Xenex Healthcare Services, Llc v. Larochelle et al

MOTION to Dismiss for Lack of Jurisdiction

W.D. Tex.April 13, 2017

1 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION XENEX HEALTHCARE SERVICES, LLC, Plaintiff, v. Civil Action No. 5:17-cv-00328 JOHN LaROCHELLE; SOLARIS DISINFECTION, INC; AND ANGELICA HOLDINGS, LLC, Defendant. / DEFENDANTS’ SOLARIS DISINFECTION, INC. AND ANGELICA HOLDINGS, LLC EXPEDITED MOTION TO DISMISS UNDER FED. R. CIV. P. 12(B)(2) AND BRIEF IN SUPPORT Defendants Solaris Disinfection, Inc. (“Solaris”) and Angelica Holdings, LLC (“Angelica Holdings”) (collectively, “Defendants” 1 ) file this Expedited Motion to Dismiss for Lack of Personal Jurisdiction under Fed. R. Civ. P. 12(b)(2) and Brief in Support. Defendants move to dismiss on an expedited basis because Plaintiff previously obtained ex parte a Temporary Restraining Order (“TRO”) in Texas District Court for Bexar County, and that TRO continues to restrain both Solaris and Angelica Holdings. That Court did not have jurisdiction to enter such an order. I. PRELIMINARY STATEMENT As alleged in the Petition, this case “ultimately stem[s] from a contract” between Plaintiff Xenex Healthcare Services, LLC (“Xenex”), a Texas based company, and a third party, Sodexo Operations, LLC (“Sodexo”), a wholly owned subsidiary of a French corporation called Sodexo, 1 The undersigned counsel does not represent and does not file this motion on behalf of the third named defendant, John LaRochelle. Case 5:17-cv-00328 Document 2 Filed 04/13/17 Page 1 of 9 2 Inc. (See Pl. Pet. ¶¶ 9, 21) Despite having no connection to that contract, Xenex has sued Solaris, a Canadian corporation, and Angelica Holdings, a Delaware company, but Xenex has not alleged any action either Defendant undertook in Texas nor has it alleged any other connection with the Defendants to the state. In fact, neither Solaris nor Angelica Holdings has the minimum contacts required with Texas sufficient to confer personal jurisdiction. Neither entity does business in the state, and Xenex has not alleged any fact to the contrary. Instead, Xenex’s causes of action arise from Solaris’s and Angelica Holdings’s alleged contacts with Defendant John LaRochelle (“LaRochelle”), a New Hampshire resident and employee of Sodexo, contacts that (even if they occurred) occurred outside Texas. As a result, Xenex’s claims against Solaris and Angelica Holdings should be dismissed because neither entity is subject to jurisdiction in Texas. II. BACKGROUND Xenex contends that Solaris and Angelica Holdings committed violations of the Texas Uniform Trade Secrets Act, the Texas Theft Liability Act, conversion, tortious interference with a contract, tortious interference with a business relationship, tortious interference with prospective business relations, civil conspiracy, unfair competition, and unjust enrichment relating to alleged communications with LaRochelle. (See Pl. Pet. ¶¶ 55-117). Specifically, Xenex alleges that a Sodexo employee, LaRochelle, obtained and subsequently disclosed Xenex’s confidential information and trade secrets to Solaris and Angelica Holdings. (See id. Preliminary Statement). Xenex further claims that LaRochelle will soon leave his job at Sodexo to join Solaris. (See id.). Xenex has not alleged any jurisdictional facts showing contacts of any kind between Solaris and Angelica Holdings and the State of Texas. Indeed, its causes of action against Case 5:17-cv-00328 Document 2 Filed 04/13/17 Page 2 of 9 3 Solaris and Angelica Holdings arise exclusively from alleged contacts with LaRochelle that occurred outside the state, and Solaris and Angelica Holdings do not have any contacts with Texas. III. ARGUMENT This Court Lacks Personal Jurisdiction Over Solaris And Angelica Holdings. Xenex, as plaintiff, bears the burden of establishing that this Court may exercise personal jurisdiction over Solaris and Angelica Holdings. See Wilson v. Belin, 20 F.3d 644, 648 (5th Cir. 1994) (“When a nonresident defendant presents a motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing the district court’s jurisdiction over the nonresident.”); Craftsman v. Lugosch, 486 F. Supp. 2d 595, 597 (W.D. Tex. 2007) (same). This requires a showing that: “(1) the long-arm statute of the forum state creates personal jurisdiction over the defendant; and (2) the exercise of personal jurisdiction is consistent with the due process guarantees of the United States Constitution.” Clemens v. McNamee, 615 F.3d 374, 378 (5th Cir. 2010). Because the Texas long-arm statute has been interpreted as extending to the limit of due process, these two inquiries are the same for district courts in Texas. See Religious Tech. Ctr. v. Liebreich, 339 F.3d 369, 373 (5th Cir. 2003). Under well-established principles of due process, this Court may not exercise personal jurisdiction over Solaris or Angelica Holdings unless Xenex establishes that: (1) Solaris or Angelica Holdings purposefully availed themselves of the benefits and protections of Texas by establishing “minimum contacts” with the state, such that (2) the exercise of personal jurisdiction over Solaris or Angelica Holdings “does not offend traditional notions of fair play and substantial justice.” Walden v. Fiore, 134 S. Ct. 1115, 1121 (2014) (citing Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). Because Xenex’s Petition is devoid of facts to establish Case 5:17-cv-00328 Document 2 Filed 04/13/17 Page 3 of 9 4 that Solaris or Angelica Holdings maintained the requisite minimum contacts with Texas, either as a matter of general or specific jurisdiction, this Court lacks personal jurisdiction over either defendant. A. Solaris And Angelica Holdings Do Not Have Continuous And Systematic Contacts With Texas Necessary For This Court To Exercise General Jurisdiction. General jurisdiction requires continuous and systematic contacts. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416 (1984). “[T]he paradigm forum for the exercise of general jurisdiction” for a corporation is its “place of incorporation and principal place of business.” Daimler, 134 S. Ct. at 760 (quoting Goodyear, 131 S. Ct. at 2851). This promotes predictability, allowing corporations to “structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit” while, at the same time, affording plaintiffs “recourse to at least one clear and certain forum in which a defendant corporation may be sued on any and all claims.” Id. at 762 n.20. The “continuous and systematic contacts test is a difficult one to meet, requiring extensive contacts between a defendant and a forum.” Submersible Sys., Inc. v. Perforadora Cent., S.A., 249 F.3d 413, 419 (5th Cir. 2001) (citation omitted). Xenex’s allegations fall well short of the standard for general jurisdiction over Solaris and Angelica Holdings. Solaris is incorporated under the laws of Canada and maintains its principal place of business in Toronto. (Declaration of Val Ramanand (“Ramanand Decl.”), attached as Exhibit A, ¶ 3). Similarly, Angelica Holdings is a limited liability company formed under the laws of Delaware and has its principal place of business in Toronto, Canada. (Ramanand Decl. ¶ 4). None of Angelica Holdings’s members are citizens of Texas. (Ramanand Decl. ¶ 4). Angelica Holdings’s sole member is Val Ramanand, a citizen and Case 5:17-cv-00328 Document 2 Filed 04/13/17 Page 4 of 9 5 resident of Toronto, Canada. 2 (Ramanand Decl. ¶¶ 1-2). Simply put, there is no evidence or even allegation of the sort of continuous and systematic contacts between Solaris or Angelica Holdings and Texas that would support the exercise of general personal jurisdiction. B. Solaris’s And Angelica Holdings’s Communications With LaRochelle Do Not Create Specific Jurisdiction In Texas. To determine if a district court has specific jurisdiction over a defendant requires a three- step analysis: (1) whether the defendant has minimum contacts with the forum state, i.e., whether it purposely directed its activities toward the forum state or purposefully availed itself of the privileges of conducting activities there; (2) whether the plaintiff’s cause of action arises out of or results from the defendant’s forum- related contacts; and (3) whether the exercise of personal jurisdiction is fair and reasonable. See Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 271 (5th Cir. 2006). “Specific jurisdiction ‘focuses on the relationship among the defendant, the forum, and the litigation.’” Monkton Ins. Servs., Ltd. v. Ritter, 768 F.3d 429, 432-33 (5th Cir. 2014) (quoting Walden, 134 S. Ct. at 1121 (quotation marks and citations omitted)). “[T]he relationship must arise out of contacts that the ‘defendant himself creates with the forum State,” and “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.” Walden, 134 S. Ct. at 1122 (emphasis in original). This well-established test was followed by this Court in the dismissal of another nonresident defendant sued by Xenex less than a year ago. 3 In Xenex Disinfection Serv. LLC, v. 2 The citizenship of a limited liability company’s members is attributed to the LLC itself. See, e.g., Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077, 1080 (5th Cir. 2008) (determining issue of first impression in the Circuit that “like limited partnerships and other unincorporated associations or entities, the citizenship of a LLC is determined by the citizenship of all of its members.”) (citations omitted). 3 It appears that Xenex is a frequent litigant before the District Court of Bexar County, having brought no fewer than six actions in that court since 2014. See, e.g., Xenex Disinfection Services Case 5:17-cv-00328 Document 2 Filed 04/13/17 Page 5 of 9 6 Jeffery Deal and UVAS, LLC, No. SA-16-CV-232-XR, 2016 WL 3033779, at *1 (W.D. Tex. May 25, 2016), Xenex contended that Deal and UVAS made false and misleading statements, including a posting on Twitter, to Xenex’s current and potential customers relating to the effectiveness of Xenex’s disinfection device. Id. Xenex argued that personal jurisdiction existed over Deal and UVAS based on Deal’s statements “about the performance of a device that is manufactured, sold and marketed from the State of Texas by a Texas company.” Id. at *2. This Court disagreed: “Plaintiff misstates the law in this circuit.” Id. “[Xenex] failed to make a prima facie showing that either Dr. Deal or UVAS purposefully directed any alleged defamatory or inaccurate statements toward Texas residents.” Id. at *3. Xenex’s grounds for jurisdiction here are much weaker than even those rejected in Deal. Xenex has not alleged any facts to show that either Solaris or Angelica Holdings purposefully directed any activity to or maintained any contacts—much less the “minimum contacts” required—in Texas. For example, Xenex does not allege that Solaris or Angelica Holdings “traveled to, conducted activities within, contacted anyone in, or sent anything or anyone to” Texas. Id. at 1124. Instead, Xenex appears to allege that because Solaris and Angelica Holdings allegedly communicated with either LaRochelle or other Sodexo employees concerning Xenex and its product, Solaris and Angelica Holdings fall within this jurisdiction. (See Pl.’s Pet. ¶ 8) But as this Court made clear in Deal, that is not enough. Instead, “the relationship must arise out of contacts that the ‘defendant himself creates with the forum State.’” Walden, 134 S. Ct. at 1122 (emphasis in original). Neither entity has created such a relationship with Texas. LLC v. George Lichtblau et al., Cause No. 2014CI02018; Xenex Disinfection Services LLC v. Spectra254, LLC, Cause No. 2014CI19749; Xenex Disinfection Services LLC v. The Clorox Co., Cause No. 2015CI05178; Xenex Disinfection Services LLC v. Tru-D SmartUVC, LLC, Cause No. 2015CI16814; Xenex Disinfection Services LLC v. Jeffery Deal and UVAS, LLC, Cause No. 2015CI19491. Case 5:17-cv-00328 Document 2 Filed 04/13/17 Page 6 of 9 7 Solaris and Angelica Holdings have never maintained an office, headquarters, or place of business in Texas. (Ramanand Decl. ¶ 5). In fact, Angelica Holdings is merely a holding company for Solaris’s intellectual property. (Ramanand Decl. ¶ 6). Solaris and Angelica Holdings have never been registered to do business in Texas and do not have agents for service of process within the state. (Ramanand Decl. ¶¶ 7-8). They have never owned real property in Texas. (Ramanand Decl. ¶ 9). They have never paid taxes to Texas and have never owned bank accounts here. (Ramanand Decl. ¶¶ 10-11). Solaris and Angelica Holdings have never conducted business in Texas. (Ramanand Decl. ¶ 12). Neither Solaris nor Angelica Holdings have had any communications with LaRochelle about any business opportunities or activities within Texas. (Ramanand Decl. ¶ 13). In short, there simply is no evidence of any specific, direct, intentional contacts between Solaris or Angelica Holdings and Texas. IV. CONCLUSION For these reasons, Defendants Solaris and Angelica Holdings respectfully move the Court to dismiss the claims asserted in Plaintiff Xenex’s Original Petition under Fed. R. Civ. P. 12(b)(2) for lack of personal jurisdiction and grant any and all other relief whether in equity or in law on an expedited basis. Case 5:17-cv-00328 Document 2 Filed 04/13/17 Page 7 of 9 8 Date: April 13, 2017 Respectfully submitted, /s/ Matthew T. Nickel Matthew T. Nickel Texas Bar No. 24056042 Adam H. Pierson Texas Bar No. 24074897 Blake J. Brownshadel Texas Bar No. 24073969 Dentons US LLP 2000 McKinney Avenue, Suite 1900 Dallas, Texas 75201 Phone: (214) 259-0900 Fax: (214) 259-0910 matt.nickel@dentons.com adam.pierson@dentons.com blake.brownshadel@dentons.com ATTORNEYS FOR DEFENDANTS SOLARIS DISINFECTION, INC. AND ANGELICA HOLDINGS, LLC Case 5:17-cv-00328 Document 2 Filed 04/13/17 Page 8 of 9 9 CERTIFICATE OF SERVICE I hereby certify that on April 13, 2017, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the foregoing: Steven M. Zager Texas Bar No. 22241500 AKIN GUMP STRAUSS HAUER & FELD LLP One Bryant Park Bank of America Tower New York, NY 10036-6745 Phone: 212.872.1000 Fax: 212.872.1002 szager@akingump.com Clayton N. Matheson Texas Bar No. 24074664 AKIN GUMP STRAUS HAUER & FELD LLP 300 Convent Street, Suite 1600 San Antonio, Texas 78205-3732 Phone: 210.281.7000 Fax: 210.224.2035 cmatheson@akingump.com ATTORNEYS FOR PLAINTIFF XENEX HEALTHCARE SERVICES, LLC S. Jan Hueber, Partner COTTEN SCHMIDT & ABBOTT, LLP 100 Energy Way Suite 2000 Fort Worth, Texas 76102 Phone: 817.338.4500 Fax: 817.338.4599 jhueber@csa-lawfirm.com ATTORNEY FOR DEFENDANT JOHN LAROCHELLE /s/ Matthew T. Nickel Matthew T. Nickel Case 5:17-cv-00328 Document 2 Filed 04/13/17 Page 9 of 9 Exhibit A Case 5:17-cv-00328 Document 2-1 Filed 04/13/17 Page 1 of 3 Case 5:17-cv-00328 Document 2-1 Filed 04/13/17 Page 2 of 3 Case 5:17-cv-00328 Document 2-1 Filed 04/13/17 Page 3 of 3 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION XENEX HEALTHCARE SERVICES, LLC, Plaintiff, v. Civil Action No. 5:17-cv-00328 JOHN LaROCHELLE; SOLARIS DISINFECTION, INC; AND ANGELICA HOLDINGS, LLC, Defendant. / ORDER GRANTING DEFENDANTS’ EXPEDITED MOTION TO DISMISS On this day the Court considered Defendants’ Solaris Disinfection, Inc. (“Solaris”) and Angelica Holdings, LLC (“Angelica Holdings”) (collectively, “Defendants”) Expedited Motion to Dismiss. Having considered the Expedited Motion and all other matters on file and before the Court, the Court is of the opinion that the Expedited Motion to Dismiss should be, and is hereby GRANTED: IT IS ORDERED that Defendants’ Expedited Motion to Dismiss is Granted, and all Plaintiff’s claims against Defendants are dismissed without prejudice to refiling in a court of proper jurisdiction. ORDERED this ____ day of ______________, 2017. ________________________________ UNITED STATES DISTRICT JUDGE Case 5:17-cv-00328 Document 2-2 Filed 04/13/17 Page 1 of 1