Central Freight Lines Inc. v. Apa Transport Corp.

• Citation: 322 F.3d 376
• Decision Date: 05 March 2003
• Docket Number: No. 02-50702.,02-50702.
• Parties: CENTRAL FREIGHT LINES INC., Plaintiff-Appellant, v. APA TRANSPORT CORP., Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

322 F.3d 376

CENTRAL FREIGHT LINES INC., Plaintiff-Appellant, v. APA TRANSPORT CORP., Defendant-Appellee.

No. 02-50702.

United States Court of Appeals, Fifth Circuit.

March 5, 2003.

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Jonathan Matthew LeBlanc (argued), William H. Chamblee, Chamblee & Ryan, Dallas, TX, for Plaintiff-Appellant.

Retta A. Miller, Brian Allan Kilpatrick (argued), Jackson Walker, Dallas, TX, for Defendant-Appellee.

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

Before JOLLY, HIGGINBOTHAM and MAGILL,^* Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

In this appeal, we are called upon to decide whether the district court erred in dismissing the lawsuit brought by plaintiff Central Freight Lines, Inc. for lack of personal jurisdiction over the defendant, APA Transport Corp. We conclude that the district court does have personal jurisdiction over the defendant. Accordingly we reverse the judgment of the district court and remand for further proceedings.

I

Plaintiff-Appellant Central Freight Lines, Inc. ("CFL") is a freight delivery company located in Waco, Texas that primarily ships freight in the southwestern United States. Defendant-Appellee APA Transport Corp. ("APA") is a freight delivery company located in North Bergen, New Jersey. APA primarily ships freight in the northeastern United States. In September 2000, the two companies entered into an "Interline Agreement" — a standing agreement reflecting the terms and conditions under which each carrier could use the services of the other in the other company's primary region of operation. In December 2000, CFL began shipping freight to APA's terminal in North Bergen, New Jersey for delivery by APA to customers in APA's primary area of operations in the northeastern United States.

In March 2001, CFL notified APA and its other partners-in-shipping across the United States that CFL anticipated receiving a two-year contract with Dell Computers to deliver Dell freight from the Western District of Texas to Dell customers across the United States. At this time, CFL requested that each of its partners determine if it could profitably handle Dell's shipments to its respective region of operation based on a "D-83" pricing methodology and the other terms and conditions provided by their respective interline agreements with CFL.¹ APA apparently agreed to complete CFL's shipments of Dell merchandise in accord with their Interline Agreement. In alleged reliance upon the pricing information provided by APA and CFL's other partners-in-shipping, CFL entered into a contract with Dell Computers in March 2001. APA began receiving shipments of Dell merchandise at its terminal in New Jersey the following month.²

At some point shortly thereafter, business dealings between CFL and APA soured. CFL alleges that APA breached their Interline Agreement by demanding prices for the delivery of Dell's freight of 194% of the negotiated and accepted rate. CFL also alleges that APA wrongfully withheld delivery of Dell's freight until CFL indicated that it would pay APA and wrongfully refused to accept additional deliveries. For its part, APA alleges that CFL failed to pay APA approximately $430,254 for APA's share of freight charges. Both parties agree that CFL stopped shipping Dell freight to APA in early June 2001 and found an alternative carrier to ship freight to the northeastern United States.

CFL filed this action against APA on June 28, 2001, in the Western District of Texas, alleging breach of contract, breach of fiduciary duty, negligent misrepresentation, and tortious interference with CFL's contractual relationship with Dell. On August 7, 2001, APA filed a motion to dismiss CFL's complaint for lack of personal jurisdiction or for improper venue or, in the alternative, to transfer venue to the District of New Jersey.

APA then filed a separate action against CFL on July 20, 2001, in the District of New Jersey, apparently alleging breach of contract claims against CFL arising out of CFL's alleged failure to pay APA its share of freight revenues for shipments delivered by APA pursuant to the Interline Agreement. (APA's case is APA Transport Corp. v. Central Freight Lines, Inc., Cause No. 01-CV-3445 (D.N.J.).) Upon CFL's motion, the New Jersey district court stayed the proceedings in its court until such time as the Western District of Texas ruled on APA's motions to dismiss or transfer.

Following limited expedited discovery regarding jurisdiction and venue, on June 6, 2002, the Western District of Texas granted APA's motion to dismiss for lack of personal jurisdiction, finding that APA did not have sufficient contacts with the State of Texas to support the court's exercise of specific or general personal jurisdiction over the defendant. CFL timely appealed that judgment. CFL also filed a motion for an expedited appeal that was granted by this court on September 27, 2002.³

II

This court reviews a district court's dismissal for lack of personal jurisdiction de novo. Alpine View Co. v. Atlas Copco A.B., 205 F.3d 208, 214 (5th Cir.2000). When, as here, the district court did not conduct an evidentiary hearing on defendant's motion to dismiss, the party seeking to assert jurisdiction is required only to present sufficient facts to make out a prima facie case supporting jurisdiction. Id. (citing cases). The court shall accept as true that party's uncontroverted allegations (so long as the allegations are not merely conclusory) and resolve all factual conflicts in favor of the party seeking to invoke the court's jurisdiction. Id. (citing cases).

In a diversity action, a federal court may exercise personal jurisdiction over a defendant only to the extent permitted by the applicable law of the forum state. See Fed.R.Civ.P. 4(e)(1), (h)(1), and (k)(1). In this case, it is well-established that the Texas long-arm statute authorizes the exercise of personal jurisdiction to the full extent allowed by the Due Process Clause of the Fourteenth Amendment. See 2 Tex. Civ. Prac. & Rem.Code Ann. § 17.042 (West 1997); Alpine View, 205 F.3d at 214; Schlobohm v. Schapiro, 784 S.W.2d 355, 357 (Tex.1990).

The Due Process Clause of the Fourteenth Amendment protects an individual's liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful "contacts, ties, or relations." Int'l Shoe Co. v. Washington, 326 U.S. 310, 319, 66 S.Ct. 154, 90 L.Ed. 95 (1945). Exercising personal jurisdiction over a nonresident defendant is consistent with constitutional due process when "(1) that defendant has purposefully availed himself of the benefits and protections of the forum state by establishing `minimum contacts' with the forum state; and (2) the exercise of jurisdiction over that defendant does not offend `traditional notions of fair play and substantial justice.'" Mink v. AAAA Development LLC, 190 F.3d 333, 336 (5th Cir.1999) (quoting International Shoe Co., 326 U.S. at 316, 66 S.Ct. 154 (1945)). "`Minimum contacts' can be established either through contacts sufficient to assert specific jurisdiction, or contacts sufficient to assert general jurisdiction." Id.; Alpine View, 205 F.3d at 215. When a nonresident defendant has "purposefully directed its activities at the forum state and the litigation results from alleged injuries that arise out of or relate to those activities," the defendant's contacts are sufficient to support the exercise of specific jurisdiction over that defendant. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (internal quotation marks omitted). General jurisdiction may be asserted when a defendant's contacts with the forum state are substantial and "continuous and systematic" but unrelated to the instant cause of action. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 8, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984).

A. Contacts Sufficient To Establish General Jurisdiction

APA does not appear to have the kind of substantial, continuous, and systematic contacts with the State of Texas sufficient to support an exercise of general jurisdiction in this case. See Alpine View 205 F.3d at 217-18. See also Helicopteros Nacionales de Colombia, 466 U.S. at 414, 104 S.Ct. 1868; Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485 (1952)(upholding the exercise of general jurisdiction where corporation had temporarily relocated its principal place of business to forum state by conducting meetings in the state, maintaining records and bank accounts in the state and making all important business decisions in the forum state). In this case, although APA has federal operating authority in Texas, APA has never registered to do business in the state, has never maintained any kind of business office or records in the state, and has never paid franchise taxes in the state. Likewise, even though APA routinely arranges and receives interline shipments to and from Texas and apparently sends sales people to the state on a regular basis to develop business, negotiate contracts, and service national accounts, APA has never actually operated any trucks or picked up or delivered any freight in Texas. Even if APA's contacts with the state of Texas have been, in some sense, "continuous and systematic," APA's activities, in toto, are clearly not substantial enough to justify subjecting APA to suit in the Western District of Texas based on a theory of general personal jurisdiction. See Wilson v. Belin, 20 F.3d 644, 649-51 (5th Cir.1994) (distinguishing Perkins on this basis and holding that court lacked general personal jurisdiction over the defendant, despite the fact that defendant had a relationship with a Texas law firm and engaged in various professional and pro bono projects in the State over a period of several years).⁴

B. Contacts Sufficient To Establish Specific Jurisdiction

Specific jurisdiction is another matter,...