BEAUMONT – Texas courts have no business reviewing an action brought by Georgia-based Majors Management and six Louisiana convenience stores, referred to as Store LLCs in the opinion, against a Texas distributor, a Texas appeals court ruled last month.
"We conclude that the Store LLCs and Majors each lacked sufficient minimum contacts with Texas to support the exercise of personal jurisdiction over those entities," Texas 9th District Court of Appeals at Beaumont Chief Justice Charles Kreger wrote in the court majority's opinion issued Feb. 8. "Accordingly, we reverse the trial courts' orders denying the special appearances and render judgment dismissing all of Price's claims against the Store LLCs and Majors for want of personal jurisdiction."
Kreger wrote the 21-page opinion in which Justice Steve McKeithen and Justice Hollis Horton concurred.
The case is rooted in a May 2013 business arrangement which allowed Beaumont-based Price to sell cigarettes and other items wholesale to the Louisiana convenience stores, according to the appeal court's opinion. Majors Management is a Georgia limited liability company and the six convenience stores are owned by separate foreign limited liability companies and are named based on each store's street address, according to the opinion.
"Price filed several lawsuits against various non-resident defendants relating to unpaid invoices, and all but one of the defendants entered special appearances in their respective cases, asserting that Texas courts lacked personal jurisdiction over them," the opinion said. "All of the special appearances were denied [by the trial court], and this interlocutory appeal followed."
Defendants in the case who entered personal appearances when the case was before the 136th District Court in Jefferson County had a point, according to the appeals court's opinion. A Texas court may exercise personal jurisdiction over a non-resident if under the state's Texas long-arm statute if exercising that jurisdiction "is consistent with federal and state constitutional due process guarantees," the opinion said.
The Texas long-arm statute would apply in this case if the non-resident has contracts via mail or in some other way with a Texas resident and "and either party is to perform the contract in whole or in part in this state" or if the non-resident "commits a tort in whole or in part" in Texas, the opinion said.
"The exercise of personal jurisdiction over a non-resident defendant requires first that the non-resident have established minimum contacts with the forum state and also that the exercise of such jurisdiction comports with traditional notions of fair play and substantial justice," the opinion said. "Minimum contacts are sufficient when the non-resident purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of that state's laws."
None of that applied in this case, the appeals court justices opined. Price and company "failed to meet its burden to establish that Majors' communications or activities, individually or cumulatively, were sufficient to demonstrate that it purposefully did business in a Texas forum," the opinion said.
Majors Management also "did not at any point, through any of its agents or employees, physically enter the state," the opinion said. "Rather, all of its contacts with Price were through telephone calls, email messages and wire transfers."