Construcciones Integrales del Carmen, S.A. de C.V. v. Goodcrane Corporation et al, No. 4:2008cv03427 - Document 38 (S.D. Tex. 2009)
Court Description: MEMORANDUM AND OPINION entered DENYING Defts. 19 MOTION to Dismiss 1 Complaint,.(Signed by Judge Lee H Rosenthal) Parties notified.(leddins, )
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etween Harvey, the forum, and the controversy involved in the instant case is nevertheless relevant to our determination.” Id. Harvey’s contacts with Texas were not “random,” “fortuitous,” or “attenuated,” but instead demonstrated that Harvey had “maintained constant and extensive personal and business connections with Texas throughout his adult life.” Id. The court held that although the question was a close one, Harvey’s Texas contacts supported the exercise of general personal jurisdiction by a Texas court. Id. Other circuits have upheld the exercise of general personal jurisdiction when the nonresident defendant conducted substantial business activities in the forum state. In LSI Indus. v. Hubbell Lighting, Inc., 232 F.3d 1369, 1375 (Fed. Cir. 2000), the court found general jurisdiction based on the defendant’s employment of multiple distributors in the state and generation of millions of dollars in annual revenues from in-state sales. In Metropolitan Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560 (2d Cir. 1996), the court held that the nonresident defendant had sufficient contacts with 11 Vermont to support general jurisdiction. Over a four-year period, the defendant’s contacts with Vermont included $4 million in sales, ongoing relationships with five authorized dealers for its products in the state, product support for those dealers, national advertising that reached Vermont, direct marketing to at least three Vermont firms, and more than one hundred visits by employees to Vermont. Id. at 570. The defendant, however, owned no property in Vermont and did not control its authorized dealers there. Id. at 572. The court acknowledged that any one of these contacts alone would be insufficient, but held that “when taken together, [the contacts] are sufficient to establish general jurisdiction.” Id. at 570 (emphasis in original)1; see also Coremetrics, Inc. v. Atomic Park.com, LLC, 370 F.Supp.2d 1013, 1019 (N.D. Cal. 2005) (holding that court had general jurisdiction over nonresident defendant because of the “substantial proportion of sales made to California by” the defendant). By contrast, if the defendant’s business activities in the forum state are a small percentage of its overall business, general jurisdiction is lacking. See, e.g., Hockerson-Halberstadt, Inc. v. Propet USA, Inc., 62 Fed. Appx. 322, 337 (Fed. Cir. 2003) (concluding that there was no general jurisdiction over defendant who made only 0.00008 percent of its sales to forum state); Injen Tech. Co. Ltd. v. Advanced Engine Mgmt., 270 F.Supp.2d 1189, 1194 (S.D. Cal. 2003) (noting that sales by defendant to forum state, which “account [ed] for only 2% of its total business, are not the kind of ‘systematic and continuous’ contacts that would warrant the exercise of general jurisdiction”). Some courts have held that general jurisdiction is appropriate when the nature of a 1 The court nevertheless dismissed the case because jurisdiction would not comport with traditional notions of fair play and substantial justice. Neither the plaintiff nor the defendant resided in Vermont, the state of Vermont had no discernable interest in the case, and the plaintiff's only interest in Vermont as a forum seemed to be a generous statute of limitations. Id. at 570. 12 defendant’s forum-state contacts is central to its business. In Lakin v. Prudential Securities, 348 F.3d 704 (8th Cir. 2003), the defendant was a federally chartered savings bank with its principal place of business in Georgia. The defendant was sued in Missouri for claims arising from a multimillion dollar, multistate fraud. The court held that the Georgia-based defendant’s contacts with Missouri were continuous and substantial, based on the fact that its $10 million home-equity loan portfolio in the state implied multiyear lending relationships with “hundreds, if not thousands of Missouri residents.” Id. at 709. The court observed that although the defendant did not conduct a large percentage of its business in Missouri, the home-equity market in that state appeared to be central to the defendant’s business. The court was unable to tell from the record whether the loans, which were made in Georgia, were in fact secured by property in Missouri, which was likely. The court remanded for additional jurisdictional discovery, concluding that if the loans were secured by Missouri property, general jurisdiction would be appropriate because the home-equity market there would be central to the defendant’s business. Id. at 709–710; see also Provident Nat’l Bank v. Lehman Mgmt. Co., 819 F.2d 434, 438 (3d Cir. 1987) (holding general jurisdiction by a Pennsylvania court over a nonresident defendant proper because although the defendant had no property in Pennsylvania and conducted no advertising and only a small percentage of its business in that state, “the nature of [defendant’s] contacts with Pennsylvania . . . was central to the conduct of its business.”). In the present case, ABC’s forum contacts are more analogous to those of the defendants in Perkins and Holt than in Submersible or Johnston. As in Perkins, in which the company relocated to Ohio, ABC relocated to Houston after Goodcrane moved its operations to Texas. In their depositions, Patrick and Benjamin Almeda, III testified that they live in Texas and are the only 13 members or managers of ABC and the only individuals who conduct ABC business. Patrick Almeda acknowledged that mail addressed to ABC was sent to his home in Texas. The record evidence supports the conclusion that although ABC was incorporated in Washington, its principal – and only – place of business is in Texas. Similar to Perkins, in which the director did most of his work from the Ohio office, the tax records and lease agreements show that ABC conducts its business in Houston. Moreover, as in Holt, in which the defendant owned real estate in Texas, ABC owns two Texas properties and ABC’s only business is to own and lease property. When this suit was filed, ABC had three properties, one in Washington and two in Texas. ABC did not have a tenant or lease for its Washington property. ABC leased its two Texas properties to Goodcrane, a Texas corporation. ABC’s only business activities are located in Texas. And ABC’s only representatives authorized to conduct business on behalf of the company live and work in Texas. The nature of ABC’s Texas contacts is central to the conduct of its business. Unlike Submersible, in which the only forum-state contact was one contract and the defendant’s headquarters and business were in Mexico City, nearly all of ABC’s business is in Texas. Moreover, unlike Johnston, in which the bulk of the nonresident defendant’s business was done in Canada with a former director who resided but did not work in Texas, the bulk of the business done by ABC is in Texas and the Almedas actively manage the company from a Texas residence. ABC has the required minimum contacts with the State of Texas for general personal jurisdiction. B. Fair Play and Substantial Justice If minimum contacts are shown, jurisdiction exists unless the nonresident defendant can make a compelling case that the exercise of jurisdiction would violate traditional notions of fair play and substantial justice. Wien Air Alaska, Inc. v. Brandt, 195 F.3d 208, 215 (5th Cir.1999). In 14 making this determination, courts consider: (1) the burden on the defendant; (2) the interest of the forum state in adjudicating the dispute; (3) the plaintiff's interest in obtaining convenient and effective relief; (4) the interstate judicial system’s interest in obtaining the most efficient resolutions of controversies; and (5) the shared interest of the several states in furthering fundamental social policies. Bullion v. Gillespie, 895 F.2d 213, 216 (5th Cir. 1990). Subjecting ABC to jurisdiction in a Texas court would not offend traditional notions of fair play and substantial justice. The Court in Perkins concluded that “if an authorized representative of a foreign corporation be physically present in the state of the forum and be there engaged in activities appropriate to accepting service or receiving notice on its behalf, . . . there is no unfairness in subjecting that corporation to the jurisdiction of the courts of the state through such service of process upon that representative.” 342 U.S. at 445. Similarly, in Holt, the court found that because the defendant was in Texas for a golf tournament during his trial, the burden of litigating in Texas was slight. 801 F.2d at 780. The burden on ABC of litigating this case in Texas is similarly slight because ABC’s sole members, Patrick and Benjamin Almeda, III, live and work in Texas and have consented to personal jurisdiction individually. Patrick Almeda is the registered agent of ABC and conducts business activities on behalf of ABC in Texas. This state has an interest in adjudicating this dispute because ABC does business in Texas with a Texas company and is directed by Texas residents. See Central Freight Lines Inc. v. APA Transport Corp., 322 F.3d 376 (5th Cir. 2003). Given that Texas has a legitimate interest in adjudicating this case and that the burden on the defendant is slight, the exercise of jurisdiction in Texas does not offend fair play or substantial justice. 15 IV. Conclusion ABC has minimum contacts with Texas sufficient to justify general personal jurisdiction in a Texas court. ABC’s motion to dismiss for lack of personal jurisdiction is denied. SIGNED on June 30, 2009, at Houston, Texas. ______________________________________ Lee H. Rosenthal United States District Judge 16
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