Personal Jurisdiction

In the law, “waiver” is defined as the voluntary relinquishment of a known right. Lawyers waive defenses and legal argument in courts more often than you might think. Sometimes it’s intentional, and sometimes it’s not. Sometimes it’s the result of the lawyer’s mistake. A lawyer forgets to raise a defense, or simply overlooks one.

Since a waiver can result from a lawyer’s mistake, the last thing a lawyer ever wants to hear from his opponent in court is that he waived an argument. I was once presenting oral argument in front of a court of appeals, and my opponent began arguing that I waived an argument. When I responded that he in fact had waived his waiver argument by not raising it in the trial court, he got this “deer in the headlights” look. He was stunned. I swear, I thought the guy was going to soil himself right there in the middle of the courtroom.

Much to the dismay of many out-of-state defendants, it is pretty easy to inadvertently waive a challenge to a Texas court’s personal jurisdiction. Unlike subject matter jurisdiction, which cannot be waived, personal jurisdiction (jurisdiction over the defendant) can be waived. And it can happen accidently. In fact, that is usually how it occurs. The defendant or his lawyer files a pleading or motion before filing the special appearance contesting jurisdiction. That will result in a waiver. Or the defendant makes an “appearance” before judgment which violates the rule pertaining to special appearances. That can also result in a waiver of a challenge to personal jurisdiction. Basically, any action by the defendant or his lawyer to invoke the trial court’s judgment on a question other than the court’s jurisdiction, or to seek affirmative action or relief from the court, can potentially result in a waiver.

This is the kind of stuff that keeps lawyers awake at night. Have I done something that might actually hurt my client, when all I’m trying to do is help them? It doesn’t have to be that way. Knowing what actions can constitute a waiver, and what actions will not, is the key. A Texas lawyer experienced in the area of personal jurisdiction knows this minefield and how to safely maneuver through it. He can make sure you don’t “waive” goodbye to your jurisdictional challenge.

Written By: Alex Beard

In a rare move, the Dallas Court of Appeals has levied sanctions against a party for filing a frivolous appeal of a trial court’s order denying that party’s special appearance.  In Estate of Deuel-Nash, 2014 WL 5581044 (Tex. App. – Dallas 2014, n.p.h.), the defendant (Nash) in a probate proceeding filed a plea to the jurisdiction (which is different from a special appearance contesting personal jurisdiction) and later filed a “motion to nonsuit” the plea to the jurisdiction.  The defendant also served a non-party with a subpoena.  The defendant thereafter failed to produce documents in response to a demand from the plaintiff, prompting the trial court to issue an order to the defendant to appear and respond to the plaintiff’s motion to show cause.  In response to that order, the defendant filed a special appearance, contesting the probate court’s jurisdiction over him.

            Before the trial court ruled on the defendant’s special appearance, it held a hearing on the plaintiff’s motion to show cause.   At the hearing the defendant’s lawyer told the judge that he could not respond to the motion to show cause until the court ruled on the special appearance.  The trial judge then stated that he was denying the special appearance, and the next day he signed an order to that effect.  The defendant then filed an interlocutory appeal of that ruling.

            The Dallas Court of Appeals affirmed the trial court’s decision, reasoning that the defendant had made a general appearance in the trial court before filing his special appearance, and thus had waived his special appearance.  His counsel in fact admitted as much at oral argument.  He nevertheless argued that his client’s general appearance did not operate as a waiver of the special appearance as to the motion to show cause because that motion was severable, and because a special appearance can be made as to a severable claim.  The court of appeals held that this argument was waived because it was never presented to the trial court.  It also held that the defendant waived an argument that the trial court ruled on the special appearance without first conducting a hearing on it.

            Having concluded that the defendant made a general appearance and had waived its arguments to the contrary, the court of appeals was asked by the plaintiff/appellee to impose sanctions against the defendant for filing a frivolous appeal – something appellate courts rarely do and don’t like to do.  The court noted that an appeal is frivolous “when the record, viewed from the perspective of the advocate, does not provide reasonable grounds for the advocate to believe that the case could be reversed.”  The court acknowledged that it would impose sanctions “only in circumstances that are truly egregious,” but found that the facts of this case met that standard.  In this connection, the court held that the defendant’s brief made no mention of the fact that he had generally appeared in the probate proceeding.  Due to this “lack of candor” in the briefing, and the frivolousness of the appeal, the court ruled that the appeal was frivolous, and granted the plaintiff leave to submit evidence of at least $ 7,000 in fees, which it apparently intends to award as a sanction.

            As any lawyer will tell you, it always hurts to lose a case.  You try not to take it personally, but it’s easier said than done.  It’s not so much that your ego is bruised; you just feel bad for the client, who has placed his or her trust in you.   But what no lawyer ever wants to face is the specter of sanctions, because that can not only impact your reputation, but can also hit you or your client in the pocketbook.

In past posts I’ve emphasized the danger of waiving a defendant’s challenge to personal jurisdiction.  I’ve also discussed how waiving arguments on appeal can have disastrous effects.  One can find no better example than the Deuel-Nash decision.

Don’t let it happen to you.

Written By: Alex Beard

My family spent this past 4^th of July weekend at a bed and breakfast in Granbury, Texas. We haven’t done any “small town” Texas vacations, and this seemed about as good an opportunity as any. Granbury puts on a great celebration of our nation’s birthday in its town square. A big parade, huge fireworks show, vendors on the square (yes, more food trucks, and with Cajun food!) and craft beer from a local brewery. Oh, and Babe’s Chicken Dinner House. For a brief getaway to celebrate the 4^th, it doesn’t get much better than that.

One of the highlights of the trip was an event we weren’t even aware of until we’d already arrived. On the town square was a refurbished opera-house, complete with balcony and beautiful new chandeliers. The theater was staging a play by local actors, one fit for the occasion – 1776. Now, I vaguely remember the movie of the same title released back in the 1970’s, and all I can remember is that I couldn’t make it through the movie without falling asleep. A lot of talking and arguing by guys wearing white wigs. I was just a teenager and so I wanted ACTION. Couldn’t they have stuck in just a few Revolutionary War battles to spice things up?

Maybe it’s just a function of age, but the live theater performance of 1776 in Granbury was a much different experience. I didn’t fall asleep this time, despite having thrown back a few cold ones from Revolver Brewing Company. And to be sure, the performances were great, but what struck me the most was the historical perspective I walked away with. I guess on some conscious level I always knew that John Adams, Thomas Jefferson, and our other founding fathers were what Bill and Ted would call “righteous dudes,” but I never really thought about what they were up against. They knew that if they failed they’d be tried and put to death as traitors. What cojones they had! I left the theater thinking about what a different path our country might be on right now if just a few members of Congress had their guts.

Although our founding forefathers gave us much to be thankful for and to celebrate, they didn’t give us the 14^th Amendment and the due process clause. That came much later, in 1868. I’ve never thought about that until we started driving back home from Granbury. With the family in tow and already talking about whether to make “the 4^th in Granbury” a family tradition or else vacation outside Texas next year, I got to thinking about the practical implications of our decision, in ways I had not thought of before.

So much of personal jurisdiction law is devoted to determining whether the out-of-state defendant has “minimum contacts” with the state in which suit is filed (the forum state). The question often boils down to whether the court can assert jurisdiction over the non-resident without violating what the U. S. Supreme Court calls “traditional notions of fair play and substantial justice. ” But there is a much easier way to obtain jurisdiction over a non-resident defendant without engaging in these court battles.

That way is by serving the defendant with suit papers while the defendant is physically present within the forum state. It does not matter if the defendant happens to be in the state for just a few minutes, or if that person is present within the state for reasons unrelated to the lawsuit. What matters is that the defendant be within the physical territorial limits of the state. If the party wanting to sue can find the defendant physically within the state in which suit was filed, and can serve him with suit papers there (usually with the help of a process server), then viola, jurisdiction over the non-resident defendant exists. It’s virtually automatic.

Think about the implications of that for a just a minute. A father sues for divorce in New Jersey where he resides and where the couple used to reside, and the mother files for divorce in California, where she now resides with the kids. The father travels to California on business, and afterwards decides to take one of the kids to San Francisco for the weekend. When he returns to drop off the kid, he’s served with suit papers in the California suit filed by the wife. Boom, the California court has jurisdiction over him. It simply doesn’t matter that the father has no “minimum contacts” with California. And it does not matter that he was not in California to discuss the divorce. What matters is that he was physically present in the state and was served with suit papers while there. That’s all that 14^th Amendment “due process” requires. So the father must hire an attorney in California and litigate the divorce there. Bummer (at least for the father).

There are those of you out there thinking, “that’s just not fair,” or “that just can’t be the law. ” I assure you it is the law. And for those of you who might be thinking, “that’s just a drummed up hypothetical that has no basis in reality,” I assure you it is not. It’s from a real case — and not just any case. This is not some random ruling handed down by a federal judge who should have retired long ago or by some state judge whose cheese has fallen off the cracker. It’s from the United States Supreme Court, see Burnham v. Superior Court of California, 495 U. S. 604 (1990), and has been the law for as long as, well, the 14^th Amendment has been around.

The irony in all of this is that the Supreme Court in Burnham based its holding on principles taken from “English common law practice. ” That’s right, it comes from the law of Great Britain. So we can “thank” Great Britain for at least one principle that is now firmly entrenched as U. S. personal jurisdiction law – a principle referred to as “transitory” personal jurisdiction.

Personal jurisdiction is often a hotly contested issue in courts. Nobody likes to get sued, and they especially don’t like to get sued outside their home state. And plaintiffs don’t like to have to file lawsuits outside their home state. So it’s a little surprising to me that more plaintiffs’ attorneys do not pour more of their resources into locating and serving the defendant at a time when the attorney knows the defendant will be physically present within the state in which suit is filed. Let’s face it, these days with so many advances in technology it’s not too hard to know where a particular person is going to be at any given moment.

Travelling to a state for a business meeting with someone or a company that might be planning to sue you there? Better think twice before agreeing to attend in person. Got a connecting flight through a city where you know someone might be trying to sue you? Better be looking over your shoulder as you pass through the security checkpoints. Planning on vacationing to a state where someone has threatened you with legal action? Better be careful. A strange man with suit papers in hand could be waiting for you as you check into the hotel.

While the law of personal jurisdiction continues to evolve, jurisdiction based on physical presence is not about to change. There are some limited exceptions to the rule which some states recognize. For example, some courts have enacted laws that prevent a plaintiff from”tricking” someone into going into the forum state so that they can be found and served with suit papers. But for the most part,if you’re found there, you can be served there and will have to defend the lawsuit there.

I can’t speak for the rest of my family, but for me a “family tradition” of spending every 4^th of July in Granbury is looking better all the time.

Written By: Alex Beard

I was raised in the deep South during the 1970’s. One of my all-time favorite movies, which was filmed during that same time period and at a location not too far from where I grew up, is Deliverance. It tells the story of four men who go on a river rafting trip down the Chattooga River, only to run into some mountain men who don’t exactly welcome them with open arms. In the most famous scene (“squeal like a pig”) one of the mountain men rapes a member of the group. But the scene that sticks with me the most is the one that immediately follows.

The group is arguing what they should do now that they’ve killed the rapist. Do they notify the local police and tell them what happened, or do they just keep quiet, bury the body, and hope no one ever finds out? One of the men argues for telling the police. “It is a matter of the law!” he yells. The Burt Reynolds character yells back, “The law? What law? Where’s the law?” He goes on, “And I’ll be damned if I’m gonna stand trial here when this man’s aunt or uncle, maybe his mommy or daddy, is sittin’ in the jury box!” The men end up taking a vote, and they decide to bury the guy and leave the State of Georgia – for good.

What always struck me about that scene was how scared the men were about the prospect of having to stand trial far away from home. Even though they would probably have had a good defense to any murder charges, they weren’t about to take any chances. They understood that the locals would probably view them as outsiders and convict. Their fear was so great that it overcame any desire to do what most people would consider to be the “right thing” to do, which would be to call the police and “let the justice system work.”

What the group understood is that the justice system doesn’t always work, and certainly not perfectly. But more importantly, they also understood the power that courts have over the people that are within their reach. In the law, this power is referred to as “personal jurisdiction.” It is the power of a court over a person to make rulings and enter binding judgments. It is an awesome power. And it is the driving force behind this legal blog.

To be sure, the law of personal jurisdiction is not for everyone. It’s procedural in nature, and for that reason alone many lawyers don’t want anything to do with it. They find it dry and boring. But not me. To me it’s fascinating for a host of reasons, not the least of which is that every case is different. The issues it raises are often complex, sometimes cutting edge, and occasionally bleed into more substantive areas of the law. It involves Constitutional due process rights and principles of fundamental fairness. It’s a perfect fit for a lawyer like me who likes to bring all of his analytical and advocacy skills to bear for a client.

Since the concept of personal jurisdiction applies to individuals and businesses alike, the issue whether a court has personal jurisdiction over one of the parties can arise in just about any type of lawsuit. It comes into play not only when individuals are dragged into courts outside their home state, but also when businesses are sued in states where they have no substantial business presence or meaningful business contacts.

Personal jurisdiction is generally not a hot topic among lawyers, so you’re not likely to overhear them arguing the finer points over dinner or at some lawyer hangout. What most lawyers know about personal jurisdiction they learned in law school. And often to their delight, most of what they learned poured out of their ears as soon as they exited the bar exam. Sure, some lawyers might still vaguely recall the concept of “minimum contacts,” but for most others it’s likely a distant memory. I’m one of the few who still finds it interesting and challenging, especially when I get to apply its principles in real life cases.

While you might think this area of the law is already well settled, I assure you it is not. The law of personal jurisdiction is constantly evolving. That’s partly because our world is changing. Technological advances and new means of communication are impacting how courts analyze these issues. New decisions are being released by the courts every day. Just within the past several weeks, the U.S. Supreme Court has issued two new decisions in this area, Daimler AG v. Baumanand Walden v. Fiore.

My love and passion for this area of the law is what prompted me to create this blog. In the coming months, we’ll explore these legal decisions and other aspects of personal jurisdiction in more detail. I’ll share some of my personal insights which come from having been involved in cases where my client successfully challenged personal jurisdiction. And along the way I’ll offer some practical tips to out-of-state lawyers who might have a client that has been sued in Texas. I hope you’ll join me for what should be an interesting journey!

Written By: Alex Beard

I love food trucks. They’re just cool. It’s no wonder they’re the latest craze among foodies. Most of them put out surprisingly good fare (not just street tacos, but all types of cuisine) and what’s really nice is they often come to you. But before there was social media, you never knew where a food truck was going to be. Now with Twitter and other social media, you can know where a particular food truck will be at any given time. There are even apps to help you find them.

Since I’m a big fan of food trucks, I couldn’t wait to see the new movie Chef. It tells the story of a renowned chef at a Los Angeles bistro who’s getting ready for a big night because a famous food critic is coming to review his latest work. The chef wants to offer a special menu, but the owner, played by Dustin Hoffman, puts his foot down and instructs the chef to go with the crowd-pleasing favorites. The chef gives in, and as you might guess, disastrous results follow. The critic hates the food and writes a scathing review, personally attacking the chef. The review makes its way to the internet and Twitter, and this sets off a chain of events that drive the remainder of the plot. I don’t want to spoil it for you, but let’s just say the chef doesn’t take the criticism particularly well, and this leads to his quick ouster from the restaurant. It also dashes any hopes he may have had of landing another job in town.

So what does the down-on-his luck, out of work famous chef do? He flies to Miami with his ex-wife and 10 year old-son and finds an old, beaten down and filthy food truck. With the idea planted by his ex-wife, and the help of his son and an assistant chef from his old restaurant, the chef transforms the truck into an amazing Cuban restaurant on wheels. In the process, he transforms his relationship with his son. Together the three embark on a cross-country trip, stopping in culinary meccas like New Orleans (my old stomping ground) where they sample beignets at Café Du Monde, and Austin, Texas, where they pick up a few briskets at Franklin’s Barbecue (I still haven’t been able to get in there before they run out). In the process, the chef not only finds his true calling, but also reunites with his family. It’s a great story.

What does the movie have to do with personal jurisdiction, you ask? Not a whole lot, frankly, at least not directly. But as I was watching the film, I couldn’t help but wonder how a court would analyze the issue of personal jurisdiction with respect to a business on wheels, one that travels from state to state, with no fixed presence in any one state. What if, God forbid, the chef had given a tourist in the French Quarter a life-threatening case of food poisoning? Since I’ve personally enjoyed the toilet-hanging experience of salmonella food poisoning, I wondered in what state(s) the food truck business and its chef could be sued.

Based on recent clarifications in the law, the answer became pretty apparent. In Daimler AG v. Bauman, 134 S.Ct. 746 (2014), the U.S. Supreme Court held that “general” jurisdiction exists in the state where the defendant is considered “at home.” Well, that standard doesn’t really apply to a business that is constantly on the move and has no real home. Although the food truck would be titled and licensed in a particular state, those “contacts” might not be substantial enough to trigger a finding of general jurisdiction if the truck doesn’t do a lot of business there.

If a court were to have jurisdiction over a food truck in this scenario, it would likely be in the form of “specific,” not general jurisdiction. Specific jurisdiction is “case-linked” jurisdiction. Another recent decision from the U.S. Supreme Court, Walden v. Fiore, 134 S.Ct. 1115, (2014), makes clear that the focus of a court’s analysis with respect to this type of jurisdiction is where the defendant’s activity occurs that gives rise to the claim. The state where the plaintiff happens to reside, or feels the effect of the defendant’s conduct, is largely if not completely irrelevant.

So in our food truck hypothetical, our tourist plaintiff wouldn’t be entitled to sue the food truck business in his or her home state, even if he or she didn’t become ill until arriving home (what a fun plane ride that would be). The plaintiff would have to sue the food truck business in Louisiana, where the food was prepared and served. And the food truck business would have to answer and defend the suit in Louisiana since it established “minimum contacts” in that state by making the conscious decision to enter the state and serve food there. It would not matter that the food truck was long gone from Louisiana by the time the plaintiff became ill. The proper forum would still be Louisiana.

This is all “food for thought,” but doesn’t this discussion just make your mouth water?

Bon appetit!

Written By: Alex Beard