Opinion ID: 458560
Heading Depth: 3
Heading Rank: 1

Heading: Minimum-Contacts Analysis

Text: 22 We begin our application of the foregoing principles to the case at hand by examining the relationship among Spademan, the State of Texas, and this litigation. See Helicopteros Nacionales, 104 S.Ct. at 1872; Shaffer v. Heitner, 433 U.S. at 204, 97 S.Ct. at 2579-2580. The plaintiffs argue that the district court erred in analyzing each of Spademan's contacts with Texas individually. The plaintiffs assert that the court should have looked to the totality of the circumstances, including the number of contacts, to determine whether the exercise of in personam jurisdiction is proper. They point to the following contacts: Spademan entered into a contract with Texas residents; Spademan shipped bindings to the plaintiffs in Texas for modification; Spademan, or his attorneys, and the plaintiffs exchanged letters and telephone calls regarding the assignment of the patent and the reissuance of the patent; the amended agreement included a choice-of-law provision that anticipated the application of Texas law; SRS advertised in and shipped its products to Texas; and, finally, SRS marketed the modified bindings in Texas. 23 The district court concluded that Spademan's contacts with Texas did not demonstrate that he purposefully availed himself of the privilege of conducting business in Texas or that he invoked the benefits and protection of Texas law. We agree. While the number of contacts with the forum state is not determinative, it is indeed one of the relevant factors to be considered within the totality of the circumstances in assessing the propriety of exercising personal jurisdiction over a nonresident. See Standard Fittings Co. v. Sapag, S.A., 625 F.2d 630, 643 (5th Cir.1980) (identifying quantity of contacts as one of several factors used in determining whether personal jurisdiction comports with due process), cert. denied, 451 U.S. 910, 101 S.Ct. 1981, 68 L.Ed.2d 299 (1981); Product Promotions, 495 F.2d at 495 n. 17 (same); Bigelow-Sanford, Inc. v. Gunny Corp., 649 F.2d 1060, 1063 (5th Cir.1981) (totality of circumstances expressly assessed in examining application of state long-arm statute); Gold Kist Inc. v. Baskin-Robbins Ice Cream Co., 623 F.2d 375, 381 (5th Cir.1980) (same); Olsen by Sheldon v. Government of Mexico, 729 F.2d 641, 649 (9th Cir.) (totality of circumstances examined to determine if nonresident could reasonably anticipate defending suit in distant forum), cert. denied, --- U.S. ----, 105 S.Ct. 295, 83 L.Ed.2d 230 (1984). We are not convinced by the plaintiffs that the district court failed to employ this criterion in analyzing Spademan's contacts with Texas. The court properly focused on the purposeful-availment inquiry--certainly itself a totality-of-the-circumstances test--while recognizing that no single factor, particularly the number of contacts, is determinative. 24 In Burger King, reaffirming its rejection of the notion that personal jurisdiction might turn on mechanical tests or conceptualistic theories of the place of contracting or of performance, the Supreme Court noted: 25 [W]e note a continued division among lower courts respecting whether and to what extent a contract can constitute a contact for purposes of due process analysis. If the question is whether an individual's contract with an out-of-state party alone can automatically establish sufficient minimum contacts in the other party's home forum, we believe the answer clearly is that it cannot.... Instead, we have emphasized the need for a highly realistic approach that recognizes that a contract is ordinarily but an intermediate step serving to tie up prior business negotiations with future consequences which themselves are the real object of the business transaction. ... It is these factors--prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing--that must be evaluated in determining whether the defendant purposefully established minimum contacts within the forum. 26 105 S.Ct. at 2185-86 (quoting Hoopeston Canning Co. v. Cullen, 318 U.S. 313, 316, 317, 63 S.Ct. 602, 604, 605, 87 L.Ed. 777 (1943)). The Burger King Court went on to hold that the nonresident-defendant franchisees had purposefully availed themselves of the benefits and protection of the law of Florida, the forum state, by entering into a carefully structured 20-year relationship that envisioned continuing and wide-reaching contacts with Burger King in Florida. Id. at 2186. The Court emphasized the substantial record evidence indicating that the franchisees knew they were affiliating themselves with a Florida-based enterprise. Hence, it was reasonable for the franchisees to be subject to the in personam jurisdiction of the district court sitting in Florida. 27 The record evidence in the case sub judice points to a contrary conclusion. We stress that Spademan's contract with the Texas plaintiffs does not alone establish the sufficient minimum contacts with Texas. Instead we look to the factors of prior negotiations, contemplated future consequences, terms of the contract, and the parties' actual course of dealing to determine whether Spademan purposefully established minimum contacts with the forum. 28 The district court correctly observed that Spademan's shipment of two bindings to the plaintiffs in Texas is of little weight, citing Hydrokinetics, Inc. v. Alaska Mechanical, Inc., 700 F.2d 1026, 1028 (5th Cir.1983), cert. denied, --- U.S. ----, 104 S.Ct. 2180, 80 L.Ed.2d 851 (1984). In Hydrokinetics, we held that personal jurisdiction was lacking over the defendant although: the defendant corporation had agreed to purchase specific goods to be manufactured in Texas; payment for these goods was to be made in Texas; extensive communications were exchanged between the parties (originally in Texas and Alaska) before the written agreement was signed; officers of the defendant Alaska corporation traveled to Texas to close the deal; and the contract was formally created in Texas as the place of acceptance. The court below analogized Spademan's shipment of the bindings to Texas to the officers' visit to Texas to close the deal in Hydrokinetics. Although this analogy is imperfect, the point is well taken, especially in the light of other of our decisions in breach-of-contract suits holding that the shipment of articles to the forum state is insufficient to justify an exercise of in personam jurisdiction over the nonresident shipper. See, e.g., Loumar v. Smith, 698 F.2d 759 (5th Cir.1983) (nonresident partnership not subject to personal jurisdiction of Texas court although it sold and shipped to Texas plaintiff goods that were the subject of the breach-of-contract claim). Further, we have held that an exchange of communications between a resident and a nonresident in developing a contract is insufficient of itself to be characterized as purposeful activity invoking the benefits and protection of the forum state's laws. See Hydrokinetics, 700 F.2d at 1029 (citing Charia v. Cigarette Racing Team, Inc., 583 F.2d 184, 187-88 (5th Cir.1978); Benjamin v. Western Boat Building Corp., 472 F.2d 723, 729 (5th Cir.), cert. denied, 414 U.S. 830, 94 S.Ct. 60, 38 L.Ed.2d 64 (1973)). Thus, the communications between Spademan and the plaintiffs, whether originating in California or Texas, leading up to the agreement are insufficient to support an exercise of jurisdiction by a Texas court over Spademan. Moreover, we see little distinction between these communications and those between the plaintiffs and Spademan's attorneys regarding the reissuance of the patent. The quality of the contacts as demonstrating purposeful availment is the issue, not their number or their status as pre- or post-agreement communications. Hence, we do not even consider Spademan's dubious assertion that the communications actually involved exchanges between the plaintiffs and the U.S. Patent and Trademark Office acting through Spademan's California attorneys. The agreement to mail payment checks into the forum state does not weigh heavily in the calculus of contacts. See Patterson, 764 F.2d at 1147; C & H Transportation Co. v. Jensen & Reynolds Construction Co., 719 F.2d 1267, 1270 (5th Cir.1983), cert. denied, --- U.S. ----, 104 S.Ct. 1930 (1984); Hydrokinetics, 700 F.2d at 1029; U-Anchor Advertising, Inc. v. Burt, 553 S.W.2d 760, 762 (Tex.1977), cert. denied, 434 U.S. 1063, 98 S.Ct. 1235, 55 L.Ed.2d 763 (1978). Hence, Spademan's mailing of payments to the plaintiffs in Texas can hardly be termed significant in terms of determining purposeful availment of the benefits of the forum state's laws. In contradistinction to the contract at issue in Burger King, the agreement entered into by Spademan and the plaintiffs did not contemplate a long-term relationship with the kinds of continuing obligations and wide-reaching contacts envisioned by the Burger King contract. Arguably, the plaintiffs' agreement to later aid in effectuating a reissuance of the original patent constitutes something of a continuing obligation. Even this contact, however, falls short of a connection giving rise to a reasonable anticipation on the part of Spademan of being haled into court in the forum state.DP1Considering the totality of the facts of this case, we conclude that the inference of purposeful availment necessary to support the exercise of personal jurisdiction over Spademan is not supported. The random use of interstate commerce to negotiate and close a particular contract, the isolated shipment of goods to the forum at the instigation of the resident plaintiffs, and the mailing of payments to the forum do not constitute the minimum contacts necessary to constitutionally exercise jurisdiction over Spademan. See Patterson, 764 F.2d at 1147; C & H Transportation, 719 F.2d at 1270. 7