemal v. Westin Hotel Co., 186 F.3d 588, 592 (5th Cir. 1999). A court is not required to “credit conclusory allegations, even if uncontroverted.” Panda Brandywine Corp. v. Potomac Elec. Power Co., 253 F.3d 865, 869 (5th Cir. 2001). Plaintiff served CWI pursuant to the Texas long-arm statute and all of Plaintiff’s claims against CWI are under Texas law. (See Pl.’s Org. Pet. ¶¶ 9, 79-96) Because the Texas long-arm statute confers jurisdiction to the limits of constitutional due process, the sole inquiry is whether the assertion of personal jurisdiction over a defendant comports with federal due process Case 3:16-cv-02658-C Document 6 Filed 09/23/16 Page 8 of 16 PageID 104 DEFENDANT CARTRIDGE WORLD INTERNATIONAL, INC.’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND BRIEF IN SUPPORT Page 5 guarantees. Cent. Freight Lines, Inc. v. APA Transp. Corp., 322 F.3d 376, 380 (5th Cir. 2003); TV Azteca v. Ruiz, 490 S.W.3d 29, 36 (Tex. 2016), reh’g denied (June 10, 2016). The due process inquiry permits a court to exercise jurisdiction over a nonresident defendant when (1) the defendant has purposefully availed itself of the benefits and protections of the forum state by establishing “minimum contacts” with that state; and (2) the exercise of jurisdiction over that defendant “does not offend ‘traditional notions of fair play and substantial justice.’” Int’l Shoe Co. v. State of Washington, 326 U.S. 310, 316 (1945). The nonresident defendant’s purposeful availment must be such that the defendant “should reasonably anticipate being haled into court” in the forum state. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). This requirement “ensures that a defendant will not be haled into a jurisdiction solely as a result of ‘random,’ ‘fortuitous,’ or ‘attenuated’ contacts, or of the ‘unilateral activity of another party or a third person.’” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985) (internal citations omitted). The “minimum contacts” prong of the due process analysis may only be satisfied by a finding of either “specific” or “general” jurisdiction. General jurisdiction exists when a defendant’s contacts with the forum state, even if unrelated to the causes of action, can be described as “so ‘continuous and systematic’ as to render them essentially at home in the forum [s]tate.” Daimler AG v. Bauman, 134 S.Ct. 746, 751 (2014) (citing Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)). When general jurisdiction is asserted, the minimum contacts analysis is more demanding and requires a showing of substantial activities within the forum state. Jones v. Petty- Ray Geophysical Geosources, Inc., 954 F.2d 1061, 1068 (5th Cir. 1992). In contrast, for specific jurisdiction to exist the nonresident defendant must purposefully do some act or consummate some transaction in the forum state, and the cause of action must arise from or be connected with such act or transaction. Id. Specific jurisdiction focuses on the Case 3:16-cv-02658-C Document 6 Filed 09/23/16 Page 9 of 16 PageID 105 DEFENDANT CARTRIDGE WORLD INTERNATIONAL, INC.’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND BRIEF IN SUPPORT Page 6 “relationship among the defendant, the forum, and the litigation.” Walden v. Fiore, 134 S.Ct. 1115, 1118 (2014). The defendant’s relationship must arise out of contacts that the defendant himself creates with the forum state, not the defendant’s contacts with persons who reside in the forum state. Id. at 1122. CWI Is Not Subject to Specific Jurisdiction in Texas. B. In order to assert specific jurisdiction over CWI, Plaintiff must show that CWI’s alleged contacts with Texas arise from, or are directly related to, the causes of action asserted. Walden, 134 S.Ct. at 1118; Lewis, 252 F.3d at 358. For the reasons discussed below, Plaintiff’s claims against CWI do not arise from, are not related to, and are not connected with any purposeful acts or activity allegedly committed by CWI in Texas or directed by CWI toward Texas. (Weeden Aff., App. 3 at ¶¶ 14-20). As such, no basis exists for exercising specific jurisdiction over CWI. Plaintiff’s Petition does not specifically allege that the parties’ dispute “arises out of” or “relates to” any of CWI’s own acts or omissions in Texas. Plaintiff has alleged claims against CWI for negligence, gross negligence, negligent misrepresentation, and unjust enrichment. (Pl.’s Org. Pet. ¶¶ 79-96). However, the factual allegations in the Petition do not distinguish between the conduct of the eight defendants; rather, Plaintiff uses generic terms in an attempt to impute the Kuenstler Defendants’ alleged conduct in Texas to CWI. (See Pl.’s Org. Pet. ¶¶ 12-25) For example, in support of its negligent misrepresentation claims, Plaintiff makes only the conclusory allegation that CWI “both directly and through their Franchisee” made representations to Plaintiff. (Pl.’s Org. Pet. ¶ 88) In reality, CWI has never had any contact or communications with Plaintiff and has never made any representations whatsoever to Plaintiff, much less any communications or representations regarding the toner cartridges and/or any other products. (Weeden Aff., App. 3 at ¶ 17) Even more, Plaintiff makes no allegations that CWI specifically directed, instructed, or ratified any of the alleged conduct of the Kuenstler Case 3:16-cv-02658-C Document 6 Filed 09/23/16 Page 10 of 16 PageID 106 DEFENDANT CARTRIDGE WORLD INTERNATIONAL, INC.’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND BRIEF IN SUPPORT Page 7 Defendants. (Weeden Aff., App. 3 at ¶ 18) In fact, CWI has never had any direct contact or communications with the Kuenstler Defendants, and no such contract or communication is alleged. (Weeden Aff., App. 3 at ¶ 18; see Pl.’s Org. Pet.) The Petition is simply devoid of allegations regarding CWI’s specific conduct, much less any conduct by CWI in Texas or directed by CWI at Texas. Plaintiff does not allege, nor can it allege in good faith, that CWI committed any of the acts alleged in the Petition within the State of Texas, nor did it direct any such acts toward the State of Texas. (Weeden Aff., App. 3 at ¶ 14) CWI is not a party or signatory to the franchise agreements referenced in the Petition, nor has CWI entered into any contract by mail or otherwise with Plaintiff or the Kuenstler Defendants that is performable, in whole or in part, by either party in Texas. (Weeden Aff., App. 4 at ¶19) Furthermore, neither CWI nor any of its authorized representatives have ever traveled to Texas in connection with any of the alleged transactions referenced in the Petition. (Weeden Aff., App. 4 at ¶ 20) Plaintiff has failed to allege any contacts CWI has with Texas—because none exist— that relate to the causes of action asserted. Plaintiff cannot establish specific jurisdiction over CWI, and therefore, Plaintiff’s claims against CWI should be dismissed for lack of personal jurisdiction. CWI is Not Subject to General Jurisdiction in Texas. C. A plaintiff seeking to establish general jurisdiction must show that the nonresident defendant has “continuous and systematic” contacts with the forum state. See Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 416 (1984). The “continuous and systematic” contacts test is a “difficult one to meet, requiring extensive contacts between a defendant and a forum. Even repeated contacts with forum residents by a foreign defendant may not constitute the requisite substantial, continuous and systematic contacts required for a finding of general jurisdiction.” Johnston v. Multidata Sys. Int’l Corp., 523 F.3d 602, 609-10 (5th Cir. 2008) As Case 3:16-cv-02658-C Document 6 Filed 09/23/16 Page 11 of 16 PageID 107 DEFENDANT CARTRIDGE WORLD INTERNATIONAL, INC.’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND BRIEF IN SUPPORT Page 8 the Supreme Court has recently stated, general jurisdiction over a corporation will only exist where a corporation has affiliations with the forum state that are “so continuous and systematic as to render it essentially at home in the forum state,” such as when the corporation is incorporated, or maintains its principal place of business, in the forum state. Daimler, 134 S. Ct. at 760-61. And, the Fifth Circuit has noted that it is “incredibly difficult to establish general jurisdiction in a forum other than the place of incorporation or principal place of business.” Monkton Ins. Servs., Ltd. v. Ritter, 768 F.3d 429, 432 (5th Cir. 2014).; see also Am. Bank, F.S.B. v. Auto-Owners Mutual Fire & Casualty Ins. Co., No. 4:10-CV-331-A, 2010 WL 3784282, at *4 (N.D. Tex. Sept. 27, 2010) (the “Fifth Circuit imposes a ‘high standard set by the Supreme Court’ to establish general jurisdiction, and recognizes ‘just how difficult it is’ to meet the standard.”); Bearry v. Beech Aircraft Corp., 818 F.2d 370, 374 (5th Cir. 1987); see Helicopteros, 466 U.S. at 411, 416 (general jurisdiction in Texas did not exist even though defendant purchased 80% of its helicopter fleet, spare parts, and accessories for more than $4 million from Bell Helicopter in Fort Worth, sent prospective pilots to Fort Worth for training and to ferry aircraft to South America, sent management and maintenance personnel to Fort Worth for technical consultation, and received over $5 million in payments drawn on a bank in Houston). Here, Plaintiff does not assert any factual allegations regarding any purported continuous and systematic contacts between CWI and Texas, because no such facts exist. CWI is not incorporated in Texas and does not maintain its principal place of business in Texas. Nor does CWI have the substantial, continuous, and systematic contacts with the State of Texas necessary to support the exercise of general jurisdiction over it by a Texas court. See Helicopteros, 466 U.S at 415-16. In fact, the undisputed evidence conclusively negates general jurisdiction by demonstrating, among other facts, that: • CWI is incorporated in the State of Delaware; Case 3:16-cv-02658-C Document 6 Filed 09/23/16 Page 12 of 16 PageID 108 DEFENDANT CARTRIDGE WORLD INTERNATIONAL, INC.’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND BRIEF IN SUPPORT Page 9 • CWI maintains its principal place of business in McHenry, Illinois; • CWI has never had any offices, real or personal property, or employees residing in Texas; • CWI has never maintained a bank account, mailing address, or telephone listing in Texas; • CWI has never manufactured or sold any products in Texas; • CWI is not registered to do business in Texas and does not have a registered agent for service of process in Texas, nor is it required to; • CWI has never entered into any contracts in or with the State of Texas or any of its localities; and • CWI has never committed a tort in whole or in part in Texas. (Weeden Aff., App. 2 at ¶¶ 2-12) Any contacts CWI has ever had with Texas have been too sporadic and attenuated to support any finding of personal jurisdiction. (See Weeden Aff., App. 2 at ¶ 13) There is no allegation or factual support to suggest CWI’s contacts with Texas, if any, were continuous and systematic enough to make CWI essentially “at home” in Texas. Simply stated, Plaintiff has not (and cannot) meet its “difficult burden” of establishing general jurisdiction over CWI. The only factual allegations in Plaintiff’s Petition do not distinguish between the conduct of the eight defendants; rather, Plaintiff uses the generic term “Defendants” and makes sweeping allegations that imputes the Kuenstler Defendants’ conduct to CWI. (See Pl.’s Org. Pet. ¶¶ 12- 25) The only specific allegation as CWI is that it is “a Managing Member of [Cartridge World North America], and upon information and belief, Defendants were involved in the delivery of the toner cartridges to Plaintiff, and benefited financially from the repeated re-sale and delivery of pilfered toner cartridges to Plaintiff.” (Pl.’s Org. Pet. ¶ 14) Plaintiff’s conclusory and generic allegations do not come close to establishing the minimum contacts required for this Court to exercise general jurisdiction over CWI. See Able Fund v. Dobbins, No. 3:05-CV-2263-H, 2006 Case 3:16-cv-02658-C Document 6 Filed 09/23/16 Page 13 of 16 PageID 109 DEFENDANT CARTRIDGE WORLD INTERNATIONAL, INC.’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND BRIEF IN SUPPORT Page 10 WL 1816430, at *3 (N.D. Tex. June 22, 2006) (rejecting conclusory allegations in complaint as a basis for exercising general jurisdiction over defendants); Goddard v. National Ass’n of Physician Recruiters, Inc., No. 3:04-CV-1424-H, 2005 WL 50871, at *2 (N.D. Tex. Jan. 11, 2005) (same). Even more, the alleged acts of the Kuenstler Defendants cannot be imputed to CWI for jurisdictional purposes because these acts are the “unilateral activity of another party.” See Burger King Corp., 471 U.S. at 475. The Exercise of Personal Jurisdiction over CWI Would Offend Traditional D. Notions of Fair Play and Substantial Justice. Finally, in addition to the foregoing, the exercise of personal jurisdiction over it in this case would offend “‘traditional notions of fair play and substantial justice.’” Stuart v. Spademan, 772 F.2d 1185, 1191 (5th Cir. 1985) (quoting International Shoe Co, 326 U.S. at 316). The fairness of exercising personal jurisdiction is determined by balancing several factors, including: (1) the burden on the nonresident defendant; (2) the interests of the forum state; (3) the plaintiff’s interest in convenient and effective relief; (4) the judicial system’s interest in obtaining the most efficient resolution of controversies; and (5) the shared interest of the several states in furthering fundamental substantive social policies. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980). These fairness factors, however, cannot vest “the court with jurisdiction over a nonresident when the minimum contacts analysis weighs against [it].” Stuart, 772 F.2d at 1191-92. Applying these factors here confirms that the burden and inconvenience for CWI will be substantial if it is compelled to litigate this action in Texas. (Weeden Aff., App. 4 at ¶ 21) CWI has no presence in Texas, and imputing jurisdiction upon CWI in this matter would force it to establish contacts with Texas, which do not currently exist, sufficient to allow it to effectively defend itself in this matter. Case 3:16-cv-02658-C Document 6 Filed 09/23/16 Page 14 of 16 PageID 110 DEFENDANT CARTRIDGE WORLD INTERNATIONAL, INC.’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND BRIEF IN SUPPORT Page 11 Texas has little interest in keeping CWI in this case because CWI was not involved with any of the alleged conduct that occurred in Texas, nor did CWI direct any conduct at Texas. (Weeden Aff., App. 2-4 at ¶¶ 2- 21) And the Plaintiff has an avenue for relief because the Court has personal jurisdiction over the defendants whose alleged conduct Plaintiff’s claims in this lawsuit are largely based. (See generally, Pl.’s Org. Pet.) The minimum contacts analysis clearly establishes that CWI lacks the requisite contacts with Texas necessary to sustain personal jurisdiction, and haling CWI to court in a state with which CWI has infrequent contacts at best would offend traditional notions of fair play and substantial justice. PRAYER IV. For the foregoing reasons, Cartridge World International, Inc. respectfully requests that this Court dismiss this case against it for lack of personal jurisdiction. Respectfully submitted, /s/ Rodney H. Lawson RODNEY H. LAWSON Texas State Bar No. 12059700 Email: rlawson@ccsb.com DEBRÁN L. O’NEIL Texas State Bar No. 24083497 Email: doneil@ccsb.com CARRINGTON, COLEMAN, SLOMAN & BLUMENTHAL, L.L.P. 901 Main Street, Suite 5500 Dallas, Texas 75202-3767 Telephone: 214/855-3000 Telecopy: 214/855-1333 Attorneys for Defendants Cartridge World North America and Cartridge World International, Inc. Case 3:16-cv-02658-C Document 6 Filed 09/23/16 Page 15 of 16 PageID 111 DEFENDANT CARTRIDGE WORLD INTERNATIONAL, INC.’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND BRIEF IN SUPPORT Page 12 Certificate of Service The undersigned certifies that a copy of the foregoing instrument was served upon the attorneys of record in the above cause in accordance with Rule 5, Federal Rules of Civil Procedure, on this 23rd day of September, 2016. /s/ Rodney H. Lawson Rodney H. Lawson i_6697347v.2 Case 3:16-cv-02658-C Document 6 Filed 09/23/16 Page 16 of 16 PageID 112 APPENDIX UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION HALF PRICE BOOKS, RECORDS, MAGAZINES, IN CORPORA TED, Plaintiff, vs. § § § § § § § TODD KUENSTLER, Individually; § MAGGIE KUENSTLER, Individually; § GROUP 23, INC.; GROUP 523 LLC; § GROUP 2323 LLC; GROUP 52323 LLC; § CARTRIDGE WORLD NORTH AMERICA; § and CARTRIDGE WORLD § INTERNATIONAL, INC., § Defendants. § § CIVIL ACTION NO. 3: 16-cv-02658-C AFFIDAVIT OF STEVE WEEDON STATE OF NORTH CAROLINA § § COUNTY OF MECKLENBURG § BEFORE ME, the undersigned notary public, personally appeared Steve Weedon, who, known to me, being first duly sworn, on his oath stated as follows: 1. My name is Steve Weedon. I am over the age of twenty-one (21) years old, of sound mind, have never been convicted of a felony, and am fully competent to make this Affidavit. I am the Director of Cartridge World International, Inc. ("CWI"). As such, I have personal knowledge of the facts contained in this Affidavit, all of which are true and correct. I have reviewed Plaintiff's Original Petition (the "Petition") and am familiar with the allegations Plaintiff Half Price Books, Records, Magazines, Incorporated ("Plaintiff') has asserted against CWI. AFFIDAVIT OF STEVE WEEDON Page 1 Case 3:16-cv-02658-C Document 6-1 Filed 09/23/16 Page 1 of 4 PageID 113 APPENDIX 2. CWI is not a Texas resident. CWI is a Delaware corporation with its principal place of business in McHenry, Illinois. 3. CWI does not maintain, and has never maintained, a place of business, an office, or other facilities in Texas. 4. CWI does not maintain, and has never maintained, a mailing address, bank account, or telephone listing in Texas. 5. CWI does not own, and has never owned, real or personal property in Texas. 6. CWI does not pay, and has never been required to pay, taxes to the state of Texas or any of its localities. 7. CWI does not have, and has never had, any employees residing within Texas that are authorized to act on its behalf. 8. CWI has never manufactured any products in Texas, nor has it ever sold any products in Texas. 9. CWI is not registered to do business in Texas, nor is it required to register to do business in Texas. 10. CWI does not maintain, and is not required to maintain, a registered agent for service ofprocess in Texas. 11. CWI has never entered into any contracts in or with the State of Texas or any of its localities. 12. CWI has never committed a tort in whole or in part in Texas. 13. CWI does not have continuing and systematic contacts with Texas that would justifY the assumption of in personam general jurisdiction by this Court or any other court in AFFIDAVIT OF STEVE WEEDON Page2 Case 3:16-cv-02658-C Document 6-1 Filed 09/23/16 Page 2 of 4 PageID 114 APPENDIX Texas. To the extent that CWI has any contacts with Texas, they are infrequent and completely unrelated to the allegations in this lawsuit. 14. CWI did not commit any of the acts alleged in the Petition within the State of Texas, nor did it direct any such acts toward the State of Texas. 15. CWI has not purposefully availed itself of the privileges and benefits of conducting business in Texas, nor has it invoked the benefits and protections of the laws of Texas. CWI has never filed a lawsuit in Texas. 16. CWI has not purposefully established minimum contacts with Texas giving rise to or related to Plaintiffs causes of action that would justify the assumption of in personam specific jurisdiction by this Court or any other court in Texas. Plaintiffs causes of action and claims asserted in the Petition against CWI do not arise from, are not related to, and are not connected with any purposeful acts or activity committed by CWI in Texas or directed toward Texas. 17. CWI has never had any contact or communications with Plaintiff and has never made any representations whatsoever to Plaintiff, much less any communications or representations regarding the toner cartridges and/or any other products. 18. Prior to the receipt of the Petition in this lawsuit, CWI was not aware of any of the conduct Plaintiff alleges the other defendants committed in this case. CWI did not direct, instruct, or ratify any of the alleged conduct of Defendants Todd Kuenstler, Maggie Kuenstler, Group 23, Inc., Group 523 LLC, Group 2323 LLC, or Group 52323 LLC (collectively, the "Kuenstler Defendants"). In fact, CWI has never had any direct contact or communications with the Kuenstler Defendants. AFFIDAVIT OF STEVE WEEDON Page 3 Case 3:16-cv-02658-C Document 6-1 Filed 09/23/16 Page 3 of 4 PageID 115 APPENDIX 19. CWI is not a party or signatory to the franchise agreements referenced in the Petition, nor has CWI entered into any contract by mail or otherwise with Plaintiff that is performable, in whole or in part, by either party in Texas. 20. Neither CWI, nor any of its authorized representatives, have ever traveled to Texas in connection with any of the alleged transactions referenced in the Petition. 21. CWI has no reason to travel to, or be in, Texas. Any travel to Texas from its headquarters in McHenry, Illinois, in connection with this lawsuit would be a significant inconvenience and burden to any representative of CWI. And it would be unfair to subject CWI or its representatives to the possibility of a trial in Texas regarding matters in which it had absolutely no contacts whatsoever with the State of Texas. Further Affiant sayeth not. Steve Weedon SUBSCRIBED AND SWORN TO B~ ME G;f-tv ~ V'Jeeol en 0~ this a-~ day of be.r wh1ch w1tness my hand and offiCial seal of office. i 6699972v.2 AFFIDAVIT OF STEVE WEEDON by the said , 2016, to certify Page4 Case 3:16-cv-02658-C Document 6-1 Filed 09/23/16 Page 4 of 4 PageID 116