ORLANDO S. GARCIA, U.S. District Judge.
Came on this date for consideration the Motion to Dismiss for Lack of Personal Jurisdiction filed by the Defendants on August 20, 1999 (Docket Entry No. 3). The Court, based on its review of the motion, the Response filed by the Plaintiffs on December 1, 1999 (Docket Entry No. 10), and the Reply filed by Defendants on December 14, 1999 (Docket Entry No. 13), enters the following order.
I. Background of the Case
John Perrott Enterprises, Inc. ("JPE") originally filed this action in Judicial District Court, Bexar County, Texas against David A. Kerstein, as Executor of the Estate of James U. Blanchard, III ("Blanchard"), and Blanchard, Mozambique Enterprises, Ltd. ("BME") Therein, JPE brings claims sounding in quantum meruit and broach of contract for services it allegedly provided in the development of a game park/tourism development in Mozambique. JPE seeks actual and exemplary damages, pre- and post-judgment interest, and attorney's fees.
Except where it is necessary to distinguish between Blanchard and BME, the Court will refer to them collectively as Defendants.
Defendants removed the case to this Court on the basis of diversity of citizenship on August 20, 1999. They then filed the instant motion to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2), Federal Rules of Civil Procedure.
II. Long-Arm Jurisdiction Standard
This Court has personal jurisdiction over a nonresident defendant to the same extent that a Texas state court has such jurisdiction. Bullion v. Gillespie, 895 F.2d 213, 215 (5th Cir. 1990); Federal Rules of Civil Procedure, Rule 4(e). The reach of this jurisdiction is delimited by: (1) the state's long-arm statute; and (2) the Due Process Clause of the Fourteenth Amendment to the federal Constitution. Bullion, 895 F.2d at 215. Because the Texas long-arm statute extends to the limits of federal due process, the two-step inquiry is reduced to determining whether requiring Defendants defend this lawsuit in Texas would encroach on their individual liberty interests — not to be subjected to suits in a distant forum with which they have little connection-that are safeguarded by the Due Process Clause.
The Texas long-arm statute, Tex.Civ.Prac. Rem. Code Ann. § 17.02 (Vernon 1986), authorizes the exercise of jurisdiction over nonresidents "doing business" in Texas. The Texas Supreme Court has interpreted the "doing Business" requirement broadly, allowing the long-arm statute to reach as far as the federal Constitution permits. Schlobohm v. Schapiro, 784 S.W.2d 355, 357 (Tex. 1990).
The Due Process clause provides, "[N]or shall any State deprive any person of life, liberty, or property, without due process of law." U.S. Const. Amend. XIV, § 1.
Exercising personal jurisdiction over a nonresident does not violate due process principles if two requirements are satisfied. First, the nonresident defendant must have purposefully availed himself of the benefits and protections of the forum state by establishing "minimum contacts" with the forum state. International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). Second, the exercise of jurisdiction over the nonresident defendant must not offend "traditional notions of fair play and substantial justice." Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 113, 107 2.Ct. 1026, 1033, 94 L.Ed.2d 92 (1987) (citing International Shoe, 326 U.S. at 316, 66 S.Ct. at 158).
The "minimum contacts" prong of this inquiry can be further subdivided into contacts that give rise to "specific" personal jurisdiction and those that give rise to "general" personal Jurisdiction. Specific jurisdiction exists when the nonresident defendant's contacts with the forum state arise from, or are directly related to, the cause of action. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 8, 104 S.Ct. 1868, 1872 n. 8, 80 L.Ed.2d 404 (1984). The Texas Supreme Court has specified three factors necessary to obtain specific jurisdiction over a nonresident corporation, to-wit: (1) the nonresident defendant or foreign corporation must purposefully do some act or consummate some transaction in the forum state; (2) the cause of action must arise from, or be connected with, such act or transaction; and (3) the assumption of jurisdiction by the forum state must not offend traditional notions of fair play and substantial justice. . . . Schlobohm, 784 S.W.2d at 358.
If a nonresident defendant is found to have sufficient related or unrelated minimum contacts with the forum state, the Court must then ascertain whether the "fairness" prong of the inquiry is met. See Asahi, 480 U.S. at 105, 107 S.Ct. at 1033. The "fairness" of requiring a nonresident to defend a suit in a remote forum is a function of several factors, including the "interests of the forum State." Asahi, 480 U.S. at 113, 107 S.Ct. at 1033.
The factors to be considered in the fairness inquiry are: (1) [T]he burden upon the resident defendant; (2) the interests of the forum state; (3) the plaintiffs interest in securing relief; (4) "the interstate judicial system's interest in obtaining the most efficient resolution of controversies"; and (5) "the share interest of the several States in furthering fundamental substantive social policies." Bullion, 895 F.2d at 216 n. 5 citing Asahai, 480 U.S. at 113, 107 S.Ct. at 1033 (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292, 100 S.Ct. 559, 563, 62 L.Ed. 490 (1980))).
When, as here, a nonresident defendant files a motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing this Court's jurisdiction over the nonresident. Stuart v. Spademan, 772 F.2d 1185, 1192 (5th Cir. 1985). When the motion is ruled on without a hearing, the plaintiff may bear his burden by presenting a prima facie case that personal jurisdiction is proper. Wilson v. Belin, 20 F.3d 644, 648 (5th Cir. 1985), cert. denied, 513 U.S. 930, 115 S.Ct. 322, 130 L.Ed.2d 282 (1994); Spademan, 722 F.2d at 1192. "Moreover, on a motion to dismiss for lack of jurisdiction, uncontroverted allegations in the plaintiffs complaint must be taken as true, and conflicts between the facts contained in the parties' affidavits must be resolved in the plaintiffs favor for purposes of determining whether a prima facie case for personal jurisdiction exists." Bullion, 895 F.2d at 217 (quoting D.J. Investments, Inc. v. Metzeler Motorcycle Tire Agent Gregg, Inc., 754 F.2d 542, 545 (5th Cir. 1985)). In making its determination, the Court may consider affidavits, interrogatories, depositions, oral testimony, or any combination of recognized discovery methods. Spademan, 772 F.2d at 1992.
Utilizing these factual and legal standards, the Court analyzes the submissions of the parties to determine if it enjoys jurisdiction over the Defendants.
III. Arguments and Analysis
Initially, the Court notes that JPE has disavowed any intent to argue that Defendants are subject to the general jurisdiction of this Court. Accordingly, the focus of this inquiry will be limited solely to whether or not Defendants are amenable to the "specific jurisdiction" of the Court.
When specific jurisdiction is at issue, the minimum contacts inquiry focuses on whether the nonresident defendant has "`purposefully directed' his activities at residents of the forum." Asahi Metal Ind Co. v. Superior Court of Calif, 480 U.S. 102, 109-11, 107 S.Ct. 1026, 1031, 94 L.Ed.2d 92 (1987); Burger King, 471 U.S. at 472, 105 S.Ct. at 2182; Ketton v. Hustler Magazine, Inc., 465 U.S. 770, 773-75, 104 S.Ct. 1473, 1478, 79 L.Ed.2d 790 (1984), and the plaintiffs claims arise out of the defendant's purposeful contact with the forum. Burger King, 471 U.S. at 472, 105 S.Ct. at 2182; Helicopteros, 466 U.S. at 413-15, 104 S.Ct at 1872. 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'." Spademan, 722 F.2d at 1191. In some cases, one contact from which the cause of action arises may be sufficient to meet the minimum contacts requirement. Southmark Corp. v. Life Investors, Inc., 851 F.2d 763, 772 (5th Cir. 1988) (citing Micromedia v. Automated Broadcast Controls, 799 F.2d 230, 234 (5th Cir. 1986)).
To establish specific jurisdiction in a case based on a contract, as in the case sub judice, more than mere contracting with a resident of the forum state is necessary to subject a nonresident to the forum's jurisdiction. Colwell Realty Invest., Inc. v. Triple T Inns, Inc., 785 F.2d 1330 (5th Cir. 1986). Instead, courts must pursue a "highly realistic" approach, focusing on factors such as "prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing . . ., in determining whether the defendant purposefully established minimum contacts within the forum." Burger King, 471 U.S. at 479.
JPE contends that Defendants are subject to personal jurisdiction in Texas because they "`reached out' from Louisiana and created a continuing relationship with [JPE], a citizen of Texas." See Plaintiffs Response to Defendants' Motion to Dismiss for Lack of Personal Jurisdiction ("Plaintiffs Response") at p. 2. Moreover, JPE argues, specific jurisdiction over the Defendants exists because much of the work under the contract was performed by JPE in Texas and checks to reimburse JPE for telephone and fax communications it made during the "prefeasability phase of performance were mailed by BME to JPE in Texas. Naturally, Defendants maintain that they are beyond the reach of the long arm jurisdiction of Texas because (1) the material performance under any contract that existed between the parties was to be performed in Mozambique, (2) all communications, saving one minor discussion that James Blanchard had with JPE during a visit to San Antonio, took place outside of Texas, and (3) Defendants did not require JPE to perform any act in Texas.
Initially, the Court finds that much of the activity on which JPE relies in attempting to satisfy the minimum contacts requirement is conduct which can only be characterized as the unilateral activity of JPE itself, not the actions of Defendants. As noted earlier, the minimum contacts requirement is satisfied only when the contact with the forum state is a result of the defendant's purposeful conduct and does not arise from the unilateral activity of the plaintiff. World-Wide Volkswagen Corp v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980) (emphasis added). Therefore, JPE's references to such activities as Perrott traveling to London, South Africa, Mozambique and Costa Rica with Blanchard is misguided. None of these events involve activities taken by Blanchard or BME in Texas. Likewise, JPE's listing of all the activities it conducted in Texas from April 11, 1995 to June 13, 1995, prior to Perrott relocating to Mozambique to work on the project, is immaterial. At the risk of over stressing the point, it is only the conduct of the nonresident which is aimed at the forum state that is determinative of whether or not the exercise of specific jurisdiction by the forum state's tribunal is proper.
As for those actions of the Defendants referenced by JPE, many are of the sort which courts have deemed insufficient to support a finding that specific jurisdiction exists over a nonresident defendant. First, the law is settled that merely contracting with a resident of the forum state does not subject a nonresident defendant to the jurisdiction of the forum state. See Holt Oil Gas Corporation v. Harvey, 801 F.2d 773, 778 (5th Cir. 1986), cert. denied, 481 U.S. 1015, 107 S.Ct. 1892, 95 L.Ed.2d 499 (1987). Also, the exchange of communications in the development of a contract is "insufficient to be characterized as purposeful activity invoking the benefits and protection of the forum state's laws." Hydrokinetics, Inc. v. Alaska Mechanical, Inc., 700 F.2d 1026, 1029 (5th Cir. 1983), cert. denied, 466 U.S. 962, 104 S.Ct. 2180, 80 L.Ed.2d 561 (1984) (citing Benjamin v. Western Boat Building Corp, 472 F.ZD 723, 729 (5th Cir.), cert. denied, 414 U.S. 830, 94 S.Ct. 60, 38 L.Ed.2d 64 (1973)). Likewise, engaging in communications with a resident of the forum state during the course of carrying out a contract does not subject a nonresident to the jurisdiction of the state. See Patterson v. Dietze, Inc., 764 F.2d 1145, 1146-47 (5th Cir. 1985). Given this, it naturally follows that the combination of executing a contract in the forum state and engaging in communications with a resident of the state during the course of performance of the contract is likewise insufficient to establish the requisite minimum contacts necessary to support the exercise of jurisdiction over a nonresident defendant. Gundle Lining Construction Corporation v. Adams County Asphalt, Inc., 85 F.3d 201, 205 (5th Cir. 1996) (citing Spademan, 772 F.2d at 1193). Also, the fact that payment checks are mailed into the forum state does not weigh heavily in the consideration. Hydrokinetics, 700 F.2d at 1029.
Accordingly, JPE's contention that the fact that Blanchard executed the contract with JPE in Texas, frequently communicated from places outside of Texas with JPE in Texas about the work being performed by JPE and Bechtel Corporation in Texas on the project, and mailed checks from Louisiana to JPE in Texas constitute the requisite minimum contacts to justify this Court exercising its specific jurisdiction over the Defendants must be rejected.
With regard to the lone trip Blanchard did make to Texas in June of 1995, Perrott avers as follows in his affidavit:
Mr. Blanchard came to meet me in San Antonio, Texas, on June 2. We discussed the purpose of his trip to Texas, which was to consolidate our thinking about the information gathered, contacts made, and work done over the previous seven (7) weeks, but primarily to review the competitive bids, to made a decision on Mr. Blanchard's choice between Bechtel and Bovis U.K. to lead the feasibility study, and to discuss further the terms of my participation via JPEI in the project.
Mr. Blanchard and I met all day and worked on the project in my office on June 3. We had telephone conferences with Bechtel representatives, WATG (architects) and Horwath (market analysts) in London. JPEI furnished Mr. Blanchard detailed cost estimates from Bechtel and Bovis U.K. I furnished Mr. Blanchard much information about those companies, based upon my experience. Mr. Blanchard finally chose Bechtel over Bovis U.K.; and we informed Bechtel of this decision from JPEI's office in Texas. The selection of Bechtel to prepare the feasibility study was a critical step to advancement of the project.
On the afternoon of June 4, Mr. Blanchard returned to New Orleans, after having hired Bechtel and made a commitment to proceed with the feasibility study, with JPEI as his project manager.
At my office in Texas, Mr. Blanchard formally, verbally, engaged JPEI with the title of Project Manager to oversee preparation of the feasibility study first from my office at Fair Oaks Ranch, Texas, then on site in Mozambique.
See Affidavit of John R. Perrott, pages 7-8.
Even assuming, as it must, that everything contained in the above-quoted excerpt is true, the Court is nevertheless compelled to conclude that this single visit by Blanchard to Texas, though relevant to the inquiry, is not sufficient to support a finding that Defendants purposefully availed themselves of the benefits and protections of Texas laws such that it would not be unfair or unreasonable to require them to defend this suit before this Court. This conclusion is based on a comparison of these facts with those alleged by the plaintiffs in Hydrokinetics and Spademan, both cases where the court determined that the nonresident defendant had insufficient contacts with Texas to support the exercise of specific jurisdiction over him.
In Hydrokinetics, the plaintiff, Hydrokinetics, alleged that Alaska Mechanical was subject to the specific jurisdiction of the Texas court based on the following: (1) Alaska Mechanical agreed to purchase specific goods to be manufactured in Texas; (2) payment for these goods was to be made in Texas; (3) before any written agreement was signed extensive communications occurred between the parties, originating in Texas and Alaska; (4) officers of Alaska Mechanical traveled to Texas to "close" the deal; and (5) the contract was formally created in Texas because that was the place of the acceptance of Alaska Mechanical's offer lay Hydrokinetics. Hydrokinetics, 700 F.2d at 1028-1029. The Fifth Circuit affirmed the district court's dismissal for lack of jurisdiction over Alaska Mechanical, opining:
Although it did agree to purchase goods which it knew were to be manufactured by Hydrokinetics in Texas, no performance by Alaska Mechanical was to take place in Texas, other than perhaps the payment for the goods. We do not believe that the unilateral activity of Hydrokinetics in Texas satisfies the requirement of contact between Alaska Mechanical and the state of Texas. . . . Nor do we weigh heavily the fact that Alaska Mechanical may have mailed payment checks into the forum state in exchange for the goods.
See U-Anchor Advertising, Inc. v. Burt, Tex. 1977,
553 S.W.2d 760, 762,
cert. denied
434 U.S. 1063,
98 S.Ct. 1235,
55 L.Ed.2d 763 (1978). Yet we do consider significant that only a single transaction is involved in this case, governed by Alaska law, which is the defendant's sole contact with the forum state. The only performance in Texas was that of the plaintiff, with delivery by Hydrokinetics taking place in the state of Washington. As for the exchange of communications between Texas and Alaska in the development of the contract, that in itself is also insufficient to be characterized as purposeful activity invoking the benefits and protections of the forum state's laws.
See Benjamin v. Western Boat Building Corp., 5 Cir. 1973,
472 F.2d 723, 729,
cert. denied, 1973,
414 U.S. 830,
94 S.Ct. 60,
38 L.Ed.2d 64.
Accord, Charia v. Cigarette Racing Team, Inc., 5 Cir. 1978,
583 F.2d 184, 187-88. That officers of Alaska Mechanical twice traveled to Texas to inspect Hydrokinetic's facilities and to resolve the dispute between the parties is relevant, but in this case we do not find it is sufficient to alter the basic quality and nature of Alaska Mechanical's contact with the state of Texas. Although the bargain may have been cemented in Texas when Hydrokinetics accepted Alaska Mechanical's offer, the significance of that is diminished by the provision specifying that the agreement be governed and construed according to the laws of the state of Alaska. We do not hold that the facts relied on by Hydrokinetics in support of its contention that the district court in Texas has jurisdiction over the person of the defendant are not relevant to the determination; we merely conclude that, considering the totality of the facts of this case, the necessary inference of purposeful availment is not supported.
700 F.2d at 1029-1030 (citations omitted).
In Spademan, a diversity action alleging breach of contract, the plaintiffs argued that the district court wrongfully granted Spademan's motion to dismiss for lack of personal jurisdiction when the evidence showed the following with regard to his contacts with Texas: (1) Spademan entered into a contract with Texas residents; (2) Spademan shipped ski bindings to the plaintiff in Texas for modification; (3) Spademan, or his attorneys, and the plaintiffs exchanged letters and telephone calls regarding the assignment of the patent and the reissuance of the patent covering the ski binding; (4) the amended agreement included a choice-of-law provision that anticipated the application of Texas law; (5) SRS, Spademan's company in California, shipped its products to Texas; and (6) SRS marketed the modified ski bindings in Texas. The Fifth Circuit rejected plaintiffs argument and affirmed the district court, explaining:
The district court correctly observed that Spademan's shipment of two bindings to the plaintiffs in Texas is of little weight, citing
Hydrokinetics, Inc. v. Alaska Mechanical, Inc., 700 F.2d 1026, 1028 (5
th cir. 1983),
cert. denied,
466 U.S. 962,
104 S.Ct. 2180,
80 L.Ed.2d 851 (1984). . . . Further, we have held that an exchange of communications between a resident and a nonresident in developing a contract is insufficient of itself to be characterized as purposeful activity invoking the benefits and protection of the forum state's laws.
See Hydrokinetics, 700 F.2d at 1029 (citing
Charia v. Cigarette Racing Team, Inc., 583 F.2d 184, 187-88 (5
th Cir. 1978);
Benjamin v. Western Boat Building Corp., 472 F.2d 723, 729 (5
th Cir.),
cert. denied,
414 U.S. 830,
94 S.Ct. 60,
38 L.Ed.2d 64 (1973)). Thus, the communications between Spademan and the plaintiffs, whether originating in California or Texas, leading up to the agreement are insufficient to support an exercise of jurisdiction by a Texas court over Spademan. Moreover, we see little distinction between these communications and those between the plaintiff and Spademan's attorneys regarding the reissuance of the patent. the quality of the contacts as demonstrating purposeful availment is the issue, not their number or their status as pre- or post-agreement communications. Hence, we do not even consider Spademan's dubious assertion that the communications actually involved exchanges between the plaintiffs and the U.S. Patent and Trademark Office acting through Spademan's California attorneys. the agreement to mail payment checks into the forum state does not weigh heavily in the calculus of contacts. . . . (citations omitted). Hence, Spademan's mailing of payments to the plaintiffs in Texas can hardly be termed significant in terms of determining purposeful availment of the benefits of the forum state's laws. In contradistinction to the contract at issue in
Burger King, the agreement entered into by Spademan and the plaintiffs did not contemplate a long-term relationship with the kinds of continuing obligations and wide-reaching contacts envisioned by the
Burger King contract. Arguably, the plaintiffs' agreement to later aid in effectuating a reissuance of the original patent constitutes something of a continuing obligation. Even this contact, however, falls short of a connection giving rise to a reasonable anticipation on the part of Spademan of being haled into court in the forum state. Considering the totality of the facts of this case, we conclude that the inference of purposeful availment necessary to support the exercise of personal jurisdiction over Spademan is not supported. The random use of interstate commerce to negotiate and close a particular contract, the isolated shipment of goods to the forum at the instigation of the resident plaintiffs, and the mailing of payments to the forum do not constitute the minimum contacts necessary to constitutionally exercise jurisdiction over Spademan.
772 F.2d at 1193-1194.
When viewed alongside the nonresident's contacts with the forum state in Hydrokinetics and Spademan, it is clear that those had by the Defendants with Texas in the instant case are appreciably less significant both in terms of quantity and quality than those of the defendants in either of those cases. In light of the finding that the court lacked specific jurisdiction in both of those cases, the same conclusion must be reached in this case.
Accordingly, the Court finds that, under the totality of the circumstances, there is insufficient evidence to support a finding that Defendants have had the requisite purposeful minimum contacts with Texas to warrant a conclusion that they have availed themselves of the benefits and protection of this state such that it would not offend the traditional notions of due process and fair play to require them to defend themselves in this forum.
CONCLUSION
Based on the above findings of facts and conclusions, it is hereby ORDERED that the Defendants' Motion to Dismiss for Lack of Personal Jurisdiction be, and the same is hereby. GRANTED and that this action be, and is hereby, DISMISSED WITHOUT PREJUDICE for lack of jurisdiction over the Defendants.