Alert 24 Security, LLC v. Tyco International, Ltd.
Alert 24 Security, LLC v. Tyco International, Ltd.
Opinion of the Court
OPINION AND ORDER
Pending before the Court is Defendants’ motion to dismiss for lack of personal jurisdiction, improper process and service of process, Plaintiffs response, and Defendants’ reply.
I. BACKGROUND
Plaintiff herein, Alert 24 Security, LLC (“Alert 24”), is a Texas limited liability corporation, but a citizen of Arizona.
Alert 24 alleges that on or about January 25, 2010, it sent a demand letter to Defendants, Tyco International, Ltd. (“Tyco Int’l”) and ADT Private Security Services de Mexico, S.A. de C.V. (“ADT Private Security”), asking them to either cease the use of the EEDDs located in Mexico or to pay for the use of the EEDDs.
On January 27, 2011, Alert 24 filed in this case an amended petition and application for temporary injunction.
II. PRELIMINARY MATTER
Alert 24 would have this Court exercise personal jurisdiction over Defendants in this case, in part, based on the actions of various business entities that are not parties to this action. Alert 24 should have clearly identified the entities and then attempted to identify jurisdictionally relevant links between those entities and Defendants. By relying on vague designations such as “Tyco” and “ADT” when more precise designations were readily available, Alert 24 has done little more than muddy the waters. This approach is particularly perplexing since much of the evidence cited by Alert 24 provides more, specific corporate designations— designations that are crucial in this context. When a party files a pleading laden with ambiguities, the Court must interpret those ambiguities, and the filing party runs the risk that its imprecise arguments will be misinterpreted.
III. ANALYSIS
If the Court finds that it lacks personal jurisdiction over Defendants, the issues of •improper process and service of process will be rendered moot. The Court will begin with the personal jurisdiction analysis.
The burden of showing that the Court may exercise personal jurisdiction over Defendants falls on Alert 24.
A federal court sitting in diversity may exercise personal jurisdiction over a nonresident defendant (1) as allowed under the state’s long-arm statute; and (2) to the extent permitted by the Due Process Clause of the Fourteenth Amendment. “Because the Texas long-arm statute extends to the limits of federal due process, the two-step inquiry collapses into one federal due process analysis.” To satisfy the requirements of due process, the plaintiff must demonstrate: “(1) that the nonresident purposely availed himself of the benefits and protections of the forum state by establishing ‘minimum contacts’ with the state; and (2) that the exercise of jurisdiction does not offend ‘traditional notions of fair play and substantial justice.’ ”15
Therefore, the Court must evaluate all of Defendants’ alleged links to Texas and will then determine whether these links rise to the level of “minimum contacts” necessary to exercise jurisdiction.
“Minimum contacts” can be established either through contacts sufficient to assert specific jurisdiction, or contacts sufficient to assert general jurisdiction.*593 Specific jurisdiction over a nonresident corporation is appropriate when that corporation has purposefully directed its activities at the forum state and the “litigation results from alleged injuries that arise out of or relate to those activities.” General jurisdiction, on the other hand, will attach where the nonresident defendant’s contacts with the forum state, although not related to the plaintiffs cause of action, are “continuous and systematic.”16
Generally, “at this stage the plaintiff is required to present only a prima facie case for personal jurisdiction.”
1) That a contract arose between Alert 24 and ADT Private Security after Alert 24 sent a demand letter to ADT Private Security.18
2) Defendants engaged in a conspiracy to commit torts by directing the filing of the Webb County lawsuit and by harming a Texas resident with acts committed in other jurisdictions.19
3) ADT Private Security’s “predecessor in interest” sued Alert 24 in Webb County, Texas.20
4) A relationship exists between “Tyco” and “ADT.”21
5) Defendants and ADT Mexico comprise a single business enterprise.22
6) Tyco Int’l has shareholders who receive proxy statements from Tyco on an annual basis and Tyco Int’l issues dividends to Texas residents from the money it collects from its subsidiaries.23
7) Tyco Int’l has a litany of connections with Texas through various subsidiaries and divisions.24
8) Defendants advertise in Texas.25
9) Defendants advertise directly to Texas citizens through a website that includes an e-mail function through which Texas citizens may seek information, advice and other communications directly from employees and representatives of Tyco and ADT.26
The Court will now evaluate these alleged connections to determine whether they support an exercise of personal jurisdiction or entitle Alert 24 to conduct limited jurisdictional discovery.
A. Specific Jurisdiction
Due to the nature of the allegations, the Court will analyze whether the first five assertions support specific jurisdiction and whether the remaining assertions support
1. Demand Letter
Alert 24 alleges that it sent a demand letter to ADT Private Security which called for various actions by ADT Private Security. This unilateral action by Alert 24 represents no action by ADT Private Security and is therefore not a contact for jurisdictional purposes.
2. Tort and Conspiracy
Alert 24 claims that Defendants engaged in a tort in the State of Texas because Defendants filed suit in Texas or directed that suit be filed in Texas and because Defendants’ acts harmed Alert 24, “a Texas resident.”
Similarly, Alert 24’s conclusory allegations that the state court lawsuit was the product of a “conspiracy” and that the filing of the suit itself was tortious,
3. Defendants’ Corporate Relationships
In the state court lawsuit, ADT Mexico, which is not a party to this lawsuit, sued Alert 24. Even if the state court lawsuit could support this Court’s exercise of personal jurisdiction over the parties to that suit, Tyco Int’l and ADT Private Security, the defendants herein, were not parties in that lawsuit. In order for Alert 24 to be entitled to conduct jurisdictional discovery, it must first advance a legal theory under which Defendants have a connection with this state that would justify an exercise of personal jurisdiction over them.
Alert 24 appears to claim that the requisite connections are provided by various relationships between ADT Mexico, Tyco Int’l and ADT Private Security. The allegations made by Alert 24 are (1) that ADT
This Court finds Patin v. Thoroughbred Power Boats Inc.
The Court will follow the Fifth Circuit’s direction in Patín, in evaluating the corporate relationships in the current case. Because the Court is sitting in diversity, it will employ the choice-of-law rules of Texas, the forum state.
i. Place of Incorporation
When faced with situations similar to the present case, other courts have found that the relevant law for evaluating a corporation’s relationships is the state of incorporation.
ii. Most Significant Relationship
Alternatively, a Texas court might determine the relevant law under a different choice-of-law theory. Texas follows “[t]he ‘most significant relationship’ rule ... [in] all civil matters except those contract cases in which the parties have agreed to a valid choice of law clause.”
§ 6. Choice-Of-Law Principles
(1) A court, subject to constitutional restrictions, will follow a statutory directive of its own state on choice of law.
(2) When there is no such directive, the factors relevant to the choice of the applicable rule of law include (a) the needs of the interstate and international systems, (b) the relevant policies of the forum, (c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue, (d) the protection of justified expectations, (e) the basic policies underlying the particular field of law, (f) certainty, predictability and uniformity of result, and (g) ease in the determination and application of the law to be applied.43
§ 145. The General Principle
(1) The rights and liabilities of the parties with respect to an issue in tort are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the occurrence and the parties under the principles stated in § 6.
(2) Contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include: (a) the place where the injury occurred, (b) the place where the conduct causing the injury occurred, (c) the domicil, residence, nationality, place of incorporation and place of business of the parties, and (d) the place where the relationship, if any, between the parties is centered. These contacts are to be evaluated according to their relative importance with respect to the particular issue.44
As the Court considers each factor under § 6, it will consider the contacts listed in § 145 to the extent they are relevant.
The Court first considers the needs of the interstate and international system. “Probably the most important function of choice-of-law rules is to make the interstate and international systems work well. Choice-of-law rules, among other things, should seek to further harmonious relations between states and to facilitate commercial intercourse between them.”
The Court now considers the policies of the other interested states. The corporate law policies of Switzerland are likely to be advanced by applying those policies to Tyco Int’l which is incorporated in Switzerland. Furthermore, to the degree that Tyco Int’l had relationships with foreign companies that were centered in Switzerland, Switzerland may have an interest in applying Swiss law to those relationships. Likewise, Mexican corporate law polices would likely be advanced by applying those policies to the two companies incorporated in Mexico and to corporate relationships centered in Mexico.
As to the protection of justified expectations, “[gjenerally speaking, it would be unfair and improper to hold a person liable under the local law of one state when he had justifiably molded his conduct to conform to the requirements of another state.”
Since there is no evidence before the Court regarding the laws of Switzerland and Mexico, the Court cannot determine whether there is basic underlying policy in this field by comparing them with Texas law. Nor may the Court ascertain which law would further that undetermined policy.
Next the Court finds that the most certain, predictable and uniform results will be achieved by analyzing the corporate relationships of Swiss and Mexican companies under the laws of Switzerland and Mexico — not the laws of Texas.
The Court finds that the seventh factor, the ease of determination and application of the law to be applied, is not a significant factor in this case.
Ultimately, the Court finds that either Switzerland or Mexico has the most significant relationship to the issue of the links between Tyco Int’l, ADT Private Security and ADT Mexico.
iii. Alert 24’s Failure to Meet its Burden
The Court has conducted two choice-of-law analyses and both indicate that either Swiss or Mexican law is the appropriate law for analyzing the relationships among Defendants and ADT Mexico. Alert 24 did not provide any arguments under the laws of Mexico or Switzerland. Therefore, the Court finds that Alert 24 has failed to meet its burden of asserting a relevant theory which would permit ADT Mexico’s involvement in the state court suit to be attributed to Defendants.
B. General Jurisdiction
Because Alert 24' claims to do not arise out of or relate to the remaining alleged contacts, such contacts may only be considered for the purposes of general jurisdiction. “The contacts must be reviewed in toto, and not in isolation from one another.”
Second, Alert 24 points to Tyco IntTs connections with the state of Texas via its subsidiaries. “As a general rule, however, the proper exercise of personal jurisdiction over a nonresident corporation may not be based solely upon the contacts with the forum state of another corporate entity with which defendant may be affiliated.”
Third, Alert 24 highlights Tyco and ADT’s website as another relevant connection with the state of Texas. In Revell v. Lidov,
Fourth, due to the lack of clarity in Alert 24’s response, it is unclear whether Alert 24 is alleging that certain advertising activity was conducted by Defendants themselves or that it was conducted by corporations related to Defendants. To the extent Alert 24 was highlighting activities of various subsidiaries, the Court will not consider those actions because Alert 24 has not alleged a theory which would permit the Court to attribute the actions of the subsidiaries to Defendants.
Ultimately, Alert 24’s allegations in the aggregate do not support a finding of general jurisdiction. Furthermore, the allegations are insufficient to warrant jurisdictional discovery.
IV. CONCLUSION
After considering the motion, response, reply, record and controlling authorities, the Court finds that Alert 24 has failed to present a prima facie case that the Court may exercise personal jurisdiction over Defendants under either general or specific jurisdiction. Furthermore, none of Alert 24’s allegations merit jurisdictional discovery. Therefore, the Court GRANTS Defendants’ motion to dismiss for lack of personal jurisdiction. The motions to dismiss for improper process and service of process are DENIED as moot. The clerk of court is ordered to terminate the case.
IT IS SO ORDERED.
. Dkt. Nos. 3, 9 & 15.
. Dkt. No. 6.
. Dkt. No. 9 at ¶¶ 1 & 2.
. Dkt. No. 1 at p. 31; Dkt. No. 9 at ¶¶ 8, 9 & 10.
. Id. at ¶¶ 2-10.
. Dkt. No. 1 atp. 31.
. Id. at pp. 32-33; Dkt. No. 9 at ¶¶ 11-13.
. Dkt. No. 1 atpp. 32-33.
. Id. at pp. 26-41.
. Id. at pp. 32-34.
. Dkt. No. 1.
. Dkt. No. 3.
. Luv N’ care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 469 (5th Cir. 2006).
. 564 F.3d 386 (5th Cir. 2009).
. Id. at 398 (quoting Johnston v. Multidata Sys. Int’l Corp., 523 F.3d 602, 609 (5th Cir. 2008)).
. Alpine View Co. Ltd. v. Atlas Copco AB, 205 F.3d 208, 215 (5th Cir. 2000) (quoting Burger King v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985); Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415-416, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984)) (citing Wilson v. Belin, 20 F.3d 644, 647 (5th Cir. 1994)).
. Walk Hay del & Assoc. v. Coastal Power Production Co., 517 F.3d 235, 241 (5th Cir. 2008).
. Dkt. No. 1 at pp. 32-33; Dkt. No. 9 at ¶¶ 11-13.
. Dkt. No. 9 at ¶¶ 19 & 23.
. Id. at ¶¶ 2-7.
. Id. at ¶¶ 15-16.
. Id. at ¶¶ 28-29.
. Id. at ¶ 29.
. Id. at ¶¶ 30 & 31.
. Id. at ¶ 32.
. Id. at ¶ 33.
. Dkt. No. 9 at V 19. (Alert 24 claims that it is a Texas resident, however, it is a limited liability company whose sole owner is an Arizona citizen. [Dkt. No. 6]. Thus, Alert 24 is itself an Arizona citizen, rather than a Texas citizen.).
. 652 F.2d 1260, 1268 (5th Cir. 1981).
. Dkt. No. 9 at ¶ 19.
. Id.
. Guidry v. U.S. Tobacco Co., Inc., 188 F.3d 619, 631-632 (5th Cir. 1999).
. 294 F.3d 640 (5th Cir. 2002).
. Id.
. Id. at 646.
. Id. at 647.
. Id. at 647-649.
. Id. at 649.
. Id. at 654-655.
. Delta Seaboard Well Services, Inc. v. American Int’l Specialty Lines Ins. Co., 602 F.3d 340, 343 (5th Cir. 2010).
. See Alberto v. Diversified Group, Inc., 55 F.3d 201, 203-208 (5th Cir. 1995); see also Ace American Ins. Co. v. Huntsman Corp., 255 F.R.D. 179, 195-196 (citing Davaco, Inc. v. AZ3, Inc., No. 3:07-cv-803, 2008 WL 2243382, at *1 (N.D.Tex. May 30, 2008)).
. Crisman v. Cooper Industries, 748 S.W.2d 273, 276 (Tex.App.-Dallas 1988) (writ denied) (citing Duncan v. Cessna Aircraft Co., 665 S.W.2d 414, 421 (Tex. 1984)).
. Duncan v. Cessna Aircraft Co., 665 S.W.2d 414, 420-421 (Tex. 1984).
. Restatement (Second) of Conflict Of Laws § 6(1971).
. Restatement (Second) of Conflict Of Laws § 145 (1971).
. Restatement (Second) of Conflicts of Laws § 6 comment (d).
. The Court notes that Alert 24 claims in its amended complaint that Tyco IntTs principal place of business is New Jersey. [Dkt. No. 1 at p. 28], Tyco Int’l disputes this assertion. [Dkt. No. 1 at p. 2]. Because this analysis focuses on the corporate relationships among a Swiss company and two Mexican companies, and New Jersey has no apparent connection with this aspect of the case or with any of the activity on which this case is based, the Court finds that New Jersey law is not a contender under the “most significant relationship” analysis.
. Restatement (Second) of Conflicts § 6 comment (g).
. Johnston v. Multidata Systems Int’l. Corp., 523 F.3d 602, 610 (5th Cir. 2008).
. Dkt. No. 9 at ¶ 29.
. Freudensprung v. Offshore Technical Services, Inc., 379 F.3d 327, 345-346 (5th Cir. 2004) (citations omitted).
. See Jones v. Petty-Ray Geophysical Geosource, Inc., 954 F.2d 1061, 1070 n. 12 (5th Cir. 1992); see also PHC-Minden, L.P. v. Kimberly-Clark Corp., 235 S.W.3d 163, 175 (Tex. 2007) (quoting Gentry v. Credit Plan Corp. of Houston, 528 S.W.2d 571, 573 (Tex. 1975)).
. 317 F.3d 467 (5th Cir. 2002).
. Id. at 471.
. QR Spex, Inc. v. Motorola, Inc., 507 F.Supp.2d 650, 662-663 (E.D.Tex., 2007).
. See Qassas v. Daylight Donut Flour Co., LLC, Civil Action No. 4:09-cv-208, 2009 WL 1795004, *5 (S.D.Tex., June 24, 2009) (citing Mink v. AAAA Dev. LLC, 190 F.3d 333, 337 (5th Cir. 1999)).
Reference
- Full Case Name
- ALERT 24 SECURITY, LLC v. TYCO INTERNATIONAL, LTD.
- Cited By
- 3 cases
- Status
- Published