497 S.W.3d 99
Tex. App.2016Background
- ERC Midstream (Texas LLC) and its owner/manager Mark Hutchison developed a midstream oil/gas project in Gonzales County, Texas and sought equity financing.
- Hutchison met with Brian Bierbach (American Midstream CEO) in Dallas; Hutchison alleges Bierbach (on AMP’s behalf) represented AMP had capital to fund the Project and promised Hutchison a 10% equity stake, inducing Hutchison to join AMP and disclose proprietary Project information.
- AMP later lacked capital; a third party (ArcLight/HPIP) funded the Project, Hutchison was terminated and unpaid. ERC/Hutchison sued AMP, Bierbach and others asserting, among other claims, fraud.
- Bierbach filed a special appearance asserting lack of personal jurisdiction in Texas. The trial court struck portions of Hutchison’s affidavit, granted the special appearance, and dismissed Bierbach.
- The court of appeals reversed as to the fraud claim, holding plaintiffs adequately pleaded and supported Texas long‑arm jurisdiction for fraud based on Bierbach’s Dallas meeting and representations, and remanded that claim for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs pleaded sufficient facts under Texas long‑arm to allege a tort in Texas | Hutchison alleged Bierbach made fraudulent representations in Dallas inducing disclosure of trade secrets; this brings Bierbach within Tex. Civ. Prac. & Rem. Code § 17.042(2) | N/A (challenge focused on evidentiary negation below) | Court: Pleadings sufficiently alleged fraud committed in Texas to invoke long‑arm statute. |
| Whether Bierbach negated all jurisdictional bases with evidence on special appearance | Hutchison relied on his affidavit and allegations showing Bierbach made representations in Dallas | Bierbach denied (by affidavit) he offered equity and contended no misrepresentations occurred in Texas; argued trial court properly struck portions of Hutchison’s affidavit | Court: Bierbach negated only one alleged misrepresentation (equity promise) but not the representation that AMP had capital; thus he failed to negate all pleaded bases for jurisdiction. |
| Whether Bierbach’s Dallas meeting and alleged representations satisfy purposeful availment/minimum contacts for specific jurisdiction | Meeting was purposeful, aimed at acquiring a Texas project and Texas resident; representation formed core of the fraud claim | Bierbach argued the trip was insubstantial/initiated by Hutchison and a single contact is insufficient | Court: A voluntary, face‑to‑face meeting in Texas where alleged misrepresentations were made establishes purposeful availment and a substantial connection to the fraud claim; a single contact may suffice. |
| Whether exercising jurisdiction comports with fair play and substantial justice | Texas has strong interest (tort in Texas, Texas plaintiff, Texas project); judicial economy favors Texas forum | Bierbach cited burden of litigating in Texas and Colorado’s interests | Court: Bierbach failed to show the exercise of jurisdiction would be unreasonable; traditional notions of fair play and substantial justice satisfied. |
Key Cases Cited
- Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569 (Tex. 2007) (framework for long‑arm and due‑process analysis)
- Moncrief Oil Int’l Inc. v. OAO Gazprom, 414 S.W.3d 142 (Tex. 2013) (specific‑jurisdiction should be analyzed claim‑by‑claim and purposeful availment standard)
- Kelly v. Gen. Interior Const., Inc., 301 S.W.3d 653 (Tex. 2010) (defendant bears burden to negate all pleaded bases for jurisdiction)
- Hoagland v. Butcher, 474 S.W.3d 802 (Tex. App.—Houston [14th Dist.] 2014) (application of Moncrief and purposeful‑availment analysis; single or limited contacts can support jurisdiction)
- Max Protetch, Inc. v. Herrin, 340 S.W.3d 878 (Tex. App.—Houston [14th Dist.] 2011) (face‑to‑face meeting in Texas where representations were made can form core of litigation and support jurisdiction)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (minimum contacts and fair play/substantial justice principles)