ON MOTION FOR REHEARING
Our opinion of February 24, 1982, is withdrawn and this opinion is substituted therefor.
Elizabeth Hall and the other plaintiffs in the trial court (Hall) are the survivors of four citizens of the United States killed in a helicopter crash in Peru while working in that country constructing a pipeline. Hall sued Helicol, the owner and operator of the helicopter which crashed, in Harris County, Texas, in four separate causes of action.
The only issue before us is whether under the facts of this cause of action, was Helicol amenable to jurisdiction in Texas. Therefore, this Court must decide whether the trial court's exercise of jurisdiction over Helicol was consistent with the requirements of due process of law under the Constitution of the United States.
In 1974, Petro Peru, the Peruvian state owned oil company, made a contract with Williams-Sedco-Horn,
The deceased workers here in question, were not Texas residents, but were all United States citizens. They were hired by Williams-Sedco-Horn, in Houston, Texas, and sent to Peru to work on the pipeline. The workers were killed in the crash of a Bell helicopter, owned and operated by Helicol in Peru, during their transportation pursuant to the contract between Helicol and Williams-Sedco-Horn.
In addition to negotiating this contract, Helicol committed all of the following acts in Texas:
We hold that these contacts constitute sufficient minimum contacts to find Helicol amenable to the jurisdiction of the Texas courts.
In their briefs before this Court, all parties agreed that our opinion in U-Anchor Advertising, Inc. v. Burt, 553 S.W.2d 760 (Tex.1977) controlled the disposition of this case.
In U-Anchor, we stated:
In the U-Anchor opinion we specifically adopted the above language from Hoppenfeld. Also in U-Anchor, this Court approved the three-prong test set out in O'Brien v. Lanpar Company, 399 S.W.2d 340 (Tex.1966). That three-prong test is:
The second prong of the O'Brien test requiring that the cause of action must arise out of the contacts with the forum state, has been the subject of some controversy ever since the O'Brien test was adopted. The second prong is useful in any fact situation in which a jurisdiction question exists; and is a necessary requirement where the nonresident defendant only maintained single or few contacts with the forum. However, the second prong is unnecessary when the nonresident defendants presence in the forum through numerous contacts is of such a nature, as in this case, so as to satisfy the demands of the ultimate test of due process. Accordingly through the statutory authority of Art. 2031b Tex. Rev.Civ.Stat.Ann. there remains the single inquiry: is the exercise of jurisdiction consistent with the requirements of due process of law under the United States Constitution? This inquiry is frequently put into the following terms: "... due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend traditional notions of
The U. S. Supreme Court has broadened the parameters of due process to allow inquiry into other "relevant factors." Recently in World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980) the Supreme Court reiterated that the relationship between the defendant and the forum must be such that it is "reasonable ... to require the corporation to defend the particular suit which is brought there." Citing, International Shoe, supra. In looking to this reasonableness, the U. S. Court stated that the burden on the defendant:
Worldwide Volkswagen Corp. v. Woodson, 444 U.S. at 291, 100 S.Ct. at 564. Therefore, our inquiry can go beyond the substantial contacts which Helicol maintains in Texas, and we may also look to this State's interest in adjudicating the dispute; and Hall's interest in effective and convenient relief.
Texas has an interest in adjudicating this dispute. Hall is not a Texas resident, but is a citizen of this country. More importantly, Hall was hired in Houston, Texas, by a Texas resident. It cannot be questioned that this forum has an interest in protecting the employees of its "residents" (Williams-Sedco-Horn). This is especially necessary in light of the fact that Texas is the headquarters of countless international companies, and as a member of the "interstate judicial system," this State has an interest in obtaining the most efficient resolution of controversies and in furthering fundamental substantive social policies. (See above quote, citing Kulko v. California Superior Court, supra.)
Hall has a genuine interest and desire in obtaining convenient and effective relief. The U. S. Supreme Court directly considered the plaintiff's interest involved in McGee v. International Life Insurance Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957). In McGee, a California resident was suing a Texas insurance company as a beneficiary under a life insurance policy. The defendant's only contact with California had been its mailing of the policy to the state, and its receipt of premium payments from the decedent. The U. S. Supreme Court addressed the relative convenience of the parties and based their decision allowing maintenance of the suit in California on the State's interest in providing effective redress, and the fact that an individual claimant could not overcome the difficulties of maintaining an action in a foreign forum "... thus in effect making the company judgment proof." 355 U.S. at 223, 78 S.Ct. at 201. The Court did recognize the inconvenience that this worked on the defendant, but based on the contacts of the defendant, due process would not be offended. Admittedly this cause does not fall precisely within the facts of McGee, it does fall within its spirit.
Based on the considerations of the above discussion and looking to the requirements
The judgment of the court of civil appeals is reversed and the judgment of the trial court is affirmed.
Concurring opinion by CAMPBELL, J., in which McGEE, J., joins.
Dissenting opinion by POPE, J., in which GREENHILL, C. J., and BARROW, J., join.
CAMPBELL, Justice, concurring.
I concur with the result of the opinion by Justice Wallace for these additional reasons.
The issue in World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980), was "whether, consistently with the due process clause of the Fourteenth Amendment, an Oklahoma court may exercise in personam jurisdiction over a non-resident automobile retailer and its wholesale distributor in a products liability action, when the defendants' only connection with Oklahoma is the fact that an automobile sold in New York to New York residents became involved in an automobile accident in Oklahoma." Id. at 287, 100 S.Ct. at 562. The question before this Court is whether, consistently with the due process clause of the Fourteenth Amendment, a Texas court may exercise in personam jurisdiction over a non-resident provider of helicopter services, when the defendant's connections with Texas were all of those listed in the opinion by Justice Wallace.
In World-Wide, there was no evidence that World-Wide or its retail distributor, Seaway, did any business in Oklahoma, shipped or sold any products to or in that state, had an agent to receive process there, or purchased advertisements in any media calculated to reach Oklahoma. During oral arguments before the U. S. Supreme Court, plaintiff's attorney conceded there was no showing that any automobile ever sold by World-Wide or Seaway had ever entered Oklahoma with the single exception of the car involved. Id. at 289, 100 S.Ct. at 563. Thus, World-Wide holds that driving a car through a state is not such "minimum contacts" to give that state jurisdiction in an action against a New York seller.
In reaching this decision, the U. S. Supreme Court stated:
444 U.S. at 295, 100 S.Ct. at 566. 62 L.Ed. 2d at 500.
Applying that same language to the facts of this case, I would write: Helicol carries on much business in Texas. They close many purchases of helicopters and spare parts and negotiate contracts in Texas. They regularly secure the services of Bell Helicopter in training their pilots and repair technicians. They solicited business in Texas by sending a representative to Houston to negotiate with Williams-Sedco-Horn. The record shows they regularly buy helicopters and spare parts in Texas and seek Texas services for training their employees. They directly secure the services of the Texas markets, maintain employees in Texas on a year-round basis and 26 times sent officials of their company to Texas. This activity has continued since 1970. In this
The U. S. Supreme Court, in World-Wide, was addressing the jurisdictional problem between states. However, we do not have the same problem as World-Wide. We do not have a dispute over jurisdiction between coequal sovereigns in a federal system. We are deciding jurisdiction between countries; as to citizens of the United States and a resident of Colombia. Therefore, "due process" in this case must be universal in its application.
Now, let us look at what World-Wide said about "minimum contacts" and reasonableness of the "forum" among the states, and apply those tests to our facts:
444 U.S. at 291-92, 100 S.Ct. at 564.
The contacts of Helicol in Texas were not "minimal," they were "substantial." It is not unreasonable to require a company with the expertise in international business, as Helicol, to defend a suit in a state where it has conducted multi-million dollars of business. However, it is unreasonable to require the widows and children seeking relief here to go to a foreign country to prosecute their action.
This Court has an interest in adjudicating the dispute of these United States citizens. They do not have the power to select another state but must be removed to a foreign country. This Court has an interest in assuring these plaintiffs obtain convenient and effective relief, at least when that interest is not adequately protected by the plaintiff's power to choose the forum country.
"Due process" is not a rigid, unchanging rule that courts could always determine by
444 U.S. 292-93, 100 S.Ct. at 564-65.
The quote from McGee is as applicable to the facts of this case as it was to the McGee facts. It could be written: Today many commercial transactions touch two or more countries and may involve parties separated by continents or oceans. With this increasing internationalization of commerce has come a great increase in the amount of business conducted by mail and satellite communications across continental lines. At the same time modern transportation and communication have made it much less burdensome for a party sued to defend himself in a country where he engages in economic activity.
The McGee court further stated: "Of course there may be inconvenience to the insurer if it is held amenable to suit in California where it had this contract but certainly nothing which amounts to a denial of due process." 355 U.S. at 224, 78 S.Ct. at 201. In my opinion, the inconvenience to Helicol, considering their substantial contacts in Texas, is certainly nothing which amounts to a denial of due process.
In Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958), the Supreme Court, in explaining the requirements of due process, stated:
357 U.S. at 253, 78 S.Ct. at 1239.
This Court, in U-Anchor Advertising, Inc. v. Burt, 553 S.W.2d 760 (Tex.1977), tested the jurisdiction of Texas courts over the Oklahoma resident by stating:
553 S.W.2d at 763.
Applying the U-Anchor test and using the U-Anchor language, I find Helicol's contacts
McGEE, J., joins in this concurring opinion.
POPE, Justice, dissenting.
I respectfully dissent. The former dissenting opinion handed down July 21, 1982, is withdrawn. The survivors of four nonresidents who were killed in an airplane crash in the jungles of Peru, have sued the defendant Helicol in Houston, Texas. Helicol is a resident corporation of Colombia, South America. Neither the plaintiffs, the decedents, the defendant, nor the tort action have any connection with Texas. The court makes Texas the courthouse for the world, requiring only that the plaintiff show that the defendant had made purchases of supplies from some unrelated business located in Texas. I disagree with the court's opinion, because it is not grounded upon the correct facts and because our long-arm statute reaches only to "causes of action arising out of such business done in this State." Tex.Rev.Civ.Stat.Ann. art. 2031b.
The court mistakenly says that Williams-Sedco-Horn, a Texas joint venture, was the party that contracted with the Peruvian owned oil company, Petro Peru. The opinion also says that the defendant Helicol negotiated and made its agreement with Williams-Sedco-Horn in Houston, Texas. The true facts, as stated by the court of civil appeals are that Williams-Sedco-Horn was not the party who contracted either with the Peruvian oil company or with Helicol. The undisputed testimony was that Peru forbade a contract to construct the pipeline with any corporation unless it was a Peruvian company. The contract, written in Spanish and approved by the government, was with Peruvian-based Consorcio, not Williams-Sedco-Horn. The parties to the contract for the helicopters were Consorcio and Helicol. The court of civil appeals so found and enforced that finding by its further reference to paragraph 19 of the contract, which states, in the words of that court, "that all parties agree that Lima, Peru, is the residence for all related to the contract and that the parties submitted to the jurisdiction of Peru." The court of civil appeals made these other significant findings:
Article 2031b Requires a Nexus to Business Done in This State.
Article 2031b expressly requires a nexus between the helicopter crash and the contacts relied upon to justify jurisdiction. The nexus requirement in Texas is found in the clear wording of the statute itself. Section 3 of article 2031b provides:
Tex.Rev.Civ.Stat.Ann. art. 2031b, § 3 (emphasis added).
Article 2031b was enacted in the wake of International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), which greatly expanded the jurisdictional potential of the various states. The Supreme Court reasoned in International Shoe that the exercise of jurisdiction over a non-resident defendant satisfies due process when the defendant has had "certain minimum contacts ... such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" Id. at 316, 66 S.Ct. at 158. This standard was broader in its effect than the "long-arm" statutes then employed in most states, including Texas.
Jurisdiction statutes express the limits of a state's interest, in acquiring jurisdiction over nonresident defendants.
Two prior opinions by this court hold that the nexus was required and in both cases, it was present. In O'Brien v. Lanpar Company, 399 S.W.2d 340, 342 (Tex.1966) we upheld an Illinois default judgment against O'Brien, a nonresident Texas corporation whose president went to Illinois and employed the plaintiff as its attorney. We then stated this three-prong requisite for jurisdiction over a nonresident:
U-Anchor Advertising, Inc. v. Burt, 553 S.W.2d 760 (Tex.1977) was the next time this court wrote on this subject. U-Anchor, a Texas corporation, solicited a contract with defendant Burt in Oklahoma to place advertising displays at points along Oklahoma highways. Burt agreed to pay U-Anchor $80.00 a month for 36 months and to make the payments at U-Anchor's office in Amarillo, Texas. We held that U-Anchor's cause of action against Burt satisfied the nexus requirement of article 2031b. We wrote that it was "connected with the contractual obligation assumed by Burt and partially performable in Texas." Id. at 762. We held, however, that Burt could not be sued in Texas because U-Anchor failed to satisfy the first and third requirements of O'Brien, supra at 763. As to the first requirement, we held that Burt's contacts with Texas were not purposefully conducted
There is more reason here than in U-Anchor to deny Texas jurisdiction. The four plaintiffs worked for Consorcio. The contract fixed jurisdiction in Peru. Billings for work had to be made by Helicol to Consorcio in Peru. In U-Anchor, we held that Burt was no more than a passive customer of a Texas corporation, in that instance, the very party who was sued. In this case, however, Helicol has been pulled from Peru to Texas because it has been a customer of Bell Helicopter in Fort Worth. It had transactions with a company that in no way was connected with this litigation. U-Anchor is no support for the majority opinion.
The majority opinion disregards the statutory requirement that suit may be brought against a foreign corporation "upon causes of action arising out of such business done in this State."
The construction of article 2031b, here urged, conforms to that of the Fifth Circuit in several recent decisions. In Prejean v. Sonatrach, Inc., 652 F.2d 1260 (5th Cir. 1981), one defendant, Beech, had extensive contacts with Texas, all unrelated to the cause of action. These contacts were similar to Helicol's activities in Texas, but were much more extensive. For example, Beech entered into an $11.1 million subcontract with Bell Helicopter in Fort Worth for the production of airframe assemblies, and had produced these for Bell continuously since 1967 under contracts exceeding $72 million. Id. at 1270 n.19. In addition, Beech had two employees residing and conducting business in Texas. A local corporation wholly owned by the defendant had sold and serviced aircraft manufactured by Beech. These contacts constituted "doing business" in Texas, but the court concluded that jurisdiction in Texas could not be asserted because the activities were unrelated to the cause sued upon. They did not have the "slightest causal relationship with the decedent's wrongful death." Id. at 1270.
In Jim Fox Enterprises, Inc. v. Air France, 664 F.2d 63 (5th Cir. 1981), the defendant, Air France, was doing "a thriving business in Texas." Id. at 65. It had a ticket office at Houston's Intercontinental Airport and a district sales office downtown. It listed six local telephone numbers in the Houston telephone directory, leased Texas real estate, employed Texas residents, and paid Texas employment and personal property taxes. Gross receipts from passenger ticket sales in Texas totalled in excess of $59 million. Nevertheless, the court in Jim Fox recognized that article 2031b requires a nexus between the cause of action and the contacts with Texas, and that Air France's contacts, being unrelated to the cause of action, were insufficient to support jurisdiction.
In another case, Placid Investments, Ltd. v. Girard Trust Bank, 662 F.2d 1176 (5th Cir. 1981), it was undisputed that the defendant did business in Texas. As noted by the court, the defendant maintained bank accounts in Texas, owned Texas real estate, and received revenue from Texas sources. Id. at 1178. None of these contacts, however, "gave rise" to the cause of action. As a result, the Fifth Circuit concluded, the causal relationship or nexus requirement in article 2031b was not met, and jurisdiction could not be asserted.
When a defendant has established a general business presence in the state, characterized by "substantial and continuous activity," that state may take jurisdiction over the defendant for unrelated causes of action. Perkins v. Benguet Consolidated Mining Co., supra 342 U.S. at 438, 445, 448, 72 S.Ct. at 414, 418, 419; O'Neal v. Hicks Brokerage Co., 537 F.2d 1266, 1268 (4th Cir.
The term "substantial and continuous activity" has a distinct meaning when used in the context of due process. It suggests that the individual or corporate defendant is enough of an "insider" in the forum that he may be safely relegated to the state's political processes. Brilmayer, How Contacts Count: Due Process Limitations on State Court Jurisdiction, 1980 Sup.Ct.Rev. 77, 87 (1980). Achievement of such a position requires more of the defendant than "minimum contacts." Instead, the defendant must establish some close substantial connection with the state approaching the relationship between the state and its own residents.
The court in this case has applied the "minimum contacts" standard. The error in this reasoning is that the nexus requirement is satisfied and becomes unnecessary, not upon a showing of "minimum contacts," but upon a demonstration of the defendant's substantial and continuous activity in the forum. Absent a showing of such activity, the nexus requirement becomes a highly significant factor. Texas should not assume jurisdiction over this case that involves nonresident plaintiffs and a nonresident defendant when the cause of action arises out of facts totally unrelated to the forum state.
A separate concurring opinion filed on rehearing contends that the "long arms" of state jurisdiction should extend more elastically when reaching for nonresident defendants who are citizens of other countries. While this argument may appeal to those who contend that noncitizens should receive less due process than United States citizens, cf. Plyler v. Doe, ___ U.S. ___, 102 S.Ct. 2382, 72 L.Ed.2d 786 (1982); Truax v. Raich, 239 U.S. 33, 36 S.Ct. 7, 60 L.Ed. 131 (1915), it is nevertheless inconsistent with the way due process has been applied in previous cases. Although such a contention is rarely raised, cases dealing with jurisdictional issues invariably apply the same due process standards to citizens and noncitizens alike. See, e.g., Jim Fox Enterprises v. Air France, 664 F.2d 63 (5th Cir. 1981); Prejean v. Sonatrach, Inc., 652 F.2d 1260 (5th Cir. 1981); Hutson v. Fehr Brothers, Inc., 584 F.2d 833 (8th Cir. 1978); Honeywell, Inc. v. Metz Apparatewerke, 509 F.2d 1137 (7th Cir. 1975); Product Promotions, Inc. v. Cousteau, 495 F.2d 483 (5th Cir. 1974); Bryant v. Finnish National Airline, 15 N.Y.2d 426, 260 N.Y.S.2d 625, 208 N.E.2d 439 (1965). See also A. Ehrenzweig & E. Jayme, Private International Law vol. II at 22 (1973) (neither party's citizenship affects an American court's jurisdiction).
The court has established Texas as a "magnet" forum, drawing to its courts the trial of any lawsuit involving a defendant who has ever made purchases in Texas.
I would affirm the court of civil appeals.
GREENHILL, C. J., and BARROW, J., join in this dissent.
Tex.Rev.Civ.Stat.Ann. art. 2031b, § 2 (emphasis added).
Vt.Stat.Ann. title 12, § 855, quoted in Thode, supra at 305 n.167 (emphasis added). Other statutes adopted with similar provisions include: Ill.Rev.Stat. ch. 110, § 17(1); Md.Ann. Code, Courts and Judicial Proceedings, § 6-103; N.Y.Civ.Prac.Law and Rules § 302; Ohio Rev.Code Ann. § 2307.382. See also Precision Polymers, Inc. v. Nelson, 512 P.2d 811, 813 (Okla.1973) (construing Okla.Stat. title 12, §§ 187, 1701.03):
The Oklahoma statute requires a nexus notwithstanding the fact that the act has been construed to extend to constitutional limits. See Roberts v. Jack Richards Aircraft Co., 536 P.2d 353, 355 (Okla.1975).
See also Kulko v. California Superior Court, 436 U.S. 84, 98, 98 S.Ct. 1690, 1700, 56 L.Ed.2d 132 (1978) ("California has not attempted to assert any particularized interest in trying such cases in its courts by, e.g., enacting a special jurisdictional statute."); Iowa Electric Light and Power Co. v. Atlas Corp., 603 F.2d 1301 (8th Cir. 1979); Comment, Federalism, Due Process, and Minimum Contacts: World-Wide Volkswagen Corp. v. Woodson, 80 Colum.L. Rev. 1341, 1345 (1980).
The United States Supreme Court had made it clear that a state's interest in subjecting a nonresident to its judicial jurisdiction is a fundamental factor to be considered in cases of this kind. In International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), the interest of the state was obvious in that the suit was brought by the state itself, for unpaid taxes. In McGee v. International Life Insurance Co., 355 U.S. 220, 223, 78 S.Ct. 199, 201, 2 L.Ed.2d 223 (1957), the validity of the exercise turned upon California's paramount interest in the litigation. The Court noted the state's manifest interest in protecting its residents, stating: "These residents would be at a severe disadvantage if they were forced to follow the insurance company to a distant State." In Hanson v. Denckla, 357 U.S. 235, 251-52, 78 S.Ct. 1228, 1238-39, 2 L.Ed.2d 1283 (1958), the Court emphasized the absence of a substantial state interest, distinguishing McGee. The Court explained:
Contrary to this court's conclusion on rehearing that Texas has an interest in adjudicating this case because the plaintiffs are United States citizens, cases demonstrate that state interest in litigation is consistently derived from a state's desire to protect its own citizens and property and to effectuate its own regulatory policies. See, e.g., Blount v. Peerless Chemicals, Inc., 316 F.2d 695, 697 (2d Cir.), cert. denied, 375 U.S. 831, 84 S.Ct. 76, 11 L.Ed.2d 62 (1963); Compania de Astral v. Boston Metals Co., 205 Md. 237, 107 A.2d 357 (1954), cert. denied, 348 U.S. 943, 75 S.Ct. 365, 99 L.Ed. 638 (1955). See also Comment, Federalism, Due Process, and Minimum Contacts: World-Wide Volkswagen Corp. v. Woodson, 80 Colum.L.Rev. 1343, 1345(1980).