Moki Mac River Expeditions v. Drugg

• Citation: 221 S.W.3d 569
• Decision Date: 02 March 2007
• Docket Number: No. 04-0432.,04-0432.
• Parties: MOKI MAC RIVER EXPEDITIONS, Petitioner, v. Charles DRUGG and Betsy Drugg, Individually, and as Representatives of the Estate of Andrew Patrick Drugg, Respondents.
• Court: Texas Supreme Court

221 S.W.3d 569

MOKI MAC RIVER EXPEDITIONS, Petitioner, v. Charles DRUGG and Betsy Drugg, Individually, and as Representatives of the Estate of Andrew Patrick Drugg, Respondents.

No. 04-0432.

Supreme Court of Texas.

Argued November 17, 2005.

Decided March 2, 2007.

E. Thomas Bishop, Alexander N. Beard and Stephanie Ann Finch, Bishop & Hummert, P.C., Dallas, for Petitioner.

Steven E. Aldous, Michael Braden and Robert Ray Varner Jr., Braden, Vamer & Aldous, P.C., Dallas, for Respondent.

Douglas Alexander, Alexander Dubose Jones & Townsend, LLP, Austin, for Amicus Curiae.

Justice O'NEILL delivered the opinion of the Court, in which Chief Justice JEFFERSON, Justice HECHT, Justice WAINWRIGHT, Justice BRISTER, Justice GREEN, and Justice WILLETT joined.

A Texas court may assert specific jurisdiction over an out-of-state defendant if the defendant's contact with this state is purposeful and the injury arises from or relates to those contacts. In this wrongful-death case against a Utah-based river-rafting outfitter, the defendant contends the plaintiff's death on a Grand Canyon hiking trail did not arise from or relate to its instate commercial activities so as to establish specific jurisdiction over it in Texas. We agree. Accordingly, we reverse and remand the case to the court of appeals to determine whether general jurisdiction exists.

I. Background

Charles and Betsy Drugg's thirteen-year-old son, Andy, died on a June 2001, river-rafting trip in Arizona with Moki Mac River Expeditions, a Utah-based river-rafting outfitter. Moki Mac did not directly solicit the Druggs to participate in the trip. Instead, the Druggs learned about Moki Mac's excursions from a fellow Texas resident, Annie Seals, who had contacted the company regarding a rafting trip in the Grand Canyon. There was no space available for her at that time, but Seals's contact information was placed on Moki Mac's computerized mailing list so that she would automatically receive a brochure for the 2001 season when it became available. Moki Mac subsequently sent two brochures to Seals in Texas detailing pricing and schedules for upcoming excursions. Seals informed Moki Mac of the interest of several others in Texas with whom she shared the literature, including Andy and members of his family.

Betsy Drugg reviewed the brochures and information from Moki Mac's website. After corresponding with Moki Mac representatives from her home in Texas, Betsy ultimately decided to send Andy on the rafting trip. Andy's grandmother sent Moki Mac an application and payment for herself and Andy. As was its practice, Moki Mac sent a letter confirming payment to the Druggs' home in Texas along with an acknowledgment-of-risk and release form, which the company requires participants to sign as a prerequisite to attendance. Both Andy and his mother signed the form and returned it to Moki Mac.

The Druggs allege that on the second day of Andy's fourteen-day trip, Moki Mac guides led the group up an incline on a trail that narrowed around and was obstructed by a large boulder. The guides were positioned at the head and rear of the group, but no guide was present near the boulder. As Andy attempted to negotiate the boulder-blocked path, requiring him to lean back while attempting to cross a very narrow ledge, he fell backwards approximately fifty-five feet and was fatally injured.

The Druggs filed suit in Texas for wrongful death due to Moki Mac's negligence and for intentional and negligent misrepresentation.¹ The trial court denied Moki Mac's special appearance and the court of appeals affirmed on the basis of specific jurisdiction, holding that the Druggs' misrepresentation claim arose from, and related to, Moki Mac's purposeful contacts with Texas. 2004 WL 100389. Because the court of appeals found specific jurisdiction, it did not consider whether general jurisdiction was proper. We granted Moki Mac's petition for review to consider the extent to which a claim must "arise from or relate to" forum contacts in order to confer specific jurisdiction over a nonresident defendant.²

II. Jurisdiction

As a threshold matter, the Druggs contend we do not have jurisdiction over Moki Mac's interlocutory appeal in this case. Generally, a court of appeals' decision in an interlocutory appeal is final. TEX. GOV'T CODE § 22.225(b)(3). When, however, the court of appeals holds differently from a prior decision of another court of appeals, this Court, or the United States Supreme Court, we have jurisdiction to resolve the disagreement or conflict. TEX. GOV'T CODE §§ 22.001(a)(1), (2) and 22.225(c); Henry Schein, Inc. v. Stromboe, 102 S.W.3d 675 (Tex.2002). Moki Mac contends the court of appeals' decision in this case conflicts, inter alia, with Laykin v. McFall, 830 S.W.2d 266 (Tex.App.-Amarillo 1992, orig. proceeding). There, the court of appeals held that a Texas court could not assert jurisdiction over an out-of-state defendant in a suit by a Texas resident alleging fraud and conversion because the "focal point" of the allegedly tortious activity and the plaintiff's damages did not lie in Texas. Id. at 270. In this case, in contrast, the court of appeals held that the Texas court could assert jurisdiction without regard to the likely focus of the parties' efforts in the underlying lawsuit. 2004 WL 100389, at *4. We have jurisdiction to resolve the conflict in this interlocutory appeal. TEX. GOV'T CODE § 22.001(a)(2).

III. In Personam Jurisdiction

The plaintiff bears the initial burden of pleading sufficient allegations to invoke jurisdiction under the Texas long-arm statute. Am. Type Culture Collection v. Coleman, 83 S.W.3d 801, 807 (Tex.2002). The nonresident defendant then assumes the burden of negating all bases of jurisdiction in those allegations. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 793 (Tex.2002). Because the question of a court's exercise of personal jurisdiction over a nonresident defendant is one of law, we review a trial court's determination of a special appearance de novo. Id. at 794. When, as here, the trial court does not make findings of fact and conclusions of law in support of its ruling, we infer "all facts necessary to support the judgment and supported by the evidence .. . ." Id. at 795.

Texas courts may assert in personam jurisdiction over a nonresident if (1) the Texas long-arm statute authorizes the exercise of jurisdiction, and (2) the exercise of jurisdiction is consistent with federal and state constitutional due-process guarantees. Schlobohm v. Schapiro, 784 S.W.2d 355, 356 (Tex.1990). Our long-arm statute describes what, "[i]n addition to other acts," may constitute doing business in this state. TEX. CIV. PRAC. & REM. CODE § 17.042. Pertinent to this case are the first two subsections, which provide that a nonresident does business in Texas if it:

(1) contracts by mail or otherwise with a Texas resident and either party is to perform the contract in whole or in part in this state; [or]

(2) commits a tort in whole or in part in this state;

Id. § 17.042(1), (2). The Druggs' negligent and intentional misrepresentation claims based on Moki Mac's brochures and release form satisfy the doing-business requirement for jurisdiction under the plain language of the statute. But the exercise of jurisdiction under the statute must be consistent with federal and state constitutional guarantees of due process. See Schlobohm, 784 S.W.2d at 356.

We have said that the long-arm statute's broad doing-business language allows the statute to "reach as far as the federal constitutional requirements of due process will allow." Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex. 1991); see also Schlobohm, 784 S.W.2d at 357; U-Anchor Adver., Inc. v. Burt, 553 S.W.2d 760, 762 (Tex.1977). Thus, the requirements of the Texas long-arm statute are satisfied if an assertion of jurisdiction accords with federal due-process limitations. Am. Type Culture Collection, 83 S.W.3d at 806; CSR Ltd. v. Link, 925 S.W.2d 591, 594 (Tex.1996); Schlobohm, 784 S.W.2d at 357.

Federal due-process requirements limit a state's power to assert personal jurisdiction over a nonresident defendant. See Guardian Royal, 815 S.W.2d at 226. Personal jurisdiction is proper when the nonresident defendant has established minimum contacts with the forum state, and the exercise of jurisdiction comports with "`traditional notions of fair play and substantial justice.'" Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 85 L.Ed. 278 (1940)). Minimum contacts are sufficient for personal jurisdiction when the nonresident defendant "`purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.'" Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958) (quoting Int'l Shoe Co., 326 U.S. at 319, 66 S.Ct. 154); Michiana Easy Livin' Country, Inc. v. Holten, 168 S.W.3d 777, 784 (Tex.2005).

We have recently explained that there are three parts to a "purposeful availment" inquiry. Michiana, 168 S.W.3d at 784-85. First, only the defendant's contacts with the forum are relevant, not the unilateral activity of another party or a third person. Id. at 785. Second, the contacts relied upon must be purposeful rather than random, fortuitous, or attenuated. Id.; see also Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476 n. 18, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). Thus, "[s]ellers who `reach out beyond one state and create continuing relationships and obligations with citizens of another state' are subject to the jurisdiction of the latter in suits based on their activities." Michiana, 168 S.W.3d at 785 (quoting Burger King, 471 U.S. at 473, 105 S.Ct. 2174). Finally, the "defenda...