Judge: Michael Schneider
Holding: Motion to Dismiss for Lack of Personal Jurisdiction and Improper Venue denied; Motion to Dismiss for Lack of Personal Jurisdiction granted.
As I have previously noted, this case involves numerous defendants, many of whom filed similar initial motions to dismiss or transfer asserting various grounds. In wading through the rulings, I found a useful pair of bookends on the subject of personal jurisdiction, in which the same judge, in the same case, using the same case law, granted one motion and denied another, based on the particular facts relating to personal jurisdiction as to the two defendants.
The capitalization-impaired Defendant, last.fm, Ltd. moved to dismiss Plaintiff's Complaint for lack of personal jurisdiction and improper venue, and by agreement of the parties, Plaintiff conducted jurisdictional discovery. After reviewing the applicable standards, Judge Schneider concluded that the critical issue in this case was whether the defendant's website was sufficiently interactive to support the Court's exercise of jurisdiction. In this case, the parties agreed that more than 1 million Texas residents had subscribed to the Defendant's services via its website, including entering their location which the Court found "has at least some effect on the services then provided to the user." Under these circumstances, the Court concluded, the defendant had purposefully directed its contacts to Texas, and the claims arose out of these contacts. With respect to the additional ground that venue was improper, the Court noted that venue against a foreign defendant is determined in accordance with the general venue statute, which permits venue against a foreign defendant in "any judicial district."
AxxonSoft US / Ltd.
Two other defendants also filed a Motion to Dismiss for Lack of Personal Jurisdiction, and the Plaintiff responded by filing a motion asking the Court to authorize jurisdictional discovery. Again, after reviewing the applicable standards, Judge Schneider concluded that one of the defendants was a foreign corporation with its principal place of business overseas as well, and the other defendant, its U.S. subsidiary, was headquartered and had its principal place of business in Virginia. The plaintiff attempted to establish jurisdiction by arguing that the defendants' partners operate throughout Texas and that the defendants' website was used to solicit business in Texas. Judge Schneider concluded that the defendants' operations through its business partners did not provide sufficient contacts to support the exercise of jurisdiction, and concluded that the website at issue, in contrast to the one described in the paragraph above, was not sufficient to support jurisdiction either.
As I noted above, the Plaintiff also sought jurisdictional discovery. The court denied this request, noting that while the Plaintiff had outlined the topics on which sought discovery, it had not identified any facts it "reasonably expects to discover" that would correct the deficiencies identified in its jurisdictional arguments. "It is not Plaintiff's lack of evidence that fall short," Judge Schneider wrote. "Instead, Plaintiff's theory of jurisdiction is flawed. Without more, Plaintiff cannot engage in a jurisdictional 'fishing expedition.'"