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Flexsteel Pipeline Technologies Inc. v. Chen

United States District Court, N.D. Florida, Panama City Division

August 9, 2019

FLEXSTEEL PIPELINE TECHNOLOGIES, INC., Plaintiff,
v.
BIN CHEN and CHANGCHUN GAOXIANG SPECIAL PIPE CO., LTD., a/k/a GOLSUN PIPES, Defendants.

          ORDER

          GARY R. JONES, UNITED STATES MAGISTRATE JUDGE

         On August 8, 2019, the Court conducted a telephonic hearing to address Flexsteel's Motion to Compel Jurisdictional Discovery, ECF No. 108, and Defendant Golsun's Response in Opposition. ECF No. 111. For the reasons discussed on the record at the hearing, which are fully incorporated into this order, and as summarized below, Flexsteel's Motion to Compel Jurisdictional Discovery is due to be granted to the extent detailed in this order.

         DISCUSSION

         Flexsteel's motion relates to the Court's previous ruling authorizing Flexsteel to conduct jurisdictional discovery from Golsun before Golsun may renew its motion to dismiss for lack of personal jurisdiction.

         On March 31, 2019, the Court denied Golsun's motion to dismiss without prejudice so that Flexsteel could conduct jurisdictional discovery before Golsun renewed its motion to dismiss. ECF No. 98. Flexsteel submitted to the Court a plan for the proposed jurisdictional discovery, which the Court adopted and approved on April 9, 2019. ECF No. 100. The plan envisioned by the Court at that time required Flexsteel to serve the written discovery requests within 5 days and then Golsun would respond to the written discovery requests within 30 days. Flexsteel was then required to complete the depositions of the Golsun witnesses within 60 days after Flexsteel received Golsun's document production. The deadline to complete jurisdictional discovery under this plan was August 1, 2019. That has not happened, however, because a dispute arose concerning Golsun's objections to some of Flexsteel's written discovery requests. The parties attempted to resolve their difference through meet and confers but were unsuccessful, thus prompting the filing of the motion to compel jurisdictional discovery.

         The main disagreements between the parties concern the following: (1) whether Golsun must produce documents concerning its United States and Florida activities after August 19, 2016, the date the complaint was filed in this case; (2) whether Golsun must produce passport information concerning travel in the United States by Golsun employees and representatives; (3) whether Golsun must respond to Flexsteel's interrogatory no. 7; (4) whether Golsun must produce drafts of contracts, distributorship agreements, or sales agreements that were not executed and concern sales territories outside the United States; and (5) the location of the depositions Flexsteel will conduct after written discovery is completed.

         Turning first to the issue of whether Golsun must produce documents post-dating the filing of the complaint in this case, Flexsteel asserts that information about Golsun's activities in the United States during the last three years is important for determining personal jurisdiction. Flexsteel says that its claims in this case concern not only the misappropriation of its technology but Golsun's ongoing and continuing use of the misappropriated technology. Thus, according to Flexsteel, because the claims in this case involve continuing tortious behavior post-complaint activities are relevant to personal jurisdiction.

         Golsun looks at Flexsteel's claims much more narrowly. Golsun argues that the misappropriation claims in this case concern the single onetime misappropriation of Flexsteel's technology when a Chinese patent was obtained in 2008 and then when a U.S. patent was obtained in 2015.

         As the Court explained at the hearing, the Court concludes that Golsun's post-complaint activities are relevant to the issues the Court must consider in resolving the motion to dismiss for lack of personal jurisdiction. For example, in assessing the due process prong of the personal jurisdictional analysis the Court must assess, among other considerations, whether the exercise of personal jurisdiction comports with “traditional notions of fair play and substantial justice.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-75 (1985). Certainly, purposeful contacts with Florida and the nature of Golsun's activities in the United States, if any, during the last three years would be instructive as to whether forcing Golsun to defend this suit in the United States would offend these types of considerations.

         The claims in this case are not as narrow as Golsun suggests. There is little dispute that Flexsteel's complaint in this case is not just that its technology was misappropriated but that Golsun continues to use the technology in competition with Flexsteel. For that reason, in addition to other relief, Flexsteel requests injunctive relief to stop Golsun from using the technology. Where, as here, the claims concern alleged ongoing harm, other courts have considered post-complaint activity as relevant to the issue of personal jurisdiction. See, e.g. Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1562 (Fed. Cir. 1994); OnAsset Intelligence, Inc. v. 7PSolutions, LLC., No. 3:12-cv-3709-N, 2013 WL 12125993, at *3 (N.D. Tex. Aug. 21, 2013).

         For these reasons, Flexsteel's motion to compel Golsun to produce documents post-dating the filing of the complaint is due to be granted. Golsun must produce documents concerning its activities after August 19, 2016.

         Regarding the dispute about travel in the United States by Golsun employees, Flexsteel says that Golsun only produced documents evidencing some trips to the United States and Florida by Golsun's CEO, Mr. Li but did not produce any documents concerning other trips by Mr. Li or any documents evidencing trips by other Golsun officers, employees or agents. Flexsteel requests that to remedy this deficiency the Court should require Golsun to produce the passport stamp pages from these officers and employees.

         Golsun says that it cannot force employees to produce their passports, and in any event, stamps on a passport would not identify whether a trip is for business or personal reasons. Personal trips by Golsun employees, unrelated to any business purpose, would of course not be relevant to the determination of whether Golsun is subject to personal jurisdiction.

         Although the Court agrees that Golsun is not required to produce to Flexsteel the passport stamp pages from its employees' passports, the passport stamp pages would provide the best check on the dates and locations of any trips to the United States. Accordingly, counsel for Golsun is directed to obtain (but not produce) the passport stamp pages for Golsun employees, who have traveled to the United States. Counsel must then obtain and produce all documents from Golsun evidencing the expenses for the trips for any travel identified on the passport stamp pages. To the extent travel is identified on the passport stamp pages, and the travel is for Golsun business purpose but Golsun does not have documents evidencing the expenses for the trips, Golsun must advise Flexsteel of the date(s) and location(s) of the business trip(s) and that Golsun does not have any documentations ...


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