Media campaign = Texas jurisdiction

Two important concepts about personal jurisdiction were at issue in Celanese Corp. v. Salcedo Sahagun, a case about “Mexican nationals’ use of a Washington, D.C. publicist to disseminate defamatory statements directed at Texas and other markets as part of a national media campaign . . . .” The resolution of those questions turned in no small part on the nuances of how they were defined. The first question was whether a publicist was an agent (and thus, creating imputation) as opposed to an independent contractor; its resolution turned on whether the defendants “retained control over [her] manner and means of performance — regardless of whether they chose to exercise that right.” The second involved the reconciliation of cases applying Calder v. Jones; the Court approached that issue by focusing on “whether [defendants] intended to benefit from having the statements distributed in Texas, regardless of the route taken to get them there.” No. 05-16-00868-CV (Aug. 9, 2017) (mem. op.)

Lawyer came to Texas, but no jurisdiction in Texas.

texas signA law firm’s former client sued for allegedly flawed tax advice; part of the basis for personal jurisdiction in Texas was the presence of a firm partner at a meeting with the IRS in Dallas. As to that point, the Fifth Court held: “On this record, we conclude there is no evidence of a substantial connection between Wolfe’s attendance at the June 2010 Dallas meeting and the operative facts of the litigation, i.e., whether appellants breached their fiduciary duties owed to Millennium when they ‘represented Hanson’ during the appeal of the 2009 audit and ‘continued to take positions’ during the June 2010 Dallas meeting that were ‘adverse to Millennium’s interests’ respecting the disputed tax benefits . . . . Therefore, Wolfe’s attendance at that meeting does not constitute a contact supporting specific jurisdiction.” The opinion reviews and rejects other arguments for personal jurisdiction, many of which appear (in various forms) in similar cases involving professional advice and state lines. Fried Frank v. Millennium Chemicals, No. 05-16-01132-CV (July 31, 2017) (mem op.)

Perhaps conspirators, but not jurisdiction-creators.

Plaintiff sued two insurance companies, headquartered out-of-state, who produced evidence that their business was limited to out-of-state activity. As to an allegation that the companies and their agents met in Torontconspiracyo where they “conspired to forge [Plaintiff’s signature,” the Court reminded that “the assertion of personal jurisdiction over a nonresident defendant may not be based solely upon the effects or consequences of an alleged conspiracy with a resident in the forum state.” Friend v. Acadia Holding Corp., No. 05-16-00286-CV (April 27, 2017) (applying Nat’l Indus. Sand Ass’n v. Gibson, 897 S.W.2d 769, 773 (Tex. 1995)).

Legal effect of “He’s dead, Jim.”

dr mccoyIf Dr. McCoy made his famous pronouncement, not as to an Enterprise crew member in a red shirt, but during litigation about another defendant by filing a “suggestion of death,” would he make a general appearance in that litigation? The Fifth Court answered “no” in Hegwer v. Edwards, primarily citing a line of cases holding that making and filing a Rule 11 agreement does not amount to a general appearance. No. 05-15-01464-CV (March 22, 2017).

Not so long arm of the law: no personal jurisdiction over out-of-state attorney who joint ventures with Texas counsel

Short Arms

In Mitchell v. Freese & Goss, PLLC (July 15, 2016), the Dallas Court of Appeals considered an appeal of the denial of a special appearance by Mitchell, a Mississippi attorney sued in Dallas County by a Texas law firm, Freese & Goss. Mitchell and Freese & Goss had a joint venture to represent Mississippi clients in litigation in Mississippi. After the cases settled, there was a dispute over attorney’s fees. Mitchell sued Freese & Goss in Mississippi and Freese & Goss brought this suit in Dallas County alleging wrongful conduct by Mitchell adversely affecting the joint venture. Mitchell filed a special appearance, which was denied. Mitchell then filed an interlocutory appeal.

On appeal, Freese & Goss asserted that the trial court had personal jurisdiction over the claims against Mitchell because the dispute arose out of Mitchell’s contacts with Texas. Specifically, Mitchell had a business relationship with Freese & Goss for the purpose of litigating the Mississippi claims, Mitchell participated in meetings and phone calls with Freese & Goss, the suit concerned payments to be made by Freese & Goss, Mitchell solicited clients to sue Freese & Goss, and those acts were specifically directed toward causing injury to appellees in Texas.

The Dallas Court of Appeals reversed and rendered a judgment that the Court lacked personal jurisdiction over the claims asserted against Mitchell. It held that merely contracting with Freese & Goss, a Texas resident, is insufficient for jurisdictional purposes. The relationship focused on activities in Mississippi, where the litigation was to be conducted, and Freese & Goss’s unilateral activities in Texas were not relevant to the analysis. Nor did the fact that some of the clients eventually moved to Texas render Mitchell susceptible to suit in Texas because “the mere existence of an attorney-client relationship unaccompanied by other sufficient contacts with the forum, does not confer personal jurisdiction….” Finally, the fact that Mitchell might have caused their shared clients to sue Freese & Goss did not confer jurisdiction because his alleged activities took place in Mississippi, and it is not enough that the effects of a tort will be felt in Texas to confer personal jurisdiction. Because Mitchell did not purposefully avail himself the privilege of doing business in Texas, the Dallas Court of Appeals reversed and rendered judgment.

Mitchell v. Freese & Goss, PLLC (July 15, 2016)

In the Battle of Animal Control vs. Ayn Rand, the Court of Appeals Washes Its Hands. As Should We All.

One thing every lawyer in Texas learns early on is that if you want to challenge personal jurisdiction, you have to file a special appearance before you answer the petition. Critter Control, Inc. sought to avoid that waiver point by filing a motion to withdraw its original answer in favor of a subsequently filed special appearance, which the trial court denied. Critter Control filed for interlocutory appeal, and Galt Strategies, LLC filed a motion to dismiss for lack of appellate jurisdiction. The Court of Appeals dismissed the appeal because it did not challenge the denial of the special appearance, but the Court notably did not foreclose the stratagem of moving to withdraw the answer in order to assert the untimely special appearance.

Critter Control, Inc. v. Galt Strategies, LLC, No. 05-15-01011-CV

For Mandamus, Two Months Is Not an Unreasonable Wait

On July 10, the district court orally denied the special appearance of Ann Stokley. The court did not sign a written order, however, which left Stokley unable to pursue an interlocutory appeal. On September 15, Stokley filed a petition for writ of mandamus with the Dallas Court of Appeals. Two days later, that Court has issued a brief memorandum petition denying relief. Although a trial court abuses its discretion when it fails to rule within a reasonable time, the Court could not conclude that the trial court had done so here in light of “the trial court’s actual knowledge of the motion, whether its refusal to act is overt, the state of the court’s docket, and the existence of other judicial and administrative matters which must be addressed first.” Ms. Stokley will presumably pursue an interlocutory appeal sometime after the trial court issues a written order.

In re Stokley, No. 05-15-01110-CV

A Dispatch From the Surprisingly Litigious World of Theater Poster Collecting

Readers may recall the recent dust-up over a collection of movie posters held by an auction house. In a new case, the disputed collection consists of Broadway theater window cards, which a Texas resident had shipped to an Internet reseller in Vermont. The owner filed suit in Dallas, alleging the reseller had breached the parties’ oral contract by failing to pay him for the cards sold, failing to return the unsold cards to him, and failing to safeguard the cards. The defendants filed a special appearance, which the trial court granted and the Court of Appeals affirmed. Although the primary defendant had made payment to the plaintiff in Texas, an agreement to make payments in the forum state does not weigh heavily in the “calculus of [minimum] contacts.” Although there were multiple conflicts in the parties’ accounts of their dealings, the Court of Appeals deferred to the trial court’s resolution of the factual discrepancies, and the remaining, undisputed facts did not demonstrate purposeful availment of Texas as a forum for the transactions at issue.

Klug v. Wickert, No. 05-14-00080-CV

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Court Reverses Trial Court, Finding No Personal Jurisdiction Over Third-Party Defendant

In this case involving corporate infighting, the defendant filed a third-party claim against Troy Brown.  Mr. Brown filed a special appearance asserting that the court did not have personal jurisdiction, which the trial court denied.  Mr. Brown appealed.

The Court of Appeals reversed, determining that Brown did not have minimum contacts with Texas such that he was subject to personal jurisdiction here.  The Court specifically found that several emails Brown sent to people in Texas did not “constitute a contact demonstrating purposeful availment.”

Brown v. Pennington