Sindhi v. Raina
MEMORANDUM OPINION AND ORDER deferring ruling on 32 MOTION for Judgment, Motion for Modification of Permanent Injunction and for Entry of Final Judgment filed by Salim I Sindhi; denying 49 MOTION to Set Aside Default filed by Kunal R Raina; gran ting 51 MOTION for Order to Show Cause Why Kunal R. Raina Should Not Be Held In Contempt filed by Salim I Sindhi; and denying as moot 58 MOTION for Admission of Evidence or Clarification of Prerequisites for Admission re 49 MOTION to Set Aside Default filed by Kunal R Raina. (Ordered by Judge Sidney A Fitzwater on 9/20/2017) (Judge Sidney A Fitzwater)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
SALIM I. SINDHI,
KUNAL R. RAINA,
§ Civil Action No. 3:15-CV-3229-D
Plaintiff Salim I. Sindhi (“Sindhi”) moves for modification of an interlocutory
permanent injunction and for entry of final judgment, and for an order to show cause why
defendant Kunal R. Raina (“Raina”) should not be held in contempt. Raina moves to
overturn the default judgment in this case and for admission of evidence or clarification of
prerequisites for admission. For the reasons that follow, the court denies Raina’s motion to
overturn the default judgment, grants Sindhi’s motion for an order to show cause, and defers
a ruling on Sindhi’s motion for modification of the permanent injunction and for entry of
final judgment until the court conducts an evidentiary hearing. The court denies as moot
Raina’s motion for admission of evidence or clarification of prerequisites for admission.
This is an action by Sindhi against Raina for copyright infringement under 17 U.S.C.
§§ 501-505, and for violating the Texas Uniform Trade Secrets Act (“TUTSA”), Tex. Civ.
Prac. & Rem. Code Ann. §§ 134A.002-005 (West Supp. 2016). Sindhi formerly employed
Raina as a manager for his online newspaper content management system (“CMS”) business,
bulletlink.com. Sindhi alleges that Raina stole bulletlink.com CMS source code, trade
secrets, and other confidential information to create a substantially similar competing CMS
called “TechCruiser.” TechCruiser’s business is described as a “software licensing and
delivery model in which software is licensed on a subscription basis and is centrally hosted.”
D. Mot. Overturn Default Judg. 4-5. TechCruiser’s website is interactive and includes a
“Buy Now” page, which allows customers to sign up to license Raina’s software, without any
apparent restrictions based on geography. Raina maintains in his motion to overturn default
judgment that “Defendant Raina’s company TechCruiser Solutions has clients from all over
the globe including some from Texas.” Id. at 5. Sindhi alleges, and Raina does not dispute,
that Raina licensed TechCruiser software to two Dallas-based online newspapers, White Rock
Lake Weekly News and Katy Trail Weekly, for at least 43 months and 29 months,
respectively.1 Sindhi filed a copyright registration for bulletlink.com CMS source code with
the U.S. Copyright Office on September 21, 2015. Raina, an Indian national and permanent
resident of India, was served with this lawsuit through Hague Service Convention on June
Exhibits that Sindhi submitted in support of his motion to modify the permanent
injunction show that Raina includes Katy Trail Weekly under the “Our Featured Clients”
section of the TechCruiser website. Both the Katy Trail Weekly and White Rock Lake Weekly
sites display “Powered by TechCruiser” in the footer of their site pages. Sindhi calculates
that Katy Trail Weekly licensed TechCruiser software from November 2014 to March 2017
and accounted for $1,131.00 of TechCruiser’s business. Sindhi also estimates that White
Rock Lake Weekly licensed TechCruiser software from September 2013 to March 2017 and
accounted for $1,677.00 of TechCruiser’s revenue.
On June 21, 2016 Raina filed a motion to dismiss for lack of jurisdiction. On
September 29, 2016 the court issued two orders. One stated that Raina’s counsel had not
been admitted to practice before the court and required that his counsel apply for admission
to the Bar or for admission pro hac vice within 21 days. The other stated that Raina must
provide the clerk of court a certificate of interested persons within 21 days. Raina failed to
comply with both orders.
On October 24, 2016 the court filed two more orders. One order stated that, if Raina
failed to file the required certificate of interested persons within 14 calendar days, the court
would strike Raina’s responsive pleadings and enter a default judgment without additional
prior notice. The other stated that, if Raina did not comply with the court’s September 29,
2016 order regarding counsel, the court would strike his responsive pleadings and enter a
default judgment without additional prior notice. Raina failed to comply with these two
On November 8, 2016 the court filed an order striking Raina’s responsive pleadings,
including his motion to dismiss for lack of personal jurisdiction, on the basis that he had
“repeatedly failed to comply with orders of this court after having been advised of the
consequences of such failure.” Nov. 8, 2016 Order at 1. The court in the same order entered
an interlocutory default judgment against Raina. On November 21, 2016 the court entered
a permanent injunction against Raina,2 but the permanent injunction did not address all the
The court permanently enjoined Raina, TechCruiser, and “all other persons in active
concert with him who receive actual notice of this injunction” from “possessing, publishing,
relief that Sindhi seeks in this case, and was therefore an interlocutory, not final, judgment.
No further proceedings took place in this court until April 4, 2017, when Sindhi
moved to modify the permanent injunction and for entry of a final judgment. He seeks
damages in the sum of $1,469,494.00 and attorney’s fees in the sum of $56,255.17.3 Sindhi
asks the court to modify the permanent injunction, inter alia, to clarify the injunction’s
applicability to various third parties providing services to Raina based on Sindhi’s trade
On April 24, 2017 Raina filed a motion to overturn the default judgment. Raina seeks
to overturn the interlocutory default judgment under Fed. R. Civ. P. 60(b)(4)4 on the basis
that it is void for lack of personal jurisdiction. He maintains that he does not have
disclosing or utilizing in any for or for any purpose the trade secrets, including the source
coded . . . that Raina misappropriated[.]” Permanent Injunction at 1.
Sindhi requests actual damages of $734,747.00, the sum of $84,747.00 in unjust
profits, and unjust enrichment of $650,000 through use of Sindhi’s CMS source code and
trade secrets, pursuant to Tex. Civ. Prac. & Rem. Code Ann. § 134A.004(a). He also asks
the court to award exemplary damages of two times his actual damages based on Raina’s
willful and malicious misappropriation, pursuant to Tex. Civ. Prac. & Rem. Code Ann. §
Raina contends in the alternative that the interlocutory default judgment should be
set aside under Rule 60(b)(1), (5), or (6). The court concludes below that Raina has failed
to show “mistake, inadvertence, surprise, or excusable neglect,” as required by Rule 60(b)(1),
because his contacts with the state of Texas should reasonably have put him on notice that
he could be haled into a Texas federal court. Nor has Raina shown “the inequity of the
continuing operation of a judgment” under Rule 60(b)(5). See Cook v. Birmingham News,
618 F.2d 1149, 1152 (5th Cir. 1980). Finally, Raina has not shown “extraordinary
circumstances” that call for relief under Rule 60(b)(6). Evenson v. Sprint/United Mgmt. Co.,
2011 WL 3702627, at *4 (N.D. Tex. Aug. 23, 2011) (Fitzwater, C.J.) (quoting Hess v.
Cockrell, 281 F.3d 212, 216 (5th Cir. 2002)).
constitutionally sufficient minimum contacts with the forum state, and that Sindhi is estopped
from showing that this court has personal jurisdiction over him because Sindhi has previously
represented to Indian courts that his cause of action arose in India. On April 30, 2017 Sindhi
filed a motion for order to show cause why Raina should not be held in contempt. On August
9, 2017 Raina filed a motion for admission of evidence or clarification of prerequisites for
The court turns first to Raina’s motion to overturn the default judgment under Rule
The court will treat Raina’s motion as one to set aside the November 8, 2016 order
entering an interlocutory default judgment. The interlocutory permanent injunction entered
on November 21, 2016 did not purport to be a final judgment, and even Sindhi, by moving
now for entry of a final judgment, seems to recognize that the court has not as yet entered a
final judgment in this case. See P. Mot. for Modification of Permanent Inj. and Entry of
Final J. at 14 (“Sindhi asks the Court to enter the Proposed Modified Permanent Injunction
and to enter the Proposed Final Judgment.”).
Under Rule 60(b)(4), a judgment can be set aside if it is void. “[R]elief from
judgment is available if the district court lacked subject matter or personal jurisdiction, or if
the court acted in a manner inconsistent with due process of law.” Salazar v. Owens-Ill.
Salary Emp. Welfare Benefits Plan, 2010 WL 454900, at *1 (N.D. Tex. Jan. 26) (Sanderson,
J.) (citing Callon Petrol. Co. v. Frontier Ins. Co., 351 F.3d 204, 208 (5th Cir. 2003)), rec.
adopted, (N.D. Tex. Feb. 10, 2010) (Fitzwater, C.J.).
The Fifth Circuit has not resolved the question of which party bears the burden of
proof on a Rule 60(b)(4) motion. See Jackson v. FIE Corp., 302 F.3d 515, 521 n.6 (5th Cir.
2002) (declining to “choose a side in the split of authority on this question”); compare Bally
Export Corp. v. Balicar, Ltd., 804 F.2d 398, 401 (7th Cir. 1986) (holding defendant with
notice who elects to suffer default judgment must bear burden of showing lack of personal
jurisdiction), with Rockwell Int’l Corp. v. KND Corp., 83 F.R.D. 556, 559 (N.D. Tex. 1979)
(Porter, J.) (placing burden on plaintiff because no reason exists to “reverse the normal
placement when a party challenges the existence of In personam jurisdiction through a Rule
12 motion to dismiss”). Here, regardless who has the burden of proof, Raina cannot succeed
on his Rule 60(b)(4) motion to overturn the default judgment because the evidence
preponderates in favor of the finding that the court has personal jurisdiction over him.
The determination whether a federal district court has in personam jurisdiction over
a nonresident defendant is bipartite. See Ham v. La Cienega Music, Co., 4 F.3d 413, 415 (5th
Cir. 1993). The court first decides whether the long-arm statute of the state in which it sits
confers personal jurisdiction over the defendant.5 If it does, the court next resolves whether
Sindhi has invoked this court’s federal question jurisdiction to sue Raina for
copyright infringement under 17 U.S.C. §§ 501-505, and this court’s supplemental
the exercise of personal 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 consider whether exercising jurisdiction over Raina 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) (citing WorldWide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)).
A defendant’s minimum contacts with the forum may support either specific or
jurisdiction to sue for a violation of TUTSA. When jurisdiction is founded “upon a federal
statute that is silent as to service of process, and a state long-arm statute is therefore utilized
to serve an out-of-state defendant, [Rule 4] requires that the state’s standard of amenability
to jurisdiction apply.” DeMelo v. Toche Marine, Inc., 711 F.2d 1260, 1266 (5th Cir. 1983)
(addressing former Rule 4(e)) (following Burstein v. State Bar of Cal., 693 F.2d 511, 514
(5th Cir. 1982)). The Copyright Act does not provide for nationwide service of process.
Tomelleri v. MEDL Mobile, Inc., 657 Fed. Appx. 793, 794 (10th Cir. 2016). “[W]hen a
plaintiff invokes federal question jurisdiction and serves process under a state long-arm
statute, a federal court can assert jurisdiction only if the state court could have done so.”
Petroleum Helicopters, Inc. v. Avco Corp., 804 F.2d 1367, 1371 (5th Cir. 1986).
general jurisdiction over the defendant. Mink, 190 F.3d at 336. For the court to properly
exercise specific personal jurisdiction, the defendant must have “purposefully directed” his
activities at residents of the forum, and the litigation must result from alleged injuries that
“arise out of or relate to” the defendant’s activities directed at the forum. Archer & White,
Inc. v. Tishler, 2003 WL 22456806, at *2 (N.D. Tex. Oct. 23, 2003) (Fitzwater, J.) (citing
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985); Helicopteros Nacionales de
Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984)).
When specific jurisdiction is based on online interactions via an Internet website, the
court determines purposefulness of contacts based on the sliding scale adopted in Zippo
Manufacturing Co. v. Zippo Dot Com, Inc., 952 F.Supp. 1119, 1124 (W.D. Pa.1997). See
Am. Eyewear, Inc. v. Peeper’s Sunglasses & Accessories, Inc., 106 F.Supp.2d 895, 900-01
& 900 n.10 (N.D. Tex. 2000) (Fitzwater, J.) (citing Mink, 190 F.3d at 336). The Zippo scale
spans three levels of interactivity of a defendant’s website: where a website is nothing more
than a passive advertisement, the court must decline to exercise personal jurisdiction; where
a website facilitates contractual relationships and the knowing and repeated transmission of
computer files over the Internet, personal jurisdiction is proper; and where a website falls
somewhere in between, “the exercise of jurisdiction is determined by the level of interactivity
and commercial nature of the exchange of information that occurs on the website.” Mink,
190 F.3d at 336 (interpreting Zippo). While interactivity is a significant factor in determining
purposeful conduct when personal jurisdiction is based on Internet contacts, “internet-based
jurisdictional claims must continue to be evaluated on a case-by-case basis, focusing on the
nature and quality of online and offline contacts to demonstrate the requisite purposeful
conduct that establishes personal jurisdiction.” Pervasive Software Inc. v. Lexware GmbH
& Co. KG, 688 F.3d 214, 227 (5th Cir. 2012).
The court now considers whether it may exercise personal jurisdiction over Raina,
limiting its analysis to whether Raina’s contacts support the exercise of specific jurisdiction.
Because Sindhi’s claims are related to Raina’s contacts with the state, the court need only
address whether the purposefulness of Raina’s contacts meets the constitutional minimum
Raina’s contacts with the state of Texas are based entirely on the sales made through
the TechCruiser website. Raina does not deny that he has sold TechCruiser software to at
least two Dallas-based customers. Instead, Raina contends that having “merely online
contacts” with the forum does not support personal jurisdiction because he never made any
in person business visits to Texas. He also posits that nothing in his contract with
Sindhi—no choice of law provision, listing of the business location, or residences of the
Raina maintains that the court cannot exercise personal jurisdiction over him because
his allegedly tortious action was not directed at Texas. That is, he posits that Sindhi’s claims
of copyright infringement and stealing trade secrets are entirely separate from Raina’s
contacts with Texas. The court disagrees. Sindhi has established by a preponderance of the
evidence that Raina is profiting from the allegedly stolen or copied source code through his
sales to Texas customers. Thus his contacts with the state of Texas are related to Sindhi’s
claims of copyright infringement. See Stomp, Inc. v. NeatO, LLC, 61 F.Supp.2d 1074, 1077
(C.D. Cal. 1999) (holding that defendant’s contacts and plaintiff’s claim were closely related
based on similar facts involving products sold online to forum state residents by defendant
who incorporated technology of patent at issue).
parties—made it apparent that the contract would have a substantial connection with Texas.
The court is unpersuaded by Raina’s arguments. Online contacts with a forum, even
without in person visits or a contract substantially connected to the forum, can support the
exercise of personal jurisdiction. See e.g., Mink, 190 F.3d at 336 (describing when court may
exercise personal jurisdiction over defendant who operates Internet website without other
contacts to forum state). TechCruiser’s online contacts with Texas satisfy the constitutional
minimum contacts requirement. First, TechCruiser has maintained at least two contractual
relationships with Dallas-based customers that have continuously licensed TechCruiser
software as part of their sites for multiple years. See Stuart v. Spademan, 772 F.2d 1185,
1194 (5th Cir. 1985) (“The quality of the contacts as demonstrating purposeful availment is
the issue, not their number[.]”); see also McGee v. Int’l Life Ins. Co., 355 U.S. 220, 223
(1957)) (noting that even single, non-unilateral contact can form a basis for specific
Second, TechCruiser sits on the extreme of the Zippo interactivity scale that supports
the exercise of personal jurisdiction. The site facilitated ongoing contractual relationships
with two Dallas online newspapers that incorporated TechCruiser’s software as part of their
businesses. Furthermore, the interactivity of the TechCruiser site—specifically its “Buy
Now” feature—distinguishes it from the “passive advertisement” website over which the
Fifth Circuit declined to exercise personal jurisdiction in Mink. See Mink,190 F.3d at 337.
In Mink the website provided only a printable mail-in order form, a toll-free telephone
number, and an email address, but had no capacity for buyers to place online orders. See id.
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By contrast, TechCruiser’s “Buy Now” page appears to allow customers to purchase
subscriptions to its software online, without any apparent restrictions based on geography.
This case is therefore distinguishable from one in which a passive defendant merely lists an
email address or telephone number or in which a third-party customer, on its own initiative,
contacts the defendant to inquire about its willingness to transact business.
Raina’s contention that the TechCruiser website has never specifically targeted Texas
residents does not change the result under the Zippo analysis. And Raina acknowledges in
his motion to overturn default judgment that “Defendant Raina’s company TechCruiser
Solutions has clients from all over the globe including some from Texas.” D. Mot. Overturn
Default J. 5; cf. Luv N’ Care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 470-71 (5th Cir. 2006)
(holding that court had personal jurisdiction where defendant’s invoices indicated forum state
as the destination, and concluding that businesses cannot claim ignorance of contents of their
The court therefore concludes that Raina could have reasonably anticipated being
haled into court in Texas. See World-Wide Volkswagen, 444 U.S. at 297.
The court is similarly unpersuaded by Raina’s argument that Sindhi is judicially
estopped from establishing personal jurisdiction in this court because he asserted in Indian
court cases that his cause of action arose in India.7
Raina cites Sindhi’s representation to an Indian court in his civil action against Raina
that “the entire cause of this suit arose in Nashik i.e. within the jurisdiction of this court[.]”
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Because this court has federal question jurisdiction, see supra note 5, it applies the
federal law of judicial estoppel. See In re Coastal Plains, Inc., 179 F.3d 197, 205 (5th Cir.
1999) (citing Johnson v. Or. Dep’t of Human Res., 141 F.3d 1361, 1364 (9th Cir. 1998))
(action under Americans with Disabilities Act; “[f]ederal law governs the application of
judicial estoppel in federal courts”); see also Hall v. GE Plastic Pac. PTE Ltd., 327 F.3d 391,
395 (5th Cir. 2003) (“[G]enerally this Circuit considers judicial estoppel ‘a matter of federal
procedure’ and therefore applies federal law.”); cf. Success Motivation Inst. of Japan Ltd. v.
Success Motivation Inst., Inc., 966 F.2d 1007, 1009 (5th Cir. 1992) (holding that when
federal court jurisdiction is based on diversity, Erie governs and state law of res judicata
applies). Judicial estoppel is “a common law doctrine by which a party who has assumed one
position in his pleadings may be estopped from assuming an inconsistent position.” In re
Coastal Plains, 179 F.3d at 205 (citing Brandon v. Interfirst Corp., 858 F.2d 266, 268 (5th
Cir. 1988)). It is an equitable doctrine, and the choice whether to invoke it lies within the
district court’s discretion. See In re Coastal Plains, 179 F.3d at 205.
When determining whether to apply judicial estoppel, the court looks to three factors:
whether “(1) the party against whom judicial estoppel is sought has asserted a legal position
which is plainly inconsistent with a prior position; (2) a court accepted the prior position; and
(3) the party did not act inadvertently.” Reed v. City of Arlington, 650 F.3d 571, 574 (5th
D. Mot. Overturn Default J. 12. He also cites Sindhi’s description of the place of occurrence
in the criminal case as Nashik.
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Cir. 2011). “[T]he ‘judicial acceptance’ requirement ‘does not mean that the party against
whom the judicial estoppel doctrine is to be invoked must have prevailed on the merits.
Rather, judicial acceptance means only that the first court has adopted the position urged by
the party, either as a preliminary matter or as part of a final disposition.’” In re Coastal
Plains, 179 F.3d at 206 (citing Reynolds v. Comm’r, 861 F.2d 469, 473 (6th Cir. 1988)).
Raina distinguishes the act of stealing the source code from the act of licensing the
code to Texas customers in an attempt to show that Sindhi’s assertion that the theft occurred
in India precludes him from basing personal jurisdiction on where the code was licensed.
But even if the court assumes arguendo that Sindhi asserted plainly inconsistent positions
by first representing to Indian courts that his cause of action arose entirely in Nashik and later
attempting to establish personal jurisdiction in this court based on Raina’s contacts with the
state of Texas, Raina has not shown that the Indian court accepted Sindhi’s assertions.
Although Raina succeeded in two of his claims, whether a party prevailed on the merits in
the previous judgment is not dispositive of whether a court accepted a certain legal position.
See Reynolds, 861 F.2d at 473. Raina has not presented sufficient evidence to support the
finding that the Indian court relied on Sindhi’s specific representation that the entire cause
of action arose in Nashik in either a preliminary matter or final disposition.
For these reasons, equity does not require that Sindhi be estopped from representing
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that this court has personal jurisdiction over Raina.8 The evidence shows that this court may
properly exercise personal jurisdiction over Raina.
Raina has also failed to show that haling him into court in Texas would offend notions
of “fair play and substantial justice.”
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 interests 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). Raina “must present a ‘compelling case’ that jurisdiction is unreasonable
and incompatible with ‘fair play and substantial justice.’” Tempur-Pedic Int’l, Inc. v. Go
Satellite Inc., 758 F.Supp.2d 366, 377 (N.D. Tex. 2010) (Fitzwater, C.J.) (quoting Burger
King, 471 U.S. at 477-78). “It is rare to say the assertion [of jurisdiction] is unfair after
minimum contacts have been shown.” Id. (quoting Wien Air Alaska, Inc. v. Brandt,195 F.3d
208, 215 (5th Cir. 1999) (alterations in original)). Raina has not made the required showing
of a compelling case.
Although Raina points to the general difficulty of foreign discovery, he does not
The court has assumed arguendo that Raina’s Indian court documents are admissible.
Because the court holds that Raina has not prevailed in his judicial estoppel argument, even
with the support of such documents, it need not determine their admissibility. The court
therefore denies Raina’s motion for admission of evidence as moot.
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present any compelling instances of inconvenience in this case. For example, he merely
states that an Indian court is more competent to make factual determinations because Indian
forensic labs possess the parties’ hard drives. But he presents no evidence that a United
States court would be ill-equipped to assess such evidence.
Similarly, Raina contends that an Indian court is better positioned to evaluate Sindhi’s
Indian copyright, but the claim before this court concerns Sindhi’s United States copyright
and the violation of United States and Texas law.
Raina also argues that Sindhi’s filing of a civil suit in Texas following his two
unsuccessful suits against Raina in India offend “traditional notions of fair play and
substantial justice.” But even if the court assumes that this circumstance bears upon the first
factor—Raina’s burden—it is insufficient when considered together with all the relevant
factors to warrant the conclusion that the court cannot exercise personal jurisdiction over
Because Raina has not made the required showing of a compelling case, the court
holds that it would not offend traditional notions of fair play and substantial justice to
exercise in personam jurisdiction in this case.
Sindhi moves the court to enter final judgment for damages in the sum of
$1,469,494.00 and attorney’s fees in the sum of $56,255.17. Although the court upholds the
interlocutory default judgment against Raina, it concludes that it must conduct an evidentiary
hearing to determine damages. Accordingly, the court defers ruling on Sindhi’s motion for
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entry of final judgment for damages until a hearing is convened.
“As a general proposition, in the context of a default judgment, unliquidated damages
normally are not awarded without an evidentiary hearing. That rule, however, is subject to
an exception where the amount claimed is a liquidated sum or one capable of mathematical
calculation.” James v. Frame, 6 F.3d 307, 310 (5th Cir. 1993). “[L]iquidated damages are
those either agreed upon by the parties in a contract, or fixed by operation of law.” Super 8
Motels, 2008 WL 878426, at *4 (D.N.J. Apr. 1, 2008); see IBEW-NECA Sw. Health &
Benefit Fund v. Heritage Specialities, 2003 WL 21673487, at *1 (N.D. Tex. July 15, 2003)
(Lindsay, J.) (awarding plaintiffs liquidated damages on default judgment where fund
provided that liquidated damages are “equal to $20.00 or ten percent (10%) of unpaid
contributions”). A sum capable of mathematical calculation is one that can be “‘computed
with certainty by reference to the pleadings and supporting documents alone,’ rendering an
evidentiary hearing unnecessary.” See James, 6 F.3d at 311 (quoting Frame v. S-H, Inc., 967
F.2d 194, 204 (5th Cir. 1992)).
Sindhi requests damages in the amount of $1,469,494.00. This amount is neither
liquidated nor computable with certainty based on supporting documents. To award
exemplary damages under Tex. Civ. Prac. & Rem. Code § 134A.004(a), the court must find
by clear and convincing evidence that Raina’s misappropriation was willful and malicious.
Id. at § 134A.004(b). Sindhi has not carried this burden in his motion, and the court
concludes that an evidentiary hearing is necessary to make such a determination.
Additionally, Sindhi’s calculation of TechCruiser’s unjust profits is based on an
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estimated rate of $39.00 per month, which TechCruiser has not had an opportunity to contest.
Similarly, Sindhi’s estimate of unjust enrichment rests on a number of unchallenged
assumptions.9 A hearing is necessary to evaluate these variables.
Accordingly, for the reasons explained, the court denies Raina’s motion to overturn
the default judgment; grants Sindhi’s motion for an order to show cause; defers a ruling on
Sindhi’s motion for modification of the permanent injunction and for entry of final judgment
until the court conducts an evidentiary hearing; and denies as moot Raina’s motion for
admission of evidence or clarification of prerequisites for admission. By separate order filed
today the court is setting a date for the show cause hearing and hearing on Sindhi’s motion
for modification of the permanent injunction and for entry of final judgment.10
September 20, 2017.
SIDNEY A. FITZWATER
UNITED STATES DISTRICT JUDGE
For example, Sindhi applies a 50% discount to his calculation of the money he
invested in developing and maintaining his trade secrets and copyrighted materials to arrive
at the amount of Raina’s unjust enrichment.
Because Sindhi’s motions for modification of permanent injunction and for a show
cause order make similar arguments, a combined hearing will be conducted.
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