Olympia Capital Associates, L.P. v. Jackson

• Decision Date: 03 March 2008
• Docket Number: No. 05-06-00479-CV.,05-06-00479-CV.
• Parties: OLYMPIA CAPITAL ASSOCIATES, L.P., Appellant v. Daniel L. JACKSON, in his Capacity as Receiver of Integral Arbitrage, L.P., Integral Hedging, L.P., Integral Equity, L.P., Integral Investment Management, L.P., and Integral Management, L.L.C., Appellee. and Daniel L. Jackson, in his Capacity as Receiver of Integral Arbitrage, L.P., Integral Hedging, L.P., Integral Equity, L.P., Integral Investment Management, L.P., and Integral Management, L.L.C., Appellant v. Olympia Capital International, Inc., Appellee.
• Court: Texas Court of Appeals

247 S.W.3d 399

OLYMPIA CAPITAL ASSOCIATES, L.P., Appellant v. Daniel L. JACKSON, in his Capacity as Receiver of Integral Arbitrage, L.P., Integral Hedging, L.P., Integral Equity, L.P., Integral Investment Management, L.P., and Integral Management, L.L.C., Appellee. and Daniel L. Jackson, in his Capacity as Receiver of Integral Arbitrage, L.P., Integral Hedging, L.P., Integral Equity, L.P., Integral Investment Management, L.P., and Integral Management, L.L.C., Appellant v. Olympia Capital International, Inc., Appellee.

No. 05-06-00479-CV.

Court of Appeals of Texas, Dallas.

March 3, 2008.

Jay J. Madrid, Craig Harris, Jaime Myers, Winstead Sechrest & Minick, P.C., Dallas, TX, for Appellant.

Karen Lynn Kellett, The Kellett Law Firm, Alexander N. Beard, Bishop & Hummert, P.C., Dallas, TX, for Appellee.

Before Justices WHITTINGTON, MOSELEY, and O'NEILL.

OPINION

Opinion by Justice MOSELEY.

Daniel L. Jackson, as receiver for Integral Arbitrage, L.P., Integral Hedging, L.P., Integral Equity, L.P., Integral Investment Management, L.P., and Integral Management, L.L.C., ("Receiver") filed suit against Olympia Capital Associates, L.P. ("Associates") and Olympia Capital International, Inc. ("International"). The trial court denied Associates's special appearance and granted International's. Associates and the Receiver appeal the respective orders. For the reasons that follow, we conclude that International's and Associates's contacts with Texas are insufficient to create either specific or general jurisdiction. Accordingly, we: (1) affirm the trial court's amended order sustaining International's special appearance and dismissing International; and (2) reverse the trial court's amended order overruling Associates's special appearance and enter judgment dismissing Associates for lack of jurisdiction.

I. PERSONAL JURISDICTION

A. Substantive Law

Texas courts may assert personal jurisdiction over a nonresident if it is authorized by the Texas long-arm statute and is consistent with federal and state constitutional due-process guarantees. Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 807 (Tex.2002). See TEX. CIV. PRAC. & REM.CODE ANN. §§ 17.041.045 (Vernon 1997 & Supp.2007). The long-arm statute allows Texas courts to "reach as far as the federal constitutional requirements of due process will allow." Am. Type Culture Collection, Inc., 83 S.W.3d at 806 (quoting Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex. 1991)). See also TEX. CIV. PRAC. & REM. CODE ANN. § 17.042 (acts constituting "doing business" within state for purposes of long-arm statute). Thus, a Texas court may exercise personal jurisdiction over a nonresident if doing so complies with federal due-process requirements. See Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 575 (Tex.2007). Those requirements are satisfied if: (1) the nonresident defendant has established minimum contacts with the forum state; and (2) 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)).

1. Nature of Contacts with Texas

The contacts relevant to a jurisdictional analysis are those through which 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) (citing Int'l Shoe Co., 326 U.S. at 319, 66 S.Ct. 154). See Michiana Easy Livin' Country, Inc. v. Holten, 168 S.W.3d 777, 784 (Tex.2005). Only the defendant's contacts with the forum are relevant, not the unilateral activity of another party or third person. Michiana, 168 S.W.3d at 785. Such contacts must be purposeful rather than random, fortuitous, or attenuated. Id. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 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). Further, the "defendant must seek some benefit, advantage or profit by `availing' itself of the jurisdiction." Michiana, 168 S.W.3d at 785. What is important is the quality and nature of the defendant's contacts with the forum state, rather than their number. Am. Type Culture Collection, Inc., 83 S.W.3d at 806.

2. Extent of Contacts — Specific and General Jurisdiction

A nonresident defendant's contacts with the forum state meet the federal due-process minimum contacts standard if the contacts establish either "specific jurisdiction" or "general jurisdiction." See BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 795-96 (Tex.2002).

a. Specific Jurisdiction

Specific jurisdiction exists if the defendant's alleged liability arises out of or is related to the defendant's activities conducted within the forum. 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). See also CSR Ltd. v. Link, 925 S.W.2d 591, 595 (Tex.1996). In other words, there must be "a substantial connection between [the nonresident's contacts with the forum] and the operative facts of the litigation." Moki Mac, 221 S.W.3d at 585. Specific jurisdiction is not established merely by allegations or evidence that a nonresident committed a tort in the forum state or "directed a tort" at the forum state. Michiana, 168 S.W.3d at 790-92.

b. General Jurisdiction

General jurisdiction exists if the defendant's contacts with the forum are continuous and systematic, whether or not the defendant's alleged liability arises from those contacts. BMC Software Belgium, 83 S.W.2d at 796; CSR Ltd., 925 S.W.2d at 595. General jurisdiction is "dispute-blind," as it permits the court to "exercise jurisdiction over the nonresident defendant based on any claim, including claims unrelated to the defendant's contacts with the state." PHC-Minden, L.P. v. Kimberly-Clark Corp., 235 S.W.3d 163, 168-69 (Tex.2007). Thus general jurisdiction involves a more demanding minimum-contacts analysis than that involved in specific jurisdiction, with a substantially higher threshold for subjecting the out-of-state defendant to personal jurisdiction. Id at 168. "Usually, `the defendant must be engaged in longstanding business in the forum state, such as marketing or shipping products, or performing services or maintaining one or more offices there; activities that are less extensive than that will not qualify for general in personam jurisdiction.'" Id. (quoting 4 CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE & PROCEDURE § 1067.5 (2007))). The relevant time period for assessing minimum contacts for general jurisdiction ends at the time suit is filed. Id. at 169.

3. Additional Due-Process Requirements

Federal due-process also requires the exercise of personal jurisdiction to comport with traditional notions of fair play and substantial justice. BMC Software Belgium, 83 S.W.3d at 795 (citing Int'l Shoe, 326 U.S. at 316, 66 S.Ct. 154). In making that determination we evaluate the defendant's contacts in light of the following factors: (1) the burden on the nonresident defendant; (2) the forum state's interest in adjudicating the dispute; (3) the plaintiff's interest in obtaining convenient and effective relief; (4) the interstate judicial system's interest in obtaining the most efficient resolution of controversies; and (5) the shared interest of the several states in furthering substantive social policies. See Burger King Corp., 471 U.S. at 477, 105 S.Ct. 2174; World-Wide Volkswagen Corp., 444 U.S. at 292, 100 S.Ct. 559; Guardian Royal Exch. Assurance, Ltd., 815 S.W.2d at 231. "Only in rare cases, however, will the exercise of jurisdiction not comport with fair play and substantial justice when the nonresident defendant has purposefully established minimum contacts with the forum state." Guardian Royal Exch. Assurance, Ltd., 815 S.W.2d at 231.

B. Burden of Pleading/Proof

The plaintiff bears the initial burden of pleading sufficient allegations to invoke the provisions of the Texas long-arm statute. Am. Type Culture Collection, Inc., 83 S.W.3d at 807; Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199, 203 (Tex.1985) (citing Siskind v. Villa Found. for Educ., Inc., 642 S.W.2d 434, 438 (Tex.1982)). Upon filing a special appearance, the nonresident defendant assumes the burden of negating all bases of personal jurisdiction alleged by the plaintiff.¹ Am. Type Culture Collection, Inc., 83 S.W.3d at 807; Siskind, 642 S.W.2d at 438 (citing E. Wayne Thode, In Personam Jurisdiction; Article 2031b, The Texas "Long Arm" Jurisdiction Statute; And the Special Appearance to Challenge Jurisdiction in Texas and Elsewhere, 42 TEX. L.REV. 279, 322(1964)). In other words, the defendant must disprove the existence of minimum contacts sufficient to establish personal jurisdiction over it — general, specific, or both — as alleged by the plaintiff. See Am. Type Culture Collection, Inc., 83 S.W.3d at 807; Thode, supra at 322. However, absent allegations of any specific, purposeful act through which the defendant can be said to have sought a benefit by "availing itself of the jurisdiction," Michiana, 168 S.W.3d at 785, evidence that a defendant is a nonresident is sufficient to meets its burden. See Hotel Partners v. KPMG Peat Marwick, 847 S.W.2d 630, 633 (Tex.App.-Dallas 1993, writ denied) (citing Siskind, 642 S.W.2d at 438).

C. Standard of Review

Whether personal jurisdiction exists is a question of law, and we review the trial court's ruling on a special appearance de novo. BMC Software Belgium, 83 S.W.2d at 794. However, the trial court must frequently resolve fact questions before deciding the jurisdictional question. Id. If the trial court does not issue findings of fact, we imply all such findings necessary to...