Michiana Easy Livin' Country Inc. v. Holten

The court disapproves of those opinions holding that 1. specific jurisdiction is necessarily established by allegations or evidence that a nonresident committed a tort in a telephone call from a Texas number, or that 2. specific jurisdiction turns on whether a defendant's contacts were tortious rather than the contacts themselves.

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Click here for the full text of this decision FACTS:James Holten decided to buy a $64,000 Coachmen recreational vehicle sight unseen. Eschewing every RV dealer in Texas, he sought a lower price from Michiana Easy Livin’ Country, Inc., an outlet store that only did business in Indiana. Holten called Michiana in Indiana, sent payment to Indiana, paid for delivery from Indiana, and agreed to resolve every dispute in Indiana. But when a dispute actually arose, he filed suit in Texas. The trial court and court of appeals denied Michiana’s special appearance. HOLDING:The court reverses the court of appeals’ judgment and renders judgment dismissing the claims against Michiana for want of jurisdiction. Michiana did not place large numbers of RVs in a stream of commerce flowing to Texas. Nor is there any evidence of any additional conduct � Michiana did not design, advertise or distribute RVs in Texas. “Exercising jurisdiction here would go far beyond anything we have approved in other commercial cases.” The U.S Supreme Court has answered the question whether a single contract with a Texas resident can automatically establish jurisdiction � “the answer clearly is that it cannot.” Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985). Michiana anticipated some profit from this single sale, at least until the litigation started. But “financial benefits accruing to the defendant from a collateral relation to the forum State will not support jurisdiction if they do not stem from a constitutionally cognizable contact with that State.” World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980). The court of appeals affirmed on the basis of two contacts between Michiana and Texas: 1. misrepresentations Michiana allegedly made in response to a phone call from Holten; and 2. Michiana’s arrangements with a shipper to deliver the RV to Holten for use in Texas. The court finds neither is sufficient. “The court below joined many of its sister courts in stating the following as a rule of jurisdiction:”If a tortfeasor knows that the brunt of the injury will be felt by a particular resident in the forum state, he must reasonably anticipate being haled into court there to answer for his actions.’ But neither this Court nor the United States Supreme Court has ever said so.” Several problems arise if jurisdiction turns not on a defendant’s contacts, but on where it “directed a tort:” 1. it shifts a court’s focus from the relationship among the defendant, the forum and the litigation to the relationship among the plaintiff, the forum and the litigation; 2. directed-a-tort jurisdiction confuses the roles of judge and jury by equating the jurisdictional inquiry with the underlying merits; 3. if directing a tort at Texas is enough, then personal jurisdiction arises when plaintiffs allege a tort, but not when they allege breach of contract; 4. changes in technology have made reliance on phone calls obsolete as proof of purposeful availment (while the ubiquity of “caller ID” may allow nonresidents to know a caller’s telephone number, that number no longer necessarily indicates anything about the caller’s location). The court disapproves of those opinions holding that 1. specific jurisdiction is necessarily established by allegations or evidence that a nonresident committed a tort in a telephone call from a Texas number, or that 2. specific jurisdiction turns on whether a defendant’s contacts were tortious rather than the contacts themselves. OPINION:Brister, J.; Jefferson, C.J., Hecht, Owen and Green, JJ., join. DISSENT:Medina, J.; O’Neill, J., joins. “Today the Court holds that an out-of-state defendant who intentionally defrauds a Texas resident, with full knowledge that reliance and damages will occur in Texas, cannot be made to answer for its conduct in a Texas court simply because the defrauded Texan initiated the phone call. Because the assumption of jurisdiction by Texas courts in this case does not offend the due process clause, I dissent.”

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