Opinion
Civil Action No. 3:01-CV-1180-M.
December 3, 2001.
MEMORANDUM OPINION AND ORDER
Before the Court is Defendant's Motion to Dismiss for Lack of Personal Jurisdiction or, Alternatively, to Transfer Venue, filed on September 5, 2001 in the above-entitled action. Having considered Defendant's motion, along with the Response and Reply filed thereto, the Court is of the opinion that Defendant's motion should be DENIED, for the reasons stated below.
I. Factual Predicate
Plaintiff Lexington Services Associates, Ltd. ("Lexington"), a Texas limited partnership, acts as a provider of reservation services for hotels. In 1996 and 1997, Lexington entered into two Reservation Service Agreements with Defendant 730 Bienville Partners, Ltd. ("Bienville"), a Louisiana limited partnership that operates two hotels in New Orleans. The contracts are virtually identical in their language. In both, Lexington agreed to provide its reservation services in exchange for 6% of the gross revenues generated for the hotels by the Lexington reservation system. The parties agreed that "[a]ll transactions under [these] Agreement[s] shall take place at and all amounts due under this Agreement are due and payable . . . at Lexington's offices in Irving, Texas, USA." Additionally, the contracts contained a choice-of-law provision that stated: "THE LAWS OF THE STATE OF TEXAS SHALL GOVERN THIS AGREEMENT."
On June 19, 2001, Plaintiff filed suit in this District, alleging that Bienville breached the two hotel reservation contracts by failing to pay Plaintiff and also requesting declaratory judgment on the enforceability of the provisions within the agreements requiring Defendant to provide thirty days notice of termination of the agreements and requiring automatic renewal of the contracts if Defendant failed to timely notify Plaintiff of the termination. On July 5, 2001, Bienville filed suit in the Eastern District of Louisiana, alleging that it suffered damages because Lexington breached the contracts by failing to provide the requisite reservation services ("the Louisiana case").
On September 5, 2001, Bienville filed with this Court a Motion to Dismiss for Lack of Personal Jurisdiction, or, Alternatively, to Transfer Venue. In it, Defendant argues that it has had no contacts with Texas, either specific or general, that would entitle this Court to assert personal jurisdiction over it, and that even if the Court does find it has personal jurisdiction over Bienville, it should still transfer the case to the Eastern District of Louisiana, the more proper venue for this case and the location of the other suit. In its Response, Lexington urges that this Court does have jurisdiction over Defendant, because of the choice-of-law provisions in the contract, the presence of the clauses specifying that all transactions under the agreements are to have occurred at Plaintiff's Irving office, and because at least a small measure of Bienville's clientele are Texas residents.
II. Personal Jurisdiction
In determining whether it has personal jurisdiction over Defendant, the Court must conduct a dualistic state/federal inquiry: The Court must first determine whether it has jurisdiction under the Texas long-arm statute, Texas Civil Practice and Remedies Code § 17.042; second, it must decide whether assertion of jurisdiction over Defendant satisfies the dictates of the Due Process Clause. "The Texas long-arm statute authorizes the exercise of jurisdiction over, inter alia, those who do business in Texas, which includes contracting with a Texas resident where either party is to perform the contract in whole or in part in Texas." Jones v. Petty-Ray Geophysical Geosource, Inc., 954 F.2d 1061, 1067 (5th Cir. 1992). Because this case centers around two contracts made between the out-of-state Defendant and a Texas resident, and the contracts were to be performed, at least in part, in this state, Texas long-arm jurisdictional requisites are satisfied.
The Due Process Clause permits the exercise of personal jurisdiction over a nonresident defendant if
(1) [the] defendant has purposefully availed himself of the benefits and protections of the forum state by establishing "minimum contacts" with the forum state; and (2) the exercise of jurisdiction over that defendant does not offend "traditional notions of fair play and substantial justice." To comport with due process, the defendant's conduct in connection with the forum state must be such that he "should reasonably anticipate being haled into court" in the forum state.Latshaw v. Johnson, 267 F.3d 208, 211 (5th Cir. 1999). Two categories of conduct are sufficient to constitute requisite minimum contacts with the forum state: acts specific to the instant suit, which grant a court specific jurisdiction over a defendant; or transactions, although unrelated, that are of such a "continuous and systematic" nature as to be "sufficient to allow a court to assert [general] jurisdiction over the party." BeautiControl, 2001 WL 1149360, at *8.
The Court begins by finding that it does not have general jurisdiction over Defendant, as the mere fact that some of Bienville's hotel customers may be Texas citizens is not a sufficient basis for a finding of general jurisdiction. See Gardemal v. Westin Hotel Co., 186 F.3d 588, 596 (5th Cir. 1999). In contrast, the Court finds that Plaintiff has proffered evidence sufficient to support a finding of specific jurisdiction over Defendant. Specifically, that the agreements at issue contain choice-of-law clauses and provisions requiring that all transactions under the contracts take place at Plaintiff's Irving office weigh heavily in favor of a finding of jurisdiction. The Fifth Circuit has held:
Although a single act by the defendant directed at the forum state can be enough to confer personal jurisdiction if that act gives rise to the claim being asserted, entering into a contract with an out-of-state party, without more, is not sufficient to establish minimum contacts. Rather, in a breach of contract case, to determine whether a party purposefully availed itself of a forum, a court must evaluate "prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing."Latshaw v. Johnston, 167 F.3d 208, 211 (5th Cir. 1999). Taking into account the above-stated factors, the Court determines that the choice-of-law and place-of-performance provisions in the contracts, along with the Court's finding that the contracts were, in actuality, at least partially performed in this District, are, when taken together, sufficient to vest this Court with jurisdiction over Defendant.
Plaintiff's Chief Financial Officer, Shawn Heaton, testified in an affidavit submitted to the Court that Brett Smith, President of Bienville, and Anthony D'Angelo, Vice President of Bienville, have traveled to Texas on more than one occasion to conduct business with Plaintiff. See Heaton Aff. ¶ 8.
Although Bienville correctly argues that a choice-of-law provision, standing alone, is insufficient to allow assertion of jurisdiction over a party, both the Supreme Court and the Fifth Circuit have emphasized that such clauses can and should be taken into account as a factor in a court's jurisdictional analysis. See, e.g., Burger King Corp. v. Rudzewicz, 471 U.S. 462, 482 (1985) ("Nothing in our cases . . . suggests that a choice-of-law provision should be ignored in considering whether a defendant has `purposefully invoked the benefits and protections of a State's laws' for jurisdictional purposes."); Jones v. Petty-Ray Geophysical Geosource, Inc., 954 F.2d 1061, 1069 (5th Cir. 1992) ("[T]he law governing the contract, while not necessarily determinative, [is a] relevant factor for determining purposeful activity.").
A finding of specific jurisdiction does not end the jurisdictional inquiry under the Due Process Clause, however. The Court must still evaluate whether assertion of jurisdiction over Bienville offends "traditional notions of fair play and substantial justice." "In this inquiry, it is incumbent on the defendant to present a compelling case that the presence of some consideration would render jurisdiction unreasonable." Jones, 954 F.2d at 1068; see also Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985) ("[W]here a defendant who purposefully has directed his activities at forum residents seeks to defeat jurisdiction, he must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable."). The Fifth Circuit has found that the following factors should be considered in conducting this fairness analysis:
(1) the burden upon the nonresident defendant; (2) the interests of the forum state; (3) the plaintiff's interest in securing relief; (4) "the interstate judicial system's interest in obtaining the most efficient resolution of controversies"; and (5) "the shared interest of the several States in furthering fundamental substantive social policies."Bullion v. Gillespie, 895 F.2d 213, 216 n. 5 (5th Cir. 1990). The Court finds that Defendant has not presented a compelling case that at least some of these factors weigh against a finding that the Court has jurisdiction over it. Defendant argues that these factors mitigate in favor of dismissing the action for want of personal jurisdiction, because (a) Defendant's burden of litigating in Texas would be large, (b) Texas's interest in this litigation is minimal, (c) the plaintiff's interest in securing relief would be protected by allowing Lexington to assert its claims in the Louisiana case, and (d) "the interest of the judicial system . . . would be served most efficiently and effectively by permitting both the parties' claims, all of which arise out of the Reservations Service Agreements, to be brought in . . . the Louisiana [c]ase."
Defendant's contentions regarding these factors do not persuade the Court that it should dismiss the action. Defendant's burden of litigating in Texas is minimal. Although, of course, it would be more convenient for Bienville to defend against Plaintiff's claims in Louisiana, Texas is not a significant distance away from Defendant's place of business. Defendant's assertion that Texas's interest in the litigation is less than Louisiana's is also incorrect. Texas and Louisiana both have interests in the litigation, as the basis for the suit is a contract entered into by residents of both states. Of the two fora, this Court finds that Texas has the greater interest in the case, as the contracts at issue provide that any disputes are to be governed by Texas law, and all transactions between the parties in relation to the contracts were to have occurred in Texas. Third, although Plaintiff's interest in the litigation would most likely be sufficiently protected if this suit were dismissed, because Lexington could assert its claims in the Louisiana suit, Plaintiff should not have to bring its claims in the Louisiana case, which was initiated after Plaintiff brought this suit in Texas. Finally, although the Court agrees that judicial economy would be best served if the two cases were consolidated, it is Defendant who chose to file the Louisiana suit after Plaintiff initiated this action, and its choice to forego assertion of its claims as counterclaims in the instant suit and instead bring them in a separate, and later-filed, action should not be considered a reason for this Court to dismiss this action and force Plaintiff to bring its claims in the Louisiana case. Thus, the Court finds that Defendant has not presented compelling reasons for this Court to dismiss the case on grounds of fundamental unfairness.
The Court does not opine at this time whether the contentions in the Louisiana suit constitute compulsory counterclaims that must be brought in this action, nor whether the suits should be consolidated.
III. Venue
Because the Court finds that it has personal jurisdiction over Bienville, it must next decide whether it should nonetheless transfer the case to the Eastern District of Louisiana, where Defendant's suit is currently pending, under 28 U.S.C. § 1404(a), which provides: "For the convenience of the parties and witnesses, in the interests of justice, a district court may transfer any civil action to any other district or division where it might have been brought." The Fifth Circuit has held that "[t]he district court has broad discretion in deciding whether to order a transfer." Caldwell v. Palmetto State Sav. Bank, 811 F.2d 916, 919 (5th Cir. 1987). The Court declines to transfer the case to the Eastern District of Louisiana, as it finds that the Northern District of Texas is the most proper forum for the action, and interests of convenience of the parties and witnesses, as well as other factors the Court should consider in determining whether to transfer the case under § 1404(a), do not overcome the deference given to Plaintiff's choice of forum. See Robinson v. TCI/US West Comm., Inc., 117 F.3d 900, 908 (5th Cir. 1997).
Another Court within this District has stated the factors that should be taken into account in a Motion to Transfer based on § 1404(a) as follows:
To decide whether a case should be transferred pursuant to § 1404(a)[,] the court takes into account such factors as: (1) plaintiff's choice of forum; (2) the availability of compulsory process for the attendance of unwilling witnesses; (3) the cost of obtaining the attendance of willing witnesses; (4) the accessibility and location of sources of proof; (5) the location of counsel; (6) the relative congestion of the courts' dockets; (7) the accessibility of the premises to jury view; (8) the relation of the community in which courts and the jurors are required to serve to the occurrence giving rise to the suit; and (9) the time, cost, and ease with which the trial can be conducted, and all other practical considerations relative to the trial and determination of the case.Cooper v. Pied Piper Mills, Inc., No. 3:98-CV-1309, 1998 WL 713270 (N.D. Tex. Oct. 5, 1998) (Fitzwater, J.).
For the reasons stated above, the Court finds that it can assert jurisdiction over Defendant and that venue is proper in this District. Therefore, the Court DENIES Defendant's Motion to Dismiss, or, Alternatively, to Transfer Venue.
SO ORDERED.