Opinion
SA-02-CV-0031-RF
May 21, 2003
Before the Court is United States Magistrate Judge Nancy Stein Nowak's March 5, 2003 Report recommending denial of Defendant's Amended Motion to Dismiss for Lack of Personal Jurisdiction. Because her recommendation is neither clearly erroneous nor contrary to law, the Court is of the opinion that Magistrate Judge Nowak's Report and Recommendation should be ADOPTED IN ITS ENTIRETY. Accordingly, Defendant's Amended Motion to Dismiss for Lack of Personal Jurisdiction should be DENIED.
STANDARD OF REVIEW
A district court reviews do novo a magistrate judge's report and recommendation if a party files specific objections within ten days of receiving the report. If no objections are filed, review is for findings and recommendations that are clearly erroneous or contrary to law. No objections have been filed in response to the Report and Recommendation in this case. Thus, the Court need not conduct a de novo review of Magistrate Judge Nowak's findings and recommendations.
United States v. Wilson, 864 F.2d 1219, 1221 (5th Cir. 1989).
DISCUSSION
This suit alleging common-law theories of breach of contract, promissory estoppel, and unjust enrichment was instituted in the 218th Judicial District Court, Atascosa County, Texas and removed to the Western District of Texas on the basis of diversity by notice of January 11, 2003. Plaintiff Ergonomic Lighting System, Inc. is a Texas corporation with its principal place of business in Atascosa County, Texas. Defendant Commercial Petroleum Equipment is a California corporation with its principal place of business in Sun Valley, California.
Defendant is primarily engaged in the distribution of petroleum marketing equipment to service stations and similar purchasers. Plaintiff sells energy-efficient lighting systems for use and installation in gas stations and convenience stores. In July, 2001, Plaintiff solicited a written contract in which Defendant agreed to purchase light fixture kits supplied by Plaintiff. Plaintiff alleges that it partially performed its obligation under the contract in shipping some, but not all, of the light kits that had been ordered, and that Defendant is in breach for its failure to pay for those light kits which had been ordered. Plaintiffs causes of action for promissory estoppel and unjust enrichment are related to Defendant's alleged failure to perform in full its obligations under the written contract.
The Amended Motion to Dismiss for Lack of Personal Jurisdiction was filed on April 5, 2002. Plaintiffs Response followed on April 19, 2002. Defendant filed a Reply on May 3, 2002. Defendant and Plaintiff, by their respective letters of August 13 and 21, 2002, respectively, provided the Court with additional arguments as to the significance of a recent personal-jurisdiction opinion issued by the Texas Supreme Court.
Defendant first moved to dismiss for lack of personal jurisdiction simultaneously with its notice of removal. The motion was denied, and Defendant was allowed to reassert the motion at the conclusion of Plaintiffs discovery.
See Am. Type Culture Collection, Inc. v. Coleman, 83 Sw.3d 801 (Tex. 2002) (explaining that the Federal Rules of Civil Procedure allow a federal court in a diversity case to exercise jurisdiction over a non-resident corporate defendant only if permitted by state law; that the Texas long-arm statute has the same scope as the Constitution; and that in undertaking the minimum-contacts analysis, courts have distinguished between general and specific personal jurisdiction, either of which will suffice for the exercise of personal jurisdiction).
With respect to this Court's exercise of personal jurisdiction over the parties in this matter, Defendant in its Motion to Dismiss denies that the requisite minimum contacts exist between it and the state of Texas, and further argues that traditional notions of fair play and substantial justice would be offended if this Court were to continue to assert jurisdiction over it. Plaintiff has responded that the underlying facts support the conclusion that both general and specific jurisdiction are present in satisfaction of the minimum-contacts requirement, and that such jurisdiction further is not offensive to the traditional notions of fair play and substantial justice.
See Alpine View Co. Ltd. v. Atlas Copco AB, 205 F.3d 208 (5th Cir. 2000).
Magistrate Judge Nowak, in construing the facts in the light most favorable to Plaintiff found that Plaintiff had met its prima facie burden of establishing the general personal jurisdiction of this Court over Defendant. She based this judgment on evidence that Defendant had (1) obtained a Texas sales-tax permit, and reported sales, and paid state and local taxes when required; (2) did business with either Texas-based corporations or with the Texas offices of out-of-state corporations; (3) maintained an interactive website; and (4) maintained exclusive distributorship agreements with businesses that have distribution facilities in Texas.
See Trinity Indus., Inc. v. Mayers Assoc., Ltd., 41 F.3d 229, 230 (5th Cir. 1995) ("When the district court rules on a motion to dismiss without an evidentiary hearing the plaintiff need only present a prima facie case of personal jurisdiction.").
Magistrate Judge Nowak found that the latter of these factors, alone, established a prima facie showing. The remaining factors, while not dispositive in their own right, when taken together, amounted to a prima facie showing.
Magistrate Judge Nowak found insufficient evidence offered in support of Plaintiff's claim that the Court also had specific personal jurisdiction over Defendant. But because minimum contacts with Texas were established by virtue of the Court's general personal jurisdiction over Defendant, and Defendant was unable to show that this Court's exercise of personal jurisdiction over it would otherwise transgress traditional notions of fair play and substantial justice, she determined that this Court's exercise of personal jurisdiction over Defendant complies with the Texas long-arm statute insofar as the requirements of the Due Process clause have been met. Because these findings are neither clearly erroneous nor contrary to law, the Court adopts Magistrate Judge Nowak's recommendation that this Court deny Defendant's Amended Motion to Dismiss for Lack of Personal Jurisdiction.
In this regard, she noted that contracting with a resident of the forum state, mailing payment checks to Texas, and exchanging phone calls and emails with Plaintiff in Texas did not demonstrate purposeful availment of the benefits and protections of Texas law.
CONCLUSION
It is therefore ORDERED that the Report and Recommendation of the United States Magistrate Judge be ADOPTED IN ITS ENTIRETY.
It is further ORDERED that Defendant's Amended Motion to Dismiss for Lack of Personal Jurisdiction be DENIED.