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Personal Jurisdiction Requires "Minimum Contacts"

Mar 1, 2013

Can my company be sued in Texas even though its offices are located in a different state?

Of course, a person (and in the eyes of the law, a company is a person for most purposes) can be sued anywhere, but if the person being sued, the nonresident defendant, does not have a sufficient relationship with the state where it is being sued, the court will not have “personal jurisdiction” over the defendant and the lawsuit will be subject to being dismissed for lack of personal jurisdiction. Generally in Texas federal courts, the party who filed the lawsuit, the plaintiff, bears the burden of establishing that the nonresident defendant has contacts with Texas sufficient to invoke the jurisdiction of the federal court located in Texas. The plaintiff can meet that burden by making “a prima facie showing” that nonresident defendant has purposefully availed itself of the benefits and protections of Texas by establishing ‘minimum contacts’ with Texas. A court’s exercise of personal jurisdiction over a non-resident defendant comports with constitutional due process requirements when (1) the defendant “purposefully availed” itself of the benefits and protections of the forum state by establishing “minimum contacts” with that state, and (2) the exercise of personal jurisdiction does not offend traditional notions of “fair play and substantial justice.” See Moncrief Oil Int'l., Inc. v. OAO Gazprom, 481 F.3d 309, 311 (5th Cir. 2007). Both prongs must be satisfied in order for a court to exercise personal jurisdiction over the defendant. If the plaintiff makes a prima facie showing of minimum contacts, then the burden shifts to the defendant to show that the court’s exercise of jurisdiction would not comply with “fair play” and “substantial justice.” See Freudensprung v. Offshore Technical Servs., Inc., 379 F.3d 327, 343 (5th Cir. 2004). In making a fundamental fairness determination, a court must examine: (1) the burden on the defendant; (2) the forum state’s interests; (3) the plaintiff's interest in convenient and effective relief; (4) the judicial system’s interest in efficient resolution of controversies; and (5) the states’ shared interest in furthering fundamental social policies. See Stroman Realty, Inc. v. Wercinski, 513 F.3d 476, 487 (5th Cir. 2008).

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