Wednesday, October 10, 2007

A Perfectly Clear Long Arm Jurisdiction Case :: Weldon-Francke v. Fisher, 06CV0386 (14th Texas Court of Appeals Sept. 11, 2007)

I love Internet long-arm jurisdiction cases: they are a mire of how the judiciary deals with a defendant that has made itself available in every forum everywhere all the time all over the globe. No matter how judges grapple with notions of due process, you always are left with the feeling that one party or another got screwed. And it is wonderful to watch old school judges who grew up driving VWs grapple with this new environment, flipping through one failed metaphor after another in an attempt to pigeon-hole what would be “fair” on the Internet. There are no easy or clear cases on the sliding scale of Internet long arm jurisdiction.

Except this one.

When last we visited Internet long arm jurisdiction, we reviewed a case where a Louisiana court concluded that the advertisement on eBay by a Texas residence of a vehicle, which was delivered in Texas, and which broke down in Texas, and where defendant had no further described contacts with Louisiana other than a couple of phone calls to plaintiff, was sufficient to sustain minimum contacts required for long arm jurisdiction (in contrast to most other eBay jurisdiction cases which conclude that minimum contacts are lacking). This time it’s Texas’ turn.

It would be interesting to attempt to do a correlation between what portion of a state’s GDP comes from high technology, and the outcome of cases such as these. I’ll just throw out the wild unsubstantiated thesis that the greater a state’s economy can be attributed to high tech, the more high tech friendly the jurisdiction common law is. Louisiana’s GDP for computer and electronic product manufacturing for 2005 was apparently $88m while Texas’ was $18,164m. Hum!

Today’s case is Weldon-Francke v. Fisher, 06CV0386 (14th Texas Court of Appeals Sept. 11, 2007). Plaintiff* believed that defendant* had done a poor job on a trust, and filed suit in a Texas court. Here are the geographic facts: plaintiff contacted defendant, a New Hampshire attorney, in NH, requesting that defendant draw up a trust for a NH property, the work on the trust was conducted in NH, the trust was delivered to plaintiff in NH, and the bill for the legal work was mailed to a NH address. Let’s see, did I cover all the contacts with the state of Texas? Yip, that was pretty much it.

Eight years after the NH trust was drawn up, plaintiff had some concerns about the trust, hired a Texas lawyer, and that Texas lawyer contacted defendant. Defendant obtained permission from plaintiff to talk to the Texas lawyer, and discussed the trust with the Texas lawyer by phone and in a letter.

In specific jurisdiction cases, a court can have jurisdiction over an out-of-state defendant where the dispute arises from defendant’s contact with the state in which the court resides. In this case, plaintiff attempts to argue that defendant’s contact with Texas was that defendant knew that Plaintiff was a Texan. You can almost hear the appellate court judge holding back laughter in rejecting this (got any good caselaw supporting your argument, counselor?).

Next, plaintiff argues that the phone call and letter eight years later was the basis of jurisdiction. Well, at least there was a contact here. But the court concludes “the undisputed evidence shows that [defendant] engaged in these telephone calls and sent these letters to answer questions and respond to requests from the [Plaintiff] and their Texas counsel regarding her 1998 legal services.” Defendant is responding to plaintiff’s query; defendant did not purposefully avail itself of the forum of Texas. The court goes on to note that defendant was not paid for the work involved in responding to the Texas lawyer, nor was defendant engaging in any new legal representation. This dispute involved the trust from eight years ago which was conducted entirely in NH. The Court tosses out specific jurisdiction.

But this blog is dedicated to Internet law. We have not even mentioned the Internet yet. So here it goes: in a feeble attempt to establish general jurisdiction (continuous and systematic contacts with a forum), plaintiffs say, “oh, and defendant has a website that can be read in Texas.” Note interestingly enough that there is no evidence on the record that plaintiff ever actually viewed or relied upon, while in Texas, defendant’s website – just that defendant has a website. Also note that evidence indicates that defendant had no other contact with Texas.

The court sets forth the sliding scale test for long arm jurisdiction which slides from passive websites that just provide information to interactive websites where visitors can do business. The court notes that defendant’s website does not provide for any level of “exchange of information” or “transaction of business” between visitors and the law firm. The defendant’s website merely provides background and promotional information. “But . . . but,” plaintiff argues, the website “extols the Law Firm’s professional experience in federal estate and gift taxation law. Raise your hand, those of you who think this was a persuasive argument.

Outcome: a passive website which provides background information and no interactivity (and where there is no evidence that plaintiff ever read or relied upon the website) is not sufficient minimum contacts with a state to sustain general long arm jurisdiction.

You would think that this provides a certain level of clarity in the sea of uncertainty over Internet long jurisdiction. Here is the paradigm example of the “passive website” along the sliding scale of jurisdiction. On this ground, we know attempted litigation would be frivolous (right?). But remember, this is an appeal. The lower court had managed to conclude that it had both general and specific jurisdiction over defendant!

I wonder if the lower court judge drives a VW?

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*I cheated and simply referred to the plaintiffs and the defendants in the singular.

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