IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

 

No. 98-11141

 

WIEN AIR ALASKA, INC.

Plaintiff-Appellant

versus

GERALD I. BRANDT

Defendant-Appellee

 

Appeal from the United States District Court

For the Northern District of Texas

 

November 5, 1999

Before REAVLEY, HIGGINBOTHAM, and DENNIS, Circuit Judges.

HIGGINBOTHAM, Circuit Judge:

In this diversity case, we consider whether a foreign

defendant’s contacts with Texas are sufficient to confer personal

jurisdiction under the Due Process Clause. Because we find

sufficient minimum contacts exist and the assertion of jurisdiction

would not be unfair or unreasonable, we REVERSE the district

court’s dismissal and REMAND for further proceedings consistent

with this opinion.

I.

Wien Air Alaska, Inc. (Wien Air) is an Alaskan corporation
2

based in Texas, whose sole shareholder is Thor Tjontveit. Gerald I.

Brandt is a citizen of the Federal Republic of Germany who provided

his services as an attorney for Wien Air from approximately August

1989 to April 1991. Brandt originally visited Texas in 1989 to

help Tjontveit acquire Wien Air, then conducted most of his

business with Wien Air through foreign meetings, correspondence and

communications to Texas, and a final set of meetings in Texas in

April 1991. 

Wien Air was in the business of leasing U.S. aircraft and

planned to expand into Eastern Europe. Brandt helped Wien Air

develop this plan. On September 29, 1990, Wien Air authorized

Brandt to form two German companies to maintain airport facilities

in Germany. Late that year, Wien Air learned that Brandt’s law

partner, Hubertus Kestler, represented another airline company, GAC

Trans-Air Carrier Lease GmbH Flugzeugleasing (GAC) and its sole

shareholder Stephan Grzimek. Kestler was developing a plan for GAC

that competed with Wien Air’s plans. 

Brandt told Wien Air that he represented only Wien Air’s

interests and suggested that Wien Air might be able to purchase GAC

because of GAC’s financial problems, provided Wien Air sold GAC

some airplanes first. Tjontveit proposed to buy GAC and Brandt

told Tjontveit on January 3, 1991 that GAC would accept Tjontveit’s

offer if Tjontveit would pay $1.3 million earnest money to Brandt,

toward the full price of 5 million deutsche marks (DM). Acceptances

of this offer were exchanged during February and March 1991.

At the same time, Brandt arranged for Wien Air to purchase a
3

25% stake in Flugservice Berlin (FSB), a company owned by the

former East German Airlines. On February 25, 1991, in Germany, a

document was prepared, signed, and notarized, which supposedly

created a new company, Neue Flugservice und Development Berlin GmbH

(NFSB), as a holding company for the FSB purchase. Stock in NFSB

was never turned over to Wien Air. Only in October of 1993 was it

discovered by Ms. Long, an employee of Wien Air, that Brandt owned

the FSB stock himself and had acquired the interest March 1, 1991.

Tjontveit met Brandt in Germany on March 11, 1991 to close

Wien Air’s purchase of GAC and Wien Air’s sale of aircraft to GAC,

but GAC stock was not delivered and the transaction did not close.

Brandt’s law partner Kestler, however, allegedly withdrew DM 5

million from Wien Air’s bank in Germany that day without

Tjontveit’s knowledge or permission, using a power of attorney

given to Kestler by Wien Air at Brandt’s request.

Brandt prepared a new document, confirming the GAC deal,

signed by GAC, notarized by Ms. Long, which set a new closing date

for the sale: March 26, 1991. Later, Brandt would tell Wien Air

that this document was unenforceable under German law because it

was not notarized by a German notary. At that time, Brandt told

Tjontveit to go to Iceland on March 25, 1991 to close the GAC

transaction. Tjontveit went there, but neither Brandt nor GAC

appeared. Brandt called and said closing would occur instead in

mid-April 1991. On March 28, 1991 and April 2, 1991, Brandt wrote

Tjontveit in Texas promising that all transactions would be

completed as intended.
4

On April 6, 1991, Tjontveit terminated Brandt’s services for

himself and Wien Air, and on April 10, 1991, Tjontveit told Brandt

that Wien Air had retained another lawyer as counsel and warned

Brandt not to transfer or vote shares of FSB. Tjontveit then asked

Brandt to return Wien Air’s power of attorney and to take no

further actions until instructed. Tjontveit stated, however, that

he was not terminating Brandt as an attorney, but wanted to

continue the relation once the GAC situation was resolved.

The GAC deal did not close on April 15, 1991. The next day,

Brandt called Tjontveit in Texas to again promise that the GAC deal

would close. Brandt said he would come to Texas to close all

outstanding matters on April 21 and 22, 1991.

Meetings in Texas on April 21 and 22 occurred with both Brandt

and Tjontveit present. At these meetings, Brandt stated the

following: (1) Brandt would complete the German registration

process for the two Wien Air subsidiaries; (2) FSB stock belonged

to Wien Air, but Brandt held it in trust for Wien Air; (3) Brandt

would return all of Wien Air’s documents and all valuable personal

property of Tjontveit; (4) Brandt would go back to Germany and

determine the status of FSB and report back to Wien Air; and (5)

Brandt was still acting as Wien Air’s attorney. 

Brandt did not disclose that he had appropriated the interest

in FSB to himself or explain what had happened to the DM 5 million

Kestler had taken. Brandt then demanded DM 1.3 million for past

services. Wien Air agreed to pay this based on the above promises

and representations, signing a document in German allowing Brandt
5

to withdraw the money from a Wien Air account in Germany.

Finally, on May 9, 1991, in New York, Brandt announced the GAC

deal would not close and GAC stock would not be delivered. He

explained that the document evidencing that deal was not binding

because it had not been notarized by a German notary. Brandt said

he did not represent Wien Air or Tjontveit, but only represented

GAC.

Wien Air brought suit in Texas state court alleging fraud,

fraudulent inducement, and breach of contract and fiduciary duties.

The case was removed to federal court. Brandt sought dismissal

asserting lack of personal jurisdiction and forum non conveniens.

The district court did not hold an evidentiary hearing but based

its decisions on the affidavits and pleadings of the parties. The

court granted dismissal, holding that Wien Air was unable to make

a prima facie showing that the defendant had the necessary minimum

contacts with Texas to support specific jurisdiction. We REVERSE

the dismissal because we find that the defendant’s contacts with

Texas suffice to show the requisite minimum contacts and that the

assertion would not be unfair or unreasonable. The issue of forum

non conveniens was not raised on appeal and we do not consider it.

II.

Wien Air seeks to establish jurisdiction over Brandt under the

Texas long arm statute, which Texas construes to extend to the

limits of due process. See Schlobohm v. Schapiro, 784 SW.2d 355,
6

357 (Tex. 1990); Wilson v. Belin, 20 F.3d 644, 647 (5th Cir. 1994).

Obtaining personal jurisdiction over a non-resident of a state is

constitutionally permissible if the nonresident “purposefully

availed himself of the benefits and protections” of Texas by

establishing “minimum contacts” with Texas such that the defendant

could “reasonably anticipate[] being haled into court in the forum

state” and the exercise of jurisdiction does not offend

“traditional notions of fair play and substantial justice.” Holt

Oil & Gas Corp. v. Harvey, 801 F.2d 773, 777 (5th Cir. 1987);

Wilson, 20 F.3d at 647.

At issue is whether Brandt’s contacts with Texas are

sufficient to support an assertion of personal jurisdiction.

Because the district court did not hold an evidentiary hearing on

the issue of jurisdiction, Wien Air need only establish a prima

facie case. See Wilson, 20 F.3d at 648. Where the facts are not

in dispute, the review of the district court’s determination of

personal jurisdiction is de novo. Id. at 647-48. Where facts are

disputed, the plaintiff presenting a prima facie case is entitled

to have the conflicts resolved in his favor. See Bullion v.

Gillespie, 895 F.2d 213, 216-17 (5th Cir. 1990); Felch v.

Transportes Lar-Mex SA De CV, 92 F.3d 320, 327 (5th Cir. 1996).

The district court concluded that while Brandt “had contact with

Wien Air in Texas on several occasions, those contacts related to

and developed out of an ongoing relationship between the parties

established in Germany and do not establish that Brandt

purposefully availed himself of the benefits and protections of
7

Texas law.” Even if the parties formed their relationship in

Germany, however, a single act by Brandt directed toward Texas that

gives rise to a cause of action by Wien Air can support a finding

of minimum contacts. See Calder v. Jones, 465 U.S. 783 (1984);

Ruston Gas Turbines, Inc. v. Donaldson Co., 9 F.3d 415, 419 (5th

Cir. 1993). 

In Calder minimum contacts were found when a journalist wrote

a defamatory article in Florida which he knew would affect the

plaintiff’s reputation in California. The Court specifically found

that the defendant had “expressly aimed” the tort at California.

Id. at 789. The defendants in Calder analogized themselves to a

welder who works on a boiler in Florida which later explodes in

California. The defendants argued that jurisdiction over the

welder would not be proper (even if allowable over the

manufacturer) because the welder did not control where the

manufacturer sold the boiler and the welder “derive[d] no direct

benefit” from such distant sales. Id. The Court rejected this

analogy based on the fact that the defendants were charged with

intentional, tortious conduct directed toward the forum state. In

those circumstances, the defendants must “‘reasonably anticipate

being haled into court there’ to answer for the truth of the

statements made in their article.” Id. at 790, 789-90.

This test applies outside the context of defamation, see

Allred v. Peterson, 117 F.3d 278, 286-287 (5th Cir. 1997), although

it has been remarked that the effects of defamation are more

obviously felt in a foreign forum than the effects of other
8

intentional torts. Id. at 287 (citing Wallace v. Herron, 778 F.2d

391, 395 (7th Cir. 1985)). The foreseeable effects of a tort “are

to be assessed as part of the analysis of the defendant’s relevant

contacts with the forum.” Id. (quoting Wallace, 778 F.2d at 395

(emphasis added)). Foreseeable injury alone is not sufficient to

confer specific jurisdiction, absent the direction of specific acts

toward the forum. See, e.g., Jobe v. ATR Marketing, Inc., 87 F.3d

751, 753-54 (5th Cir. 1996); Southmark Corp. v. Life Investors,

Inc., 851 F.2d 763 (5th Cir. 1988).

According to the plaintiff’s allegations, however, Brandt

performed several tortious actions outside of Texas directed

towards Wien Air in Texas. These actions had foreseeable effects

in the forum and were directed at the forum. These contacts take

the form of letters, faxes, and phone calls to Texas by Brandt

whose contents contained fraudulent misrepresentations and promises

and whose contents failed to disclose material information. 

For example, Wien Air provides a sworn affidavit from its

employee Ms. Long stating that numerous calls, letters and faxes

were made by Brandt to Wien Air in Texas, and she avers that these

calls contained the promises, assurances, and representations that

are at the heart of the lawsuit. In her words, “Mr. Brandt told me

by phone to Texas that the delivery of the GAC stock would occur on

March 11, 1991.” She also stated that 

[t]here were several times between late 1990 and late

1991 when Mr. Brandt called me either at my home in Texas

or at the office in Texas, regarding these transactions.

He called many times between late February, 1991 through

April, 1991 and reassured me that a deal had been

consummated, that the GAC would be delivered to Wien Air,
9

and that the aircraft purchases would all close. 

Brandt also performed services through these communications.

For example, Long states that Brandt sent by fax a copy of a Notary

Act he prepared, notarized by Kestler, which supposedly

“constituted acceptance of an offer Mr. Tjontveit had made to buy

100 percent of the GAC stock from Mr. Grzimek” according to Brandt.

Another example provided by Wien Air is a letter sent from

Brandt to Texas, dated April 2, 1991, in which Brandt states, with

respect to the GAC deal: “You know, I’m always helping you where I

can. Also in this special matter, we will find a solution, which

will satisfy you. This I promised you.” In another letter to

Texas, dated March 28, 1991, Brandt states: “Mr. Grzimek couldn’t

reach you by phone and so he beg[g]ed me to confirm, that all

pending contracts between you and Wien Air Alaska and him and GAC

are valid and will be fulfil[l]ed by him and GAC, when both parties

fulfil[l] their obligations.”

Brandt disputes the number and content of the communications

between Brandt and Wien Air in Texas. Brandt claims, for example,

that there were few or no calls, and even if there were any, there

is no evidence that their content related to or gave rise to any

cause of action. At this stage, however, any conflict between the

plaintiff and defendant with respect to the content and existence

of these communications must be construed in favor of Wien Air. As

such, the prima facie evidence indicates that Brandt directed

affirmative misrepresentations and omissions to the plaintiff in

Texas. 
10

The defendant argues that communications directed into a forum

standing alone are insufficient to support a finding of minimum

contacts. See, e.g., Holt Oil & Gas Corp. v. Harvey, 801 F.2d 773,

778 (5th Cir. 1987); Patterson v. Dietz, Inc., 764 F.2d 1145, 1147

(5th Cir. 1985); Nationwide Mutual Ins. v. Tryg International Ins.,

91 F.3d 790, 796 (6th Cir. 1996); Reynolds v. International Amateur

Athletic Fed., 23 F.3d 1110, 1116 (6th Cir. 1994); FDIC v. Malmo,

939 F.2d 535 (8th Cir. 1991); Austad Co. v. Pennie & Edmonds, 823

F.2d 223 (8th Cir. 1987). Cf. Allred v. Moore & Peterson, 117 F.3d

278 (5th Cir. 1997) (service of process on plaintiff in forum

insufficient to support personal jurisdiction in abuse of

prosecution claim). 

In all of these cases, however, the communications with the

forum did not actually give rise to a cause of action. Instead,

the communications merely solicited business from the forum,

negotiated a contract, formed an initial attorney-client

relationship, or involved services not alleged to form the basis of

the complaint. These cases are thus distinguishable from the

present case. When the actual content of communications with a

forum gives rise to intentional tort causes of action, this alone

constitutes purposeful availment. The defendant is purposefully

availing himself of “the privilege of causing a consequence” in

Texas. Cf. Serras v. First Tennessee Bank National Ass’n., 875

F.2d 1212 (6th Cir. 1989). It is of no use to say that the

plaintiff “fortuitously” resided in Texas. See Holt Oil, 801 F.2d

at 778. If this argument were valid in the tort context, the
11

defendant could mail a bomb to a person in Texas but claim Texas

had no jurisdiction because it was fortuitous that the victim’s zip

code was in Texas. It may have been fortuitous, but the tortious

nature of the directed activity constitutes purposeful availment.

Of course, when a lawyer chooses to represent a client in

another forum, that in itself does not confer personal jurisdiction

if the claim does not arise from the lawyer’s contacts with the

forum. See Austad, 823 F.2d at 226. However, when the claim

arises from a breach of fiduciary duty based on a failure to

disclose material information, the fact that the lawyer continually

communicated with the forum while steadfastly failing to disclose

material information shows the purposeful direction of material

omissions to the forum state. Cf. Diamond Mortgage Corp. v. Sugar,

913 F.2d 1233 (7th Cir. 1990). In Diamond Mortgage, attorneys

failed to disclose conflicts of interests at the time in which they

rendered some of their services within the state of Illinois, which

the Seventh Circuit found sufficient for “arising under”

jurisdiction under a state long-arm statute. Id. at 1245-46. The

court also found the assertion of jurisdiction was constitutional

under the Due Process Clause. See id. at 1247. The services were

performed not only by visits to the forum, but also by letters and

phone calls. Furthermore, the court noted that “the precise number

of physical visits to Illinois . . . may be irrelevant,” because

“‘it is an inescapable fact of modern commercial life that a

substantial amount of business is transacted solely by mail and

wire communications across state lines, thus obviating the need for
12

physical presence within a State in which business is conducted.’”

Id. (quoting Burger King, 471 U.S. at 476) (emphasis added). Cf.

Serras, 875 F.2d at 1218 (rejecting in dictum as “feeble” the

defendant’s argument that “if it had a duty to disclose . . . ,

that duty could have been performed anywhere so that any failure to

perform shouldn’t be held to establish a Michigan contact,” at

least when the plaintiff had also alleged affirmative acts of

misrepresentation in Michigan).

In addition to the communications Brandt directed into Texas

from outside of Texas, Brandt also visited Texas during 1989 at

which time he allegedly gained from Tjontveit the confidential

information he would later use against Wien Air. He also met with

Wien Air during April of 1991. During the April meeting, Brandt

allegedly made misrepresentations regarding his continuing legal

representation of Wien Air. Brandt, however, claims he was no

longer Wien Air’s attorney during this time period (and thus under

no duties) because his services as company attorney were terminated

on April 6, 1991, as pleaded in Wien Air’s complaint.

Even if Brandt’s services were terminated on April 6, 1991,

the evidence shows that on April 10, Tjontveit stated that he was

not halting Brandt’s services except with respect to the GAC

dispute. His letter to Brandt dated April 10 reads: “I want to

make it clear that I am not discharging you as my attorney and I

wish to continue our relationship as attorney and client.” It

continues to say “[i]f we can settle the GAC dispute

satisfactor[il]y to both of us it is my wish that I can revoke this
13

letter and we can reestablish our relationship as we did before

this dispute arose.”

Furthermore, at the April 22, 1991 meeting, Brandt demanded

payment for past legal services for dates up to and including the

meeting dates, indicating a continuing attorney relationship with

Wien Air. Brandt also allegedly promised that he was still

functioning as Wien Air’s attorney at that meeting in Texas and

also promised to complete legal work for Wien Air that he

supposedly had already started. This also indicates that an

attorney client relationship continued to exist.

An attorney-client relationship can be limited without

canceling it, and even a terminated relationship can be resumed.

Construing the facts most favorably to the plaintiff, this is what

appears to have occurred. Furthermore, by virtue of his alleged

misrepresentations, Brandt induced the plaintiff to sign a document

allowing Brandt to withdraw nearly $1 million from a trust account

in Germany. Brandt also failed to disclose information regarding

the GAC deal, insofar as Brandt allegedly no longer represented

Wien Air’s interests.

According to the evidence, Wien Air relied to its detriment on

such misrepresentations and omissions when it authorized Brandt to

take even more of Wien Air’s money with the hope that finally the

GAC deal would close. Brandt claims that no material fraud or

misrepresentations could have occurred at the April, 1991 meetings

in Texas because all relevant contracts had already been entered

into. Thus, none of his representations could have been relied
14

upon in relation to the contracts, since they already were formed.

This does little to combat the claims of breach of contract

with respect to fiduciary duty, however. Furthermore, the evidence

shows that the GAC deal had not closed as of April 22, 1991. Given

Brandt’s assertion that the GAC contract was invalid, it does not

behoove him to argue that it was already entered into. Construing

the situation most favorably to the plaintiff, the parties appeared

to have been continually modifying a deal whose terms had yet to

become final until the April meetings. The fact that the

defendant’s partner may have already converted the entire purchase

price of DM 5 million does not mean that Wien Air did not

detrimentally rely on the defendant’s representations in Texas in

April: Wien Air authorized Brandt to receive an additional DM 1.3

million in order to close the GAC deal. Then, during the next

month, Wien Air went to New York in hopes of closing this deal,

only to be thwarted again. All of this shows detrimental

reliance.

This case is most similar to Carteret Savings Bank, F.A. v.

Shushan, 954 F.2d 141 (3rd Cir. 1992). Carteret Savings concerned

misrepresentation and breach of fiduciary duty claims. Minimum

contacts were found when the defendant directed letters and phone

calls to the forum and then went to the forum for a final meeting

in which he failed to advise his client of material facts regarding

conflicts of interest. Id. at 149. Similar to the present case,

the meeting in Carteret Savings was a meeting regarding a business

transaction prior to the closing of the deal. Id. at 146, 149.
15

Not only did the court in Carteret Savings find minimum contacts,

but the court also found it insignificant that the defendant might

have come to the forum at the request of the plaintiff or that the

defendant might not have initially solicited the plaintiff’s

business. Id. 150. We likewise find irrelevant such allegations

by the defendant. For all of these reasons, we find that Wien Air

has established a prima facie case of minimum contacts over Brandt

with respect to its claims for fraud, fraudulent inducement, breach

of contract and breach of fiduciary duty. 

Once a plaintiff has established minimum contacts, the burden

shifts to the defendant to show the assertion of jurisdiction would

be unfair. See Akro Corp. v. Luker, 45 F.3d 1541, 1547 (Fed. Cir.

1995). To show that an exercise of jurisdiction is unreasonable

once minimum contacts are established, the defendant must make a

“compelling case” against it. Burger King Corp v. Rudzewicz, 471

U.S. 462, 477 (1985). It is rare to say the assertion is unfair

after minimum contacts have been shown. Akro, 45 F.3d at 1549.

The standards to be used are the “traditional notions of fair play

and substantial justice.” Felch, 92 F.3d at 323 (quoting Wilson 20

F.3d at 647; Asahi Metal Indus. Co. v. Superior Court, 480 U.S.

102, 113 (1987)). The interests to balance in this determination

are the burden on the defendant having to litigate in the forum;

the forum state’s interests in the lawsuit; the plaintiff’s

interests in convenient and effective relief; the judicial system’s

interest in efficient resolution of controversies; and the state’s

shared interest in furthering fundamental social policies. See
16

Ruston Gas Turbines, Inc. v. Donaldson Company, Inc., 9 F.3d 415,

421 (5th Cir. 1993). 

If a cause of action for fraud committed against a resident of

the forum is directly related to the tortious activities that give

rise to personal jurisdiction, an exercise of jurisdiction likely

comports with the due process clause, given the obvious interests

of the plaintiff and the forum state. See, e.g., D.J. Investments,

Inc. v. Metzeler Motorcycle Tire Agent Gregg, Inc., 754 F.2d 542,

548 (5th Cir. 1985).

Brandt claims the assertion would be unfair and unreasonable

because he is a German citizen, most of the witnesses are in

Germany, the courts in the U.S. would not be able to subpoena the

German witnesses, German law applies to all of the issues, the

judicial system’s interest in efficiency would dictate Germany

should resolve this dispute, and Texas has no interest in the case.

Wien Air’s prima facie evidence disputes many of these assertions,

especially the issue of where most of the witnesses reside and

whether they would be available to testify. 

Admittedly, litigation in the U.S. would place a burden on the

defendant. However, once minimum contacts are established, the

interests of the forum and the plaintiff justify even large burdens

on the defendant. See Asahi, 480 U.S. at 115. Moreover, Texas

clearly has an interest because the dispute involves a corporation

whose principal place of business is in Texas, and the corporation

allegedly was defrauded. This distinguishes Asahi, in which no

California parties remained in the lawsuit by the time the issue of
17

personal jurisdiction in California arose. See id. at 114. 

Resolving the conflicts in a light most favorable to the

plaintiff, we find no overwhelming burden to the defendant that

outweighs the legitimate interests of the plaintiff and the forum

state. At most Brandt demonstrates an inconvenience which would be

equally felt by forcing the plaintiff to litigate in Germany. For

all of these reasons, we hold that the assertion of jurisdiction

over the defendant is fair and reasonable.

REVERSED and REMANDED.