Online Membership Contracts and “Continuing Obligations” Can Establish Minimum Contacts for Specific Jurisdiction

1. Introduction

In Raiz Federal Credit Union v. Rize Federal Credit Union (5th Cir. Mar. 9, 2026) (per curiam, unpublished), the Fifth Circuit vacated a Texas federal district court’s dismissal for lack of personal jurisdiction in a trademark and unfair competition dispute between two credit unions with similar names and branding.

Parties. Plaintiff–Appellant Raiz Federal Credit Union (“Raiz”) is based in El Paso, Texas, and owns two registered trademarks used in connection with its financial services. Defendant–Appellee Rize Federal Credit Union (“Rize”) is based in California, maintains branches only in California and Nevada, and rebranded from “SCE Federal Credit Union” to “Rize” in June 2024.

Key issue on appeal. Whether a Texas federal court may exercise specific personal jurisdiction over Rize, a nonresident defendant, based on Rize’s relationships with Texas-based members and related activities (including online onboarding).

2. Summary of the Opinion

The Fifth Circuit held that Raiz made a sufficient prima facie showing of minimum contacts (the first prong of the specific jurisdiction test) because Rize voluntarily entered into membership agreements with Texas residents that create “continuing obligations”—even though Rize lacks Texas branches, property, or employees and does not target Texas advertising.

The panel vacated the dismissal and remanded because the district court did not properly reach the second and third prongs: (2) whether Raiz’s claims arise out of or result from Rize’s Texas-related contacts, and (3) whether exercising jurisdiction would be fair and reasonable.

3. Analysis

A. Precedents Cited

• Luv N' care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465 (5th Cir. 2006)
  The court relied on Luv N' care for the core “purposeful availment” formulation—minimum contacts exist when a defendant purposely avails itself of the privilege of conducting activities in the forum such that it can reasonably anticipate being haled into court. Luv N' care also supplied the de novo standard of review for personal jurisdiction determinations.
• Wilson v. Belin, 20 F.3d 644 (5th Cir. 1994) and Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266 (5th Cir. 2006)
  These cases anchored the procedural posture: because the district court ruled without an evidentiary hearing, Raiz only needed a prima facie showing, and factual disputes are resolved in the plaintiff’s favor.
• Carmona v. Leo Ship Mgmt., Inc., 924 F.3d 190 (5th Cir. 2019)
  Carmona provided the Fifth Circuit’s three-prong framework for specific jurisdiction and the burden-shifting rule: if the plaintiff satisfies prongs one and two, the defendant must show unfairness under prong three. The panel also used Carmona to emphasize that Texas’s long-arm statute is coextensive with due process, collapsing the statutory and constitutional inquiries.
• Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S. Ct. 2174 (1985)
  Burger King was the opinion’s principal doctrinal engine. It supplied (i) the warning against “random, fortuitous, or attenuated” contacts, (ii) the central importance of contractual “continuing obligations” in establishing purposeful availment, and (iii) the relevance (but non-dispositive nature) of choice-of-law clauses. The panel leaned on Burger King to treat Rize’s membership agreements as more than one-off interactions: they are ongoing commercial relationships.
• Vault Corp. v. Quaid Software Ltd., 775 F.2d 638 (5th Cir. 1985)
  Vault Corp. supported the proposition that even a small percentage of business tied to the forum can still constitute minimum contacts. The panel cited it to rebut the argument that “less than one percent” Texas membership defeats minimum contacts as a matter of law.
• Monkton Ins. Servs., Ltd. v. Ritter, 768 F.3d 429 (5th Cir. 2014)
  The court acknowledged Monkton’s limiting principle—merely contracting with a forum resident does not automatically establish minimum contacts— and then distinguished this case by focusing on the nature of the contractual obligations (ongoing member relationships in a financial-services context).
• Travelers Health Ass'n v. Virginia, 339 U.S. 643, 70 S. Ct. 927 (1950)
  Travelers Health reinforced the panel’s characterization of membership relationships as continuing and non-isolated, cutting against Rize’s attempt to portray the Texas ties as episodic or incidental.
• Admar International v. Eastrock, L.L.C., 18 F.4th 783 (5th Cir. 2021) and Mink v. AAAA Dev. LLC, 190 F.3d 333 (5th Cir. 1999)
  These cases framed the website issue. The district court treated Admar as effectively dispositive against jurisdiction when a website is merely accessible nationwide. The Fifth Circuit corrected that reading: Admar distinguishes the scenario where a defendant uses the website to engage in business transactions with forum residents or enters contracts with them—precisely what Raiz alleged here—citing Mink for that distinction.
• Walden v. Fiore, 571 U.S. 277, 134 S. Ct. 1115 (2014)
  Walden supplied the reminder that physical presence is not required for jurisdiction, which mattered because Rize has no Texas branches, property, or employees.
• Pervasive Software Inc. v. Lexware GmbH & Co. KG, 688 F.3d 214 (5th Cir. 2012) and Stuart v. Spademan, 772 F.2d 1185 (5th Cir. 1985)
  The court used these cases to explain the nuanced role of choice-of-law clauses: under Pervasive Software, they can reinforce deliberate affiliation with a forum when combined with other factors; under Stuart, they may be insufficient to establish purposeful availment when the totality of contacts remains weak. Here, the clause selecting California law supported California contacts but did not negate Texas minimum contacts.

B. Legal Reasoning

1) Correcting the prong-one/prong-two conflation.
The panel criticized the district court for discussing “suit-related contacts” while purporting to analyze only minimum contacts (prong one). That phrasing risks collapsing prong one (whether the defendant deliberately created forum contacts) into prong two (whether the claim arises from those contacts). The Fifth Circuit’s remedy was modest but consequential: it decided only prong one and sent the rest back.

2) Why Rize’s Texas membership relationships amounted to purposeful availment.
The court treated Rize’s relationship with Texas members as contractual, ongoing, and voluntarily accepted—hallmarks of purposeful availment under Burger King Corp. v. Rudzewicz. While Rize argued that Texas residents initiated contact via phone or online application (suggesting unilateral activity), the panel found that Rize’s acceptance of those applicants and entry into membership agreements transformed the interaction into forum-relevant, deliberate conduct.

3) Website accessibility was not the end of the analysis.
The panel rejected a categorical rule that a generally accessible website cannot support jurisdiction. Reading Admar International v. Eastrock, L.L.C. carefully, it emphasized that jurisdiction becomes more plausible where the defendant’s website is used to transact with forum residents and to form contracts, consistent with the Mink v. AAAA Dev. LLC line of authority.

4) Low volume and “fortuity” did not defeat minimum contacts.
The fact that Texas members represented less than one percent of Rize’s total membership did not preclude jurisdiction, per Vault Corp. v. Quaid Software Ltd.. The panel did acknowledge that many Texas members became members while living elsewhere (a potentially “fortuitous” connection), but it emphasized that at least some members originated from Texas—including members joining after the rebrand—and, critically, that Rize maintained ongoing obligations to those members.

5) The other asserted contacts were treated as weaker.
The court discounted (i) emails/solicitations that were triggered by service usage rather than geographic targeting, and (ii) Rize’s sponsorship/attendance at a national credit-union conference in Texas, characterizing the conference as a “fortuitous” contact not meaningfully directed at Texas consumers.

6) Choice-of-law did not immunize Rize from Texas jurisdiction.
The California choice-of-law clause mattered under Burger King, but it did not negate Texas contacts. The panel treated it as compatible with the notion that a defendant may have significant affiliations with multiple states for jurisdictional purposes.

7) Limited holding and remand.
The Fifth Circuit held only that prong one was satisfied on the prima facie record. It remanded for determinations on prong two (nexus between Texas contacts and Raiz’s Lanham Act/unfair competition claims) and prong three (fairness and reasonableness), citing Carmona v. Leo Ship Mgmt., Inc..

C. Impact

1) Remote, contract-based financial services and jurisdiction.
The opinion signals that out-of-state financial institutions (and similar membership/subscription businesses) can create minimum contacts in a forum state through ongoing account relationships with residents—even without branches, employees, or targeted advertising there. The key is not sheer volume but whether the defendant voluntarily undertakes continuing obligations to forum residents.

2) Website-based onboarding is jurisdictionally meaningful when it forms contracts.
The decision strengthens the Fifth Circuit’s distinction between passive web presence and web-enabled contracting/transactions with forum residents. Litigants should expect closer scrutiny of how online systems actually function: application flow, acceptance practices, ongoing servicing, and related communications.

3) Practical litigation consequences in trademark disputes.
Although this is a trademark and unfair competition case, the jurisdictional reasoning is not “trademark-specific.” Still, it may matter frequently in trademark disputes, where alleged infringement is often disseminated through branding and online presence. Plaintiffs may use “continuing obligations” to anchor minimum contacts where “targeted advertising” evidence is weak.

4) What remains open on remand.
The decisive battle may shift to prong two: whether Raiz’s claims “arise out of or result from” Rize’s Texas contacts. The district court must determine whether the alleged infringement is sufficiently connected to Rize’s Texas member relationships (e.g., use of the mark in servicing Texas members, member-facing portals, Texas-directed account communications, or Texas member acquisition after rebranding). The fairness prong could also become salient given Rize’s out-of-state operations.

4. Complex Concepts Simplified

Specific personal jurisdiction

The court’s power over an out-of-state defendant for claims connected to the defendant’s contacts with the forum state (as opposed to “general jurisdiction,” which is all-purpose and typically tied to where the defendant is essentially at home).

Minimum contacts / purposeful availment

The defendant must have deliberately created a meaningful relationship with the forum—so it is fair to expect being sued there. Ongoing contracts and continuing services to residents can qualify.

“Random, fortuitous, or attenuated” contacts

Accidental or incidental connections (e.g., a customer moves after joining) generally do not show the defendant chose to engage with the forum.

Prima facie showing

At the motion-to-dismiss stage without an evidentiary hearing, the plaintiff need only present enough facts that—if taken as true—support jurisdiction.

Choice-of-law clause

A contract term selecting which state’s law governs disputes. It can be evidence of deliberate affiliation with a state, but it does not automatically decide jurisdiction.

Website jurisdiction distinction

Merely having a website accessible in a forum is often insufficient. Using the website to transact with residents, form contracts, and maintain ongoing commercial relationships can support minimum contacts.

5. Conclusion

Raiz Federal Credit Union v. Rize Federal Credit Union clarifies that, in the Fifth Circuit, a nonresident defendant can establish minimum contacts with Texas by voluntarily entering into and maintaining ongoing membership contracts with Texas residents, including through online onboarding—without physical presence or Texas-targeted advertising. Because the district court did not fully analyze whether the claims arise from those contacts or whether jurisdiction would be fair and reasonable, the case was properly vacated and remanded, leaving the nexus and fairness questions for further development.