Kelso v. Lyford Cay Members Club Ltd. , 162 F. App'x 361 ( 2006 )


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  •                                                        United States Court of Appeals
    Fifth Circuit
    F I L E D
    UNITED STATES COURT OF APPEALS
    For the Fifth Circuit                January 13, 2006
    Charles R. Fulbruge III
    Clerk
    No. 04-11512
    MALCOLM KELSO,
    Plaintiff-Appellant,
    VERSUS
    LYFORD CAY MEMBERS CLUB LIMITED,
    Defendant-Appellee.
    Appeal from the United States District Court
    For the Northern District of Texas, Dallas Division
    ( 3:04-CV-1823 )
    Before HIGGINBOTHAM, DeMOSS, and OWEN, Circuit Judges.
    PER CURIAM:*
    Malcolm Kelso appeals the district court’s order dismissing
    his complaint for lack of personal jurisdiction over Defendant-
    Appellee Lyford Cay Members Club, Ltd. (the “Club”).    Kelso argues
    the court erred in concluding that it lacked both specific and
    general personal jurisdiction over the Club.    We AFFIRM.
    BACKGROUND
    *
    Pursuant to 5TH CIR. R. 47.5, the Court has determined that
    this opinion should not be published and is not precedent except
    under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
    The   Club   is   a   private    club      located      in   Nassau    in    the
    Commonwealth of the Bahamas.         Only members may use the facilities
    of the Club.    Kelso is a former Club member who filed suit against
    the Club in Texas state court, asserting breach of contract and a
    claim for quantum meruit.        The complaint arose from the Club’s
    cancellation of Kelso’s membership for failure to pay dues.
    Kelso alleges his membership was improperly cancelled because
    the Club failed to give notice of the cancellation.                   According to
    Kelso, in approximately 1991, the Club contacted Kelso and his
    former wife in Texas to inquire into their interest in membership.
    Kelso claims the membership forms were mailed to him, completed by
    him, and returned to the Club.          Kelso alleges the Club conducted
    membership   interviews    of   Kelso      in   New   York    City.        Upon   his
    acceptance into the Club, Kelso claims that he paid his membership
    dues by personal check drawn upon his Texas bank account and that
    all membership and billing information was mailed to his Texas home
    through 1998.     Kelso acknowledges receipt of notice in 1997 from
    the Club that he was not entitled to either continued membership or
    renewal of his membership.      Kelso claims the Club later entered a
    new agreement by means of a letter to Kelso’s counsel, permitting
    Kelso’s reinstatement to the Club on the condition he pay back dues
    owed from the time of Kelso’s divorce through 1999.                   Kelso claims
    he forwarded the owed monies to the Club from his Texas bank but
    that he never received a membership card or any evidence the
    membership had been reinstated.              Kelso claims he subsequently
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    received an additional bill for 1999-2000 for $4,600 and that he
    paid this final bill as well.
    The Club removed Kelso’s complaint to federal court on the
    basis of diversity jurisdiction.2             There, the Club moved to dismiss
    Kelso’s complaint for lack of personal jurisdiction or for forum
    non conveniens. Kelso responded, and the court dismissed the cause
    for lack of personal jurisdiction.              Kelso appeals.
    DISCUSSION
    This Court reviews de novo a district court’s dismissal for
    lack of personal jurisdiction.                Allred v. Moore & Peterson, 
    117 F.3d 278
    , 281 (5th Cir. 1997); see also FED. R. CIV. P. 12(b)(2).
    “When a nonresident defendant presents a motion to dismiss for lack
    of   personal   jurisdiction,       the   plaintiff     bears    the    burden   of
    establishing     the     district     court’s        jurisdiction       over     the
    nonresident.    The court may determine the jurisdictional issue by
    receiving affidavits, interrogatories, depositions, oral testimony,
    or   any   combination   of   the    recognized       methods    of    discovery.”
    Allred, 
    117 F.3d at 281
     (quoting Stuart v. Spademan, 
    772 F.2d 1185
    ,
    1192 (5th Cir. 1985)).          The district court shall resolve all
    factual disputes, however, in favor of the plaintiff.                    Wilson v.
    Belin, 
    20 F.3d 644
    , 648 (5th Cir. 1994).              The plaintiff need only
    establish a prima facie case for personal jurisdiction.                   See D.J.
    2
    It is undisputed that Kelso is a resident of Texas and the
    Club is a resident of the Bahamas.
    3
    Invs., Inc. v. Metzeler Motorcycle Tire Agent Gregg, Inc., 
    754 F.2d 542
    , 545 (5th Cir. 1985).
    “A federal district court sitting in diversity may exercise
    personal jurisdiction only to the extent permitted a state court
    under applicable state law.”    Allred, 
    117 F.3d at 281
    .   “[I]t is
    well-established that the Texas long-arm statute authorizes the
    exercise of personal jurisdiction to the full extent allowed by the
    Due Process Clause of the Fourteenth Amendment,” so the relevant
    question is whether Texas can exercise personal jurisdiction over
    the Club consistent with the Due Process Clause.   See Cent. Freight
    Lines Inc. v. APA Transp. Corp., 
    322 F.3d 376
    , 380 (5th Cir. 2003).
    The exercise of personal jurisdiction over a nonresident
    will not violate due process principles if two
    requirements are met. First, the nonresident defendant
    must have purposefully availed himself of the benefits
    and protections of the forum state by establishing
    “minimum contacts” with that forum state. And second, the
    exercise of jurisdiction over the nonresident defendant
    must not offend “traditional notions of fair play and
    substantial justice.”
    Wilson, 
    20 F.3d at 647
     (citations omitted). “Minimum contacts” may
    arise by virtue of contacts that give rise to specific personal
    jurisdiction or general personal jurisdiction.     
    Id.
    I. The district court lacked specific personal jurisdiction over
    the Club.
    When a nonresident defendant’s contacts with the forum state
    arise from or are directly related to the cause of action, specific
    personal jurisdiction exists.   Wilson, 
    20 F.3d at 647
    .    A single
    4
    act of the defendant may support specific personal jurisdiction.
    Bearry v. Beech Aircraft Corp., 
    818 F.2d 370
    , 374 (5th Cir. 1987).
    The minimum contacts query with respect to specific personal
    jurisdiction     is   satisfied      when    the     nonresident     defendant
    ‘purposefully’    avails    itself    of    the    privilege   of   conducting
    activities within the forum state, thus invoking the benefits and
    protections of its laws.”      Ruston Gas Turbines, Inc. v. Donaldson
    Co., 
    9 F.3d 415
    , 419 (5th Cir. 1993) (quoting Burger King Corp. v.
    Rudzewicz, 
    471 U.S. 462
    , 475 (1985)).
    Kelso argues that the Club’s contacts are directly related to
    the cause because the Club solicited his membership by contacting
    him in Texas and by interviewing him for membership in New York
    City.   Kelso argues that by placing the application materials in
    the mail the Club solicited Kelso’s business and purposefully
    availed itself of conducting business in the forum state by using
    the U.S. Postal Service. In support of this argument, Kelso relies
    upon our prior decision in Thorington v. Cash, 
    494 F.2d 582
     (5th
    Cir. 1974).    There, the tortious activity provision of Georgia’s
    long-arm statute controlled, and we concluded that the plaintiff
    established    personal    jurisdiction      based    upon   the    nonresident
    defendant’s actions of mailing material misrepresentations to the
    plaintiff in the forum state “with the evident intention that they
    there be relied upon and by further mailing the contract in
    question into Georgia for execution.” 
    Id. at 587
     (emphasis added).
    5
    Thorington’s holding is expressly limited “to the application of
    [Georgia’s long-arm statute] subsection (b) (tortious act within)
    to conduct which occurs prior to . . . the effective date of
    subsection (c) (act without/tortious injury within).”                
    Id. at 586
    .
    Thorington is inapposite to this dispute.
    Kelso also points to the Texas long-arm statute that defines
    the conduct of business in Texas to include (1) contracting by mail
    or otherwise with a Texas resident with performance by either party
    in whole or part in Texas and (2) commission of a tort in whole or
    in part in Texas.       TEX. CIV. PRAC. & REM. CODE § 17.042 (Vernon 2000).
    The   district    court    determined       that    Kelso   failed   to    produce
    sufficient evidence to support a prima facie case of specific
    personal jurisdiction over the Club.
    Kelso has not produced any evidence that a contract exists
    between the parties but has so alleged by arguing that a membership
    application was mailed to him in Texas, that he completed and
    returned the application, and that an agreement with the Club was
    thereby created.        The Club disputes that a contract exists but
    argues in the alternative that even if a contract did exist, no
    performance    occurred     in   Texas.       The   Club    argues   it    has   not
    purposefully directed its activities at Texas and points to facts
    in the record supporting this conclusion, including: (1) the
    private nature of the Club; (2) the closed nature of membership
    application,     that    is,   applicants     are    accepted   only      upon   the
    6
    recommendation of a current Club member; (3) outside travel agents
    may not book the use of the Club or apply for membership; (4) the
    Club does not advertise or conduct any business in the United
    States or anywhere outside of the Bahamas; and (5) the Club
    maintains no website and cannot be accessed by the Internet.                  The
    Club also responds to Kelso’s argument that the Club purposefully
    availed itself     of   the    forum    state   when   it   solicited   Kelso’s
    membership.      According to the Club, Kelso’s bare allegation of
    solicitation is insufficient to support a prima facie showing of
    specific personal jurisdiction.
    The Club also relies on Stuart v. Spademan, 
    772 F.2d 1185
     (5th
    Cir.    1985).    There,      Texan    plaintiffs    sued   a   nonresident   in
    diversity for breach of contract where it was undisputed the
    parties had contracted. The panel found that both the existence of
    the contract and the negotiations between the parties leading up to
    the agreement were insufficient to permit exercise of specific
    personal jurisdiction.        
    Id. at 1193-94
    .       The panel relied upon the
    “quality of the contacts” in resolving the question of purposeful
    availment, rather than the mere existence of the contacts.               
    Id. at 1194
    .    “The random use of interstate commerce to negotiate and
    close a particular contract, the isolated shipment of goods to the
    forum at the instigation of the resident plaintiffs, and the
    mailing of payments to the forum do not constitute the minimum
    contacts necessary to constitutionally exercise jurisdiction . . .
    7
    .”   
    Id.
       Stuart instructs that the nature of the Club’s contacts on
    this record are properly considered in determining whether the Club
    purposefully availed itself of Texas’s laws, even when it is
    assumed, as it must be given the disputed fact, that a contract
    existed between Kelso and the Club.
    Even resolving the dispute over the contract’s existence in
    Kelso’s favor, Kelso has failed to meet his burden of making a
    prima facie showing that the Club directed its activities to Texas
    in such a manner that Kelso’s cause of action arises from the
    Club’s activities in the forum state.       See 
    id. at 1193-94
    .   We
    affirm the district court’s conclusion that it lacked specific
    personal jurisdiction over the Club.
    II. The district court lacked general personal jurisdiction over
    the Club.
    General jurisdiction . . . will attach, even if the
    nonresident defendant’s contacts with the forum state are not
    directly related to the cause of action, if the defendant's
    contacts with the forum state are both “continuous and
    systematic.”
    Wilson, 
    20 F.3d at 647
     (citations omitted).
    Kelso argues the Club mailed membership information and bills
    for years via the U.S. Postal Service and received payment by the
    postal service and banks within Texas.      Kelso alleges that more
    than sixty percent of the Club’s members are U.S. citizens and that
    twenty-nine members hail from Texas.    Kelso relies solely on Bruno
    Corp. v. Turbo Research, Inc., 
    2003 U.S. Dist. LEXIS 524
     (N.D. Tex.
    Jan. 15, 2003).     There, the district court found the exercise of
    8
    general personal jurisdiction proper over a nonresident defendant
    because contacts were systematic and continuous where the defendant
    admitted it had visited Texas for trade shows over a period of
    years, made visits to Texas utilities, discussed potential business
    with a Texas company, and sent to a Texas company a proposal for
    the sale of a product.       Id. at *11-12.      In addition, the defendant
    there admitted to its execution of contracts in Texas aside from
    the one at issue in the litigation.          Id. at *12.
    Again, based upon the dispute as to the existence of a
    contract, we resolve that factor in Kelso’s favor.               Even with the
    existence     of   a   membership    contract    between   the   parties,   any
    contacts with Texas that might exist based upon that agreement are
    not sufficiently continuous and systematic to support general
    personal jurisdiction.       The mere use of the postal service and the
    acceptance of checks drawing up on accounts with a Texas bank are
    insufficient to make the showing required of Kelso.              Furthermore,
    Kelso’s reliance upon the mailing addresses of Club members from
    outdated records is unavailing for the purpose of establishing the
    Club’s systematic or continuous contacts with Texas.              We affirm as
    well    the   district    court’s     conclusion    that   general    personal
    jurisdiction over the Club was lacking.
    CONCLUSION
    After thorough review of the briefs and relevant portions of
    the record, we affirm the district court’s dismissal of Kelso’s
    9
    complaint   for   lack   of   personal   jurisdiction   over   the   Club
    essentially for the reasons provided by the district court.
    AFFIRMED.
    10