NExTT Solutions, LLC v. XOS Technologies, Inc.

71 F. Supp. 3d 857, 2014 U.S. Dist. LEXIS 165607, 2014 WL 6674619
CourtDistrict Court, N.D. Indiana
DecidedNovember 25, 2014
DocketNo. 3:13 CV 1030
StatusPublished
Cited by8 cases

This text of 71 F. Supp. 3d 857 (NExTT Solutions, LLC v. XOS Technologies, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
NExTT Solutions, LLC v. XOS Technologies, Inc., 71 F. Supp. 3d 857, 2014 U.S. Dist. LEXIS 165607, 2014 WL 6674619 (N.D. Ind. 2014).

Opinion

OPINION and ORDER

JAMES T. MOODY, District Judge.

I. BACKGROUND

Plaintiff NExTT Solutions, LLC, is an Indiana .sports software company that markets its products towards high-profile customers like the National Football League (“NFL”) and college sports programs. In 2007, NExTT began' discussing a possible business relationship with defendant Stratbridge, LLC, a Delaware software, company with its principal place of business in Massachusetts. On May 29, 2009, the parties entered into a licensing agreement (“the Contract”), under which Stratbridge was permitted to use NExTT’s NFL scouting program in developing and marketing its own products to the NFL. In July of 2012, Stratbridge sold its rights and obligations under the Contract to another defendant, XOS Technologies, Inc., a Delaware company with its principal place of business in Florida.

NExTT has sued both Stratbridge and XOS for breach of contract, breach of fiduciary duties, breach of the implied covenant of good faith and fair dealing, and fraudulent inducement. (DE #1.) NExTT also seeks a declaratory judgment and an accounting. (Id.) NExTT alleges that Stratbridge breached the contract by charging NFL teams more than it should have, failing to make reasonable efforts to grow the scouting program business, and mismanaging its contractual obligations to pursue opportunities for royalty-bearing products. NExTT further alleges that Stratbridge ignored its obligations under the Contract and instead used NExTT’s relationships with NFL teams to market its own products.

Defendants Stratbridge and XOS moved to dismiss for lack of personal jurisdiction under FedeRal Rule of Civil PROcedure 12(b)(2) and, in the alternative, for failure to state a claim under Rule 12(b)(6). (DE # 9.) NExTT opposed the motion to dismiss and requested jurisdictional discovery. (DE # 12.) On May 14, 2014, this court denied the motion to dismiss in part, holding that the court could properly exercise specific personal jurisdiction over Stratbridge. (DE #28.) The court also held that it could not exercise specific jurisdiction over XOS, but that NExTT had made a colorable showing of general jurisdiction with regard to that defendant. (Id.) Accordingly the court withheld ruling on the motion to dismiss as to XOS and permitted plaintiff a chance to conduct jurisdictional discovery. (Id.) The jurisdictional discovery period has ended, and the parties have submitted supplemental briefs and evidence in accordance with this court’s scheduling order. The motion to dismiss, as it pertains to this court’s general jurisdiction over XOS, is now ripe for ruling.

II. LEGAL STANDARD

Though XOS has moved to dismiss pursuant to both RULES 12(b)(2) and 12(b)(6), only the former need be discussed in the present order. Federal Rule of Civil Procedure 12(b)(2) requires dismissal of a claim where personal jurisdiction is lacking. After a defendant moves to dismiss under Rule 12(b)(2), “the plaintiff bears the burden of demonstrating the existence of jurisdiction.” Purdue Research Found, v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir.2003). Where, as here, the district court rules on a defendant’s motion to dismiss based on the submission of written materials without hold[860]*860ing an evidentiary hearing, the plaintiff need only make out a prima facie case of personal jurisdiction. Id. The court must resolve factual disputes in the plaintiffs favor when evaluating whether that showing has been made. Id.

III. DISCUSSION

A federal court’s personal jurisdiction over a defendant is established in a diversity-jurisdiction case, such as this one, when the defendant is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located — here, Indiana. Fed. R. Crv. P. 4(k)(l)(A). Indiana law permits its courts to exercise jurisdiction on any basis permitted by the Constitution of the United States. Ind. Tr R. 4.4(A). Thus, the statutory question merges with the constitutional one; if Indiana constitutionally may exercise personal jurisdiction over a defendant, its long-arm statute will enable it to do so. uBID, Inc. v. GoDaddy Group, Inc., 623 F.3d 421, 425 (7th Cir.2010).

The federal constitutional limits of a court’s personal jurisdiction in a diversity case are found in the Fourteenth Amendment’s due process clause, which “protects an individual’s liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful ‘contacts, ties, or relations.’ ” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 464, 471-72, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (quoting Int’l Shoe Co. v. Wash., Office of Unemployment Comp. & Placement, 326 U.S. 310, 319, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). “The nature of the defendant’s contacts with the forum state determines the propriety of personal jurisdiction and also its scope— that is, whether jurisdiction is proper at all, and if so, whether it is general or specific to the claims made in the case.” Tamburo v. Dworkin, 601 F.3d 693, 701 (7th Cir.2010). These two types of jurisdiction — general and specific — require separate examination.

A. Specific Jurisdiction

At the end of its supplemental brief, NExTT asks the court to reconsider its holding that this court cannot exercise specific personal jurisdiction over XOS. (DE # 36 at 16.) Specific jurisdiction depends on contacts that demonstrate a real relationship between the defendant and the forum state with respect to the transaction at issue. Purdue, 338 F.3d at 780. NExTT argues that XOS could have reasonably predicted that it would be answerable in a court situated in Indiana by pointing to the fact that XOS assumed all of Stratbridge’s obligations under the Contract, knew that NExTT was an Indiana company, and still owes several payments to'NExTT.

As the court already explained in its prior order, the fact that XOS assumed Stratbridge’s obligations under the Contract is not dispositive. The Seventh Circuit distinguishes between a corporate successor, which has “chosen to' stand in the shoes of its predecessor and has chosen to accept the business expectations of those who have dealt previously with that predecessor,” and an assignee, who has purchased certain specific contractual rights and assumes certain specific obligations. Purdue, 338 F.3d at 784. While the former effectively absorbs the jurisdictional contacts of its predecessor, the latter does not, and specific jurisdiction exists only if, after the purchase of the assets, the as-signee “so structured its business affairs that it reasonably could have predicted that it would be answerable in a court situated in Indiana for its actions with respect to these transactions.” Id. at 785.

In this case, it was — and still is— undisputed that XOS had no part in the Contract’s negotiation or execution.

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71 F. Supp. 3d 857, 2014 U.S. Dist. LEXIS 165607, 2014 WL 6674619, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nextt-solutions-llc-v-xos-technologies-inc-innd-2014.