Savoie v. Pritchard

• Court: U.S. Court of Appeals — Fifth Circuit
• Writing for the Court: Kurt D. Engelhardt, Circuit Judge
• Citation: Savoie v. Pritchard, 122 F.4th 185 (5th Cir. 2024)
• Docket Number: 23-30783
• Decision Date: 25 November 2024
• Parties: Kenny SAVOIE, Plaintiff—Appellant, v. Thomas PRITCHARD, Defendant—Appellee.

122 F.4th 185

Kenny SAVOIE, Plaintiff—Appellant, v. Thomas PRITCHARD, Defendant—Appellee.

No. 23-30783

United States Court of Appeals, Fifth Circuit

FILED November 25, 2024

Appeal from the United States District Court for the Western District of Louisiana, USDC No. 6:21-CV-1910, Terry A. Doughty, Chief Judge

Joseph Arthur Smith, III, Esq. (argued), Smith Law Firm, Baton Rouge, LA, for Plaintiff—Appellant.

Ryan Keith French (argued), Michael Sean Walsh, Taylor, Porter, Brooks & Phillips, L.L.P., Baton Rouge, LA, for Defendant—Appellee.

Before Dennis, Southwick, and Engelhardt, Circuit Judges.

Kurt D. Engelhardt, Circuit Judge:

In this breach-of-contract case arising from a wage payment dispute, former employee and Louisiana resident Kenny Savoie (Savoie) appeals the dismissal of claims against his boss and Virginia resident, Thomas Pritchard (Pritchard), for lack of personal jurisdiction. Pritchard contends the fiduciary shield doctrine precludes jurisdiction based on his purely corporate contacts with Louisiana. Savoie counters that the fiduciary shield doctrine is dead. Because we find life within it, we AFFIRM.

I. Factual and Procedural Background

Savoie is a former employee of Pritchard Energy Advisors, LLC d/b/a Pritchard Griffin Advisors (PGA). Co-owned by Pritchard and another individual named Ken Griffin (Griffin), PGA was a Texas LLC and financial services company that raised capital to facilitate oil and gas transactions. In 2016, before Savoie's employment with PGA, PGA and an energy company, Empire Petroleum Corporation (Empire), entered into an agreement whereby PGA would raise capital for Empire in exchange for a retainer, success fee, and common stock.

In July 2017, PGA offered Savoie a compensation-based senior position within the company, assisting PGA clients with securing upstream oil and gas opportunities. The offer letter, signed by Griffin, promised a compensation structure with splits favorable to Savoie based on deals he originated and even those he did not. The offer also indicated he would receive 5% on capital raised. Under these terms, Savoie began working with Pritchard to assist Empire in developing its oil and gas operations.

Shortly after Savoie joined PGA, Pritchard became Empire's CEO. In September 2018, Savoie followed Pritchard, joining Empire as Vice President of Operations. On April 2, 2019, Empire terminated Savoie. Following his termination, Savoie emailed Pritchard seeking compensation under the terms of the 2017 offer letter for Savoie's allegedly successful efforts as a PGA employee on Empire's behalf. Pritchard responded, explaining that Savoie was not entitled to compensation because PGA had not received any on the projects Savoie mentioned. This suit followed.

On July 1, 2021, Savoie filed his complaint in the United States District Court for the Western District of Louisiana asserting claims for breach of contract and violations of the Louisiana Wage Payment Act. Savoie alleged that PGA received ample fees and revenue from Empire as a result of Savoie's work, but PGA failed to pay him the commissions due under the 2017 agreement. As to Pritchard specifically, Savoie alleged that Pritchard breached the 2017 offer letter and the Louisiana Wage Payment Act by "[p]ersonally engag[ing] in fraudulent and deceitful conduct" when he "inform[ed] Mr. Savoie that PGA had not received any retainer money or any payments on Mr. Savoie's projects and that Mr. Savoie was therefore not entitled to any compensation." He further alleged that Pritchard "[e]xhibited a conflict of interest by serving as both a member of PGA and CEO/Director of Empire," which resulted in "Pritchard not collecting, on behalf of PGA, fees and other payments that were due to PGA from Empire."

Following jurisdictional discovery and briefing, the district court dismissed Pritchard for lack of personal jurisdiction. The court concluded that Pritchard's suit-related contacts were covered by the fiduciary shield doctrine and Savoie failed to establish any exception that would permit those contacts to be attributed to Pritchard personally. Savoie appeals.

II. Jurisdiction & Standard of Review

The district court had diversity jurisdiction over this case pursuant to 28 U.S.C. § 1332, and we have appellate jurisdiction over the order dismissing Pritchard for lack of personal jurisdiction under 28 U.S.C. § 1291. See Ritzen Grp., Inc. v. Jackson Masonry, LLC, 589 U.S. 35, 45, 140 S.Ct. 582, 205 L.Ed.2d 419 (2020). Where there is no dispute of relevant facts, the exercise of personal jurisdiction is a question of law subject to de novo review. Shambaugh & Son, L.P. v. Steadfast Ins. Co., 91 F.4th 364, 368-69 (5th Cir. 2024) (citation omitted).

As the party invoking the court's jurisdiction, Savoie "bears the burden of establishing that [Pritchard] has the requisite minimum contacts" with Louisiana to justify jurisdiction. Danziger & De Llano, L.L.P. v. Morgan Verkamp, L.L.C., 24 F.4th 491, 495 (5th Cir. 2022) (citation omitted). When "the court rules on a motion to dismiss for lack of personal jurisdiction without holding an evidentiary hearing, that burden requires only that the nonmovant make a prima facie showing." Id. While the district court must accept as true the allegations in the complaint, it "is not obligated to consult only [those] assertions . . . in determining whether a prima facie case for jurisdiction has been made." Paz v. Brush Engineered Materials, Inc., 445 F.3d 809, 812 (5th Cir. 2006). Instead, the court "may consider the contents of the record before the court at the time of the motion, including 'affidavits, interrogatories, depositions, oral testimony, or any combination of the recognized methods of discovery.' " Quick Techs., Inc. v. Sage Grp. PLC, 313 F.3d 338, 344 (5th Cir. 2002) (citation omitted). When considering the host of allegations and evidence, we accept as true "plaintiff's uncontroverted, nonconclusional factual allegations" and "resolve all controverted allegations in the plaintiff's favor." Def. Distrib. v. Grewal, 971 F.3d 485, 490 (5th Cir. 2020) (citation omitted).

III. Analysis

A federal court sitting in diversity may assert personal jurisdiction over the defendant if (1) the state's long-arm statute permits it, and (2) exercising jurisdiction would not violate the Fourteenth Amendment's Due Process Clause. Libersat v. Sundance Energy, Inc., 978 F.3d 315, 318 (5th Cir. 2020). Louisiana's long-arm statute is "coextensive" with the limits of constitutional due process. Id. (quoting Petroleum Helicopters, Inc. v. Avco Corp., 513 So. 2d 1188, 1192 (La. 1987)). For this reason, "the sole inquiry" is usually "whether exercising jurisdiction would violate the Due Process Clause." Id. Due process is satisfied where the defendant "purposefully availed himself of the benefits and protections of the forum state by establishing minimum contacts with the forum state, and the exercise of jurisdiction over that defendant does not offend traditional notions of fair play and substantial justice." Panda Brandywine Corp. v. Potomac Elec. Power Co., 253 F.3d 865, 867 (5th Cir. 2001) (citation omitted).

Sufficient contacts will give rise to either general or specific jurisdiction. Shambaugh & Son, L.P., 91 F.4th at 372. Because Savoie does not press general jurisdiction, only specific personal jurisdiction is at issue here. This circuit engages in a three-step analysis to determine whether a court may exercise specific jurisdiction over a non-forum defendant. The analysis considers:

(1) whether the defendant has minimum contacts with the forum state, i.e., whether it purposely directed its activities toward the forum state or purposefully availed itself of the privileges of conducting activities there; (2) whether the plaintiff's cause of action arises out of or results from the defendant's forum-related contacts; and (3) whether the exercise of personal jurisdiction is fair and reasonable.

Id. (citation omitted). Savoie must establish the first two prongs before the burden shifts to Pritchard to show that exercising jurisdiction would be unfair or unreasonable. Monkton Ins. Servs., Ltd. v. Ritter, 768 F.3d 429, 433 (5th Cir. 2014).

A. The fiduciary shield doctrine applies to this contract case.

Pritchard raises the fiduciary shield doctrine as an obstacle to establishing personal jurisdiction. The shield, if applicable, prevents the exercise of personal jurisdiction based solely on acts undertaken in a defendant's corporate capacity.¹ Because the doctrine originates from "judicial interpretations of long-arm statutes"—not the federal due process clause—the shield exists only to the extent state law recognizes it. Escoto v. U.S. Lending Corp., 675 So.2d 741, 745 (La. App. 4th Cir. 1996); see also Newsome v. Gallacher, 722 F.3d 1257, 1278 (10th Cir. 2013) (citing Calder v. Jones, 465 U.S. 783, 790, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984); Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 781 n.13, 104 S.Ct. 1473, 79 L.Ed.2d 790 (1984)) ("[T]he Supreme Court has made clear "that the fiduciary shield is a question of state law, not due process.").²

The Louisiana Supreme Court has not expressly adopted the fiduciary shield doctrine. In Southeast Wireless Network, Inc., however, a majority of the court implicitly recognized the shield by "adopt[ing] the reasoning" of a Louisiana appellate court which defined the shield and its exceptions. Se. Wireless Network, Inc. v. U.S. Telemetry Corp., 954 So.2d 120, 128-29 (La. 2007) (citing Escoto, 675 So.2d at 745-46). The Louisiana Supreme Court explained that the shield is "rooted in the principle that the acts of a corporate officer in his corporate capacity cannot form the basis for jurisdiction over him in an individual capacity." Id. at 128 (quoting Escoto, 675 So.2d at 745). Nevertheless, the shield "will not defeat personal jurisdiction where a non-resident corporate agent commits a tort within a forum state which would subject him to personal liability...