504 S.W.3d 394
Tex. App.2016Background
- Flotek (Texas energy-services company) sued former employee Chris Vermeulen in Texas for breach of a bonus/confidentiality agreement, conversion, trade-secret misappropriation, tortious interference, and conspiracy after he left Flotek and formed Tycoon.
- Flotek later added Predator Downhole, Inc. (Wyoming corporation headquartered in Casper, WY) and Nancy Vermeulen (Chris’s wife and Predator officer) as defendants, alleging they conspired with Chris to commercialize a five-inch motor using Flotek’s confidential information.
- Predator’s business is based in Wyoming with six employees and no Texas office, registered agent, or regular presence; Predator submitted an affidavit denying Texas-directed operations or revenues.
- Flotek relied on transactional contacts: Predator’s purchases from and sales/invoices to several Texas vendors/customers (Integrity Directional Services, Dyna-Drill, United Machine Works, Fusion, BasinTek, Apex, Essentra, Advanced Concepts, Kalsi), and related emails and invoices, alleging those contacts furthered the conspiracy.
- The trial court denied Predator’s and Nancy’s special appearances; they appealed on grounds Texas lacks personal jurisdiction (both general and specific).
- The court of appeals reversed, holding no general jurisdiction and no specific jurisdiction because Flotek failed to connect Predator’s/Nancy’s Texas contacts to the operative facts of the litigation (the five-inch motor, “Shanghai,” or the alleged misappropriation).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Texas has general jurisdiction over Predator or Nancy | Predator’s repeated purchases from and sales to Texas entities establish continuous and systematic contacts | Predator/Nancy lack offices, employees, agents, bank accounts, or marketing in Texas; contacts are incidental purchases/sales | No general jurisdiction; contacts not continuous/systematic enough |
| Whether Texas has specific jurisdiction over Predator and Nancy | Predator purposefully availed itself and its Texas transactions relate to the alleged conspiracy and the five-inch motor | Predator/Nancy’s Texas contacts are unrelated to the operative facts; any Texas effects flowed from an out-of-state conspiracy | No specific jurisdiction; Flotek failed to show a substantial connection between Texas contacts and operative facts |
| Whether conspiracy allegations can supply jurisdictional contacts | Conspiracy plus Predator’s Texas transactions suffice because Predator benefited and caused effects in Texas | Bare conspiracy allegations are insufficient; plaintiff must show defendant’s own forum conduct tied to claims | Rejected: conspiracy alone (without evidence linking defendants’ Texas conduct to operative facts) cannot establish jurisdiction |
| Whether plaintiff met burden to show jurisdiction after defendants’ affidavits | Flotek points to multiple invoices, emails, and shipments to prove purposeful availment and relation to claims | Defendants negated jurisdiction with affidavit evidence; plaintiff must identify record evidence linking contacts to the claims | Plaintiff failed to meet burden; appellate court will not independently search record for missing connections |
Key Cases Cited
- Int’l Shoe Co. v. Washington, 326 U.S. 310 (1945) (establishes minimum contacts standard for personal jurisdiction)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (contacts via long-term contractual relationship can support jurisdiction)
- Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (1984) (isolated purchases and visits insufficient for general jurisdiction)
- Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777 (Tex. 2005) (contacts must show conduct and connection with forum beyond fortuity)
- Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569 (Tex. 2007) (specific jurisdiction requires a substantial connection between contacts and operative facts)
- PHC–Minden, L.P. v. Kimberly–Clark Corp., 235 S.W.3d 163 (Tex. 2007) (general jurisdiction requires substantially higher, continuous and systematic contacts)
- BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789 (Tex. 2002) (standard of review and burdens in special appearances)
- Nat’l Indus. Sand Ass’n v. Gibson, 897 S.W.2d 769 (Tex. 1995) (effects of an alleged conspiracy alone cannot establish jurisdiction)