Opinion ID: 318520
Heading Depth: 2
Heading Rank: 2

Heading: constitutional considerations-- cema

Text: 29 We turn to the question whether the district court's exercise of jurisdiction over the person of CEMA, authorized by the Statute, would comport with constitutional requirements. We answer affirmatively, and hold, therefore, that the district court erred in dismissing the suit against defendant CEMA. 30 In reaching this conclusion we work within the familiar framework provided by a series of Supreme Court decisions that rendered much of the learning on in personam jurisdiction obsolete. 16 Under this long-arm quintet 31 the governing principle is the fairness of subjecting a defendant to suit in a distant forum. Only if the nonresident defendant has such 'minimum contacts' with the state 'that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice, International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), or if the defendant has performed some act 'by which (it) purposefully avails itself of the privilege of conduction activities within the forum State, thus invoking the benefits and protections of its laws,' Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958); McGee v. International Life Insurance Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957), may the forum, consistently with due process, extend its long arm to embrace it. 32 Jetco Electronic Industries, supra, 473 F.2d at 1234. Thus the decisions 'set up a dual test for determining whether a court may take jurisdiction without depriving a defendant of due process of law.' First, 'there must be some minimum contact with the state which results from an affirmative act of the defendant.' Secondly, 'it must be fair and reasonable to require the defendant to come into the state and defend the action.' 2 Moore, supra note 16, P4.25(5) (5) at 1171-72. 17 33 In applying the first of these two tests in the case at bar, we emphasize that the number of the defendant's contacts with the forum state is not, of itself controlling. 'Very little purposeful activity within a state is necessary to satisfy the minimum contacts requirement,' although 'we have . . . unequivocally required some activity by the defendant . . ..' Benjamin v. Western Boat Building Corp., 5 Cir. 1973, 472 F.2d 723, 726. As important as the existence of some contacts with the forum is that those contacts support an inference that the nonresident defendant purposefully availed himself of the benefits of conducting business in the forum. Id.; Gurley v. Lindsley, 5 Cir. 1972, 459 F.2d 268, 278, mandate amended, 466 F.2d 498. 34 Appellee CEMA insists that its contacts with the State of Texas were insufficient to meet the constitutional requirement. It had no place of business there; it had no local advertising, listings, or bank accounts; it solicited no business there, and did none aside from that with appellant; it sent no representatives there; and in fact it performed no physical act of any sort there. 18 The contract was initiated by appellant when Ross visited France, and all of the negotiations occurred in France. Moreover, all of the studies and reports, which were prepared in French and translated into English, as well as the photographs and film were made along the Mediterranean coast, thousands of miles away. And all payments by appellant were to be made in Marseilles. In fact, CEMA concludes, its only contacts with Texas resulted from the performance of its contractual obligation to send the reports and film to Dallas, which admittedly required several deliveries. 35 We think appellee has understated both the number and the importance of its contacts with Texas. In the first place, we believe CEMA has incorrectly placed the essential locus of its contract with Product Promotions. Although the contract is silent regarding the law to be applied to it, it is generally recognized that 'the place of the contract is the place where the last act necessary to the completion of the contract was done, that is where the contract first creates a legal obligation.' 1 Williston on Contracts 97 at 356 (3d ed. Jaeger 1957); accord, Florida Towing Corp. v. Oliver J. Olson & Co., 5 Cir. 1970, 426 F.2d 896, 900. Under that principle, Ross's letter of February 7, 1972, accepting CEMA's offer, 19 an acceptance which was effective on dispatch in Dallas, made Texas the place of the contract. 20 Moreover, that most of CEMA's substantive work was done in the Mediterranean area does not alter the fact that an integral, essential portion of CEMA's performance, delivery of the results in satisfactory form, had to take place in Dallas. 21 In any event, the Supreme Court in McGee v. International Life Insurance Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957), made it clear that neither the defendant nor the defendant's agents need have been physically within the State-- contact by mail alone can be sufficient. And even if the defendant performs no physical act within the State, activities outside the State can provide adequate contacts if they have reasonably foreseeable consequences within the State. 22 36 Aside from their number, appellee's contacts are also adequate to support the inference of an affirmative, purposeful decision by CEMA to avail itself of the privilege of conducting some business in Texas. As a careful study of the Supreme Court decisions suggests, this requirement should not be read too literally; thus, for example, the nonresident defendant need not have agreed that suits on the contract will be heard in the forum state. Instead, the requirement reflects the Court's Conclusion that 'the unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State.' Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283, 1298. The operative consideration is that the defendant's contacts with the forum were deliberate, rather than fortuitous, so that the possible need to invoke the benefits and protections of the forum's laws was reasonably foreseeable, if not foreseen, rather than a surprise. 23 37 It is clear to us that this case rests on more than the unilateral activity of a Texas plaintiff claiming some relationship with a nonresident defendant. The cause of action for breach of contract arose out of a transaction between the parties that was consummated in Texas. Moreover, though CEMA may not have planned over to come to Texas, we cannot say that CEMA's contacts with the State were purely fortuitous or accidental. CEMA entered a contact that required some performance in Texas; that it did not contemplate breaching its own contractual obligations does not make it unreasonable to foresee that those obligations might be tested in Texas. And since the contract was made in Texas, CEMA had reason to foresee that enforcement and protection of its own rights under the contract might depend on the laws of Texas. 24 In short, CEMA voluntarily entered a transaction with one it knew to be a Texas resident, 25 a transaction which had a substantial connection with Texas and which CEMA had reason to know could have consequences in Texas. 26 38 A second test must also be satisfied if a court's exercise of personal jurisdiction over a nonresident defendant is to be consistent with due process. Simply stated, it must not be unfair or unreasonable to require the nonresident to defend the suit in the forum. Although no particular factor controls our answer, this test requires us to consider such things as the interest of the state in providing a forum for the suit, the relative conveniences and inconveniences to the parties, and basic equities. We conclude that the case sub judice meets the requirement of this second test. 39 We base this conclusion on several considerations. In the first place, Texas certainly has a legitimate and reasonable interest in providing a forum for this suit. 27 The plaintiff is a Texas resident, the contract was made in Texas, and Texas law will surely be of some relevance in resolving the suit. In other words, we see a rational nexus between this lawsuit and a Texas forum. 28 Measuring the convenience to one party against the inconvenience to the other results in something of a stand-off, Atwood Hatcheries, supra, 357 F.2d at 854 n. 23. Obviously it is more convenient for appellant to litigate in Texas and more convenient for CEMA to do so elsewhere. 29 Nevertheless, the important thing is that we are unable to conclude that any hardship or inconvenience to CEMA from having to defend the suit in Texas rises to the level of a denial of due process. Finally, CEMA has pointed to no particular inequity that might result if a court in Texas exercises jurisdiction over CEMA's person in this suit, and we can find none. The maintenance of this suit against CEMA in Texas will not 'offend 'traditional notions of fair play and substantial justice. International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945).