Crouch Railway Consulting, LLC v. LS Energy Fabrication, LLCAnnotate this Case
The Supreme Court affirmed the decision of the court of appeals reversing the judgment of the chancery court dismissing this complaint against a Texas company for lack of personal jurisdiction, holding that the exercise of specific personal jurisdiction was constitutionally permissible.
The Texas company contracted with a Tennessee civil engineering company for services related to the potential construction of a railcar repair facility in Texas. When the Texas company failed to pay in full, the Tennessee company filed a breach of contract action in Tennessee. The chancery court dismissed the complaint, concluding that the Texas company lacked the minimum contacts necessary for the exercise of personal jurisdiction and that requiring the Texas company to litigate in Tennessee would be unreasonable and unfair. The court of appeals reversed. The Supreme Court affirmed, holding (1) the Tennessee company established a prima facie case for the valid exercise of personal jurisdiction over the Texas company; and (2) the exercise of jurisdiction was fair and reasonable.
Authoring Judge: Justice Jeffrey S. Bivens
Trial Court Judge: Judge Joseph A. Woodruff
The issue in this appeal is whether a Tennessee court may exercise specific personal jurisdiction over a Texas corporate defendant involved in a contractual dispute with a Tennessee company it chose to perform specialized professional services. A Texas oil-drilling company elected to contract with a Tennessee civil engineering company for custom design and consulting services related to the potential construction of a railcar repair facility in Texas. The Tennessee company performed the services primarily out of its principal place of business in Tennessee. When the Texas company failed to pay in full, the Tennessee company filed a civil action in Tennessee for breach of contract and unjust enrichment. The Texas company moved to dismiss the complaint for lack of personal jurisdiction. See Tenn. R. Civ. P. 12.02(2). The Williamson County Chancery Court granted the motion, finding (1) that the Texas company lacked the minimum contacts necessary for the exercise of specific personal jurisdiction, and (2) that requiring the Texas company to litigate in Tennessee would be unreasonable and unfair. The Court of Appeals reversed, relying primarily on Nicholstone Book Bindery, Inc. v. Chelsea House Publishers, 621 S.W.2d 560 (Tenn. 1981), cert. denied, 455 U.S. 994 (1982). Although we find Nicholstone to be consistent with our opinion today, we base our review on contemporary jurisprudence in this area of the law. We hold that, consistent with the Due Process Clause of the Fourteenth Amendment, the Tennessee company established a prima facie case for the valid exercise of personal jurisdiction over the Texas company. Additionally, the exercise of jurisdiction would not be unfair or unreasonable. Therefore, we affirm the decision of the Court of Appeals and remand this case to the trial court for further proceedings.