Valtech Solutions Inc v. Davenport et al

Filing 32

MEMORANDUM OPINION AND ORDER granting in part and denying in part 26 MOTION for Leave to Conduct Jurisdictional Discovery filed by Valtech India Software Services Private Limited, Valtech Solutions Inc. (Ordered by Judge Sidney A Fitzwater on 5/23/2016) (Judge Sidney A Fitzwater)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
VALTECH SOLUTIONS, INC., et al.,
Plaintiffs,
VS.
DEBORAH DAVENPORT, et al.,
Defendants.

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§ Civil Action No. 3:15-CV-3361-D
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MEMORANDUM OPINION
AND ORDER
Plaintiffs move for leave to conduct jurisdictional discovery to enable them to respond
to a challenge by Indian defendants to the court’s exercise of personal jurisdiction. For the
reasons that follow, the court grants the motion in part and denies it in part.
I
Plaintiffs Valtech Solutions, Inc. (“Valtech Solutions”) and Valtech India Systems
Private Limited (“Valtech India”) sue defendants Deborah Davenport (“Davenport”),
Siddharth Shrivastava (“Shrivastava”), Jagadeesh Chandra (“Chandra”), Vinod Rajarathnam
(“Rajarathnam”), Rajesh Nagaral (“Nagaral”), and UST Global Inc. (“UST Global”), alleging
claims for tortious interference with existing contracts and civil conspiracy.1 Plaintiffs’
claims are based on allegations that Davenport, Shrivastava, Chandra, Rajarathnam, and
Nagaral (collectively, the “Indian Defendants”) conspired with UST Global (which plaintiffs

1

Plaintiffs also allege claims for breach of fiduciary duty and breach of employment
agreement against Davenport alone.

allege is “Texas-based,” Ps. Br. 6), to willfully and intentionally interfere with contracts
between Valtech Solutions (a Texas entity) and Valtech India and their clients, at least two
of whom—OnlineMedSys.com (“OMS”) and Solutions By Text (“SBT”), a subdivision of
Marketing Response Solutions (“MRS”)—are located in Texas.
Plaintiffs filed this case in Texas state court, and the Indian Defendants, with the
consent of Davenport and UST Global, removed the case to this court.2 Before the case was
removed, the Indian Defendants—who are Indian citizens who reside in Bangalore,
India—each filed special appearances contesting personal jurisdiction. Plaintiffs attempted
in state court to obtain jurisdictional discovery from the Indian Defendants, but they allege
that the Indian Defendants have failed to fully comply with their discovery obligations,
including court orders.
After the case was removed, the Indian Defendants moved to dismiss plaintiffs’ claims
against them for lack of personal jurisdiction under Fed. R. Civ. P. 12(b)(2) and based on
forum non conveniens, and, alternatively, moved to compel arbitration. Plaintiffs obtained
a continuance of their obligation to respond to the motion,3 and they filed the instant motion
seeking leave to conduct jurisdictional discovery. Plaintiffs seek leave to serve specified

2

Plaintiffs have filed a motion to remand the case to state court, which remains
pending and will be decided separately.
3

The court granted plaintiffs’ unopposed motion for extension of time to respond to
defendants’ motion until after the court rules on their motion for leave to conduct
jurisdictional discovery. The court sets that deadline infra at § V.
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written discovery4 and to take the Indian Defendants’ depositions for the stated purposes of
ascertaining, inter alia, the Indian Defendants’ involvement in interfering with plaintiffs’
contracts with Texas-based clients OMS and MRS; the Indian Defendants’ solicitation of
plaintiffs’ Texas-based clients, which may also have involved the disclosure of confidential
information; harm that the Indian Defendants directed at and caused to Texas-based Valtech
Solutions; the Indian Defendants’ contacts with the State of Texas, including travel to Texas;
and the convenience of litigating this case in Texas. The Indian Defendants oppose the
motion.
II
A district court has broad discretion regarding whether to permit a party to conduct
jurisdictional discovery. Wyatt v. Kaplan, 686 F.2d 276, 283-84 (5th Cir. 1982). To be
entitled to this relief, the party seeking discovery must make a “preliminary showing of
jurisdiction.” Fielding v. Hubert Burda Media, Inc., 415 F.3d 419, 429 (5th Cir. 2005).
“‘[D]iscovery on matters of personal jurisdiction need not be permitted unless the motion to
dismiss raises issues of fact.’ ‘When the lack of personal jurisdiction is clear, discovery
would serve no purpose and should not be permitted.’” Kelly v. Syria Shell Petroleum Dev.
B.V., 213 F.3d 841, 855 (5th Cir. 2000) (ellipsis and citation omitted). “A plaintiff seeking

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Plaintiffs seek leave to serve on the Indian Defendants two interrogatories related to
potential witnesses and locations of proof that they maintain are relevant to the Indian
Defendants’ forum non conveniens challenge. Plaintiffs also seek leave to serve on
defendant UST Global requests for production focused on the Indian Defendants’ connection
to Texas.
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discovery on matters of personal jurisdiction is expected to identify the discovery needed,
the facts expected to be obtained thereby, and how such information would support personal
jurisdiction.” Mello Hielo Ice, Ltd. v. Ice Cold Vending LLC, 2012 WL 104980, at *7 (N.D.
Tex. Jan. 11, 2012) (McBryde, J.) (citing Kelly, 213 F.3d at 855). A court can deny leave to
conduct jurisdictional discovery when the movant fails to specify the facts it believes
discovery would uncover and how these facts would support personal jurisdiction. See id.;
see also King v. Hawgwild Air, LLC, 2008 WL 2620099, at *8 (N.D. Tex. June 27, 2008)
(Lindsay, J.).
III
Plaintiffs have satisfied the requirement that they make a “preliminary showing of
jurisdiction.” Fielding, 415 F.3d at 429. In Fielding the Fifth Circuit cited with approval the
Third Circuit’s standard—articulated in Toys “R” Us, Inc. v. Step Two, S.A., 318 F.3d 446,
456 (3d Cir. 2003)—that “[i]f . . . plaintiff[s] present[] factual allegations that suggest ‘with
reasonable particularity’ the possible existence of the requisite ‘contacts between the party
and the forum state,’ the plaintiff[s’] right to conduct jurisdictional discovery should be
sustained.” Id. at 456 (brackets and citations omitted). Plaintiffs’ allegations satisfy this
standard.
Plaintiffs can establish specific personal jurisdiction over a nonresident defendant by
showing, inter alia, that the defendant “‘purposefully directed’ his activities at residents of
the forum, and the litigation . . . result[s] 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
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22456806, at *2 (N.D. Tex. Oct. 23, 2003) (Fitzwater, J.) (quoting Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 472 (1985)). In their first amended petition and motion for leave
to conduct jurisdictional discovery, plaintiffs allege, inter alia, that Rajarathnam, while
employed by Valtech India, traveled to Texas at least five times to meet with OMS; that on
May 30, 2014 Rajarathnam traveled to OMS’s office in Houston for a planning meeting with
UST Global, and, shortly thereafter, OMS stopped doing business with plaintiffs and started
doing business with UST Global; that Chandra, while employed by Valtech India, introduced
SBT to UST Global in an effort to solicit SBT to join UST Global; that Chandra and Nagaral
scheduled a meeting with SBT and Rajarathnam (who, at the time, had already resigned from
Valtech India) to solicit SBT’s business, that Rajarathnam met with MRS (or its subsidiary,
SBT) in Texas, and that since that meeting, SBT has stopped doing business with Valtech
India and started doing business with UST Global; that Chandra sent the president of MRS
the contact information for UST Global while he was still employed by Valtech India; and
that Shrivastava traveled to Texas to meet with UST Global. Based on these allegations, the
court concludes the existence of the requisite contacts with Texas is possible, and the court
is satisfied that plaintiffs have made a “preliminary showing of jurisdiction” sufficient to
merit at least some jurisdictional discovery.

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IV
The court in its discretion will permit plaintiffs to conduct some jurisdictional
discovery, and therefore grants plaintiffs’ motion in part.
A
Plaintiffs seek leave to serve two interrogatories on each of the Indian Defendants
asking each defendant to identify (1) potential witnesses, including their employers, their
addresses, and the frequency with which they travel to Texas, and (2) all sources of proof and
the location of those sources, as discussed on page 14 of defendants’ motion to dismiss.5
Plaintiffs acknowledge in their brief that this information relates to defendants’ motion to
dismiss based on forum non conveniens. Because these interrogatories seek information that
appears to be solely within the Indian Defendants’ control, there is no suggestion that it will
be particularly onerous for these defendants to respond to the interrogatories, and the
information plaintiffs seek is narrowly tailored and relevant to plaintiffs’ response to the
Indian Defendants’ forum non conveniens arguments, the court therefore grants plaintiffs
leave to conduct this discovery.
B
Plaintiffs also seek to depose each of the Indian Defendants, and they request that
each one produce certain specified documents at the defendant’s deposition. Plaintiffs

5

It is unclear what sources of proof plaintiffs are referring to on page 14 of defendants’
motion to dismiss. The Indian Defendants do argue on page 19 of their motion to dismiss
that “[t]he evidence and records needed to defend against Valtech Solutions’ claims are also
located in India.” Ds. 1/11/16 Br. 19.
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contend that this discovery “is expected to uncover tortious conduct in Texas and purposeful
conduct directed at Texas, including the [Indian Defendants’] involvement in a scheme to
deplete Plaintiffs’ workforce, interfere with Plaintiffs’ contracts, including contracts
Plaintiffs have with Texas entities, and disclose Plaintiffs’ confidential information—which
would establish minimum contacts sufficient to confer jurisdiction.” Ps. Reply 11. Having
reviewed the documents that plaintiffs seek in connection with the proposed depositions, the
court concludes that plaintiffs have adequately explained the facts that they believe the
specified documents will uncover and how these facts will support personal jurisdiction. The
court is not persuaded, however, that plaintiffs will be unable to obtain the facts they require
through the Indian Defendants’ compliance with plaintiffs’ requests for documents or that
taking depositions of these foreign defendants is necessary. Although it appears from the
record that the Indian Defendants have complied with some (but not all) of their discovery
obligations,6 the court is not persuaded that potentially costly and time-consuming
depositions are warranted at this point. Accordingly, the court orders that, no later than 28
days after this memorandum opinion and order is filed, the Indian Defendants produce the

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For example, on May 27, 2015 the court ordered the Indian Defendants to respond
to plaintiffs’ discovery requests seeking, inter alia, documents or communications relating
to conduct directed at, or communications with residents of Texas; documents or
communications relating to travel to Texas as referenced in the Indian Defendants’ special
appearances; and documents or communications relating to OMS and MRS. The Indian
Defendants maintain that they have complied with plaintiffs’ requests, but plaintiffs argue
that the Indian Defendants have only produced 149 documents due to their “minimal
document collection efforts,” and that they have omitted from their production several
documents that contradict statements made in their sworn special appearances. Reply 7.
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documents plaintiffs request in “Exhibit A” to their deposition notices, Ps. App. 38, 42, 46,
50. If the Indian Defendants fail to fully comply with this directive, plaintiffs may move
anew for permission to conduct jurisdictional discovery through depositions of each of the
Indian Defendants.
C
Plaintiffs seek leave to serve 44 requests for production on defendant UST Global.
Assuming, without deciding, that UST Global is not obligated to respond to all of these
requests,7 the court concludes that plaintiffs have failed to adequately explain how some of
the discovery they seek in their requests for production will support the court’s exercising
personal jurisdiction over the Indian Defendants.

For example, plaintiffs seek

“[c]ommunications involving Shouvik Bhattacharyya (a Texas resident) referring or relating
to [the Indian Defendants],” Ps. App. 31, but they do not explain who this person is, what this
person’s connection to the lawsuit is, or whether, and on what basis, there is any reason to
believe that the Indian Defendants’ purposeful contacts with this person resulted in plaintiffs’
alleged injuries. Plaintiffs similarly seek “[c]ommunications between Alan Goerner and [the
Indian Defendants],” id. at 32, but they fail to provide any basis from which the court can
determine that discovery regarding this individual will uncover facts that would support

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So far as the court can determine, UST Global—a defendant in this suit—has neither
objected to the discovery plaintiffs request nor responded to plaintiffs’ motion for
jurisdictional discovery. Normally, a party who does not timely object to discovery requests
must comply with those requests. Plaintiffs do not rely on that premise to obtain
jurisdictional discovery from UST Global.
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personal jurisdiction. As to other document requests, however, plaintiffs have clearly met
their burden.

See, e.g., Ps. App. 31 (Request No. 3, seeking “[d]ocuments and

communications involving [the Indian Defendants] related to soliciting business from [MRS]
(a Texas entity).”); id. at 32 (Request No. 41, seeking “[d]ocuments and communications
related to meetings held in Texas attended by Siddharth Shrivastava.”). Having reviewed
plaintiffs’ document requests, the court concludes that, with respect to Request Nos. 1-4, 2330, 35, and 41-44, plaintiffs have sufficiently specified the facts they believe discovery will
uncover and how these facts would support personal jurisdiction. Accordingly, the court
orders that no later than 28 days after this memorandum opinion and order is filed, UST
Global respond to Request Nos. 1-4, 23-30, 35, and 41-44.
V
As noted, see supra note 3, the court previously granted plaintiffs’ unopposed motion
for extension of time to file response to defendants’ Rule 12(b)(2) motion to dismiss for lack
of jurisdiction, motion to dismiss for forum non conveniens, and alternatively, motion to
compel arbitration. Plaintiffs must file their response to the motion no later than 28 days
after the Indian Defendants and defendant UST Global comply with their discovery
obligations under this memorandum opinion and order. So that the court can calendar this
deadline internally, plaintiffs are directed to notify the court in writing once the deadline can
be calculated.

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*

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Plaintiffs’ February 5, 2016 motion for leave to conduct jurisdictional discovery is
granted in part and denied in part. The Indian Defendants and defendant UST Global must
comply with their respective discovery obligations no later than 28 days after this
memorandum opinion and order is filed. This deadline may be extended, if necessary, by
agreed order or for good cause by motion.
SO ORDERED.
May 23, 2016.

_________________________________
SIDNEY A. FITZWATER
UNITED STATES DISTRICT JUDGE

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