Prejean v. Sonatrach, Inc.

• Decision Date: 13 August 1981
• Docket Number: No. 79-3356,79-3356
• Citation: 652 F.2d 1260
• Parties: Mary Jean PREJEAN, et al., Plaintiffs-Appellants, v. SONATRACH, INC., et al., Defendants-Appellees. . Unit A
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1260

652 F.2d 1260

Mary Jean PREJEAN, et al., Plaintiffs-Appellants, v. SONATRACH, INC., et al., Defendants-Appellees.

No. 79-3356.

United States Court of Appeals, Fifth Circuit.

Unit A

Aug. 13, 1981.

Baron & Cowley, Frederick M. Baron, Russell Wills Budd, Dallas, Tex., for plaintiffs-appellants.

Vinson & Elkins, Louis E. McCarter, David H. Brown, Houston, Tex., for Sonatrach, Inc.

Richard H. Caldwell, Gerald L. Bracht, Houston, Tex., for Beech Aircraft Corp.

George N. Tompkins, Jr., Condon & Forsyth, Thomas J. Whalen and Lawrence Mentz,New York City, Alan S. Dale, Houston, Tex., for Air Algerie.

Helene Allan Alt, Houston, Tex., for Continental Ins. Co.

Appeal From the United States District Court for the Southern District of Texas.

Before WISDOM, RUBIN and SAM D. JOHNSON, Circuit Judges.

SAM D. JOHNSON, Circuit Judge:

The widows in this diversity suit for wrongful death appeal from the district court order dismissing all three defendants for lack of personal jurisdiction. This Court affirms in part and in part reverses and remands the dismissal.

The two decedents ¹ were employed by a Dallas engineering firm that allegedly entered into a contract with defendant Sonatrach, Inc., the Algerian national oil company, to provide technical assistance. While allegedly performing duties in Algeria pursuant to this contract, an airplane manufactured by defendant Beech Aircraft Corporation (Beech), owned by defendant Air Algerie, and allegedly chartered by Sonatrach, crashed on October 16, 1975, because of unknown causes, tragically killing the engineers.

The widows then filed this wrongful death suit in federal district court on October 12, 1977. Service of process was made under the Texas Long Arm Statute, Tex.Rev.Civ.Stat.Ann. art. 2031b, on the three defendants in November 1977. ² All three defendants promptly contested the existence of personal jurisdiction. After service was made but before dismissal of the suit Sonatrach became licensed to do business in Texas. After some jurisdictional discovery, the district court first dismissed Beech, then Air Algerie, and finally Sonatrach.

The central issue in this case is the meaning and application of the Texas Long Arm Statute. The first question posed to this Court is whether or not Article 2031b authorizes the broadest possible reach fourteenth amendment due process permits. Plaintiffs argue that the statute is coextensive with the limits due process places on state long arm jurisdiction and that all three defendants in one way or another have constitutionally sufficient contacts with Texas. Defendants counter that any and all of their respective contacts with Texas are unrelated to plaintiffs' suit and that the statute requires a nexus between the cause of action and the defendants' contacts, regardless of what due process permits.

International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), and its progeny set forth the due process confines on a state's ability to subject a nonresident defendant to suit in its courts. Constitutionally permissible amenability to process depends upon the quality and nature of the activity within the state such that it is fair and reasonable for the nonresident to come into that forum and defend the action. Beyond this limit state service of process statutes may not reach. But due process does not compel the states to assert jurisdiction this far. Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437, 440, 72 S.Ct. 413, 415, 96 L.Ed. 485 (1952).

Because jurisdiction is achieved by service under the long arm statute, and because due process is a limit on the reach of the statute, the first and threshold question is whether the statutory requirements have been met. Only if the statute authorizes the exercise of in personam jurisdiction does the court reach the question of whether the assertion of that jurisdiction exceeds constitutional bounds. ³

It is true that due process allows the state to assert jurisdiction over a nonresident defendant that carries on continuous and systematic activities in the state unrelated to the cause of action. Perkins, 342 U.S. at 445-47, 72 S.Ct. at 418-19. ⁴ The Texas statute, however, expressly limits personal jurisdiction to causes of action arising out of activities or business done within the state. Section 2 restricts amenability to "any action ... arising out of (business engaged in within the state.)" Section 3 confines amenability to "any action, suit or proceedings arising out of such business done in this State." ⁵ Section 4 defines doing business as including but not limited to the entering into a contract by mail or otherwise with a resident of Texas to be performed in whole or in part by either party in Texas, or the committing of any tort in whole or in part in Texas. ⁶ The statute thus unambiguously reaches only suits arising out of contacts with Texas.

Plaintiffs rely on two cases to support their theory that, despite its literal language, Article 2031b encompasses causes of action unrelated to the defendant's contacts with the forum. The first is U-Anchor Advertising, Inc. v. Burt, 553 S.W.2d 760 (Tex.1977), cert. denied, 434 U.S. 1063, 98 S.Ct. 1235, 55 L.Ed.2d 763 (1978). The Texas Supreme Court broadly stated that Article 2031b reaches the constitutional limits of due process. It is evident from a reading of that case, however, that this language directly addressed only the meaning of "doing business" in the context of whether it is coextensive with the constitutional confines of due process. ⁷ The cause of action in that case not only arose out of the business done in Texas, the Texas Supreme Court expressly noted that connection in its determination of whether jurisdiction existed. 553 S.W.2d at 760. ⁸ Therefore while the statute encompasses all nonfortuitous contact with the forum such that due process would allow amenability to suit, in addition the cause of action must arise out of those minimum contacts. ⁹

The other case relied on by plaintiffs is Navarro v. Sedco, Inc., 449 F.Supp. 1355 (S.D.Tex.1978). This district court opinion seized on the broad language of U-Anchor concerning the reach of the statute as authority for the proposition that the cause of action need not arise out of defendant's business in Texas. As the earlier discussion makes plain, however, Article 2031b demands what due process merely takes into account: a nexus between the contacts with the forum and the cause of action of such a kind as to make the cause of action arise from those contacts. ¹⁰ Navarro thus took the U-Anchor language out of context. This Court expressly disapproves Navarro's language refusing to require a nexus, and henceforth it should not be followed. Until such time as the Texas Legislature should see fit to eliminate the nexus requirement, ¹¹ service of process under Article 2031b cannot be made validly on a nonresident defendant whose contacts with Texas have no connection with the plaintiff's cause of action. ¹²

Having established the contours of Article 2031b, the next inquiry is whether or not defendants here were in fact amenable under the statute at the time service of process was made. Plaintiffs allege that the negligence of all three defendants caused the fatal crash and that Beech is also strictly liable. Under section 4 of Article 2031b, a defendant is deemed to be doing business through the commission of any tort in whole or in part in Texas. It is clear that this cause of action arises out of the alleged tort; the question is whether any part of the alleged tort occurred in Texas.

The statute specifies committing a "tort" in the state, rather than committing merely a tortious act or omission in the state. The plaintiffs argue that since "tort" includes tortious injury, part of the tort occurs at the place of the legal injury, not just the place of the wrongful act or omission. The wrongful death action is a statutory cause of action for the intangible injury to the decedent's survivors of lost future pecuniary benefits, care, maintenance, support, services, advice, and counsel. See, e. g., Dover Corp. v. Perez, 587 S.W.2d 761, 768, opinion supplemented on other grounds, 591 S.W.2d 547 (Tex.Civ.App. Corpus Christi 1979, writ ref'd n.r.e.). The tortious injury, however, is the death of the decedent, not the economic consequences that flow from his death. Cf. Restatement of Conflicts, Second, §§ 145 and 146. Within the meaning of the statute, therefore, the tort did not occur in the State of Texas. Consequently, to serve process pursuant to Article 2031b, the putative defendant would have to be "doing business" in Texas, and this wrongful death action would have to have arisen from that business.

Even if the economic and the intangible injuries to the plaintiffs constituted a Texas nexus or the statute was otherwise satisfied, however, that would not alone suffice, for the assertion of jurisdiction must still pass constitutional muster. ¹³ The essence of the due process cases such as International Shoe and Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958), is that the contact with the forum must not be fortuitous. When a defendant purposefully avails himself of the benefits and protection of the forum's laws by engaging in activity in the state or engaging in activity outside the state that has reasonably foreseeable consequences in the state maintenance of the lawsuit does not offend traditional notions of fair play and substantial justice. ¹⁴ Considerations such as the quality, nature, and extent of the activity in the forum, the foreseeability of consequences within the forum from activities outside it, and the relationship between the cause of action and the contacts, relate to whether it can be said that the defendant's actions constitute "purposeful availment. ¹⁵ In other words, a defendant's activities in relation to the state indicate he is on notice that he could be haled into its cour...