Hevar Systems Inc v. Lead IT Inc et al

Filing 17

MEMORANDUM OPINION AND ORDER granting 10 Motion to Dismiss/Lack of Jurisdiction filed by Lead IT Inc, Ram Talluri. (Ordered by Chief Judge Sidney A Fitzwater on 1/15/2014) (Chief Judge Sidney A Fitzwater)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
HEVAR SYSTEMS, INC.,
Plaintiff,
VS.
LEAD IT, INC., et al.,
Defendants.

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§ Civil Action No. 3:13-CV-4579-D
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MEMORANDUM OPINION
AND ORDER
In this removed action, defendants Lead It, Inc. (“Lead”) and Ram Talluri
(“Talluri”)—both Illinois citizens—move to dismiss for lack of in personam jurisdiction.1
Plaintiff Hevar Systems Inc. (“Hevar”) has not responded to the motion. For the reasons that
follow, the court grants defendants’ motion to dismiss for lack of in personam jurisdiction
and dismisses this case without prejudice by judgment filed today.
I
Hevar sues Lead and Talluri to recover on claims of business disparagement,
defamation, and libel per se. Hevar alleges that it entered into a subcontracting agreement
with Lead under which Lead was to provide computer software and systems services to

1

Although defendants do not cite the rule on which their jurisdictional challenge is
based, the motion is necessarily brought under Fed. R. Civ. P. 12(b)(2).
Alternatively, defendants move to dismiss plaintiff’s claims for defamation (including
libel per se) and business disparagement under Rule 12(b)(6) for failure to state a claim on
which relief can be granted. The court need not reach defendants’ alternative Rule 12(b)(6)
motion.

Hevar and its clients. It asserts that “Talluri acting individually and as an agent for [Lead]
sent multiple libelous emails to multiple recipients in [Hevar’s] business community . . .
stat[ing] that [Hevar] did not have an office in the USA, that the Department of Homeland
Security [was] looking for the owner, and that they never pay your money.” Pet. ¶ 7
(second). Hevar alleges that these statements concerning its business were “patently false.”
Id. at ¶ 8.
On December 6, 2013 defendants filed the instant motion to dismiss. Hevar’s
response to the motion was due on December 27, 2013. See N.D. Tex. Civ. R. 7.1(e). Hevar
has not responded to the motion, and it is now ripe for decision.2
II
A
The determination whether a federal district court has in personam jurisdiction over
a nonresident defendant is bipartite. The court first decides whether the long-arm statute of
the state in which it sits confers personal jurisdiction over the defendant. If it does, the court
then resolves whether the exercise of jurisdiction is consistent with due process under the
United States Constitution. See Mink v. AAAA Dev. LLC, 190 F.3d 333, 335 (5th Cir. 1999).
Because the Texas long-arm statute extends to the limits of due process, the court need only

2

On January 10, 2014 defendants filed a “reply brief in support of their motion to
dismiss,” the apparent purpose of which is to point out that Hevar did not respond to their
motion to dismiss. Although this “reply brief” was unnecessary, the court notes that Hevar
has still not responded to the motion to dismiss despite the additional notice provided by
defendants.
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consider whether exercising jurisdiction over Lead and Talluri would be consistent with the
Due Process Clause of the Fourteenth Amendment. See id.; Alpine View Co. v. Atlas Copco
AB, 205 F.3d 208, 214 (5th Cir. 2000).
The Due Process Clause of the Fourteenth Amendment permits
the exercise of personal jurisdiction over a nonresident
defendant when (1) that defendant has purposefully availed
himself of the benefits and protections of the forum state by
establishing “minimum contacts” with the forum state; and (2)
the exercise of jurisdiction over that defendant does not offend
“traditional notions of fair play and substantial justice.” To
comport with due process, the defendant’s conduct in
connection with the forum state must be such that he “should
reasonably anticipate being haled into court” in the forum state.
Latshaw v. Johnston, 167 F.3d 208, 211 (5th Cir. 1999) (footnotes omitted). To determine
whether exercising jurisdiction would satisfy traditional notions of fair play and substantial
justice, the court examines (1) the defendant’s burden, (2) the forum state’s interests, (3) the
plaintiff’s interest in convenient and effective relief, (4) the judicial system’s interest in
efficient resolution of controversies, and (5) the states’ shared interest in fundamental social
policies. Ruston Gas Turbines, Inc. v. Donaldson Co., 9 F.3d 415, 421 (5th Cir. 1993).
A defendant’s contacts with the forum may support either specific or general
jurisdiction over the defendant. Mink, 190 F.3d at 336. “Specific jurisdiction exists when
the nonresident defendant’s contacts with the forum state arise from, or are directly related
to, the cause of action. General jurisdiction exists when a defendant’s contacts with the
forum state are unrelated to the cause of action but are ‘continuous and systematic.’” Id.
(citations omitted).

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“The district court usually resolves the jurisdictional issue without conducting a
hearing.” Ham v. La Cienega Music Co., 4 F.3d 413, 415 (5th Cir. 1993) (footnote omitted).
“When a court rules on a motion to dismiss for lack of personal jurisdiction without holding
an evidentiary hearing, it must accept as true the uncontroverted allegations in the complaint
and resolve in favor of the plaintiff any factual conflicts posed by the affidavits. Therefore,
in a no-hearing situation, a plaintiff satisfies his burden by presenting a prima facie case for
personal jurisdiction.” Latshaw, 167 F.3d at 211 (footnotes omitted).
B
In Hevar’s state court petition, it pleads the predicate for the court’s exercise of in
personam jurisdiction as follows:
This court has jurisdiction over Defendants because said
Defendants purposely availed [themselves] of the privilege of
conducting activities in the state of Texas and established
minimum contacts sufficient to confer jurisdiction over said
Defendant[s], and the assumption of jurisdiction over
Defendants will not offend traditional notions of fair play and
substantial justice and is consistent with the constitutional
requirements of due process.
Pet. ¶ 5 (first). Hevar also alleges: “Plaintiff would also show that the cause of action arose
from or relates to the contacts of Defendants to the state of Texas, thereby conferring specific
jurisdiction with respect to said Defendants.” Id. at ¶ 5 (second). As is clear from the
allegations of Hevar’s state court petition, it relies on specific (not general) jurisdiction.
Through a declaration submitted in support of their motion, defendants have
controverted the allegations of Hevar’s petition that purport to show the existence of specific

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jurisdiction.3 According to Talluri’s declaration, Lead (whom Hevar alleges can be served
with process in Illinois) “has not performed tortious acts in Texas purposefully directed
toward Texas or Texas residents,” and Talluri (whom Hevar alleges can be served at his
place of employment in Illinois) “[has] not performed tortious acts in Texas purposefully
directed toward Texas or Texas residents.” Ds. App. 1.
In this no-hearing situation, once defendants controverted the jurisdictional allegations
contained in Hevar’s state court petition, the burden shifted to Hevar to adduce affidavit or
declaration evidence sufficient to satisfy the minimum contacts prong of the due process test.
Because Hevar has not responded to defendants’ motion, it has not carried this burden.
Because Hevar has failed to establish defendants’ minimum contacts with the state of Texas,
this court is not shown to have in personam jurisdiction over either defendant. Hevar’s
action against defendants must therefore be dismissed without prejudice.
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Defendants’ December 6, 2013 motion to dismiss is granted, and this action is
dismissed without prejudice by judgment filed today.
SO ORDERED.
January 15, 2014.
_________________________________
SIDNEY A. FITZWATER
CHIEF JUDGE

3

The same declaration contains denials of activities that would establish general
jurisdiction. The court need not consider these denials, however, because Hevar does not
rely on general jurisdiction in its state court petition.
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