Pervasive Software, Inc. v. Lexware GMBH & Co. KG , 688 F.3d 214 ( 2012 )

Case: 11-50097 Document: 00511928888 Page: 1 Date Filed: 07/20/2012
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
July 20, 2012
No. 11-50097 Lyle W. Cayce
Clerk
PERVASIVE SOFTWARE INC.,
Plaintiff-Appellant
v.
LEXWARE GMBH & COMPANY KG,
Defendant-Appellee
Appeal from the United States District Court
for the Western District of Texas
Before DENNIS, CLEMENT, and HIGGINSON, Circuit Judges.
DENNIS, Circuit Judge:
The plaintiff-appellant, Pervasive Software Inc. (“Pervasive”), a Delaware
corporation having its principal office in Austin, Texas, sued defendant-appellee,
Lexware GmbH & Co. Kg (“Lexware”), a corporation organized under the laws
of the Federal Republic of Germany, for damages and injunctive relief on the
basis of breach of contract, quantum meruit, unjust enrichment, and conversion
in a Texas state court. Lexware removed the case to the federal district court,
and that court, in response to Lexware’s motion, dismissed the case for lack of
personal jurisdiction over Lexware. Pervasive appealed. We affirm, concluding
that Pervasive has failed to establish a prima facie case that Lexware had
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minimum contacts with Texas to support the exercise of either specific or general
personal jurisdiction over Lexware.
I. Facts and Procedural History
Pervasive, formerly named Btrieve Technologies, Inc., is a computer
software manufacturer, incorporated under the law of Delaware, with its
principal place of business in Austin, Texas. Pervasive sells its software products
globally, has employees and offices in Germany, Europe, and elsewhere, and
conducts business worldwide. Lexware is a German software developer based in
Freiburg, Germany. It produces German tax and financial software programs for
German taxpayers exclusively in the German language.
Among its software products, Pervasive has developed and sold globally
the Btrieve Client Engine Version 6.15 (“Btrieve” or “Btrieve software”).1 In
1994, Lexware purchased a copy of Btrieve software in Germany from SOS
Software Service GmbH (“SOS”), a third-party German software distributor.2
Lexware paid 1,327.25 deutschmarks to SOS for Btrieve. Included in the
software package was a license agreement, the Derivative Software License
Agreement (“DSLA”). By purchasing and using the Btrieve software package,
Lexware signified that it entered into the DSLA with Pervasive. The DSLA
1
Btrieve is a software product that provides a database module that stores, edits, and
searches data, and was produced with the purpose of being purchased and used by other
software developers, who incorporate Btrieve into their own derivative software products.
2
The parties disagree about whether this software sale took place in 1994 or 1996.
“When, as here, the district court conducted no evidentiary hearing, the party seeking to assert
jurisdiction must present sufficient facts as to make out only a prima facie case supporting
jurisdiction. We must accept as true that party’s uncontroverted allegations, and resolve in its
favor all conflicts between the facts contained in the parties’ affidavits and other
documentation.” Alpine View Co. Ltd. v. Atlas Copco AB, 205 F.3d 208, 215 (5th Cir. 2000)
(citations omitted). Although the date of the sale is not material, we resolve the conflict in
favor of Pervasive.
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specified the terms and conditions of Lexware’s Btrieve software license and
contained a Texas choice-of-law clause. The DSLA was for a term of one year, to
be renewed automatically until one party terminated the agreement. The DSLA
did not require Lexware to make additional payments or royalties to Pervasive,
and under the DSLA Pervasive had no obligation to provide Lexware with
ongoing technical support or assistance for Btrieve. Two forms accompanied the
DSLA: (1) a request that the purchaser identify the product that it purchased;
and (2) a request that the purchaser indicate the product name, category, and
description of its derivative products. Both forms requested that they be
completed and mailed to Pervasive’s office in Austin, Texas. According to
Pervasive, Lexware did not return these forms.
Lexware incorporated Btrieve into several of its products, German
financial and tax software programs that were designed to assist German
speaking taxpayers in preparing their German tax returns. The programs were
not available in English. Pervasive did not agree to assist Lexware in
incorporating Btrieve into its products or provide Lexware any technical
assistance with Btrieve.
In 1999 and 2000, Pervasive and Lexware entered into a second, separate
license agreement, the European Manufacturing Partner Agreement (EMPA).
The EMPA involved a different and new Pervasive product line, the PSQL
products. The parties negotiated and executed this agreement during several in-
person meetings of their representatives in Germany. The EMPA required
Lexware to make monthly reports to Pervasive and to incur a royalty fee to
Pervasive each time Lexware sold a derivative product containing PSQL.
Lexware made a one-time, non-refundable prepayment to Pervasive from which
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the royalty fees were to be deducted. In 2002, Lexware released a new German
taxpayer product line incorporating PSQL but discontinued it less than one year
later because it was commercially unsuccessful. The EMPA had an initial three-
year term that Lexware did not extend. In 2000, Pervasive and Lexware
negotiated two addenda to the EMPA. The first (“Addendum 1”) set forth
Lexware’s agreement to purchase from Pervasive 7,500 enabling technology user
seats for PSQL, and contained provisions for reporting requirements and royalty
fee payments. Lexware prepaid a fee of $125,250 for the 7,500 enabling seats.
Addendum 1 to the EMPA was executed by the parties effective June 30, 2000.
The second addendum (“Addendum 2”) governed an Educational Grant Program.
These addenda did not purport to amend or alter the DSLA. In 2006, 2008, and
2009, Lexware purchased three additional items for download from the
Pervasive website that were not related to the Btrieve software it bought from
SOS in 1994.
Pervasive and Lexware did not communicate directly with each other until
1999, when they began negotiations in respect to the EMPA. They then
communicated several times between 1999 and 2003 regarding the EMPA and
Lexware’s reporting and royalty fee requirements. In 2002, Lexware asked
Pervasive for a certificate that it was a U.S. taxpayer so as to enable Lexware
to obtain an exemption from German taxes in connection with its payment of
royalty fees under the EMPA. In 2003, Lexware asked Pervasive for certification
that Pervasive was a U.S. corporation for the purposes of U.S. federal taxation.
These requests were not related to the DSLA and pertained only to the EMPA
and Addendum 1. Pervasive supplied the certificate of its U.S. taxpayer status
to Lexware in June 2003. The companies did not communicate again until 2007,
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when Lexware requested a price quote for a new version of PSQL; the e-mail was
forwarded to Pervasive’s German representatives, one of whom then called
Lexware to discuss PSQL and Btrieve. Lexware did not purchase the new
version of PSQL. In 2009, Lexware contacted Pervasive and requested the
Btrieve Ultimate Patch or update, but Pervasive ultimately did not provide
Lexware with that software patch or update.
Lexware does not have an office, own property, or have agents or
employees in Texas, and it does not promote, market, or sell its products inside
Texas. Its products are specifically designed for the German taxpayer market
and are only available in the German language. Pervasive did not assist
Lexware in incorporating Btrieve into its German taxpayer products or provide
it with any other technical support. Lexware has an interactive website, using
only the German language, that allows customers to purchase and download free
trials of Lexware’s software products. The website is accessible worldwide,
including in Texas. Lexware has sent fifteen internet orders to twelve Texas
billing or shipping addresses since 2007. Lexware’s materials may also be
purchased on several third-party vendor websites, which are accessible by
persons in Texas. Lexware books are available for purchase on Amazon’s U.S.
website.
Pervasive describes itself as “a global leader in embeddable data
management and data integration software,” and has sold its products to
customers in more than 150 countries. It has an interactive website that is
accessible worldwide and in Germany, and it has used foreign third-party
distributors. Most of Pervasive’s offices are in Texas, but the company maintains
a European Service and Support Center in Dublin, Ireland, and has several
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offices in Japan and Europe, including in Germany. Pervasive employed two
German resident representatives, who used a German e-mail address
(pervasive.de) to contact Lexware. Many of Pervasive’s communications with
Lexware were in German. Lexware representatives also used German e-mail
addresses (lexware.de).
In 2008, Pervasive representatives e-mailed Lexware, in the German
language, to request the return of the Btrieve master CD and key generator.3
Lexware replied, promising to handle the request but asking for more
information about when and to whom Pervasive gave the CD and key generator.
The record does not reflect whether Pervasive supplied Lexware with this
information. In 2009, Pervasive’s German representatives requested that
Lexware report on its distribution of Lexware software products that
incorporated Btrieve. Lexware refused on grounds that the DSLA did not
obligate Lexware to make such reports or to pay Pervasive any royalty on the
sale of Lexware products. Pervasive then contacted Lexware to terminate the
DSLA. When Lexware rejected its demand, Pervasive sent Lexware a cease-and-
desist letter. On March 26, 2010, Pervasive filed a complaint against Lexware
in the 200th Judicial District of Travis County, Texas, seeking damages and
injunctive relief. Pervasive raised four causes of action. First, Pervasive claimed
that Lexware breached its contractual obligations under the DLSA. Pervasive
also claimed that it was entitled to the fair value of Lexware’s use of Btrieve
3
Neither party has provided a description of these items. The Btrieve master CD was
likely the CD on which Lexware’s copy of Btrieve was stored. Neither party explains the exact
nature of the “key generator.” Although the record does not state this, we assume that the CD
and key generator were contained in the Btrieve product package that Lexware purchased
from SOS in 1994.
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under quantum meruit and unjust enrichment. Finally, Pervasive claimed that
Lexware committed the tort of conversion by wrongfully exercising dominion and
control over Btrieve. Lexware removed the case to the United States District
Court for the Western District of Texas and filed motions to dismiss for lack of
personal jurisdiction and failure to state a claim upon which relief can be
granted. See Fed. R. Civ. P. 12(b)(2), 12(b)(6). The district court granted
Lexware’s 12(b)(2) motion, and Pervasive appealed.
II. Discussion
A. Standards of Review
We review de novo a district court’s determination that it lacks personal
jurisdiction. Stripling v. Jordan Prod. Co., 234 F.3d 863, 869 (5th Cir. 2000). As
the party seeking to invoke the power of the court, Pervasive “bears the burden
of establishing jurisdiction but is required to present only prima facie evidence.”
Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 270 (5th Cir. 2006); Luv N’
Care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 469 (5th Cir. 2006). “In determining
whether a prima facie case exists, this Court must accept as true [the Plaintiff’s]
uncontroverted allegations, and resolve in [its] favor all conflicts between the
[jurisdictional] facts contained in the parties’ affidavits and other
documentation.” Freudensprung v. Offshore Technical Servs., Inc., 379 F.3d 327,
343 (5th Cir. 2004) (alterations in original) (quoting Nuovo Pigone, SpA v.
STORMAN ASIA M/V, 310 F.3d 374, 378 (5th Cir. 2002)) (internal quotation
marks omitted).
B. Personal Jurisdiction
1. General Principles
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A federal court sitting in diversity must satisfy two requirements to
exercise personal jurisdiction over a nonresident defendant. First, the forum
state’s long-arm statute must confer personal jurisdiction. Second, the exercise
of jurisdiction must not exceed the boundaries of the Due Process Clause of the
Fourteenth Amendment. Mink v. AAAA Dev. LLC, 190 F.3d 333, 335 (5th Cir.
1999). Because Texas’s long-arm statute has been interpreted to extend to the
limits of due process, we only need to determine whether subjecting Lexware to
suit in Texas in this case would be consistent with the Due Process Clause of the
Fourteenth Amendment. Id.The Due Process Clause of the Fourteenth Amendment protects a
corporation, as it does an individual, against being made subject to the binding
judgments of a forum with which it has established no meaningful “contacts,
ties, or relations.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 319 (1945). Thus,
“[t]he Due Process Clause . . . sets the outer boundaries of a state tribunal’s
authority to proceed against a defendant.” Goodyear Dunlop Tires Operations,
S.A. v. Brown, 131 S. Ct. 2846, 2853 (2011) (citing Shaffer v. Heitner, 433 U.S.
186, 207 (1977)). “The canonical opinion in this area remains [International
Shoe], in which we held that a State may authorize its courts to exercise
personal jurisdiction over an out-of-state defendant if the defendant has ‘certain
minimum contacts with [the State] such that the maintenance of the suit does
not offend traditional notions of fair play and substantial justice.’” Id. (quoting
Int’l Shoe, 326 U.S. at 316 (second alteration in original) (internal quotation
marks omitted)).
“Endeavoring to give specific content to the ‘fair play and substantial
justice’ concept, the Court in International Shoe classified cases involving
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out-of-state corporate defendants. First, as in International Shoe itself,
jurisdiction unquestionably could be asserted where the corporation’s in-state
activity is ‘continuous and systematic’ and that activity gave rise to the
episode-in-suit.” Id. (quoting Int’l Shoe, 326 U.S. at 317). “Further, the Court
observed, the commission of certain ‘single or occasional acts’ in a State may be
sufficient to render a corporation answerable in that State with respect to those
acts, though not with respect to matters unrelated to the forum connections.” Id.(quoting Int’l Shoe, 326 U.S. at 318). “The heading courts today use to encompass
these two International Shoe categories is ‘specific jurisdiction.’ Adjudicatory
authority is ‘specific’ when the suit ‘aris[es] out of or relate[s] to the defendant’s
contacts with the forum.’” Id. (alterations in original) (internal citation omitted)
(quoting Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 414
n.8 (1984)). “Specific jurisdiction . . . depends on an ‘affiliatio[n] between the
forum and the underlying controversy,’ principally, activity or an occurrence that
takes place in the forum State and is therefore subject to the State’s regulation.”
Id. at 2851 (alteration in original) (quoting Arthur T. von Mehren & Donald T.
Trautman, Jurisdiction to Adjudicate: A Suggested Analysis, 79 Harv. L. Rev.
1121, 1136 (1966)).
“International Shoe distinguished from cases that fit within the ‘specific
jurisdiction’ categories, ‘instances in which the continuous corporate operations
within a state [are] so substantial and of such a nature as to justify suit against
it on causes of action arising from dealings entirely distinct from those
activities.’” Id. at 2853 (alteration in original) (quoting Int’l Shoe, 326 U.S. at
318). “Adjudicatory authority so grounded is today called ‘general jurisdiction.’”
Id. (quoting Helicopteros, 466 U.S. at 414 n.9). “For an individual, the paradigm
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forum for the exercise of general jurisdiction is the individual’s domicile; for a
corporation, it is an equivalent place, one in which the corporation is fairly
regarded as at home.” Id. at 2853-54 (citing Lea Brilmayer et al., A General Look
at General Jurisdiction, 66 Tex. L. Rev. 721, 728 (1988)).
“Since International Shoe, this Court’s decisions have elaborated primarily
on circumstances that warrant the exercise of specific jurisdiction, particularly
in cases involving ‘single or occasional acts’ occurring or having their impact
within the forum State. As a rule in these cases, this Court has inquired whether
there was ‘some act by which the defendant purposefully avail[ed] itself of the
privilege of conducting activities within the forum State, thus invoking the
benefits and protections of its laws.’ Hanson v. Denckla, [357 U.S. 235, 253
(1958)]. See e.g., World-Wide Volkswagen Corp. v. Woodson, [444 U.S. 286 (1980)]
(Oklahoma court may not exercise personal jurisdiction ‘over a nonresident
automobile retailer and its wholesale distributor in a products-liability action,
when the defendants’ only connection with Oklahoma is the fact that an
automobile sold in New York to New York residents became involved in an
accident in Oklahoma’); Burger King Corp. v. Rudzewicz, [471 U.S. 462, 474-75
(1985)] (franchisor headquartered in Florida may maintain breach-of-contract
action in Florida against Michigan franchisees, where agreement contemplated
ongoing interactions between franchisees and franchisor’s headquarters); Asahi
Metal Industry Co. v. Superior Court of Cal., Solano Cnty., [480 U.S. 102, 105
(1987)] (Taiwanese tire manufacturer settled product liability action brought in
California and sought indemnification there from Japanese valve assembly
manufacturer; Japanese company’s ‘mere awareness . . . that the components it
manufactured, sold, and delivered outside the United States would reach the
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forum State in the stream of commerce’ held insufficient to permit California
court’s adjudication of Taiwanese company’s cross-complaint); id., at 109, 107
S. Ct. 1026 (opinion of O'Connor, J.); id., at 116–117, 107 S. Ct. 1026 (Brennan,
J., concurring in part and concurring in judgment).” Id. at 2854 (first and last
alterations in original).
2. Lack of Specific Jurisdiction—Breach of Contract, Unjust
Enrichment, and Quantum Meruit Claims
Specific jurisdiction requires a plaintiff to show that: “(1) there are
sufficient (i.e., not ‘random fortuitous or attenuated’) pre-litigation connections
between the non-resident defendant and the forum; (2) the connection has been
purposefully established by the defendant; and (3) the plaintiff’s cause of action
arises out of or is related to the defendant’s forum contacts. Once [the] plaintiff
makes that showing, the defendant can then defeat the exercise of specific
jurisdiction by showing (4) that it would fail the fairness test, i.e., that the
balance of interest factors show that the exercise of jurisdiction would be
unreasonable.” 1 Robert C. Casad & William B. Richman, Jurisdiction in Civil
Actions § 2-5, at 144 (3d ed. 1998) [hereinafter Casad & Richman] (footnote
citing cases omitted); see also McFadin v. Gerber, 587 F.3d 753,759 (5th Cir.
2009); Seiferth, 472 F.3d at 271; Jones v. Petty-Ray Geophysical, Geosource, Inc.,
954 F.2d 1061, 1068 & n.9 (5th Cir. 1992).
In respect to Pervasive’s breach of contract, unjust enrichment, and
quantum meruit claims, Pervasive has not made a prima facie showing of any
act by which Lexware purposefully availed itself of the privilege of conducting
activities within the forum state of Texas, so as to invoke the benefits and
protections of its laws. Accepting as true the facts alleged by Pervasive, all of
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Lexware’s acts giving rise to Pervasive’s claims against Lexware took place in
Germany, not in Texas. Lexware purchased Pervasive’s software product,
Btrieve, in Germany from SOS, a third-party German software distributor. The
DSLA, the license contract between Pervasive and Lexware, was an off-the-shelf,
out-of-the-box contract that was accepted and activated by Lexware’s purchase
of Btrieve from SOS in Germany. There were no prior negotiations between
Pervasive and Lexware and SOS was not an agent of either company. Lexware
allegedly later breached the DSLA in Germany when it refused Pervasive’s
demands that it terminate the DSLA and cease and desist its dominion and
control over Btrieve in Germany. Likewise, Pervasive’s claims against Lexware
for unjust enrichment and quantum meruit arose in Germany from Lexware’s
refusal of Pervasive’s demand that it cease and desist its dominion over the
Btrieve software. Consequently, because none of Lexware’s acts giving rise to
Pervasive’s claims occurred in or purposefully established contacts with Texas,
the assertion of specific personal jurisdiction over Lexware for those claims in
Texas would offend due process. Accordingly, the district court did not err in
granting Lexware’s Rule 12(b)(2) motion to dismiss the complaint against it for
lack of specific personal jurisdiction over Lexware. This conclusion is clearly
required by the controlling Supreme Court and circuit precedents discussed
below.
a. Neither Lexware’s purchase and use of Btrieve nor its entry
into the DSLA established purposeful contacts with Texas.
“The unilateral activity of [a plaintiff] who claim[s] some relationship with
a nonresident defendant cannot satisfy the requirement of contact with the
forum State. . . . [I]t is essential in each case that there be some act by which the
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defendant purposefully avails itself of the privilege of conducting activities
within the forum State, thus invoking the benefits and protections of its laws.”
Hanson, 357 U.S. at 253. “This ‘purposeful availment’ requirement ensures that
a defendant will not be haled into a jurisdiction solely as a result of ‘random,’
‘fortuitous,’ or ‘attenuated’ contacts, or of the ‘unilateral activity of another party
or a third person.’” Burger King, 471 U.S. at 475 (quoting Keeton v. Hustler
Magazine, Inc., 465 U.S. 770, 774 (1984); World-Wide Volkswagen, 444 U.S. at
299; and Helicopteros, 466 U.S. at 417). Thus, Pervasive’s unilateral acts cannot
satisfy the requirement of contact with the forum state and availment of its laws
by Lexware.
Moreover, it is now well settled that “an individual’s contract with an
out-of-state party alone [cannot] automatically establish sufficient minimum
contacts in the other party’s home forum.” Burger King, 471 U.S. at 478. “The
Court long ago rejected the notion that personal jurisdiction might turn on
‘mechanical’ tests, or on ‘conceptualistic . . . theories of the place of contracting
or of performance.’ Instead, we have emphasized the need for a ‘highly realistic’
approach that recognizes that a ‘contract’ is ‘ordinarily but an intermediate step
serving to tie up prior business negotiations with future consequences which
themselves are the real object of the business transaction.’ It is these factors—
prior negotiations and contemplated future consequences, along with the terms
of the contract and the parties’ actual course of dealing—that must be evaluated
in determining whether the defendant purposefully established minimum
contacts within the forum.” Id. at 478-79 (alteration in original) (quoting Int’l
Shoe, 326 U.S. at 319; and Hoopeston Canning Co. v. Cullen, 318 U.S. 313, 316,
316-17 (1943)).
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Applying these principles, Lexware, by becoming a party to the DSLA in
Germany, did not make minimum contacts with Texas or purposefully avail
itself of the protections and benefits of that state’s laws. There were no prior
negotiations between Lexware and Pervasive concerning that contract. The
DSLA was an off-the-shelf, out-of-the-box contract that came with Btrieve, which
Lexware purchased in Germany from a German software distributor. Nothing
in the DSLA or the manner of purchase suggested that either party envisioned
a long-term interactive business relationship involving Lexware’s purposeful
future contacts with Texas. Thus, the DSLA was not “an intermediate step
serving to tie up prior business negotiations” by the parties in Texas or a
contract calling for Lexware’s future purposeful contacts with Pervasive in the
forum state. Id. at 479 (citing Hoopeston Canning Co., 318 U.S. at 317).
Although the DSLA did contain a Texas choice-of-law clause, that clause
alone is not dispositive of the issue of specific personal jurisdiction. Burger King,
471 U.S. at 481-82; Interfirst Bank Clifton v. Fernandez, 844 F.2d 279, 284 n.4
(5th Cir. 1988). When combined with other factors, a choice-of-law clause may
reinforce a conclusion that a defendant “deliberate[ly] affiliat[ed] with the forum
State and [had] reasonable foreseeability of possible litigation there.” Burger
King, 471 U.S. at 482. However, the presence of a choice-of-law clause is not
sufficient in itself to establish personal jurisdiction when, as here, the contacts
do not otherwise demonstrate that the defendant “purposefully availed himself
of the privilege of conducting business in Texas.” Stuart v. Spademan, 772 F.2d
1185, 1192 (5th Cir. 1985).4
4
Pervasive cites to two Texas court cases, Michiana Easy Livin’ Country Inc. v. Holten,
168 S.W.3d 777 (Tex. 2005), and Barnhill v. Automated Shrimp Corp., 222 S.W.3d 756 (Tex.
App.–Waco 2007, no pet.), to support its argument that the choice-of-law provision was
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Thus, Lexware’s acts solely within Germany that gave rise to its
contractual relationship with Pervasive under the DSLA differentiate this case
from Burger King, 471 U.S. 462, in which the Michigan defendant, Rudzewicz,
“deliberately ‘reach[ed] out beyond’ Michigan” to negotiate and enter into a
“carefully structured 20-year” franchise contract with the Florida-based
franchisor, Burger King, “that envisioned continuing and wide-reaching contacts
with Burger King in Florida.” Id. at 479-80 (alteration in original) (citation
omitted). Rudzewicz’s business partner attended prescribed management
courses in Florida, Rudzewicz purchased restaurant equipment from a Florida-
based division of Burger King, and the restaurant was regulated by policy set by
Burger King’s Florida-based headquarters. Id. at 466. In contrast, the DSLA
involved no prior negotiations between Lexware and Pervasive and did not
envision “continuing and wide-reaching contacts” between them in Texas. Id. at
480. Lexware made no contact with Texas when it purchased the software
evidence that Pervasive “ought to be subject to suit in any jurisdiction where it ‘enjoys the
benefits and protection of the laws of that state.’” Michiana, 168 S.W.3d at 787 (footnote
omitted). Neither case supports this theory. Michiana does not stand for the proposition, as
asserted by Pervasive, that a contracting party always “‘enjoys the benefits and protection of
the laws of [the forum] state,’” Id. (footnote omitted), when it agrees to a choice-of-law clause.
Though the choice-of-law and choice-of-forum clauses at issue in Michiana stipulated that
suits would be governed by Indiana law, the court did not rely on the clauses to reject Holten’s
assertion of specific jurisdiction, and instead focused on the contacts that Michiana had with
Texas. In Michiana, the court declined to find specific jurisdiction where the buyer, a resident
of Texas, purchased a recreation vehicle from a store that only did business in Indiana–which
is comparable to the present case, in which a Texas resident sold a product to Lexware, a
software company doing business in Germany and not in Texas. Barnhill correctly stated that
a choice-of-law clause “‘standing alone would be insufficient to confer jurisdiction’” and
considered the clause only as “a factor” in its determination of specific jurisdiction. 222 S.W.3d
at 764 (citation omitted). In Barnhill, the court affirmed that the trial court had specific
jurisdiction over the case not because of the choice-of-law clause, but because the disputed
contract contemplated a long-term relationship with Texas that the DSLA, in the present case,
did not contemplate.
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program in Germany and thereby entered into the related licensing agreement,
the DSLA, with Pervasive in Germany. The DSLA required only that the
purchaser return the object code and source code to Pervasive’s office in Texas
upon the contract’s termination; and purchasers were asked to fill out and
return two exhibits attached to the DSLA to Pervasive’s office in Texas. It
envisioned no additional contact between the purchasing party and Pervasive or
its home state of Texas. Lexware’s subsequent communication about Btrieve was
limited to a request for the Btrieve Ultimate Patch, which Pervasive never
supplied.5 None of Lexware’s actions in that connection demonstrates that it
purposefully “reach[ed] out” to Pervasive in Texas so as to subject it to Texas
courts’ jurisdiction. Burger King, 471 U.S. at 473 (alteration in original)
(“[P]arties who ‘reach out beyond one state and create continuing relationships
and obligations with citizens of another state’ are subject to the regulations and
sanctions in the other State for the consequences of their activities.” (quoting
Travelers Health Ass’n v. Virginia, 339 U.S. 643, 647 (1950))).
Instead, the record demonstrates that in respect to Lexware’s purchase
of the Btrieve software, and entry into the DSLA with Pervasive, Pervasive
reached beyond Texas and into Germany, Lexware’s principal place of business,
not vice versa. In its complaint, Pervasive described itself as “a global leader in
embeddable data management and data integration software.” It went on to
boast that: “For more than two decades, Pervasive Software’s products have
delivered value to tens of thousands of customers in more than 150 countries,
5
Indeed, the DSLA specifically stated that Pervasive was not responsible for providing
any technical assistance or upgrades to purchasers of Btrieve, which further suggests that
Pervasive itself did not intend the DSLA to create any long-term contacts between Pervasive
and the purchaser.
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and international sales and operations currently account for a substantial part
of Pervasive Software’s business.” It states that it has “servic[ed] virtually every
industry and market around the world.” Pervasive sold its software to a German
third-party distributor for sale in Germany. It employed representatives who
lived in Germany, used German e-mail addresses, and conversed with Lexware
largely in German. Thus, in respect to Lexware’s purchase of the Btrieve
software and its entry into the DSLA contract with Pervasive in Germany, it was
Pervasive, rather than Lexware, that reached out of its own state in order to
purposefully sell its product and create a contractual relationship with Lexware
in Germany.
b. Pervasive’s attempt to link the EMPA and its Addendum 1 with the
DSLA is futile because neither contract provides such a link or a
purposeful contact by Lexware to the forum state.
Pervasive argues that Addendum 1 to the EMPA, in linkage with the
DSLA, established purposeful contacts by Lexware with Texas. We disagree. We
have just explained why Lexware’s entering into the DSLA did not involve any
purposeful contact by it with Texas. For similar reasons, the EMPA and its
Addendum 1 did not involve any purposeful contact by Lexware with Texas
either. Pervasive’s argument that the parties agreed to link the EMPA’s
Addendum 1 with the DSLA is without merit.
In 1999 and 2000, the parties negotiated and executed the EMPA and its
Addendum 1 in Germany. In the EMPA, Pervasive licensed Lexware to use
certain Pervasive software products, viz., Pervasive SQL Client/Server engine
for Windows NT Netware and Linux (Suse, Red Hat and Caldera); Pervasive
SQL 2000 Workgroup; and Pervasive SQL 2000 Workstation. The EMPA and its
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Addendum 1 deal only with Pervasive’s SQL 2000 products; they do not affect
or alter the DSLA by which Lexware was licensed to use Pervasive’s Btrieve
software product in 1994. The DSLA and the EMPA (with its Addendum 1) are
two separate contracts which license Lexware to use two different lines of
Pervasive products, Btrieve and Pervasive’s SQL 2000 products, respectively.
Pervasive argues that “[b]y its own language, Addendum 1 to the EMPA
(the ‘Btrieve Addendum’) licensed 7,500 Btrieve ‘enabling’ seats to Lexware for
US $125,250.” But this is simply not so. Addendum 1 to the EMPA clearly
licensed Lexware to use 7,500 “user seats of the Software authorized for
distribution by [Lexware] as specified in Attachment 1 paragraph 1.1 of the
European Manufacturing Partner Agreement.” That Attachment 1 paragraph
1.1 of the EMPA provides: “1. Software Authorized for Distribution by [Lexware]:
1.1 Pervasive SQL 2000 Client/Server engine for Windows NT; Netware and
Linux (Suse, Red Hat and Caldera)[.]” Thus, Addendum 1 to the EMPA licensed
Lexware to use only the Pervasive SQL products and not the Btrieve Client
Engine Version 6.15, which we have referred to in shorthand in this opinion as
“Btrieve.” Consequently, Addendum 1 to the EMPA did not link the DSLA with
the EMPA or link the Btrieve and the Pervasive SQL software products, as
Pervasive contends.
Pervasive’s argument appears to be based on the appearance of the term
“Btrieve” in a single instance in Addendum 1 of the EMPA in which it provides:
1. Btrieve Enabling Technology Program (“Enabling”)
“Enabling” means the utilization of a Btrieve connection for internal
(internal to the application) use by application software developed,
marketed and installed by Lexware. This prerequisit [sic] is linked
to the fact that all Lexware application software independent of the
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database management system used, requires “Enabling” in order to
function properly.
Pervasive, as the drafter of the contract, presumably could have explained
exactly what this provision means, but it did not undertake to do so. Instead,
Pervasive assumes, without explaining how, that the Addendum 1 to the EMPA
somehow links the EMPA with the DSLA and thereby makes both contracts
applicable to the otherwise separate and distinct software products dealt with
by each contract, viz., “Btrieve Client Engine Version 6.15” and “Pervasive SQL
Client/Server engine for Windows NT; Netware and Linux (Suse, Red Hat and
Caldera),” respectively. In the absence of further alleged facts or explanation by
Pervasive, we do not think the EMPA and its Addendum 1 can reasonably be
read to merge them with the DSLA or to confuse the software products dealt
with separately by each contract. Furthermore, even if the DSLA and the EMPA
were to be linked as Pervasive supposes, this would not come any closer to
conferring specific jurisdiction upon the Texas forum over Lexware in this case.
The EMPA and its Addendum 1, like the DSLA, did not involve any purposeful
contact with Texas by Lexware. Thus, the two contracts, together or apart, fail
to establish specific jurisdiction over Lexware in Texas.
c. Lexware’s internet website sales did not establish personal
jurisdiction over Lexware in Texas
Pervasive adduced evidence that twelve persons or businesses in Texas
bought fifteen software programs from Lexware over the internet during a four-
year period. Consequently, Pervasive argues, Lexware made sufficient minimum
contacts to subject it to specific personal jurisdiction in Texas. Considering,
however, that these internet sales averaged only about $66 each, that none of
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them resulted in actionable harm to anyone in Texas, that only nine of the
fifteen products were derived from Btrieve, and that none of Pervasive’s causes
of action arose or resulted from those internet sales, this jurisdictional argument
is meritless.6
The Supreme Court has recognized that the internet is “‘a unique and
wholly new medium of worldwide human communication.’” Reno v. Am. Civil
Liberties Union, 521 U.S. 844, 850 (1997) (footnote omitted). As such, it “raises
significant questions about the application of traditional personal jurisdiction
doctrine.” 4A Charles Alan Wright et al., Fed. Prac. & Proc. § 1073.1, at 322 (3d
ed. 2002) [hereinafter Wright et al]. “Although the Internet and the other new
communications technologies do present some strikingly new factual patterns
and do change the way personal jurisdiction is acquired over some defendants
at the margins,” id. at 322, “the analysis applicable to a case involving
jurisdiction based on the Internet . . . should not be different at its most basic
level from any other personal jurisdiction case. If the defendant is not physically
present in or a resident of the forum state, and has not been physically served
in the forum state, the federal court must undertake the traditional personal
jurisdiction analysis.” Id. at 327.7
6
Pervasive also argues that the mere availability of some Lexware products on third-
party websites accessible from Texas is a relevant contact by Lexware with Texas. Pervasive
produced no allegations or evidence that any Texas resident actually purchased a Lexware
product from a third-party website, or that Lexware intended its products to be purchased by
persons or entities in Texas. Therefore, this argument is without merit.
7
In International Shoe, the Court warned that “[i]t is evident that the criteria by which
we mark the boundary line between those activities which justify the subjection of a
corporation to suit, and those which do not, cannot be simply mechanical or quantitative.” Int’l
Shoe, 326 U.S. at 319. Although interactivity along the Zippo sliding scale can be an important
factor in an internet-based personal jurisdiction analysis because it can provide evidence of
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“The exercise of specific personal jurisdiction based on the defendant’s
contacts with the forum through the Internet requires that the plaintiff satisfy
the terms of the appropriate jurisdictional statute, and then show that the
exercise of jurisdiction will not violate the Constitution.” Id. at 332. “This due
process analysis has been refined . . . into a three-part test that seems fully
applicable to jurisdiction questions generated by the new technologies: (1) Did
the plaintiff’s cause of action arise out of or result from the defendant’s
forum-related contacts? (2) Did the defendant purposely direct its activities
toward the forum state or purposely avail itself of the privilege of conducting
activities therein? (3) Would the exercise of personal jurisdiction over the
defendant be reasonable and fair?” Id. at 334 (citing Mink, 190 F.3d at 336;
Bancroft & Masters, Inc. v. Augusta Nat’l Inc., 223 F.3d 1082, 1086 (9th Cir.
2000); Intercon, Inc. v. Bell Atl. Internet Solutions, Inc., 205 F.3d 1244, 1247
(10th Cir. 2000); Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414, 416 (9th Cir.
1997); CompuServe, Inc. v. Patterson, 89 F.3d 1257, 1263 (6th Cir. 1996)). If the
plaintiff’s allegations or evidence of defendant’s internet activities can satisfy
each prong of this test, the exercise of specific jurisdiction by a federal court
generally should be upheld. Id. Here, Pervasive has failed to satisfy either of the
first two prongs of the three-part test, and we therefore need not consider the
third prong.
purposeful conduct, see Mink, 190 F.3d at 336 (citing Zippo Mfg. Co. v. Zippo Dot Com, Inc.,
952 F. Supp. 119, 124 (W.D. Pa. 1997)), internet-based jurisdictional claims must continue to
be evaluated on a case-by-case basis, focusing on the nature and quality of online and offline
contacts to demonstrate the requisite purposeful conduct that establishes personal
jurisdiction.
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Pervasive fails the first part of the three-part test because the causes of
action it asserts, based on Lexware’s alleged breach of the DSLA in Germany
and Lexware’s alleged dominion and control of Btrieve in Germany, did not arise
out of or result from the relatively sparse contacts involving Lexware’s fifteen
internet website sales of its products to twelve Texas billing addresses. See
Revell v. Lidov, 317 F.3d 467, 472 (5th Cir. 2002) (“For specific jurisdiction we
look only to the contact out of which the cause of action arises . . . .”).
Moreover, Pervasive also fails the second part of the three-part test
because Lexware’s actions of making its German tax and financial software
internet-accessible were not purposely directed toward Texas or purposely
availing of the privilege of conducting activities in Texas. In Hanson, the Court
said that jurisdiction cannot exist unless “there be some act by which the
defendant purposefully avails itself of the privilege of conducting activities
within the forum State, thus invoking the benefits and protections of its laws.”
357 U.S. at 253; see also Wilson v. Belin, 20 F.3d 644, 647-49 (5th Cir. 1994).
“Thus it is not enough that the defendant has contacts with the forum; a
separate requirement in the court’s jurisdictional analysis is that those contacts
must have been purposefully established by the defendant.” Casad & Richman,
supra, § 2-5, at 148-49. “In many cases where specific jurisdiction is
unconstitutional, it is not because the defendant’s contacts with the forum are
‘insufficient;’ after all one may be enough. Often the difficulty is not the lack of
contacts but rather that such contacts that exist do not count because they have
not been established purposefully by the defendant.” Id. § 2-5, at 149-50. That
is the case here; none of the contacts relied upon by Pervasive to invoke specific
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jurisdiction over Lexware in the Texas forum count because none of them were
established purposefully by Lexware.
“The objective of the purposeful availment requirement is to provide
predictability and give notice to the defendant that it is subject to suit in the
forum state, so that the company ‘can act to alleviate the risk of burdensome
litigation by procuring insurance, passing the expected costs on to customers, or,
if the risks are too great, severing its connection with the State.’” Hy Cite Corp.
v. Badbusinessbureau.com, LLC, 297 F. Supp. 2d 1154, 1163 (W.D. Wis. 2004)
(quoting World-Wide Volkswagen, 444 U.S. at 297). The purposeful availment
requirement “ensures that a defendant will not be haled into a jurisdiction solely
as a result of ‘random,’ ‘fortuitous,’ or ‘attenuated’ contacts.” Burger King, 471
U.S. at 475 (citations omitted). “Website interactivity is important only insofar
as it reflects commercial activity, and then only insofar as that commercial
activity demonstrates purposeful targeting of residents of the forum state or
purposeful availment of the benefits or privileges of the forum state.”
Shamsuddin v. Vitamin Research Prods., 346 F. Supp. 2d 804, 813 (D. Md.
2004). A corporation’s sales to forum residents must be more than “‘isolated’”
occurrences for the assertion of jurisdiction to satisfy the requirements of due
process. Burger King, 471 U.S. at 475 n.18 (citation omitted).
Applying these principles, we conclude that Pervasive failed to show that
Lexware had purposeful minimum contacts with Texas such that it should have
reasonably anticipated being haled into court there. Lexware has no offices or
sales agents in Texas and solicits no business there through advertising targeted
specifically to Texas. Lexware’s only contact with Texas is a commercial,
interactive website which is accessible globally but available only in the German
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language. This only coincidentally, and not purposely or deliberately, includes
contact with a relatively few German taxpayers who happen to access it from
Texas. Because Lexware’s website and products were not available in English
and have little utility for Texas or U.S. taxpayers, Lexware’s contacts with Texas
via its website cannot be interpreted as purposeful attempts to develop a market
for Lexware’s German tax return preparation programs in Texas or to avail itself
of the protections of that state’s laws. “[T]he foreseeability that is critical to due
process analysis is not the mere likelihood that a product will find its way into
the forum State. Rather, it is that the defendant’s conduct and connection with
the forum State are such that he should reasonably anticipate being haled into
court there.” World-Wide Volkswagen, 444 U.S. at 297.
In essence, Lexware’s actions toward Texas and its affiliation with that
state were not so deliberate and substantial that Lexware should have
reasonably anticipated being haled into court in Texas.
3. Lack Of Specific Jurisdiction—Conversion
The Texas long-arm statute states that a nonresident is considered to be
doing business in the state—and therefore is subject to personal jurisdiction—
if it “commits a tort in whole or in part in [Texas].” Tex. Civ. Prac. & Rem. Code
§ 17.042; see also McFadin, 587 F.3d at 761 (quoting Guidry v. United States
Tobacco Co., 188 F.3d 619, 628 (5th Cir. 1999)).8 The tort of conversion is defined
as “‘the wrongful exercise of dominion and control over another’s property in
denial of or inconsistent with his rights.’” Bandy v. First State Bank, Overton,
Tex., 835 S.W.2d 609, 622 (Tex. 1992) (quoting Tripp Village Joint Venture v.
8
“The plaintiff bears the initial burden of pleading allegations sufficient to bring a
nonresident defendant within the provisions of the long-arm statute.” American Type Culture
Collection, Inc. v. Coleman, 83 S.W.3d 801, 807 (Tex. 2002).
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MBank Lincoln Centre, N.A., 774 S.W.2d 746, 750 (Tex.App.—Dallas 1989, writ
denied)). After reviewing the pleadings and the evidence presented, we agree
with the district court that Pervasive has failed to make a prima facie showing
that Lexware committed a conversion of Pervasive’s property “in whole or in
part” in Texas. Accordingly, Pervasive cannot subject Lexware to specific
personal jurisdiction in Texas under the Texas long-arm statute on grounds of
the tort of conversion.
It is undisputed that Lexware lawfully received dominion, control, and
license to use the Btrieve software under the DSLA when Lexware purchased
the Btrieve software package from SOS in Germany in 1994. There is no
allegation or evidence that Lexware acted to exercise dominion and control over
the Btrieve software by refusing to return it to Pervasive in any country other
than Germany. In its complaint, Pervasive alleges that Lexware committed the
tort of conversion by “wrongfully exercising dominion or control over the Btrieve
Software in a manner inconsistent with Pervasive Software’s rights.” In effect,
Pervasive alleges that Lexware’s license to use and control Btrieve ceased when
Pervasive notified Lexware that it was terminating the DSLA and demanded
that Lexware cease and desist dominion and control over Btrieve. However, that
conversion, if it occurred as alleged by Pervasive, was committed in Germany,
not Texas. Pervasive argues that Lexware, which has offices only in Germany,
retained a copy of the Btrieve software after Pervasive attempted to terminate
the DSLA, and therefore converted that copy of the software. The Btrieve
software therefore was converted, if at all, in Germany, not in Texas. Because
the tort was not committed, in whole or in part, in Texas, it does not fall under
Texas’s long-arm statute. See Tex. Civ. Prac. & Rem. § 17.042; Tuscano v.
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Osterberg, 82 S.W.3d 457, 470 (Tex.App.—El Paso 2002) (concluding that the
Texas court could not exercise personal jurisdiction over the plaintiff’s
conversion claim because the plaintiff provided no proof that the defendants
converted any property or materials in Texas), abrogated on other grounds by
BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 793 (Tex. 2002);
Central Tex. Cattle Co. v. McGinness, 842 S.W.2d 388, 391 (Tex.App.—San
Antonio 1992) (concluding that the Texas court could not exercise personal
jurisdiction over the plaintiff’s alleged conversion of cattle because all the
defendant’s actions with regard to the cattle occurred outside of Texas); cf.
Goodyear Dunlop, 131 S. Ct. at 2851 (“Because the episode-in-suit . . . occurred
in France, and the tire alleged to have caused the accident was manufactured
and sold abroad, North Carolina courts lacked specific jurisdiction to adjudicate
the controversy.”). The mere fact that the converted item originated in Texas is
not sufficient to create personal jurisdiction under the long-arm statute; the item
must be in Texas when the conversion actually occurs. See Laykin v. McFall, 830
S.W.2d 266, 269-70 (Tex.App.—Amarillo 1992, orig. proceeding) (holding that
there is no personal jurisdiction over a conversion claim where a ring, sent
voluntarily out of Texas to a broker in California, was not converted until the
broker refused to return it and therefore converted it in California, not Texas).
Because the alleged conversion by Lexware occurred, if at all, in Germany, when
Lexware refused to return its copy of Btrieve to Pervasive, the Texas district
court lacked specific personal jurisdiction over the conversion claim.
In its complaint, Pervasive alleged only that Lexware converted the
Btrieve software. In response to Lexware’s Rule 12(b)(6) motion, Pervasive also
argued that Lexware converted a master CD and key generator by retaining
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them after Pervasive attempted to terminate the DSLA. However, these alleged
conversions also occurred in Germany and therefore the Texas long-arm statute
is not applicable. Therefore, because Pervasive has not pleaded or argued that
Lexware committed the alleged conversions in whole or in part in Texas,
Pervasive did not make a prima facie showing that Lexware can be haled into
Texas courts under the Texas long-arm statute.
4. General Personal Jurisdiction
Pervasive also failed to make a prima facie case of general personal
jurisdiction. “A court may assert general jurisdiction over foreign (sister-state
or foreign-country) corporations to hear any and all claims against them when
their affiliations with the State are so ‘continuous and systematic’ as to render
them essentially at home in the forum State.” Goodyear Dunlop, 131 S. Ct. at
2851 (quoting Int’l Shoe, 326 U.S. at 317). In International Shoe, the Supreme
Court explained that “continuous activity of some sorts within a state is not
enough to support the demand that the corporation be amenable to suits
unrelated to that activity . . . the continuous corporate operations within a state
[must be] so substantial and of such a nature as to justify suit against it on
causes of action arising from dealings entirely distinct from those activities.”
Int’l Shoe, 326 U.S. at 318; see also Goodyear Dunlop, 131 S. Ct. at 2856.
Lexware had only sporadic and attenuated contacts with the state of Texas,
largely through its intermittent communications with Pervasive and fifteen
internet website sales, over a four-year period, to twelve German taxpayer
consumers with billing addresses in Texas, totaling approximately 650 Euros
(approximately $915). Only nine of these sales—totaling approximately 330
Euros (approximately $465)—contained Btrieve-derived software. These contacts
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were neither continuous nor systematic and do not satisfy the standard set out
by the Supreme Court for establishing general personal jurisdiction over
Lexware.
The Supreme Court has held that a court may exercise general personal
jurisdiction over a company in only one case that postdated International Shoe.
In Perkins v. Benguet Consol. Mining Co., 342 U.S. 437 (1952), the Supreme
Court found there to be general personal jurisdiction because the defendant, a
Philippine mining corporation, had ceased activity in the Phillippines during
World War II, conducted all its business in Ohio, and the company president
maintained an office in Ohio in which all company files were kept and from
which all company activities were supervised. Because Ohio had become the
corporation’s principal place of business, Ohio was authorized to exercise general
personal jurisdiction over the company. Id. at 447-48; see also Goodyear Dunlop,
131 S. Ct. at 2856. In a subsequent case, the Court held that a Columbian
corporation did not have “the kind of continuous and systematic general business
contacts the Court found to exist in Perkins.” Helicopteros Nacionales, 466 U.S.
at 416. In Helicopteros, the nonresident defendant, a Columbian corporation,
sent its chief executive officer to Texas for a contract-negotiation session;
accepted checks drawn on a Texas bank; purchased helicopters, equipment, and
training services from a Texas-based company for substantial sums of money;
and sent personnel to a Texas-based company’s facilities in Texas for training.
Id. at 409, 416. Helicopter Nacionales’ contacts with Texas far exceeded
Lexware’s contacts with the state in the present case, and still the Supreme
Court held that they did not “constitute the kind of continuous and systematic
general business contacts . . . found to exist in Perkins,” and were insufficient to
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support the exercise of jurisdiction over a claim that neither “ar[o]se out of . . .
no[r] related to” the defendant’s activities in Texas. Id. at 415–416 (internal
quotation marks omitted). The Court in Helicopteros concluded that “mere
purchases [made in the forum State], even if occurring at regular intervals, are
not enough to warrant a State’s assertion of [general] jurisdiction over a
nonresident corporation in a cause of action not related to those purchase
transactions.” Id. at 418. In the same vein, the Court in Goodyear Dunlop
concluded: “[w]e see no reason to differentiate from the ties to Texas held
insufficient in Helicopteros, the sales of petitioners’ tires sporadically made in
North Carolina through intermediaries.” 131 S. Ct. at 2856.
Measured against Goodyear Dunlop, Helicopteros, and Perkins, it is clear
that Lexware has not had continuous and systematic contacts in Texas such that
it would be permissible to subject Lexware to general personal jurisdiction in the
forum state of Texas. Unlike the defendant in Perkins, whose sole wartime
business activity was conducted in Ohio, Lexware is in no sense at home in
Texas. Lexware’s attenuated connections to the state fall far short of the “‘the
continuous and systematic general business contacts”’ necessary to make
Lexware “at home” in the forum. These connections therefore do not empower
Texas to entertain suit against Lexware on claims unrelated to anything that
connects Lexware to the state. Goodyear Dunlop, 131 S. Ct. at 2857 (quoting
Helicopteros, 466 U.S. at 416).
C.
In its January 4, 2011 order, the district court granted Lexware’s Rule
12(b)(2) motion and dismissed the case without prejudice. It therefore did not
reach Lexware’s 12(b)(6) motion. Pervasive argues that the district court should
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have addressed Pervasive’s conversion claim only in the 12(b)(6) motion and that
it erred by conflating merits issues raised in the 12(b)(6) motion with its analysis
of the 12(b)(2) motion. The district court did not err in first addressing the
12(b)(2) motion to dismiss for lack of personal jurisdiction over Lexware or in
granting that motion. “Personal jurisdiction, [like subject matter jurisdiction],
is ‘an essential element of the jurisdiction of a district . . . court,’ without which
the court is ‘powerless to proceed to an adjudication.’” Ruhrgas AG v. Marathon
Oil Co., 526 U.S. 574, 584 (1999) (second alteration in original) (quoting Emp’rs
Reinsurance Corp. v. Bryant, 299 U.S. 374, 382 (1937)). “The requirement that
jurisdiction be established as a threshold matter . . . is inflexible and without
exception,” id. at 577 (quoting Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83,
94-95 (1998) (internal quotation marks omitted), because “[j]urisdiction is power
to declare the law, and [w]ithout jurisdiction the court cannot proceed at all in
any cause.” Id. (quoting Steel Co., 523 U.S. at 94) (internal quotation marks
omitted). Thus, subject matter jurisdiction and personal jurisdiction claims are
“threshold grounds for denying audience to a case on the merits,” and require
that the courts reach the threshold claims before reaching claims on the merits.
Id. at 584-85. Accordingly, we see no error in the district court’s decision to
dispose of the personal jurisdiction issue first and in not proceeding further after
concluding that it lacked personal jurisdiction over Lexware.
D.
Finally, Pervasive argues that the district court should have granted its
requests for leave to amend the complaint.“Whether leave to amend should be
granted is entrusted to the sound discretion of the district court, and that court’s
ruling is reversible only for an abuse of discretion.” Wimm v. Jack Eckerd Corp.,
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3 F.3d 137, 139 (5th Cir. 1993). Where, as in the present case, the district court
provides no explanation for denying leave to amend, we affirm only where “the
reason for the denial is ‘readily apparent’ . . . [and] the record reflects ‘ample and
obvious grounds for denying leave to amend.’” Mayeaux v. La. Health Serv. &
Indem. Co., 376 F.3d 420, 426 (5th Cir. 2004) (footnotes omitted). In this case,
the futility of amendment was readily apparent, and the record provided ample
and obvious grounds for denying the motion based on futility. See Cent. Laborers’
Pension Fund v. Integrated Elec. Servs. Inc., 497 F.3d 546, 556 (5th Cir. 2007).
Pervasive made only a general request for leave to amend and did not identify
how amendment would confer personal jurisdiction over Lexware. Pervasive did
not identify any additional cause of action it might plead or explain how it might
survive a personal jurisdiction challenge. None of the facts adverted to by
Pervasive in any way suggests that it may have a cause of action against
Lexware arising out of or related to Lexware’s contacts with the forum state.
Therefore, we find no error in the district court’s decision to deny Pervasive’s
motion to amend its complaint.
III. CONCLUSION
For these reasons, the judgment of the district court is AFFIRMED.
31