Next Technologies, Inc. v. Thermogenisis, LLC

121 F. Supp. 3d 671, 2015 U.S. Dist. LEXIS 101380, 2015 WL 4644890
CourtDistrict Court, W.D. Texas
DecidedAugust 4, 2015
DocketNo. A-15-CV-00225-LY-ML
StatusPublished
Cited by12 cases

This text of 121 F. Supp. 3d 671 (Next Technologies, Inc. v. Thermogenisis, LLC) is published on Counsel Stack Legal Research, covering District Court, W.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Next Technologies, Inc. v. Thermogenisis, LLC, 121 F. Supp. 3d 671, 2015 U.S. Dist. LEXIS 101380, 2015 WL 4644890 (W.D. Tex. 2015).

Opinion

ORDER ON JURISDICTIONAL DISCOVERY

MARK LANE, United States Magistrate Judge. .

Before the Court is the above-referenced case, in-which Plaintiff Next Technologies, Ine.’s Amended Motion for Limited Discovery on Jurisdiction [Dkt. #15], Defendants’ Response thereto [Dkt. # 17], and Next-Technologies, Inc.’s Reply [Dkt. # 16] have been referred to United States Magistrate Judge Mark Lane for disposition. See 28 U.S.C. § 636(b)(1)(B), Fed. R.Civ.P. 72; Loe. R. W.D. Tex. App’x. C, Rule 1(d). The Court set the Amended Motion for Limited Discovery on Jurisdiction [Dkt. # 15] and related briefing for hearing on Thursday, July 30, 2015. Counsel for Plaintiff.and counsel for Defendants appeared and participated in the hearing.

The issue presently before the Court is not whether Plaintiff has established personal jurisdiction over the Individual Defendants. The Court today decides whether Plaintiff is entitled to pursue limited jurisdictional discovery to support the claim that personal jurisdiction over the Individual Defendants exists. Having considered the Amended Motion for Limited Discovery on Jurisdiction [Dkt. # 15], the related briefing,-the argument of counsel at the hearing, the relevant case law, and the case file as a whole, the Court issues the following Opinion and Order.

I. Background

Plaintiff Next Technologies-, Inc. manufactures “walking desks” or “treadmill desks” in Texas. Compl. [Dkt. #1] at ¶ 9. Plaintiff alleges Defendant Thermo-Genisis,- Inc. (“ThermoGenisis”) markets a competing desk product and, in a false advertising scheme, purports to host an “independent review site” called WorkWhileWalking.com. Id. at ¶¶ 13-19. Plaintiff alleges the Individual Defendants, Ron Wiener and Larry Swanson, are responsible for the content of this website. Id. at ¶¶ 16-17. The website reviews the pros and cons of various walking desks, including desks produced by ThermoGenisis and desks produced by its competitors. Id. at ¶ 19. Plaintiff- alleges the WorkWhileWalking.com reviews are not independent, but are advertisements for Defendant ThermoGenisis’ products. Id. Plaintiff further alleges reviews posted, on the WorkWhileWalking.com site contain false, misleading, and defamatory statements about Plaintiffs.products. Id. at ¶ 26.

Plaintiff asserts Individual Defendant Ron Wiener, the Manager and CEO of ThermoGenisis and sometime Editor in [674]*674Chief of WorkWhileWalking.com, approached Plaintiff in 2013 about partnering to make WorkWhileWalking.com a distributor or affiliate of Next Technologies. Id. at ¶¶ 24-25. Plaintiff asserts that, prior to these overtures, WorkWhileWalking.com posted a very favorable review of a Next Technologies product. Id. at ¶¶ 20-21. After Plaintiff declined to enter the proposed business arrangement, however, WorkWhileWalking.com posted a number of allegedly false and defamatory reviews of Plaintiffs products. Id. at ¶ 26.

Plaintiff sent WorkWhileWalking.com a cease and desist letter in January of 2015 and received a response letter signed by Individual Defendant Larry Swanson, who was then acting as Editor in Chief of WorkWhileWalking.com, in February of 2015. Id. at ¶¶ 27-30. Plaintiff asserts this letter suggested that the ratings of its products were tied to whether it was willing to do business with WorkWhileWalking.com as a distributor or affiliate. Id. Plaintiff alleges that in February of 2015, shortly after it received the Swanson letter, the WorkWhileWalking.com review of Plaintiffs NextDesk product was modified to remove some of the defamatory and misleading statements, but that the posted review, as modified, still contained false, misleading, and defamatory statements. Id. at ¶¶ 31-32, 47.

Plaintiff has sued ThermoGenisis (d/b/a WorkWhileWalking.com and iMovr), Wiener, and Swanson. Plaintiff sues Thermo-Genisis under the Lanham Act, 15 U.S.C. '§ 1125, alleging the entire “independent” WorkWhileWalking.com website is a false advertising scheme for ThermoGenisis products. Id., Counts One and Two. Plaintiff has sued all Defendants, including Wiener and Swanson, for copyright violation pursuant to 17 U.S.C. § 106, alleging the images of Next Technologies’ products displayed on the WorkWhileWalking.com website were posted without authorization. Id., Count Three. Plaintiff further alleges against all Defendants, including Wiener and Swanson, state law claims of tortious interference with contractual relations and prospective business relationships, defamation per se, and defamation. Id., Counts Four to Seven.

ThermoGenisis, LLC (“ThermoGenisis”) has answered the Complaint, see Answer [Dkt. # 7], thus conceding personal jurisdiction is proper in the Western District of Texas. See Fed.R.Civ.P. 12(b)(2), 12(h). Larry Swanson and Ron Wiener (the “Individual Defendants”) have responded to the Complaint with a Motion to Dismiss for Lack of Personal Jurisdiction [Dkt. #6], asserting the fiduciary shield doctrine applies to nullify any contacts with Texas arising out of their work on behalf of ThermoGenisis. Id. at 5-9. The merits of this motion are not currently before the Court. First, it is necessary to determine whether Plaintiff is entitled to limited jurisdictional discovery before answering the Individual Defendants’ Motion to Dismiss [Dkt. # 6].

Plaintiffs Amended Motion for Limited Discovery on Jurisdiction [Dkt. # 15], filed in response to the Individual Defendants’ Motion to Dismiss [Dkt. # 6], seeks discovery to support its contention that the fiduciary shield doctrine does not prevent this Court from exercising specific personal jurisdiction over Wiener and Swanson. Am. Mot. Disc. [Dkt. # 15] at 7-10. There are two exceptions to the fiduciary shield doctrine: It does not shield an individual from personal jurisdiction arising out of his own allegedly tortious actions, even if taken while working for a corporate entity, and it does not apply when the corporation at issue is merely an alter ego of the individual Defendant. Stuart v. Spademan, 772 F.2d 1185, 1197-98 (5th Cir.1985). Plain[675]*675tiff asserts both exceptions apply here. Am. Mot. Disc. [Dkt. # 15] at 7-10.

First, Plaintiff alleges Wiener was individually responsible for soliciting Plaintiff in Texas as a business partner. Id. at 9-10. Plaintiff further alleges Wiener was individually responsible for causing defamatory reviews of Plaintiffs products to be posted on WorkWhileWalking.com in retaliation for Plaintiffs refusal to do business with him. Id. at 7-8. With regard to Swanson, Plaintiff alleges he signed and sent a letter implying that the website’s negative reviews of Plaintiffs products would continue unless Plaintiff agreed to reopen negotiations concerning a business relationship with Defendants. Id. at 8.

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121 F. Supp. 3d 671, 2015 U.S. Dist. LEXIS 101380, 2015 WL 4644890, Counsel Stack Legal Research, https://law.counselstack.com/opinion/next-technologies-inc-v-thermogenisis-llc-txwd-2015.