Opinion
NO. 4:01-CV-0718-A
September 10, 2001
MEMORANDUM OPINION and ORDER
Came on for consideration the motion of Unitrin, Inc., ("Unitrin") to dismiss for lack of personal jurisdiction. The court, having considered the motion, the response of plaintiffs, Syed Suleman, Deshonna Ford, and Carlton Hightower, the reply, the record, and applicable authorities, finds that the motion should be granted.
I. Plaintiffs' Claims
On March 22, 2001, plaintiffs filed their original petition in the 18th Judicial District Court of Johnson County, Texas. By notice of removal filed April 24, 2001, the action was brought before the United States District Court for the Northern District of Texas, Dallas Division. By order signed August 20, 2001, the action was transferred to the Fort Worth Division, where it was assigned to the docket of the undersigned.
Plaintiffs allege that they are former employees of defendants The Reliable Life Insurance Company ("Reliable") and Unitrin. Further, during their employment, each of them was unlawfully discriminated against by Reliable and Unitrin in violation of the Texas Commission on Human Rights Act, TEXAS LABOR CODE §§ 21. 001-.306 (Vernon 1996). Plaintiffs also assert claims for intentional infliction of emotional distress.
II. Grounds of the Motion
Unitrin asserts that it was not the employer of any of the plaintiffs, that it is not a resident of Texas, and that it has no contacts with the State of Texas. In sum, Unitrin contends that it does not have minimum contacts with Texas under either specific or general jurisdiction concepts.
III. Jurisdiction
When a nonresident defendant presents a motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing that in personam jurisdiction exists. Wilson v. Belin, 20 F.3d 644, 648 (5th Cir.), cert. denied. 513 U.S. 930 (1994); Stuart v. Spademan, 772 F.2d 1185, 1192 (5th Cir. 1985); D.J. Investments, Inc. v. Metzeler Motorcycle Tire Agent Gregg, Inc., 754 F.2d 542, 545-46 (5th Cir. 1985). The plaintiff need not, however, establish personal jurisdiction by a preponderance of the evidence; prima facie evidence of personal jurisdiction is sufficient. WNS, Inc. v. Farrow, 884 F.2d 200, 203 (5th Cir. 1989); Wyatt v. Kaplan. 686 F.2d 276, 280 (5th Cir. 1982). The court may resolve a jurisdictional issue by reviewing pleadings, affidavits, interrogatories, depositions, oral testimony, exhibits, any part of the record, and any combination thereof. Command-Aire Corp. v. Ontario Mechanical Sales Serv., Inc., 963 F.2d 90, 95 (5th Cir. 1992). Allegations of the plaintiff's complaint are taken as true except to the extent that they are contradicted by defendant's affidavits. Wyatt, 686 F.2d at 282-83 n. 13 (citing Black v. Acme Markets, Inc., 564 F.2d 681, 683 n. 3 (5th Cir. 1977)). Any genuine, material conflicts between the facts established by the parties' affidavits and other evidence are resolved in favor of plaintiff for the purposes of determining whether a prima facie case exists.Jones v. Petty-Ray Geophysical Geosource, Inc., 954 F.2d 1061, 1067 (5th Cir.), cert. denied, 506 U.S. 867 (1992);Bullion v. Gillespie, 895 F.2d 213, 217 (5th Cir. 1990).
In a diversity action, personal jurisdiction over a nonresident may be exercised if (1) the nonresident defendant is amenable to service of process under the law of a forum state, and (2) the exercise of jurisdiction under state law comports with the due process clause of the Fourteenth Amendment.Wilson, 20 F.3d at 646-47; Thompson v. Chrysler Motors Corp., 755 F.2d 13162, 1166 (5th Cir. 1985) (quoting Smith v. DeWalt Prods. Corp., 743 F.2d 277, 278 (5th Cir. 1984)). Since the Texas long-arm statute has been interpreted as extending to the limits of due process, the only inquiry is whether the exercise of jurisdiction over the nonresident defendant would be constitutionally permissible. Bullion, 895 F.2d at 216; Stuart, 772 F.2d at 1189.
See, e.g., Guardian Royal Exchange Assurance Ltd. v. English China Clays, P.L.C.. 815 S.W.2d 223, 226 (Tex. 1991); Schlobohm v. Schapiro, 784 S.W.2d 355, 357 (Tex. 1990); Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199, 200 (Tex. 1985).
For due process to be satisfied, (1) the nonresident defendant must have "minimum contacts" with the forum state resulting from an affirmative act on the defendant's part, and (2) the contacts must be such that the exercise of jurisdiction over the person of the defendant does not offend "traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)).
The minimum contacts prong of the due process requirement can be satisfied by a finding of either "specific" or "general" jurisdiction over the nonresident defendant. Bullion, 895 F.2d at 216. For specific jurisdiction to exist, the foreign defendant must purposefully do some act or consummate some transaction in the forum state and the cause of action must arise from or be connected with such act or transaction. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985). Even if the controversy does not arise out of or relate to the nonresident defendant's purposeful contacts with the forum, general jurisdiction may be exercised when the nonresident defendant's contacts with the forum are sufficiently continuous and systematic as to support the reasonable exercise of jurisdiction. See, e.g., Helicópteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416 (1984); Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 779 (1984); Perkins v. Benguet Consol. Mining Co., 342 U.S. 437 (1952). When general jurisdiction is asserted, the minimum contacts analysis is more demanding and requires a showing of substantial activities within the forum state. Jones, 954 F.2d at 1068.
The second prong of the due process analysis is whether exercise of jurisdiction over the nonresident defendant would comport with traditional notions of fair play and substantial justice.International Shoe, 326 U.S. at 316. In determining whether the exercise of jurisdiction would be reasonable such that it does not offend traditional notions of fair play and substantial justice, the Supreme Court has instructed that courts look to the following factors: (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) shared interest of the several states in furthering fundamental substantive social policies. Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 113 (1987) (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980)).
IV. Law Applied to the Facts
Although plaintiffs allege in their original petition that they were employees of Unitrin, Unitrin has established, through undisputed affidavits, that it is a holding company and does not have any employees. Unitrin holds stock in other companies, including a subsidiary, United Insurance Company of America, which is the parent corporation of Reliable.
In response, plaintiffs point to letters they sent to the president of Unitrin complaining about Reliable's treatment of them. However, the unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the minimum contacts requirement.Hanson v. Denckla, 357 U.S. 235, 253 (1958). Moreover, the mere existence of a parent-subsidiary relationship is not sufficient to warrant the assertion of jurisdiction over the foreign parent.Alpine View Co. Ltd. v. Atlas Copeo AB, 205 F.3d 208, 218 (5th Cir. 2000). Rather, plaintiffs must submit proof of control by the parent over the internal business operations and affairs of the subsidiary in order to fuse the two for jurisdictional purposes. Hargrave v. Fibreboard Corp., 710 F.2d 1154, 1159 (5th Cir. 1983). This they have not done.
In the alternative, plaintiffs urge that the court has general jurisdiction over Unitrin because they were able to participate in an employee benefit plan sponsored by Unitrin. But, mere provision of benefit plans and other administrative services is not sufficient minimum contact to support general jurisdiction. See, e.g., Central States, Southeast and Southwest Areas Pension Fund v. Reimer Express World Corp., 230 F.3d 934, 945 (7th Cir. 2000); Dunn v. A/S Em. Z. Svitzer, 885 F. Supp. 980, 988-89 (S.D. Tex. 1995) (also discussing the factors to consider regarding exercise of jurisdiction over parent corporation based on activities of subsidiary). Plaintiffs offer no proof of continuous and systematic contacts with Texas sufficient to subject it to personal jurisdiction here.
The court need not discuss the second prong of the due process analysis since plaintiffs have not met the first.
V. ORDER
For the reasons discussed herein,
The court ORDERS that Unitrin's motion to dismiss be, and is hereby, granted, and that plaintiffs' claims against it be, and are hereby, dismissed for lack of personal jurisdiction.
The court determines that there is no just reason for delay in, and hereby directs, entry of final judgment as to the dismissal of plaintiffs' claims against Unitrin