### TEXA S C OU R T OF A PPEAL S, THIR D DIST R ICT , AT AU STIN

NO. 03-0 7 -00 690 -CV

Al st om P owe r , I nc .; Al st om - S witz e r lan d - Lt d.; F ac to r y M ut ualIns ur anc e Co m pany ; a nd We lli ngt on - F ive - L im it e d, a s t he M aj or it y M e m be r of Sy ndic at e 20 20 atLllo yds , forth e 1999 Underwriting Year of Accounting Whose Registe red Off ice is 88 Leadenhall S tre et, Lond on EC3A 3BA, App ellants

v. Inf rassure, Ltd. , Appellee

F ROM THE DISTRICT CO URT OF HAY S COUNTY , 207TH JUDICIAL DISTRICT NO. 05- 2193 , HO NORAB LE JACK H. RO B ISO N , JUDGE PRESIDI NG

M E M O R

A N D U M O P I N I O N Alstom (Switzerland) (“A lstom”) is a Swiss compa ny that manufa cture s and ser vices g as turbines used in powe r plants. Employ ees of Alstom P ower , Inc., an A merica n subsidiary

of Alstom, inadvertently

damag ed a tur

bine at a Hay s County

power plant while servic ing it. Alstom paid par t of the cost to re pair the turb i ne, and the power plant’s insurer s paid the re st. The power plant’s insurer s and A ls to m then sued Alstom’s insurer, Infra ssure, Ltd., for contr ibution. I nfra ssure, which is based in Switzerland, filed a specia l appea

ranc e, arguing that it wa s not subje ct to persona l jurisdiction in Hay s County . The district cour t gr anted Infra ssure’s spe ci al ap p ea ra nce, a nd the plaintiffs appe aled. We will aff irm.We re ce n t l y considere d related eve nts in Munters Euroform GmbH v . American Nat’l 1 Power, Inc. , No. 03-05-00493- CV, 2009 Tex. App. L EXI S 9860 (Tex. App.—Austin Dec. 31, 2009, no pet. h.). B e tw e e n O c tob e r 2 00 1 a nd Marc h o f 2003 , Inf

ra ssu re c oll e c te d r ou g hly

$7 00 ,0 00 in 2 premiums from Alstom for insuringwork that Alstom perf ormed on nine g as turbines in Texas. 2 F ACTUAL AND P ROCEDURAL BACK GR OUND 1 The undisputed re cord shows that I nfra ssure be g an ins u ri ng Alstom in 1999. Alstom’s insurance policy was a “fr ame” policy , which mea ns that it contained g ener al terms but require d Alstom to subm it a separ ate “ decla ration for m” desc ribing eac h particula r mai n tenanc e projec t it wanted insured. The parties a g ree that (1) Alstom obtained its frame policy from Infra ssure throug h neg otiations and communications occur ri n g entirely in Switz erla

nd; (2) the Alstom employ ee who neg otiated the policy on Al s t o m ’s behalf

was a Swiss citiz en and r esident; (3)
c ov e ra g e un de r t

he po lic y wa s d e no min a te d in

Swi ss f ra nc s; (4 ) a ll c la ims un de r t

he po lic y we re to be handled throug h Swiss entities in Switzerland; and (5) all communications relating to the policy
wer e to be made throug h Swiss entiti es in Switz erla nd. In addition, the policy contained a “L aw a

nd J urisdiction Clause” that stated: “ For all disputes arising out of this I nsuranc e contr act, Swiss L aw shall apply . Place of

J urisdiction is Zür ich.” I n e arl y 20 03 , A lst om s ub mitte d a de cla rat io n for

m f or ma int e na nc e wo rk that it s Americ an subsidiary , Alstom Power , planned to per form at a Hay s County

power plant owned by the Hay s Energ y

L imited Partnership (HEL P). I n fr as s u re ag ree d to cover the work, just as it had
c ov e re d o the r m a int e na

nc e wo rk pe rf or me d b y Al sto m Po we r i n T e xas i n th e pr e vio us tw o y e ars . 2 Ag ain, all communications occ urre d in Switz erla nd.FM Globa l is based in Rhode I sland and has be en license d to issue insurance in Texas since 3 1968. Wellington is based in Eng land. Ap pe lla nts br ie f t his iss ue e xten siv e ly

but c ite no a

uth or ity ind ic a tin g that it

is r e le va nt t o 4 our jurisdictional a

naly sis. Be cause the trial court’s jurisdictional a naly sis is the only

object of our revie w, we w ill not address the conc ealment issue f urther. 3 During the m aintenanc e work, the g as turbine incur red r oug hly

$7 milli on in damag e. HEL P held an insuranc e policy throug h Fa ctory

Mutual I nsuranc e Company (“F M Global”) a

nd Wellington Under

writers, Ltd. ( “Wellington”) that named Alstom a nd Alstom Power as additional ins ur e ds
. Ac c or din g ly , w he n A lst om Pow e r’ s e mpl oy e e s d ama g e d th e tur bin e , H EL P no tif

ie d it s 3 insurers. Those insurers ultimately pai droug hly

$5 milli on in repa ir costs. Alstom paid the
rema ining $2 million, which was the de ductible under HEL P’s insurance policy
. Al sto m no tif

ie d it s o wn

ins ur e r, Inf

ra ssu re , of the dama g e to the tur bin e imm e diate ly aft e r th e d ama g e o c c u r

r e d
. Ro u g h ly o n e w e e k late r , In f r a s s ur e ’ s Pr o

je c t In s ur an c e M an a g er a nd CEO flew f

rom Switz erla

nd to Texas to ins pec t t h e d am age. I nfra ssure did not, howeve r, end up offe ring to contribute to the re pair c osts. I n fac t, I nfra ssure a lleg edly tried to conc eal the e x istence of its ins ur anc e po lic y

fr om H EL P and

HE L P’ s in sure rs . 4 I n e xch ang e fo r p ayingthe tur bin e re pa ir

c os ts, HE L P’ s in sure rs re c e ive d a pr o- rata
ass ignm ent of A ls to m’ s i nt eres t in Al st om ’s I nfr ass ure p ol icy . C on seq uen tl y , HE L P ’s i ns urer s, FM Gl ob al and W ellin g ton , jo ine d w ithAl sto m in su ingInf

ra ssu re in H ay s Co un ty

dis tr ic t c ourt
. I nf ra ssu re te mpo ra

ri ly re mov e d the c a se to fe de ra l c ourt in Au sti n, but the pla int if fs we re a ble t o obtain a re mand to state cour t. I nfra ssure then f

iled its special appe ara

nce, which t h e t ri al court eventua lly

g rante d. S ubsequently , at the plaintiffs’ r equest, the c ourt issued finding s of fa ct and conclu s i o ns of law. In doing so, the court a dopted ver batim the proposed f

indings of f

act a nd4

conclusions of law that I nfra ssure had submitt ed. The plaintiffs submitt ed a reque st fo r a m en ded and additional finding s of fa ct and c onclusions of law. Af ter the c ourt denied the ir reque st, plaintiffs fi le d th is a

pp e a l.
STA ND AR D O F RE VI EW We reviewde novo a tr ial court’s determination of whether Texas can a ssert per sonal jurisdiction ove r a nonresident defe ndant. Moki MacRiver Ex peditions v. Drugg , 221 S.W .3d 569, 574 (Tex. 2007). We revie w the finding s of fa ct under lying suc h a dete rmination, howeve r, for leg al
an d f a c tu a l s u f

f ic ie n c y . B

MC Software Belgium, N.V. v. Marchand, 83 S.W .3d 789, 794 (Tex. 2002). Under

our leg al-suff

iciency standard of

rev i ew , we view

the evidenc e in the lig ht most favora

ble to the challeng ed finding and indulge ever y rea sonable infe renc e that would support it. City of Keller v. W

ilson , 168 S.W .3d 802, 822 (Tex. 2005)
. We must cre dit f avora ble evidenc e if a re asonable fac t-finder cou l d and dis reg ard c ontrary evidenc e unless a r easona ble fa ct-finde r could not. Id . at 827. Ther e is leg ally insufficient e vidence or “no e vidence ” of a v i t al fact when (a) there is a complete absence of evidence of a vit al fact; (b) the court is barred by rules of la

w or of evide nce f

rom g iving weig ht to the onl y evidenc e offere d to prove a vital fac t; (c) the evidenc e of fe re d to pr ov e a

vit a l f a c t is no mor e tha

n a me re sc int il la; or (d) th e ev ide nc e c on c lus ive ly establishes the opposite of the vital fac t. Me r r el l Dow Pharms., Inc. v . Havne r , 953 S.W .2d 706, 71 1 ( Te x. 19 97 ). Mo re tha n a sci nti lla of e vid e nc e e xists to sup po rt a fi nd ingif the e vid e nc e wo uld allow re asonable and fa ir-minded people to differ in their conc lusions. Id
.5 Under our fa ctual-suf

ficienc y standard of

revie w, we we i gh all the evidenc e in the
rec ord and ma

y overturn a

finding only if it is so ag ainst the g reat weig ht and pre pondera nce of the evidenc e as to be clea

rly wrongand manife stly

unjust. Se e Cai n v . B ain , 709 S.W .2d 175, 176 (Tex. 1986). Once we de termine that the tria l court’s f in d in g s a re suppor ted by sufficie nt evidence , we de cide a s a matter of l aw whe ther those f indings ne g ate a ll bases for pe rsonal jurisdiction. GJP, In c . v . G ho sh , 2 51 S.W. 3d 85 4, 87 1 ( Te x. Ap p. —Aus tin 20 08 , n o p e t.) . I n doin g so , we re vie w a ll rele vant evidenc e that wa s befor e the tria l court. Se e id
.

We review de novo a tr ial court’s c onclusions of law. Marchand , 83 S.W .3d at 794.
DI SCU SSIO N Appellants enume rate three issues: (1) whe ther Infra ssure’s i n -state a ctivities are sufficie nt to subject it to the persona l jur isdiction of Texas c ourts; ( 2) whether the Texas Insuranc e Cod e su bje c ts Inf ra ssu re to t he pers on al juri sd ic tio n o f T e xas c ourt s; a nd (3 ) whe the r t

he fo rumse le c tio n c la

us e in I nf ra ssu re ’s po lic y

is m and a tor

y or pe rm iss ive . T he se iss ue s are int e rr e late d, so
w e a d dr e s s t h e mj o i n t l y.

Ap pe lla nts argue that Inf

ra ssu re is s ub je c t to pe rs on a l juri sd ict io n in Te xas c ourt s beca use Infra ssure (1) insured and collecte d premiums from maintenanc e wor k in Texas and (2) se nt high- ra nk ingc omp any

e xec uti ve s to Te xas t o inve sti g a te Al sto m’ s c la im. Texas’s long- arm-jur isdiction statute g overns Te x as cour ts’ exercise of

jurisdiction
over nonr esident def

endants. SeeTex. Ci v. Prac. & Rem. Code Ann. §§ 17.041-.045 (West 2008). The statute pe rmits Tex as cour ts to ex erc ise jurisdiction over a nonr esident d ef endant that “ does6

business” in Texas. Id
. § 17.042. This br oad languag e extends Tex as cour ts’ persona l jurisdiction “‘a s far as the fe dera l constituti onal re qu i re m en t s of due pr ocess will per mit.’” Marchand, 83 S.W .3d at 795 (quoting U- An c ho r A dv e r. , I

nc . v . B ur t , 5 53 S.W. 2d

76 0, 76 2 ( Te x. 19 77 )) . T hu s, Texas courts look to both feder al and Texan jurisprudence in resolving questions of persona l jurisdiction. Id
.

The Te x as Supreme Court ha s rec ently restate d the standar d for pe rsonal jur isdiction:
Pers o nal jurisdiction is proper whe n the nonre sident defe ndant has e stablished min imum c on ta c ts w iththe fo rum st a te, and the e xer c ise of jur isd ic tio n c omp or

ts with traditional notions of fair play and substantial justice. Minimum co n t acts are su ff ic ie nt f or pe rs on a l juri sd ic ti on

wh e n th e no nr e sid e nt d e fe nd ant p ur po se fu lly avails itself of the pr ivilege of conduc ting a ctivities wi t h i n t h e for um State, thus inv ok ingthe be ne fi ts a

nd pr ote c tio ns of

its laws . Moki Mac , 221 S.W .3d at 575 (c itations and quotations omit ted). The Court continued: [T] here are three parts to a “ purpo s eful availment” inquiry . First, only the defe ndant’s conta cts with the forum a re r eleva nt, not the unilateral a ctivity of anothe r party or a third pe rson. Second, the c ontacts re lied upon must be purposef ul rather than random, fortuitous, or attenuate d. Thus, [s] ellers who rea ch out b ey o n done state and c re a te c on tin

uin g re lat i o n sh ips and

ob lig a tio ns wi th c iti zen s o f a no the r s tate ar e s u b j e c tt o t h e j u r i s d i c t i o no f

th e l a t t e r i n s u i t s b a s e d o n th e i r a c t i v i t i e s . F i n a l l y, the def endant must seek some benef it, advantag e or pr ofi t b y availingitself of the jurisdiction.
Id . ( c itatio ns and

qu otatio ns omi tte d) . T his ana ly sis e nta ils that “a de fe nd ant m ay

purp os e fu lly

avo id a par ticular for um by structuring its transac tions in such a way as t o neither profit from the for um’s laws nor subjec t itself to jurisdiction t here .” Id
.

A nonre sident defe ndant’s conta cts with a for um state7

may g iv e ri se to two ty

pes of pe rsonal jurisdiction. I f the de fenda nt has made continuous and sy stematic conta cts with the forum, g ener a l j u r is diction is established w h e t h e r o r n o tt h e d e f

e n d an t ’ s a l l e g e d

l i a b i l i ty ar i s e s f r o m t h o s e c o n t a c t s . In c on tr a st,
. . . [s]pe c if

ic jur isd ic tio n is esta

bli sh e d if the de fe nd ant’ s a lle g e d li a bil ity ari s[e s] out of

or [is] r e late d to an a c tiv ity

c on du c te d w ith in t

he fo rum.
Id . at 575-76 (c itations and quotations omit ted). Ge nera l jurisdiction “require s a showingthat the de fe nd ant c on du c te d s ub sta nti a l a c tiv iti e s w ith in t

he fo rum, a

mor e de mand ing min imum c on ta c ts analy s i s than for spe cific jurisdiction.” Marchand , 83 S.W .3d at 797 (c itation and quotation omitt ed).

Even if we wer e to assume that Infra ssure’s in-state contac ts were sufficie nt to satisfy the min imum- c on ta c ts te st fo r g e ne ra l or sp e c if ic jur isd ic tio n, that w ou ld n ot e nd our a na ly sis . T his is b e c a us e e ve n if

a no nr e sid e nt d e fe nd ant h a s ma de su ff ic ie nt c on ta c ts w ith th e for um st a te to
su pp or t a fi nd ingof

g e ne ra l or

sp e c if ic jur isd ic tio n, c on sti tut ion a l du e pr oc e ss c on c e rn s p ro hib it subjecting the nonre sident defe ndant to s u c h ju r isdiction if doing so would violate tra ditional notions of fa ir play

and substantial justice. Thus, once a cour t ha s deter mined that a nonresident de fenda nt’s contac ts with the forum are sufficie nt to subject the defe ndant t o the forum’ s jurisdiction, the court must also conside r “w h ether the asser tion of jurisdiction comports with fair play and substantial justice.” Gh os h , 2 5 1 S
. W
. 3 d at 8 6 8 (c i t i n g Marchand , 83 S.W .3d at 795). This analy sis involves
we ig hin g fi ve fa c tor s: (1) the bur den on the de fenda nt, (2) the int er es t s of the for um state in adjudicating the di spute, (3) the pla intiff' s interest in obtaining convenie nt and ef fec tive relief

, (4) the interstate judicial sy stem’s interest in obtainingthe most effic ient resolution of controve rsies, and ( 5) the shar ed intere st of the seve ral States in furthe ring fu nd ame nta l su

bs tanti ve so c ia l po lic ie s.8

Gu ar dia n R oy al E

x c ha nge As su ra nc e, Lt

d. v . E ng lis h Ch ina Cla

y s, P. L.C. , 815 S.W
. 2d 223, 228 ( T e x. 1 9 9 1 ) ( qu o tati o n s o mi tt e d )
. Wh e r e , a s h e r e , a d is p ute is inte r

n a ti o n a l, o n ly

th e f ir s t t h ree fa ct o rs ar e re levant. Se e id
. a t2 3 2 n . 1 7 ( “ S i n c e th i s i s ani n t e r n a t i o n a l d i s p u t e an d

n o ta d i s p ute betwee n coequa l sove reig ns in our fede ral sy stem, we need not c onsider the interstate j u d i cial sy stem’s interest in obtaining the m ost eff icient resolution of controve rsies or the sha red inter est of the seve ral states in fur

theringfundame ntal substantive social policies.”)
. General Jurisdiction

Appellants in i t i all y

argue that Te x as cour

ts should have g ener al jurisdiction over I nf ra ssu re be c a us e of the e xtent of I nf

ra ssu re ’s in- state a c tiv iti e s. We dis a g re e . T he re c or d r e ve a ls that I nfra ssure is connected to Tex as only throug h Alstom’s insurance policy . I t is true that under the policy I nfra ssure insure d nine maintenanc e proje cts in Texas betwee n 2001 and 2003. “It is the quality and natur e of the defendant’s [ forum-state ] contac ts,” howeve r, “rather than t heir number , that is important to the mini mum-contac ts analy sis.” American Type C u l t ure Collection, Inc. v. Coleman , 8 3 S. W.3 d 8 01 , 8 06 (T e x. 20 02 ). He re , t he poli c y a t is su e wa s n e g oti a te d in Switz erla nd betwee n Swiss parties, and it contemplated that all inter ac t i o n betwee n Alstom and I nf ra ssu re wou ld occur i n Sw itze rl and . F ur the rm or e , th e po lic y

did no t in iti a lly

me nti on Te xas; rathe r, Alstom brought T exas into the picture by asking Infra ssure to cove r spec ific projec ts there. See M oki Mac , 2 21 S.W. 3d at 57 5 ( “ [O]nl y the de fe nd ant’ s c on ta c ts w iththe fo rum are re le va nt” to the j u ri s d i ct i o nal ana ly sis, “not the unilatera l activity of anothe r par

ty or a third pe rson.”)
.I ndeed, it appe ars that the only time I nfra ssure e mploy ees e ver se t foot in Texas was when 5 its CEO a nd Pr oje c t Ins ur anc e Mana g e r f le w t o H ay s Co un ty

to i nv e sti g a te Al sto m’ s c la im. As n o te d a

b o v e , I n f r a s s u r e c o ll e c te d r o u g h ly $ 7 0 0 , 0 0 0 in p r e mi u ms f r o m A ls to m f

or 6 insuring A lstom’s work i n Texas. Appellants argue that these premiums wer e ef fec tively paid by Te xas r e sid e nts be c a

us e Al sto m pa sse d o n th e ir c os t to its c lie nts . T his fa c t is ir re le va nt b e c a us e “only the def endant’ s contac ts with the forum” a ffe ct t he jurisdi ctional ana ly sis, “not the unilatera l activity of another party or a third pe rson.” Moki Mac Riv er Expe ditions v. Drugg , 221 S.W .3d 569, 575 (Tex. 2007). Se e als o Medc ost, L.L .C. v. Loiseau , 16 6 S. W.3 d 4 21 , 4 28 n. 7 ( Te x. Ap p. —Aus tin 20 05 , n o p e t.) (“ Me dCo st’ s ‘p ro fi t- ba se d’ re latio ns hip thr ou g h an a tte nu a te d c ha in of c on tr a c ts w ith o t h e r s c an n o t c o n f

e r p e r s o n a l j u r i s d i c t i o n , n o r c an th e f a c t th a t M e d C o s t u l t i m a t e l y r e c e i v e d m o n e ys from Te x as entities.”)
. 9 F ina lly , I nf

ra ssu re ha d no co rp or a te pr e se nc e in T e xas, solicited no business in T exas, and did no 5 b u s i n e s s w i t hT e xa s r e s i de nts
. I n other wor ds, I nfra ssure’s c ontacts with Texas were not 6 “continuous and sy stematic.” Id . As a re sult, Tex as cour t s ca n n o t proper ly exercise g ener al jurisdiction over Infra ssure. Specific Jurisdiction

I t is a closer question whether Texas c ourts can proper ly exercise specific jurisdiction
ov e r I nf ra ssu re . So me fe de ra l c ourt s se e m to e mpl oy a c a te g or ic a l rul e that insure rs are su bje c t to specific jurisdiction where ver the ir policies oper ate. See, e .g. , Commonwealth v. SS Zoe Colocotroni , 628 F.2d 652, 670 (1st. Cir. 1980). Other fede ral c ourts reje ct that rule. See, e .g. , OMI Holdings, Inc. v. R oyal Ins. Co. of Canada , 149 F.3d 1086, 1094-95 (10th Cir. 1998). The Texas Supreme Court has implicitly reje cted it too. In Guardian Royal , the Court he ld that T e xas c ourt s could not proper ly

exercise pe rsonal jurisdiction over a n Eng lish insu re r o f an Eng lish company wh os e po lic y

c ov e re d lo sse s “ any

wh e re in the wo rl d [the ins ur e d] and its su bs idi ary c omp anie s d id business.” 815 S.W .2d at 225. Although the court deter mined that the insurer’ s contac ts with Tex as10

wer e theor etically

sufficie nt to just ify persona l jur isdiction, the c ourt held that asse rting jurisdiction over the insurer w ould be “unr easona ble.” Id
. at 232. In support of this positi on, the Court noted the fo llo wi ngfa c ts:

• Th e ins ur e r a

nd the ins ur e d w e re bo th E ng lis h c omp anie s;

• T h e i n s u r e d ’ s s u

b r o g e e , an o th e r

i n s ur e r , w a s n o ta

T e x a s c o mp an y;

• “All ac ts conce rning the neg otiation, impl ementation and perfor mance of the po lic y and e nd or se me nts (i nc lud ing the pa y me nt o f p re miums) oc c urre d in Eng land”;

• Texas’s interest in adjudicating the dispute was minimal because the par ties involved wer e “ne ither Texas consumer s nor [Tex as] insureds”; and

• Th e ins ur e d’ s in te re st i n li tig a tin g in T e xas w a s mi nim a l, becaus e it c ou ld obtain convenie nt and ef

fec tive relief

by litigatingin Eng land.

Id . at 232-33. Given its fac tual simil arities to this case, Guardian Royal is highly instructive for our own fa ctorial a

naly sis. As stated above, the first fac tor Texas courts conside r in deter mining whe ther they can r easo n a

b ly e xerc ise specif

ic per sonal jurisdiction over a nonr esident def endant is the burde n on the def

endant. Id . at 232. Courts have r epeatedly noted t h at l i tigating in Amer ica c an be espec ially difficult for f

oreig n defe ndants. See, e .g. , id
. at 229 (“‘ The unique burdens placed upon one who must defe nd oneself in a fore ign le g al sy stem should have signific ant weig ht in assessing th e r e a s o n a

b le n e s s o f

s tr e tc h in g th e lo n g ar

m o f p e r s o n a l j ur is d ic ti o no v e r n a ti o n a l b o rder s.’”) (q u o t i n g As ah i Me tal In du s. Co. v . S up e rio r Co ur t , 48 0 U. S. 10 2, 11 4 ( 19 87 )) . H e re , Inf ra ssu re is
a Swi ss c omp any

wi th r ou g hly

35 e mpl oy e e s and

no on g oin g pr e se nc e in the Un ite d Stat e s. Th e se11

fac ts sugg est that litigating in T exas w ould inde ed be burdensome on I nfra ssure. Appe llants argue that Inf ra ssu re ha s d e mon str a te d a wi ll in gn e ss t o s ub je c t it se lf to T e xas j ur isd ic tio n b e c a us e it voluntarily

insured maintena

nce w ork i n Texas and sent executives to Texas to investigate Alstom’s
c la im. Th e re is a sig nif

ic ant dif fe re nc e , how e ve r, be tw e e n s e nd ingtw o e mpl oy e e s o n a sin g le vis it to Texas and eng ag ing in a potentially leng thy lawsuit in Texas. Further more, a s will be discussed be low , it a pp e ars that even tho ug h Inf ra ssu re kn ow ing ly

ins ur e d ma int e na

nc e wo rk in T e xas, it expected that any

dispute over that insura

nce w ould be re solved exclusively in Switzerland. On the whole, th e n , th e f

ir s t f a c to r o f th e “ f

a ir p la y an d s u b s ta n ti a l ju s ti c e ” an a ly s is , th e b ur d e n o nthe defe ndant, weig hs ag ainst exercising persona l jurisdiction over Infra ssure.

Th e se c on d f

a c tor Te xas c ourt s c on sid e r i n d e te rm ini ngwh e the r t he y c an r e a so na

bly
e xer c ise sp e c if

ic pe rs on a l juri sd ic tio n o ve r a no nr e sid e nt d e fe nd ant i s T exas’ s inte re st i n adjudicatingthe dispute. Id . at 232. Texas has no intere st in adjudicating this dispute bec ause none of the pa rties is a Texas reside nt. Se e id . at 23 3 ( “ Te xas d oes no t hav e a c omp e lli ngint e re st i n providing a for

um for re solution of disput es betwe en [foreig n] i nsurer s.”). Appe llants argue that Texas I nsuranc e C o d e ch apter 101 demonstrates that Texas professes a n interest in insuranc e disputes like this one. Chapte r 101 regulates the una uthorized practice of insuranc e in Texas, and it purports to “subject certain insurers and persons to the j urisdiction of .
. . the cour ts of this state.” Te x. I ns . Co de Ann. § 1 01 .0 01 (c )( 2) (We st 2 00 9) . B y its ow n ter

ms, ho we ve r, c ha

pte r 101 a ims to pr ote c t T e xas r e sid e nts and to p re ve nt u

na uth or ize d in sure rs fr om us ing Te xas a s a “ sa fe ha rb or ” to issue unauthorized insuranc e. Se e id . § 10 1. 00 1( b) , ( d) . N e ith e r i ssu e is imp lic a te d he re , a s n o p art yMoreove r, althoug h I nfra ssure issued a n insurance policy

to a non-re sident company that 7 cover ed wor

k perf ormed in Texas, this conduct does not constitute “the business of insurance ” as define d by the Texas L eg islature in the Texas I nsuranc e Code. See Tex. Ins. Code. Ann. § 101.051 (West 2009). Be cause I nfra ssure ha s not eng ag ed in the business of insura nce a s defined in se ction 101.051 of t he ins uranc e code, I nfra ssure would not be subj ect to regulation under c hapter 101 for the unauthorized pra ctice of insurance
. Se e id . § 101.001. Appellants ar g ue that Insuranc e Code section 101.001(b)( 3) shows the Tex as leg islature 8 h as p ro fe s s ed an interest in protec ting a ll insurers license d to do business in Tex as. SeeT e x I ns . Code § 101.001(b)( 3) (“ I t is the policy of this state to pr otect residents ag ainst acts by a per son or insurer who is not authorized to do ins uranc e busi ness i n this state by
. . . protecting authorized . . . ins ur e rs . . . from unfa ir competition by unauthorized persons and insurers.” ) (e mphasis added) . The statute plainly states, howeve r, that Texas ha s an intere st in protecting “author ized insurers” only as a me ans of pr ote c tin g Te xas re sid e nts
. No Te xas r e sid e nt h a s an inte re st i n th is l aws uit . T hu s, thi s lawsuit does not further

the intere st ex presse d in section 101.001(b)( 3). And e ven if it did, se c tio n 1 01 .0 01 (b )( 3) c ou ld n ot c re a te jur isd icti on ov e r I nf ra ssu re if jur isd ic tio n w e re oth e rw ise unconstitutional. See BMC Software Belgium, N.V. v. Marchand, 83 S.W .3d 789, 795 (Tex. 2002) (exercise of per sonal jurisdiction is li mited by constitutional due proce ss considerations). 12 is a Te xas r e sid e nt a

nd I nf ra ssu re di d no t is su e ins ur anc e out of Te xas. Thus , c on tr ary to 7 Appellants’ argument, the Texas L eg islature has not e x presse d an interest in disputes like this one. 8 We theref ore c onclude that the se cond fa ctor of the “fa ir play and substantial justice” a naly sis weig hs ag ainst exercising persona l jurisdiction over Infra ssure.

Th e thi rd fa c tor Te xas c ourt s c on sid e r i n d e te rm ini ngwh e the r t he y c an r e a so na

bly
e xer c ise sp e c if

ic pe rs on a l juri sd ic tio n o ve r a no nresi de nt d e fe nd ant i s th e pla int if f’ s inte re st i n obtaining convenie nt a

nd eff ective relief

. Guardian Royal , 815 S.W .2d at 232. Appellants a rgue that Texas is the most co n v en i en t and ef fec tive forum bec ause ( 1) witnesses a re loc ated he re a

nd (2 ) a pp e lla nt F M G lob a l ha s an o ff

ice here . Wh ile it i s tr

ue that so me wi tne sse s, inc lud ingso me wh o p e rs on a lly

ins pe c te d th e dama g e to H EL P’ s turb ine , a re pr e suma

bly loc ate d in Texa s, it i s a lso true t h a t m a ny k e y w it n e s s e s, including A lstom and I nfra ssure e mploy ees, a re loc ated in Switzerland. Cf
. TH Agric. & Nutrit ion, LL C v. AceEuropean Group Ltd. , 488 F.3d 1282, 1295- 96 (10t h Cir.At a min imum, S wi tze rl and

is i nd isp uta

bly a c on ve nie nt a

nd e ff e c tiv e fo rum f

or the Swi ss 9 c omp any Al sto m. It is a xiomatic that subr og e e s st and in t he sh oe s o f t

he ir su br og or s b oth proce durally

and substantively
. See Guardian Royal Ex ch a n g e Assurance, Ltd. v. English C hina Cla y s, P. L.C. , 81 5 S .W .2 d 2 23 , 2 34 (Tex . 1 99 1) ( Mau z y , J ., di ss ent in g). Th us , t o t he ex ten t t hatFM Global is A lstom’s subrog ee, it c annot complain that Switz erla nd is an inconvenie nt and ineff ective fo rum. 13 2007) (pr esenc e of some witnesses in Kansa s does not make Ka nsas more c onvenient and e ffe ctive forum when other witnesses are in N ether lands). In addition, e ven though FM Global has a n office in T e xas, it o pe rate s g lob a lly , a nd it h a s a lr e a dy

joi ne d th e oth e r a

pp e lla nts in fi lin g an a c tio n a g a ins t I nf r a s s u r e i nS w i t z e r l an d
. T h i s f a c tun d e r m i n e s th e c l a i mth a tl i t i g a t i n g i nS w i t z e r l an d i s t ru ly inc on ve nie nt o r i ne ffect iv e for any of the Ap pe lla

nts
. Thus, the third fac tor of the “ fair pla y and 9 substantial justi ce” analy sis weig hs ag ainst Texas co u rt s exercising specific persona l jurisdiction over Infra ssure.

As alre ady

discussed, the i n t er n at i o nal nature of this dispute means that we do not need to consider the fourth and f ifth fac tors of the “ fair pla y and substantial justice” a naly sis. See Guardian Royal , 8 15 S.W. 2d a t 23 2 n .1 7 ( “ Sin c e thi s is an inte rn a tio na l di sp ute and no t a dis pute betwee n coequa l sovereig ns in our fede ral sy s t em , we ne ed not consider the interstate judicia l sy stem’s interest in obtaining the m ost eff icient resolution of controve rsies or the sha red inter est of the s ever a l s tate s in

f u rth e r in g f

u n d ame n ta l s u

b s ta n ti v e s o c ia l p o li c ie s . ” )
. B u t b e c a u s e the
no nr e sid e nt d e fe nd ant is an ins ur e r, we c on sid e r t wo a dd iti on a l f

a c tor s: “ (a ) t

he ins ur e r’ s awa

re ne ss that it wa s r e sp on sib le to c ov e r l os se s ari sin g fr om a su bs tanti a l su

bje c t of ins ur anc e re g ular ly prese nt in the forum state; and ( b) t he nature of the pa rticular insura

nce c ontrac t and its covera g e.” Id . at 227. Reg ardingthe first of these fac tors, Infra ssure undoubtedly fo re s aw that c laims mightWe discuss this i ssue more e x tensively below. 10 Th i s i s ana d d i t i o n a l f a c t o r w e i g h i n ga g a i n s tT e xa s e xe r c i s i n g j ur i s d i c t i o no v e r th is 11 dispute. See B urger King Corp. v. Rudzewicz , 4 71 U.S
. 46 2, 48 2 ( 19 85 ) ( c ho ic e -o f- law c la us e re le va nt to jur isd ic tio na l ana ly sis be c a us e it s ug g e sts wh e the r t

he re wa s “ de lib e ra

te a ff ili a tio n w ith the forum State a

nd the re asonable fore seea bility of possible litigation there ”). 14 arise f rom ac tiviti es in Texas. Howeve r, fore seea bility alone is not enoug h. Se e id . ( fo re se e a bil ity
no t ne c e ssa

ri ly de te rm inativ e wh e n c on sid e ri ngwh e the r n onre sid e nt d e fe nd ant p urp osef ull y established minimum contacts with foru m s t at e). G iven that both parties to Alstom’s insuranc e po lic y we re Swi ss, and

g ive n th a t th e po lic y ’s “ L aw a nd Juri sd ic ti on Cl a

us e ” name d o nly Swi tze rl and a s a loc a tio n to a ir dis pute s, Infra ssure had no rea son to f orese e beingsued in Texas 10
e ve n if it ha d re a so n to fo re se e c la ims ari sin g in T e xas. Mo re ov e r, I nf ra ssu re ins ur e d o nly

dis c re te
ma int e na nc e pr oje c ts i n T e xas; it d id n ot i ns ur e pr op e rt y that re ma ine d in Texa s o n a n o ng oin g ba sis
. Reg ardingthe sec ond insurance -spec ific fa ctor, namely “the nature of the particula r insurance contra ct and its cove ra g e , ” A ls to m’ s insur ance contra ct did specific ally cover maintenanc e projec ts in Tex as. As noted a bove, howe ver, the contra ct dictated that all claims wer e to be handled and all communications made throug h Swiss entiti es in Switz erla nd. As also noted above , the “L aw and Jurisdi ction Clause” of the contra ct evince s an intent to addre ss all dispute s i n Switz erla nd. Ap pe lla nts argue that, o n th e c on tr ary , th e “ L aw a nd Juri sd ic tio n Cl a

us e ” su g g e sts that Texas ma

y proper ly exercise jurisdiction over disputes betwee n Alstom and I nfra ssure. Ag ain, t h a tc l a u s e r e a d s : “ F o r

a l l d i s p u t e s ar i s i n g o u t o f th i s In s ur an c e c o n tr a c t , S w i s s L aw s h a l l a p p l y. Place of J urisdiction is Zür ich.” Appe llants conce de that the first sentenc e of this c lause dictates that Swi ss law w ill g ov e rn

thi s d isp ute e ve n if

it p lay s o ut i n T e xas c ourt s. They never theless contend 1115

that jurisdiction is proper in Texas because the sec ond sentenc e of the clause is “permissive” r ather than “manda

tory ”—i.e., it states that Z urich is a pr oper f orum but not the on ly

proper forum. Texas courts g ener all y h o n o r forum-selec tion clauses. See Michiana Easy Livin’ Co u n tr y , I n c . v. Holten , 168 S.W .3d 777, 793 (Tex. 2005) (“[E]nforce ment of a f orum-sele ction clause is mandatory absent a showing that enfor ceme nt w ould be unre asonable and unjust, or that the clause was invalid due to fr aud or ove rre aching .”) ( quot at i o n o m i t ted). And A ppellants are
corr ect that only

a cla use mandating

suit in Zuric h could re nder Te x as an impr o p er f orum per se . Se e id . at 792 (“ Ge ne ra lly , a for um- se le c tio n c la

us e op e rate s a s c on se nt t o ju ri sd ic tio n in

on e fo rum,
no t pr oo f t

hat the Con sti tut ion

wo uld a llo w n o o the r. ” ). L og ic a lly , h ow e ve r, “ ins e rt ion of a c la us e desig nating a for eig n forum sug g ests that no local ava ilment was intended.” Id . at 793. This is an application of the vener able pr inciple ex p r es s i o u n i u s es t

ex cl u s i o alterius

— “ th e n a mi n g o f one thing excludes another .” See CKB & Assocs., Inc . v. MooreMcCormac k Pe troleum, Inc. , 734 S.W .2d 653, 655-56 (Te x . 1987) (a

pply ing pr inciple to interp re tation of contra ct). The fac t that Alstom’s insur ance contra ct names only Z urich a s “Place of Jurisdi ction” strong ly sug g ests that the par

ties intended jurisdiction to lie nowhere else. Cf
. Frietsch v. Re

fco, Inc

. , 56 F.3d 825, 829 ( 7th C i r. 1995) (f inding it “implausible” that forum-se lection clause was intende d to be per missive rather tha

n
mand a tor y be c a us e c la us e say s “ pla c e of

jur isd ic tio n is Ge rm any ,” no t “ a pla c e of ju ri sdic tio n is Ger many .”). When coupled with the fac ts that (1) both parties to the c ontrac t are Swiss and (2) the
c on tr a c t un e qu ivo c a lly

su bje c ts a ll d isp ute s to Swi ss l aw, the mos t re a so na ble re a din g of

the c la us e is that the parties intende d Z urich to be the only place of jurisdiction. Neve rt h eless, bec ause A lstom’s insurance policy does not ac tually

say “exclusive place of jurisdiction is Zur ich”or something to that effe ct, we cannot c onclude that the c lause a lone16

prec ludes Texas courts fr om exercising pe rsonal jurisdiction over Infra ssure. See Michiana , 16 8 S. W.3 d at 79 2. Th is fa c t do e s no t he lp Ap pe lla nts , ho we ve r, be c a

us e the c la

us e wa s n ot t

he so le basis on which the tria l court g rante d I nfra ssure’s spe cial appear ance . Rather, the tr ial court tre ated the clause as but one element of i ts “fair play and substantial justice” a

naly sis. Doing so wa s proper . Se e id . at 793 (“ [I ]nsertion of a clause desig nating a for eig n forum sug g ests that no local ava ilment was intende d.”). The clause exemplifies how “a de fenda nt may purposef ully [atte m p t to] avoid a particula r for um by structuring its transac tions in such a way as t o neither profit from the f orum’s laws nor subjec t itself to jurisdiction t here .” Moki Mac , 221 S.W .3d at 575.

As a re sult of all these consider ations, we hold t hat eve n if Infra ssure ha d sufficie nt min imum c on ta c ts w ithTe xas t o ju sti fy sp e c if ic jur isd ic tio n, it wo uld

be un fa ir and unre a so na

ble for Te x as cour

ts to ex erc ise that jurisdiction.
CO NC LU SION On these f

acts, Te x as cour

ts cannot fa irly

and re asonably

exercise pe rsonal jurisdiction over the Swiss company I nfra ssure. We there fore aff irm the trial cour

t’s g rant of I nfra ssure’s spe cial appe ara nce.

__________________________________________

David Pury ear , J ustice Be fore J ustices Patterson, Pury ear and He nson Affir med Filed: F ebrua

ry 12, 2010