Sealed 1 v. Sealed 1
625 F. App'x 628
5th Cir.2015Background
- Plaintiffs (U.S. businessmen and a New Mexico-connected company) claimed commissions from transactions in which Father and Father’s Co. (Saudi nationals/entities) purchased Bank Guarantees.
- Plaintiffs relied on a Non‑Circumvention, Non‑Disclosure & Working Agreement containing a Texas forum‑selection clause signed by Son, Son’s Co., and Smith (neither Father nor Father’s Co. signed).
- Plaintiffs allege Son, Son’s Co., and Smith acted as agents for Father and Father’s Co., and thus the forum clause binds the nonsignatory defendants; plaintiffs submitted embassy and bank letters and bank screenshots as supporting evidence.
- Father and Father’s Co. submitted affidavits denying any agency relationship or affiliation with Son’s Co.; Smith also denied authority to bind Father’s Co. or Father.
- The district court initially denied, then on reconsideration dismissed for lack of personal jurisdiction because plaintiffs failed to present admissible evidence of agency; the Fifth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Father/Father’s Co. are bound by forum‑selection clause via agency | Son, Son’s Co., and Smith signed the Agreement as agents for Father/Father’s Co., so clause binds them | No agency: defendants deny authorizing Son/Son’s Co./Smith to act or sign for them | Plaintiffs failed to show admissible evidence of actual authority; dismissal affirmed |
| Whether hearsay documents (embassy/bank letters, screenshots) establish apparent authority | Embassy/bank letters and account screenshots manifest principal conduct cloaking agents with authority | Documents are hearsay, not attributable to Father/Father’s Co., and are directly contradicted by defendants’ affidavits | Hearsay and unauthenticated documents cannot establish apparent authority |
| Whether plaintiff may rely on statements by purported agents (e.g., Smith) under Fed. R. Evid. 801(d)(2)(D) | Agent statements (Smith) are opposing‑party admissions and thus not hearsay, proving agency | Rule 801(d)(2)(D) cannot be used to bootstrap agency: such statements don’t by themselves prove existence/scope of agency | Court refused to credit those hearsay statements to prove agency; inadmissible to establish agency on motion to dismiss |
| Whether to apply single‑business‑enterprise (piercing) theory to treat Father’s Co. and Son’s Co. as one enterprise | Plaintiffs urged veil piercing to attribute Son’s Co. acts to Father’s Co. | Defendants opposed; issue not raised below | Argument waived on appeal for failure to raise in district court |
Key Cases Cited
- Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266 (5th Cir. 2006) (plaintiff bears burden to establish personal jurisdiction)
- Walk Haydel & Assocs. v. Coastal Power Prod. Co., 517 F.3d 235 (5th Cir. 2008) (standard for prima facie jurisdictional showing when no evidentiary hearing)
- Panda Brandywine Corp. v. Potomac Elec. Power Co., 253 F.3d 865 (5th Cir. 2001) (courts should not credit conclusory allegations)
- Gaines v. Kelly, 235 S.W.3d 179 (Tex. 2007) (Texas law on actual and apparent agency principles)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (forum‑selection clauses and due process)
- Daimler AG v. Bauman, 134 S. Ct. 746 (2014) (agent conduct can create forum contacts for a principal)