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finding significant that nonresident Defendant profited from brokering deals for Texas residents
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Civil Action No. 3:01-CV-2771-P
May 14, 2002
MEMORANDUM OPINION AND ORDER
Now before the Court for consideration are:
1. Motion of Defendant Joseph Wicker to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(2), with brief in support and appendix, filed January 3, 2002;
2. Motion of Defendant Independent Financial, LLC to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(2), with brief in support and appendix, filed January 3, 2002;
3. Plaintiffs Response to Defendants' Joseph Wicker and Independent Financial's Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(2), with brief in support, filed March 11, 2002;
4. Defendants Joseph Wicker and Independent Financial, LLC's Reply to Plaintiffs Memorandum in Opposition to Defendants' Motions to Dismiss for Lack of Personal Jurisdiction, filed March 26, 2002;
5. Plaintiffs Motion for Leave to Take Oral Depositions of Joseph Wicker, Lorraine Holguin, Larry Richie, and Robert Harris Before Ruling on Defendants' Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(2), with brief in support, filed March 11, 2002;
6. Defendants Joseph Wicker and Independent Financial, LLC's Response and Objections to Plaintiffs Motion for Leave to Take Oral Depositions of Joseph Wicker, Lorraine Holguin, Larry Richie, and Robert Harris Before Ruling on Defendants' Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(2), filed March 20, 2002; and
7. Plaintiffs Reply to Defendants Joseph Wicker and Independent Financial, LLC's Response and Objections to Plaintiffs Motion for Leave to Take Oral Depositions of Joseph Wicker, Lorraine Holguin, Larry Richie, and Robert Harris Before Ruling on Defendants' Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(2), filed March 28, 2002
After reviewing all of the motions, briefing, attachments, and the relevant law, the Court hereby DENIES Defendants' Motion to Dismiss for Lack of Personal Jurisdiction. Further, the Court hereby DENIES as MOOT Plaintiffs Motion for Leave to Take Oral Depositions.
BACKGROUND
Defendants Joseph Wicker ("Wicker"), Brian Robertson ("Robertson") and Independent Financial, LLC ("Independent Financial") are citizens of the State of Arizona. Plaintiff Advantage Investors Mortgage Corp. ("Advantage"), a Texas corporation, filed suit against Defendants in Texas state court for claims predominately related to breach of contract, breach of implied contract, breach of covenant of good faith and fair dealing, and breach of fiduciary duty as to Wicker and Robertson, and for conversion, interference with contract, and common law fraud against all the Defendants. Pl.'s Orig. Pet. at 3-7. After removing the case to federal court based upon the diversity of the parties, Wicker and Independent Financial filed separate motions to dismiss Plaintiff's claims against them for lack of personal jurisdiction.
Advantage's claims arise from a contract and the subsequent business relationship created between itself and Defendants Wicker and Robertson. In the summer of 1999, Wicker and Robertson began to explore the possibility of opening a Phoenix, Arizona branch office of Advantage Investors Mortgage Corp., a mortgage finance company. Wicker Decl. ¶ 20. Wicker began this process by calling an 800 number and speaking to a representative of Advantage located in Colorado. Wicker Decl. ¶ 21. He was thereafter directed to contact Pam Comstock of Advantage in California. Id. After speaking with Ms. Comstock, Wicker requested an application to open a branch office and a contract to become that branch's manager, and mailed the completed documents to Kathryn Leary of Advantage in Dallas, Texas. Wicker Decl. ¶ 22. The application process was completed sometime in September of 1999, with the branch management contract providing that the laws of the State of Texas would govern the parties agreement. See Id.; see also Pl.'s Mem. Opp. to Defs.' Mot. to Dismiss, Exh. 4 ("Supplemental Employment Agreement").
Wicker asserts that while employed by Advantage, he performed all of his work in Arizona, with the exception of two training meetings he attended in Texas at the request of Plaintiff: one in Dallas shortly after the application process was completed, and another sometime thereafter. See Wicker Decl. ¶ 19. In addition, Wicker claims that as part of his duties as branch manager, and pursuant to Plaintiffs policy, he oversaw the mailing of all the fees earned from the mortgage closings by his Arizona branch to Advantage headquarters in Dallas. Wicker Decl. ¶ 23. Advantage would then pay all operating costs of the branch office and forward any remaining fees to Wicker and Robertson. Def. Wicker's Br. in Supp. at 3.
Defendants assert that initially Wicker and Robertson were required to form a limited liability company, named J B Management LLC, a company formed under the laws of the State of Arizona and with its principal place of business in Arizona. Advantage would pay any fees due to Wicker and Robertson to the company. However, around May of 2000, this policy was abandoned by Advantage and all fees to be paid to Wicker and Robertson were sent directly to them. See Wicker Decl. ¶ 24.
In August of 2001, Wicker decided to resign from Advantage, and he and Robertson thereafter acquired Independent Financial. Wicker Decl. ¶ 25. Wicker asserts that he removed his name from Plaintiffs license in Arizona and give Advantage notice of his resignation on or about September 10, 2001. Wicker Decl. ¶ 26. Moreover, Wicker states as the reason for his resignation the fact that in May of 2001 he was notified by Advantage that it had employed a new management company and it was going to require him to sign a new contract in order to remain as a branch manager, which he refused. Wicker Decl. ¶ 28.
Advantage asserts that, in addition to Wicker's mailing of his branch officer application and contract to Texas, his two visits for training, and the mailing of loan checks "every time he closed a loan," Wicker repeatedly brokered loans for Texas residents for properties located in Texas, earning substantial fees on each loan. Pl.'s Mem. Opp. to Defs.' Mot. to Dismiss at 3 Exh. 3 (citing Rea Aff.). While Wicker disputes having any connections to three of the loans listed by Plaintiff, he admits that he did sign the loan application for two of these loans, receiving a total of $1,323.34 in commissions. See Defs.' Resp. and Obj. to Pl.'s Mot. for Leave at 2 Exh A. Regardless, Plaintiff asserts that whether or not Wicker actually served as loan officer for each of the Texas borrowers, his branch received a portion of the fees related to the Texas loans, and as such, he received any income remaining in the branch after expenses were paid. See Rea Aff. at ¶ 2 (Mem. in Supp. of Pl.'s Reply to Defs.'s Resp. and Obj. to Pl.'s Mot., Exh. B).
Plaintiff has submitted charts entitled "Funding History — Wicker Branch (TX Properties)," wherein it claims that during his employment with Advantage, Wicker closed loans on the following Texas properties for Texas individuals:
Name Date File Number Loan Amount (1) Cox 12/14/00 #302363 $132,000.00 (2) Lawler Sr. 12/29/00 #302248 $107,863.00 (3) Stetkewicz 12/29/00 #301674 $95,800.00 (4) Jones 01/30/01 #303859 $137,600.00 (5) Gafford 05/03/01 #303033 $117,161.00See Pl.'s Mem. Opp. to Defs.' Mot. to Dismiss, Exh. 3.
More specifically, Wicker asserts that the loan documents for "Stetkewicz," "Jones," and "Gafford" referenced in Plaintiffs charts, were signed by his sister, Kim Wicker, a former employee of Advantage. Wicker admits to signing to the loan documents for "Cox" and "Lawler Sr.," with the branch office receiving $5,063.11 and $2,733.00 for these two loans respectively, and him personally receiving $1,323.24 for the two loans. Defs.' Resp. and Obj. to Pl.'s Mot. at 2 Exh. A (Wicker Decl. ¶¶ 2-3).
Meanwhile, Defendant Independent Financial states that although it has recently submitted applications to (1) be qualified to do business in Texas, (2) for a Texas mortgage broker's license, and (3) designated an address in Texas, it has not done any business in Texas, nor has it made any preparations to do business herein except for the aforementioned registrations. See Decl. of Independent Financial ¶¶ 19-21. Nevertheless, it is Advantage's contention that Independent Financial's loan officers Lorraine Holguin, Larry Richie and Robert Harris, in the past and presently, have solicited, transacted and closed loans in the State of Texas. See Couchman Aff. ¶¶ 2-4. Moreover, Advantage asserts that beginning in or around the summer of 2001, Robertson and Wicker began originating loans for Independent Financial and caused loan officers in their office (also Advantage employees) to originate loans for Independent Financial without forwarding funds to Plaintiff Pl.'s Orig. Pet. ¶¶ 10, 17. The Court shall now proceed to determine whether personal jurisdiction exists over these Defendants
DISCUSSION
I. Plaintiff's Affidavits and Evidence in Support
Before discussing the substance of Defendants' motions to dismiss, as a preliminary matter, the Court must determine the admissibility of affidavits and evidence submitted by Plaintiff in support of its Memorandum in Opposition to Defendants' Motion to Dismiss and its Memorandum in Support of Plaintiffs Motion for Leave. Specifically, Advantage has submitted the affidavit testimony of Carol Lynne Couchman, a former loan officer for Independent Financial, who testified that during her employment with Independent, Lorraine Holguin, another loan officer for Independent Financial, was soliciting, transacting and closing loans in the State of Texas. See Couchman Aff. at ¶ 2. Ms. Couchman's affidavit also states that Independent Financial loan officers Larry Richie and Robert Harris are currently soliciting, transacting and closing loans in the State of Texas. See Couchman Aff. at ¶ 4. Defendants have filed an objection to this testimony on the basis of Ms. Couchman's lack of personal knowledge and due to the fact that such testimony is incorrect. See Defs.' Resp. and Obj. to Pl.'s Mot. for Leave at 3.
The correct spelling of this name is "Larry Ricci." See Defs.' Resp. and Obj. to Pl.'s Mot. for Leave at 3 n. 2.
It is the Defendants contention that the Couchman affidavit is not admissible because it does not show how Ms. Couchman has any personal knowledge regarding the activities of Holguin, Ricci, or Harris, since she was fired by Defendant in December of 2001. See Id. at 3. Moreover, Defendants assert that Lorraine Holguin was terminated by Independent Financial in October of 2001, and any work she did involving closing loans with Texas residents was done entirely while she was in the previous employ of Advantage. Id. at 3-4. The court must take the allegations of the plaintiff's complaint as true, except where they are "controverted by opposing affidavits," and the court will resolve all conflicts in the facts in favor of the plaintiff. Thompson v. Chrysler Motors Corp., 755 F.2d 1162, 1165 (5th Cir. 1985). Under this standard, the Court finds that affiant Couchman has sufficiently demonstrated that her testimony is based upon her knowledge and experience acquired while employed by Independent Financial, and as such, shall overrule the Defendants' objections.
Defendants further assert that Plaintiffs exhibit entitled "Funding History — Wicker Branch (TX Properties)" should be ruled inadmissible because it is irrelevant to show Wicker's personal contacts under the fiduciary shield doctrine. See Def.'s Resp. and Obj. to Pl.'s Mot. at 5. As shall be discussed infra, the Court finds this argument without merit and shall overrule the Defendants objection as to this evidence.
II. Personal Jurisdiction
A federal court sitting in diversity may exercise personal jurisdiction over a nonresident defendant if the exercise of personal jurisdiction by the forum state is consistent with due process. Latshaw v. Johnston, 167 F.3d 208, 211 (5th Cir. 1999). When a nonresident defendant presents a motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing proper jurisdiction. D.J. Investments, Inc. v. Metzeler Motorcycle Tire Agent Gregg, Inc., 754 F.2d 542, 544-45 (5th Cir. 1985). In meeting this burden, the plaintiff must establish a prima facie case of personal jurisdiction, and proof by a preponderance of the evidence is not required. Id. at 545-46. When the court rules on a motion to dismiss without holding an evidentiary hearing, the court must accept all uncontroverted facts in the complaint as true and must resolve all factual conflicts in favor of the plaintiff. Latshaw, 167 F.3d at 211. Furthermore, reasonable inferences from the facts will be drawn in favor of the plaintiff. Felch v. Transportes Lar-Mex SA DE CV, 92 F.3d 320, 327 (5th Cir. 1996).
In a diversity suit, two preconditions must be met in order for a court to properly exercise jurisdiction over a nonresident defendant: (1) the nonresident defendant must be amenable to service of process under the forum state's long-arm statute, and (2) the exercise of jurisdiction must comport with federal due process requirements. The Texas long-arm statute for service of process extends jurisdiction to the constitutional limits of due process. Latshaw, 167 F.3d at 211. Therefore, in analyzing the Defendants' due process challenges to this Court's jurisdiction, the sole question that the Court must determine is whether the exercise of personal jurisdiction satisfies the due process requirements of the Fourteenth Amendment. WNS, Inc. v. Farrow, 884 F.2d 200, 202 (5th Cir. 1989).
A. Service of Process
Texas' long-arm statute permits service of process on nonresidents who have engaged in business in Texas so long as the lawsuit relates to such business. Tex. Civ. Prac. Rem. Code Ann. § 17.042 (Vernon 1997). This statute states that "[i]n addition to other acts that may constitute doing business, a nonresident does business in this state if the nonresident . . . commits a tort in whole or in part in this state." Tex. Civ. Prac. Rem. Code Ann. § 17.042(2) (Vernon 1997).
Advantage alleges in its complaint that the Defendant Independent Financial has intentionally interfered with Plaintiffs valid contracts with Robertson and Wicker by inducing or causing said individuals to breach and/or terminate their contracts with Advantage. Pl.'s Orig. Pet. at ¶¶ 32-35. Additionally, Advantage alleges that all the Defendants intentionally and maliciously prevented it from entering into a business relationship with borrowers who sought to obtain mortgage loans through Plaintiff, as well as committed fraud against it, by causing its loan officers to originate loans for Independent Financial, instead of Advantage, beginning in or around the summer of 2001. Pl's Orig. Pet. ¶¶ 10, 36-40, 44-47. As stated above, the Court must take all allegations in Plaintiff's complaint as true to the extent that they are not controverted by Defendants, and all factual conflicts must be resolved in favor of Plaintiff. Therefore, taking these allegations of fraud and intentional interference with contractual and prospective business relations as true, Wicker and Independent Financial have committed a tort in Texas. For purposes of long-arm jurisdiction, a tort is committed where the resulting injury occurs. See Hupp v. Siroflex of America, Inc., 848 F. Supp. 744, 746 (S.D. Tex. 1994). Accordingly, Defendants are deemed amenable to service of process under of the Texas long-arm statute.
B. Due Process
Due process requires that a court seeking jurisdiction over a nonresident defendant must find that the defendant has purposefully established "minimum contacts" with the forum state so that the exercise of jurisdiction does not offend "traditional notions of fair play and substantial justice." Asahi Metal Indus. Co., Ltd. v. Super Ct. of Cal., Solano County, 480 U.S. 102, 105 (1987). Therefore, a court may properly exercise jurisdiction over a nonresident defendant once the plaintiff makes a prima facie demonstration of two elements: (1) the nonresident must have some minimum contact with the forum which results from an affirmative act on his part, and (2) it must be fair and reasonable to require the nonresident to defend the suit in the forum state. Stuart v. Spademan, 772 F.2d 1185, 1189 (5th Cir. 1985).
1. Minimum Contacts
The basis of establishing minimum contacts between a nonresident defendant and the forum state lies in finding that the defendant purposefully availed itself of the laws and protections of the forum state. Asahi, 480 U.S. at 109. The court must determine that the defendant could foresee that its affirmative acts might cause it to be haled into court in that forum state. Latshaw, 167 F.3d at 211. Minimum contacts may be established on the basis of contacts that give rise to either general or specific jurisdiction. Helicopteros Nacionales de Columbia v. Hall, 466 U.S. 408, 414 n. 8, 415 n. 9 (1984). Here, since Advantage's allegations against Defendants arise from their contacts to the forum state, the Court need only find the minimum contacts necessary to establish specific jurisdiction. WNS, Inc., 884 F.2d at 202-03. Moreover, because the acts directed at the forum state give rise to the claim being asserted, a single act by the defendant directed at the forum state can be enough to confer personal jurisdiction. Latshaw, 167 F.3d at 211.
In support of its argument that this Court may exercise personal jurisdiction over the Defendants, Plaintiff asserts that Wicker and Robertson, when they submitted their branch office application and contract, knew Advantage was a business situated in Texas. See Pl.'s Mem. in Opp. to Defs.' Mot. at 2-3. Therefore, the source from which the Defendants would receive payment all had a Texas nexus. In a breach of contract case, however, the fact that the contract was entered into with a Texas resident will not alone support the exercise of personal jurisdiction over a nonresident defendant. Latshaw, 167 F.3d at 211. The court must also evaluate "prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing." Id.
First, the Court notes that the branch management contract executed between Advantage and Wicker provided that the laws of the State of Texas would govern the parties agreement. See Pl.'s Mem. Opp. to Defs.' Mot. to Dismiss, Exh. 4 ("Supplemental Employment Agreement"). While a choice of law provision alone does not confer jurisdiction over the court, such a provision is a factor in considering minimum contacts. Stuart, 772 F.2d at 1195 ("choice-of-law provisions warrant some weight in considering whether a defendant has purposefully invoked the benefits an protection of a state's laws for jurisdictional purposes, 'although such a provision standing alone would be insufficient to confer jurisdiction'").
It is also undisputed that the performance of the contract between the parties, with the exception of the mailing of all loan fees to Texas, occurred almost entirely in Arizona. See Command-Aire Corp. v. Ontario Mechanical Sales and Serv., Inc., 963 F.2d 90, 94 (5th Cir. 1992) (stating that the place where the contract is to be performed is a weighty consideration). In fact, Wicker states that his contacts with Texas consist mainly of his mailing of the branch office application and contract to Advantage, as well as traveling to Texas twice after the contract was executed for the purposes of training. See Def. Wicker's Br. in Supp. at 2. While the exchange of communications alone in "developing or carrying out the contract itself [is] in itself insufficient to constitute purposeful availment of the benefits and protection of Texas law," these exchanges also factor into the Court's minimum contacts analysis. Holt Oil Gas Corp. v. Harvey, 801 F.2d 773, 778 (5th Cir. 1986).
Advantage emphasizes the fact that Wicker's contacts with the forum state also consisted of mailing loan checks to Advantage's headquarters in Texas "every time he closed a loan." Pl.'s Mem. in Opp. to Defs.' Mot. at 3. Wicker argues that such mailing does not constitute a minimum contact since it was required to make such mailings as part of his employment with Advantage, and moreover, this dispute has nothing to do with such conduct, but instead concerns Wicker's resignation from Advantage. Def. Wicker's Br. in Supp. at 7-8. In determining whether the mailings of all loan proceeds to Advantage constitute minimum contacts, the Court must assess whether Wicker and Robertson should have been able to "reasonably anticipate being haled" into Texas court as a result of their actions. Colwell Realty Inv., Inc. v. Triple T Inns of AZ, Inc., 785 F.2d 1330, 1332 (5th Cir. 1986).
The Fifth Circuit has found minimum contacts where the parties entered into an ongoing business relationship conducted through telephone and facsimile communications. See Southwest Offset, Inc. v. Hudco Publishing Co., Inc., 622 F.2d 149 (5th Cir. 1980). In Hudco, the Court noted that the nonresident defendant took on a larger role than just a passive, one time customer of a Texas corporation when the defendant placed several orders with the plaintiff from which he expected to make a profit. Id. at 152. In fact, although the defendant had performed no physical act within the state, "its activities in sending certain items to Texas under [its] contract," were found adequate enough to support an inference of an "affirmative, purposeful decision . . . to avail itself of the privilege of conducting some business in Texas." See Id. Similarly here, the relationship between Advantage and Wicker was not that of a one-time customer or of an isolated contract. The relationship more closely resembled that where the parties maintain a more continuous and long term relationship involving several transactions. See EMC Residential Mortgage Corp. v. Burrow Closing Management Corp., No. Civ.A. 3:01-CV-1461-P, 2002 WL 180844 at *3 (N.D.Tex. Feb. 1, 2002) (Solis, J.) (finding minimum contacts where defendant continuously sent documentation, including draws, invoices, and monthly progress reports, to plaintiffs headquarters located in Texas). The Court also finds significant for purposes of establishing minimum contacts with the forum state Plaintiffs allegations that Wicker repeatedly brokered loans for Texas residents involving properties located in Texas, while earning substantial fees on each loan.
Contrary to Wicker's view, the instant action has everything to do with Wicker and Robertson's alleged conversion of fees and breach of an agreement to forward fees to Plaintiff for loans closed in Advantage's name, using Advantage's goodwill, contacts, and confidential information by Wicker's branch and/or while Wicker was an employee of Advantage. See Pl.'s Mem. in Opp. to Defs.' Mot. at 4. As such, Wicker could have reasonably foreseen being haled into court in Texas for engaging in such conduct having an effect in Texas. See Brown v. Flowers Indus., Inc., 688 F.2d 328, 334 (5th Cir. 1982) (finding that Defendant could have easily foreseen being haled into court in Mississippi where defendant placed an allegedly defamatory phone call to plaintiff, who resided in Mississippi).
Alternatively, Wicker argues that any contact he had with Texas was as a result of his employment with Advantage, and as such cannot be used as a basis for asserting jurisdiction over him personally. See Def. Wicker's Br. in Supp. at 8. As a general rule, the "fiduciary shield" doctrine shields an individual from jurisdiction that would be based on the individual's contacts with the forum state while acting as an agent of a corporation. Stuart, 772 F.2d at 1197. However, the Court finds that case inapposite here since Plaintiffs claims against Wicker arise precisely out of his alleged failure to act as an employee of Advantage and because of the alleged misuse of Advantage's office, confidential information, rate sheets, industry contacts and goodwill to Plaintiffs detriment. See Pl.'s Orig. Pet. ¶ 15.
Finally, taking Advantages' allegations as true, Defendant Independent Financial likewise has directed its activities at Texas residents sufficient to establish the minimum contacts necessary to establish personal jurisdiction. Through the actions of Wicker, Robertson and its loan officers, Independent has purportedly interfered with Advantage's business relations and converted Advantage's funds as Lorraine Holguin, Larry Ricci, Robert Harris, have in the past and presently solicited, transacted and closed loans in the State of Texas. See Couchman Aff. ¶¶ 2-4. In Calder v. Jones, 465 U.S. 783 (1984), the Supreme Court held that a defendant will be subject to jurisdiction in a particular forum if the defendant committed an intentional tort which he knows will harm the plaintiff in that forum. The Court reasoned that where the defendants had acted as "primary participants in an alleged wrongdoing intentionally directed at a [forum state] resident," they could reasonably anticipate being haled into court in the forum state. Calder, 465 U.S. at 789; see also Union Carbide Corp. v. UGI Corp., 731 F.2d 1186, 1190 (5th Cir. 1984) (holding that an intentionally tortious act committed by a defendant outside of Texas, which resulted in an injury in Texas, was sufficient to support a court's assertion of jurisdiction within the limits of the due process clause). In the case at bar, accepting Plaintiffs allegations in its complaint as true, Defendants Wicker, Robertson and Independent Financial were the participants in an alleged scheme of conversion, interference with contract, and common law fraud on Advantage. Pl.'s Orig. Pet. at 3-7. They knew that their actions would have an impact on Advantage's mortgage loan business, and they also knew that Advantage would feel the brunt of the injury, that is, financial loss, in Texas. In sum, Defendants were primary participants in several alleged torts which had the effect of causing injury to a Texas resident. As such, this Court may properly exercise jurisdiction over them. See Calder, 465 U.S. at 789; Union Carbide, 731 F.2d at 1190.
2. Substantial Justice and Fair Play
The Court, having determined that sufficient minimum contacts exist to support the exercise of personal jurisdiction over Defendants, it must also decide whether it would comport with the "traditional notions of fair play and substantial justice" to exercise such jurisdiction. Int'l Shoe Co. v. State of Washington, 326 U.S. 310, 316 (1945). In other words, the relationship between the defendant and the forum must be such that it is reasonable to require the defendant to defend the particular suit which is brought there. Id. at 317. In resolving this inquiry, the Court must consider (1) the burden on the defendant, (2) the interests of the forum state, (3) the plaintiff's interest in obtaining relief, (4) the interstate judicial system's interest in obtaining the most efficient resolution of controversies, and (5) the shared interest of the several States in furthering fundamental substantive social policies. Asahi, 480 U.S. at 107. Defendants may defeat personal jurisdiction, however, by presenting "a compelling case that the presence of some other considerations would render jurisdiction unreasonable." Burger King, 471 U.S. at 477. It is the defendants' burden to show that conducting litigation in this court would be "so gravely difficult and inconvenient" that it would be at a "severe disadvantage" in comparison to the plaintiffs. Burger King, 471 U.S. at 478 (citations omitted).
As to the interests of the forum state, the Fifth Circuit has noted that "Texas has a significant interest in redressing injuries that occur within its borders at the hands of nonresidents." WNS, Inc., 884 F.2d at 204. Certainly Texas has an interest in redressing injuries caused to Texas corporations due to continuous fraud directed at Texas from foreign corporations, regardless of whether it occurs by fax or in person.
Courts have recognized that defendants may incur a burden in traveling to litigate claims. However, the Supreme Court has stated that when the defendant has conducted some business activity in the forum state, "it usually will not be unfair to subject [defendant] to the burdens of litigating in another forum for disputes relating to such activity." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985). In this particular case, the Defendants have not produced the compelling evidence necessary to overcome the forum state's interest in resolving this matter. Nor have the Defendants demonstrated that these facts severely disadvantage them as compared to the Plaintiff's. See Magna Group, Inc. v. Gordon Floor Covering, Inc., No. Civ.A. 3:99-CV-1926-P, 1999 WL 1204483 at *4 (N.D.Tex. Dec. 16, 1999) (Solis, J.) (holding substantial justice and fair play not violated for California corporation to defend tort action in Texas court).
CONCLUSION
For the reasons stated herein, the Court finds the Plaintiff has established the Defendants' minimum contacts with Texas for this Court to assert personal jurisdiction over them, and that to do so comports with traditional notions of fair play and substantial justice. Therefore, the Court may exercise personal jurisdiction over the Defendants within the bounds of due process. The Court hereby DENIES Defendants' Motion to Dismiss for Lack of Personal Jurisdiction. Further, the Court DENIES as MOOT Plaintiff's Motion for Leave to Take Oral Depositions.
So Ordered.