Willow Bend v. Downtown ABQ Partners: Tethering Personal Jurisdiction To The Substantive Law

Posted on July 16, 2010 by Kendall Gray

Yesterday, the Fifth Circuit released Willow Bend v. Downtown ABQ Partners, a personal jurisdiction case that will be of interest to commercial practitioners.  The contractual and breach of fiduciary duty claims arose out of a Louisiana real property transaction.  The Court affirmed a dismissal for lack of personal jurisdiction as to a non-signatory individual (Garcia) and the partnership for which that person was the managing partner (Downtown ABQ).   Judge Higginbotham wrote the Court's opinion. 

Determining minimum contacts can sometimes be like trying to nail jello to a tree.  But Judge Higginbotham (in characteristic fashion) gives the analysis some structure. 

Judge Higginbotham's take on minimum contacts requires a nexus between:

  • the forum;
  • a particular party; and
  • a substantive legal duty actually pertaining to that specific party. 

The nexus was present with regard to the company that actually entered into the contract.  It did not exist for Garcia, nor for the partnership managed by Garcia.  The reason: the duties alleged were tethered to the contract to which they were not a party and did not apply to them.

This paragraph from the opinion sums it up:

[The] written agreement is no throwaway: in fact, it is the critical forum contact in this case, and the linchpin of the district court’s exercise of jurisdiction over Blue Dot. Willow Bend’s winning breach of contract and breach of fiduciary duty claims against Blue Dot arose out of and resulted from Blue Dot’s primary contact with the state of Louisiana—its contract with Willow Bend. Without a contract tying the non-signatories Garcia and Downtown ABQ to Willow Bend’s claims against them, however, those claims share an inadequate nexus to the forum: . . .  Willow Bend sued for breach of contract and breach of fiduciary duty, after all, and a defendant cannot be said to have breached a contract it never made or to have skirted a duty it never assumed. . . . Willow Bend contracted with Blue Dot—and Blue Dot alone—and it is with Blue Dot that its claims for breach of contract and breach of fiduciary duty must lie.

Thus, jurisdiction and the merits are enmeshed because jurisdiction is "claim specific." Had the breach of a different legal duty that applied to the non-signatories been alleged (e.g., fraud) a different result might have obtained. 

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5th Circuit Update: Jurisdiction

Posted on April 11, 2010 by Kendall Gray

That incredibly geeky sound you heard over the weekend was the sound of delight as civil procedure profs and appellate lawyers thrilled over the new Fifth Circuit opinions.  What could be better than federal subject matter jurisdiction involving alienage, diversity and removal?

  •  In Halmekangas v. State Farm the defendant removed a case to federal court that had no independent basis for federal subject matter jurisdiction, arguing that it was related to a Katrina coverage case already pending in federal court and would fall under the court's "supplemental jurisdiction" (28 U.S.C. 1367).  The Fifth Circuit said, "Interesting argument, but no. Every case must have its own basis for federal jurisdiction before non-federal claims may hitch a ride."  Judge Higginbotham wrote the opinion. 
  • Berik Stiftung v. Plains Marketing involved the wonderfully arcane question of how a Lichtensteinian entity ought to be treated for determining diversity of citizenship jurisdiction.  Berik Stiftung argued that it was like a trust under U.S. law and the court should consider only the citizenship of its beneficiaries (i.e., Florida v. Canada and Texas).  Plains argued that Berik Stiftung was more like a corporate person so that the court should consider the state of its incorporation (i.e. Lichtenstein v. Canada and Texas).   This would mean damn foreigners on both sides of the "v," no diversity of citizenship and no federal jurisdiction. 

Plains won.  Judge DeMoss wrote the opinion and got to use the words "res nova" and  “juristische Person.”  Nice touch, that.

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Fifth Circuit Update

Posted on March 23, 2010 by Kendall Gray

Well, it's been a quiet week in the United States Court of Appeals for the Fifth Circuit, my home Circuit. 

Actually, the Court has been handing down opinions with such regularity, the sister circuits are starting to take offense because the Mighty Fifth is making them look slothful by comparison.

Yesterday, the court handed down three published opinions, two of which might have interest to civil practitioners.  Very briefly:

  • In Carmona v. Southwest Airlines Co. (pdf), the Court reversed the district court's decision to grant judgment as a matter of law on a flight attendant's ADA claim.  The flight attendant's psoriatic arthritis had caused the employee to miss work.  The jury had found in favor of the employee on his ADA claim but had rejected his claim under Title VII.  Judge Garwood wrote the opinion.
  • And my personal favorite, Wells v. Smithkline Beecham (pdf).  The Plaintiff brought a products liability claim under Texas law and argued that Smithkline Beecham ought to have warned him that Requip would cause compulsive gambling, resulting in millions of dollars of gambling losses.  The Court affirmed the trial court's Daubert ruling finding that the expert testimony linking compulsive gambling to Requip was not up to snuff.  Judge Higginbotham wrote the opinion.   

 Daubert is one of my favs, so watch this space for some further analysis--unless the Mighty Fifth keeps up this pace, in which case there will be insufficient time!

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