In Ultra Deep Picasso Pte. Ltd. v. Dynamic Indus., the Fifth Circuit addressed the critical issue of where a bank account can be garnished in an “in rem” proceeding grounded in admiralty law. Applying the general principle that the property must be found within the district where the trial court is located, the Fifth Circuit concluded that a bank account is located where its funds can be withdrawn — a standard that requires the physical presence of the bank or its branches within the district.

The court rejected the argument that it’s enough to have jurisdiction in the district over the garnishee bank. In rem jurisdiction “rests on the attaching court’s jurisdiction over both the garnishee and the property to be attached.” Because the garnishee bank didn’t have a branch in the district, but only a “representative office” with limited authority, the garnishment failed. No. 23-20357, Oct. 18, 2024.

An explosion on the M/V FLAMINIA (right) led to a $200 million arbitration award, which in turn led to an action to confirm that award in New Orleans federal court. The Fifth Circuit reversed for a lack of personal jurisdiction, concluding:

• Forum. “When assessing personal jurisdiction in a confirmation action under the New York Convention, a Convention, a federal court should consider contacts related to the parties’ underlying dispute and not only contacts related to the arbitration proceeding itself. That holding aligns our court with every other circuit to address this issue.”
• Waiver. Unlike the facts of an earlier case involving a “letter of understanding,” the defendant’s LOU in tihs case said that it was “given without prejudice to any and all rights or defenses MSC, its agents or affiliates have or may have in the Proceedings.”
• Contacts. “[T]he dispute’s sole contact with the forum—the DVB’s shipping from the Port of New Orleans—did not occur as a result of MSC’s ‘own choice.’ … [The fact that the DVB was loaded onto the FLAMINIA in New Orleans was the result of “the unilateral activity” of other parties, not MSC.” (citations omitted).

No. 22-30808 (Jan. 29, 2024).

After carefully reviewing what arguments were properly before it, the Fifth Circuit went on to hold in Shambaugh & Son, LP v. Steadfast Ins. Co. that the plaintiff had not established jurisdiction over an out-of-state insurer: “Steadfast could not have reasonably anticipated being haled into court in Texas simply because Shambaugh’s records were kept in an office (in Austin) maintained by a division (Northstar) of a subsidiary (Shambaugh).” No. 23-50004 (Jan. 18, 2024). The Court noted the insurer’s involvement with other Texas litigation but found those contacts irrelevant and inadequate to establishe jurisdiction.

Shambaugh & Son, LP v. Steadfast Ins. Co. presents a dispute about personal jurisdiction in an insurance-coverage case. The Fifth Circuit began by identifying the arguments properly before it, noting the distinction between waiver and forfeiture:

“The terms waiver and forfeiture—though often used interchangeably by jurists and litigants—are not synonymous.”  “Whereas forfeiture is the failure to make the timely assertion of a right, waiver is the ‘intentional relinquishment or abandonment of a known right.’”

Applying those standards, the Court observed, inter alia:

• “… if complaint allegations alone prevented subsequent forfeiture, then
  it is difficult to imagine when any claim or argument could ever be forfeited”;
• “… if including a claim in a complaint fails to preserve that claim … then a fortiori attaching an exhibit to a pleading does not insulate arguments derived from that exhibit“;
• A statement about choice of law did not avoid forfeiture when that “statement is nested within a broader discussion about forum shopping”;
• An argument about a specific statute was forfeited, and was not saved by a broader discussion about minimum contacts, when the lower-court briefing did not cite that statute and the statutory argument “is narrower and conceptually distinct from [appellant’s] other minimum contacts arguments.”

No. 23-50004 (Jan. 18, 2024).

In Whirlpool Corp. v. Shenzhen Sanlida Elec. Tech. Co., the plaintiff obtained a preliminary injunction against sale of a kitchen mixer that allegedly infringed on the “KitchenAid” design. Shenzen, a China-based manufacturer, objected to the issuance of an injunction before service of process (although its counsel appeared at the preliminary-injunction hearing and argued about the merits, and Shenzen did not dispute that jurisdiction would exist upon completion of service).

The Fifth Circuit rejected this argument, noting:

• Text. “Federal Rule of Civil Procedure 65[(a)(1)] states that a court ‘may issue a preliminary injunction only on notice to the adverse party..”
• Circuit precedent. “[A]s we stated in Corrigan Dispatch Co. v. Casa Guzman, S.A., ‘Rule 65(a) does not require service of process,’ but rather requires ‘notice to the adverse party.’ 569 F.2d 300, 302 (5th Cir. 1978).
• Practicality. “[B]ecause ‘formal service of process under the Hague Convention . . . can take months,’ adopting Shenzhen’s position could result in the ‘unfortunate effect of immunizing most foreign defendants from needed emergency injunctive relief.'” (citation omitted).

No. 22-40376 (Aug. 25, 2023).

While the Supreme Court issued several opinions in Mallory v. Norfolk Southern Railway, No. 21–1168 (U.S. June 27, 2023), the part joined by a five-justice majority is straightforward. A condition for registering to do business in Pennsylvania is consent to be sued there, and the Court held that condition did not raise a due-process concern, reaffirming the validity of much older precedent on the point. Justice Jackson’s concurrence helpfully distinguishes the concepts of waiver and “minimum contacts.” No. 21-1168 (U.S. June 27, 2023).

The complex trial-court system in Texas led to Tex. Civ. Prac. & Rem. Code § 16.065, which suspends limitations for 60 days after a dismissal for lack of jurisdiction. Simple enough, in theory. But in Sanders v. The Boeing Co., the Fifth Circuit showed the deceptive complexity of that statute when it certified these two issues about the statute to the Texas Supreme Court

1)     Does Texas Civil Practice & Remedies Code § 16.064 apply to this lawsuit where Plaintiffs could have invoked the prior district court’s subject matter jurisdiction with proper pleading?

2)     Did Plaintiffs file this lawsuit within sixty days of when the prior judgment became “final” for purposes of Texas Civil Practice & Remedies Code § 16.064(a)(2)?

(The second issue arose from the specific question “whether Texas law would deem dht flight attendants’ tolling savings-statute deadline as running from the time the district court entered judgment or the time [the Fifth Circuit] affirmed that judgment.”) No. 22-20317 (May 25, 2023).

The 2017 collision between the MV ACX Crystal and the destroyer U.S. Fitzgerald led to litigation in New Orleans federal court against NYK, a huge shipping concern with global operations. The district court acknowledged that for this international case, the constitutional standard for personal jurisdiction was based on the Fifth rather than the Fourteenth Amendment, but concluded that the standards were materially similar and that it lacked jurisdiction over NYK.

A Fifth Circuit panel affirmed and the en banc court did also, noting that the other Circuits addressing this constitutional question reached similar conclusions. A dissent argued that the majority’s position about jurisdiction would undermine the effective operation of Congressionally-created causes of action involving asset seizure by the Castro regime and terrorist activity. Douglass v. NYK, No. 20-30382 (Aug. 16, 2022) (en banc). The judges’ votes broke along atypical lines and are detailed below:

My colleague Kyle Gardner and I wrote this article for the most recent Headnotes about two cases–one federal, one state–that summarize basic personal-jurisdiction principles for Texas in business cases.

Johnson v. Huffington Post held, as to a libel claim, that Fifth Circuit precedent compelled dismissal for lack of personal jurisdiction: “HuffPost is interactive, but its story about Johnson has no ties to Texas. The story does not mention Texas. It recounts a meeting that took place outside Texas, and it used no Texan sources. Accordingly, we lack jurisdiction over HuffPost with respect to Johnson’s libel claim.” The full court recently voted 10-7 to not take the matter en banc, as follows:

The third panel member, Judge King, as a senior judge was not eligible to participate in the en banc vote. The four judges whose names are underlined joined a dissent from the denial of en banc review.

In one corner, Getagadget LLC, which holds a registered trademark for “BIG BITE” for its beach toy shaped like a shark’s head. In the other, Jet Creations, Inc., which makes the Big Bite Prehistoric T-Rex Pool Float. Held, Getagadget did not establish Texas jurisdiction over its trademark-infringement claim when its counsel ordered a Big Bite Prehistoric T-Rex Pool Float:

“[I]n order to demonstrate that its trademark infringement and unfair competition claims arose out of sales that Jet directed at Texas, Getagadget was required to show that those sales were to customers who could have been potentially deceived by the alleged infringement. Getagadget’s counsel’s transactions will not suffice because counsel ‘knew exactly with whom []he was dealing and knew that defendants were not associated in any way with plaintiff.’ ‘Clearly, [Getagadget and its counsel were] not confused as to the source of the products in question.'”

Getagadget LLC v. Jet Creations, Inc., No. 19-41019 (March 30, 2022) (mem. op.).

A Texas law firm sued an Ohio firm, alleging the breach of an agreement about a substantial fee. The Fifth Circuit affirmed dismissal for lack of personal jurisdiction, crisply summarizing key Circuit precedent for commercial tort and contract claims. (To the right is 600Camp’s standard personal-jurisdiction graphic, the classic comic book hero Plastic Man).

• Tort: “Walden and Sangha largely resolve this issue. Danziger alleges in support of its fraud and unjust enrichment claims (1) that Morgan Verkamp failed to disclose its representation of Epp when responding to an unsolicited email from Danziger about the Epp case and (2) that Morgan Verkamp continued not to disclose its representation of Epp while the two firms worked together on other cases. Danziger alleges in support of its tortious interference with prospective contractual relations claim that Morgan Verkamp emailed Epp (who is not alleged to have been in Texas) to convince him not to formalize his relationship with Danziger. Thus, although Morgan Verkamp’s allegedly tortious conduct may have affected Danziger in Texas, none of this conduct occurred in Texas.”
• Contract: “Danziger alleges in support of its breach of contract claim that: (1) Epp reached out to Danziger about a potential qui tam matter; (2) Danziger arranged two conference calls between itself, Morgan Verkamp, and Epp; (3) Danziger and Morgan Verkamp agreed telephonically to split any fees they received from their work on the Epp matter; (4) the parties exchanged several emails with each other and Epp regarding their potential representation of Epp; and (5) Morgan Verkamp ultimately represented Epp in a Pennsylvania lawsuit but refused to split the fees that it received from the case.  Thus, unlike Electrosource, this case does not nvolve ‘wide reaching contacts and contemplated future consequences within the forum state.’ And unlike Central Freight, ‘[t]he plaintiff’s Texas location’ was not
  ‘strategically advantageous to the defendant …, suggesting that the defendant had purposefully availed itself of doing business in Texas.’ Rather, as in Trois, ‘[t]he only alleged Texas contacts related to contract formation or breach are [the defendant’s] conference calls negotiating the agreement while [the plaintiff] was in Texas.’ … And like Holt Oil, the defendant’s ‘communications to Texas rested on nothing but “he mere fortuity that [the plaintiff] happens to be a resident of the forum.”‘ As we held in Moncrief Oil, ‘mere fortuity that one company
  happens to be a Texas resident … is not enough to confer jurisdiction.'”

Danziger & De Llano, LLP v. Morgan Verkamp, LLC, No. 21-20186 (Jan. 27, 2022) (citations omitted, emphasis in original).

“Louisiana residents can access Eastrock’s website, no less than residents of other states. But as our cases suggest, and as we now expressly hold, a defendant does not have sufficient minimum contacts with a forum state just because its website is accessible there. The defendant must also target the forum state by purposefully availing itself of the opportunity to do business in that state. And here, there is no evidence that Eastrock targets Louisiana: Eastrock has not sold a single accused product to a Louisiana resident, and it solicits no business there through targeted advertising. That ends this case.” Admar Int’l Inc. v. Eastrock LLC, No. 21-30098-CV (Nov. 19, 2021). (For reference, I think this is the current version of the website in question; the litigation involved the defendant’s alleged misuse of product images.)

In 2017, the USS Fitzgerald, a U.S. Navy destroyer, collided with the MV ACX Crystal, a commercial container ship, in Japanese territorial waters. The incident caused extensive damage and injury, including the death of seven American sailors. Relatives of the deceased sailors sued the ship owner in federal court under the Death on the High Seas Act. They based personal jurisdiction on Fed. R. Civ. P. 4(k)(2), “alleging that, despite NYK Line’s status as a foreign corporation, its substantial, systematic, and continuous contacts with the United States should make NYK Line amenable to suit in federal court.” I

In Douglass v. Nippon Yusen Kabushiki Kaisha, the Fifth Circuit noted that that the case raised novel but significant issues about the distinction between 5th and 14th Amendment due process protections, but found itself constrained by the “rule of orderliness” to follow an earlier Circuit case on the topic. A 2-judge dissent urged en banc consideration, noting that “[o]ur decision today … determines that a global corporation with extensive contacts with the United States cannot be haled into federal court for federal claims arising out of a maritime collision that killed seven United States Navy sailors.” No. 20-30379 (April 30, 2021).

28 USC § 1631 says: “Whenever a civil action is filed in a court as defined in section 610 of this title . . . and that court finds that there is a want of jurisdiction, the court shall, if it is in the interest of justice, transfer such action or appeal to any other such court . . . in which the action or appeal could have been brought at the time it was filed . . ., and the action or appeal shall proceed as if it had been filed in . . . the court to which it is transferred on the date upon which it was actually filed in . . . the court from which it is transferred.” In Franco v. Mabe Trucking Co., the Fifth Circuit concluded that “want of jurisdiction” included both personal and subject-matter jurisdiction, observing:  “[I]t appears no circuit split currently exists on this issue, and while we cannot predict how those circuits who have left the question open will ultimately resolve the matter, we decline to now create a split by adopting an overly restrictive reading of § 1631. Because no amount of legislative history can defeat unambiguous statutory text, we join the weight of circuit authority and conclude that the use of the term ‘jurisdiction’ in § 1631 encompasses both subject-matter and personal jurisdiction.” No. 19-30316 (March 18, 2021) (footnote and citation omitted). The Court also found no Erie problem in section 1631’s definition of the relevant filing date for limitations purposes.

“Sharing liability is not the same as sharing an identity. As our colleagues in the Ninth Circuit explained, ‘Liability and jurisdiction are independent. . . . Regardless of their joint liability, jurisdiction over each defendant must be established individually.’  Lumping defendants together for jurisdictional purposes merely because they are solidary obligors ‘is plainly unconstitutional.'” Libersat v. Sundance Energy, No. 20-30121 (Oct. 26, 2020) (citation omitted, emphasis added).

The loser of a Florida arbitration sought to challenge it in Texas; the Fifth Circuit affirmed dismissal for lack of personal jurisdiction in Sayers Construction v. Timberline Construction, No. 19-51099 (Oct. 2, 2020), observing as to the categories  of facts alleged:

• Solicitation. “Reid and Duffy are irrelevant because the ‘unilateral activity of a third party’ cannot establish minimum contacts on behalf of a corporate defendant.”
• Communications. “[M]ailing payments to the forum state, engaging in communications related to the execution and performance of the contract, and the existence of a contract between the nonresident defendant and a resident of the forum are insufficient to establish . . . minimum contacts . . . .” (citation omitted); and
• Texas choice-of-law clause. “[T]he choice-of-law clause in the Master Services Agreement does not suggest the parties expected to resolve their disputes in Texas. That’s because the same Agreement also required that arbitration take place in accordance with the AAA’s venue-selection rules—i.e., as close as possible to the project in Florida.”

The long-running litigation about 3D printed firearms (to the right, the single-shot “Liberator” returned to the Fifth Circuit in Defense Distributed v. Grewal, in which a manufacturer sought relief in Texas from the New Jersey AG. The Court found personal jurisdiction in Texas, noting: “Grewal’s conduct beyond sending the cease-and desist letter confirms his intent to crush Defense Distributed’s operations and not simply limit the dissemination of digital files in New Jersey. Grewal’s enforcement actions are selective. He has not targeted the many similarly-situated persons who publish Defense Distributed’s files on the internet. Instead, he has focused solely on Defense Distributed.” No. 19-50723 (Aug. 19, 2020) (distinguishing Stroman Realty, Inc. v. Wercincki, 513 F.3d 476 (5th Cir. 2008).

“Jackson [National Life]’s objection to personal jurisdiction concerned only class members who were non-residents of Texas. Those members, however, were not yet before the court when Jackson filed its Rule 12 motions. What brings putative class members before the court is certification: ‘Certification of a class is the critical act which reifies the unnamed class members and, critically, renders them subject to the court’s power.’ When Jackson filed its pre-certification Rule 12 motions, however, the only live claims belonged to the named plaintiffs, all Texas residents as to whom Jackson conceded personal jurisdiction.” Accordingly, Jackson did not waive the issue of personal jurisdiction by raising it in the proceedings about certification. Cruson v. Jackson National Life, No. 18-40605 (March 25, 2020).

A fatal injury at the L’Auberge Casino in Lake Charles, Louisiana, led to litigation in Texas against the casino’s owner. The plaintiffs asserted general personal jurisdiction based on the casino’s substantial marketing efforts directed toward Texas. The Fifth Circuit acknowledged “a handful of . . . district court cases finding general jurisdiction against non-resident casinos for their localized marketing efforts,” but found that recent Supreme Court opinions about general jurisdiction meant that “local advertising, as a standalone factor, does not meet ‘the demanding nature of the standard for general personal jurisdiction over a corporation.'” Frank v. P N K (Lake Charles) LLC, No. 18-31060 (Jan. 21, 2020) (applying, inter alia, Daimler AG v. Bauman, 571 U.S. 117 (2014)).

Diece-Lisa Indus., Inc. v. Disney Enterprises, Inc., a dispute about trademark rights related to “Lots-O’-Huggin’ Bear” (right), analyzed whether the disposition of several consolidated cases on personal-jurisdiction grounds could be reviewed. After reviewing the specific claims and the applicable standards, the Fifth Circuit “conclude[d] that we have jurisdiction to review the interlocutory orders . . . because they can be ‘regarded as merged into the final judgment terminating'” one of the case numbers. It then affirmed, finding that the plaintiffs’ “franchise theory” (a kind of single-business-enterprise argument) lacked merit, and that a nonexclusive license agreement also was not, by itself, a basis for jurisdiction. No. 17-41268 (Nov. 19, 2019).

Jones, the heir of a former member of the Dixie Cups, a Louisiana-based musical group, sued the Artist Rights Enforcement Corporation in Louisiana for mishandling royalties. The Fifth Circuit affirmed the dismissal of Jones’s case for lack of personal jurisdiction, observing:

• The contract was not signed in Louisiana;
• “Even if the contract was discussed and drafted in Louisiana, the exchange of communications in carrying out a contract is not enough to establish personal jurisdiction”;
• Jones had nothing to do with any Louisiana-based discussions in any event;
• “When royalties were collected, they were sent to New York and stored in a New York bank”; and
• “Although AREC sent payments to Louisiana, this [was] . . . only because [the former band member] resided there, which fails to establish purposeful minimum contacts.”

Jones v. Artists Rights Enf. Corp., No. 19-30374 (Oct. 22, 2019) (unpublished).

The Flying Dutchman is a mythical ship that forever travels the seas, unable to find a port. Conn Appliances, Inc. v. Williams presents a similar tale about a dispute involving a retail installment contract. Williams sued Conn in Tennessee, realized that he had an arbitration agreement in his contract, and then dismissed his suit in favor of arbitration in Tennessee (the clause required arbitration “near his residence”). Williams won; he filed suit in Tennessee to enforce the award while Conn filed sued in its home state of Texas to vacate it (the clause allowed confirmation in “any court with jurisdiction”). The Fifth Circuit agreed that Williams was not subject to personal jurisdiction in Texas, and affirmed the dismissal of that action. Conn protested that it was not subject to jurisdiction in Tennessee, and the Court observed: “[E]ven if the Western District of Tennessee is not the proper forum, the lack of jurisdiction over Conn in another forum does not mean that the Southern District of Texas has personal jurisdiction over Williams.” No. 19-20139 (Sept. 4, 2019).

On the topic of personal jurisdiction, recent Supreme Court cases emphasize that “[i]t is the defendant, not the plaintiff or third parties, who must create contacts with the forum State..” Walden v. Fiore, 571 U.S. 277 (2014).  An interesting test of that principle arose in Carmona v. Leo Ship Management, No. 18-20248 (May 10, 2019), in which a stevedore sued for injuries incurred in Houston while unloading pipe from a globe-circling freighter. He sued LSM, the company that by contract operated the M/V Komatsushima Star (right) (since, renamed the M/V Kacey, and moored in the Yellow Sea as of this post). LSM did not own the ship “and could not direct where it traveled, what it carried, or for whom it worked,” and thus tried to invoke Walden and related cases about jurisdiction arising from a “mere fortuity.”

The Fifth Circuit observed:

• “[A] defendant’s contacts with a forum and the purposefulness of those contacts are distinct–though often overlapping –inquiries. Although tortious conduct within a forum ensures the existence of contacts it does not always guarantee that such contacts were deliberate.” (citation omitted);
• “Especially considering that the contract was freely  terminable with two months’ notice, LSM was hardly compelled to travel to Texas against its will. Rather, it made a deliberate choice to keep its employees aboard a ship bound for Texas” and thus “purposely availed itself” of the Texas forum;
• But as to one of Carmona’s claims: “LSM presented undisputed evidence that a third party had stowed the pipes aboard the ship while it was outside the United States,” thus establishing that “the claim that the pipes were improperly stowed does not stem from LSM’s activities in Texas.”

In a forum dispute arising from an oil-rig explosion, the Fifth Circuit rejected four arguments for personal jurisdiction in Texas over one of the parties, arising from that party’s litigation activity:

1. Counterclaiming. “[A] non-resident defendant may participate in litigation without submitting to the court’s jurisdiction so long as it maintains its objection to personal jurisdiction. Relatedly, this court has also held that filing a counterclaim or ‘third-party claim does not, without more, waive an objection to personal jurisdiction.'” (citation and footnote omitted);
2. Moving to compel arbitration. “Ironshore submitted to the court’s jurisdiction for the sole purpose of compelling arbitration. By submitting to the court’s power for this limited purpose and maintaining its personal jurisdiction motion to dismiss, Ironshore continued to object to ‘the power of the court’ and did not waive its personal jurisdiction defense.”
3. Demand letters. “Many other circuits have addressed similar scenarios in which a potential plaintiff sends a cease-and-desist letter threatening litigation to a potential defendant. None of these courts held that sending a letter amounts to
   purposeful availment.”
4. Settlement agreement with Texas forum clause. “There are no allegations of suit-related contact between Ironshore and Texas other than Ironshore’s
   participation as a defendant in litigation and the forum-selection clause in the
   settlement agreement . . . .”

Halliburton Energy Services, Inc. v. Ironshore Specialty Ins. Co., No. 17-20678 (April 17, 2019).

I think the server for this blog is located in Texas, but it could just as easily be on the South Pole – I have no control over (or interest in) how HostGator organizes its business. In the same spirit, the Fifth Circuit affirmed a personal jurisdiction dismissal in a trademark dispute between “greatfence.com” and “agreatfence.com“: “We need not decide today whether a web server’s location alone never suffices to establish personal jurisdiction. We simply hold that it cannot do so here, where there is no allegation, argument, or evidence that the defendants played any role in selecting the server’s location—or that its location was selected with the purpose or intent of facilitating the defendants’ business in the forum.” GreatFence.com v. Bailey, No. 17-20487 (June 13, 2018, unpublished) (emphasis in original).

Gotech, a Chinese company, “knowingly chose to ignore” a lawsuit filed against it by Nagravision in the Southern District of Texas, “and even the ensuing $100 million-plus default judgment” in favor of Nagravasion. After Nagravision began enforcement proceedings in Hong Kong, Gotech then sought relief from the judgment under Fed. R. Civ. P. 60(b)(4). The Fifth Circuit rejected challenges based on standing, federal question jurisdiction, and service of process, finding fundamental problems with each. As for personal jurisdiction based on Fed. R. Civ. P. 4(k)(2), which applies “where the defendant has contacts with the United States as a whole sufficient to satisfy due process concerns and the defendnat is not subject to jurisdiction in any particular state,” the Court acknowledged some disagreement about who has the burden of proof, especially in the Rule 60(b)(4) context, but found that Nagravision had met its initial burden and Gotech had not overcome it. Nagravision, S.A. v. GoTech bInt’l Tech. Ltd., No. 16-20817 (Feb. 7, 2018).

Sangha, the “master in command” of a merchant vessel, sued Navi8 Shipmanagement, his former employer, in Texas. To support personal jurisdiction, he cited a number of communications with him in Texas. Citing Walden v. Fiore, 134 S. Ct. 1115 (2014), the Fifth Circuit found those contacts inadequate: “Even though Navig8’s email communications happened to affect Cpt. Sangha while he was at the Port of Houston, this single effect is not enough to confer specific jurisdiction over Navig8.” And the Court found that “Cpt. Sangha’s reliance on the ‘effects’ test of Calder v. Jones, 465 U.S. 783 (1984), is unavailing” — “The proper question is not whether Cpt. Sangha experienced an innjury of effect in a particular location, but whether Navig8’s conduct connects it to the forum in a meaningful way.” Sangha v. Navig8 Shipmanagement, No. 17-20093 (Feb. 5, 2018).

Trois owned a gun collection and contracted with Apple Tree, an auction center based in Ohio. The auction did not go as well as Trois hoped, and he sued in Texas for breach of contract and fraudulent inducement. The Fifth Circuit found no personal jurisdiction over the contract claim: “The only alleged Texas contacts related to contract formation or breach are Schnaidt [Apple Tree’s principal]’s . . . conference calls negotiating the agreement while Trois was in Texas.” But as to fraud: “Although Schnaidt did not initiate the conference call to Trois in Texas, Schnaidt was not a passive participant on the call. Instead, he was the key negotiating party who made representations regarding his business in a call to Texas.” Trois v. Apple Tree Auction Center, Inc., No. 16-51414 (Feb. 5, 2018). The Court went on to find venue was also proper in Texas over the tort claim.

Sidestepping the question whether International Shoe overruled the century-old case of Penn. Fire Ins. Co. v. Gold Issue Mining, 243 U.S. 93 (1917), the Fifth Circuit held that registering to do business in Louisiana did not automatically consent to personal jurisdiction there:

Nowhere in Pennsylvania Fire did the Court hold that registering to do business in a state or appointing an agent for service of process acts as consent to any suit of any kind in that state. Instead, it merely concluded that defendants had consented to service of process in Missouri, resting largely on the fact that the state court had construed the Missouri statute to require such consent to suit for the service at issue. This case lacks what Pennsylvania Fire had: a clear statement from the state court construing the statute to require consent. Gulf Coast does not identify any statute or agreement that requires foreign entities to expressly consent to any suit in Louisiana.

Gulf Coast Bank & Trust Co v. Designed Conveyor Systems LLC, No. 17-30062 (Dec. 22, 2017, unpublished) (citations omitted).

Patterson sued Aker Subsea, in the Eastern District of Louisiana, for injuries he suffered while working on a boat off the coast of Russia. He asserted general personal jurisdiction under Fed. R. Civ. P. 4(k)(2) (which measures contacts in federal question cases with reference to the entire U.S., not just a single state), based on several secondment agreements by which Aker assigned its employees to an affiliate in Houston. Relying principally on Bowles v. Ranger Land Systems, 527 F. App’x 319 (5th Cir. 2013), the Fifth Circuit affirmed Aker’s dismissal, noting: “This court has declined to exercise general personal jurisdiction over a corporation where its most significant and continuous contact with the forum was having employees located there.” Patterson v. Aker Solutions Inc., No. 15-30690 (June 13, 2016).

Hazim, a resident of Kansas, sued S&D Ltd., a publisher based in the UK, about its handling of Hazim’s book. Their contract had Texas choice-of-law and forum-selection provisions. Finding that the specific terms of the forum selection provision were not dispositive, the Fifth Circuit held that under Int’l Energy Ventures Management LLC v. United Energy Group, 2016 WL 1274030 (5th Cir. March 31, 2016), Hazim did not establish personal jurisdiction: “[T]he contract was between a Kansas resident and a United Kingdom entity and contemplated performance in the United Kingdom and Kansas. Even accepting that the contract contained the Texas choice-of-law and forum selection provision (as the IVEM-UEG contract did) . . . the contract on which Hazim is suing is not sufficiently related to Texas[.]” Hazim v. Schile & Denver Book Publishers, No. 15-20586 (May 5, 2016, unpublished).

Judgment creditors garnished two oil tankers (including the M/V FMPC 30, right); the garnishees appealed as to the connection between them and the judgment debtors.  After reviewing the distinction between “alter ego” theories at the jurisdictional and merits stages, the Fifth Circuit reversed.  Finding that “[t]he [district court relied almost exclusively on two ‘organizational charts’ submitted by Plaintiffs (taken from Garnishees’ website),” the Court found that the charts “do not actually depict corporate structure” or ” show the functional relationship among the entities.”   Accordingly, the case for “jurisdictional veil piercing” was not established and the garnishment proceeding was dismissed.  Licea v. Curacao Drydock Co., No. 14-20619 (Nov. 23, 2015).

Eric Eddy alleged injury from a printing press.  The Fifth Circuit affirmed for lack of personal jurisdiction in Texas, holding:

1.  “Once the press was installed in Mississippi, it exited the stream of commerce because the Mississippi buyer was a consumer of the product, not a distributor or retailer.”  After that point, the movement of the press “was the result of ‘fortuitous’ and ‘attenuated’ acts of third parties[.]”  (The last sentence echoes the Supreme Court’s recent emphasis of this general concept in  Walden v. Fiore, 134 S. Ct. 1115 (2014)).

2.  While spare parts for the press were shipped by the defendant to Texas, no evidence showed that those parts contributed to the plaintiff’s injury, and the defendant “introduced uncontroverted evidence establishing that the drive shaft Eddy alleged caused his injury was not, and could not have been, the same shaft that was shipped with the spare parts.”

Eddy v. The Printers House (P) Limited, No. 15-10370 (Oct. 2, 2015, unpublished).

First Metropolitan Church sued Genesis Group, a company that helps churches obtain mortgage refinancing.  The Fifth Circuit affirmed dismissal for lack of personal jurisdiction in a short opinion, echoing its recognition of recent Supreme Court opinions in Monkton Ins. Servs. v. Ritter, 768 F.3d 429 (5th Cir. 2014).  An interactive website, even one that lists Texas business references, does not create general jurisdiction, and contracting with a Texas resident does not create jurisdiction if it does not “contemplate a long-term relationship with . . . continuing obligations and wide-reaching contacts.”  First Metropolitan Church of Houston v. Genesis Group, No. 15-20186 (Sept. 17, 2015, unpublished)

In resolving a personal jurisdiction issue that turned on a party’s agency, the Fifth Circuit observed:

• While a statement by a purported agent may not be hearsay, it is not admissible to establish “the existence or scope” of agency; and
• Correspondence that was not specifically directed to the plaintiffs does not establish agency by estoppel.

Sealed Appellant v. Sealed Appellee, No. 14-20204 (Aug. 17, 2015, unpublished).

A company sued a Hong Kong business in Texas for unpaid consulting fees.  The Fifth Circuit reversed the dismissal of the business for lack of personal jurisdiction, finding that “the nature of the relationship” between it and the plaintiff, as well as both parties’ “joint connection” to a transaction involving BP’s Houston office, made it “foreseeable that the hub of [plaintiff’s] consulting activity would be in Texas.”  It also found no “unique” burden on the business of having to litigate in the U.S.  The Court affirmed the dismissal of an in-state defendant (and thus the removal of the case based on diversity/improper joinder) for failure to state a contract, quantum meruit, or fraud claim against him. International Energy Ventures Management, LLC v. United Energy Group, Ltd., No. 14-20552 (Aug. 21, 2015). (This opinion has subsequently been withdrawn and replaced)

Jefferson sued Delgado Community College, alleging that it was “an agency or instrumentality of the government of the State of Louisiana.”  The Louisiana Attorney General appeared for the State, argued that she had not correctly named the State in the case, and suggested how to properly serve the college.  Jefferson v. Delgado Community College, No. 14-30379 (March 12, 2015, unpublished).  The district court denied the AG’s motion to dismiss, pointing to what the pleading said.  The AG sought appellate review and the Fifth Circuit found it had no jurisdiction.  The ruling was not appealable as a collateral order: “For example, personal jurisdiction implicates a defendant’s due process rights, but a defendant may not appeal the denial of a motion to dismiss based on lack of personal jurisdiction under the collateral order rule.”  The Court also denied mandamus relief, noting that the district court’s ruling was not clearly erroneous given the language of the pleading, and suggesting that the parties may wish to consider the AG’s suggestion about proper service for future proceedings in the case.

In Matassarin v. Grosvenor, the Fifth Circuit reversed a dismissal on personal jurisdiction grounds, reminding: “For an intentional tort claim, purposeful availment can be established through ‘a single phone call and the mailing of allegedly fraudulent information’ to the forum state if ‘the actual content of communications with a forum gives rise to’ the claim, as when the communications’ content was allegedly fraudulent.”  (quoting Lewis v. Fresne, 252 F.3d 352, 355-56 (5th Cir. 2001)).  Here, the plaintiff described communications, received in Texas by email and fax, that he alleged to contain misrepresentations about several features of a condominium unit.

Ritter, a resident of Texas, owned an insurance company in the Cayman Islands. Litigation broke out, in Texas, between Ritter and the Cayman-based entity that managed the insurance company.  Ritter sought to join a Cayman-based bank to the Texas case, arguing that it failed to detect the manager’s wrongdoing.  The district court dismissed for lack of personal jurisdiction and the Fifth Circuit affirmed.  Monkton Ins. Servs. v. Ritter, No. 13-50941 (Sept. 26, 2014).  The case is notable as one of the first applications by the Circuit of two 2014 Supreme Court cases about personal jurisdiction.

First, as to general jurisdiction, applying Daimler AG v. Bauman, 134 S. Ct. 746 (2014), the Court observed: “It is . . . incredibly difficult to establish general jurisdiction in a forum other than the place of incorporation or principal place of business.”  The Court also reminded that a “sliding scale” analysis about the jurisdictional effect of a defendant’s website “is not well adapted to the general jurisdiction inquiry, because even repeated contacts with forum residents by a foreign defendant may not constitute the requisite substantial, continuous and systematic contacts required for a finding of general jurisdiction—in other words, while it may be doing business with Texas, it is not doing business in Texas.” (quoting Revell v. Lidov, 317 F.3d 467, 471 (5th Cir. 2002) (citing Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997)).

Second, as to specific jurisdiction, the Court noted that Walden v. Fiore, 134 S. Ct. 1115 (2014), emphasized that a plaintiff’s unilateral actions with respect to the forum cannot create personal jurisdiction.  Here, the bank transactions at issue were initiated by Ritter, running afoul of this principle.  The Court also found no abuse of discretion in denying jurisdictional discovery.

Plaintiffs, citizens of Texas, sued two citizens of Massachusetts and their companies, alleging violations of the Texas Fraudulent Transfer Act.  Dontos v. Vendomation NZ Ltd., No. 12-10986 (Sept. 16, 2014, unpublished).  The district court dismissed for lack of personal jurisdiction and the Fifth Circuit reversed.

Noting that it was “hesitant to make per se rules regarding fact-specific minimum contacts analysis,” the Court observed generally that “a debtor who is liable under TUFTA to a Texas resident is likely subject to suit in the creditor’s forum state because the debtor acted with actual or constructive fraudulent intent to expressly aim their conduct at a creditor in the forum, where the tort’s harm was felt.”  Similarly, while “a mere ‘passive transferee[]” is unlikely to be subject to jurisdiction in the creditor’s resident state,” if ” the transferee ‘precipitate[s] and direct[s] an alleged fraudulent transfer at the expense of a known . . . creditor in Texas,” jurisdiction is likely.  (reviewing and applying Mullins v. TestAmerica, Inc., 564 F.3d 386, 400 (5th Cir. 2009) (citing Calder v. Jones, 465 U.S. 783, 789-90 (1984)).

Applying those principles, and accepting the plaintiffs’ allegations as true, the Court found sufficiently detailed allegations to state a prima facie case for personal jurisdiction as to both the debtor and the initial transferees.

Two classic jurisdictional issues were presented in Special Industries, Inc. v. Zamil Group Holding Co., No. 13-20231 (Aug. 5, 2014, unpublished), which affirmed a dismissal on personal jurisdiction grounds in a forum dispute between Texas and Saudi Arabia.

First, citing Moncrief Oil Int’l, Inc. v. OAO Gazprom, 481 F.3d 309 (5th Cir. 2007), the Fifth Circuit emphasized the importance of the “hub” of contract performance, finding: “The foreseeability that [plaintiff] would perform part of its obligations under the contract in Texas, and that the parties did in fact engage other Texas companies for work on the project, is not enough for a finding of specific jurisdiction over the . . . defendants.  The contracts were formed outside of Texas, did not expressly provide for work to be done in Texas, the [plaintiff] individuals performing work under the contract did not do so solely from Texas, Texas was not the hub of the parties’ activities, the contracts’ choice of law provisions did not provide for Texas law, and payments under the contract were not made to Texas.”

Second, as to an “alter ego” theory of jurisdiction over another defendant, the Court held: “We find no authority allowing for the assertion of general jurisdiction over a foreign parent corporation premised only on the foreign corporation’s ownership of subsidiaries in the forum and representations by the foreign parent of its ‘unified’ corporate structure. The assertion of jurisdiction must be premised either on sufficient minimum contacts of the foreign parent with the forum or on some evidence demonstrating the parent company’s actual control over the internal business operations and affairs of the subsidiary.” (distinguishing Daimler-Benz AG v. Olson, 21 S.W.3d 707 (Tex. App.–Austin 2000, pet. dism’d w.o.j.)

Defendant was personally served in Louisiana; the question was whether the plaintiffs fraudulently induced her to come there.  Gatte v. Dohm (June 23, 2014, unpublished). More specifically, Defendant (part owner of a Mexican clinic where the plaintiffs’ relative had died) alleged she had been duped into travelling to Louisiana to return the decedent’s ashes and personal effects to family members, as they were too distraught to travel themselves.  The district court found fraudulent inducement; the Fifth Circuit reversed, noting a conflict between the affidavits submitted by the parties and applying the principle: “Conflicts between the facts contained in the parties’ affidavits must be resolved in the plaintiff’s favor for purposes of determining whether a prima facie case for personal jurisdiction exists.”  (citing D.J. Investments, Inc. v. Metzeler Motorcycle Tire Agent Gregg Inc., 754 F.2d 542, 546 (5th Cir. 1985).

“Picking up where we left off in Germano v. Taishan Gypsum Company, Ltd., 742 F.3d 576 (5th Cir. 2014),” the Fifth Circuit affirmed personal jurisdiction in three other suits involving default judgments arising from the “Chinese Drywall” MDL litigation.  In re: Chinese-Manufactured Drywall Products Liability Litig., No. 12-31213 (May 20, 2014).  Again, the Court found jurisdiction for the same basic reasons related to the “stream of commerce.” Applying Florida and also Louisiana law, this opinion also features a detailed discussion of when an agency relationship can give rise to jurisdiction, applying the recent Supreme Court case of Daimler AG v. Bauman, 134 S. Ct. 746 (2014).

The Chinese defendant in Germano v. Taishan Gypsum Co., part of the “Chinese Drywall” MDL proceeding, sought to set aside a default judgment for lack of personal jurisdiction.  742 F.3d 576 (5th Cir. 2014).  Applying Fourth Circuit law, which the Court characterized as taking a “more conservative” approach to recent Supreme Court decisions than the Fifth (see Ainsworth v. Moffett Engineering, 716 F.3d 174 (5th Cir. 2013).  The Court found jurisdiction under that Circuit’s “stream-of-commerce plus” test, noting that the defendant sold directly into Virginia, made markings on its product specific to the Virginia customer, modified the design specifically for that customer, and had a plan to expand sales by leveraging the relationship with the customer.  The Court also found a lack of excusable neglect, noting that service was proper under the Hague Convention and that the defendant delayed seeking legal counsel for many months.  

Plaintiffs sued for defamation, based on critical comments about their role in the Chinese drywall MDL that ended up on the “Above the Law” website.  Herman v. Cataphora, Inc., No.12-30966 (Sept. 17, 2013).  The Fifth Circuit agreed with the district court that Louisiana had no jurisdiction over the defendants because that state was not the “focal point” of the statements, citing Calder v. Jones, 465 U.S. 783 (1984) and Clemens v. McNamee, 615 F.3d 374 (5th Cir. 2010).  It took issue, however, with the district court granting the motion to dismiss and then ordering a transfer.  It noted that a district court has authority to transfer (under 28 U.S.C. § 1406(a)) if it determines that it lacks personal jurisdiction, and therefore vacated the dismissal order and remanded with instructions to order transfer.

Plaintiff asserted personal jurisdiction under Calder v. Jones, 465 U.S. 783 (1984), alleging that a receiver’s purported misconduct would forseeably damage investors in Texas. Bustos v. Lennon, No. 12-50765 (August 16, 2013, unpublished).  The Fifth Circuit affirmed dismissal, finding that the alleged misconduct was not intentionally aimed at Texas, and that jurisdiction did not comport with “fair play and substantial justice” given the status of related litigation in another state.

An insurance company complained that its counsel allowed entry of a consent judgment in a Louisiana case that wrongly imposed $400,000 in liability on it that another insurer should have covered. The company, based in South Carolina, sued for legal malpractice in Texas, the location of the third-party administrator who had overseen the counsel. Companion Property & Casualty v. Palermo, No. 12-11255 (July 17, 2013).  The Fifth Circuit found that the firm’s relationship with the TPA was not enough to establish general jurisdiction, and also found no basis for personal jurisdiction in Texas over the Louisiana-based firm.  The counsel was in Louisiana, the alleged malpractice occurred in Louisiana, and the insured was in South Carolina: “Although [the firm’s] contacts with [the TPA] are factually related – and perhaps integral – to the substance of [Plaintiff’s] claim, the alleged malpractice does not arise from a breach of some duty owed to [the TPA].”

The defendant in Bowles v. Ranger Land Systems did not have a bank account, registered agent, or office in Texas.  No. 12-51255 (June 16, 2013, unpublished).  As a defense contractor, the company had a handful of employees at three Army bases in Texas, but that presence was not substantial enough to create general jurisdiction.  (citing Johnston v. Multidata Systems Int’l Corp., 523 F.3d 602, 612-13 (5th Cir. 2008) (presence of two employees, who reported to out-of-state supervisor, was “certainly a regular contact with Texas” but was “not substantial enough to create a general business presence in Texas”)).  The Fifth Circuit also found no abuse of discretion in denying further jurisdictional discovery based on these allegations.

In 2011 in J. McIntyre Machinery v. Nicastro, the Supreme Court revisited the issue of specific personal jurisdiction over a manufacturer based on putting a product into the “stream of commerce.”  131 S. Ct. 2780 (2011).  While the fractured Court did not produce a majority opinion, the plurality and a 2-Justice concurrence expressed concern about a view of that doctrine that would allow jurisdiction in a particular state based on a manufacturer’s general intent to do business across the country.  The Fifth Circuit directly addressed that language in Ainsworth v. Moffett Engineering, No. 12-60155 (May 9, 2013), finding that the plurality was not controlling, and that the 2-Justice concurrence was decided on the limited ground that no formulation of the doctrine would allow jurisdiction based on that manufacturer’s small number of shipments into the forum.  Because the defendant in Ainsworth had over 100 shipments during the relevant time, jurisdiction was appropriate. Language from past Circuit cases that may be inconsistent with McIntyre was noted but kept in place for now.