Opinion
No. SA 98-CA-849 WWJ
March 22, 2002
MEMORANDUM OPINION AND ORDER
The court now considers Dcfendant Avantel's ("defendant") motion to dismiss for lack of personal jurisdiction pursuant to rule 12(b)(2) of the Federal Rules of Civil Procedure [Document No. 87]. For the reasons outlined below, the motion will be denied.
Defendant Avantel's motion for leave to extend the page limit for its reply in support of its motion to dismiss [Document No. 113] shall be, and is hereby, GRANTED.
BACKGROUND
On September 18, 1998, the plaintiff brought this diversity action against the various defendants, in its fourth amended complaint [Document. No, 105], the plaintiff asserts claims for breach of contract, promissory estoppel, negligent misrepresentation, quantum merit, fraud, and conspiracy, claims which arose out of a business relationship involving the marketing of communications services in the Republic of Mexico. The plaintiff is a Texas corporation with its principal place of business in San Antonio, Texas while the defendant (though the exact nature of the entity is disputed) appears to be a Mexican corporation with its principal place of business in Mexico City. Avantel filed this motion to dismiss for lack of personal jurisdiction on April 18, 2001 [Document No. 87], TelePlus responded on December 17, 2001 [Document No. 109], and Avantel replied on January 17, 2002 [Document No. 113). The court has carefully considered these pleadings and all applicable authorities in reaching its decision.
ANALYSIS
In a diversity case, a federal court may only exercise jurisdiction over a nonresident corporate defendant to the extent allowed under state law. See Alpine View Co. Ltd. v. Atlas Copco AB, 205 F.3d 208, 214 (5th Cir. 2000). It has been held that the reach of the Texas long-arm statute is equivalent to that of the United States Constitution, and thus the only question before the court is whether or not exercising personal jurisdiction over Avantel would offend the Due Process clause of the Fourteenth Amendment. See id.
"The Due Process clause . . . permits the exercise of personal jurisdiction over a nonresident defendant when (1) that defendant has purposefully availed himself of the benefits and protections of the forum state by establishing "minimum contacts' with the forum state; and (2) the exercise of jurisdiction over that defendant does not offend traditional notions of fair play and substantial justice." Id, at 215 (citations omitted). "Mimmum contacts" may be established sufficient for a court to assert either specific jurisdiction or general jurisdiction. Specific jurisdiction is appropriate where the corporation 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. (quoting Burger King Gorp. v. Rudzewics, 471 U.S. 462, 472 (1985) (in turn quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984))). General jurisdiction is appropriate "where the nonresident defendant's contacts with the forum state, although not related to the plaintiff's cause of action, are 'continuous and systematic." Id. (quoting Helicopteros, 466 U.S. at 415-16).
The plaintiff claims that the court may exercise both specific and general jurisdiction over Defendant Avantel. Because the court finds that it may exercise specific jurisdiction, it need not, and does not, decide the issue of general jurisdiction.
Where, as here, the court hold's no evidentiary hearing, the party seeking to assert jurisdiction need only present sufficient facts to make out a prima facie case in Support of jurisdiction. Id. The party's uncontroverted allegations are to be accepted as true, and all conflicts between the facts contained in the parties' affidavits and other documentation are likewise to be resolved in the party's favor. Id.
Plaintiff's argument for specific jurisdiction rests upon "fraudulent and tortious communications" that the defendant allegedly directed "into Texas intending that Teleplus rely upon those representations in Texas." (Document No. 109 at 5]. According to Robert Mahler's affidavit, those communications include:
• Representations made by Craig McBurnett in San Antonio in January 1996 as to possible compensation structure (Affidavit of Robert Mahler, ¶ 9];
• The possibility of Teleplus providing marketing services for Avautel during the upcoming "Equal Access" campaign in Mexico [¶ 11];
• A facsimile sent from Mr. McBurnett to Mr. Mahler on January 22, 1996 further spelling out the compensation structure [Id., Exh. 7];
• A June 3, 1996 e-mail from Eduardo Janciro of Avantel to Mr. Mahler in San Antonio informing him that Teleplus would be a designated sales representative for Avantel [Exh. 8];
• A November 1996 phone call from Avantel's Mike Tomas to Mr. Mahler in San Antonio, informing Mr. Mahler of the need for Teleplus to "mobilize a sales force and provide the necessary marketing services beginning January 3, 1997, on the Equal Access 'Blitz,'" constituting all marketing throughout Mexico, with the exception of the Monterrey, Mexico City and Guadalajara markets, with commissions to be paid at a slightly lower rate than those agreed to for the sale of business switched voice products [¶ 17];
• At least a dozen phone conversations between Mr. Tomas and Mr. Mahler between November 1996 and January 1997, in which Avantel officially "hired" Teleplus to provide marketing services for the Equal Access Program [¶ 18];
• A lengthy e-mail from Tomas to Mahler on or after December 13, 1996, in response to a similarly lengthy e-mail from Mahler to Tomas, providing details as to Avantel's Equal Access requirements, as well as answers to Mahler's questions about customer tracking and commissions [¶ 19, Exh. 14 and 15];
• An e-mail from Myriam Zepeda to Mahler in San Antonio, acknowledging Teleplus' Equal Access activities, and representing that Avantel was "taking care of" customer tracking [Exh. 23];
• An e-mail from Avantel's Jorge Zapata, copying Mahler in San Antonio, setting forth Avantel's "pre-Equal Access hiring plan," which includes a number of cities for which "CDS" (a Teleplus subsidiary) will provide "all efforts" [¶ 24, Exh. 19];
• Numerous communications, both written and verbal, indicating, sometimes directly and sometimes circumstantially, an understanding on the part of Avantel that Teleplus would be performing Equal Access marketing on behalf of Avantel, contrary to their later assertion that any such services were without Avantel's knowledge or permission.
There can be no doubt that these communications, when viewed in the light most favorable to the plaintiff, indicate some sort of relationship between Avantel and Teleplus with regard to the Equal Access campaign. The court must decide whether or not such allegedly tortious communications, when directed into Texas, constitute sufficient minimum contacts to justify an assertion of specific jurisdiction. Burger King at 472. For guidance on this point, the plaintiff points to Wien Air Alaska, Inc. v. Brandt, 195 F.3d 208 (5th Cir. 1999). Wien Air stands unambiguously for the proposition that "(w)hen the actual content of communications with a forum gives rise to intentional tort causes of action, this alone constitutes purposeful availment." Id. at 213. In addition to a number of non-intentional tort claims, the plaintiff's fourth amended complaint asserts causes of action for fraud and breach of fiduciary duties, By the standard of Wien Air, there can he no doubt that the plaintiff has articulated a prima facie case for the assertion of specific jurisdiction. Construing the facts in the light most favorable to the plaintiff, as the court must, Defendant Avantel made false representations to the plaintiff, intending for the plaintiff to rely on those representations. Teleplus did reasonably rely on those representations and as a result suffered significant damages. The content of the communications — the promises, inducements, and encouragements — directed to the plaintiff in Texas unquestionably give rise to the plaintiff's intentional tort causes of action.
Defendant Avantel counters that a forum selection clause in a contract negotiated between the parties specifically requires that the parties seek legal redress in Mexican courts, under Mexican law. The forum selection clause, Section 22 of the contract, reads:
the Parties specifically submit themselves to the Laws and Courts of Mexico City, DF, Mexico waiving all other laws which may be deemed appropriate by reason of their present or future legal addresses or for any other reason,
[Document No. 113 at 3]. If the subject matter of this dispute is covered by the contract (or, "the Agreement," as the defendant refers to it), then clearly the plain language of the choice of forum clause precludes an exercise of personal jurisdiction in this ease. A forum selection clause is presumed valid and enforceable, unless it is proven that enforcing the clause would be unreasonable under the circumstances. Mitsui Co. (USA), Inc. v. Mira M/V, 111 F.3d 33, 35 (5th Cir, 1997). To make such a finding, the court would have to find that the clause itself is the product of fraud or overreaching, violates public policy, or effectively deprives a party of its day in court. See id. As the defendant points out, no such proof is before the court.
For the purposes of this decision, the court assumes that the defendant's translation of the clause in question is correct.
The parties appear to agree that the contract does not cover the subject matter of this civil action. In this dispute, the court is concerned with, among other things, allegedly fraudulent representations made regarding the provision of marketing services in preparation for the "Equal Access" program, in which Mexico's long distance market was opened up to competition. "Exhibit A" to the contract (as translated by the defendant) details a "[l]ist of services that REPRESENTATIVE (Teleplus) can offer and that are subject to commission." [Declaration of Robert Arnett at 15]. That list includes "Avantel Multifax, Domestic Private Line, International Private Line, Avantel Domestic X.25 Packet Switching Service, Avantel Domestic Frame Relay Service, and Avantel MCI Internet." [Id.] The plaintiff claims that this list of services does not encompass Equal Access marketing. The defendant tacitly agrees, as it claims that Teleplus' Equal Access work and subsequent request for payment constituted a breach of the provision of the contract stating that "'any additional product' other than described in the Agreement's attachment 'may only be offered with Avantel's prior written approval.'" [Document No. 113 at 7]. The defendant does not assert that this clause precludes jurisdiction by bringing any subsequent promises allegedly made by the defendant within the ambit of the forum selection clause, and the court declines to so find.
The defendant cites GH Partners v. Boer Goat, 896 F. Supp. 660 (W.D. Tex. 1995), for the proposition that, where a fraud claim arises out of communications exchanged in negotiating and performing a contract, and where the contract in question contains a choice of law clause specifically designating laws other than those of the state of Texas, the defendant "could not reasonably anticipate being haled into Texas courts." [Document No. 113 at 6). What distinguishes this dispute from the Boer Goat dispute, however, is the fact that this civil action did not arise from "communications exchanged in negotiating and performing" the contract in question; it arose from allegedly fraudulent misrepresentations made wholly apart from the contract containing the choice of law and forum clauses. The court is therefore not persuaded that the reasoning of Boer Goat applies in this case.
The court finds that the defendant has unquestionably purposefully availed itself of the benefits and protections of the state of Texas by establishing 'minimum contacts' with Texas. What remains to be decided is whether the defendant has shown that the exercise of jurisdiction would offend traditional notions of fair play and substantial justice. International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). "It is rare to say the assertion is unfair after minimum contacts have been shown." Wien Air, 195 F.3d at 215 (citations omitted). Factors to be balanced in making this determination include: (I) the burden on the defendant, (2) the forum state's"s interest in the adjudicating the dispute, (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 Burger King, 471 U.S. at 477.
The court has no doubt that litigating this dispute in Texas would place a substantial burden upon the defendant. That substantial burden, however, is justified in light of the fact that the court has determined that minimum contacts have been established. See Wien Air, 195 F.3d at 215 (citing Asahi Metals Indus. Co. v. Superior Court, 480 U.S. 102, 115 (1987)). As in Wien Air, Texas retains its own substantial interest in adjudicating this dispute, given that it involves the survival of a corporation with its principal place of business in Texas, a business claiming that it was defrauded by the defendant. The court finds no "overwhelming burden to the defendant" that "outweighs the legitimate interests of the plaintiff and the forum state." Wien Air, 195 F.3d at 216.
In summary, it is found that the court may and should exercise jurisdiction over Defendant Avantel in this civil action. Accordingly, the defendant's motion to dismiss shall be, and is hereby,