3:21-cv-01846
N.D. Tex.May 3, 2022Background
- Plaintiff Ecigrusa LLC (Worldwide Vape Distribution), a Texas wholesaler, orally ordered 1,086 JUUL Pods from Silver State Trading (Nevada) on Aug. 9, 2019 and paid $736,992 in advance.
- Defendants (Silver State, Empire Imports, and Angel) returned $350,000 by wire then failed to return the balance; instead Worldwide received an unrelated shipment of SKOL Pods and a purported sales order claiming Worldwide ordered those goods.
- Worldwide sued in Texas state court for breach of contract, conversion, breach of implied warranty of merchantability, and DTPA violations; service was effected via the Texas Secretary of State.
- Defendants removed to federal court and moved to dismiss under Rule 12(b)(2) for lack of personal jurisdiction.
- The district court evaluated specific jurisdiction (no general jurisdiction alleged), considered the parties’ submissions (sales orders, texts, affidavit), and found Defendants lacked sufficient minimum contacts with Texas.
- Court granted the 12(b)(2) motion and dismissed all claims without prejudice for lack of personal jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction over Defendants (general vs. specific) | Repeated transactions (≈35) with Texas and Angel’s communications justify jurisdiction | Defendants lack continuous/systematic contacts; contacts are unilateral by Worldwide; Angel acted as agent | No general jurisdiction; no specific jurisdiction—minimum contacts not established for Silver State, Empire, or Angel; dismissal under Rule 12(b)(2) |
| Jurisdiction for breach-of-contract claim | Contracts and shipments to Texas connect dispute to Texas | Contracts were discrete shipments instigated by Worldwide; place/control of performance was California | No specific jurisdiction under Burger King factors; contacts insufficient |
| Jurisdiction for conversion claim | Failure to refund constituted conversion tied to Texas payment | Alleged conversion occurred in California when defendants refused refund | No jurisdiction: conversion occurred in CA, not in Texas |
| Jurisdiction for implied warranty & DTPA claims | Nonconforming goods and alleged misrepresentations support jurisdiction | Stream-of-commerce not applicable; DTPA knowledge-based claims are not intentional torts; apply Burger King | No jurisdiction: warranty claim analyzed like contract claim (Burger King); DTPA likewise fails for lack of minimum contacts |
Key Cases Cited
- Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266 (5th Cir. 2006) (plaintiff bears prima facie burden on personal jurisdiction)
- Pervasive Software Inc. v. Lexware GmbH & Co. KG, 688 F.3d 214 (5th Cir. 2012) (accept uncontroverted allegations; resolve conflicts in plaintiff’s favor for prima facie showing)
- Stuart v. Spademan, 772 F.2d 1185 (5th Cir. 1985) (factors for contract-based specific jurisdiction analysis)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (purposeful availment/totality of circumstances for contract claims)
- Moncrief Oil Int’l, Inc. v. OAO Gazprom, 481 F.3d 309 (5th Cir. 2007) (plaintiff’s unilateral activity in forum insufficient for defendant’s purposeful availment)
- Danziger & De Llano, L.L.P. v. Morgan Verkamp, L.L.C., 24 F.4th 491 (5th Cir. 2022) (claim-specific jurisdiction inquiry; separate analyses for tort and contract claims)
- Walden v. Fiore, 571 U.S. 277 (2014) (intentional tort contacts must connect defendant to the forum itself)
- Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (2011) (general jurisdiction requires contacts so continuous and systematic as to render defendant at home)