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this opinion should not be published and is not precedent except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
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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