Rieder v. Woods (Opinion)Annotate this Case
The Supreme Court reversed the decision of the court of appeals holding that a forum-selection clause in a contract bound all involved parties even where the only signatories did not assert any claims against one another, holding that the court of appeals erred in construing the contract containing the forum-selection clause and a contract that did not as a single, unified instrument and by applying the transaction-participant enforcement theory.
Personal jurisdiction over two nonresident individuals and a nonresident LLC was premised on a forum-selection clause in a contract the nonresident LLC executed with a resident LLC. A signatory LLC sought to enforce the clause against nonsignatory individuals, and nonsignatory individuals sought to enforce the clause against nonsignatory individuals and a signatory LLC. The court of appeals concluded that all defendants were amenable to suit in Texas regardless of their status as a signatory. The Supreme Court reversed, holding (1) the separately executed instruments considered by the court of appeals were not part of a single, unified instrument and, therefore, must be construed separately; and (2) the transaction participant enforcement theory relied upon by the court of appeals was inapplicable.