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On July 15th, 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.
From Andrews Kurth's Appellate Record Blog:
© 2012 Andrews Kurth LLPAbout the Author
