Opinion
No. 1:22-CV-83-DAE
2022-08-08
Marcus TURNER, Plaintiff, v. HARVARD MEDTECH OF NEVADA, LLC, and Kuldarshan S. Padda, Defendants.
Jennifer Brown Trillsch, Alexius Miller, Jones Spross PLLC, Austin, TX, for Plaintiff. Paul S. Padda, Paul Padda Law, PLLC, Las Vegas, NV, T. Wade Jefferies, The Law Firm of T. Wade Jefferies, Austin, TX, for Defendants.
Jennifer Brown Trillsch, Alexius Miller, Jones Spross PLLC, Austin, TX, for Plaintiff. Paul S. Padda, Paul Padda Law, PLLC, Las Vegas, NV, T. Wade Jefferies, The Law Firm of T. Wade Jefferies, Austin, TX, for Defendants.
ORDER: (1) GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION; (2) MOOTING MOTION TO DISMISS FOR IMPROPER VENUE; AND (3) TRANSFERRING CASE TO DISTRICT OF NEVADA
David Alan Ezra, Senior United States District Judge
The matter before the Court is Defendants Harvard MedTech of Nevada, LLC ("HMT") and Kuldarshan S. Padda's ("Padda") Motion to Dismiss for Lack of Personal Jurisdiction or, Subject Thereto, Motion to Dismiss for Improper Venue or, in the Alternative, for Transfer to the District of Nevada. (Dkt. # 5.) The Court finds these matters suitable for disposition without a hearing. After careful consideration of the memoranda in support of and in opposition to the motions, the Court, for the reasons that follow, GRANTS IN PART and DENIES IN PART the motion to dismiss for lack of personal jurisdiction, DENIES AS MOOT the motion to dismiss for improper venue, and TRANSFERS the case to the District of Nevada.
BACKGROUND
On December 8, 2021, Plaintiff Marcus Turner filed suit in the 353rd Judicial District Court of Travis County, Texas. (Dkt. # 1-1.) Plaintiff's original petition alleges that in October 2020, he and Defendant Padda negotiated the essential terms of Plaintiff's upcoming employment with HMT, the result of which was an oral employment agreement ("Employment Agreement"). (Id. at 5.) According to Plaintiff, pursuant to the terms of the Employment Agreement, he would begin contracting services through the end of the year on a part-time basis based on compensation pending. (Id.) In exchange for duties typical of a Chief Technology Officer/Senior Vice-President of Technology, Plaintiff alleges that he was to receive a market-value salary for the 2021 calendar year and a stock option with a four-year earn in at a .25 percent per year basis, as well as paid time off and reimbursement of business travel and other out-of-pocket expenses. (Id.)
Thereafter, in December 2020, Plaintiff contends that Defendants represented that they could not afford to pay market rates to Plaintiff, but that he could be onboarded as a "(TX) IT TECH" in order to provide him with health insurance. (Dkt. # 1-1 at 5.) Plaintiff further alleges that Defendants also promised to adjust his salary to market rate by the end of June 2021, to take effect in July 2021, in accordance with their oral October 2020 Employment Agreement. (Id. at 5-6.) Based on these promises, Plaintiff alleges that he assumed a full-time role for Padda and HMT in January 2021, working in excess of 40 hours per week. (Id. at 6.) According to Plaintiff, he was introduced by Padda to other staff as Chief Technology Officer and Senior Vice President of Technology. (Id.) Plaintiff also received a partial salary of $11,829.96 for his work from January to June 2021. (Id.)
In June 2021, Plaintiff alleges that Defendants adjusted his salary to $175,000 per year—less than the market rate—but promised that his salary would again be adjusted to market rate in September 2021, to take effect in October 2021, and to write a check for the difference between the market rate salary earned between January and August 2021. (Dkt. # 1-1 at 6.) According to Plaintiff, he also accepted Defendants' oral offer to increase Plaintiff's stock grant by one point. (Id.)
In July 2021, Plaintiff alleges his relationship with Defendants deteriorated and that he endured verbal abuse from Padda. (Id.) Plaintiff contends that in late July 2021, he informed Defendants that he would not continue his employment in 2022 due to verbal abuse and that HMT had a toxic culture. (Id.) However, Plaintiff alleges he did not immediately terminate the relationship due to the significant compensation owed to him based on the Employment Agreement. (Id. at 6-7.)
According to Plaintiff, on September 16, 2021, his employment abruptly ended in a termination letter by Defendants. (Dkt. # 1-1 at 7.) Plaintiff contends, however, that the termination letter erroneously stated that Plaintiff had resigned on August 23, 2021. (Id.) Plaintiff alleges that he did not resign and that he continued to work up until he was terminated by Defendants. (Id.) Plaintiff asserts that Defendants have failed and refused to pay him the full compensation he was promised and owed, as well as failed to reimburse him for submitted expenses and for paid time off. (Id.)
Defendants dispute the facts alleged in Plaintiff's petition. Defendants maintain that Plaintiff did in fact resign his employment in an email sent to Padda on September 2, 2021, which memorialized his earlier termination in August 2021. (Dkt. # 5 at 2.) Defendants also contend that Plaintiff sought unemployment benefits from the Texas Workforce Commission ("TWC"), which identified Plaintiff's employer as "Advanstaff, Inc." ("Advanstaff"), and not HMT, and stated that he was fired from assignment. (Id. at 3.)
Plaintiff's petition alleges claims against Defendants for breach of contract and for declaratory judgment. (Dkt. # 1-1.) On January 31, 2022, Defendants removed the case to this Court on the basis of diversity jurisdiction. (Dkt. # 1.) Plaintiff's petition states that he is a citizen of Texas, residing in Travis County, Texas. (Dkt. # 1-1 at 4.) Plaintiff also alleges that HMT is a Nevada limited liability company with its principal place of business in Nevada, and that Padda is a citizen of the state of Nevada. (Id.)
On February 22, 2022, Defendants filed the instant motion to dismiss for lack of personal jurisdiction, or for improper venue, or in the alternative, for transfer to the District of Nevada. (Dkt. # 5.) On March 8, 2022, Plaintiff filed a response in opposition (Dkt. # 7); Defendants filed a reply on March 18, 2022 (Dkt. # 9.)
Plaintiff's response to the motion argues that it was untimely filed. (Dkt. # 7 at 5.) This argument is without merit. On February 8, 2022, the Court granted Defendants unopposed motion, ordering that "Defendants shall answer or otherwise respond to the Complaint on or before February 22, 2022." The instant motion was thus timely filed on February 22, 2022, in accordance with both the Court's Order to do so, and Rule 12 of the Federal Rules of Civil Procedure.
APPLICABLE LAW
Defendants move to dismiss pursuant to both Rules 12(b)(2) and 12(b)(3) of the Federal Rules of Civil Procedure. (Dkt. # 5.)
Federal Rule of Civil Procedure 12(b)(2) governs dismissal for lack of personal jurisdiction. Fed. R. Civ. P. 12(b)(2). Under Rule 12(b)(2), a plaintiff bears the burden of establishing personal jurisdiction and must establish a prima facie case of personal jurisdiction. Wilson v. Belin, 20 F.3d 644, 648 (5th Cir. 1994). The Court "may resolve a jurisdictional issue by reviewing pleadings, affidavits, interrogatories, depositions, oral testimony, exhibits, any part of the record, and any combination thereof." Command-Aire Corp. v. Ontario Mech. Sales & Serv. Inc., 963 F.2d 90, 95 (5th Cir. 1992). The Court accepts as true all uncontroverted allegations in the complaint, and conflicts between affidavits must be resolved in the plaintiff's favor. Wilson, 20 F.3d at 648 (quoting Bullion v. Gillespie, 895 F.2d 213, 217 (5th Cir. 1990)). A prima facie case of personal jurisdiction may be overcome if the defendant "present[s] a compelling case that . . . render[s] jurisdiction unreasonable." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). The Court must find it has personal jurisdiction over a defendant before making any decision as to the merits. Sinochem Int'l Co. v. Malaysia Int'l Shipping Corp., 549 U.S. 422, 430, 127 S.Ct. 1184, 167 L.Ed.2d 15 (2007).
Federal Rule of Civil Procedure 12(b)(3) allows a party to move to dismiss an action for "improper venue." Fed. R. Civ. P. 12(b)(3). Once a defendant raises improper venue by motion, "the burden of sustaining venue will be on [the] Plaintiff." Cincinnati Ins. Co. v. RBP Chem. Tech., Inc., No. 1:07-CV-699, 2008 WL 686156, at *5 (E.D. Tex. 2008). "Plaintiff may carry this burden by establishing facts that, if taken to be true, establish proper venue." Id. (citations omitted). The Court "must accept as true all allegations in the complaint and resolve all conflicts in favor of the plaintiff." Mayfield v. Sallyport Glob. Holdings, Inc., No. 6:16-CV-459, 2014 WL 978685, at *1 (E.D. Tex. 2014) (citing Ambraco, Inc. v. Bossclip, B.V., 570 F.3d 233, 237-38 (5th Cir. 2009)). In determining whether venue is proper, "the Court may look beyond the complaint to evidence submitted by the parties." Ambraco, 570 F.3d at 238. If venue is improper, the Court must dismiss, "or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought." 28 U.S.C. § 1406(a); Fed. R. Civ. P. 12(b)(3).
ANALYSIS
Defendants first move to dismiss Plaintiff's complaint for lack of personal jurisdiction against HMT and Padda pursuant to Rule 12(b)(2). (Dkt. # 5 at 4.) In support of their argument, Defendants assert that Plaintiff's employer was Advanstaff and not HMT, as Plaintiff indicated in his paperwork to the TWC. (Id.) Defendants further maintain that HMT does not maintain systematic or continuous ties to Texas, and that HMT is a Nevada limited liability company with its principal place of business in Nevada. (Dkt. # 5 at 5.) Defendants also contend that Padda is neither Plaintiff's employer, nor has he ever set foot in the state of Texas for any purpose related to Plaintiff's association with HMT. (Id.) Defendants instead contend that Plaintiff would routinely travel to Nevada for meetings and that he resigned while in that state. (Id.)
Plaintiff responds that the Court has specific and general jurisdiction over Defendants given that Defendants' contacts with the state of Texas produced the subject contract at issue, and that they were continuous and systematic. (Dkt. # 7 at 9.) Regarding Advanstaff, Plaintiff contends that this company only administered the payroll and benefits while Plaintiff was employed at HMT, but that it was not represented by any person during the negotiation and execution of the Employment Agreement. (Id. at. 2.)
A. Personal Jurisdiction
A federal court sitting in diversity may exercise jurisdiction over a nonresident defendant only if: (1) the state's long-arm statute would confer jurisdiction; and (2) due process is satisfied under the Fourteenth Amendment to the United States Constitution. Stripling v. Jordan Prod. Co., LLC, 234 F.3d 863, 869 (5th Cir. 2000). The Texas long-arm statute has been interpreted as extending to the limits of due process. See Gillespie, 895 F.2d at 215. Thus, the jurisdictional analysis is collapsed into one inquiry as to whether jurisdiction comports with federal due process. Id.
For a federal court to have jurisdiction over a nonresident defendant, due process requires that the defendant have certain "minimum contacts" with the forum state such that the exercise of jurisdiction does not offend "traditional notions of fair play and substantial justice." Int'l. Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 85 L.Ed. 278 (1940)). A court may exercise personal jurisdiction over a foreign defendant based on general jurisdiction or specific jurisdiction. See Daimler AG v. Bauman, 571 U.S. 117, 127, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014).
General jurisdiction is present where a defendant's contacts with the forum state are "so 'continuous and systematic' as to render [it] essentially at home in the forum State." Daimler, 571 U.S. at 138-39, 134 S.Ct. 746 (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011)). "For an individual, the paradigm forum for the exercise of general jurisdiction is the individual's domicile." Id. at 137, 134 S.Ct. 746. "[G]enerally, a corporation's 'home' falls into two paradigmatic places: (1) the state of incorporation and (2) the state where it has its principal place of business." Frank v. PNK (Lake Charles) L.L.C., 947 F.3d 331, 337 (5th Cir. 2020). For specific personal jurisdiction, "due process requires (1) minimum contacts by the defendant purposefully directed at the forum state, (2) a nexus between the defendant's contacts and the plaintiff's claims, and (3) that the exercise of jurisdiction over the defendant be fair and reasonable." Fintech Fund, F.L.P. v. Horne, 836 Fed.Appx. 215, 220 (5th Cir. 2020) (quoting ITL Int'l, Inc. v. Constenla, S.A., 669 F.3d 493, 496 (5th Cir. 2012)).
Plaintiff contends that the Court has personal jurisdiction over Defendants on the following bases: (1) by their entering into agreements with Plaintiff who was located in the state of Texas; (2) Plaintiff performed his duties as a corporate officer of HMT while in Texas, for which wages and the grant of common stock and reimbursement of expenses incurred in Texas, and subject to Texas sales tax; and (3) Defendants provided benefits to Plaintiff in Texas which were subject to TWC regulation and oversight. (Dkt. # 7 at 9.)
The Court turns to whether the Court has personal jurisdiction over each of Defendants.
1. Padda
Defendants contend that Plaintiff has failed to identify Padda's basis for liability in this case. (Dkt. # 9 at 2.) Defendants further argue that Plaintiff's petition fails to identify whether Padda was Plaintiff's employer or his relationship at all with Padda. (Id.) Defendants also assert that Plaintiff does not identify what specific activity Padda engaged in that would subject him to personal jurisdiction in Texas. (Id.)
The Court agrees with Defendants. Even if the Court assumes that Padda was Plaintiff's supervisor and that Padda was the person responsible for contract negotiations on HMT's behalf, Plaintiff fails to allege that Padda is subject to personal jurisdiction in Texas. Contracting with a Texas resident (e.g., Plaintiff's alleged Employment Agreement negotiated and entered into with Padda), or accepting the transfer of money to a Texas bank (e.g., the wage and other payments made by Padda or HMT to Plaintiff) is not enough to establish that a defendant has sufficient contacts with Texas. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) ("If the question is whether an individual's contract with an out-of-state party alone can automatically establish sufficient minimum contacts in the other party's home forum, we believe the answer clearly is that it cannot."); Old Republic Nat'l Title Ins. Co. v. Bell, 549 S.W.3d 550, 564 (Tex. 2018).
Here, there is no dispute that Padda is a citizen of Nevada, and Plaintiff does not allege any deliberate contact by Padda directed at Texas as opposed to Plaintiff himself. Further, Plaintiff's allegations of misconduct by Padda occurred while Padda was in Nevada. Thus, the fact that Padda communicated with Plaintiff does not create minimum contacts with Texas. Indeed, merely contacting or contracting with a resident of a forum state is insufficient to subject a defendant to specific jurisdiction in that state. See Conn Appliances, Inc. v. Williams, 936 F.3d 345, 348 (5th Cir. 2019). Moreover, the " 'minimum contacts' analysis looks to the defendant's contacts with the forum State itself, not the defendant's contacts with persons who reside there." Walden v. Fiore, 571 U.S. 277, 285, 134 S.Ct. 1115, 188 L.Ed.2d 12 (2014) (citations omitted). Thus, the Court finds Plaintiff fails to establish this Court has personal jurisdiction over Padda.
2. HMT
Defendants also contend that Plaintiff has failed to allege specific facts that demonstrate general or specific personal jurisdiction in Texas over HMT. (Dkt. # 9 at 4.) Defendants maintain that Plaintiff has failed to show or even allege purposeful activities by HMT in Texas to establish jurisdiction. (Id.) Defendants assert that the mere facts that Plaintiff lives in Texas, receives his salary in Texas, and files his taxes here are not evidence sufficient to subject HMT to general or specific personal jurisdiction in this state. (Id.)
Again, the Court agrees. There is no dispute that HMT is a Nevada limited liability company with its principal place of business in Nevada. Like the Court's discussion above regarding Padda, Plaintiff has failed to adequately allege or produce any evidence which indicates that HMT should be subjected to jurisdiction in this state. Plaintiff cannot rely on any alleged contract negotiations or phone calls to subject HMT to jurisdiction. See Williams, 936 F.3d at 348. Nor does Plaintiff present any other contacts sufficient to establish HMT is subject to general or specific jurisdiction in Texas. Accordingly, Plaintiff has also failed to allege facts that HMT should be subjected to jurisdiction in this state.
In sum, Plaintiff has failed to demonstrate that Defendants took any deliberate action in Texas concerning the purported Employment Agreement which forms the basis of this lawsuit. Even if Plaintiff had satisfied this initial burden, the Court is not convinced that exercising personal jurisdiction in this matter is satisfactory under the notions of fair play and substantial justice as required by law.
B. Transfer to the District of Nevada
Defendants also move to dismiss this case pursuant to Rule 12(b)(3) for improper venue. (Dkt. # 5 at 6.) In the alternative, Defendants move to transfer the case to the District of Nevada. (Id.) A court may transfer a case under 28 U.S.C. § 1631 for lack of personal jurisdiction. Franco v. Mabe Trucking Co., 991 F.3d 616, 622-23 (5th Cir. 2021). Transfer under § 1631 is proper when: "(1) the transferee court would have been able to exercise its jurisdiction on the date the action was misfiled; (2) the transferor court lacks jurisdiction; and (3) the transfer serves the interest of justice." Donelon v. Pollick, CV No. 20-00177-BAJ-RLB, 2021 WL 796145, at *8 (M.D. La. Mar. 2, 2021) (Jackson, J.) (quoting Harutyunyan v. Love, No. 19-cv-41, 2019 WL 5551901, at *4 (E.D. La. Oct. 28, 2019)).
Here, it is undisputed all the Defendants are domiciled or subject to jurisdiction in the District of Nevada. The claims are premised on diversity jurisdiction. The Court has found that it lacks personal jurisdiction over Defendants. Although Plaintiff has not alleged any facts concerning the statute of limitations, the Court finds that transfer would avoid any potential prejudice to Plaintiff refiling this case and also any prejudice regarding the costs of refiling. Furthermore, Defendants would not be unduly burdened, as the case would be tried in a state where they conduct business and reside. Thus, the Court finds the interests of justice favor transfer rather than dismissal without prejudice.
CONCLUSION
Based on the foregoing, the Court GRANTS IN PART and DENIES IN PART Defendants' Motion to Dismiss for Lack of Personal Jurisdiction. (Dkt. # 5.) The motion is GRANTED as to this Court lacking personal jurisdiction over Defendants. The motion is DENIED as to the request to dismiss without prejudice Plaintiff's claims. The Court will DENY AS MOOT Defendants' Motion to Dismiss for Improper Venue. (Dkt. # 5.) The Court further ORDERS that this case is TRANSFERRED to the United States District Court for the District of Nevada.
IT IS SO ORDERED.