91 F.4th 364
5th Cir.2024Background
- Shambaugh & Son, L.P. (a Texas-organized subsidiary of EMCOR Group, Inc.) sought insurance coverage from Steadfast Insurance Co. (an Illinois company) for expenses incurred responding to subpoenas in national AFFF MDL litigation.
- The relevant liability policies were negotiated and issued outside of Texas (in NY and MA, as CT surplus lines policies) to EMCOR, a Connecticut corporation; Shambaugh, as a subsidiary, was covered but not a direct contracting party.
- The discovery expenses at issue arose from subpoenas served on Shambaugh’s Indiana office concerning litigation largely unrelated to Texas.
- Shambaugh maintained a Texas presence through Northstar, an Austin-based division, and claimed Texas law applied, seeking to litigate in federal court in Texas.
- The district court, following a magistrate’s recommendation, dismissed the suit for lack of specific personal jurisdiction over Steadfast, and Shambaugh appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Specific Personal Jurisdiction (Minimum Contacts) | Steadfast's insurance covered a Texas entity/division and is licensed in Texas | The insurance policies and relevant conduct occurred outside Texas and Texas links are too attenuated | No specific personal jurisdiction: contacts too minimal and remote |
| Nationwide Coverage Raises Jurisdiction | Policy's nationwide scope means insurer should anticipate litigation in any state | Broad policy scope does not equate to purposeful availment of Texas law or courts | No jurisdiction: nationwide coverage does not create purposeful availment |
| Other Texas Litigation Contacts | Prior unrelated Steadfast litigation in Texas supports jurisdiction | No nexus between those cases and this dispute | Rejected: unrelated litigation does not create specific jurisdiction |
| New Legal Theories Raised on Appeal | Some jurisdiction arguments based on state law, policy clauses, and statutes | Waived/forfeited as not raised before magistrate judge | Forfeiture applies: new arguments not preserved for appeal |
Key Cases Cited
- Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct., 141 S. Ct. 1017 (2021) (specific personal jurisdiction requires purposeful availment and forum-related contacts)
- World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980) (a defendant must reasonably anticipate being haled into forum court)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (minimum contacts analysis for contract-related jurisdiction)
- Bristol-Myers Squibb Co. v. Superior Ct. of Cal., 582 U.S. 255 (2017) (specific jurisdiction requires a connection between the forum and the specific claims)
- Halliburton Energy Servs., Inc. v. Ironshore Specialty Ins. Co., 921 F.3d 522 (5th Cir. 2019) (Texas law and insurer contacts insufficient for jurisdiction without meaningful Texas-linked conduct)