Court Opinion

ID: 19883
Source: CourtListenerOpinion
Date Created: 2010-04-25 07:28:50+00
Date Added: 2024-06-11T15:04:40.505924
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS
           FOR THE FIFTH CIRCUIT
                       _______________

                         m 98-50615
                       Summary Calendar
                       _______________

                PEDRO DIAZ BARREIRO,
                                            Plaintiff-Appellant,
                            VERSUS

MODEL POWER INTERNATIONAL CORPORATION, etc., et al.,
                                            Defendants,
    MODEL POWER INTERNATIONAL CORPORATION,
          a division of ATI Model Products, Inc;
                     and MDK, INC.,
                                            Defendants-Appellees.
                 _________________________

           Appeal from the United States District Court
                for the Western District of Texas
                       (DR-97-CV-84-01)
                 _________________________

                        February 9, 2000
Before SMITH, BARKSDALE, and                            jurisdiction. Barreiro claims the court erred
PARKER, Circuit Judges.                                 both in limiting jurisdictional discovery and in
                                                        deciding personal jurisdiction before resolving
PER CURIAM:*                                            subject-matter jurisdiction.

   Following a period of discovery, the district                                II.
court, without addressing subject matter                    Federal courts have discretion to avoid a
jurisdiction, dismissed for want of personal            difficult question of subject matter jurisdiction
jurisdiction. We affirm.                                when the absence of personal jurisdiction is the
                                                        surer ground, and we review the decision to
                       I.                               do so for abuse of discretion. See Ruhrgas,
   Pedro Barreiro sued Model Power                      526 U.S. at ___, 119 S. Ct. at 1572.
International Corporation (“Model Power”),
M.D.K., Inc. (“MDK”), and SKI Industrial                   [I]n cases removed from state court to
Company (“SKI”) in state court for breach of               federal court, as in cases originating in
contract and conversion. Model Power and                   federal court, there is no unyielding
MDK removed the action to federal court on                 jurisdictional hierarchy. Customarily, a
the basis of diversity of citizenship: Barreiro            federal court first resolves doubts about
is domiciled in Mexico, Model Power is                     its jurisdiction over the subject matter,
incorporated in New York, MDK is                           but there are circumstances in which a
incorporated in North Carolina, and SKI is                 district court appropriately accords
incorporated in Hong Kong. Because the                     priority to a personal jurisdiction
presence of an alien plaintiff and an alien                inquiry.
defendant destroys the “complete diversity”
required by 28 U.S.C. § 1332, removal was                        A State’s dignitary interest bears
proper only if, as Model Power and MDK                     consideration when a district court
claimed, SKI was fraudulently joined. See                  exercises discretion in a case of this
Ruhrgas AG v. Marathon Oil Co., 526 U.S.                   order. If personal jurisdiction raises
574, ___ n.2, 119 S. Ct. 1563, 1567 n.2                    difficult questions of state law, and
(1999). Therefore, Barreiro filed a motion for             subject-matter jurisdiction is resolved as
remand; Model Power and MDK filed motions                  easily as personal jurisdiction, a district
to dismiss for lack of personal jurisdiction.              court will ordinarily conclude that
                                                           federalism concerns tip the scales in
   After several months of discovery, Barreiro             favor of initially ruling on the motion to
had failed to produce any evidence supporting              remand. In other cases, however, the
a prima facie case of personal jurisdiction over           district court may find that concerns of
Model Power or MDK, so the court dismissed                 judicial economy and restraint are
those defendants for lack of personal                      overriding.      See, e.g., Asociacion
jurisdiction, leaving SKI as the only remaining            Nacional de Pescadores v. Dow
defendant. As an alien corporation, SKI had                Quimica, 988 F.2d 559, 566-567 (C.A.5
to be served process pursuant to the Hague                 1993) (if removal is nonfrivolous and
Convention protocols, but this had not yet                 personal jurisdiction turns on federal
been accomplished. Because the only plaintiff              constitutional issues, “federal intrusion
and only defendant were aliens, the court                  into state courts’ authority . . . is
remanded for want of subject-matter                        minimized.”). The federal design allows
                                                           leeway for sensitive judgments of this
                                                           sort.
   *
      Pursuant to 5TH CIR. R. 47.5, the court has
determined that this opinion should not be              Id. at 1566, 1571 (internal citation and
published and is not precedent except under the         quotation marks omitted).
limited circumstances set forth in 5TH CIR. R.
47.5.4.                                                    Barreiro incorrectly asserts that the
                                                    2
question of diversity in deciding subject matter       demonstrating personal jurisdiction because of
jurisdiction can never involve difficult legal         the limitation placed on jurisdictional
questions and must always be resolved before           discovery. “[J]urisdictional discovery is within
personal jurisdiction. Even where personal             the trial court’s discretion and will not be
jurisdiction raises difficult questions of state       disturbed ordinarily unless there are unusual
law, and subject matter jurisdiction is resolved       circumstances showing a clear abuse.”
as easily as personal jurisdiction, a district         Patterson, 764 F.2d at 1148 (internal
court need not always rule on the motion to            quotation marks omitted).
remand firstSSthe Ruhrgas Court noted that,
in such circumstances, the court ordinarily will          The court gave Barreiro several months to
do so, but concerns of judicial economy and            conduct jurisdictional discovery, but he came
rest raint may override that ordinary                  up with no evidence supporting personal
chronology. See id. at 1571. This case is one          jurisdiction, while defendants produced
in which the court may properly defer                  significant evidence refuting it. The court did
resolution of subject matter jurisdiction.             not abuse its discretion in limiting jurisdictional
                                                       discovery to a reasonable period of time.
   After months of discovery, Barreiro had not
produced evidence that Model Power or MDK                 AFFIRMED.
was subject to personal jurisdiction under the
Texas long-arm statute.1 In contrast, Model
Power and MDK produced significant
evidence that such jurisdiction was lacking.
The court reviewed this evidence, concluding
not only that neither Model Power nor MDK
had the requisite minimum contacts with the
forum state, but that even if such contacts had
been established, it would not have been fair
and reasonable to exert jurisdiction. See
Patterson v. Dietze, Inc., 764 F.2d 1145, 1146
(5th Cir. 1985).

   In contrast to this straightforward analysis,
the court, to determine subject matter
jurisdiction, would have had to consider the
claim that the alien party SKI was fraudulently
joined, when SKI had not yet been served and
therefore was not even before the court. See
Jernigan v. Ashland Oil Inc., 989 F.2d 812,
815-16 (5th Cir. 1993) (discussing the test for
fraudulent joinder).       Resolving personal
jurisdiction first was not an abuse of
discretion.

                    III.
   Barreiro claims he was prevented from

      1
          TEX. CIV. PRAC. & REM. CODE ANN.
§ 17.042 (1997). The statute authorizes personal
jurisdiction to the extent allowed by the Due
Process Clause. See Kawasaki Steel Corp. v.
Middleton, 699 S.W.2d 199, 200 (Tex. 1985).

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