Opinion
Civil No. 3:05-CV-0196-H.
April 11, 2005
MEMORANDUM OPINION AND ORDER
Before the Court are Defendants Bruce Hawkins' and Commercial Arbitration Forum's Special Appearance Disputing Venue and Motion to Dismiss, filed March 7, 2005; and Plaintiff's Response, filed March 28, 2005. For the following reasons, Defendants' Motion is DENIED.
I. Background
In and around August 2003, Defendant Bruce Hawkins ("Hawkins") incorporated Commercial Arbitration Forum ("CAF"). (Defs.' Mot. at 2.) CAF, a non-profit organization incorporated in Washington, is wholly owned by Hawkins. ( Id. at 1.) At the request of clients, Hawkins, a licensed attorney from Washington, provided legal services. ( Id.; Pl.'s App. at 3-11.) In addition to providing "document production and advice," Hawkins "litigat[ed] cases in arbitration" for clients (Defs.' Mot. at 2; see also Pl.'s App. at 3-11). Among his clients were Gregg L. Young ("Young") and Freddy Nicol ("Nicol"), both Texas residents. (Pl.'s App. at 2, 16, 18, 20, 25, 71-72, 75.) Hawkins and CAF corresponded with and provided services to both Young, Nicol, and six other Texas residents. ( Id. at 4; Pl.'s Resp. at 6.) Acting under the advice of Hawkins and CAF, Young and Nicol filed claim disputes with Plaintiff Chase Manhattan Bank, N.A, ("Chase"), their credit-card company. (Pl.'s App. at 16, 18, 25, 71-77.) Hawkins and CAF also provided template documents and advice to Young and Nicol in their attempt to confirm their arbitration awards in Texas state courts. ( Id. at 1-77 (Exs. A, B, C).) On January 27, 2005, Chase filed the instant diversity action seeking to enjoin Hawkins and CAF from providing forms to and assisting credit-card holders in their allegedly bogus disputes with Chase. (Pl.'s Resp. at 2.) Hawkins and CAF ("Defendants") now move under 28 U.S.C. §§ 1391 and 1404 to transfer venue and dismiss on the basis that venue is not proper in this district. (Defs.' Mot. at 1, 4.) Defendants also invoke the forum non conveniens doctrine as a ground to dismiss. ( Id. at 6.)
Prior to filing its claim, Chase merged with Bank One Delaware, N.A. ("Bank One"). Young's and Nicol's then credit-card company was Bank One, now known as Chase.
The evidence shows that Young and Nicol appeared pro se in their state court confirmation of arbitration actions, i.e. Hawkins did not represent them in Texas courts. (Pl.'s App. at 32-33, 74-77.)
II. Venue Under § 1391
Pursuant to 28 U.S.C. § 1391(a) a "civil action wherein jurisdiction is founded only on diversity of citizenship may, except as otherwise provided by law, [may] be brought . . . in . . . a judicial district in which any defendant is subject to personal jurisdiction at the time the action is commenced[.]" 28 U.S.C. § 1391(a)(3) (West 2005). "In a diversity action, a federal court may exercise personal jurisdiction over a defendant only to the extent permitted by the applicable law of the forum state." Cent. Freight Lines Inc. v. APA Transport Corp., 322 F.3d 376, 380 (5th Cir. 2003) (citing FED. R. CIV. P. 4(e)(1), (h)(1), and (k)(1)). In Texas, the exercise of personal jurisdiction over a nonresident defendant is proper where: 1) the defendant has committed an act that confers jurisdiction under the Texas long-arm statute; and 2) the exercise of jurisdiction under that statute does not deprive the defendant of the due process of law guaranteed by the Fourteenth Amendment of the United States Constitution. See Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985); Delgado v. Reef Resort Ltd., 364 F.3d 642, 645 (5th Cir. 2004), cert. denied, ___ U.S. ___, 125 S.Ct. 623 (Nov. 29, 2004); Cent. Freight Lines, 322 F.3d at 380.
The Texas long-arm statute provides, inter alia, that a nonresident does business in Texas if the nonresident commits a tort in whole or in part in Texas. TEX. CIV. PRAC. REM. CODE ANN. § 17.042(2) (Vernon Supp. 2004). Because courts have interpreted the Texas long-arm statute, to extend to the limits of due process, see Cent. Freight Lines, 322 F.3d at 380, the sole inquiry is whether the assertion of personal jurisdiction over a defendant comports with federal constitutional requirements. Id.; Aviles v. Kunkle, 978 F.2d 201, 204 (5th Cir. 1992). Obtaining personal jurisdiction over a nonresident comports with constitutional requirements if (1) the nonresident purposefully availed himself of the benefits and protections of Texas law by establishing minimum contacts with Texas such that he could reasonably anticipate being haled into court in Texas, and (2) the exercise of jurisdiction does not offend traditional notions of fair play and substantial justice. See Cent. Freight Lines, 322 F.3d at 380.
Minimum contacts with a forum state "can be established either through contacts sufficient to assert specific jurisdiction, or contacts sufficient to assert general jurisdiction." Cent. Freight Lines, 322 F.3d at 381 (citing Mink v. AAAA Dev. LLC, 190 F.3d 333, 336 (5th Cir. 1999) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310 (1945))). General jurisdiction exists when a nonresident defendant has engaged in continuous and systematic contacts with the forum state. Id. Specific jurisdiction exists if the plaintiff can establish that "defendant has purposefully directed its activities at the forum state and the litigation results from alleged injuries that arise out of or relate to those activities." Id. (citing Burger King, 471 U.S. at 472).
A. Minimum Contacts: Specific Jurisdiction
The Court's analysis of Hawkins' contacts with Texas is controlled by Streber v. Hunter, 221 F.3d 701 (5th Cir. 2000). Under Streber, where an attorney provides advice, knowing it will be received by a Texas client, that attorney has purposefully availed himself of the benefits and protections of Texas law. ( Id. at 718) (citing Busch v. Buchman, Buchman O'Brien, 11 F.3d 1255, 1257 (5th Cir. 1994) (allowing Texas personal jurisdiction over New York attorney who only performed work in New York because he knew his tax opinion would be included in materials shipped to Texas). Accordingly, Chase has made a prima facie showing of minimum contacts, i.e. personal jurisdiction over Hawkins and CAF. Specifically, Chase alleges that Hawkins and CAF contacts with Young, Nicol, and other Texas residents gives rise to the civil conspiracy and tortious interference causes of action. (Pl.'s Original Compl. at 4, 14-15.) Cf. Delta Brands Inc. v. Danieli Corp., 99 Fed.Appx. 1, 7-8 (5th Cir. 2004) ("[Plaintiff] has not . . . alleged that [Defendant's tort] arose out of contacts initiated by [Defendant.] Nor has [Plaintiff] alleged that [Defendant's tort] occurred in telephone calls, emails, or faxes, to [Plaintiff] in Texas.").
In the context of intentional torts, the Fifth Circuit's standard for minimum contacts is less stringent than its standard for general jurisdiction. See Lewis v. Fresne, 252 F.3d 352, 358-59 (5th Cir. 2001). "A single act by a defendant can be enough to confer personal jurisdiction if that act gives rise to the claim being asserted." Id.; Wien Air Alaska, 195 F.3d at 213; Brown v. Flowers Industries, Inc., 688 F.2d 328, 332-33 (5th Cir. 1982) ("The district court erroneously concluded . . . that this one contact [a single tort] was insufficient under the due process clause to subject the defendants to in personam jurisdiction."). "When the actual content of communications with a forum gives rise to intentional tort causes of action, this alone constitutes purposeful availment," TIG Ins. Co. v. NAFCO Ins. Co., Ltd., 177 F. Supp. 2d 561, 566 (N.D. Tex. 2001), because "[t]he defendant is purposefully availing himself of 'the privilege of causing a consequence' in Texas." Wien Air Alaska, 195 F.3d at 213.
B. Fair Play and Substantial justice
Once the plaintiff makes a prima facie showing of minimum contacts, "the burden of proof shifts to the defendant to show that the assertion of jurisdiction is unfair and unreasonable." Cent. Freight Lines, 322 F.3d at 384. To prevail, the "defendant must make a 'compelling case.'" Id. (citing Burger King, 471 U.S. at 477). In determining whether the assertion of jurisdiction is fair and reasonable, the Court engages in a balancing of interests. Id.; TIG Ins. Co., 177 F. Supp. 2d at 567. The interests the Court considers are: "(1) the burden on the nonresident defendant of having to defend itself in the forum; (2) the interests of the forum state in the case; (3) the plaintiff's interest in obtaining convenient and effective relief; (4) the interstate judicial system's interest in the most efficient resolution of controversies; and (5) the shared interests of the states in furthering fundamental social policies." Cent. Freight Lines, 322 F.3d at 384 (citing Asahi Metal Indus. Co., Ltd. v. Super. Ct. of Cal., 480 U.S. 102, 115 (1987)).
Hawkins and CAF do not make a "compelling case." Defendants assert in conclusory fashion that "exercising jurisdiction would offend traditional notions of fair play and justice." (Defs.' Mot. at 5.) Hawkins and CAF do not address the interests of: the forum state in the case; Chase in obtaining relief; the judicial system in efficient resolution of the controversy; or the states in furthering fundamental social policies. Nor have Hawkins and CAF "identified any conflict between the interests of Texas and other states that would flow from the exercise of personal jurisdiction here." Irving v. Owens-Corning Fiberglas Corp., 864 F.2d 383, 387 (5th Cir. 1989), cert. denied, Jugometal Enter. for Imp. and Exp. of Ores and Metals v. Irving, 493 U.S. 823 (1989). The Court concludes that in focusing solely on the encumbrance of having to defend in the forum, Hawkins and CAF have not met their burden of showing that the assertion of jurisdiction would be unfair.
The Supreme Court has stated that "[w]hen minimum contacts have been established, often the interests of the plaintiff and the forum will justify even the serious burdens placed on the alien defendant." Asahi Metal Indus., 480 U.S. at 114-15. Litigating in Texas satisfies Chase's interest in obtaining convenient and effective relief and provides an efficient resolution of the controversy. The exercise of jurisdiction over Hawkins and CAF does not offend traditional notions of fair play and substantial justice. Accordingly, Hawkins' and CAF's Motion to Dismiss on the ground of improper venue is DENIED.
III. Transfer Under § 1404
Even where venue is proper under 28 U.S.C. § 1391(a)(3), the Court may, pursuant to 28 U.S.C. § 1404(a), transfer the action,"[f]or the convenience of the parties and witnesses, in the interest of justice, . . . to any other district or division where it might have been brought." 28 U.S.C. § 1404(a). Transfer of venue pursuant to § 1404(a) is within the discretion of the district court and will not be disturbed on appeal absent an abuse of discretion. See Peteet v. Dow Chem. Co., 868 F.2d 1428, 1436 (5th Cir. 1989). "In applying the provisions of § 1404(a), . . . the first determination to be made is whether the judicial district to which transfer is sought would have been a district in which the claim could have been filed." In re Volkswagen AG, 371 F.3d 201, 203 (5th Cir. 2004) (citing In re Horseshoe Entertainment, 337 F.3d 429, 433 (5th Cir. 2003)).
The movant bears the burden of proving that transfer is appropriate. See Peteet, 868 F.2d at 1436; Grencorp Fin. Ltd. P'ship v. GMAC Commercial Mortg. Corp., No. Civ. A. 3-03-CV-3098-B, 2005 WL 762608, at *2 (N.D. Tex. Apr. 01, 2005) (Boyle, J.); Heritage Life Ins. Co. v. Walker, 3-04CV1732-L, 2005 WL 598248, at *1 (N.D. Tex. Mar. 11, 2005) (Lindsay, J.). Because this is a diversity action, 28 U.S.C. § 1391(a) controls which judicial district would have been a district in which the claim could have been filed. In re Volkswagen AG, 371 F.3d at 203 (citing 28 U.S.C. §§ 1332, 1391).
Defendants seek transfer to either the District of Nevada or the Western District of Washington. (Defs.' Mot. at 3.) Defendants, however, have not briefed or submitted evidence showing whether the District of Nevada or the Western District of Washington "would have been a district in which the claims could have been filed." In re Volkswagen AG, 371 F.3d at 203. There is no evidence that "all defendants reside in the same state," 28 U.S.C. § 1391(a)(1); that either the District of Nevada or the Western District of Washington is "a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred," id. § 1391(a)(2); or that "there is no district in which the action may otherwise be brought" other than the District of Nevada or the Western District of Washington in which the "defendant[s are] subject to personal jurisdiction at the time the action is commenced[.]" Id. § 1391(a)(3). Because Defendants have not sustained their burden of proving that transfer is appropriate, Defendants' Motion to Transfer Venue is DENIED.
Plaintiff's Original Complaint, filed January 27, 2005, alleges that five of the seven defendants reside or maintain their principal place of business in the Western District of Washington, while two defendants maintain their principal place of business in the District of Nevada. (Pl.'s Original Compl. at 2-4.)
IV. Forum Non Conveniens
"A forum non conveniens inquiry has several steps. First, the defendant invoking the doctrine must establish that an alternate forum is both available and adequate. An available forum is one where the case and all the parties can come within its jurisdiction." Brokerwood Intern. (U.S.), Inc. v. Cuisine Crotone, Inc., 104 Fed. Appx. 376, 383 (5th Cir. 2004) (citing Alpine View Co. v. Atlas Copco A.B., 205 F.3d 208, 221 (5th Cir. 2000)). As discussed above, the conclusory arguments of Defendants, that "more convenient" alternative fora are available (Defs.' Br. at 6), does not provide the Court with a basis to conclude that there is "an available forum . . . where the case and all the parties can come within its jurisdiction." Brokerwood, 104 Fed. Appx. at 383. Defendants' forum non conveniens argument is without merit. Accordingly, Defendants' Motion to Dismiss on the ground of forum non conveniens is DENIED.
The Court does not reach the second (whether certain private factors support dismissal) or third steps (whether certain public factors support dismissal). Brokerwood, 104 Fed. Appx. at 383.
V. Conclusion
For the foregoing reasons, Defendants Bruce Hawkins' and Commercial Arbitration Forum's Special Appearance Disputing Venue and Motion to Dismiss is DENIED.
SO ORDERED.