Opinion
Civil No. 3:04-CV-1424-H.
January 11, 2005
MEMORANDUM OPINION AND ORDER
Before the Court are Defendant Richard Glehan's Motion to Dismiss Plaintiffs' Original Petition for Lack of Personal Jurisdiction, filed August 20, 2004; Plaintiffs' Response, filed September 13, 2004; and Defendant's Reply, filed September 27, 2004. For the following reasons, Defendant's Motion is DENIED.
I. Background
Joseph Goddard ("Goddard") is the President and Managing Partner of Goddard Heathcare Consulting, Inc. ("GHC"). (Pl.'s Orig. Pet. Ex. D.) Goddard and GHC ("Plaintiffs") assert claims against National Association of Physician Recruiters, Inc. ("NAPR"), a national membership organization in the healthcare industry, and Richard D. Glehan ("Glehan"). (Pl.'s Orig. Pet. ¶¶ 14-27; Def.'s Mot. at 2; Def.'s App. at 1.) Plaintiffs allege defamation, business disparagement, and civil conspiracy by NAPR and Glehan ("Defendants"). (Def.'s Mot. at 1.) Glehan serves, in an unpaid capacity, as the Chairperson of NAPR's Ethics Committee. (Def.'s Mot. at 2; Def.'s App. at 2.) In lieu of an answer, Glehan filed the instant Federal Rule of Civil Procedure 12(b)(2) Motion to Dismiss all claims against him, arguing that he is beyond that the forum state's in personam jurisdiction. (Def.'s Mot. at 1.)
Glehan has not filed an answer, therefore any citations and references to an answer relate to NAPR's "Answer(s)". Any citations or references to a motion relate to Glehan's "Motion" only.
GHC, a Texas corporation with its principal place of business in Texas, was a member of NAPR until Goddard terminated GHC's membership. (Pl.'s Orig. Pet. ¶¶ 3, 12, 13; id. Ex. E.) Like GHC, Goddard is also a Texas resident. (Pl.'s Orig. Pet. ¶ 2.) As NAPR and Glehan are residents of Florida and Connecticut, respectively, NAPR removed on diversity jurisdiction grounds. (Notice of Removal at 1, 2.)
The following factual allegations are uncontroverted. On or about March 19, 2003, NAPR, acting on a formal complaint alleging a violation of the NAPR ethics code, conducted an investigation of GHC and one of its employees. ( See Pl.'s Orig. Pet. ¶ 9; Def.'s 1st Am. Answer at 1.) On or about April 7, 2003, Defendants sent correspondence to Plaintiffs notifying them of the results of the investigation, including a copy of NAPR's investigative report. (Pl.'s Orig. Pet. ¶ 9; Def.'s 1st Am. Answer at 1.) On or about June 15, 2003, Defendants mailed a letter to Plaintiffs imposing a sanction on GHC because of Plaintiffs' violation of the NAPR Ethics Code. (Pl.'s Orig. Pet. ¶ 10; id. Ex. B; Def.'s 1st Am. Answer at 1.) On or about June 25, 2003, Defendants again corresponded with Plaintiffs, this time indicating that the sanction imposed would be expanded and "published in the . . . NAPR newsletter [distributed to NAPR] member[s]." (Pl.'s Orig. Pet. ¶ 11; id. Ex. C) and distributed to Karen Zeller, Willard S. Kautter, and Kathy Nikunen, who are NAPR's President, Executive Vice President, and Ethics Committee Investigator, respectively. (Pl.'s Orig. Pet. Ex. C; Def.'s Mot. at 3, 7-8.) Prior to publication of the NAPR newsletter with the results of the investigation, Goddard terminated GHC's NAPR membership, by letter to Karen Zeller, dated June 26, 2003. (Pl.'s Orig. Pet. ¶¶ 12, 13; id. Ex. E; Def.'s 1st Am. Answer at 2.) The newsletter, with the results of the investigation, was sent to NAPR members nationwide on or about October 26, 2003. (Def.'s 1st Am. Answer at 2.) The correspondence, communications, and newsletter distribution described above form the basis of Plaintiffs' claims of defamation, business disparagement, and civil conspiracy against Defendants. Glehan brings his Motion to Dismiss on the basis of lack of personal jurisdiction.
II. Standard of Review
"In a diversity action, a federal court may exercise personal jurisdiction over a defendant only to the extent permitted by the applicable law of the forum state." Cent. Freight Lines Inc. v. APA Transport Corp., 322 F.3d 376, 380 (5th Cir. 2003) (citing FED.R.CIV.P. 4(e)(1), (h)(1), and (k)(1)). In Texas, the exercise of personal jurisdiction over a nonresident defendant is proper where: 1) the defendant has committed an act that confers jurisdiction under the Texas long-arm statute; and 2) the exercise of jurisdiction under that statute does not deprive the defendant of the due process of law guaranteed by the Fourteenth Amendment of the United States Constitution. See Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985); Delgado v. Reef Resort Ltd., 364 F.3d 642, 645 (5th Cir. 2004), cert. denied, ___ U.S. ___, 125 S.Ct. 623 (Nov 29, 2004); Cent. Freight Lines, 322 F.3d at 380.
The Texas long-arm statute provides, inter alia, that a nonresident does business in Texas if the nonresident commits a tort in whole or in part in Texas. TEX. CIV. PRAC. REM. CODE ANN. § 17.042(2) (Vernon Supp. 2004). Because courts have interpreted the Texas long-arm statute, to extend to the limits of due process, see Cent. Freight Lines, 322 F.3d at 380, the sole inquiry is whether the assertion of personal jurisdiction over a defendant comports with federal constitutional requirements. Id.; Aviles v. Kunkle, 978 F.2d 201, 204 (5th Cir. 1992). Obtaining personal jurisdiction over a nonresident comports with constitutional requirements if (1) the nonresident purposefully availed himself of the benefits and protections of Texas law by establishing minimum contacts with Texas such that he could reasonably anticipate being haled into court in Texas, and (2) the exercise of jurisdiction does not offend traditional notions of fair play and substantial justice. See Cent. Freight Lines, 322 F.3d at 380; TIG Ins. Co. v. NAFCO Ins. Co., Ltd., 177 F. Supp. 2d 561, 565 (N.D. Tex. 2001).
Minimum contacts with a forum state "can be established either through contacts sufficient to assert specific jurisdiction, or contacts sufficient to assert general jurisdiction." Cent. Freight Lines, 322 F.3d at 381 (citing Mink v. AAAA Dev. LLC, 190 F.3d 333, 336 (5th Cir. 1999) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310 (1945))). General jurisdiction exists when a nonresident defendant has engaged in continuous and systematic contacts with the forum state. Id. Specific jurisdiction exists if the plaintiff can establish that "defendant has purposefully directed its activities at the forum state and the litigation results from alleged injuries that arise out of or relate to those activities." Id. (citing Burger King, 471 U.S. at 472).
"When . . . the district court [does] not conduct an evidentiary hearing on defendant's motion to dismiss, the party seeking to assert jurisdiction is required only to present sufficient facts to make out a prima facie case supporting jurisdiction." Cent. Freight Lines, 322 F.3d at 380 (citing Alpine View Co. v. Atlas Copco A.B., 205 F.3d 208, 214 (5th Cir. 2000)); TIG Ins. Co., 177 F.Supp. 2d at 565. In determining whether a prima facie case for personal jurisdiction exists, the Court accepts as true only non-conclusory uncontroverted allegations "and resolve[s] all factual conflicts [contained in the parties' affidavits] in favor of the party seeking to invoke the court's jurisdiction." Cent. Freight Lines, 322 F.3d at 380; Bullion v. Gillespie, 895 F.2d 213, 215 (5th Cir. 1990).
III. Analysis
In the instant diversity action, an evidentiary hearing has not been conducted. Therefore, the Court determines whether Plaintiffs have met their prima facie burden pursuant to the jurisdictional requirements under Texas law; that is, whether Glehan established minimum contacts with Texas such that he could reasonably anticipate being haled into Texas courts and whether the exercise of jurisdiction offends traditional notions of fair play and substantial justice.
A. Minimum Contacts
1. General Jurisdiction
The continuous and systematic contacts test required for general jurisdiction is a difficult standard to satisfy. Submersible Sys., Inc. v. Perforadora Cent., S.A. de C.V., 249 F.3d 413, 419 (5th Cir. 2001) (citing 16 James Wm. Moore et. al., Moore's Federal Practice ¶ 108.41[3] (3d ed. 1999)); see, e.g., Brokerwood Int'l. (U.S.), Inc. v. Cuisine Crotone, Inc., 104 Fed.Appx. 376, 382 (5th Cir. 2004); Cent. Freight Lines, 322 F.3d at 381 (no general jurisdiction even though defendant "routinely arranges and receives interline shipments to and from Texas and apparently sends sales people to the state on a regular basis to develop business, negotiate contracts, and service national accounts"); Wilson v. Belin, 20 F.3d 644, 650-51 (5th Cir. 1994) (even if possibly continuous, defendant's contacts were not substantial enough for general personal jurisdiction). General Jurisdiction requires that Glehan engage in extensive contacts with the forum. See Submersible Sys., 249 F.3d at 419; Brokerwood Int'l., 104 Fed.Appx. at 382. "[T]he general jurisdictional inquiry focuses exclusively on whether the nonresident defendant's contacts with the forum unrelated to the cause of action are sufficiently 'continuous and systemic' to satisfy due process requirements." Freudensprung v. Offshore Technical Servs., Inc., 379 F.3d 327, 345 (5th Cir. 2004) (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 417 (1984)); see Revell v. Lidov, 317 F.3d 467 (5th Cir. 2002) ("General jurisdiction exists when a defendant's contacts with the forum state are unrelated to the cause of action but are 'continuous and systematic.'")
Nothing in Plaintiffs' pleadings present sufficient facts to make out a prima facie case supporting general jurisdiction. There is no allegation that Glehan (or NAPR) conducts regular business or makes any business decisions in Texas, substantial or otherwise. Other than the allegations forming the basis of their claims, Plaintiffs have not shown any general contacts unrelated to the cause of action. Plaintiffs argue in error that the communications consisting of "one phone call and . . . three letters to Plaintiffs in Texas . . . placed into a publication . . . sent to . . . Texas. . . . are pervasive and frequent enough to support general jurisdiction." (Pl.'s Resp. at 5.) Neither of Glehan's (or NAPR's) contacts, unrelated to the cause of action, rise to the "continuous and systematic" level required for general personal jurisdiction to attach.
The Fifth Circuit reviews general jurisdiction questions by reference to "the Supreme Court's seminal case on general jurisdiction, Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437, 438 (1952)." See Revell, 317 F.3d 467; Wilson, 20 F.3d at 650-51. "In Perkins, a Philippine corporation temporarily relocated to Ohio. The corporation's president resided in Ohio, the records of the corporation were kept in Ohio, director's meetings were held in Ohio, accounts were held in Ohio banks, and all key business decisions were made there." Revell, 317 F.3d at 471 (citing Wilson, 20 F.3d at 650-51).
2. Specific Jurisdiction
Specific jurisdiction may exist where the cause of action is predicated on or directly related to defendant's contacts with the forum. Freudensprung, 379 F.3d at 343 ("A court may exercise specific jurisdiction when (1) the defendant purposely directed its activities toward the forum state or purposely availed itself of the privileges of conducting activities there; and (2) the controversy arises out of or is related to the defendants contacts with the forum state.") (citing Helicopteros, 466 U.S. 408); Revell, 317 F.3d at 470. The Court determines whether the quality, not merely the quantity, of the contacts "suggest that the nonresident defendant purposefully availed himself of the benefits of the forum state." Brown v. Flowers Indus., Inc., 688 F.2d 328, 333 (5th Cir. 1982), cert. denied, 460 U.S. 1023 (1983).
"This 'purposeful availment' requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of 'random,' 'fortuitous,' or 'attenuated' contacts, or of the unilateral activity of another party or a third person." Burger King Corp., 471 U.S. at 475 (citations omitted).
In the context of intentional torts, the Fifth Circuit's standard for minimum contacts is less stringent than its standard for general jurisdiction. See Lewis v. Fresne, 252 F.3d 352, 358-59 (5th Cir. 2001). "A single act by a defendant can be enough to confer personal jurisdiction if that act gives rise to the claim being asserted." Id.; Wien Air Alaska, 195 F.3d at 213; Brown, 688 F.2d at 332-33 ("The district court erroneously concluded . . . that this one contact [a single tort] was insufficient under the due process clause to subject the defendants to in personam jurisdiction."). "When the actual content of communications with a forum gives rise to intentional tort causes of action, this alone constitutes purposeful availment," TIG Ins. Co., 177 F. Supp. 2d at 566, because "[t]he defendant is purposefully availing himself of 'the privilege of causing a consequence' in Texas." Wien Air Alaska, 195 F.3d at 213. Here, Plaintiffs have made a prima facie showing of minimum contacts; specifically, Plaintiffs allege that the actual content of Gelhan's (and NAPR's) communications with Plaintiffs was defamatory, and gives rise to the business disparagement and civil conspiracy causes of action. Cf. Delta Brands Inc. v. Danieli Corp., 99 Fed.Appx. 1, 7-8 (5th Cir. 2004) ("[Plaintiff] has not . . . alleged that [Defendant's tort] arose out of contacts initiated by [Defendant.] Nor has [Plaintiff] alleged that [Defendant's tort] occurred in telephone calls, emails, or faxes, to [Plaintiff] in Texas.").
B. Fair Play and Substantial justice
Once the plaintiff makes a prima facie showing of minimum contacts, "the burden of proof shifts to the defendant to show that the assertion of jurisdiction is unfair and unreasonable." Cent. Freight Lines, 322 F.3d at 384. To prevail, the "defendant must make a 'compelling case.'" Id. (citing Burger King, 471 U.S. at 477). In determining whether the assertion of jurisdiction is fair and reasonable, the Court engages in a balancing of interests. Id.; TIG Ins. Co., 177 F. Supp.2d at 567. The interests the Court considers are: "(1) the burden on the nonresident defendant of having to defend itself in the forum; (2) the interests of the forum state in the case; (3) the plaintiff's interest in obtaining convenient and effective relief; (4) the interstate judicial system's interest in the most efficient resolution of controversies; and (5) the shared interests of the states in furthering fundamental social policies." Cent. Freight Lines, 322 F.3d at 384 (citing Asahi Metal Indus. Co., Ltd. v. Super. Ct. of Cal., 480 U.S. 102, 115 (1987)).
Glehan does not make a "compelling case." The Court concludes that in focusing solely on the encumbrance of having to defend himself in the forum, Glehan has not met his burden of showing that the assertion of jurisdiction would be unfair. The Supreme Court has stated that "[w]hen minimum contacts have been established, often the interests of the plaintiff and the forum will justify even the serious burdens placed on the alien defendant." Asahi Metal Indus., 480 U.S. at 114-15. Glehan does not address the interests of: the forum state in the case; the Plaintiffs in obtaining relief; the judicial system in efficient resolution of the controversy; or the states in furthering fundamental social policies. Nor has Glehan "identified any conflict between the interests of Texas and other states that would flow from the exercise of personal jurisdiction here." Irving v. Owens-Corning Fiberglas Corp., 864 F.2d 383, 387 (5th Cir. 1989), cert. denied, Jugometal Enter. for Imp. and Exp. of Ores and Metals v. Irving, 493 U.S. 823 (1989). Litigating in Texas satisfies the Plaintiffs' interest in obtaining convenient and effective relief and provides an efficient resolution of the controversy. The exercise of jurisdiction over Glehan does not offend traditional notions of fair play and substantial justice.
IV. Conclusion
For the foregoing reasons, Defendant Richard Glehan's Motion to Dismiss Plaintiffs' Original Petition for Lack of Personal Jurisdiction is DENIED.
SO ORDERED.