Runnels v. Tmsi Contractors, Inc.

• Decision Date: 01 July 1985
• Docket Number: No. 85-4016,85-4016
• Citation: 764 F.2d 417
• Parties: Ernest W. RUNNELS, Plaintiff-Appellant, v. TMSI CONTRACTORS, INC. and TMSI Arabia, Ltd., Defendants-Appellees. Summary Calendar.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 417

764 F.2d 417

Ernest W. RUNNELS, Plaintiff-Appellant, v. TMSI CONTRACTORS, INC. and TMSI Arabia, Ltd., Defendants-Appellees.

No. 85-4016

Summary Calendar.

United States Court of Appeals Fifth Circuit.

July 1, 1985.

Brame, Bergstedt & Brame, David B. McCain, Lake Charles, La., for plaintiff-appellant.

Camp, Carmouche, Barsh, Hunter, Gray, Hoffman & Gill, David R. Frohn, Lake Charles, La., for defendants-appellees.

Appeal from the United States District Court for the Western District of Louisiana.

Before WILLIAMS, JOLLY, and HILL, Circuit Judges.

ROBERT MADDIN HILL, Circuit Judge:

Ernest Runnels appeals from the dismissal of his Louisiana diversity action for lack of personal jurisdiction. Runnels brought an action for wrongful termination of his contract for employment in Saudi Arabia against TMSI Arabia, Ltd. (TMSI Arabia). On TMSI Arabia's motion, the district court dismissed for lack of personal jurisdiction. Concluding that TMSI Arabia had sufficient minimum contacts with Louisiana and that maintenance of this action in Louisiana would not offend traditional notions of fair play and substantial justice, we reverse and remand.

I. Facts

As the consequence of a referral from a former colleague and acquaintance, Runnels received a telephone call in Louisiana in April 1982 from Richard McKim, an agent of TMSI Arabia, ¹ soliciting him for employment in Saudi Arabia. Subsequent to their conversation, McKim sent by express mail to Runnels at his home in Louisiana a sample employment agreement and other documents to facilitate travel abroad. Runnels then submitted a resume to McKim which was forwarded to TMSI Arabia for approval.

On or about April 17, TMSI Arabia transmitted a telex message to McKim in California confirming that an approval had been issued for the employment of Runnels. Between then and April 22 McKim sent to Runnels in Louisiana a TMSI Arabia employment contract for signature. Runnels signed the contract, retained a copy and returned the original to McKim in Los Angeles, which original was then forwarded to Saudi Arabia for signature. McKim and his secretary then coordinated the necessary out-processing services for Runnels such as a medical examination, a work visa and travel arrangements.

The contract provided for employment as a senior electrical technician for a period of one year from April 22, 1982, to April 23, 1983. Runnels worked in Saudi Arabia for TMSI Arabia and its client, the Arabian American Oil Company (ARAMCO), pursuant to the employment contract through and beyond April 23, 1983, because his employer requested that the term be extended. After working a brief extension period, he was advised by representatives of TMSI Arabia that his employer was interested in obtaining his services for another year of employment. Agents for TMSI Arabia gave Runnels money to purchase a round trip ticket to the United States; he was also instructed to return to Saudi Arabia on May 28, 1983, to begin his next term of employment. Runnels did return to Saudi Arabia where, on May 28, he renewed his employment contract with TMSI Arabia for an additional year.

In June 1983 Runnels' employment was terminated as a result of ARAMCO's request that he be removed "due to security breach." Shortly thereafter, Runnels received a letter from TMSI Arabia stating that his employment had been terminated because he violated a provision of his employment contract. Runnels then brought this suit in response to his termination under the renewed employment contract signed in Saudi Arabia. From the district court's grant of TMSI Arabia's motion to dismiss for lack of jurisdiction, this appeal followed.

II. Jurisdiction

Runnels contends that the district court had jurisdiction over TMSI Arabia by virtue of the Louisiana "long-arm" statute, La.Rev.Stat.Ann. 13:3201 (West Supp.1985). ² In a diversity action, such as this, "a federal court has jurisdiction over a nonresident defendant only to the extent permitted by the long-arm statute of the forum state." Growden v. Ed Bowlin and Associates, Inc., 733 F.2d 1149 (5th Cir.1984); see Quasha v. Shale Development Corp., 667 F.2d 483, 485-86 (5th Cir.1982). It is now settled that the Louisiana long-arm statute permits the exercise of in personam jurisdiction over a nonresident defendant to the full limits of due process under the fourteenth amendment in cases where the suit arises from the contacts of the nonresident with the state of Louisiana. Growden, 733 F.2d at 1150; Austin v. North American Forest Products, 656 F.2d 1076, 1089 (5th Cir.1981). It follows, then, that "[b]usiness activity which will satisfy the requirements of due process will thus necessarily satisfy the 'transacting business' requirement of the [Louisiana] Longarm Statute." Austin, 656 F.2d at 1089. Consequently, it is necessary to consider only whether the exercise of jurisdiction over TMSI Arabia, the nonresident defendant, conforms with the requirements of due process.

III. Due Process Requirements

In Bean Dredging Corp. v. Dredge Technology Corp., 744 F.2d 1081 (5th Cir.1984), we restated the due process requirements for the exercise of personal jurisdiction:

For due process requirements to be met in a court's assertion of personal jurisdiction, the nonresident defendant must have certain "minimum contacts" with the forum state "such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.' " International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 342, 85 L.Ed. 278 (1940)); DeMelo v. Toche Marine, Inc., 711 F.2d at 1270. To make this determination, the court must first consider whether the defendant purposefully availed itself of the benefits and protection of the forum state's laws; and second, whether the state has any special interest in providing a forum for the suit, taking into consideration the relative conveniences and inconveniences of the parties. Austin v. North American Forest Products, 656 F.2d at 1089; Standard Fittings Co. v. Sapag, S.A., 625 F.2d at 641-43.

744 F.2d at 1083.

A. The District Court Decision

In determining that TMSI Arabia lacked sufficient contacts with Louisiana, the district court failed to undertake the two-prong inquiry stated above to determine whether defendant's due process rights would be violated by the exercise of personal jurisdiction. Rather, the court first determined that the facts of the instant action are very similar to the facts of both Thibodeaux v. King-Wilkinson, Inc., 386 So.2d 189 (La.App. 3d Cir.) (contacts insufficient to support jurisdiction over the foreign employer), writ refused, 392 So.2d 668 (La.1980), and Babineaux v. Southeastern Drilling Corp., 170 So.2d 518 (La.App. 3d Cir.) (en banc) (contacts sufficient to support jurisdiction over the foreign employers), writs refused, 247 La. 613, 172 So.2d 700 (La.1965), appeal dismissed for want of a substantial federal question, 382 U.S. 16, 86 S.Ct. 67, 15 L.Ed.2d 12 (1965). It then concluded that this action more closely resembles Thibodeaux than Babineaux and dismissed the action against TMSI Arabia for want of jurisdiction.

Thibodeaux and Babineaux are indeed closely analogous to this action. In Thibodeaux, a Louisiana resident sued a Texas corporation for back wages allegedly due under an employment contract between the parties for work in Scotland. As in this action, the defendant was not qualified to do business in Louisiana nor had it appointed an agent there for service of process. After plaintiff's friend, who worked for the defendant in Scotland, suggested employment with defendant, plaintiff received a telephone call in Louisiana from the Houston office of defendant also suggesting employment. A contract of employment was then signed in Texas. No contacts, other than the initial call to plaintiff suggesting employment, occurred in Louisiana. On the basis of these minimal contacts, the Louisiana Third Circuit determined that the contract was not a Louisiana contract and that defendant's contacts with Louisiana were insufficient to be considered transacting business in Louisiana. 386 So.2d at 191.

In Babineaux, a Louisiana resident sued two Panamanian corporations for injuries he sustained while he was engaged in oil field work in Kuwait. Again, none of the defendants had qualified to do business in Louisiana nor had they appointed an agent there for service of process. Unlike Thibodeaux, but just as in this action, the defendants in Babineaux advertised in a local Louisiana newspaper to solicit workers for offshore drilling work in the Persian Gulf. Plaintiff responded to this advertisement and obtained an interview with defendants initially in Louisiana and then in Texas. Plaintiff then executed an employment contract in Louisiana and forwarded it to Dallas, Texas, where it was later signed by an officer of the defendants and returned to plaintiff. The Louisiana court noted in addition to the above facts that several other employees were engaged for overseas operations as a result of the defendants' advertisements and interviews in Louisiana. The Louisiana Third Circuit, en banc, then concluded that due process would support jurisdiction over defendants as a result of their contacts with Louisiana. Babineaux, 170 So.2d at 527.

In concluding that this action falls on the "Thibodeaux side of the line," the district court stated:

In Babineaux the plaintiff responded to an ad in a Lafayette newspaper and was interviewed along with other applicants by an agent of the employer at a motel in Lafayette. Here, the plaintiff was the only person contacted and he was reached by an agent from California by telephone. Moreover, the employment contract terminated in this case was a one-year renewal contract executed in Saudi Arabia after the plaintiff had worked for TMSI for a year.

We are not convinced that these...