FLEXSTEEL PIPELINE TECHNOLOGIES INC v. CHEN et al

Filing 114

ORDER granting 108 Flexsteel's Motion to Compel Jurisdictional Discovery. Golsun must produce supplemental documents by August 30, 2019. Flexsteel must complete depositions by September 30, 2019. Golsun must file its renewed motion to dismiss for lack of personal jurisdiction by October 14, 2019. Flexsteel must file its response by October 30, 2019. Signed by MAGISTRATE JUDGE GARY R JONES on 08/09/19. (grj)

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IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF FLORIDA
PANAMA CITY DIVISION
FLEXSTEEL PIPELINE
TECHNOLOGIES, INC.,

Case No. 5:16-cv-239-TKW-GRJ

Plaintiff,
v.
BIN CHEN and CHANGCHUN
GAOXIANG SPECIAL PIPE CO., LTD.,
a/k/a GOLSUN PIPES,
Defendants.
______________________________/

ORDER
On August 8, 2019, the Court conducted a telephonic hearing to
address Flexsteel’s Motion to Compel Jurisdictional Discovery, ECF No.
108, and Defendant Golsun’s Response in Opposition. ECF No. 111. For
the reasons discussed on the record at the hearing, which are fully
incorporated into this order, and as summarized below, Flexsteel’s Motion
to Compel Jurisdictional Discovery is due to be granted to the extent
detailed in this order.

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DISCUSSION
Flexsteel’s motion relates to the Court’s previous ruling authorizing
Flexsteel to conduct jurisdictional discovery from Golsun before Golsun
may renew its motion to dismiss for lack of personal jurisdiction.
On March 31, 2019, the Court denied Golsun’s motion to dismiss
without prejudice so that Flexsteel could conduct jurisdictional discovery
before Golsun renewed its motion to dismiss. ECF No. 98. Flexsteel
submitted to the Court a plan for the proposed jurisdictional discovery,
which the Court adopted and approved on April 9, 2019. ECF No. 100. The
plan envisioned by the Court at that time required Flexsteel to serve the
written discovery requests within 5 days and then Golsun would respond to
the written discovery requests within 30 days. Flexsteel was then required
to complete the depositions of the Golsun witnesses within 60 days after
Flexsteel received Golsun’s document production. The deadline to
complete jurisdictional discovery under this plan was August 1, 2019. That
has not happened, however, because a dispute arose concerning Golsun’s
objections to some of Flexsteel’s written discovery requests. The parties
attempted to resolve their difference through meet and confers but were
unsuccessful, thus prompting the filing of the motion to compel jurisdictional
discovery.

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The main disagreements between the parties concern the following:
(1) whether Golsun must produce documents concerning its United States
and Florida activities after August 19, 2016, the date the complaint was
filed in this case; (2) whether Golsun must produce passport information
concerning travel in the United States by Golsun employees and
representatives; (3) whether Golsun must respond to Flexsteel’s
interrogatory no. 7; (4) whether Golsun must produce drafts of contracts,
distributorship agreements, or sales agreements that were not executed
and concern sales territories outside the United States; and (5) the location
of the depositions Flexsteel will conduct after written discovery is
completed.
Turning first to the issue of whether Golsun must produce documents
post-dating the filing of the complaint in this case, Flexsteel asserts that
information about Golsun’s activities in the United States during the last
three years is important for determining personal jurisdiction. Flexsteel says
that its claims in this case concern not only the misappropriation of its
technology but Golsun’s ongoing and continuing use of the misappropriated
technology. Thus, according to Flexsteel, because the claims in this case
involve continuing tortious behavior post-complaint activities are relevant to
personal jurisdiction.

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Golsun looks at Flexsteel’s claims much more narrowly. Golsun
argues that the misappropriation claims in this case concern the single onetime misappropriation of Flexsteel’s technology when a Chinese patent was
obtained in 2008 and then when a U.S. patent was obtained in 2015.
As the Court explained at the hearing, the Court concludes that
Golsun’s post-complaint activities are relevant to the issues the Court must
consider in resolving the motion to dismiss for lack of personal jurisdiction.
For example, in assessing the due process prong of the personal
jurisdictional analysis the Court must assess, among other considerations,
whether the exercise of personal jurisdiction comports with “traditional
notions of fair play and substantial justice.” Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 474-75 (1985). Certainly, purposeful contacts
with Florida and the nature of Golsun’s activities in the United States, if
any, during the last three years would be instructive as to whether forcing
Golsun to defend this suit in the United States would offend these types of
considerations.
The claims in this case are not as narrow as Golsun suggests. There
is little dispute that Flexsteel’s complaint in this case is not just that its
technology was misappropriated but that Golsun continues to use the
technology in competition with Flexsteel. For that reason, in addition to

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other relief, Flexsteel requests injunctive relief to stop Golsun from using
the technology. Where, as here, the claims concern alleged ongoing harm,
other courts have considered post-complaint activity as relevant to the
issue of personal jurisdiction. See, e.g. Beverly Hills Fan Co. v. Royal
Sovereign Corp., 21 F. 3d 1558, 1562 (Fed. Cir. 1994); OnAsset
Intelligence, Inc. v. 7PSolutions, LLC., case No. 3:12-cv-3709-N, 2013 WL
12125993, at *3 (N.D. Tex. Aug. 21, 2013).
For these reasons, Flexsteel’s motion to compel Golsun to produce
documents post-dating the filing of the complaint is due to be granted.
Golsun must produce documents concerning its activities after August 19,
2016.
Regarding the dispute about travel in the United States by Golsun
employees, Flexsteel says that Golsun only produced documents
evidencing some trips to the United States and Florida by Golsun’s CEO,
Mr. Li but did not produce any documents concerning other trips by Mr. Li
or any documents evidencing trips by other Golsun officers, employees or
agents. Flexsteel requests that to remedy this deficiency the Court should
require Golsun to produce the passport stamp pages from these officers
and employees.

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Golsun says that it cannot force employees to produce their
passports, and in any event, stamps on a passport would not identify
whether a trip is for business or personal reasons. Personal trips by Golsun
employees, unrelated to any business purpose, would of course not be
relevant to the determination of whether Golsun is subject to personal
jurisdiction.
Although the Court agrees that Golsun is not required to produce to
Flexsteel the passport stamp pages from its employees’ passports, the
passport stamp pages would provide the best check on the dates and
locations of any trips to the United States. Accordingly, counsel for Golsun
is directed to obtain (but not produce) the passport stamp pages for Golsun
employees, who have traveled to the United States. Counsel must then
obtain and produce all documents from Golsun evidencing the expenses
for the trips for any travel identified on the passport stamp pages. To the
extent travel is identified on the passport stamp pages, and the travel is for
Golsun business purpose but Golsun does not have documents evidencing
the expenses for the trips, Golsun must advise Flexsteel of the date(s) and
location(s) of the business trip(s) and that Golsun does not have any
documentations evidencing the trip. Lastly, consistent with the Court’s
ruling that documents concerning post-filing activities must be produced,

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Golsun must produce documents evidencing business trips to the United
States which post-date August 19, 2016.
Turning to Interrogatory number 7, Flexsteel requested Golsun to
“describe in detail … communications, relationships, or interactions
regarding Golsun Pipe or the Patents-in-Suit with anyone located, based,
domiciled or otherwise using an address in the United States.” Golsun did
not respond to this request and instead represented that it “is without
information sufficient to respond to this request.” As the Court stated at the
hearing, this interrogatory requests information highly relevant to the
personal jurisdiction inquiry and therefore must be provided. Golsun says
that disclosing its activities in the United States would place an undue
burden on it because of the volume of Golsun’s activities within the United
States. The interrogatory merely requires Golsun to describe its activities
and not list every phone call or date when a phone call was made. There is
nothing burdensome about responding to this interrogatory and therefore
Golsun must provide a response.
Lastly, regarding whether Golsun must produce copies of unsigned
drafts of contracts, distributorship or other agreements, these documents
must be produced, even where the contract is with an entity in the United
States but concerns sales outside of the United States.

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The Court also discussed with the parties the location of the
depositions after Golsun has produced the supplemental documents
required by this order. Golsun suggests that the depositions should take
place by videoconference. Because the depositions would be document
intensive, and there may be language issues, Flexsteel wants to take the
depositions in person. The depositions cannot be taken in China because
of prohibitions in China on taking depositions there. Golsun has suggested
Hong Kong as an alternative. Because there may be a possibility that the
Golsun witnesses will be traveling in the next two months to a location in
the United States or a location outside the United States, such as London,
which would be more convenient, Golsun’s counsel must contact his client
to determine whether the Golsun witnesses have any travel plans in the
next 60 days. If so, counsel should discuss arrangements to schedule the
depositions at the neutral location. In the event the Golsun witnesses do
not have any travel plans scheduled within the next 60 days the parties are
directed to discuss arrangements for Flexsteel to pay the travel expenses
of the Golsun witnesses for depositions to be conducted in a convenient
location in the United States. In the event the parties are unable to reach
agreement on the location of the depositions by August 30, 2019, Flexsteel
must file a motion advising the Court that the parties did not reach

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agreement. The Court will then schedule a brief telephonic hearing and
select the location for the depositions.
Because Golsun is required to produce supplemental documents, the
parties requested, and the Court agreed, that the current schedule must be
modified. Therefore, the following schedule applies. Golsun must produce
supplemental documents by August 30, 2019. Flexsteel must schedule and
complete the depositions of the Golsun witnesses by September 30, 2019.
Golsun must file its renewed motion to dismiss for lack of personal
jurisdiction by October 14, 2019. Flexsteel must file its response to the
motion to dismiss by October 31, 2019.
Accordingly, upon due consideration, it is ORDERED:
1. Flexsteel’s Motion to Compel Jurisdictional Discovery, ECF No.
108, is GRANTED. Flexsteel must produce the supplemental
documents identified in this order by August 30, 2019.
2. The parties must discuss the location for the Golsum witness
depositions, and if agreement is not reached by August 30, 2019,
Flexsteel must file a motion advising the Court that the parties did
not reach agreement. The Court will then schedule a telephonic
hearing and the Court will select the location for the depositions.
3. Flexsteel must complete the depositions of the Golsun witnesses
by September 30, 2019. Golsun must file its renewed motion to
dismiss for lack of personal jurisdiction by October 14, 2019.

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Flexsteel must file its response to the motion to dismiss by
October 31, 2019.
DONE AND ORDERED this 9th day of August 2019.

s/Gary R. Jones

GARY R. JONES
United States Magistrate Judge