Opinion ID: 652919
Heading Depth: 2
Heading Rank: 1

Heading: Transfer Under 28 U.S.C. Sec. 1404(a)

Text: 9 Section 1404(a) provides that a district court [f]or the convenience of parties and witnesses [and] in the interest of justice ... may transfer any civil action to any other district or division where it might have been brought. 28 U.S.C. Sec. 1404(a). 10 Petitioners assert that mandamus is warranted because Phillyship is not subject to personal jurisdiction in Texas, thus the Southern District of Texas is not a district in which the action might have been brought. 5 11 The district court, in its order denying petitioners' and Phillyship's motions for reconsideration, stated that third-party defendant Phillyship has sufficient minimum contacts with Texas for a Texas court to exercise personal jurisdiction over it. 6 We turn to the soundness of that ruling. 12 Under Rule 4(e) of the Federal Rules of Civil Procedure, district courts have personal jurisdiction over nonresident defendants to the extent authorized under the law of the forum state in which the district court sits. Grand Entertainment Group, Ltd. v. Star Media Sales, Inc., 988 F.2d 476, 481 (3d Cir.1993). Jurisdiction over a nonresident who does business in Texas is authorized under Texas' Long Arm Statute. See Tex. Civ.Prac. & Rem.Code Ann. Sec. 17.042 (Vernon 1986). The Texas Supreme Court has held that the statute's broad language allows the exercise of jurisdiction to reach as far as the federal constitutional requirements of due process will allow. Guardian Royal Exch. Assur., Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex.1991); 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). Thus, the well-established minimum contacts analysis governs our resolution of this issue.
13 Noble Denton primarily advances specific jurisdiction as the basis for finding that Phillyship is subject to personal jurisdiction in the Southern District of Texas. 14 The Supreme Court of Texas has adopted a formula to aid courts in determining whether the assertion of personal jurisdiction over a nonresident defendant is proper under the federal constitutional requirements. See Guardian Royal, 815 S.W.2d at 229-32; Schlobohm v. Schapiro, 784 S.W.2d 355, 358 (Tex.1990). 15 First, the nonresident defendant must have purposefully established minimum contacts with Texas. There must be a substantial connection between the nonresident defendant and Texas arising from action or conduct of the nonresident defendant purposefully directed toward Texas. When specific jurisdiction is asserted, the cause of action must arise out of or relate to the nonresident defendant's contacts with Texas.... 16 Second, the assertion of personal jurisdiction must comport with fair play and substantial justice. 17 Guardian Royal, 815 S.W.2d at 230-31 (footnotes omitted). 18 The undisputed contacts relied upon by Noble Denton and apparently found sufficient by the district court were: (1) Phillyship's contract with Sunbelt, a Texas corporation; and (2) post-contract telephone and facsimile contacts by Phillyship with Noble Denton. 7 19 We must determine whether or not these contacts are sufficient to support the district court's conclusion that Phillyship purposefully availed itself of the privilege of doing business in Texas. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-75, 105 S.Ct. 2174, 2183-84, 85 L.Ed.2d 528 (1985). We note at the outset that unilateral contacts by the party asserting the existence of personal jurisdiction are insufficient. Guardian Royal, 815 S.W.2d at 227. Under a specific jurisdiction analysis, in order for the exercise of personal jurisdiction to be proper the cause of action must arise from or be related to Phillyship's contacts with Texas. Id.; see Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 8, 104 S.Ct. 1868, 1872 n. 8, 80 L.Ed.2d 404 (1984). 20 Noble Denton's reliance on the contract between Phillyship and Sunbelt as a purposeful contact fails. Although Noble Denton was not a party to this contract, it, nevertheless, asserts that the cause of action arises out of this contract and that the contract therefore is a sufficient contact. It is well established, however, that a nonresident's contracting with a forum resident, without more, is insufficient to establish the requisite minimum contacts required for an exercise of personal jurisdiction over the nonresident. See Burger King, 471 U.S. at 478, 105 S.Ct. at 2185; Colwell Realty Invs., Inc. v. Triple T Inns, Inc., 785 F.2d 1330, 1334 (5th Cir.1986) (noting that under the facts before it, merely contracting with a resident of the forum state [was] insufficient ... to subject the nonresident [defendant] to the forum's jurisdiction); U-Anchor, 553 S.W.2d at 761-64 (holding that nonresident defendant whose only contacts with Texas were contract with Texas plaintiff and remittance of payments to Texas lacked minimum contacts where contract was solicited, negotiated and executed in Oklahoma). Thus, the contract between Phillyship and Sunbelt is insufficient to support personal jurisdiction over Phillyship in Texas. 21 Noble Denton's reliance on communications between itself and Phillyship is similarly misplaced. Its argument is based on an affidavit in which one of its employees asserts that he received several telephone calls from Phillyship employees regarding the seafastening plan Noble Denton was designing under its contract with Sunbelt. Noble Denton also relies on a series of facsimiles that it sent to Phillyship in response to the above telephone calls. These facsimiles outline the seafastening plan that Phillyship was under contract with Sunbelt to implement. Noble Denton was contractually bound to Sunbelt to provide the seafastening plan to Phillyship. We conclude that these informational communications in furtherance of that contract do not establish the purposeful activity necessary for a valid assertion of personal jurisdiction over Phillyship. See Stuart v. Spademan, 772 F.2d 1185, 1193 (5th Cir.1985) (stating 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). 22 Noble Denton relies on Siskind v. Villa Foundation for Education, Inc., 642 S.W.2d 434 (Tex.1982) and Memorial Hospital System, Inc. v. Fisher Insurance Agency, Inc., 835 S.W.2d 645 (Tex.Ct.App.1992) as support for its conclusion that Phillyship had sufficient contacts for a Texas court to assert personal jurisdiction over it. These cases, however, are factually distinguishable. 23 Noble Denton cites Siskind for the proposition that [a] non-resident defendant with no physical presence in Texas may nevertheless be subject to the personal jurisdiction of a Texas court, where it is shown that the non-resident defendant initiated communications by telephone, from outside of Texas and directed into Texas, which have resulted in damage to a plaintiff in Texas. 24 While this proposition accurately reflects the Siskind decision, it is inapplicable to the facts before us. 8 Siskind involved a suit for, inter alia, misrepresentation and violations of the Texas Deceptive Trade Practices Act. The contacts in Siskind were found sufficient because it was during these contacts that the alleged misrepresentations, the basis of the suit, occurred. Siskind, 642 S.W.2d at 436-37. Our case, in contrast, involves a suit for negligence and breach of contract. The telephone calls allegedly made by Phillyship are not the basis of the cause of action. 9 Thus, Noble Denton's reliance on Siskind is inapposite. 25 Similarly, Memorial Hospital involved alleged fraudulent misrepresentations made during a single telephone call. Memorial Hospital, 835 S.W.2d at 648. The court found this one contact to be sufficient for the assertion of specific jurisdiction because the contact with Texas itself was the basis for the cause of action. Id. at 650. Thus, there was a substantial connection between the contact in the forum and the cause of action. Id. 26 The contacts relied upon by Noble Denton, whether considered individually or collectively, are insufficient to establish specific jurisdiction 10 over Phillyship, thus the Southern District of Texas is not a jurisdiction in which the action might have been brought. Accordingly, the district court lacked the authority to transfer this case under 28 U.S.C. Sec. 1404(a) and the writ must issue.