The World in U.S. Courts: Summer 2014 - Personal Jurisdiction
June.04.2014
Plaintiff AEG filed suit for breach of contract against two air freight companies, alleging Defendants failed to pay for jet fuel delivered in Nairobi, Kenya. Defendant VDA, a Russian company, filed to dismiss for lack of personal jurisdiction.
VDA argued a lack of general personal jurisdiction because it is incorporated in and has it principal place of business in Russia. However, Plaintiff argued that VDA has purchased jet fuel from Plaintiff and other Texas suppliers. The Court held such transactions, although amounting to $3 million, were insufficient because the U.S. Supreme Court had stated in Daimler AG v. Bauman that mere purchases in the U.S., even if at regular intervals, could not establish personal jurisdiction. The Court also rejected Plaintiff’s arguments that a subsidiary’s Texas-based office conferred jurisdiction, as Daimler also rejected this basis for personal jurisdiction.
As to specific personal jurisdiction, Plaintiff argued VDA’s purchase of Texas jet fuel was a sufficient contact, as it represented VDA’s decision to choose to contract with Plaintiff and thus to “purposefully avail” itself of the jurisdiction. However, the Court rejected this argument because “merely contracting with a Texas resident is not enough.” Furthermore, the contracts were not such as to make foreseeable that VDA would be sued in Texas, rendering the case law cited by Plaintiffs inapposite.