IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 17-41268

DIECE-LISA INDUSTRIES, INCORPORATED, 

Plaintiff - Appellant

v.

DISNEY ENTERPRISES, INCORPORATED; DISNEY CONSUMER 

PRODUCTS, INCORPORATED, 

Defendants - Appellees

------------------------------------------------

Consolidated with 17-41271

DIECE-LISA INDUSTRIES, INCORPORATED, 

Plaintiff - Appellant

v.

DISNEY STORE USA, L.L.C.; DISNEY SHOPPING, INCORPORATED; 

BUENA VISTA HOME ENTERTAINMENT, INCORPORATED; WALT 

DISNEY STUDIOS MOTION PICTURES; BUENA VISTA THEATRICAL 

GROUP, LIMITED; DISNEY INTERACTIVE STUDIOS, INCORPORATED; 

DISNEY LICENSED PUBLISHING-DISNEY BOOK GROUP, L.L.C.; WALT 

DISNEY RECORDS; DISNEY DESTINATIONS, L.L.C.; WALT DISNEY 

PARKS ; RESORTS U.S., INCORPORATED; MAGICAL CRUISE 

COMPANY, LIMITED; MAGIC KINGDOM, INCORPORATED, 

Defendants - Appellees

United States Court of Appeals

Fifth Circuit

FILED

November 19, 2019

Lyle W. Cayce

Clerk

 Case: 17-41268 Document: 00515205353 Page: 1 Date Filed: 11/19/2019
No. 17-41268

c/w No. 17-41271

2

Appeals from the United States District Court

for the Eastern District of Texas

Before STEWART, DENNIS, and WILLETT, Circuit Judges.

JAMES L. DENNIS, Circuit Judge.

Plaintiff Diece-Lisa Industries, Inc. (Diece-Lisa) filed two separate 

lawsuits against various Disney corporate entities alleging that those entities’

use of the “Lots-O’-Huggin’ Bear” (aka “Lotso”) in the movie Toy Story 3 and 

sales of merchandise depicting Lotso infringed on Diece-Lisa’s “Lots of Hugs” 

trademark. The two cases were consolidated, and more than three years of 

litigation ensued. Diece-Lisa appeals three of the court’s rulings in the 

consolidated case. We AFFIRM in part, VACATE in part, and REMAND with 

instructions.

I.

Diece-Lisa holds a trademark issued in 20081 for “Lots of Hugs” as a 

word mark for use in connection with “[t]oys, namely, puppets” and sells 

stuffed toy bear products branded with the mark. In 2010, Disney released 

Toy Story 3, an animated film featuring Disney heroes Sheriff Woody and Buzz 

Lightyear. In the film, Woody and Buzz battle Lotso,2 a hot pink teddy bear

with a big nose and a Southern accent. The film was a critical and commercial 

success, becoming the highest-grossing film of 2010. Toy Story 3 gave rise to 

many consumer products, including toys depicting various characters from the 

 

1 Diece-Lisa held an earlier trademark for “Lots of Hugs,” issued in 1997, but that 

trademark was canceled in 2004 by the United States Patent and Trademark Office. 

2 The character is referred to in the movie and in merchandise by both his full name, 

Lots-O’-Huggin’ Bear, and his nickname, Lotso. For consistency and brevity, we will use his 

nickname throughout.

 Case: 17-41268 Document: 00515205353 Page: 2 Date Filed: 11/19/2019
No. 17-41268

c/w No. 17-41271

3

picture. The Lotso character has been sold as a stuffed toy and a plastic 

figurine, as well as incorporated into a variety of other consumer products. 

Diece-Lisa brought suit in the United States District Court for the 

Eastern District of Texas, alleging that the sales of Lotso merchandise by 

various Disney entities infringed on Diece-Lisa’s “Lots of Hugs” trademark.3

There are two primary groups of Disney defendants relevant to this appeal: (1) 

the retail entities, consisting of Disney Store USA, LLC (DSU) and Disney 

Shopping, Inc. (DSI); and (2) the IP entities, consisting of Disney Enterprises, 

Inc. (DEI) and Disney Consumer Products, Inc. (DCP). The retail entities

(DSU and DSI) sell merchandise modeled on characters from Disney and Pixar

movies. DSU owns brick-and-mortar retail stores that sell the merchandise, 

while DSI sells similar merchandise online at disneystore.com. As for the IP 

entities, DEI owns intellectual property rights in Disney characters, and, along 

with DCP, grants licenses to third parties—including the retail entities—to 

manufacture and sell merchandise based on those characters.

Diece-Lisa first filed suit in 2012 against the retail entities, DSU and 

DSI, (docketed as case No. 2:12-CV-00400, referred to herein as the 400 case), 

alleging federal trademark infringement and unfair competition based on sales 

of toy bears and other merchandise marked with the Lotso name.4 In 2014, 

Diece-Lisa filed a separate suit in the same court (docketed as case No. 2:14-

CV-00070, referred to herein as the 70 case), this time against the IP entities,

DEI and DCP, claiming trademark infringement based on the IP entities’

 

3 In addition to trademark infringement, Diece-Lisa also alleged unfair competition 

under the Lanham Act.

4 Diece-Lisa’s 400 case was originally filed against DEI, Pixar, and The Walt Disney 

Company, asserting five trademark-based claims. Its first amended complaint retained the 

same causes of action from the original complaint but substituted the retail entities for the 

former defendants. Diece-Lisa’s second amended complaint dropped all but the federal 

trademark infringement and unfair competition claims.

 Case: 17-41268 Document: 00515205353 Page: 3 Date Filed: 11/19/2019
No. 17-41268

c/w No. 17-41271

4

granting licenses to third parties who manufacture and sell Lotso

merchandise. The IP entities moved to dismiss the 70 case for lack of personal 

jurisdiction and improper venue, arguing that their only activities relating to 

Texas—granting non-exclusive licenses to third-party licensees who chose to 

conduct business in Texas—were insufficient to confer personal jurisdiction

over the IP entities.

The district court consolidated the 400 case and the 70 case. Soon after 

consolidation, the magistrate judge5 granted Diece-Lisa leave to file a third 

amended complaint (3AC) that would serve as the complaint in both cases, 

overruling objections from Disney defendants (both the IP and retail entities).

The 3AC increased the number of corporate subsidiary Disney defendants from 

four to fourteen and expanded the action from claims based on sales of 

merchandise marked with the allegedly infringing Lotso name to claims based 

on uses of the Lotso character in the Toy Story 3 movie, video games, CDs, 

books, ice shows, and other live productions. The consolidated suit then had 

ten new Disney subsidiary defendants (the “New Parties”) and several new 

infringement claims based on the use of a character, rather than on the alleged 

use of the “Lots of Hugs” mark. All the New Parties moved to dismiss, arguing 

that venue was improper and that Diece-Lisa failed to state a cause of action. 

Five of the New Parties moved to dismiss for lack of personal jurisdiction. As 

we explain further below, the court never ruled on these motions.

While these motions from the New Parties were pending, the court 

turned its focus to the IP entities, denying their pre-consolidation motion to 

dismiss the 70 case for lack of personal jurisdiction. Because the parties had 

yet to conduct jurisdictional discovery, the court reasoned, Diece-Lisa had to 

make only a prima facie showing of personal jurisdiction. While Diece-Lisa 

 

5 The case was referred to a magistrate judge “for all pretrial proceedings.”

 Case: 17-41268 Document: 00515205353 Page: 4 Date Filed: 11/19/2019
No. 17-41268

c/w No. 17-41271

5

had not necessarily “proven personal jurisdiction by a preponderance of the 

evidence,” the court found it met the prima facie standard. The IP entities filed 

a motion for reconsideration, again urging that they were not subject to 

personal jurisdiction because their only contact with Texas was their grant of

non-exclusive licenses to third parties who conducted business in Texas. 

Following the IP entities’ motion for reconsideration, the district court 

and magistrate judge took a number of actions relevant to this appeal with 

respect to the various parties in the consolidated action, which we set out in 

the order they occurred.

First, nearly a year after granting Diece-Lisa leave to file the 3AC, the 

magistrate judge vacated that order sua sponte and without prior notice or a 

hearing, effectively removing the New Parties, and Diece-Lisa’s claims against 

them, from the suit. This vacatur occurred while motions to dismiss based on 

personal jurisdiction and failure to state a claim were pending that, if granted, 

would have removed the New Parties from the suit. The magistrate judge said 

he had “improvidently granted” Diece-Lisa’s motion for leave to file the 3AC, 

reasoning that the 3AC “resulted in needless complication and delay” and 

“changed the nature of the case.” The magistrate judge found the claims

alleged in the 3AC were less connected “to the original claims than the court 

originally perceived” and noted “serious issues of personal jurisdiction and 

venue” that arose under the 3AC. The effect of the district court’s vacatur 

order was that Diece-Lisa’s claims against the New Parties were eliminated, 

the New Parties were removed from the litigation, and the New Parties’

pending motions to dismiss were moot. Diece-Lisa filed objections to the 

magistrate judge’s order in the district court. 

Second, the district court stayed the case on the parties’ agreed motion. 

Specifically, while awaiting a ruling from the district court on Diece-Lisa’s

 Case: 17-41268 Document: 00515205353 Page: 5 Date Filed: 11/19/2019
No. 17-41268

c/w No. 17-41271

6

objections to the magistrate judge’s vacatur of the 3AC, Diece-Lisa and the 

defendants submitted, and the district court entered, an agreed order that

closed fact discovery and prohibited further “assertion of additional claims, 

defenses, or theories of liability or damages.” Despite this agreed order, DieceLisa filed a fourth amended complaint (4AC), which alleged new theories of 

contributory trademark infringement and vicarious liability and attempted to 

revive the character-based infringement claims eliminated by the vacatur of 

the 3AC. Diece-Lisa also issued deposition notices for fact witnesses and

requests seeking production of a broad array of documents. The magistrate 

judge granted defendants’ motion to strike the 4AC and quashed notice of the 

depositions, finding that Diece-Lisa violated the agreed order.

Third, the district court adopted the magistrate judge’s order vacating 

the 3AC, overruling Diece-Lisa’s objections.6 Like the magistrate judge, the 

district court focused on how the 3AC changed the nature of the case from one 

alleging misuse of a mark to one alleging misuse of the Lotso character. DieceLisa raised concerns of prejudice “in light of the extensive discovery and 

completed expert reports related to the most recently added defendants,” but 

the district court found these concerns “both minimal and outweighed by the 

considerations favoring denial of leave to amend.” The district court explained 

that Diece-Lisa was free to use any discovery it obtained while the 3AC was 

pending “in a separate action” but also noted that “the statutes of limitations 

applicable to [Diece-Lisa’s] claims may significantly and negatively impact its 

rights.”

Fourth, and finally, the district court turned its attention back to the IP 

entities’ motion for reconsideration of its personal jurisdiction order. The court 

 

6 The district court reviewed the magistrate judge’s order de novo “because the order 

had the dispositive effect of dismissing multiple defendants from the case.”

 Case: 17-41268 Document: 00515205353 Page: 6 Date Filed: 11/19/2019
No. 17-41268

c/w No. 17-41271

7

granted the motion and dismissed the IP entities for lack of personal 

jurisdiction, agreeing with the IP entities’ argument that “a non-exclusive 

license agreement alone is insufficient to trigger personal jurisdiction over the 

licensor.” Because the IP entities were the only defendants remaining in what 

was the 70 case before consolidation, the court dismissed the 70 case and 

deconsolidated the two cases. On Diece-Lisa’s unopposed motion, the district 

court stayed the 400 case against the retail entities pending the resolution of 

this appeal.7

Diece-Lisa appeals two of the district court’s rulings and one magistrate 

judge’s ruling in the consolidated case: (1) the district court’s final judgment in 

the 70 case dismissing the IP entities for lack of personal jurisdiction; (2) the 

district court’s adoption of the magistrate judge’s vacatur of his prior order 

allowing Diece-Lisa to file the 3AC; and (3) the magistrate judge’s striking of 

Diece-Lisa’s 4AC.

II.

Before we evaluate the merits of Diece-Lisa’s challenges to these rulings, 

we must first determine the ambit of our jurisdiction. Each constituent case 

must be analyzed individually on appeal to ascertain jurisdiction and to decide 

its disposition. Hall v. Hall, 138 S. Ct. 1118, 1128 (2018). We have jurisdiction 

over “appeals from all final decisions of the district courts,” except those 

directly appealable to the Supreme Court. 28 U.S.C. § 1291. A final judgment 

is one that “ends the litigation on the merits and leaves nothing for the court 

to do but execute the judgment.” Ray Haluch Gravel Co. v. Cent. Pension Fund, 

571 U.S. 177, 183 (2014). Consolidation complicates this finality inquiry, as 

 

7 Due to the district court’s striking the 4AC and vacatur and resulting disallowance 

of the 3AC, the live complaint in that 400 case has reverted to the pre-consolidation Second 

Amended Complaint against the retail entities.

 Case: 17-41268 Document: 00515205353 Page: 7 Date Filed: 11/19/2019
No. 17-41268

c/w No. 17-41271

8

the district court may issue a final judgment in one constituent case while 

another constituent case or cases remain pending, as occurred here. The 

Supreme Court recently addressed the reviewability of final judgments issued 

in consolidated cases, holding unanimously that “when one of several 

consolidated cases is finally decided, a disappointed litigant is free to seek 

review of that decision in the court of appeals” regardless of whether any of the 

other consolidated cases remain pending. Hall, 138 S. Ct. at 1131. When the 

district court dismissed the IP entities from the 70 case and deconsolidated the 

cases, it terminated all the claims in the 70 case, making that dismissal a final, 

appealable judgment. See id. at 1124.

The more difficult question, however, is whether our jurisdiction extends 

to the two interlocutory orders—vacating the prior allowance of the 3AC and 

striking the 4AC—issued while the 400 and 70 cases were still consolidated. 

Generally, “a party may obtain review of prejudicial adverse interlocutory 

rulings upon his appeal from adverse final judgment, at which time the 

interlocutory rulings (nonreviewable until then) are regarded as merged into 

the final judgment terminating the action.” Dickinson v. Auto Ctr. Mfg. Co., 

733 F.2d 1092, 1102 (5th Cir. 1983); see also 28 U.S.C. § 1291. Here, both 

orders that Diece-Lisa appeals were issued while the 400 and 70 cases were 

consolidated, without distinguishing between their applicability to one or the 

other case. With a final judgment issued in the 70 case but not the 400 case, 

the question is whether these interlocutory orders “merged into” the final 

judgment in the 70 case as opposed to some future, hypothetical final judgment 

in the 400 case.8

 

8 While interlocutory orders could conceivably relate equally to two or more cases that 

have been consolidated, as discussed below, that is not the situation here. We therefore need 

not address this potentially difficult conceptual problem.

 Case: 17-41268 Document: 00515205353 Page: 8 Date Filed: 11/19/2019
No. 17-41268

c/w No. 17-41271

9

Defendants argue that the orders from the consolidated case “can only 

be reviewed on appeal from a final judgment in the [400] case, which remains 

to be tried.” They claim that Diece-Lisa’s motions were filed “in both of the 

consolidated actions,” and because only one of the formerly consolidated 

actions has resulted in a final judgment, the orders in the consolidated case

are not yet reviewable. Diece-Lisa argues that the orders are reviewable 

because the orders were “effectively” rulings “in the 70 case . . . made final 

when the 70 case was dismissed.” Diece-Lisa emphasizes that the theories 

advanced and the New Parties added in the 3AC demonstrate that the 3AC 

was part of the 70 case, not the 400 case.

When cases are consolidated, their “merger is never so complete in 

consolidation as to deprive any party of any substantial rights which he may 

have possessed had the actions proceeded separately.” Hall, 138 S. Ct. at 1130. 

Moreover, “the parties to one case [do] not become parties to the other by virtue 

of consolidation[, and] the right of each to pursue his individual case on appeal 

should not be compromised by the litigation conduct of the other.” Id. at 1128. 

Finally, “consolidation [cannot] prejudice rights to which the parties would 

have been due had consolidation never occurred.” Id. 

With these considerations in mind, we conclude that we have jurisdiction 

to review the interlocutory orders disposing of the 3AC and 4AC in the 

consolidated case because they can be “regarded as merged into the final 

judgment terminating” the 70 case.9 Dickinson, 733 F.2d at 1102. Because the 

two interlocutory orders at issue here involve the district court’s orders 

disposing of the 3AC and 4AC, our factual analysis centers on how those

 

9 There is no danger that these orders will be modified pursuant to the district court’s 

continued jurisdiction over the 400 case, as the 400 case has been stayed pending our 

resolution of this appeal.

 Case: 17-41268 Document: 00515205353 Page: 9 Date Filed: 11/19/2019
No. 17-41268

c/w No. 17-41271

10

complaints relate to the two constituent cases. A review of the various 

complaints filed in this litigation reveals that the claims and parties in the 

3AC and 4AC most closely resemble and relate to those in the 70 case.

Currently, the 400 case concerns Disney’s retail entities selling Lotso 

merchandise at brick-and-mortar stores and online, while the 70 case concerns 

Disney’s IP entities entering licensing agreements with third parties who sell 

Lotso-related merchandise. Before the cases were consolidated, however, in 

addition to claims against the IP entities, the first amended complaint in the 

70 case raised claims against more than 80 unnamed Disney subsidiaries 

concerning, inter alia, the use of the Lotso character in theme parks, at resorts, 

and on cruise ships. The parties later stipulated to dismissal of those 

subsidiaries, leaving the 70 case with only the IP entities as defendants. The 

3AC added ten additional Disney subsidiaries, the New Parties, as defendants 

and broad new claims alleging misuse of the Lotso character in forums ranging 

from Disney on Ice to resorts to cruise ships. With the 3AC, then, Diece-Lisa 

revived many of the claims and parties from the earlier complaint in the 70 

case.10 Similarly, with the 4AC, Diece-Lisa attempted to resurrect the 3AC’s

character-based infringement claims and assert new theories of liability. 

Those claims and theories were directed at the IP entities—DEI and DCP—

the only defendants in the 70 case. A fact-based review of the challenged 

orders, then, supports a finding that the interlocutory orders are reviewable 

upon a final judgment in the 70 case.11

 

10 The New Parties were: Buena Vista Home Entertainment, Inc.; Walt Disney Studios 

Motion Pictures; Buena Vista Theatrical Group, Ltd.; Disney Interactive Studios, Inc.; 

Disney Licensed Publishing – Disney Book Group, LLC; Walt Disney Records; Disney 

Destinations, LLC; Walt Disney Parks & Resorts U.S., Inc.; Magical Cruise Co., Ltd.; and 

Magic Kingdom, Inc.

11 Our analysis here, in which we engage in a fact-bound determination of whether an 

interlocutory order relates more to one case or another, has revealed that the 3AC and 4AC 

do not appear to affect the rights of the parties in the still-pending 400 case (the retail 

 Case: 17-41268 Document: 00515205353 Page: 10 Date Filed: 11/19/2019
No. 17-41268

c/w No. 17-41271

11

We also note that the primary considerations underlying the finality 

requirement are “the inconvenience and costs of piecemeal review on the one 

hand and the danger of denying justice by delay on the other.” United States 

v. Miss. Power & Light Co., 638 F.2d 899, 903 (5th Cir. 1981) (quoting Gillespie 

v. U.S. Steel Corp., 379 U.S. 148, 152-53 (1965)). Our review of the 3AC and 

4AC rulings now does not create piecemeal review because Diece-Lisa is 

entitled to immediate review of the district court’s final judgment in the 70 

case. See Hall, 138 S. Ct. at 1131 (“[W]hen one of several consolidated cases is 

finally decided, a disappointed litigant is free to seek review of that decision in 

the court of appeals.”). Further, the 400 case concerns retail merchandising 

claims that do not pertain to the New Parties and do not affect their interests, 

and thus more inconvenience would result from a delay of our review of the 

interlocutory orders until a final judgment in the 400 case because the orders 

are not related to the 400 case.

Because the broader trademark claims of the 3AC and the 4AC closely 

resemble the allegations in the 70 case and because the underlying purposes 

of the finality rule would not be served by our awaiting a final judgment in all 

the consolidated cases to exercise appellate review, we conclude that DieceLisa may obtain review of these adverse interlocutory rulings in its current 

appeal from the adverse final judgment in the 70 case. See Hall, 138 S. Ct. at 

1131; Dickinson, 733 F.2d at 1102; Miss. Power, 638 F.2d at 903; 15A WRIGHT 

& MILLER, FED. PRAC. & PROC. JURIS. § 3913.

 

entities). Accordingly, we have no occasion in this case to consider whether a different result 

might follow if our review of an interlocutory order would affect another, still pending case. 

Moreover, these orders will not be modified pursuant to the district court’s continued 

jurisdiction over the 400 case, as the 400 case is stayed pending our resolution of this appeal.

 Case: 17-41268 Document: 00515205353 Page: 11 Date Filed: 11/19/2019
No. 17-41268

c/w No. 17-41271

12

III.

Diece-Lisa argues that the district court erred in concluding it lacked 

personal jurisdiction over the IP entities. The district court concluded that the 

activities of the IP entities—granting non-exclusive licenses to third-party 

licensees who conduct business in Texas and exerting quality control over those 

licensees—were insufficient to trigger personal jurisdiction over the IP 

entities. In addition to its licensor argument rejected by the district court, 

Diece-Lisa also argued in the district court that the IP entities were subject to 

personal jurisdiction because they are part of the “unified Disney company”—

if the district court had jurisdiction over the retail entities, Diece-Lisa argued,

it necessarily had jurisdiction over the IP entities as well because all Disney 

subsidiary entities are part of the unified Disney company. The district court 

did not explicitly address this argument, but nonetheless dismissed the IP 

entities as defendants for lack of personal jurisdiction. Diece-Lisa presents 

these same arguments on appeal. Because we conclude that Diece-Lisa’s 

arguments based on these two novel theories are without merit, we affirm.

We review the district court’s dismissal for lack of personal jurisdiction 

de novo. Alpine View Co. v. Atlas Copco A.B., 205 F.3d 208, 214 (5th Cir. 2000). 

“Where a district court dismisses for lack of personal jurisdiction without a 

hearing, as in this action, we review the dismissal to determine whether the 

plaintiff presented sufficient evidence to support a prima facie case supporting 

jurisdiction.” Panda Brandywine Corp. v. Potomac Elec. Power Co., 253 F.3d 

865, 868 (5th Cir. 2001). We accept as true Diece-Lisa’s uncontroverted, nonconclusory factual allegations and resolve all controverted allegations in its 

favor. See id. 

A federal court sitting in diversity in Texas may exercise personal 

jurisdiction over a foreign defendant if permitted by (1) the Texas long-arm 

 Case: 17-41268 Document: 00515205353 Page: 12 Date Filed: 11/19/2019
No. 17-41268

c/w No. 17-41271

13

statute, and (2) the due process clause of the Fourteenth Amendment. Johnson 

v. Multidata Sys. Int’l Corp., 523 F.3d 602, 609 (5th Cir. 2008). “Because the 

Texas long-arm statute extends to the limits of federal due process, the twostep inquiry collapses into one federal due process analysis.” Id. Federal due 

process is satisfied if two requirements are met: (1) “the non-resident purposely 

availed himself of the benefits and protections of the forum state by 

establishing ‘minimum contacts’ with the state”; and (2) “the exercise of 

jurisdiction does not offend ‘traditional notions of fair play and substantial 

justice.’” Id. (quoting Wilson v. Belin, 20 F.3d 644, 647 (5th Cir. 1994)). 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, or of the unilateral activity of another party or a third person.” 

Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985) (cleaned up). A 

defendant’s “minimum contacts” may give rise to either general or specific

jurisdiction. Id. We therefore analyze each in turn.

A.

A court has general jurisdiction over a corporate defendant where the 

corporation’s “affiliations with the State are so continuous and systematic as 

to render it essentially at home in the forum State,” the paradigm examples of 

which are the corporation’s place of incorporation and principal place of 

business. Daimler AG v. Bauman, 571 U.S. 117, 137 (2014) (cleaned up). DEI 

is incorporated in Delaware, DCP is incorporated in California, and both have 

their principal places of business in California. Neither DEI nor DCP has an 

office, mailing address, place of business, bank account, or real property in 

Texas. DEI has no employees in Texas, while three of DCP’s approximately 

770 employees work remotely from Texas. Neither DEI nor DCP sells any 

goods in Texas, including any goods based on Lotso or other characters from 

 Case: 17-41268 Document: 00515205353 Page: 13 Date Filed: 11/19/2019
No. 17-41268

c/w No. 17-41271

14

Toy Story 3. These uncontested facts fail to reflect that either entity’s principal 

place of business or place of incorporation is Texas, and the IP entities’ contacts 

with the Eastern District of Texas are not otherwise “so continuous and 

systematic as to render [them] essentially at home” there. Id.

B.

Specific jurisdiction “encompasses cases in which the suit arises out of or 

relates to the defendant’s contacts with the forum.” Id. at 127. Specific 

jurisdiction exists when two circumstances are met: (1) “a nonresident 

defendant has purposefully directed its activities at the forum state,” and (2)

“the litigation results from alleged injuries that arise out of or relate to those 

activities.” Sangha v. Navig8 ShipManagement Private Ltd., 882 F.3d 96, 101 

(5th Cir. 2018) (quoting Walk Haydel & Assocs. v. Coastal Power Prod. Co., 517 

F.3d 235, 243 (5th Cir. 2008)). “The inquiry whether a forum State may assert 

specific jurisdiction over a nonresident defendant ‘focuses on the relationship 

among the defendant, the forum, and the litigation.’” Walden v. Fiore, 571 U.S. 

277, 283-84 (2014) (quoting Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 775 

(1984)) (internal quotation marks omitted). “[T]he relationship must arise out 

of contacts that the ‘defendant himself’ creates with the forum State.” Id. at

284 (quoting Burger King, 471 U.S. at 475).

Diece-Lisa does not meaningfully argue that the Texas contacts of the IP 

entities alone are sufficient to support personal jurisdiction. Instead, DieceLisa presents two theories involving Texas contacts of third parties with whom 

the IP entities interact to support the exercise of specific jurisdiction over the 

IP entities, which we term the franchise theory and the licensor theory. The 

franchise theory posits that the entire Disney company should be treated as 

one franchise for purposes of personal jurisdiction. Because the district court 

has personal jurisdiction over some Disney subsidiaries, such as the retail 

 Case: 17-41268 Document: 00515205353 Page: 14 Date Filed: 11/19/2019
No. 17-41268

c/w No. 17-41271

15

entities, Diece-Lisa argues the court also has jurisdiction over other Disney 

subsidiaries, such as the IP entities. The licensor theory, on the other hand,

proposes that because the district court has jurisdiction over the third parties 

to whom the IP entities grant licenses (their licensees), the court also has 

jurisdiction over the IP entities. Both theories require us to analyze the IP 

entities’ interactions with third parties—Disney subsidiaries under the 

franchise theory and licensees under the licensor theory—to determine 

whether those interactions support a finding that the IP entities “purposefully 

directed [their] activities at [Texas].” Sangha, 882 F.3d at 101. We address 

each argument in turn.

1.

According to Diece-Lisa’s franchise theory, because the district court has 

jurisdiction over Disney’s retail entities12 and “Disney presents itself in essence 

as one company,” the Texas contacts of Disney’s retail entities “support 

jurisdiction over the other ‘segments’ engaging in the overall infringing 

activity.” Diece-Lisa contends that “the infringement by all the corporatelyinterrelated Disney companies is so interconnected and tightly controlled that 

it is appropriate for the entire infringing Disney franchise to be held liable in 

a single jurisdiction in a single suit.”

Generally, “the proper exercise of personal jurisdiction over a 

nonresident corporation may not be based solely upon the contacts with the 

forum state of another corporate entity with which the defendant may be 

affiliated.” Freudensprung v. Offshore Tech. Servs., Inc., 379 F.3d 327, 346 (5th 

Cir. 2004). This “presumption of institutional independence . . . may be 

rebutted,” however, “by ‘clear evidence,’ which requires a showing of 

‘something beyond’ the mere existence of a corporate relationship between a 

 

12 The retail entities, DSU and DSI, have not contested jurisdiction in the 400 case.

 Case: 17-41268 Document: 00515205353 Page: 15 Date Filed: 11/19/2019
No. 17-41268

c/w No. 17-41271

16

resident and nonresident entity.” Id. In determining whether the plaintiff 

“has overcome the presumption of corporate separateness” such that the 

corporations may be “fuse[d] . . . for jurisdictional purposes,” the following 

factors, referred to as the Hargrave factors, guide our inquiry: “(1) the amount 

of stock owned by the parent of the subsidiary; (2) whether the entities have 

separate headquarters, directors, and officers; (3) whether corporate 

formalities are observed; (4) whether the entities maintain separate 

accounting systems; and (5) whether the parent exercises complete control over 

the subsidiary’s general policies or daily activities.” Id; see also Hargrave v. 

Fibreboard Corp., 710 F.2d 1154, 1160 (5th Cir. 1983). We have noted that 

“the maintenance of corporate formalities tips in favor of finding that the 

entities are not alter egos,” even where other factors support an alter ego 

relationship. Jackson v. Tanfoglio Giuseppe, S.R.L., 615 F.3d 579, 588 (5th 

Cir. 2010); see also Southmark Corp. v. Life Investors, Inc., 851 F.2d 763, 773-

74 (5th Cir. 1988) (“[I]t is well-settled that where . . . a wholly owned subsidiary 

is operated as a distinct corporation, its contacts with the forum cannot be 

imputed to the parent.”).

Diece-Lisa fails to allege any facts that suggest an alter ego relationship 

between the IP entities and the retail entities.13 While both the IP and retail 

 

13 Diece-Lisa argues that the Walt Disney Company’s characterization of itself as “a 

diversified worldwide entertainment company” in previous litigation and its failure to 

distinguish between its various subsidiaries in the public eye supports imputing contacts 

from one Disney entity to another. This argument is unavailing, as we have previously found 

that website descriptions and SEC filings referring to a corporate parent and its subsidiaries 

as a singular company, without more, were “insufficient to overcome the presumption of 

corporate separateness.” Freudensprung, 379 F.3d at 346; see also Special Indus., Inc. v. 

Zamil Grp. Holding Co., 578 F. App’x 325, 331-33 (5th Cir. 2014) (finding no personal 

jurisdiction over parent company simply “by virtue of the fact that [the parent has] 

subsidiaries in Texas that do business there” and that the company “holds itself out to the 

public as a unified company doing business in Texas”). Moreover, the cases upon which 

Diece-Lisa relies are non-binding and distinguishable; in those cases, the court did not rely 

solely on the company’s public presentation in imputing contacts from a parent to its 

 Case: 17-41268 Document: 00515205353 Page: 16 Date Filed: 11/19/2019
No. 17-41268

c/w No. 17-41271

17

entities are subsidiaries of the Walt Disney Company and engage in business 

dealings with each other, there is no allegation that the entities fail to observe 

corporate formalities, nor any suggestion that the IP entities control the 

general policies or day to day activities of the retail entities. Diece-Lisa makes 

the conclusory assertion that “the infringement by all the . . . Disney companies 

is . . . interconnected and tightly controlled” but includes no facts explaining 

how Disney’s retail entities or parent corporation exert such control over the 

IP entities such that jurisdiction over one corporation in the Disney enterprise 

could confer jurisdiction over all related entities. These conclusory allegations 

are insufficient for Diece-Lisa to make out a prima facie case of personal 

jurisdiction based on the franchise theory. See Panda Brandywine Corp., 253 

F.3d at 869 (“[T]he prima-facie-case requirement does not require the court to 

credit conclusory allegations.”). Diece-Lisa has not alleged anything beyond 

the mere existence of a corporate relationship between the IP and retail 

 

subsidiary. See City of Greenville v. Syngenta Crop Prot., Inc., 830 F. Supp. 2d 550, 563-64

(S.D. Ill. 2011) (parent “made decisions about day-to-day operations” of subsidiary and 

companies “function[ed] more like a monolithic corporation controlled by [the parent] . . . as 

opposed to a group of independent though related companies”); GSK Technolgies, Inc. v. 

Schneider Elec., S.A., No. 606CV361, 2007 WL 788343, at *2 (E.D. Tex. Mar. 14, 2007) (parent 

corporations “placed the accused products into the stream of commerce with the expectation 

that [subsidiary] products would be sold” in the forum state); Frito-Lay N. Am., Inc. v. 

Medallion Foods, Inc., 867 F. Supp. 2d 859, 868-69 (E.D. Tex. 2012) (parent “exercise[d] 

control over and participate[d] fully in its subsidiaries’ operations”). 

Diece-Lisa also argues that DEI “judicially admits” to Disney’s “intertwined” 

relationships because, in pleadings in unrelated litigation, DEI has described “Disney, 

together with its subsidiaries” as “a diversified worldwide entertainment company with 

operations in five business segments.” We have held that “judicial admissions are not 

conclusive and binding in a separate case from the one in which the admissions were made.” 

Heritage Bank v. Redcom Labs., Inc., 250 F.3d 319, 329 (5th Cir. 2001) (quoting Universal 

Am. Barge Corp. v. J–Chem., 946 F.2d 1131, 1142 (5th Cir. 1991)). Moreover, even if the 

statements were judicial admissions, a judicial admission of interconnectedness among 

Disney entities, absent some admission of facts supporting a controlling or alter ego 

relationship, would not compel a finding that contacts should be imputed among subsidiaries. 

See Freudensprung, 379 F.3d at 346; Special Indus., Inc., 578 F. App’x at 331-33.

 Case: 17-41268 Document: 00515205353 Page: 17 Date Filed: 11/19/2019
No. 17-41268

c/w No. 17-41271

18

entities and has therefore not rebutted “the presumption of institutional 

independence.” See Freudensprung, 379 F.3d at 346.

2.

The second theory of personal jurisdiction raised by Diece-Lisa is the 

licensor theory, which focuses on only one of the IP entities—DEI—as owner

of Disney’s intellectual property rights. DEI grants non-exclusive licenses to 

licensees throughout the country, including some to Disney’s affiliated retail 

entities. These licenses allow third-party licensees to use the intellectual 

property owned by DEI and manufacture and sell Disney products around the 

country, including in Texas. Diece-Lisa argues that, as owner and licensor of 

intellectual property, DEI is subject to personal jurisdiction in Texas because 

it directed and authorized its licensees to use the infringing marks in Texas.

Neither this nor any other circuit has held that specific jurisdiction may 

arise solely from a defendant licensor’s non-exclusive licenses to third parties 

who sell allegedly infringing products in the forum state, and at least one 

circuit has explicitly rejected such a theory. See Breckenridge Pharm., Inc. v. 

Metabolite Labs., Inc., 444 F.3d 1356, 1366 (Fed. Cir. 2006) (“[O]ur case law 

requires that the license agreement contemplate a relationship beyond royalty 

or cross-licensing payment, such as granting both parties the right to litigate 

infringement cases or granting the licensor the right to exercise control over 

the licensee’s sales or marketing activities.”); Red Wing Shoe Co. v. HockersonHalberstadt, Inc., 148 F.3d 1355, 1361-62 (Fed. Cir. 1998) (finding the forum 

contacts of licensees “insufficient” to submit licensor to personal jurisdiction 

where licensor had “no control over [licensees’] activities”); see also Sinclair v. 

StudioCanal, S.A., 709 F. Supp. 2d 496, 508 n.8 (E.D. La. 2010) (“Courts 

routinely hold that the mere existence of a licensor-licensee relationship is 

insufficient to impute the contacts of a licensee on the licensor for the purpose 

 Case: 17-41268 Document: 00515205353 Page: 18 Date Filed: 11/19/2019
No. 17-41268

c/w No. 17-41271

19

of establishing personal jurisdiction.” (cleaned up)). We agree with the view of 

our sister circuit that something more than a non-exclusive licensor-licensee 

relationship is required to support the exercise of personal jurisdiction over the 

licensor. Because Diece-Lisa has alleged no additional contacts with Texas, we 

decline to find personal jurisdiction exists over DEI because of its licensees’ 

contacts in the forum state.14

Based on the foregoing analyses, we conclude that the district court 

properly declined to exercise personal jurisdiction over the IP entities.

IV.

Diece-Lisa contends that the district court abused its discretion by—sua 

sponte and without a hearing—vacating its order granting Diece-Lisa leave to 

file the 3AC. Under the circumstances of this case, we agree. Consequently, 

we will set aside the district court’s order pertaining to the 3AC and remand 

to the district court for further consideration and proceedings consistent with 

this opinion. 

We have repeatedly held that a district court’s failure to give notice and 

a hearing prior to sua sponte dismissal of a complaint is unfair and requires

reversal. See Surety Co. v. Blevins, 799 F.3d 366 (5th Cir. 2015); Century 

Davoodi v. Austin Indep. Sch. Dist., 755 F.3d 307 (5th Cir. 2014); Lozano v. 

Ocwen Fed. Bank, FSB, 489 F.3d 636, 642-43 (5th Cir. 2007); Carroll v. Fort 

 

14 Diece-Lisa claims that DEI was “something more” than a mere licensor. It supports 

this assertion, however, by describing actions of DEI that represent nothing more than the 

actions of a typical licensor, such as exerting quality control over the licensee. See Sheila’s 

Shine Prods., Inc. v. Sheila Shine, Inc., 486 F.2d 114, 123-24 (5th Cir. 1973) (“The owner of a 

trademark has not only a right to license the use of the trademark to others, but also a 

concurrent duty to exercise control and supervision over the licensee’s use of the mark.”). 

Diece-Lisa does not allege any activities that indicate that DEI exerts the level of control over 

its licensees that might confer personal jurisdiction, such as sharing the right to litigate 

infringement cases with its licensees or controlling the licensee’s sales. Cf. Breckenridge 

Pharm., Inc., 444 F.3d at 1366

 Case: 17-41268 Document: 00515205353 Page: 19 Date Filed: 11/19/2019
No. 17-41268

c/w No. 17-41271

20

James Corp., 470 F.3d 1171, 1177 (5th Cir. 2006). The actions of the

magistrate judge and the district court here in vacating its prior grant of leave 

allowing Diece-Lisa to file its 3AC without notice or hearing had the same 

effect, removing the New Parties from the suit and nullifying Diece-Lisa’s 

claims against them. Cf. Millar v. Houghton, 115 F.3d 348, 351 (5th Cir. 1997) 

(holding that “when a court is considering vacating and reversing a prior denial 

of summary judgment . . . the court must give the adverse party notice and an 

opportunity to respond”).

Furthermore, this unilateral ruling appears to come at a high litigation 

cost to Diece-Lisa, and to a lesser extent to the defendants. Diece-Lisa was

permitted to file its 3AC, urging claims against several Disney subsidiaries,

and was permitted to conduct discovery with respect to the New Parties for 

over a year.15 Moreover, the New Parties filed motions to dismiss for lack of 

jurisdiction, improper venue, and failure to state a claim; these motions were 

pending when the district court (and the magistrate judge) suddenly, without 

prior notice or a hearing, vacated the order allowing Diece-Lisa’s 3AC. The 

magistrate judge stated that he had improvidently granted leave to amend and

that the 3AC threatened to radically change the nature of the case. In his 

vacatur order, the magistrate judge also expressed “serious doubts about the 

factual underpinnings” of Diece-Lisa’s theory of personal jurisdiction. Given 

this expression of doubt regarding personal jurisdiction and venue—issues 

that were addressed in defendants’ pending motions but were mooted by the 

court’s vacatur—it appears that the district court used its inherent power to 

 

15 Diece-Lisa took numerous depositions and prepared expert reports based on claims 

in the 3AC. The district court found that the expense was not wasted because discovery could 

be used by Diece-Lisa in “a separate action.” But as Diece-Lisa points out (and the district 

court conceded), the court’s vacatur raises statute of limitations issues that might bar, or 

temporally restrict, the use of such discovery in subsequent actions.

 Case: 17-41268 Document: 00515205353 Page: 20 Date Filed: 11/19/2019
No. 17-41268

c/w No. 17-41271

21

vacate its interlocutory order as a shortcut, ridding the consolidated case of the 

New Parties without evaluating the court’s jurisdiction over them or the 

validity of Diece-Lisa’s claims against them.

Under these circumstances, we conclude that there appears to have been 

a misuse of judicial discretion. Accordingly, we vacate the magistrate judge’s 

and district court’s rulings as to the 3AC and remand with instructions for the 

district court to rule on defendants’ motions on personal jurisdiction, venue,

and failure to state a claim, and for any further proceedings the court deems 

appropriate and necessary.

V.

Finally, Diece-Lisa argues that the district court abused its discretion in 

striking the 4AC. We disagree. The agreed order between the parties held 

that “fact discovery [was] closed” and “there [would] be no further . . . assertion 

of additional claims, defenses, or theories of liability or damages.” In the 4AC, 

Diece-Lisa violated the agreed order by raising for the first time the theory 

that DEI was vicariously and/or contributorily liable for the “infringement by 

other Disney entities and third parties.” Diece-Lisa also violated the agreed 

order by requesting additional discovery. Therefore, the district court did not 

abuse its discretion in striking the complaint.16 See Grabowski v. Carver, 38 

F.3d 5693 (5th Cir. 1994) (reviewing the district court’s decision to strike for 

an abuse of discretion).

VI.

In sum, the district court’s orders dismissing the IP entities for lack of 

personal jurisdiction and striking the 4AC are AFFIRMED, while its order 

vacating its prior grant of leave to amend to file the 3AC is VACATED and the 

 

16 Unlike the district court’s 3AC vacatur, its 4AC ruling was not sua sponte but 

pursuant to the defendants’ motion to strike.

 Case: 17-41268 Document: 00515205353 Page: 21 Date Filed: 11/19/2019
No. 17-41268

c/w No. 17-41271

22

case is REMANDED with instructions to first determine whether the district 

court has personal jurisdiction over the New Parties in accordance with the 

jurisdictional analysis provided in this opinion and rule on the other motions 

mooted by the vacatur of the 3AC, along with any additional rulings the district 

court may deem necessary to pass upon on remand.

AFFIRMED in part, VACATED in part, and REMANDED WITH 

INSTRUCTIONS.

 Case: 17-41268 Document: 00515205353 Page: 22 Date Filed: 11/19/2019