Phc-Minden, L.P. v. Kimberly-Clark Corp.

• Decision Date: 31 August 2007
• Docket Number: No. 05-0823.,05-0823.
• Citation: 235 S.W.3d 163
• Parties: PHC-MINDEN, L.P. d/b/a Minden Medical Center, Petitioner, v. KIMBERLY-CLARK CORPORATION, Respondent.
• Court: Texas Supreme Court

235 S.W.3d 163

PHC-MINDEN, L.P. d/b/a Minden Medical Center, Petitioner, v. KIMBERLY-CLARK CORPORATION, Respondent.

No. 05-0823.

Supreme Court of Texas.

Argued November 16, 2006.

Delivered August 31, 2007.

R. Brent Cooper, Diana L. Faust, Devon J. Singh, Cooper & Scully, P.C., Dallas, for petitioner.

C. Michael Moore, David G. Cabrales, Locke Liddell & Sapp LLP, Dallas, James K. Horstman, Rodney E. VanAusdal, Iwan Cray Huber Horstman & VanAusdal, LLC, Chicago, IL, for respondent.

Mark P. McMahon, Erskine & McMahon, L.L.P., Kenneth Charles Cunningham, Director of Legal Services, Good Shepard Medical Center, Longview, Susan Cassidy Cooley, Schell & Cooley, L.L.P., Timothy D. Ryan, Shell, Mitchel & Cooley, L.L.P., Addison, Mary Olga Lovett, Andrew J. Wupper, Greenberg Traurig LLP, Gracelyn M. Sessions, Texas Children's Hospital, Houston, Stephen A. Madsen, Ryan D. Adair, Cantey & Hanger, Fort Worth, Mark A. Stinnett, Stinnett Thiebaud & Remington L.L.P., Dallas, for other interested parties.

Roger Townsend, Alexander Dubose Jones & Townsend LLP, C.W. "Rocky" Rhodes, Houston, for amicus curiae.

Chief Justice JEFFERSON delivered the opinion of the Court.

The United States Constitution prohibits a court from exercising jurisdiction over a party that lacks minimum contacts with the forum. Personal jurisdiction has been described as either specific — that is, based on contacts arising from the dispute at issue — or general, predicated on a party's "continuous and systematic" contacts with the forum. Minimum-contacts analysis is easily muddled, however, as courts frequently import contacts relevant to one type of jurisdiction when deciding the other. Additionally, courts sometimes impute contacts of related entities to each other, when mere relatedness is an insufficient basis on which to confer jurisdiction. Today, we must determine whether a Louisiana hospital, either independently or through its parent corporation, has continuous and systematic contacts with Texas. We conclude that it does not.

I Factual and Procedural Background

While traveling through Louisiana on December 10, 2000, Texas resident Jajah Eddington sought medical care at MHC-Minden Hospital ("Minden Hospital"), a 159-bed acute care hospital located in Minden, Louisiana. Medical personnel treated Eddington's flu-like symptoms in the emergency room and advised her to consult her primary care physician if her condition did not improve. Four days later, Eddington was admitted to Good Shepherd Medical Center in Longview, Texas, where she ultimately was diagnosed with toxic shock syndrome. That infection led to her death on December 28, 2000.

DeWayne Eddington, individually and as next friend of Devvyn Eddington, and as representative of Jajah Eddington's estate, sued Kimberly-Clark Corporation asserting product liability, breach of warranty, and negligence claims. He alleged that Eddington's use of Kotex tampons led to the infection that caused her death. On February 28, 2003, Kimberly-Clark filed a third-party petition against PHC-Minden, L.P. ("Minden"), which owns Minden Hospital, asserting that Minden's negligence proximately caused Eddington's death.¹ Minden is a nonresident of Texas and a wholly owned subsidiary of Province Health Care ("Province"). Kimberly-Clark pleaded that Province, whose headquarters is in Tennessee, did business in Texas and that its forum-related acts should be imputed to Minden because: (1) Province owns Minden; (2) Province and Minden share officers, directors, and "common departments or business"; (3) Province and Minden do not differentiate their operations and have failed to erect "formal barriers" between themselves; and (4) Province's officers and directors control Minden's policies. Minden filed a special appearance and, subject thereto, a general denial. The parties conducted extensive discovery relating to the jurisdictional issue. After a hearing, the trial court concluded it had general jurisdiction over Minden and denied the special appearance.

The court of appeals affirmed, reasoning that (1) Minden itself had "continuous and systematic contacts with Texas"; and (2) Minden and Province operated as a single business enterprise, and Minden, through Province, did business in Texas. 202 S.W.3d 193, 203-04. We granted Minden's petition for review to decide whether Texas courts have general jurisdiction over Minden.² 49 Tex. Sup.Ct. J. 950 (Aug. 25, 2006).

II General Jurisdiction

The Texas long-arm statute governs Texas courts' exercise of jurisdiction over nonresident defendants. See TEX. CIV. PRAC. & REM.CODE §§ 17.041-.045. That statute permits Texas courts to exercise jurisdiction over a nonresident defendant that "does business" in Texas, and the statute identifies some activities that constitute "doing business." Id. § 17.042. The list, however, is not exclusive. BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex.2002). We have held that section 17.042's language extends Texas courts' personal jurisdiction "as far as the federal constitutional requirements of due process will permit." U-Anchor Adver., Inc. v. Burt, 553 S.W.2d 760, 762 (Tex. 1977). Thus, we rely on precedent from the United States Supreme Court and other federal courts, as well as our own decisions, in determining whether a nonresident defendant has negated all bases of jurisdiction. See BMC Software, 83 S.W.3d at 795-796. Personal jurisdiction over nonresident defendants is constitutional when: (1) the 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).

In Helicopteros Nacionales de Colombia, S.A. v. Hall, the Supreme Court adopted the terms "specific" and "general" to describe the differing types of personal jurisdiction. Helicopteros, 466 U.S. 408, 414, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984) (citing Arthur T. von Mehren & Donald T. Trautman, Jurisdiction to Adjudicate: A Suggested Analysis, 79 HARV. L.REV. 1121, 1144-1164 (1966)). The Court defined specific jurisdiction as "arising out of or related to the defendant's contacts with the forum." Id. at n. 8. By contrast, the Court referred to general jurisdiction as "personal jurisdiction over a defendant in a suit not arising out of or related to the defendant's contacts with the forum."³ Id. at n. 9 (citations omitted).

In Helicopteros, the Court concluded that Texas courts did not have general jurisdiction over a Colombian company, Helicol. One of Helicol's helicopters had been involved in a crash in Peru, and the survivors and representatives of the decedents sued Helicol in state district court in Harris County, Texas. Helicol filed a special appearance and moved to dismiss the case, but the trial court denied the motion. The court of appeals, however, agreed with Helicol that in personam jurisdiction over Helicol was lacking. Helicopteros Nacionales De Colombia, S.A. v. Hall, 616 S.W.2d 247 (Tex.App.-Houston 1981). Our Court reversed. Hall v. Helicopteros Nacionales De Colombia, S.A., 638 S.W.2d 870 (1982).

The Supreme Court granted certiorari, and it summarized the pertinent jurisdictional facts:

It is undisputed that Helicol does not have a place of business in Texas and never has been licensed to do business in the State. Basically, Helicol's contacts with Texas consisted of sending its chief executive officer to Houston for a contract-negotiation session; accepting into its New York bank account checks drawn on a Houston bank; purchasing helicopters, equipment, and training services from Bell Helicopter for substantial sums; and sending personnel to Bell's facilities in Fort Worth for training.

Helicopteros, 466 U.S. at 416, 104 S.Ct. 1868. The Court concluded that the CEO's trip to Houston could not be described as a "continuous or systematic" contact. Id. Similarly, it held that Helicol's acceptance of checks drawn on a Houston bank was of "negligible significance." Id. at 416, 104 S.Ct. 1868. The Court held, relying on a 1923 unanimous opinion written by Justice Brandeis, that "purchases and related trips, standing alone, are not a sufficient basis for a State's assertion of jurisdiction." Id. at 417, 104 S.Ct. 1868 (citing Rosenberg Bros. & Co. v. Curtis Brown Co., 260 U.S. 516, 43 S.Ct. 170, 67 L.Ed. 372 (1923)).

The point at which jurisdictional contacts reach a tipping point, however, has eluded precise formulation. Beyond stating that mere purchases and related travel are not enough, the Supreme Court has given little guidance on the appropriate inquiry for general jurisdiction, although its Helicopteros conclusion that general jurisdiction was improper suggests that the requisite level of contacts is fairly substantial. 16 JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE § 108.41[3] (3d ed.2007); 4 CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE & PROCEDURE § 1067.5 (2007) (noting that the Court's rejection of each contact and its failure to aggregate contacts "suggests very strongly that the threshold contacts required for a constitutional assertion of general jurisdiction over a nonresident defendant are very substantial, indeed"). Perkins v. Benguet Consolidated Mining Co., the only case in which that court has upheld a finding of general jurisdiction, offers an insight into the nature of the contacts required. Perkins, 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485 (1952). In assessing whether the nonresident defendant's Ohio contacts were sufficient to warrant a finding of general jurisdiction, the Court noted that the company's president, who was also the general manager and principal shareholder maintained an Ohio office in which he "did many things on behalf of the company." Id. at 447-48, 72 S.Ct. 413. He maintained company files in Ohio, carried on correspondence from there, drew and distributed salary checks from his Ohio...