Premier Polymers, LLC v Wendt
Filing
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MEMORANDUM OPINION AND ORDER GRANTING 52 Sealed MOTION to (1) conduct jurisdictional discovery and (2) enlarge time to respond to the motion to dismiss and amend complaint, DENYING 55 Opposition/request to limit proposed discovery.(Signed by Judge Gray H. Miller) Parties notified.(rkonieczny, 4)
United States District Court
Southern District of Texas
ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
PREMIER POLYMERS, LLC,
Plaintiff,
v.
GREGORY WENDT, RAVAGO HOLDINGS
AMERICA, INC., RAVAGO AMERICAS, LLC,
AND GENESIS POLYMERS,
Defendants.
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October 21, 2015
David J. Bradley, Clerk
CIVIL ACTION H-15-1812
MEMORANDUM OPINION AND ORDER
Pending before the court are defendants Ravago Holdings America, Inc. (“Ravago
Holdings”), Ravago Americas, LLC (“Ravago Americas”), and Genesis Polymers’s (collectively the
“Ravago Defendants”) motion to dismiss all claims for lack of personal jurisdiction (Dkt. 50) and
plaintiff Premier Polymers, LLC’s (“Premier”) emergency motion to (1) conduct jurisdictional
discovery and (2) enlarge time to respond to the motion to dismiss and amend complaint (Dkt. 52).
The Ravago Defendants oppose Premier’s motion to conduct jurisdictional discovery. Dkt. 55.
Alternatively, they request that the court limit Premier’s proposed discovery. Id. at 15. After
considering the motion, response, reply, and applicable law, Premier’s motion (Dkt. 52) is
GRANTED and the Ravago Defendants’ request to limit Premier’s proposed discovery (Dkt. 55) is
DENIED.
I. BACKGROUND
On May 29, 2015, Premier filed its original complaint against its former employee Gregory
Wendt in state court, seeking, among other things, injunctive relief to prevent Wendt from
continuing to disclose Premier’s confidential and proprietary trade secret information to the Ravago
Defendants. Dkt. 1. On June 25, 2015, Wendt removed the lawsuit to this court. Id. On July 17,
2015, this court granted Premier’s motion for a permanent injunction.
Dkt. 38.
Premier
subsequently amended its complaint to include the Ravago Defendants. Dkt. 40. In response, the
Ravago Defendants filed their motion to dismiss (Dkt. 50), prompting Premier to file an emergency
motion to conduct jurisdictional discovery. Dkt. 52.
II. LEGAL STANDARD
In order to take jurisdictional discovery, a plaintiff must make “a preliminary showing of
jurisdiction.” Fielding v. Hubert Burda Media, Inc., 415 F.3d 419, 429 (5th Cir. 2005). A
preliminary showing does not require proof that personal jurisdiction exists, but it does require
“factual allegations that suggest with reasonable particularity the possible existence of the requisite
contacts.” Id. (quoting Toys “R” Us, Inc. v. Step Two, S.A., 318 F.3d 446, 456 (3d Cir.2003)
(internal citations omitted)). Discovery of jurisdictional facts is appropriate when the existing record
is inadequate to support personal jurisdiction and the record shows that the requested discovery is
likely to produce facts needed to withstand a motion to dismiss. Monkton Ins. Servs., Ltd. v. Ritter,
768 F.3d 429, 434 (5th Cir. 2014).
Premier seeks to assert jurisdiction over the Ravago Defendants based on both general
jurisdiction and specific jurisdiction. Dkt. 56 at 1. General jurisdiction over a corporation is proper
in a place where its affiliations with the forum state are so continuous and systematic that the
corporation “is fairly regarded as at home” there. See Daimler AG v. Bauman, 134 S. Ct. 746, 760
(2014); see also Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2851 (2011);
Monkton, 768 F.3d at 432. A corporation’s place of incorporation and its principal place of business
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are paradigm bases for general jurisdiction. Bauman, 134 S. Ct. at 760. Although the Supreme
Court has rejected the argument that simply “doing substantial business” serves as a legitimate basis
for imposing general jurisdiction, it did not “foreclose the possibility that in an exceptional case . . .
a corporation’s operations in a forum other than its formal place of incorporation or principal place
of business may be so substantial and of such a nature as to render the corporation at home in that
State.” Id. at 761 n.19.
Specific jurisdiction exists when a plaintiff’s injuries arise out of the non-resident defendant’s
contacts with the forum state. See Felch v. Transportes Lar-Mex SA DE CV, 92 F.3d 320, 324 (5th
Cir. 1996). Premier asserts that when it responds to the motion to dismiss, it will “fully brief its
argument that specific jurisdiction over the Ravago Defendants exists under the ‘effects test’
established by the Supreme Court in Calder v. Jones[,] 464 U.S. 783, 791 (1984).” Dkt. 56 at 2.
Premier claims that “the discovery sought by Premier to establish general jurisdiction also
encompasses the type of evidence needed to establish specific jurisdiction.” Id.
III. ANALYSIS
A. Ravago Americas and Genesis Polymers’s Texas Contacts
Premier asserts the following facts in support of exercising jurisdiction over defendants
Ravago Americas and Genesis Polymers:
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Ravago Americas has registered nine assumed name certificates (including Genesis
Polymers) in Texas dating from as early as October 2013. Dkt. 52, Ex. B. The
Ravago Defendants do not dispute this allegation. Dkt. 55 at 6.
•
Each assumed name certificate lists a Texas address as the “entity’s principal office
address.” Dkt. 52, Ex. B. Premier suggests that these offices constitute “principal
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offices” for personal jurisdiction purposes. Dkt. 52 at 7. The Ravago Defendants
dispute this contention, asserting that the address provided on all but two of the
certificates (211 E. 7th Street, Suite 620, Austin, Texas) is merely Ravago Americas’s
registered agent for service of process, and that the other addresses correspond to
recycling facilities that Ravago Americas owns in Texas. Dkt. 55 at 6. Therefore,
the parties dispute whether any of these offices constitute “principal offices” for
jurisdictional purposes.
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Each of Ravago Americas’s assumed names conducts business in Texas counties.
Dkt. 52 at 7.
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Ravago Americas has several manufacturing facilities in Texas. Dkt. 52 at 8. The
Ravago Defendants admit that Ravago Americas has three recycling facilities in
Texas. Dkt. 55 at 6.
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Ravago Americas has Texas-based employees. Dkt. 52 at 8. Premier has offered
evidence that at least one employee (i.e., Ravago Americas’s director of health,
safety, and environment) is based out of Houston, Texas. Dkt. 52, Ex. E.
•
Ravago Americas has a registered agent in the state of Texas for service of process
and pays franchise taxes in Texas. Dkt. 52 at 8.
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Ravago Americas and Genesis Polymers have not filed affidavits with their motion
to dismiss claiming that those entities have little to no contacts in Texas.
The court finds that these factual allegations “suggest with reasonable particularity the
possible existence of requisite contacts” to exercise personal jurisdiction over Ravago Americas and
Genesis Polymers.
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B. Ravago Holdings’s Texas Contacts
Premier’s alleged basis for exercising personal jurisdiction over Ravago Holdings is based
on imputing Ravago Americas’s Texas contacts to Ravago Holdings through an “alter ego” theory.
Dkt. 52 at 13.
In determining whether a subsidiary is the alter ego of the parent for purposes of exercising
personal jurisdiction, the Fifth Circuit applies a totality of the circumstances test and considers the
following factors:
(1) the parent and the subsidiary have common stock ownership;
(2) the parent and the subsidiary have common directors or officers;
(3) the parent and the subsidiary have common business departments;
(4) the parent and the subsidiary file consolidated financial statements and tax returns;
(5) the parent finances the subsidiary;
(6) the parent caused the incorporation of the subsidiary;
(7) the subsidiary operates with grossly inadequate capital;
(8) the parent pays the salaries and other expenses of the subsidiary;
(9) the subsidiary receives no business except that given to it by the parent;
(10) the parent uses the subsidiaries property as its own;
(11) the daily operations of the two corporations are not kept separate; and
(12) the subsidiary does not observe the basic corporate formalities.
Gundle Lining Constr. Corp. v. Adams Cnty. Asphalt, Inc., 85 F.3d 201, 208-09 (5th Cir. 1996).
Discovery is appropriate for determining whether the Texas contacts of Ravago Americas
should be imputed to Ravago Holdings under the “alter ego” doctrine. See Goodyear, 131 S. Ct. at
2857 (suggesting that respondents could have asked the Court to pierce the corporate veil in order
to acquire jurisdiction over foreign subsidiaries); see also Next Techs., Inc. v. Thermogenisis, No.
A-15-CV-00225-LVML, 2015 WL 4644890, at *4–7 (W.D. Tex. Aug. 4, 2015) (finding that the
plaintiff made “a preliminary showing of jurisdiction” based on alter ego theory); see also
Featherston v. HSBC Card Servs., Inc., No. H-09-3940, 2010 WL 3120053, at *2 (S.D. Tex. Aug.
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9, 2010) (Atlas, J.) (finding a prima facie assertion of personal jurisdiction over a non-resident
defendant under an alter ego theory given that defendant had “filed an assumed name certificate with
the State of Texas listing its ‘principal office address in Texas’ as 350 N. Paul Street in Dallas,” the
parent and subsidiary shared the same address and principals, and there was no evidence that they
observed separate corporate formalities or accounting systems).
Premier alleges several facts in support of its alter ego theory. For example, Premier asserts
that (i) Ravago Holdings has simultaneously shared the same president, assistant secretary, in-house
counsel, and other officers and directors with its wholly-owned subsidiaries: Ravago Americas and
Ravago Manufacturing Americas, Inc.; and (ii) Ravago Holdings’s mailing address is exactly the
same as both Ravago Americas and Ravago Manufacturing Inc.’s mailing address. Dkt. 52 at 15.
The court finds that Premier’s allegations are sufficient to establish the possible existence of
requisite contacts to exercise personal jurisdiction over Ravago Holdings based on an alter ego
theory.
C. The Ravago Defendants’ Request to Limit Premier’s Proposed Jurisdictional Discovery
The Ravago Defendants assert that Premier’s proposed discovery requests are not reasonably
tailored to the general jurisdiction inquiry and would impose massive costs on the defendants.
Dkt. 55 at 15. Accordingly, they request that the court “drastically curtail the discovery Premier has
proposed.” Id.
Premier’s proposed jurisdictional discovery covers thirty-one (31) pages and includes
approximately seventy (70) requests for admission, seventy (70) requests for production, and twelve
(12) interrogatories. Dkt. 52, Exs. I, J. The court finds that Premier’s proposed discovery is
reasonably tailored to determine whether either general or specific jurisdiction applies to each of the
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Ravago Defendants. The discovery requests appear to be primarily aimed at (i) establishing Ravago
Americas’s and Genesis Polymers’s Texas contacts; and (ii) proving that the various entities
involved operate as one “unitary business.” This discovery is appropriate because it is in furtherance
of Premier’s “alter ego” theory for exercising personal jurisdiction over Ravago Holdings.
Therefore, the Ravago Defendants’ request to limit the proposed jurisdictional discovery is DENIED.
D. Leave to Amend and Enlarge Time to Respond to the Motion to Dismiss
Premier has also requested leave to file an amended complaint and for additional time to
respond to the Ravago Defendants’ motion to dismiss. Dkt. 52 at 16. Premier’s requests are
GRANTED. The parties shall file a joint statement indicating the date(s) by which Premier must file
its amended complaint and response to the motion to dismiss. If the parties are unable to agree upon
such dates, the court will issue an order setting the respective due dates.
IV. CONCLUSION
Premier’s emergency motion to (1) conduct jurisdictional discovery and (2) enlarge time to
respond to the motion to dismiss and amend complaint (Dkt. 52) is GRANTED. The Ravago
Defendants’ request to limit Premier’s proposed jurisdictional discovery is DENIED.
It is so ORDERED.
Signed at Houston, Texas on October 21, 2015.
________________________________________
Gray H. Miller
United States District Judge
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