Opinion ID: 27793
Heading Depth: 1
Heading Rank: 2

Heading: Can Thoroughbred's waiver of personal jurisdiction be imputed to Stepp and Velocity?

Text: 32 Whether in personam jurisdiction can be exercised over a defendant is a question of law subject to de novo review by this court. Dickson Marine, Inc. v. Panalpina, Inc., 179 F.3d 331, 335 (5th Cir.1999). In a diversity suit, a federal court has personal jurisdiction over a nonresident defendant to the same extent that a state court in that forum has such jurisdiction. Wilson v. Belin, 20 F.3d 644, 646 (5th Cir.1994). Accordingly, the district court can exercise personal jurisdiction over the Defendants in the instant case only if the Defendants are subject to personal jurisdiction in the Louisiana state courts. 33 Generally, this court conducts a two-prong analysis to determine if a state court may exercise personal jurisdiction over a nonresident defendant. First, we determine whether the long-arm statute of the forum state confers personal jurisdiction over the defendant. Second, we ask whether the exercise of such jurisdiction by the forum state is consistent with due process under the United States Constitution. J.R. Stripling v. Jordan Prod. Co., LLC, 234 F.3d 863, 869 (5th Cir.2000) (internal citations and quotations omitted). However, because Louisiana's long arm statute is coextensive with the limits of due process, the sole inquiry into jurisdiction over a nonresident [under Louisiana law] is a one-step analysis of the constitutional due process requirements. Petroleum Helicopters, Inc. v. Avco Corp., 834 F.2d 510, 514 (5th Cir.1987). 17 34 The district court adopted Judge Parker's finding that Stepp and Velocity would not ordinarily be subject to personal jurisdiction in Louisiana courts. However, the court found that exercise of personal jurisdiction in the instant case was nonetheless appropriate because Thoroughbred's consent to personal jurisdiction could be imputed to its alter ego (Stepp) and its successor (Velocity). While the Defendants do not dispute that Thoroughbred waived any objection to personal jurisdiction by making a general answer to the Plaintiffs' complaints without raising personal jurisdiction as a defense, the Defendants contend that this waiver cannot be imputed to Stepp or Velocity. They point out that both Stepp and Velocity pleaded lack of personal jurisdiction in their first responsive pleadings, and they maintain that Stepp and Velocity lack the requisite minimum contacts with the State of Louisiana to satisfy the requirements of due process. In support of their contention that personal jurisdiction cannot be imputed under these circumstances, the Defendants rely on language in the Supreme Court's opinion in Rush v. Savchuk, 444 U.S. 320, 332, 100 S.Ct. 571, 62 L.Ed.2d 516 (1980), suggesting that, while the parties' relationships with each other may be significant in evaluating their ties to the forum, the due process requirements of International Shoe must be met as to each defendant over whom a state court exercises jurisdiction. 35 This language in Rush, however, does not preclude us from imputing the jurisdictional contacts of a predecessor corporation to its successor corporation or individual alter ego. As the Plaintiffs correctly point out, federal courts have consistently acknowledged that it is compatible with due process for a court to exercise personal jurisdiction over an individual or a corporation that would not ordinarily be subject to personal jurisdiction in that court when the individual or corporation is an alter ego or successor of a corporation that would be subject to personal jurisdiction in that court. 18 The theory underlying these cases is that, because the two corporations (or the corporation and its individual alter ego) are the same entity, the jurisdictional contacts of one are the jurisdictional contacts of the other for the purposes of the International Shoe due process analysis. See, e.g., Lakota Girl Scout Council, 519 F.2d at 637 (explaining that if the corporation is [the individual defendant's] alter ego, its contacts are his and due process is satisfied). 36 Only a few federal courts have specifically considered the related question whether a successor corporation is bound by its predecessor corporation's waiver of personal jurisdiction (or, similarly, whether an individual is bound by his or her corporate alter ego's waiver of personal jurisdiction). However, those courts have uniformly found that it is consistent with due process to impute a corporation's waiver of personal jurisdiction to its successor (or its individual alter ego), 19 for the same reasons that imputation of jurisdictional contacts is appropriate. As the Packer court explained, imputing a corporation's consent to personal jurisdiction to its individual alter ego is consistent with the underlying rationale justifying piercing of the corporate veil. 959 F.Supp. at 203. When a corporation is deemed the alter ego of an individual, then those entities are considered to be one and the same under the law: the corporation's acts must be deemed to be [the individual's] own. Id. Accordingly, just as a corporation that has previously submitted to the jurisdiction of a court cannot subsequently object to that court's exercise of jurisdiction on due process grounds, see Fed.R.Civ.P. 12(h), an individual alter ego of a corporation that has waived personal jurisdiction cannot subsequently attempt to negate that waiver. 37 Similarly, imputing a predecessor corporation's waiver of personal jurisdiction to its successor corporation when the successor is a mere continuation of the predecessor is also consistent with the principles underlying this exception to the general rule against successor liability. The premise underlying the mere continuation exception to the rule against successor liability is that the successor corporation is, in fact, the same corporate entity as the predecessor corporation, simply wearing a new hat. Bud Antle, 758 F.2d at 1458; Azar, 648 So.2d at 154. Under such circumstances, if the predecessor corporation has already submitted to the jurisdiction of a court, it cannot subsequently object to that jurisdiction on due process grounds simply because it has put on its new hat. Any other ruling would allow corporations to immunize themselves [from liability] by formalistically changing their titles. Duris v. Erato Shipping, Inc., 684 F.2d 352, 356 (6th Cir.1982). 38 Accordingly, we conclude that a successor corporation that is deemed to be a mere continuation of its predecessor corporation can be bound by the predecessor corporation's voluntary submission to the personal jurisdiction of a court. Similarly, an individual can be bound by a corporation's voluntary submission to the personal jurisdiction of a court when the corporate veil has been pierced and the corporation is deemed to be the alter ego of that individual. Consequently, in the instant case, because Thoroughbred, Stepp, and Velocity are functionally the same entity in the eyes of the law, jurisdiction over that entity is appropriate after it has (wearing any one of its hats) voluntarily submitted to the personal jurisdiction of the court by making a general appearance. 20