Rossi v. Wohl

United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS September 4, 2007
For the Fifth Circuit
Charles R. Fulbruge III
Clerk
No. 06-10923
A. CAL ROSSI
Plaintiff-Appellant,
VERSUS
FRANK WOHL, Individually, LANKLER SIFFERT & WOHL LLP,
Defendants-Appellees.
Appeal from the United States District Court
For the Northern District of Texas, Dallas Division
3:06-CV-292
Before HIGGINBOTHAM, DAVIS and BARKSDALE, Circuit Judges.
W. EUGENE DAVIS, Circuit Judge:*
This is an appeal from the district court’s order dismissing
the complaint of A. Cal Rossi, Jr. on defendants’ motion to dismiss
for lack of personal jurisdiction. Because we find that Rossi
presented a prima facie case of specific personal jurisdiction over
the defendants, we vacate and remand for further proceedings.
*
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this opinion should not be published and is not precedent except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.
I.
A. Cal Rossi is a Texas resident. He hired defendants Frank
Wohl, a New York lawyer, and his firm, Lankler Siffert & Wohl LLP,
to represent him when he was indicted on charges of racketeering
and securities fraud in the Southern District of New York. The
firm has no offices in Texas.
Rossi was acquitted, but later refused to pay invoices
submitted by his lawyers, claiming that the law firm misrepresented
his obligation to pay for certain expert expenses. Specifically he
claimed that the law firm had told him that he would not be liable
for expert and consulting fees unless Rossi’s employer first
refused to pay, and, in the case of the fees charged by FTI
Consultants, Inc. (“FTI”), that he would not be liable at all. The
law firm sued for payment in the Southern District of New York and
was successful in obtaining a summary judgment against Rossi. The
firm then obtained an order for registration in Texas of the New
York judgment. Also, the firm obtained three orders for ex parte
turnover in the Northern District of Texas. Finally, the firm has
filed a garnishment proceeding against Rossi and his employer in
Texas State Court.
In sum, both defendants, the law firm and Frank Wohl, (1)
placed hundreds of phone calls to Texas, (2) sent invoices
exceeding $4 million to Texas, (3) made three trips to Texas to
interview witnesses and meet with Rossi, and (4) allegedly
committed a tort in the State of Texas by making false
2
representations to Rossi in Texas. Further, the law firm alone (1)
contracted to perform legal services for a client living and
working in Texas, and (2) registered judgments against Rossi in
Texas courts.
Rossi filed this suit in the Northern District of Texas,
seeking recovery from the law firm for breach of fiduciary duty and
fraud, based in part on the law firm’s misrepresentation concerning
his liability for expert fees. The district court dismissed the
suit for lack of personal jurisdiction over Wohl or his firm.
II.
We review the district court’s dismissal for lack of personal
jurisdiction de novo. Alpine View Co. Ltd. v. Atlas Copco AB, 205
F.3d 208, 214 (5th Cir. 2000). In a diversity action, the court may
exercise personal jurisdiction over a nonresident defendant if (1)
the Texas long-arm statute provides a basis for personal
jurisdiction over the defendant and (2) exercise of personal
jurisdiction is consistent with the Constitution’s due process
requirements. Revell v. Lidov, 317 F.3d 467, 469 (5th Cir. 2002).
Because the Texas long-arm statute “reaches to the constitutional
limits,” we need only consider the due process analysis. Id. at
469-70.
The Due Process Clause permits the exercise of personal
jurisdiction over a nonresident defendant when “(1) that defendant
has purposefully availed himself of the benefits and protections of
the forum state by establishing minimum contacts with the forum
3
state, and (2) the exercise of jurisdiction over that defendant
does not offend traditional notions of fair play and substantial
justice.” Alpine View, 205 F.3d at 215 (citations and internal
quotation marks omitted). Minimum contacts can be established
under two categories: specific or general jurisdiction. Id. The
arguments before the district court focused on specific
jurisdiction, which exists when a nonresident defendant has
“purposefully directed its activities at the forum state and
litigation results from the alleged injuries that arise out of or
relate to those activities.” Id.(citations and internal quotation
marks omitted).
When the district court dismisses for lack of personal
jurisdiction without holding an evidentiary hearing, as occurred in
this case, we review the dismissal to determine whether the
plaintiff presented a prima facie case supporting jurisdiction.1
Id. In doing so, we accept the plaintiff’s uncontroverted and
nonconclusory factual allegations as true and resolve all
controverted allegations in the plaintiff’s favor. Id.III.
The district court noted that the plaintiff sought to assert
1
Although both parties submitted affidavits and other evidence
in support of their positions on the motion to dismiss, the
district court’s Memorandum Opinion and Order on the Motion to
Dismiss makes it clear that it treated the issue as one decided on
the basis of the pleadings and without an evidentiary hearing.
4
specific jurisdiction on the basis of the following contacts or
activities by the defendants: (1) contracting with and agreeing to
represent him, a Texas citizen, and sending bills and placing phone
calls to Texas seeking payment for services rendered, (2)
communicating false information to Plaintiff in Texas, and (3)
filing the collection actions in state and federal court in Texas.
The district court correctly considered and dismissed the contacts
in items (1) and (3) as insufficient to establish personal
jurisdiction over either Wohl or his firm.
The district court however did not address item (2), whether
communicating false information to the plaintiff in Texas presents
a sufficient basis on which specific jurisdiction could be
established. Rossi’s complaint alleges the following relevant
facts: (1) “venue is proper in this Court in that some, if not all,
of the misrepresentations described below were made by the
Defendants to Rossi while Rossi was located in the Northern
District of Texas”; (2) “[m]ore specifically, the Defendants made
certain actionable misrepresentations of fact that were directed to
a citizen of Texas (Rossi) in Texas”; and (3) “[b]y way of example
only, the Defendants represented to Rossi, orally and in writing,
that he would not be responsible for paying any monies to FTI for
work/services rendered by FTI.” Several cases from this circuit
make it clear to us that these allegations are sufficient to raise
a prima facie case of specific personal jurisdiction against the
defendants.
5
In Wien Air Alaska, Inc. v. Brandt, 195 F.3d 208 (5th Cir.
1999), the defendant, a German attorney, provided legal services
to the plaintiff, an Alaskan corporation based in Texas, to form
several German companies. During these transactions, the defendant
made various phone calls and sent faxes and letters to Texas, the
forum state. Plaintiff alleged that these communications contained
fraudulent misrepresentations. Plaintiff also alleged that the
defendant made intentional, material misrepresentations while
attending meetings in Texas. In addressing whether these
allegations were sufficient to establish a prima facie case of
personal jurisdiction against the defendant, we stated, “Even if
the parties formed their relationship in Germany, however, a single
act by Brandt directed toward Texas that gives rise to a cause of
action by Wien Air can support a finding of minimum contacts.” Id.
at 211. In addition, “[w]hen the actual content of communications
with a forum gives rise to intentional tort causes of action, this
alone constitutes purposeful availment.” Id. at 213.
In Lewis v. Fresne, 252 F.3d 352 (5th Cir. 2001), Lewis alleged
that defendant Rosenfeld participated in a phone conversation
between himself and Fresne that was designed to convince Lewis to
make a loan on the basis of several misrepresentations. Rosenfeld
did not correct the misrepresentations and prepared and sent loan
documents and stock certificates to Lewis in Texas that contained
fraudulent misstatements regarding the asset that was to secure the
loan. We found these allegations to be sufficient evidence of
6
minimum contacts because a “single act by a defendant can be enough
to confer personal jurisdiction if that act gives rise to the claim
being asserted.” Id. at 358-59. See also Streber v. Hunter, 221
F.3d 701 (5th Cir. 2000) (Defendant Blazier purposefully availed
himself of Texas laws when he gave tax advice that he knew would be
received by a Texas client. At least some of the allegations
forming the basis of the lawsuit arose from Blazier’s contacts with
Texas, including participation in a mediation in Texas. The
exercise of personal jurisdiction over Blazier was appropriate.)
We see no basis to distinguish this case from the above
authority. Rossi alleges acts by the defendants in Texas that give
rise to at least one of the claims he asserts against the
defendants. Accordingly, he has established a prima facie case
that the defendants had minimum contacts with Texas because they
“purposefully directed . . . activities at the forum state and the
litigation results from alleged injuries that arise out of or
relate to those activities.” Alpine View, 205 F.3d at 215(internal quotation marks omitted).2
Once a plaintiff has established minimum contacts with the
forum state, the burden shifts to the defendant to show that the
assertion of jurisdiction over him would be unfair. Wien Air, 195
F.3d at 215. Although the district court did not reach this stage
of the analysis, it is rare that a defendant can make such a
2
On remand, if requested by the parties, the district court may
reconsider this issue following a Rule 12(b)(2) hearing.
7
compelling case once minimum contacts have been shown. Id. “If a
cause of action for fraud committed against a resident of the forum
is directly related to the tortious activities that give rise to
personal jurisdiction, an exercise of jurisdiction likely comports
with the due process clause, given the obvious interests of the
plaintiff and the forum state.” Id.IV.
For the foregoing reasons, we vacate the judgment of the
district court and remand this case for further proceedings.
VACATED and REMANDED.
8