law-personal-jurisdiction | Internet e-commerce and contacts with forum state | special appearance |
Texas Long Arm Statute |
IN PERSONAM JURISDICTION OVER FOREIGN DEFENDANT
"Texas courts may assert personal jurisdiction over a nonresident defendant only if the Texas long-arm statute
authorizes jurisdiction and the exercise of jurisdiction is consistent with federal and state due process
standards." Id. (citing Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223,
226 (Tex. 1991)); see Texas Civ. Prac. & Rem. Code Ann. §§ 17.041-.045 (Vernon 2008) (Texas long-arm
statute). The long-arm statute allows Texas courts to exercise jurisdiction over a nonresident defendant that
"does business" in the state. Tex. Civ. Prac. & Rem. Code Ann. §17.042 (Vernon 2008). The Texas Supreme
Court has held that "section 17.042's broad language extends Texas courts' personal jurisdiction as far as the
federal constitutional requirements of due process will permit." BMC Software, 83 S.W.3d at 795.
Gonzalez v. AAG-Law Vegas, LLC (Tex.App.- Houston [1st Dist.] Oct. 29, 2009)(Op. on Rehearing by Davie L.
Wilson) (accelerated, interlocutory appeal challenging denial of special appearance, minimum contacts
analysis) (court of appeals renders judgment sustaining the special appearance) (no personal jurisdiction)
REVERSE TC JUDGMENT AND RENDER JUDGMENT: Opinion by Judge Davie L. Wilson
Before Judge Wilson, Justices Alcala and Hanks
01-08-00377-CV David M. Gonzales v. AAG-Las Vegas, L.L.C., Ascent Automotive Group, L.P., KW#1
Acquisition Company, L.L.C.
Appeal from 189th District Court of Harris County
Trial Court Judge: Hon. William R. Burke. Jr.
Personal Jurisdiction
"Texas courts may assert personal jurisdiction over a nonresident defendant only if the Texas long-arm statute
authorizes jurisdiction and the exercise of jurisdiction is consistent with federal and state due process
standards." Id. (citing Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223,
226 (Tex. 1991)); see Tex. Civ. Prac. & Rem. Code Ann. §§ 17.041-.045 (Vernon 2008) (Texas long-arm
statute). The long-arm statute allows Texas courts to exercise jurisdiction over a nonresident defendant that
"does business" in the state. Tex. Civ. Prac. & Rem. Code Ann. § 17.042 (Vernon 2008). The Texas Supreme
Court has held that "section 17.042's broad language extends Texas courts' personal jurisdiction as far as the
federal constitutional requirements of due process will permit." BMC Software, 83 S.W.3d at 795.
Choice Auto Brokers, Inc. v. Dawson (Tex.App.- Houston [1st Dist.] Sep. 25, 2008)(Nuchia)
Initially, the plaintiff bears the burden of pleading allegations sufficient to bring a nonresident defendant within
the terms of the Texas long-arm statute. Am. Type Culture Collection, 83 S.W.3d at 807. However, when a
nonresident defendant files a special appearance, that defendant assumes the burden of negating all bases of
personal jurisdiction that the plaintiff has alleged. Id.
Personal jurisdiction over nonresident defendants is constitutional when two conditions are met: (1) the
defendant has established minimum contacts with the forum state and (2) the exercise of jurisdiction comports
with traditional notions of fair play and substantial justice. Id. at 806 (citing Int'l Shoe Co. v. Washington, 326
U.S. 310, 316, 66 S. Ct. 154, 158 (1945)). A nonresident defendant's minimum contacts must derive from
purposeful availment: a nonresident defendant must have "purposefully availed" itself of the privileges and
benefits of conducting business in the foreign jurisdiction to establish sufficient contacts with the forum to confer
personal jurisdiction. Id. (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-76, 105 S. Ct. 2174, 2183-84
(1985)); Xenos Yuen v. Fisher, 227 S.W.3d 193, 200 (Tex. App.--Houston [1st Dist.] 2007, no pet.). An act or
acts "by which the defendant purposefully avails itself of the privilege of conducting activities" in Texas and
"thus invok[es] the benefits and protections" of Texas law, constitutes sufficient contact with Texas to confer
personal jurisdiction. Michiana Easy Livin' Country, Inc. v. Holten, 168 S.W.3d 777, 784 (Tex. 2005) (quoting
Hanson v. Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228, 1240 (1958)).
We consider three elements of purposeful availment. See Michiana Easy Livin' Country, 168 S.W.3d at 785; see
also First Oil PLC v. ATP Oil & Gas Corp., No. 01-07-00703-CV, 2008 WL 2186781, at * 12-3 (Tex.
App.--Houston [1st Dist.] May 22, 2008, no pet.). First, we consider only the defendant's own actions, not those
of the plaintiff or any other third party. Michiana Easy Livin' Country, 168 S.W.3d at 785; First Oil PLC, 2008 WL
2186781, at *12; see also U-Anchor Adver., Inc. v. Burt, 553 S.W.2d 760, 762-63 (Tex. 1977) (quoting Hanson,
357 U.S. at 253, 78 S. Ct. at 1240 (1958) ("The unilateral activity of those who claim some relationship with a
non-resident defendant cannot satisfy the requirement of contact with the forum State. The application of that
rule will vary with the quality and nature of the defendant's activity, but it is essential in each case that 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.")).
Second, the activities must be purposeful, not random, isolated, or fortuitous. Michiana Easy Livin' Country, 168
S.W.3d at 785; First Oil PLC, 2008 WL 2186781, at *12. "It is the quality rather than the quantity of contacts that
is determinative." First Oil PLC, 2008 WL 2186781, at *12 (emphasis in original). Third, the defendant must
seek some benefit, advantage, or profit by virtue of its activities in the proposed forum state, because this
element is based on the notion of implied consent. Michiana Easy Livin' Country, 168 S.W.3d at 785; First Oil
PLC, 2008 WL 2186781, at *12.
Our jurisdictional analysis is further divided into general and specific personal jurisdiction. CSR, Ltd. v. Link, 925
S.W.2d 591, 595 (Tex. 1996). General jurisdiction will attach when "a defendant's contacts in a forum are
continuous and systematic permitting the forum to exercise personal jurisdiction over the defendant even if the
cause of action did not arise from or relate to activities conducted within the forum state." Id. To support general
jurisdiction, the defendant's forum activities must have been "substantial," which requires stronger evidence of
contacts than for specific personal jurisdiction. Preussag Aktiengesellschaft v. Coleman, 16 S.W.3d 110, 114
(Tex. App.--Houston [1st Dist.] 2000, pet. dism'd w.o.j.).
Specific jurisdiction lies when the defendant's alleged liability arises from or is related to an activity conducted
within the forum. BMC Software, 83 S.W.3d at 796. "For a nonresident defendant's forum contacts to support an
exercise of specific jurisdiction, there must be a substantial connection between those contacts and the
operative facts of the litigation." Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 585 (Tex. 2007). This
requirement assesses "the strength of the necessary connection between the defendant, the forum, and the
litigation." Id.
Internet Use & Personal Jurisdiction
Internet usage is divided into three categories, using a sliding scale, for the purposes of establishing personal
jurisdiction. Reiff v. Roy, 115 S.W.3d 700, 705 (Tex. App.--Dallas 2003, pet. denied). (2)
"At one end of the scale are websites clearly used for transacting business over the Internet, such as entering
into contracts and knowing and repeated transmission of files of information, which may be sufficient to establish
minimum contacts with a state." Id. "On the other end of the spectrum are 'passive' websites that are used only
for advertising over the Internet and are not sufficient to establish minimum contacts even though they are
accessible to residents of a particular state." Id. at 705-06. "In the middle are 'interactive' websites that allow the
'exchange' of information between a potential customer and a host computer. Id. at 706. Jurisdiction in cases
involving interactive websites is determined by the degree of interaction. Id.
Choice Auto Brokers, Inc. v. Dawson (Tex.App.- Houston [1st Dist.] Sep. 25, 2008)(Nuchia)
(Internet sales of vehicles and personal jurisdiction, accelerated, interlocutory appeal challenging the trial
court's order denying of special appearance; case dismissed for lack of personal jurisdiction)
REVERSE TC JUDGMENT AND RENDER JUDGMENT: Opinion by Justice Sam Nuchia
Before Chief Justice Radack, Justices Nuchia and Higley
01-07-01035-CV Choice Auto Brokers, Inc. v. Carl Dawson
Appeal from 152nd District Court of Harris County
Trial Court Judge: Hon. Kenneth P. Wise
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