Adara Networks, Inc. v. Langston
Annotate this CaseAdara Networks Inc. (Networks Inc.) appeals the denial of a Rule of Civil Procedure 12(b)(2) motion to dismiss for lack of personal jurisdiction. At the time the complaint was filed, Networks Inc. was incorporated in Florida with its principal place of business in San Jose, California. Shane Langston was a member of the Mississippi Bar since 1984 and until 2016, was a resident of Mississippi. At the time of filing, he was a resident of Texas. Years before Langston moved to Texas, Langston purchased one million shares of preferred stock in Networks Inc. for $500,000. This purchase was made at the urging of his then-Madison County, Mississippi, neighbor, Ken Primos. Unknown to Langston, Primos was a paid shill for Networks Inc., acting to entice Langston and other Mississippians to invest in Networks Inc. In an affidavit filed in this proceeding, Primos swore that since at least 2002 he was paid monthly by Networks Inc. to solicit and influence investors for Networks Inc. including residents of Mississippi. Networks Inc. held one shareholder meeting over the twenty-year period that Langston was a shareholder. That shareholder meeting was held in Jackson, Mississippi, with roughly one hundred Mississippi shareholders in attendance. Langston sought multiple times to examine various corporate documents. Each time, Primos was dispatched by Networks Inc. to discourage Langston. Primos told Langston to withdraw his requests because a merger or buyout was imminent and disclosures would adversely impact Networks Inc. Networks Inc. countered the shareholders request by producing only selected documents. However, before allowing the investors to review any documents, Networks Inc. required execution of a confidentiality agreement. That agreement contained a clause requiring that any dispute arising under that agreement would be governed and interpreted by the laws of Mississippi and, further, that any disputes that arose were subject to the jurisdiction of Mississippi courts. Langston alleged that the selective production failed to encompass the documents requested and required by either Florida or Mississippi law. Langston filed a complaint for accounting; Networks Inc. responded with a Rule of Civil Procedure 12(b)(2) motion to dismiss for lack of personal jurisdiction. Networks Inc. also claimed that it had not subjected itself to the benefits and protections of Mississippi law, despite evidence to the contrary in the confidentiality agreement. The Mississippi Supreme Court determined the Mississippi Chancery Court properly denied Networks Inc.’s motion. "The chancery court can assert personal jurisdiction over Networks Inc. under either the doing-business prong of our long-arm statute or the tort prong. Langston pled sufficient facts to establish Networks Inc. did or does business in Mississippi and to plead the tort of breach of fiduciary duty. Therefore, we affirm the judgment of the chancery court."
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