CIVIL PROCEDURE
by Robert A. Weninger'
I.
II.
INTRODUCTION. • . . . . . . . • • • • . . • . . . . . . . . . . . . . . • . . . . . . . •.
PERSONAL JURISDICTION ..•..•....••.••.•...............
A.
717
718
The Nonresident Defendant Who Operates an Internet
Website Without Other Contacts in the Forum: Discussion
ofthe Fifth Circuit Decision in Mink v. AAAA Development
LLC
718
The Nonresident Defendant Whose Communications with the
Forum Give Rise to an Intentional Tort: Discussion ofthe
Fifth Circuit Decision in Wien Air Alaska v. Brandt
730
C. The Proper Sequencing ofRulings on Challenges to Personal
Jurisdiction and Subject Matter Jurisdiction
734
J. Discussion ofthe United States Supreme Court Decision
in Ruhrgas, A.G. v. Marathon Oil Co
734
2. Discussion ofthe Fifth Circuit Decision in Alpine View
737
Co. v. Atlas Copco AB
D. Specific Jurisdiction and the Stream ofCommerce Theory:
Discussion ofthe Fifth Circuit Decision in Alpine View Co.
v. Atlas Copco AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 739
E. General Jurisdiction and the Alter-Ego Theory: Discussion
ofthe Fifth Circuit Decision in Alpine View Co. v. Atlas
741
Copco AB
F. The Doctrine ofForum Non Conveniens: Discussion of
the Fifth Circuit Decision in Alpine View Co. v. Atlas
Copco AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 742
III. CONCLUSION ..........•....•.....••........••.......• 746
B.
I. INTRODUCTION
The Fifth Circuit's decisions in the area of federal civil procedure dealt
with a variety of familiar topics, such as pretrial motions and pleadings,
summary judgment, class actions, trial procedure, and appeals, to name but a
few. However, because cases involving these matters have often been
discussed in recent issues of the Survey, this year's article focuses on
significant decisions in the area of personal and subject matter jurisdiction,
particularly the proper sequencing ofrulmgs on challenges to these two kinds
ofjurisdiction, the assertion of specific and general jurisdiction, the assertion
• Professor of Law, Texas Tech University School of Law. B.B.A., University of Wisconsin,
1955; LL.B., University ofWisconsin, 1960; LL.M., University ofChicago, 1964.
717
HeinOnline -- 32 Tex. Tech L. Rev. 717 (2000-2001)
TEXAS TECH LAW REVIEW
718
[Vol. 32:717
of personal jurisdiction over a nonresident defendant who operates an Internet
website without other contacts in the forum, and the doctrine of forum non
conveniens. t
II. PERSONAL JURISDICTION
A. The Nonresident Defendant Who Operates an Internet Website
Without Other Contacts in the Forum: Discussion ofthe Fifth
Circuit Decision in Mink v. AAAA Development LLC
In Mink v. AAAA Development LLC, a panel of the Fifth Circuit decided
a matter of first impression and adopted a three-part test for determining
whether personal jurisdiction could be constitutionally asserted over a
nonresident defendant on the basis of his maintenance of an Internet website
accessible from within the forum state.2 The plaintiff, David Mink, a Texas
resident who worked in the retail furniture business, had developed a
computer program, the "Opportunity Tracking Computer System," which
allowed retailers to track information on sales of furniture and on
opportunities lost on sales not made.' Mink had demonstrated his program to
someone at a trade show who later shared the idea behind the program with
the defendants, David Middlebrook ("Middlebrook"), a Vermont resident, and
his company, AAAA Development CUAAAA n ), a Vermont corporation
(collectively "Defendantsn ).4 Mink alleged that the Defendants and others
conspired to appropriate his copyrighted and patent-pending system and create
an identical program for their own financial gain.' Mink filed his complaint
in a federal district court in Texas, and the Defendants challenged the
assertion of personal jurisdiction with motions to dismiss under Federal Rule
of Procedure 12(bX2).6 The district court dismissed the complaint, and Mink
appealed.'
1.
2.
3.
4.
See discussion i'lfra Part ItA-F.
190 F.3d 333, 336 (5th Cir. Sepll999).
Jd. at 334.
Jd. at 335.
5. Jd.
6. Id. Federal Rule of Civil Procedure l2(b)(2) authorizes a motion 10 dismiss based upon the
defense that the court lacks jurisdiction over defendant's person. FED. R. CIV. P. l2(b)(2). The motion
raises a question as 10 whether the defendant has sufficient contact with the forum 10 give the court the
right 10 exercise judicial power over the defendanl Jd.
7. Min/c, 190 F.3d at 335. Upon the granting of Defendants' motion 10 dismiss for lack of
jurisdiction, Mink filed a motion for reconsideration wherein he asserted (for the first time) that AAAA's
operation ofits Internet website, accessible from Texas, satisfied the minimum contacts requirement. Jd.
The district court denied Mink's motion. Jd. In ruling, the district court considered the pleadings,
plaintitrs motion for reconsideration, and other written materials, but the court did not conduct a full
evidentiary hearing on the jurisdictional issue. Jd. at 335-37.
HeinOnline -- 32 Tex. Tech L. Rev. 718 (2000-2001)
2001]
CIVIL PROCEDURE
719
Upon de novo review, the Fifth Circuit assessed the Defendants'
relationship with the forum state, concluding that Mink's contacts with
AAAA and Middlebrook occurred outside Texas and that neither defendant
owned property, made sales, or had any agents or employees in the forum
state.8 AAAA advertised in a national furniture trade journal and maintained
a website on the Internet where it advertised its products and services,
including the computer program in question.9 AAAA's site, accessible from
Texas, provided users with AAAA's toll-free telephone number, mailing
address, and e-mail address and allowed visitors to print out a mail-in
purchase order form. 'o Although AAAA could interact with prospective
customers electronically by replying to e-mail initiated by them, it did not
enter into contracts or engage in business transactions with anyone through its
website." In fact, AAAA's site instructed all potential customers to return
any completed purchase order forms either by regular mail or by fax. 12
Affirming the dismissal, the Fifth Circuit framed the issue as one "of
exercising jurisdiction over a defendant who operates a website without other
contacts with the forum state. "13 The court said that the question before it was
not whether the Texas long-arm statute might be construed to reach the
Defendants, but whether personal jurisdiction might be constitutionally
asserted over the website operator. 14 The court rejected Mink's argument that
AAAA's maintenance of an Internet site alone could fulfill the minimum
contacts requirement and ruled that the plaintiff had not met his burden of
establishing that the district court had personal jurisdiction over either AAAA
or Middlebrook. 15
Charles Alan Wright and Arthur R. Miller ("Wright and Miller") observe
that district courts have "considerable procedural leeway" in resolving
challenges to personal jurisdiction. 16 In Mink, as in all the other Fifth Circuit
cases that involved such challenges and are discussed in this article, the
district court made its ruling on the basis of affidavits, pleadings, and written
evidence without holding a full evidentiary hearing. 17 Indeed, a court may
decide to conduct an evidentiary hearing on jurisdictional issues, but it is not
8. Mink, 190 F.3d at 335. For a discussion of the burden of proof on the issue of personal
jurisdiction and of standards of review applied by appellate courts to district court rulings on this issue,
see Infra note 22.
9. Mink, 190 F.3d at 335.
10. Jd. at 337.
11. Jd.
12. Jd.
13. Jd. at 336.
14. Jd.
IS. Jd. at 336-37.
16. SA CHARLES ALAN WRIGHT &. ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE §
1351, at 201 (2d ed. Supp. 2000).
17. Mink, 190 F.3d at 335.
HeinOnline -- 32 Tex. Tech L. Rev. 719 (2000-2001)
720
TEXAS TECH LA W REVIEW
[Vol. 32:717
required to do SO.18 Also, Federal Rule of Civil Procedure 52(a) specifically
provides that district courts in ruling on Rule 12 motions are not obliged to
prepare findings of facts or conclusions of law. 19 In ruling on jurisdiction, the
courts in the cases that are discussed here did not prepare findings or
conclusions.2o These procedural matters have consequences for the plaintiff's
burden of proof on the issue ofjurisdiction and for the standard of appellate
review of district court rulings on that issue. 21
The plaintiff bears the burden of establishing personal jurisdiction,22 and
whether personal jurisdiction may be exercised is a question of law that is
reviewed on appeal de novo.23 But the standard of proof on the issue depends
on whether or not the district court conducts an evidentiary hearing to resolve
the question. 24 Where such a hearing is held, the plaintiff's burden is to show
the existence ofjurisdiction by a preponderance of the evidence. 2S Then, on
appeal, the district court's factual findings are reviewed for aclear error."26
But where the district court detennines the issue without the benefit of a fullblown hearing, relying solely upon pleadings, affidavits, and other written
evidence, the plaintiff's burden is only to make a prima facie case for the
existence ofjurisdiction.27 Moreover, where no hearing is conducted and the
plaintiff shows facts that are undisputed, the standard of review on appeal is
de novo. 28 Furthennore, where no hearing is conducted and the plaintiff
18. 5A WRIGHT &. MILLER, mpra note 16, § 1351, at 201.
19. FED. R. CIV. P. 52(a).
20. 5A WRIGHT &. MILLER, mpra note 16, § 1351, at 210.
21. See id. § 1351, at 201.
22. Wilson v. Belin, 20 F.3d 644, 648 (5th Cir. 1994). Wright and Miller comment upon the
burden ofproof and other procedunil ~pects of the motion to dismiss for the lack of personal jurisdiction:
The most common formulation is that the plaintiff bears the ultimate burden of demonstrating
that personal jurisdiction over the defendant exists by a preponderance of the evidence, but
need only make a prima facie showing when the court restricts its review of the Rule 12(b)(2)
motion solely to affidavits and other written evidence and without the benefit of an evidentiary
hearing. In addition, for purposes ofsuch a review, courts will take as true the allegations of
the nonmoving party and resolve all factual disputes in its favor.
When a court is considering a challenge to its jurisdiction over a defendant or over a res.
the court h~ considerable procedunilleeway. It may receive and weigh affidavits and any
other relevant matter to assist it in detmnining the jurisdictional facts; "matters ofjurisdiction
... [are] very often not apparent on the face ofthe summons or complaint."
5A WRIGHT &. MILLER, 8Upra note 16, § 1351, at 200-01 (footnotes omitted).
23. Mink v. AAAA Dev. LLC. 190 F.3d 333, 335 (5th Cir. Sept. 1999).
24. See 8Upra note 22.
25. See Carteret Say. Bank, FA v. Shushan, 954 F.2d 141, 147 (3d Cir. 1992) (citing Metro. Life
Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 567 (2d Cir. 1996); Time Share Vacation v. At!. Resorts,
Ltd., 735 F.2d 61, 65 (3d Cir. 1984».
26. Vetrotex Certainteed Corp. v. Conso!. FiberGlass Prods. Co., 75 F.3d 147, 150 (3d Cir. 1996).
27. Guidry v. United States Tobacco Co., 188 F.3d 619, 625-26 (5th Cir. Sept. 1999); Gardemal
v. Westin Hotel Co., 186 F.3d 588, 592 (5th Cir. Aug. 1999); Felch v. Transportes Lar-Mex SA De CV,
92 F.3d 320, 324 (5th Cir. 1996); Wilson v. Belin, 20 F.3d 644, 648 (5th Cir. 1994).
28. Guidry, 188 F.3d at 625.
HeinOnline -- 32 Tex. Tech L. Rev. 720 (2000-2001)
2001]
CIVIL PROCEDURE
721
shows facts that are contradicted, a reviewing court will resolve all factual
conflicts in favor ofthe plaintiff.29
Generally, two requirements must be met for a valid exercise of personal
jurisdiction.30 First, the nonresident defendant must be amenable to service
of process under a state's long-arm statute.3 ) Even if an assertion of state
court jurisdiction were constitutional under the Due Process Clause of the
Fourteenth Amendment. it would still fail if it lacked statutory authorization. 32
In those states having detailed long-arm statutes, which enumerate particular
circumstances in which courts are authorized to assert jurisdiction, questions
may arise concerning the applicability of the statute to the case at hand. n
Such jurisdictional questions involve questions of statutory construction or
interpretation and are matters of state law, not federal constitutional law. 34
Second, the assertion ofjurisdiction, even if statutorily authorized, must
be consistent with the Due Process Clause.3~ The Supreme Court has
interpreted due process to permit the exercise of personal jurisdiction over a
nonresident defendant when the nonresident has purposefully availed himself
of the benefits and protections of the forum state and has established such
"minimum contacts" with the state that he could reasonably anticipate being
haled into its courts.36 The due process requirement ofjurisdiction is divided
into two parts: "minimum contacts" and "reasonableness."37 If it is first
established that the defendant has minimum contacts, it must be further found
that the assertion of jurisdiction is reasonable in that it does not offend
"traditional notions of fair play and substantial justice."38 The Texas long-arm
statute, though of the detailed variety, has been interpreted to assert the full
extent of constitutionally permissible personal jurisdiction.39 Thus, with
respect to the assertion ofjurisdiction by a court in Texas, or by a court in a
29. Id.
30. Federal Rule ofCivil Procedwe 4(k)(1) establishes the basic framework for exercising personal
jurisdiction over defendants found within the United States. Rule 4(k)(I)(A) directs the federal courts, in
the absence of a federal statute or rule authorizing broader jurisdiction, to follow the long-ann statute of
the state in which they sit. FED. R. CIV. P. 4(k)(1).
31. Id.
32. Id.
33. See, e.g., Jim Fox Enters., Inc. v. Air France, 664 F.2d 63 (5th Cir. 1983).
34. Id.
35. Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945).
36. Id.
37. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477-78 (1985). In BUTger King, the Supreme
Court emphasized the bifurcation ofjurisdiction into two separate components-minimum contacts and
reasonableness. Id. These two variables are interrelated. Jd. Ifcontacts are numerous, the reasonableness
factors may be less substantial. Jd. Ifreasonableness factors are more substantial, contacts may be fewer.
Jd.
38. 1m '/ Shoe, 326 U.S. at 320.
39. See Hall v. Helicopteros Nacionales de Colombia, SA, 638 S.W.2d 870, 872 (Tex. 1982),
rev'd, 466 U.S. 408, remanded 10677 S.W.2d 19 (Tex. 1984). In Helicopter03, the Texas Supreme Court
extended Vemon's Annotated Civil Statutes article 2031b to the maximum limit permitted by the Due
Process Clause. Jd.
HeinOnline -- 32 Tex. Tech L. Rev. 721 (2000-2001)
722
TEXAS TECH LAW REVIEW
[Vol. 32:717
state having a long-arm statute that explicitly authorizes the maximum
permissible jurisdiction,40 the usual two-step analysis collapses into one step,
and the only question is whether subjecting the defendant to suit comports
with due process. 41 Consequently, although an assertion of jurisdiction by
such a court can raise questions of federal constitutional law, it does not
present questions of state law. 42
The minimum contacts· required by due process can be established
through contacts sufficient to assert either general or specific jurisdiction.43
These are concepts which assist in the analysis ofjurisdiction and which the
United States Supreme Court first applied in the 1984 case of He/icopteros
Nacionales de Colombia, S.A. v. Hall. 44 Specific jurisdiction over a
nonresident defendant exists when the defendant has purposefully directed his
activities at the forum state and the "litigation results from alleged injuries that
'arise out of or relate to' those activities. n4S The focus is on the relationship
between the defendant, the forum, and the litigation.46 The defendant's forum
contacts must actually give rise to the plaintiff's claim because that nexus
gives the state a direct interest in the cause of action. 47 If the forum contact
resulted from the defendant's conduct, and not the unilateral conduct of the
plaintiff or someone else, then the activity necessary to support specific
jurisdiction can be sporadic or even consist of a single act. 48 General
jurisdiction, on the other hand, exists when the nonresident's contacts with the
forum are unrelated to the plaintiff's cause ofaction, when those contacts are
so substantial as to be fairly described as II 'continuous and systematic.' a49
40. California's statute, for example, provides that "[a) court ofthis state may exercise jurisdiction
on any basis not inconsistent with the Constitution of this state or of the United States." CAL. CIV. PROC.
CODE § 410.10 (West 1973). Rhode Island has a similar statute. R.I. GEN. LAws § 9-S-33(a) (1997).
41. Minkv. AAAA Dev.llC, I90F.3d 333,33S (SthCir. Sept 1999); Electrosource v. Horizon
Battery Techs., Ltd., 176 F.3d 867 (Sth Cir. 1999) (citing Schlobohm v. Schapiro, 784 S.W.2d 3SS, 3S7
(Tex. 1990».
42. Alpine View Co. v. Atlas Copco AB, 20S F.3d 208 (Sth Cir. Feb. 2000).
43. Wilson v. Belin, 20 F.3d 644, 647 (Sth Cir. 1994).
44. 466 U.S. 408, 414 00.8-9 (1984). For the law review article first suggesting this terminology,
see Arthur von Mehren &. Donald Trautman, Jurisdiction to Adjudicate: A Suggested Analysis, 79 HARv.
L. REv. 1121 (1966).
4S. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (198S) (quoting Helicopteros, 466 U.S.
at 414).
46.
47.
Jd.
Jd. at 473-74.
48. See id.; World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297-98 (1980); McGee
v. Int'l Life Ins. Co., 3SS U.S. 220,223 (19S7).
49. Helicopteros, 466 U.S. at 41S (quoting Perkins v. Benguet Consol. Mining Co., 342 U.S. 437,
438 (19S2». In Perkins, the Supreme Court held that a Philippine mining corporation, sued in Ohio by
nonresident plaintifffor the failure to issue stock certificates, was subject to what is today called "general
jurisdiction." Jd. at 438-39. It was conceded that the plaintiff's claim was unrelated to the defendant's
activities in Ohio. Jd. Because of the Japanese occupation during World War II, defendant's activities in
the Philippines were completely suspended. Jd. at 447. During that time, the president of the corporation
kept his office in Ohio where company files were kept and directors' meetings were held. Jd. He carried
on corporate correspondence from Ohio, deposited corporate funds in banks there, and engaged an Ohio
HeinOnline -- 32 Tex. Tech L. Rev. 722 (2000-2001)
2001)
CIVIL PROCEDURE
723
Much greater forum activity is required for an assertion of general than
specific jurisdiction because, without a relationship between the claim and the
defendant's forum contacts, the state is said to lack an interest in the cause of
action. 5O
The Fifth Circuit first determined in Mink that Texas did not have
specific jurisdiction over the defendants because the plaintiff had not
Uestablished any contacts directly related to the cause of action. "'I In other
words, the Defendants' operation of the website, accessible from within the
forum, did not give rise to the claim of conspiracy.'2 The Defendants'
maintenance of the site may have been intended to solicit business from
Texas, but neither that solicitation nor any other acts associated with their use
ofthe Internet were alleged to form the basis ofMink's complaint.'3 Instead,
the court characterized the case as one of general jurisdiction and then
addressed the nature and extent of Middlebrook and AAAA's contacts with
the forum. S4 Noting the absence of any controlling authority on personal
jurisdiction and Internet use, the Fifth Circuit relied on the decision of a
federal district court from another circuit, Zippo Manufacturing Co. v. Zippo
Dot Com, and explicitly adopted the reasoning in that case." The Zippo court
called for an analysis of the U'nature and quality of commercial activity that
an entity conducts over the Internet.' "'6 It divided Internet use into a
bank to act as the corporation's transfer agent ld. at 448. "[H]e carried on in Ohio a continuous and
systematic supervision of the necessarily limited wartime activities ofthe company." Id.
SO. Helicopleros, 466 U.S. at 414 n.9; Perkins, 342 U.S. at 445-48.
51. Mink v. AAAA Dev. LLC, 190 F.3d 333, 336 (5th Cir. Sept 1999).
52. Id. at 337.
53. Id. at 336-37.
54. ld.
55. ld. at 336 (citing Zippo Mfg. Co. v. Zippo Dot Com, 952 F. Supp. 1119, 1124 (W.O. Pa.
1997». In Zippo, the plaintift Zippo, manufacturer of the popular Zippo cigarette lighter, sued the
defendant, Zippo Dot Com ("Dot Com"), a California corporation, for trademark infringement in a federal
court in Pennsylvania, Zippo's home state. Zippo, 952 F. Supp. at 1121. Dot Com operated a website and
Internet News Service and used the word "zippo" in its domain names after obtaining the right to do so by
registering it with Network Solutions. Id. The defendant advertised its news service on a website that
provided a subscription form which a user could use by entering his credit card number on the site, thereby
transmi~ing an electronic message to Pennsylvania that resulted in his subscribing to the service. Id. The
court found that electronic contacts relevant to jurisdiction were not those between the plaintiffand the
defendant, but those between the defendant and residents of the forum state. Id. at 1125-26. The court
found that Pennsylvania had jurisdiction over Dot Com because the defendant had transacted business over
the Internet with approximately 3000 individuals and access providers in Pennsylvania knowing that they
resided there. ld. at 1126. The court also identified two situations in which it would not uphold
jurisdiction: "PfDot Com] had no Pennsylvania subscribers and an Ohio subscriber forwarded a copy of
a file he obtained from Dot Com to a friend in Pennsylvania or an Ohio subscriber brought his computer
along on a trip to Pennsylvania and used it to access Dot Com's service." ld. The court said such forum
contacts would have been fortuitous within the meaning of World-Wide Volkswugen v. Woodson, 444 U.S.
286 (1980). ld. Dot Com, however, had subscribers in Pennsylvania with whom it consciously chose to
do business, and the nature and quality of its contacts with them were sufficient to constitute purposeful
availment Id.
56. Mink, 190 F.3d at 336 (quoting Zippo, 952 F. Supp. at 1124).
HeinOnline -- 32 Tex. Tech L. Rev. 723 (2000-2001)
724
TEXAS TECH LAW REVIEW
[Vol. 32:717
spectrum of situations which fell into three general categories and which the
Fifth Circuit summarized as follows:
At the one end ofthe spectJUm. there are situations where a defendant clearly
does business over the Internet by entering into contracts with residents of
other states which "involve the knowing and repeated transmission of
computer files over the Internet ...." In this situation personal jurisdiction
is proper.57 At the other end of the spectrum. there are situations where a
defendant merely establishes a passive website that does nothing more than
advertise on the Internet. With passive websites. personal jurisdiction is not
appropriate. 58 In the middle of the spectrum. there are situations where a
defendant has a website that allows a user to exchange information with a
host computer. In this middle ground. "the exercise of jurisdiction is
determined by the level of interactivity and commercial nature of the
exchange of information that occurs on the Website."59
57. Both the Mink and the Zippo courts cited CompuServe. Inc. 11. Pal/erson, 89 F.3d 1257 (6th
Cir. 1996), as a case when: a defendant clearly docs business over the Internet and thus falls into the first
category of situations. MinJc, 190 F.3d at 336; Zippo, 952 F. Supp. at 1124. In that case, defendant
Patterson, an attorney and software developer who RSided in Texas, entered into a 'Shareware Registration
Agreement" with CompuServe, a computer information service headquartered in Ohio, whereby
CompuServe distributed Patterson's software through its computer network service. CompuServe, 89 F.3d
at 1260. Patterson transmitted thirty-two master software files to CompuServe's Ohio-based computer
system and advertised his product on that system. Id. at 1260-6\. CompuServe subscribers could then
download this software onto their own computers and, if they chose, pay Patterson. Id. at 1260. Patterson
sold $650 worth ofsoftware to subscribers in Ohio through this mechanism, and the revenue was relayed
to him from Ohio. Id. He also sold an undisclosed amount to subscribers in other states. Id. When
CompuServe began marketing a software product similar to the one provided by him, Patterson objected
on grounds ofcommon law trademark violation. Id. at 1261. He communicated his threats oflegal action
against CompuServe over the Intemet Id. CompuServe brought suit in federal district court in Ohio for
a declaratory judgment that it had not violated Patterson's trademark rights. Id. The court held that there
was a prima facie case ofjurisdietion because 'Patterson purposefully availed himselfof the privilege of
doing business in Ohio. He knowingly reached out to CompuServe's Ohio home, and he benefited from
CompuServe's handling ofhis software and the fees that it generated.' Id. at 1266-67. Unlike Zippo, the
contacts relevant to jurisdiction in CompuServe were those between the plaintiff and the defendant, not
those between the defendant and RSidents ofthe forum state. Id. at 1267; Zippo, 952 F. Supp. at 1126-27.
58. But see Inset Sys.,lnc. v.lnstruction Set, Inc., 937 F. Supp. 161 (D. Conn. 1996). Indeed, the
Zippo court commented that Inset Systems "represents the outer limits of the exercise of personal
jurisdiction based on the Internet' Zippo, 952 F. Supp. at 1125.
59. Mink, 190 F.3d at 336 (citations omitted) (footnotes added). Both the Mink and the Zippo
courts cited Maritz l'. Cybergold, 947 F. Supp. 1328 (E.D. Mo. 1996), as an example of the middle
category ofsituations where a defendant's website allows a visitor to exchange information with a host
computer. Mmk, 190 F.3d at 336; Zippo, 952 F. Supp. at 1125. In such cases, jurisdiction is determined
by the level and commercial nature oftbe interaetivity. Zippo, 952 F. Supp. at 1124. Maritz, a Missouri
corporation, brought suit in a federal court in Missouri alleging trademark infringement Maritz, 947 F.
Supp. at 1329. Defendant Cybergold had established a website to promote its upcoming Intemet service.
Id. at 1330. The service consisted of assigning users an electronic mailbox and then forwarding to those
mailboxes advertisements for products and services that matched their interests. Id. The defendant's
website sent e-mail automatically to users who signed up on themailinglist.Id. The defendant planned
to charge advertisers and to provide users with incentives to view the advertisements. Id. Although the
service was not yet operational, users were encouraged to add their addRSs to a mailing list to receive
updates about the service. Id. The defendant's website sent e-mail automatically to users who signed up.
HeinOnline -- 32 Tex. Tech L. Rev. 724 (2000-2001)
2001]
CIVIL PROCEDURE
725
Applying these criteria, the Fifth Circuit concluded that it lacked general
jurisdiction over the Defendants.60 Because they did not use the website to
take orders, make contracts, or otherwise transact business, the Defendants
were outside the first category of situations where jurisdiction is said to
clearly exist.61 Nor did they fall into the middle category where an Internet
user exchanges information with a host computer.62 In this in-between group
of "semi-interactive" websites, Zippo suggested that jurisdiction be
determined by the level and commercial nature of the interactivity between
the website operator and the visitor. 63 To find that the operator of such a site
satisfied the purposeful avaHment requirement, the court must fmd something
more than an advertisement or solicitation for the sale ofgoods.64 In Mink, the
Defendants merely advertised on the Internet, providing visitors with an
opportunity to contact them bye-mail, regular mail, or telephone and not with
an opportunity to place orders or otherwise transact business electronically.65
In other words, the Defendants had simply established a passive website, and
the nature and level of their interaction with residents of the forum was
insufficient to satisfy the minimum contacts requirement. 66
Mink was decided against the background of a United States Supreme
Court divided over the stream-of-commerce rationale for asserting personal
jurisdiction. The stream-of-commerce doctrine, developed by state courts to
Id. The court rejected the defendant's contention that it operated a "passive website." Id. at 1333. The
court noted that over 130 Missouri residents had accessed the defendant's website. Id. The defendant
argued that he had merely established a passive website, but the court upheld jurisdiction, reasoning that
the defendant had engaged in "active solicitations" and "promotional activities" designed to "develop a
mailing list oflnternet users" and had "indiscriminately" responded to every user who accessed the site.
Id. at 1332·33. It found that defendant's "intent [was] to reach all Internet users, regardless ofgeographic
location." ld. at 1333. Also, the finding ofjurisdiction was bolstered by the relationship between the
plaintiff's daim and the defendant's contacts since Maritz alleged that Cybergold's communications with
website users constituted part of the activity that allegedly infringed on the trademark. Id. Further, in
addressing the reasonableness issue, the court noted, first, that the forum had an interest in detennining
whether a resident corporation's trademark was being infringed and, second, that the defendant's burden
of defending in the forum was not unduly burdensome. Id. at 1330, 1333-34.
Two recent cases have held that the existence ofan interactive website accessible to users in the forum
is insufficient, by itself, to support the forum's exercise of in personam jurisdiction. GTE New Media
Servs., Inc. v. BellSouth Corp., 199 F.3d 1343 (D.C. Cir. 2000); Millenium Enters., Inc. v. Millenium
Music, L.P., 33 F. Supp. 2d 907 (D. Or. 1999).
60. MinJc, 190 F.3d at 336.
61. Id. at 337.
62. Id.
63. ld. (citing Zippo, 952 F. Supp. at 1124).
64. Cybersell,lnc. v. Cybersell,lnc., 130 F.3d 414, 419 (9th Cir. 1997).
65. MinJc, 190 F.3d at 337.
66. Id. For a thorough discussion of cases involving personal jurisdiction and the Internet, see
Christine E. Mayewski, Note, The Presence ofa Web Site as a COMtillltional1y Permissible Basis for
Personal Jurisdiction, 73 IND. L.J. 297 (1997). For other law review commentary on this subject, see
Richard Phillip Rollo, The MOT'tUS ofInternet Personal Jurisdiction: It Is Time for a Paradigm Shift, SI
FLA. L. REv. 667 (1999) and Michael L. Russell, Note. Back to the Basics: Resisting Novel and Extreme
Approaches to the Law ofPersonal Jurisdiction and the Internet, 30 U. MEM. L. REv. 157 (1999).
HeinOnline -- 32 Tex. Tech L. Rev. 725 (2000-2001)
726
TEXAS TECH LAW REVIEW
[Vol. 32:717
meet situations where a nonresident's only forum contact was through a
defective product that caused injury, holds that personal jurisdiction may be
constitutionally asserted over "a corporation that delivers its products into the
stream of commerce with the expectation that they will be purchased by
consumers in the forum State."67 The Supreme Court first addressed this
doctrine in World-Wide Volkswagen v. Woodson. but in its most recent
statement on the question. Asahi Metal Industry Co. v. Superior Court of
California, the Court left this theory quite unsettled.68 In Asahi, the plaintiffs
were two California residents who were injured when a tire on their
motorcycle exploded during a ride. 69 In a California state court, the plaintiffs
sued Cheng Shin. the Taiwanese manufacturer ofthe defective tire tube, who
then filed a cross-complaint for indemnity against Asahi Metals, the Japanese
manufacturer of the valve assembly that Cheng Shin purchased and
incorporated into its tubes. 70 By the time the case reached the United States
Supreme Court, the plaintiffs had settled their claim against Cheng Shin,
leaving only the latter's claim against AsahPI
Eight of the nine Justices agreed that it would be unreasonable for
California to assert jurisdiction over Asahi, but the Court divided much more
closely over the issue of minimum contacts, which turned on the stream-ofcommerce question. 72 Justice O'Connor. writing for a four-member plurality,
argued that even though Asahi knew that its product would reach California,
contacts must be "more purposefully directed at the forum State than the mere
act of placing a product in the stream of commerce... 73 Justice O'Connor
viewed purposeful availment as requiring not only awareness but also contacts
showing intent to serve the market in the forum state. 74 She wrote that such
additional contacts could consist ofevidence that the product was specifically
designed for the market in the forum state. advertising or providing customer
service in that state, or marketing through a sales agent whose territory
included the forum state. 75 But in his concurring opinion, Justice Brennan,
representing another four-member group, argued that a showing of any
"additional conduct" was unnecessary.76 He reasoned that suit in the forum
state could not "come as a surprise" to Asahi since it knew that its valve
assemblies were regularly sold there. and whether or not it engaged in
67.
68.
69.
World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 298 (1980).
480 U.S. 102 (1987).
Id. at 105-06.
70. Id. at 106-07.
71. Id. at 105-06.
72. See id. at 113-16.
73. Id. at 110 (O'Connor, J., plurality opinion). ChiefJustice Rehnquist and Justices Powell and
Scaliajoined the minimum contacts part ofJustice O'Connor's opinion. Id. at lOS.
74. Id. at 112 (O'COnnor, J., plurality opinion).
75. Id. (O'Connor, 1., plurality opinion).
76. Id. at 116 (Brennan, J., concurring in part and concurring in the judgment). Justice Brennan
was joined by Justices White, Marshall, and Blackmun. Id.
HeinOnline -- 32 Tex. Tech L. Rev. 726 (2000-2001)
2001]
CIVIL PROCEDURE
727
additional conduct in California, Asahi derived economic benefit from its
association with it. 77
The differing approaches of Justices O'Connor and Brennan to the
stream-of-commerce issue furnish arguments concerning the choice of an
appropriate standard for jurisdiction in Internet advertising cases. The
defendant's act of posting infonnation or advertising on a website may be
analogized to his injecting an article into the stream of commerce even ifhis
primary objective is to serve a local market. 78 Arguably, under the Brennan
view, the defendant may reasonably expect to be haled into court wherever the
Internet might potentially carry his message (i.e., potentially anywhere in the
United States, ifnot anywhere in the world).79 Under the O'Connor view, the
defendant's act of posting a website simply for advertising purposes would
not be a sufficient basis for such expansive jurisdiction, something more is
required. so Although the Fifth Circuit in Mink did not cite Asahi, the court's
decision seems to require in website advertising cases the "additional
contacts" identified by Justice O'Connor as signifying that the defendant
purposefully directed activity toward the forum state.al
Mink was also decided against a background of conflicting decisions by
federal district courts in cases in which the nonresident defendant advertised
on a website but did not actually use the site to interact or transact business
with users. 82 One view, exemplified by Inset Systems, Inc. v. Instruction Set,
Inc., grants personal jurisdiction liberally in this particular context, primarily
because of the continuous availability of a website and its potency for
advertising and solicitation. 83 In that case, a trademark infringement action,
a federal district court in Connecticut held that merely advertising on the
Internet was sufficient to sustain an exercise of personal jurisdiction over a
nonresident operator ofa website. 84 Both the plaintiff, Inset Systems ("Inset"),
based in Connecticut, and the defendant, Instruction Set, located in
Massachusetts, were providers of software and computer support services. a,
Inset registered its name as a federal trademark while Instruction Set obtained
77. Id. (Brennan, J., concurring in part and concurring in the judgment).
78. See id. (Brennan. J., concurring in part and concurring in the judgment).
79. See /d. at 117 (Brennan, 1., concurring in part and concurring in the judgment).
80. See id. at 110 (O'Connor, J., plurality opinion).
81. In products liability cases, the Fifth Circuit has followed the original stream-of-commerce
theory developed in World-Wide Volkswagen and has specifically rejeacd Justice O'Connor's Asahi view
requiring contacts beyond the defendant's awareness that its product may reach the forum state. Ruston
Gas Turbines, Inc. v. Donaldson Co., 9 F.3d 415,420 (5th Cir. 1993). In citing Ham v. IA Cienga Music
CO.,4 F.3d 413 (5th Cir. 1993). the Ruston court said, °In Ham, we noted the disagreement of the Supreme
Court justices in Asahi regarding the stream of commerce theory and concluded: •Absent rejection by 8
ml\iority on the Supreme Court, we have continued to apply the stream ofcommence analysis found in our
pre-Asahi cases.' Ruston, 9 F.3d at 420 (quoting Ham, 4 F.3d at 416 n.II).
82. See Inset Sys., Inc. v. Instruction Set, Inc., 937 F. Supp. 161, 165 (D. Conn. 1996).
83. Id.
84. Id. at 163-66.
85. Id. at 162.
0
HeinOnline -- 32 Tex. Tech L. Rev. 727 (2000-2001)
TEXAS TECH LAW REVIEW
728
[Vol. 32:717
the right to use "inset.com" as its Internet address. 86 Instruction Set also
maintained a toll-free telephone number of 1-800-US-INSET.87 Instruction
Set had no offices or employees in Connecticut, but the advertising on its
website could reach more than 10,000 Internet users within the forum state.8S
Further, users could contact Instruction Set over the Internet.89 The court
upheld jurisdiction over Instruction Set, ruling that it had "directed its
advertising activities via the Internet and its toll-free number toward not only
the state of Connecticut, but to all states. . . . [Defendant] has therefore
purposefully availed itself of the privilege of doing business within
Connecticut."9O The court concluded that Instruction Set could reasonably
expect to be summoned into court in the forum state because "unlike
television and radio advertising, the advertisement is available continuously
to any Internet user."91 The Zippo court commented that Inset Systems
"represents the outer limits of the exercise of personal jurisdiction based on
the Internet. "92
A contrasting view in an Internet advertising case is illustrated by
Bensusan Restaurant Corp. v. King, in which a federal district court in New
York read jurisdictional rules more narrowly.93 Bensusan Restaurant, the
corporate owner of the New York City jazz club called "The Blue Note,"
brought a trademark infringement action against Richard King ("King"), the
owner of a jazz club in Columbia, Missouri, which went by the same name. 94
King maintained a website which advertised his club and provided
infonnation about upcoming shows and ticket outlet locations, but which
could not be used to obtain tickets.9' Anyone who used the site and wanted
to attend an event had to first call or visit a ticket outlet and then pick up
tickets at the door on the night of the show.96 The court said that it was
foreseeable to the defendant that New York residents who accessed the
website could be confused by his use ofthe name "Blue Note. n97 However, it
86.
Id. at 163.
Id.
Id.
Id.
90. Id. at 165.
91. Id. In analyzing jurisdiction, courts sometimes balance minimum contacts against the
~nableness ofasserting jurisdiction, finding that more ofone might make up for less of the other. See
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476 (198S). With such scant evidence of purposeful
availment in Inset Systenu, one might argue that the court reached its decision primarily on reasonableness
grounds. Connecticut, for example, is not a distant forum for a defendant residing in Massachusetts.
Further,Inset Systenu presented issues of the common and statutory law ofConnecticut where adjudication
could probably occur more efficiently than elsewhere. 937 F. Supp. at 165.
92. Zippo Mfg. Co. v. Zippo Dot Com, Inc., 9S2 F. Supp. 1119, 1125 (W.O. Pa 1997).
93. 937 F. Supp. 295 (S.D.N.Y. 1996), qff'd, 126 F.3d 25 (2d Cir. 1997).
94. Id. at 297.
9S. Id.
96. Id.
97. Id. at 297-98.
87.
88.
89.
HeinOnline -- 32 Tex. Tech L. Rev. 728 (2000-2001)
2001]
CIVIL PROCEDURE
729
said that the defendant's act of posting information about tickets and featured
events was "not the equivalent of a person advertising, promoting, selling or
otherwise making an effort to target its product in New York. 1198 Citing Justice
O'Connor's plurality opinion in Asahi, the court said, "Creating a site, like
placing a product into the stream of commerce, may be felt nationwide-or
even worldwide-but, without more, it is not an act purposefully directed
toward the forum state. "99
The Fifth Circuit's decision in Mink represents a choice between the
contrasting views that have emerged not only from federal district court cases
such as Inset Systems and Bensusan, but also from the differing approaches
of Justices O'Connor and Brennan toward the stream-of-commerce issue. 100
The reasoning of the Bensusan court, consistent with the view of Justice
O'Connor, is that, unless "additional contacts" are required, a website operator
seeking to serve a local market could be unfairly called into court in any state
where his site is accessed. 101 Courts fearing the prospect of such expansive
jurisdiction would require a plaintiffto show that the defendant purposefully
directed activity toward a particular forum. 102 On the other hand, the concern
of the Inset Systems court, more in line with the opinion of Justice Brennan,
is that the creator of a website, aware of the vast expanse of the Internet and
reaping the economic benefits of its potential for creating markets, should not
be able to escape jurisdiction simply because the website has been used only
for solicitation and commerce which has not yet taken place. 103 Such a "projurisdiction" approach is subject to the criticism that courts might adjudicate
even though they lack very substantial evidence of purposeful availment. 104
But the Brennan view would have the advantage of excusing plaintiffs from
the difficult task of affirmatively demonstrating that a website operator has
aimed his advertising at the forum state. 105 However, if this approach were
followed, a website operator seeking to avoid jurisdiction might be forced to
direct his activities to a particular region by limiting his site to password-only
access or by refusing to deal with citizens of a forum in which he did not wish
to be subject to jurisdiction.
98. Id. at 299. The court distinguished the case from CompuServe Inc. v. Patterson, 89 F.3d 1257
(6th Cir. 1996), where the defendant had ·'reached out' from Texas to Ohio and 'originated and
maintained' contacts with Ohio.· Id. at 301.
99. Id. at 301.
100. See supra notes 72-99 and accompanying text
101. Bensusan, 937 F. Supp. at 301.
102. See id.
103. Inset Sys.,lnc. v. Instruction Set, Inc., 937 F. Supp. 161, 165 (D. Conn. 1996).
104. See supra text accompanying notes 73-75, SG-SI.
105. See supra text accompanying notes 76-79.
HeinOnline -- 32 Tex. Tech L. Rev. 729 (2000-2001)
TEXAS TECH LAW REVIEW
730
[Vol. 32:717
B. The Nonresident Defendant Whose Communications with the
Forum Give Rise to an Intentional Tort: Discussion ofthe Fifth
Circuit Decision in Wien Air Alaska v. Brandt
In Wien Air Alaska v. Brandt, the Fifth Circuit decided whether the Texas
contacts of a German attorney were sufficient to subject him to personal
jurisdiction in a suit by a former client for fraud, breach of contract, and
breach of fiduciary duties. 106 The plaintiff, Wien Air, an Alaskan corporation
based in Texas, was in the aircraft leasing business. 107 In August 1989 its sole
shareholder, Thor Tjontveit ("Tjontveit"), hired the defendant, Gerald Brandt
("Brandt"), who lived and practiced law in Germany, to help him acquire
Wien Air and aid him in expanding its operations into Germany and Eastern
Europe. IOB Brandt met with Tjontveit in Texas in 1989 and visited Texas a
second time in 1991 for a final set of meetings. 109 Otherwise, Brandt
performed most of his services for Wien Air in Europe forming companies,
planning business transactions, negotiating contracts, and handling his client's
funds. 110 Importantly, these business matters were the subject of various
communications in the form of letters, faxes, and phone calls from Brandt in
Germany to Tjontveit in Texas. 1II
Ultimately, Tjontveit came to believe that Brandt (and his law partner)
had defrauded Wien Air, and in April 1991, Tjontveit discharged Brandt. 112
Thereafter, Wien Air sued Brandt in a Texas state court, alleging, in part, that
his communications to Tjontveit contained fraudulent misrepresentations and
omitted material facts. 1I3 Brandt removed the case to federal court where he
moved to dismiss for the lack of personal jurisdiction. I 14 The district court,
basing its decision only on affidavits and pleadings, dismissed the complaint
and held that Wien Air did not make a prima facie showing that Brandt's
forum contacts were sufficient to support an exercise of specific
jurisdiction. \IS Wien Air appealed. 1I6
The Fifth Circuit reversed the district court's dismissal. lI7 It identified
Brandt's forum contacts, apart from his two visits to Texas, as consisting
primarily of his letters, faxes, and phone calls to Wien Air regarding his
106.
107.
108.
109.
110.
111.
112.
113.
114.
liS.
116.
117.
19S F.3d 208 (5th Cir. Nov. 1999).
Jd. at 209.
Jd.
Jd.
Jd. at 209-10.
Jd. at 210.
Jd. at 211.
Jd.
Jd.
rd.
rd.
rd. at 209.
HeinOnline -- 32 Tex. Tech L. Rev. 730 (2000-2001)
CIVIL PROCEDURE
2001]
731
representation of it in its business affairs in Europe. 1I8 The court hel,d that
these communications were sufficient to satisfy the minimum contacts
requirement, likening them to the intentional, tortious conduct directed to the
forum in Calder v. Jones. 1l9 In Calder, the United States Supreme Court
upheld a California court's assertion of jurisdiction over a reporter for the
National Enquirer who wrote a magazine article in Florida, which defamed
a Hollywood actress, knowing that his story would affect her reputation in her
home state ofCalifornia. 120 Similarly, the Fifth Circuit in Wien Air reasoned
that although Brandt was outside the forum when he dispatched his allegedly
fraudulent messages to his client, the effects of his conduct were foreseeable
in Texas and such effects were to be included in the analysis of the
defendant's minimum contacts. 12I "When the actual content of
communications with a forum gives rise to intentional tort causes of action,
this alone constitutes purposeful availment. nl22
The court next held that the defendant was subject to specific jurisdiction
in Texas. l23 It noted that the communications, directed to the plaintiff at its
home base in the forum, gave rise to a cause of action for an intentional tort
and that the defendant's messages formed the basis of the claims alleged in
the complaint. '24 Fraud and misrepresentation, for example, depend on the
118.
119.
[d. at212.
Jd. at 211; see auo Calder v. Jones, 465 U.S. 783,791 (1984) (noting that "petitioners are
primary participants in an alleged wrongdoing intentionally directed at a California resident, and
jurisdiction over them is proper on that basis").
120. Calder, 465 U.S. at 791. In Calder, actress Shirley Jones and her husband sued the National
Enquirer, its local distributing company, an out-of-state reporter, and an editor in a California state court
alleging that Jones had been libeled by an article reporting that she "drank so heavily as to prevent her
from fulfilling her professional obligations." Jd. at 788 n.9. The reporter and edilOr resided and worked
in Florida, where the magazine had its headquarters. [d. at 785. The reporter often traveled to California
on business but made only one trip there in connection with the story. [d. He conducted most of his
research for the story by telephone ftom Florida. [d. The editor managed "just about every function of
the Enquirer: approved the subject ofthe story, and edited it in its final form. Jd. at 786. The editor and
reporter challenged the personal jurisdiction of the California court. Jd. The Supreme Court upheld
jurisdiction over them, saying that
their intentional, and allegedly IOrtious, actions were expressly aimed at Califomia. . .. [T]hey
knew that the bnmt ofthat injury would be felt by respondent in the State in which she lives
and works and in which the National Enquirer has its largest circulation. . .. An individual
injured in California need not go to Florida to seek redress ftom persons who, though
remaining in Florida, knowingly cause the injury in California.
Jd. at 789. Thus, it was foreseeable that they could be called into court there. See id.
121. WienAir, 195 F.3d at213.
122. Jd. The court also found a Third Circuit Court ofAppeals's decision persuasive. In Cartaret
Savings Bank, FA v. Shushan, 954 F2d 141 (3d Cir. 1992), the plaintiff made claims of misrepresentation
and breach offiduciary duties against defendant, a lawyer who lived and practiced outside the forum but
who sent letters and made phone calls to the forum arid went there for a final meeting with his client. Jd.
at 143. The court found that these actions constituted minimum contacts even though the lawyer might
have corne to the forum at plaintiffs request and might not have initially solicited plaintitrs business. Jd.
at ISO.
123. Wien Air, 195 F.3d at 213.
124.
Jd.
HeinOnline -- 32 Tex. Tech L. Rev. 731 (2000-2001)
TEXAS TECH LAW REVIEW
732
[Vol. 32:717
content of the various letters and phone calls, in particular, whether they
contained affinnative misrepresentations or omitted material facts. l25 The
court's finding of specific jurisdiction is fully justified by the relationship
between these communications and the cause of action alleged. 126 Brandt
disputed the number and content of his messages to Wien Air. 127 However,
the Fifth Circuit said that it must resolve factual conflicts in favor of the
plaintiff who was obligated only to present a prima facie case. l28
The court added, somewhat unnecessarily, perhaps, because it would
seem that the foregoing suffices for finding specific jurisdiction, that some of
Brandt's communications to Wien Air actually constituted the services that
he perfonned for his client. 129 In one cited instance, Brandt's act of faxing a
specific document to Tjontveit, notarized by a particular individual,
supposedly constituted the acceptance of an offer Tjontveit had made to a
certain offeree}30 In such a situation, if the plaintiff's claim for fraud or
breach of fiduciary duties were based on Brandt's handling of this particular
transaction, then his act of communicating with the forum would almost
certainly provide the nexus required for an exercise of jurisdiction. 131 But
absent such relatedness-the touchstone ofspecific jurisdiction-this particular
forum contact would seem to lack legal significance.
Once a defendant is found to have minimum contacts, these contacts
must be tested to see that the assertion of jurisdiction does not offend
"traditional notions of fair play and substantial justice."132 In this step of the
analysis, if the plaintiff carries his burden of establishing the defendant's
minimum contacts, a presumption ofjurisdiction arises in favor ofthe plaintiff
and the burden shifts to the defendant to show that the assertion ofjurisdiction
would be unreasonable. ll3 The United States Supreme Court, in Burger King
Corp. v. Rudzewicz, described the standard of proofthat would overcome this
presumption and said that a defendant "must present a compelling case that the
presence of some other considerations would render jurisdiction
unreasonable."134
125. Jd. 'Although Brandt's messages to Wien Air in Texas comprised moSl of defendant's forum
contacts, the court included within those the trips he made to the forum in 1989 and 1991. Jd. The court
said that it was insignificant that Brandt might have come to Texas at the request of Wien Air. [d. at 215.
126.
127.
128.
129.
130.
131.
132.
133.
See id.
Jd. at214.
Jd. at 215.
Jd. at 214.
Jd. at 213.
See id.
Int'l Shoe Co. v. Wash., 326 U.S. 310, 316 (1945).
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1984).
134. Jd. (emphasis added). Justice Brennan said that the factors that muSl be addressed in this
deterinination of reasonableness include the burden on the defendant, the forum Slate's interesJ in
adjudicating the dispute, the plaintiff's interesJ in obtaining convenient and effective relief, the interstate
judicial system's interest in obtaining the mOSl efficient resolution ofcontroversies, and the shared intereSl
HeinOnline -- 32 Tex. Tech L. Rev. 732 (2000-2001)
2001]
CIVIL PROCEDURE
733
In its analysis ofthe reasonableness issue in Wien Air, the Fifth Circuit
found that the interests of Texas weighed heavily in favor of asserting
jurisdiction. 135 Texas not only had an interest in providing a convenient forum
to the plaintiff, one of its resident corporations, but also an interest in the
intentional tort claim asserted in the action. 136 Brandt had directed his
communications to the forum and the actual content of his communications
formed the basis of the alleged fraud. 137 His wrongful conduct toward Wien
Air had foreseeable effects in Texas, giving Texas a legitimate interest in the
cause of action. 138
Brandt argued the obvious inconvenience of having to travel from
Germany to defend himself in a distant forum. 139 Compulsory process would
not be available to secure the attendance of witnesses outside Texas, and the
defendant, disputing the plaintiff's prima facie evidence, argued that most of
the trial witnesses resided in Gennany.l40 But the Fifth Circuit again resolved
factual conflicts in favor of the plaintiff because he was obligated only to
present a prima facie case. 141 It acknowledged that adjudication in the United
States can seriously disadvantage a foreign Iitigant. 142 However, the court
stated that once minimum contacts are established, the interests ofthe plaintiff
and the forum will often justify imposing heavy burdens on a defendant. 143
Further, the hardship for Brandt of defending a suit in Texas is no greater than
the burden on Wien Air if it were forced to litigate in Gennany.l44 On
balance, the court found that the inconvenience caused the nonresident was
not overwhelming. 145 In sum, Brandt had failed to carry his burden of
producing compelling evidence that outweighed the legitimate interests of the
plaintiff and the forum state. l46 Consequently, Texas's assertion of
jurisdiction was reasonable. 147
of the several states in furthering fundamental substantive social policies. Jd. This list of factors is
essentially the same as that set forth in the Court's earlier decision in World-Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286, 292 (1980).
135. Wien Air, 195 F.3d at 216.
136. Id. at213.
137. Id.
138. Id.
139. Id. at215.
140. Id.
141. Id.
142. Id.
143. Id.
144. Id. at 216.
145. Id.
146. Id.
147. Id.
HeinOnline -- 32 Tex. Tech L. Rev. 733 (2000-2001)
734
TEXAS TECH LAW REVIEW
[Vol. 32:717
C. The Proper Sequencing ofRulings on Challenges to Personal
Jurisdiction and Subject Matter Jurisdiction
J. Discussion o/the United States Supreme Court Decision in Ruhrgas,
A.G. v. Marathon Oil Co.
In 1999, in Ruhrgas, A.G. \I. Marathon Oil Co., the Supreme Court
reversed the Fifth Circuit and held that, in a case removed from state court, a
federal district court has discretion to consider challenges to personal
jurisdiction before addressing challenges to subject matter jurisdiction. 14K The
Court ruled that there is no absolute jurisdictional hierarchy that requires a
district court in all circumstances to decide its subject matter jurisdiction
before dismissing a removed case for lack of personal jurisdiction. 149 A
divided Fifth Circuit, in an en banc decision (nine to seven), had mandated
that issues of subject matter jurisdiction be given priority over those of
personal jurisdiction. ISO The en banc majority had viewed the requirement of
148. 526 U.S. 574, 578 (1999). Marathon Oil Co. and its subsidiaries sued Ruhrgas, a Gennan gas
supplier, under various state-law tort theories in a Texas state court. Jd. at 579. Ruhrgas removed the case
to federal district court, alleging three grounds for federal jurisdiction: diversity jurisdiction under 28
U.S.C. § 1332, federal arbitration jurisdiction under 9 U.S.C. § 205, and federal question jurisdiction under
28 U.S.C. § 1331. Jd. at 579-80. In federal court, Ruhrgas moved to dismiss for lack of personal
jurisdiction. Jd. at 580. Marathon responded by moving to remand the case to state court for lack of
subject matter jurisdiction. Jd. The case was dismissed for lack of personal jurisdiction by the district
court after allowing jurisdictional discovery. Jd. In dismissing the case, the district court relied on Fifth
Circuit precedent, permitting district courts to exm:ise discretion to adjudicate personal jurisdiction before
addressing subject matter jurisdiction. Jd.; Walker v. Savdl, 335 F.2d 536, 538 (5th Cir. 1964). Marathon
appealed the dismissal. Ru1II'gru, 526 U.S. at 580. A Fifth Circuit panel rejected each of Ruhrgas's
alleged bases of federal jurisdiction. Jd. at 580-81. It vacated the judgment of the district court and
ordered the case remanded to the state court. Jd. at 581. On its own motion, the Fifth Circuit grantccl
rehearing en bane. Jd. at 582.
Federal Rule ofCivil Procedure 12(b)(1) authorizes a motion to dismiss based upon the defense that
the court lacks jurisdiction over the subject matter ofthe action. FED. R. avo P. 12(b)( I). rrbe objection
presentccl by this motion is that the court has no authority or competence to hear and decide the case." 5A
WRIGHT & M1LLER, supra note 16, § 1350, at 194-95. "A Rule 12(b)(1) motion most typically is employed
when there is no diversity ofcitizenship between the parties and the claim asserted by plaintiff does not
involve a federal question or when the amount in controversy does not exceed the required jurisdictional
amount" Jd. A Rule 12(b)(l) motion, however, is only one ofseveral ways to present a defense oflack
of subject matter jurisdiction. Federal Rule ofCivil Procedure 12(h)(3) provides, "Whenever it appears
by the suggestion ofthe parties or otherwise that the court lacks jurisdiction of the subject-matter, the court
shall dismiss the action." FED. R. C1V. P. 12(h)(3).
The Supreme Court grantccl certiorari to resolve a conflict between the circuits. See Ruhrgcu, 526 U.S.
at 582. Contrary to the Fifth Circuit's holding in RuJrrgas, two other circuits had concluded that the
district courts have discretion to dismiss a removed case for the lack of personal jurisdiction before
reaching the issue of subject matter jurisdiction. Cantor Fitzgerald, L.P. v. Peaslee, 88 F.3d 152, 155 (2d
Cir. 1996); Allenv. Ferguson, 791 F2d 611,615 (7thCir. 1986). Prior to Ru!ugar, Fifth Circuit precedent
pennitted district courts to adjudicate personal jurisdiction without fust finding subject matter jurisdiction.
See RuJrrgar, 526 U.S. at S80.
149. Ruhrgru, 526 U.S. at 578.
150. Jd. at 582.
HeinOnline -- 32 Tex. Tech L. Rev. 734 (2000-2001)
CIVIL PROCEDURE
2001]
735
subject matter jurisdiction as the more fundamental, primarily because, while
the requirement of personal jurisdiction protects· individual liberty interests
and thus can be altered by conduct or agreement ofthe parties, federal judicial
power is defined by the Constitution and Congress and is nonwaivable. 1sl
Therefore, the Fifth Circuit held that district courts could reach questions
concerning personal jurisdiction uonly if subject-matter jurisdiction is found
to exist. n\S2
In a unanimous decision, the Supreme Court reversed. ls3 It agreed that
subject matter and personal jurisdiction serve different interests and are
dissimilar in their character. lS4 But since a case cannot be adjudicated without
either kind ofjurisdiction, the Court disagreed that the requirement of one is
more fundamental than that of the other. ISS Indeed, the Court observed that
while Ruhrgas's personal jurisdiction defense was bottomed on principles of
fundamental fairness embodied in the Due Process Clause, Marathon's subject
matter defense, lack of complete diversity, was based on an interpretation of
the jurisdiction-authorizing statutes in Title 28 of the United States Code!S6
Thus, the Court noted, the requirement of subject matter jurisdiction in the
instant case was based less on constitutional command than was the
requirement of personal jurisdiction. IS?
Further, the Court found that the Fifth Circuit's reliance on the Supreme
Court's 1998 decision in Steel Co. v. Citizens for Better Environment was
misplaced. ISS In Steel Co., the Court held that a district court may not
hypothecate subject matter jurisdiction for the purpose of deciding the merits,
but must first determine subject matter jurisdiction. 1s9 Justice Ginsburg,
writing for the Court in Ruhrgas, said that while Steel Co. required that
subject matter be decided before the merits of a dispute, it did not also require
that subject matter be decided before personal jurisdiction. \60 Issues of
personal jurisdiction do not tum on the merits of a dispute, and therefore, the
subject matter/merits sequence called for in Steel Co. is not required in a case
involving questions of personal and subject matter jurisdiction.\6\ Justice
Ginsburg agreed that ordinarily questions concerning subject matter
151.
152.
153.
154.
ISS.
156.
157.
158.
/d. at 583.
/d. at 582.
/d. at 583.
/d. at 583-84.
/d. at 584.
/d.
/d.
/d.
159. Steel Co. v. Citizens for Better Env't, 523 U.S. 83 (1998). In Steel CO., the Court disapproved
of a doctrine, formerly embraced by several circuit courts, that allowed federal courts to bypass
jurisdictional objections "where (I) the merits question is more readily resolved, and (2) the prevailing
party on the merits would be the same as the prevailing party were jurisdiction denied.· ld. at 93.
160. Ruhrgas, 526 U.S. at 584.
161.
See id.
HeinOnline -- 32 Tex. Tech L. Rev. 735 (2000-2001)
TEXAS TECH LAW REVIEW
736
[Vol. 32:717
jurisdiction should be resolved at the outset because they generally will
present no great difficulty and will be the most efficient way of disposing of
the case. 162 However, Justice Ginsburg, citing the opinion and adopting the
reasoning of Judge Higginbotham of the Fifth Circuit (who wrote for the
seven judges dissenting from the en banc decision), said that where personal
jurisdiction involves no complicated question of state law and is more easily
resolved than subject matter jurisdiction, a district court should have
discretion to follow the easier course and first resolve personal jurisdiction. 163
Such was the case, she said, in Ruhrgas where the issue of personal
jurisdiction was relatively uncomplicated but where Ruhrgas's subject matter
"argument under 9 U.S.C. § 205 presented a difficult issue of first
impression. "164
The en banc majority in Ruhrgas had perceived an affront to the dignity
of state courts if, as a threshold matter, a federal court might dismiss a
removed case for lack of personal jurisdiction. l6S The harm apprehended by
the Fifth Circuit was that the state court, upon remand of the case, would be
bound under principles of issue preclusion by the federal court's
determination of the personal jurisdiction issue. l66 But Justice Ginsburg,
agreeing with the en banc dissenting opinion, observed that a federal court's
resolution of an issue might also bind a state court if the determination
concerned subject matter jurisdiction. 167 Quoting Judge Higginbotham, she
said that the ability of federal courts to make such issue-preclusive rulings
was an inevitable result of "our 'dualistic ... system of federal and state
courts.' "168 However, Justice Ginsburg also noted that the federal design
requires cooperation and comity between these concurrent bodies. '69
Accordingly, federal courts should be sensitive to state interests, particularly
where a removed case presents a simple question of subject matter jurisdiction
but also a difficult question of personal jurisdiction involving complex or
controversial issues of state law yo In such a case, she concluded,
162.
163.
164.
165.
166.
167.
Jd.
Jd.
Jd.
Jd.
Jd.
Jd.
at 583.
at 582.
at 585.
(citing Baldwin v.lowa State Travelling Men's Assn., 283 U.S. 522, 524·27 (1931».
Justice Ginsburg furnished the example ofa removed case where the plaintiO: for breach
ofcontraet, seeks S50,OOO in compensatory and SI,OOO,OOO in punitive damages. Jd. at 586. If the federal
court decides that punitive damages are not available under applicable state law and therefore remands the
case to state court for failure to satisfy the amount-in-eontroversy requirement, the parties may be
precluded in state court from relitigating the question of whether state law allows punitive damages. Jd.
at 587.
168. Jd. at 586 (quoting Marathon Oil Co. v. Ruhrgas, 14SF.3d 211, 231 (5th Cir. 1998». Justice
Ginsburg also said that, "as Judge Higginbotham observed, 'our dualistic system of federal and state
courts' allows federal courts to make issue-preclusive rulings about state law in the exercise of
supplemcntaljurisdiction under 28 U.S.C. § 1367." Jd.
169. Jd.
170. [d.; Allen v. Ferguson, 791 F.2d 611, 616 (7th Cir. 1986).
HeinOnline -- 32 Tex. Tech L. Rev. 736 (2000-2001)
2001]
CIVIL PROCEDURE
737
U'federalism concerns tip the scales in favor of initially ruling on the motion
to remand.' _171
2. Discussion ofthe Fifth Circuit Decision in Alpine View Co. v. Atlas
CopcoAB
A/pine View Co. v. At/as Copco AB illustrates that, under the Supreme
Court decision in Ruhrgas, a federal court, in a removed case, may decide
issues of personal jurisdiction before considering challenges to subject matter
jurisdiction. 172 The plaintiffs were Alpine View Co., a British Virgin Islands
corporation, and its president, Bjorn Hansen ("Hansen"), a citizen ofNorway,
who were suppliers of offshore drill bits made by a particular manufacturer
in China. 173 Alleging various state law tort and contract claims, the plaintiffs
sued four nonresident defendant corporations, Atlas Copco AB ("ACAB"), a
holding company, and three of its subsidiaries, Atlas Copco Compressors
(UCompressors"), Atlas Copco Comptec (UComptec"), and Atlas Copco
Robbins (URobbins"), in a Texas state court. 17• The suit concerned a 1992
agreement between Hansen and Uniroc AB (another subsidiary of defendant
ACAB but not a party to the lawsuit).17s Under the 1992 agreement, Uniroc
AB was eventually to become the exclusive distributor of the drill bits. 176
Plaintiffs claimed that the defendants, by forming their own joint venture with
the drill bit manufacturer in China, had jointly violated the agreement. 177
Defendants Comptec, Compressors, and Robbins removed the case to a
federal district court, arguing that the plaintiffs had fraudulently joined
defendant ACAB, a Swedish corporation, simply to defeat diversity of
citizenship.178 A spate of motions followed the removal. l79 The plaintiffs,
171. See Rllhrgas, 526 U.S. at 586 (citing Allen, 791 F.2d at 616).
172. 205 FJd 208 (5th Cir. Feb. 2000).
173. Id. at 211.
174. Id. at 212.
175. Id.
176. Id. at 211. Defendant ACAB was a Swedish corporation. Id. Defendants Compressors and
Comptec were Delaware corporations. Id. at 212. Compressors had its principal place of business in
Massachusetts and Comptec in New York. Id. Actually, Compressor, Comptec, and Robbins were
subsidiaries oca subsidiary ofACAB. Id. ·Compressors, Comptec, and Robbins are each wholly owned
subsidiaries ofAtlas Copco North America, Inc. ('ACNA'), which is, in tum, now only partially owned
by ACAD. Neither Uniroc nor ACNA was named as a party to the action.' Id.
177. Id. at 212. None of the defendants were party to the 1992 agreement. Id.
178. Id.
If the plaintiffs preference is for a state court, rather than a federal court, he simply may file
his suit in a state court. However, if diversity of citizenship and the requisite amount in
controversy exist, and none of the defendants is a citizen of the state in which the suit is
brought, the defendant or defendants may thwart the plaintiff's choice of a state forum by
removing the suit to the federal court. To prevent this, the plaintiff may attempt to destroy
diversity ofcitizenship and make removal unavailable to the defendant.
14 CHARLESALANWRJGHT,ARTHURR. MILLER & EDWARD H. COOPER § 3641, at 152 (3d ed. 1998).
'There are cases with extensive discussion ofdevices by which a particular party attempts to prevent
HeinOnline -- 32 Tex. Tech L. Rev. 737 (2000-2001)
738
TEXAS TECH LAW REVIEW
[Vol. 32:717
non-citizens of the United States, challenged subject matter jurisdiction by
moving to remand to state court on the ground that diversity of citizenship did
not exist because alien parties appeared on both sides of the suit. 180 ACAB
moved to dismiss for lack of personal jurisdiction, for insufficiency of
process, and for lack of subject matter jurisdiction. lSI Robbins moved to
dismiss for lack of personal jurisdiction. l82 Finally, Compressors and
Comptec moved to dismiss for forum non conveniens. ls3
Without first ruling on the challenges to subject matter jurisdiction, the
district court granted ACAB and Robbins's motion to dismiss for lack of
personal jurisdiction. 184 It also granted Comptec and Compressors's motion
to dismiss for forum non conveniens. l 8.5 Later, the court denied the plaintiffs'
motion to remand to state court and ACAB's motion to dismiss for lack of
subject matter jurisdiction. '86 Upon the plaintiffs' appeal, a panel of the Fifth
Circuit, following the en banc d~ision in Marathon Oil, vacated the district
court's rulings because it had dismissed for lack of personal jurisdiction
before resolving the challenges to its subject matter jurisdiction. IS? Upon the
diversity and, thus, keep a case in state court. ld. at 152-91. The editors ofa leading casebook on civil
procedure comment on fraudulent joinder as a basis for defeating diversity of citizenship:
If joinder of a defendant is "fraudulent" in the sense that there is no colorable ground
supporting the claim, or if plaintiff has no real intention of prosecuting the claim against the
defendant, the case will be removed and the defendant dismissed. But fraudulent joinder is not
always easy to show, or, ifshown, to use as a basis for defeating removal. See, e.g., Batoffv.
State Farm Insurance Co., 977 F.2d 848, 8SI-S4 (3d Cir. 1992) (denying removal because
defendant did not meet the "heavy burden of persuasion" to show that joinder was fraudulent).
GEOFFREY C. HAzAJu> ET At., PLEADING AND PROCEDURE 442 (8th ed. 1999).
179. A/pine J'iew, 20S F.3d at 212.
180. ld. at213. Article UI, § 2 ofthe United States Constitution does not extend the power of the
federal courts to controversies between aliens. See Hodgson v. Bowerbank, 9 U.S. (S Cranch) 303 (1809).
It is a time-honored rule that ifaliens are on both sides ofa dispute, diversity jurisdiction does not exist.
ld. Also, alienage jurisdiction does not exist See Kavourgias v. Nicholaou Co., 148 F.2d 96, 97 (9th Cir.
I 94S).
181. Alpine J'iew, 20S F.3d at 214. In a motion filed as a motion to dismiss for the lack of subject
matter jurisdiction, ACAB objected stating that an arbitration panel in Norway had dismissed similar
claims brought by Alpine View. ld. at 212. The 1992 agreement between Alpine View and Uniroc
specified that all impasses were to be submitted to arbitration in Norway. ld. A dispute arose that was not
resolved through negotiation, and Alpine View filed a writ of summons for an arbitration case against
ACAB and Uniroc, alleging that they were guilty ofbreach ofcontract and ofinterfering in Alpine View's
business affairs in China. ld. The arbitration panel dismissed the claim against ACAB as it was not a
party to the 1992 agreement ld. The Fifth Circuit panel stated that "ACAB challenged subject matter
jurisdiction pursuant to the Convention of the Recognition and Enforcement of Foreign Arbitral Awards,
21 U.S.T. 2S17, T.I.A.S. No. 6997, 330 U.N.T.S. 38." ld. at 214.
182. ld. at 212.
183. ld.
184. ld. at 213.
18S. ld.
186. ld. The district court ordered that ACAB and plaintiffs' objections to subject matter
jurisdiction be denied. ld. The district court's rulings on these motions were nol made on the basis ofan
evidentiary hearing, but on the pleadings, the parties' affidavits, and other documentation. ld.
187. Alpine View Co. v. Atlas Copco AB, 180 F.3d 628, 629 (Sth Cir. 1998).
HeinOnline -- 32 Tex. Tech L. Rev. 738 (2000-2001)
2001]
CIVIL PROCEDURE
739
plaintiffs' appeal ofthe panel ruling, the Supreme Court (having reversed the
en bane decision in Marathon Oil) vacated the judgment and remanded the
case for further consideration in light of its decision in Ruhrgas .188
In reviewing the case, a panel of the Fifth Circuit first considered
whether the district court abused its discretion in ruling upon any motions
without first establishing its subject matter jurisdiction. 189 The panel
interpreted the United States Supreme Court's decision in Ruhrgas as
directing a district court, confronted with multiple bases for dismissal, "to
consider the complexity of subject-matter jurisdiction issues raised by the
case, as well as concerns of federalism, and ofjudicial economy and restraint"
in sequencing its rulings on the various issues before it. 190 Applying these
factors, the appellate court noted that the district court did not state that
subject matter jurisdiction raised particularly difficult questions, but stated
instead that judicial economy was the primary reason for first considering the
issue of personal jurisdiction. 191 The appeals court found no abuse of
discretion. 192
D. Specific Jurisdiction and the Stream ofCommerce Theory:
Discussion ofthe Fifth Circuit Decision in Alpine View Co. v.
Atlas Copco AB
The plaintiffs urged on appeal that the district court erred in refusing to
assert personal jurisdiction over ACAB and Robbins, arguing that the
defendants' delivery of products into the Texas market warranted subjecting
them to specific jurisdiction under a stream-of-commerce theory .193 Although
Atlas Copco AD v. Alpine View Co., 526 U.S. 1128 (1999).
Alpine View. 205 F.3d at 213.
Id.
191. Id. at 214.
192. Id.
193. Id. at 21 5. The Fifth Circuit has applied the strelJllH)f-commen:e theory to support assertions
ofspecificjurisdiction in products liability cases. Beany v. Beech Aircraft Corp., 818 F.2d 370, 374 (5th
Cir. 1987).
When a nonresident's contact with the forom state stems fiom a product, sold or manufactured
by the foreign defendant, which has caused harm in the forum state, the court has [specific]
jurisdiction ifit finds that the defendant delivered the product into the stream ofcommen:e with
the expectation that it would be purchased by or used by consumers in the forum state.
Id. (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 298 (1980». The Fifth Circuit,
however, disagreed with the district court's decision that the stream of commen:e doctrine would support
an exercise of general jurisdiction. Id. at 37S.
In specific jurisdiction cases, the defendant may have, at a minimum, one contact with the
forum state-the product or conduct that caused injury there. A conclusion that there is a
stream of commerce ensures that the contact that caused harm in the forum occurred there
through the defendant's conduct and not the plaintiff's unilateral activities; it does not ensure
that defendant's relationship with the forum is continuous and systematic, such that it can be
sued there for unrelated claims.
Id.
188.
189.
190.
HeinOnline -- 32 Tex. Tech L. Rev. 739 (2000-2001)
740
TEXAS TECH LAW REVIEW
[Vol. 32:717
the Fifth Circuit thus far has applied the stream-of-commerce theory only to
product liability cases, the plaintiffs argued that the rationale of such a theory
properly extends to "economic" claims, citing court decisions from other
jurisdictions where the stream-of-commerce theory was held to apply in
antitrust and intellectual property cases. l94 However, the Fifth Circuit
concluded that the relationship between the plaintiffs' causes of action and the
defendants' contacts with the forum state was too attenuated to support an
exercise of specific jurisdiction.
I"
Appellants' claims arise out oflosses they experienced as a result of ACAB's
and Robbins' alleged actions vis-A-vis the 1992 Agreement, not as a result
of any contact with a product. . .. Appellants have not asserted that the
alleged misdeeds occurred in Texas, or that the 1992 Agreement was
negotiated or executed in Texas. Neither Alpine View nor Hansen is
considered a Texas resident. . .. It simply cannot be said that ACAB or
Robbins, based on the sale ofproduets in Texas, could have anticipated being
haled into court to defend the instant suit. 196
Concluding that specific jurisdiction could not be asserted over the defendants
because their forum contacts were insufficiently related to the plaintiffs'
claims, the court found it unnecessary to also decide whether the stream-ofcommerce theory could be applied in cases other than those involving
products liability claims. l97
Plaintiffs also urged that the district court erred in refusing to assert
general jurisdiction over ACAB and Robbins, arguing that the defendants'
contacts with the forum during the relevant period, even if unrelated to the
plaintiffs' claims, were substantial, systematic, and continuous. l98 The Fifth
Circuit disagreed, saying that the evidence at best showed that defendant
Robbins
194. Alpine Yiew,205 F.3d at 215-16 (citing Beverly Hills Fan Co. v. Royal Sovereign Corp., 21
F.3d 1558 (Fed. Cir. 1994); Allen Organ Co. v. Kawai Musical Instruments Mfg. Co., 593 F. Supp. 107
(E.D. Pa. 1984); Pfeiffer v.Int'l Acad. of Biomagnetic Med., 521 F. Supp. 1331 (W.D. Mo. 1981».
195. Alpine new,205 F3d at 216. The court seemed to suggest that the plaintiffs, in making their
argument for specific jurisdiction, sought an expansive interpretation of the defendants' contacts with
Texas. See /d. It said that the plaintiffs intended "to focus the court's attention on all products-notjust
drill bits-ACAB and Robbins allegedly put into the stream of commerce." rd.
196. Jd. at 216-17.
197. Jd. at 216·18.
198. Jd. at 218; see also Helicopteros Nacionales de Colombia, SA v. Hall, 466 U.S. 408, 416
(1984) (holding that contads umelated to litigation must be continuous and systematic); Wilson v. Belin,
20 F.3d 644, 650 n.5 (5th Cir. 1994) (stating that a nonresident defendant's contacts with a forum state
must be substantial as well as continuous and systematic). The Fifth Cireuit has held that "[g]eneral
jurisdiction can be assessed by evaluating contacts of the defendant with the forum over a reasonable
number ofyears, up to the date the suit was filed." Access Telecom, Inc. v. MCI Telecomm. Corp., 197
F.3d 694, 717 (5th Cir. Dec. 1999), cert. denied, 121 S. Cl275 (2000).
HeinOnline -- 32 Tex. Tech L. Rev. 740 (2000-2001)
2001]
CIVIL PROCEDURE
741
sold, on isolated occasions, products to entities located in Texas, that it was
party to an agreement to provide Mexican mines with products that were
shipped to Texas before shipped to Mexico, that companies used Robbins'
products for projects in Texas, and that Robbins personnel made field service
visits to Texas between December 1992 and December 1993. These contacts
are neither substantial, continuous, nor systematic. 199
Viewed in light of the Supreme Court's decision in Helicopteros, which
denied general jurisdiction over a nonresident corporation whose forum
contacts were substantially greater than those of Robbins in A/pine View, the
Fifth Circuit's denial of general jurisdiction over Robbins is compelling.
E. General Jurisdiction and the Alter-Ego Theory: Discussion ofthe
Fifth Circuit Decision in Alpine View Co. v. Atlas Copco AB
The Fifth Circuit next addressed the question of whether defendant
ACAB was subject to general jurisdiction in Texas under an alter ego
theory.200 Since ACAB was a foreign holding company, the plaintiffs relied
on evidence showing that ACAB's subsidiaries, as well as companies owned
by those subsidiaries, sold products in Texas and otherwise manifested their
presence there. 201 But the court responded that to subject the defendant to
jurisdiction on the basis of the forum contacts of its subsidiaries or of third
party companies, the plaintiffs must make a prima facie showing that ACAB
so controlled those other organizations that their activities might fairly be
attributed to it,202 The court observed that the plaintifrs task of making a
prima facie case under the alter ego doctrine was made more difficult because
Alpine View, 205 F.3d at 218.
[d. at 217.
201. [d. at 218; see also Helicopteros, 466 U.S. at 411 (evaluating Helicopteros's contacts with
Texas). Helicopteros was a wrongful death action, arising out ofthe aash ofa helicopter in Peru, brought
199.
200.
in a Texas state court by survivors of the decedents against the owner and operator of the aircraft, a
Columbian corporation, which provided transportation services for oil companies in South America. 466
U.S. at 409. Defendant negotiated the contract for transportation services in Houston. [d. at 411. It
purchased 800A, of its aircraft from Bell Helicopter in Fort Worth for $4,000,000. [d. Its pilots were
trained in Texas. [d. It also accepted payment from parties to the contract in the form ofchecks for over
$5,000,000 which were drawn on a Texas bank. Jd. at 409-11. According to the Supreme Court, these
contacts did not "constitute the kind of continuous and systematic general business contacts the Court
found to exist in Perkins." [d. at416.
202. Alpine View, 205 F.3d at 217. "[A] foreign parent corporation is not subject to the jurisdiction
ofa forum state merely because its subsidiary is present or doing business there; the mere existence of a
parent-subsidiary relationship is not sufficient to warrant the assertion ofjurisdiction over the foreign
parent.- Id. at 218 (citing Hargrove v. Fibreboard Corp. 710 F.2d 1154, 1159 (5th Cir. 1983». Under
Texas law, the alter ego doctrine applies "when there is such unity between the parent corporation and its
subsidiary that the separateness of the two corporations has ceased and holding only the subsidiary
corporation liable would result in injustice." Harwood Tire-Arlington, Inc. v. Young, 963 S.W.2d 881,
885 (Tex. App.-Fort Worth 1998, pet. dism'd by &gr.).
HeinOnline -- 32 Tex. Tech L. Rev. 741 (2000-2001)
742
TEXAS TECH LA W REVIEW
[Vol. 32:717
ofthe multiple levels of subsidiaries in ACAB's corporate structure.203 "For
example, in order for the activities of Compressors, Comptec, and Robbins to
be attributed to ACAB, [plaintiffs] must make a prima facie case that ACAB
controls ACNA, itself a holding company, and controls Compressors,
Comptec, and Robbins."2lW The court conclud~ that the plaintiffs had not met
their burden on the issue ofcontrol.20S While the record disclosed that some
individuals were officers or directors of several companies within the
corporate network, that interest-bearing loans were made between entities
within this structure, and that ACAB received dividends from corporations
that did business in Texas, the court said that this was insufficient to show the
dominance required to sustain the alter ego theory.206 "Even if we were to
assume that all of ACAB's subsidiaries had substantial, continuous, and
systematic contacts with Texas, those contacts could not, based on [plaintiffs']
evidence, be attributed to ACAB."207
F. The Doctrine o/Forum Non Conveniens: Discussion o/the
Fifth Circuit Decision in Alpine View Co. v. Atlas Copco AB
The Fifth Circuit next reviewed the district court's dismissal of
defendants Comptec and Compressors for forum non conveniens. 2°S Under
the doctrine of forum non conveniens, a court having jurisdiction over an
action may, in its discretion, decline to exercise its jurisdiction when the
litigation could be brought more appropriately in another forum. 209
Application of the doctrine depends on the unique circumstances of the
specific case and requires a balancing of relevant factors-both private and
publ ie-bearing on the appropriateness of the forum and the convenience of
the parties.2lO
all
203. Alpine View, 20S F.3d at218.
204. ld.
20S. ld.
206. ld. at 218-19.
The existence of intercorporate loans does not establish the n:quisite dominance, and in fact,
interest-bearing loans suggest separation ofcorporate entities. [Plaintiffs'] evidence does not
suggest that ACAB otherwise financed its subsidiarics' operations; ... that its subsidiaries an:
grossly undercapitalized; that ACAB paid the salaries and other expenses of the subsidiaries;
that subsidiaries received all their business fi'om ACAB; that ACAB used subsidiaries' pro~
as [their] own; that daily operations of the corporations wen: not separate; or that subsidiaries
do not observe corporate fonnalities.
ld. at 219 (citations omitted).
207. ld. at 219.
208. ld. at 221.
209. See. e.g.; IS CHARLEs ALAN WRIGHT ET AL., fEDERAL PRACTICE AND PROCEDURE § 3828, at
278 (2d cd. 1996).
210. See Gulf Oil Corp. v. Gilbert, 330 U.s. SOl, S08 (1947). In 1947, the United States Supreme
Court held in GllffOil Corp. v. Gi/ben that the doctrine of forum non conveniens could be applied by
federal courts. ld. The Court held that a federal court in New York might dismiss an action brought by
HeinOnline -- 32 Tex. Tech L. Rev. 742 (2000-2001)
2001]
CIVIL PROCEDURE
743
Although 28 U.S.C. § 1404, the statute which governs the transfer of
cases between federal district courts, effectively codifies the doctrine offorum
non conveniens, the proper motion, when the alternative forum is a district
court within the United States, is for a transfer under the statute.211 However,
when the alternative forum is a court in a foreign country as in A/pine View,
or, more rarely, when the alternative forum is a state court, the proper motion
is to dismiss for forum non conveniens. 212
The Fifth Circuit held that the district court did not abuse its discretion
in ordering a dismissal for forum non conveniens.213 The burden of
a Virginia plaintiff against Gulf Oil doing business in Virginia for a fire at plaintiffs warehouse in
Virginia. Id. Although venue in the federal district court in New Yark was proper under the general venue
statute, 28 U.S.C. § 1391, the Court found no connection between New York and the facts of the case. Id.
The fire had occurred in Virginia, and Virginia law would be applied to determine liability. Id. Apart
from expert witnesses, all potential trial witnesses lived in Virginia. Id. Thus, the Court held that the
federal court in New York had discretion to dismiss the action, leaving plaintiff free to bring It in Virginia
rather than in an inconvenient forum. Id. at 502-03. Justice Jackson's statement ofthe pertinent factors
remains useful as a guide in applying the doctrine.
An interest to be considered, and the one likely to be most pressed, is the private interest
of the litigant Important considerations are the relative ease of access to sources of proof;
availability of compulsory process for attendance of unwilling, and the cost of obtaining
attendance ofwilling, witnesses; possibility ofview of premises, if view would be appropriate
to the action; and all other practical problems that ~e trial ofa case easy, expeditious and
inexpensive. There may also be questions as to the enforceability of a judgment if one is
obtained. The court will weigh relative advantages and obstacles to fair trial. It is often said
that the plaintiff may 1IOt, by choice ofan inconvenient forum, "vex." "harass," or ·oppress" the
defendant by inflicting upon him expense or trouble not necessary to his own right to pursue
his remedy. But unless the balance is strongly in favor ofthe defendant, the plaintiffs choice
of forum should rarely be disturbed.
Factors of public interest also have place in applying the doctrine. Administrative
difficulties follow for courts when litigation is piled up in congested centers instead of being
handled at its origin. Jury duty is a burden that ought not to be imposed upon the people of a
community which has no relation to the litigation. In cases which touch the affairs of many
persons, there is reason for holding the trial in their view and reach rather than in remote parts
of the country where they can leam of it by report only. There is a local interest in having
localized controversies decided at home. There is an appropriateness, too, in having the trial
ofa diversity case in a forum that is at home with the state law that must govern the case, rather
than having a court in some other forum untangle problems in conflict of laws, and in law
foreign to itself.
Id. at 508·509 (footnote omitted).
In reviewing the district court's ruling on forum non conveniens, the Alpine View court said that it
followed the analysis set forth in GulfOil. Alpine View, 205 F.3d at 221.
211. In 1948, Congress enacted 28 U.S.C. § 1404(a), which governs the transfer ofeases from one
federal district court to another "for the convenience of parties and witnesses, in the interest ofjustice."
Norwood v. Kirkpatrick, 349 U.S. 29, 33 (Clark, J., dissenting) (quoting 28 U.S.C. § 1404(a) (1948». The
statute effectively incorporates the doctrine offorum non conveniens. Id. at 32. It is understood, however,
that transfers under § 1404(a) require a lesser showing of inconvenience than do dismissals under forum
non conveniens. Id.; see 0110 All States Freight, Inc. v. Modarelll, 196 F.2d 1010, 1011 (3d Cir. 1952)
(explaining that 28 U.S.C. § 1404 helps plaintiffs avoid certain risks, such as the running of the statute of
limitations, when a suit is brought in the wrong forum).
212. See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 261 (1981).
213. Alpine View,20S F.3d at 222. The Supreme Court has emphasized that a district court's ruling
on a motion to dismiss on forum non conveniens grounds should not be disturbed unless it is an abuse of
HeinOnline -- 32 Tex. Tech L. Rev. 743 (2000-2001)
744
TEXAS TECH LAW REVIEW
[Vol. 32:717
persuading the court that all elements of the doctrine are established is on the
defendant, and ordinarily deference will be paid to a plaintiff's initial choice
offorum.214 However, the court observed that this notion of deferring to the
forum initially chosen applies with less force when plaintiffs, like Hansen and
Alpine View, are not citizens of the United States. 215 Also, the doctrine of
forum non conveniens will not be applied if dismissal will deny the plaintiff
the only forum that is available and adequate. 216 Dismissal requires, not only
that there actually be an alternative forum, but also that the parties will not be
treated unfairly if the action is maintained there. 217 In Alpine View, all the
defendants had previously agreed to submit any disputes to adjudication in
either Sweden or Norway and to have the law of either country govern the
controversy.218 On appeal, Hansen argued that he would not be treated fairly
in a forum in Norway, but the reviewing court concluded otherwise:
[Plaintiffs] had agreed to submit disputes under the 1992 Agreement to
arbitration in Norway, and had instituted a suit before a Norwegian
arbitration panel. In that suit, [plaintiffs] claimed breach of contract and
"unlawful interference in [their] business affairs and other contractual rights
in China" and sought up to $54.5 million dollars in compensation. If nothing
else, this suggests that Hansen did not believe the Norwegian forum would
be biased against him, as he [now] argues. Z19
For the doctrine of forum non conveniens to apply, however, not only
must an alternative forum be available, but also the forum initially selected
must be found to be seriously inconvenient. 220 Private interest factors to be
weighed by the court include the ease of access to sources of proof and the
discretion. Piper Ab'r:rqft, 454 U.S. at 257. In Piper Aircrqft, following the crash of a small commercial
airplane in Scotland and the deaths of the pilot and five passengers, wrongful death actions were brought
in Scotland against the owner and operator of the plane and the estate ofthe pilot. Id. at 240. A separate
wrongful death suit was brought in the California state courts by several Scottish survivors of the
passengers against Piper Aircraft, a Pennsylvania corporation that manufactured the plane, and Hartzell,
an Ohio corporation that manufactured the propellers. Id. at 239-40. The case was removed to a federal
court and, on defendant's motion, transferred to the Middle District of Pennsylvania, where defendants
obtained a dismissal for forum non conveniens. Id. at 241. The Third Circuit Court ofAppeals reversed,
holding that the district court had abused its discretion in balancing the factors made relevant by the Gulf
Oil decision and that dismissal was barred since the law ofScotland docs not recognize strict liability and
was less favorable to the plaintiff than the law of the forum. Id. at 244. The Supreme Court reversed,
noting that "the possibility of a change in substantive law should ordinarily not be given conclusive or
even substantial weight in the forum non conveniens inquiry." Id. at 247.
214. Alpine View, 205 F.3d at 222; accord Piper Aircrqft, 454 U.S. at 255.
215. Alpine View, 205 F.3d at 222; accord Piper Aircraft, 454 U.S. at 255.
216. Alpine View, 205 F.3d at 221.
217. Id. (citing In re Air Crash Disaster Ncar New Orleans, La., 821 F.2d 1147, 1165 (5th Cir.
1987».
218. Id.
219. Id.
220. Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507-08 (1947).
HeinOnline -- 32 Tex. Tech L. Rev. 744 (2000-2001)
CIVIL PROCEDURE
2001]
745
cost of obtaining the attendance of willing witnesses. 22 \ The plaintiffs argued
that, since defendants Comptec and Compressors have their principal places
of business within the United States, the district court erred in finding that
most of the witnesses would be required to travel substantial distances to
attend litigation if the action remained in Texas. 222 But the court found that
the relative ease oftravel within the United States was immaterial because the
plaintiffs had not identified one person from the United States who would be
deposed during the course of general discovery.223 The court also concluded
that the district court did not err in further finding that most of the written
evidence necessary for a resolution of the case existed outside the United
States.224
Persuaded that a balancing of private interest factors pointed decisively
toward sustaining the application.offorum non conveniens, the appeals court
said it was unnecessary to review the district court's assessment of relevant
public interest factors.22.S Ifthe court had done so, it almost certainly would
have held that these factors, too, pointed toward dismissal. A forum in the
United States might experience considerable difficulty familiarizing itself
with the law of Sweden or Norway were such law determined to govern the
dispute. 226 More importantly, the forum's legitimate interests in the dispute
were diminished because neither plaintiff was a Texas resident. 227 The 1992
agreement was not negotiated or executed in the forum, and none of the acts
that may have caused its breach was alleged to have occurred in Texas. 228
Finally, a factor which was not discussed by the court but which may
properly be considered in cases like these is that the dispute arose in the
context of international commerce.229 The plaintiffs were citizens of Norway
and the British Virgin Islands, defendant ACAB was a Swedish holding
company, and the litigation concerned the worldwide marketing of goods
manufactured in China.230 In these circumstances, an American court's
exercise ofjurisdiction over a foreign business having so slight a connection
with the forum might easily be thought to be detrimental to the foreign trade
relations of the United States.231
221.
222.
223.
224.
22S.
226.
227.
228.
229.
230.
Id. at S08.
Alpine View, 20S F.3d at 222.
Id.
Id.
Id.
See id.
Id.
Id.
See id.
Id.
231. In Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102 (1987), a case involVing
international trade, the Supreme Court adverted to the interest of other nations in a state court's assertion
ofjurisdiction over an alien defendant Id. at II S. It said:
[T]hose interests, as well as the Federal interest in its foreign relations policies, will be best
HeinOnline -- 32 Tex. Tech L. Rev. 745 (2000-2001)
746
TEXAS TECH LA W REVIEW
tIL
[Vol. 32:717
CONCLUSION
The Fifth Circuit survey of civil procedure this year focused on
significant decisions in the area of personal and subject matter Jurisdiction.
In particular, this article addressed the court's decisions regarding the proper
sequencing of rulings on challenges to these two kinds of jurisdiction, the
assertion of specific and general jurisdiction, the assertion of personal
jurisdiction over a nonresident defendant who operates an Internet website
without other contacts in the forum, and the doctrine of forum non
conveniens. In sum, this article focused on significant decisions in the Fifth
Circuit that will, inevitably, playa major role in the outcome of civil lawsuits
as American jurisprudence embarks on the 21st century.
served by a careful inquiry into the reasonableness of the assertion of jurisdiction in the
particular case, and an unwillingness to find the serious burdens on an alien defendant
outweighed by minimal interests on the part of the plaintiffor the forum state. "Great care and
reserve should be exercised when extending our notions of personal jurisdiction into the
international field."
Jd. (quoting United States v. First Nat'l Bank, 379 U.S. 378,404 (1965».
HeinOnline -- 32 Tex. Tech L. Rev. 746 (2000-2001)