MELINDA HARMON, District Judge.
The above referenced cause, removed from Texas state court on diversity jurisdiction
After a careful review of the record and the applicable law, for the reasons stated below, the Court finds that it lacks personal jurisdiction over Defendants and that a transfer to the Central District of California under § 1404 is appropriate.
Plaintiffs Evergreen Media Holdings, LLC ("Evergreen") and Tony DeRosa-Grund ("DeRosa-Grund"), a motion picture producer, purchased the rights to case files of two paranormal investigators, Ed and Lorraine Warren, from which De-Rosa-Grund wrote the story and developed the motion picture, "The Conjuring." On or around March 2010, Plaintiffs entered into an Option Quitclaim Agreement with New Line Productions, Inc. ("New Line"), pursuant to which New Line obtained from Plaintiffs an option on the rights to produce "The Conjuring" and a theatrical sequel or remake of it or additional films based on the Warrens' case files. On or around March 31, 2010 Evergreen and New Line also entered into a Producer Loanout Agreement pursuant to which DeRosa-Grund would produce "The Conjuring." Under both agreements Plaintiffs were to be compensated by New Line with a percentage of the adjusted gross receipts of "The Conjuring," which turned out to be one of the most profitable movies of 2013.
While "The Conjuring" was being filmed, but before it was released, in or around February 13, 2012 DeRosa-Grund and Peter Safran ("Safran"), who is president and owner of The Safran Company, entered into an oral agreement in Montgomery County, Texas pursuant to which Defendants would provide customary producer services (e.g., securing writers, directors and other talent for and developing Plaintiffs' projects in the marketplace and
Nevertheless, claim Plaintiffs, not only did Safran not provide any producer services to Plaintiffs with respect to the other entertainment projects, but Defendants undermined Plaintiffs' efforts in the entertainment industry. Since Defendants did not provide consideration for the oral agreement, Plaintiffs insist that no valid and binding agreement exists between the parties. Even if it did, Plaintiffs contend that Safran breached the agreement and the implied covenant of good faith and fair dealing by failing to provide the producer services relating to the other entertainment projects and by his actions undermining Plaintiffs' efforts. Therefore Plaintiffs claim they have no obligation to pay Safran any portion of the contingent compensation connected to "The Conjuring."
Furthermore New Line purportedly failed to pay the profit participation it promised to Plaintiffs.
Whether the court has personal jurisdiction over a defendant is a question of law subject to de novo review. In re Chinese-Manufactured Drywall Products Liability Litig., 753 F.3d 521, 528-29 (5th Cir.2014). When a defendant files a motion to dismiss for lack of jurisdiction under Federal Rule of Civil Procedure 12(b)(2), the plaintiff bears the burden of demonstrating that the court has personal jurisdiction over the defendant. Luv N' Care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 469 (5th Cir.) (citing Wyatt v. Kaplan, 686 F.2d 276, 280 (5th Cir.1982)), cert. denied, 548 U.S. 904, 126 S.Ct. 2968, 165 L.Ed.2d 951 (2006).
The court had discretion whether to allow jurisdictional discovery. Monkton Ins., 768 F.3d at 429, citing Davila v. U.S., 713 F.3d 248, 263-64 (5th Cir.2013). As the party opposing dismissal and requesting jurisdictional discovery, the plaintiff bears the burden of showing that discovery is needed. Id. As recently opined by the district court in National Surety Corp. v. Ferguson Enterprises, Inc., No. 3:13-CV-2045-M, 2014 WL 5472436, at *1 (N.D.Tex. Oct. 29, 2014),
Under the federal rules, except where a federal statute provides for broader personal jurisdiction, the district court's personal jurisdiction is coterminous with that of a court of general jurisdiction of the state in which the district court sits. Submersible Sys., Inc. v. Perforadora Cent., S.A. de C.V., 249 F.3d 413, 418 (5th Cir.2001). A federal court sitting in diversity may exercise personal jurisdiction over a nonresident defendant if the forum state's long-arm statute confers personal jurisdiction over that nonresident defendant and if the exercise of personal jurisdiction satisfies due process under the United States Constitution. McFadin v. Gerber, 587 F.3d 753, 759 (5th Cir.2009), citing Moncrief Oil Int'l, Inc. v. OAO Gazprom, 481 F.3d 309, 311 (5th Cir.2007). The Texas long-arm statute, Texas Civil Practice and Remedies Code §§ 17.042-.045,
Personal jurisdiction can be either specific or general jurisdiction. Mink v. AAAA Develop., LLC., 190 F.3d 333, 336 (5th Cir.1999). "Where [an individual] defendant `has continuous and systematic general business contracts' with the forum state, the court may exercise `general jurisdiction over any action brought against the defendant [regardless of whether the
Recently the Supreme Court opined that the appropriate consideration in determining general jurisdiction of a foreign corporation is whether the defendant's "`affiliations with the State are so continuous and systematic as to render [it] essentially at home in the forum State.'" Daimler AG v. Bauman, ___ U.S. ___, 134 S.Ct. 746, 761, 187 L.Ed.2d 624 (2014), quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, ___ U.S. ___, 131 S.Ct. 2846, 2851, 180 L.Ed.2d 796 (2011). "For an individual, the paradigm forum for the exercise of general jurisdiction is the individual's domicile; for a corporation ... the place of incorporation and principal place of business...." Id. at 760, citing Goodyear at 2853-54. "It is therefore incredibly difficult to establish general jurisdiction [over a corporation] in a forum other than the place of incorporation or principal place of business." Monkton Ins. Services, 768 F.3d at 432, citing Goodyear, 131 S.Ct. at 2851, and Helicopteros, 466 U.S. at 411-12, 104 S.Ct. 1868. It is undisputed that The Safran Company is a California corporation, organized and existing under the laws of California with its principal place of business in Beverly Hills, California 90210. # 1, Notice of Removal at p.3.
A defendant's presence in Texas is not "continuous and systematic merely because it advertises in that state or nationally." Brother of the Leaf, LLC v. Plastic Products Co., Inc., 2014 WL 3824209, at *4 (W.D.Tex. Aug. 1, 2014), citing Johnston v. Multidata Systems Intern. Corp., 523 F.3d 602, 609 (5th Cir. 2008), and Bearry v. Beech Aircraft Corp., 818 F.2d 370, 376 (5th Cir.1987). "[P]urchases and related trips, standing alone, are not a sufficient basis for a State's assertion of [general personal] jurisdiction." Helicopteros, 466 U.S. at 417, 104 S.Ct. 1868.
If the defendant has relatively few contacts, the court may still exercise specific personal jurisdiction over that party if the suit "`arises out of' or is related to the defendant's contacts with the forum." Helicopteros, 466 U.S. at 414 & n. 8, 104 S.Ct. 1868. Thus in this action, Defendants' contacts with Texas must relate to or arise from the alleged breach of contract and duty of good faith and fair dealing. Id. "Although a nonresident's physical presence within the territorial jurisdiction of the court is not required, the nonresident generally must have `certain minimum contacts... such that the maintenance of the suit does not offend `traditional notions of
The Fifth Circuit has concluded that specific jurisdiction is "a claim-specific inquiry: `A plaintiff bringing multiple claims that arise out of different forum contacts of the defendant must establish specific jurisdiction for each claim.'" McFadin, 587 F.3d at 759, quoting Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 271 (5th Cir.2006). Moreover, the Fifth Circuit has established a three-step analysis for determining whether specific jurisdiction exists: "`(1) whether the defendant has minimum contacts with the forum state, i.e., whether it purposely directed its activities toward the forum state or purposely availed itself of the privileges of conducting activities there
"[M]erely contracting with a resident of the forum state is insufficient to subject the nonresident to the forum's jurisdiction." Holt Oil & Gas Corp. v. Harvey, 801 F.2d 773, 778 (5th Cir.1986), cert. denied, 481 U.S. 1015, 107 S.Ct. 1892, 95 L.Ed.2d 499 (1987). See also Freudensprung v. Offshore Technical Services, Inc., 379 F.3d 327, 344 (5th Cir.2004). It is black letter law that communications between parties during contract negotiations, by themselves, are insufficient to support personal jurisdiction. Holt Oil, 801 F.2d at 778. "An exchange of communications in the course of developing and carrying out a contract ... does not, by itself, constitute the required purposeful availment of the benefits and protections of Texas law." Moncrief Oil Intern., Inc. v. OAO Gazprom, 481 F.3d 309, 312 (5th Cir.2007). See also Cardinal Health Solutions, Inc. v. St. Joseph Hosp. of Port Charlotte, Fla. Inc., 314 Fed.Appx. 744, 745 (5th Cir.2009); Freudensprung v. Offshore Technical Services, Inc., 379 F.3d 327, 344 (5th Cir.2004).
Indeed, where the exchange of communications between Texas and another state, including extensive emails and telephone calls, rests on nothing except "the mere fortuity that [plaintiff] happens to be a resident of the forum," it is insufficient to establish specific jurisdiction. MH Outdoor Media, LLC v. Am. Outdoor Advertising, LLC, No. Civ. H-14-898, 2014 WL 4537959, at *3 (S.D.Tex. Sept. 10, 2014), citing Holt, 801 F.2d at 778, and Freudensprung, 379 F.3d at 344. Jurisdiction may not be based on the fortuity of one party residing in the forum state. McFadin, 587 F.3d at 760.
Once the plaintiff has established that the defendant has minimum contacts with the forum state, the burden shifts to the defendant to show that assertion of jurisdiction would be unfair. Walk Haydel, 517 F.3d at 245. In determining whether the exercise of jurisdiction is fair and reasonable, the court examines five factors: "`(1) the burden on the nonresident defendant, (2) the forum state's interests, (3) the plaintiff's interest in securing relief, (4) the interest of the interstate judicial system in the efficient administration of justice, and (5) the shared interest of the several states in furthering fundamental social policies.'" McFadin, 587 F.3d at 759-60, quoting Luv N' Care, 438 F.3d at 473. If the plaintiff fails to establish the existence of minimum contacts with the forum state, the court need not reach the question of whether personal jurisdiction would offend traditional notions of fair play and substantial justice. Renoir v. Hantman's Associates, Inc., 230 Fed.Appx. 357, 360 (5th Cir.2007).
The fiduciary shield doctrine protects officers of a corporation in their individual capacity from personal jurisdiction when he acts on behalf of his corporation. Generally under the "fiduciary shield doctrine," "an individual's transaction of business within the state solely as a corporate officer does not create personal jurisdiction over that individual though the state has in personam jurisdiction over the corporation[.]" Stuart v. Spademan, 772 F.2d 1185, 1197 (5th Cir.1985); Fairchild v. Barot, 946 F.Supp.2d 573 (N.D.Tex. 2013) ("With limited exceptions, the fiduciary shield doctrine prohibits a court from exercising personal jurisdiction over an individual based solely on jurisdiction over the company with which the individual is associated," (citing Stuart v. Spademan)). Although the Texas Supreme Court has not adopted the doctrine, intermediate appellate courts have used it to defeat general jurisdiction over a nonresident defendant. Quality Lease and Rental Holdings, LLC v. Mobley, No. 13-14-00064-CV, 2014 WL 3738653, at *7 n. 9
The Fifth Circuit has held that, as an alternative to dismissal without prejudice, a federal court lacking personal jurisdiction may transfer the case to another court under 28 U.S.C. § 1404(a), the venue transfer statute, if the transferee court meets that statute's requirements, i.e., to any district or division in which it could have been brought if the court finds that transfer is in the interest of justice. Bentz v. Recile, 778 F.2d 1026, 1027 (5th Cir.1985); Herman v. Cataphora, Inc., 730 F.3d 460, 466 (5th Cir.2013). The district court has broad discretion to transfer a case under 28 U.S.C. 1404(a)
A civil action may be brought in —
"[W]hile a plaintiff has the privilege of filing his claims in any judicial division appropriate under the general venue statute, § 1404(a) tempers the effects of the exercise of this privilege." In re Volkswagen, 545 F.3d at 313. The Fifth Circuit has adopted the private and public interest factors set forth in Gulf Oil Corp. v. Gilbert, a forum non conveniens case, and applied them to determine whether a transfer is for the convenience of the parties and witnesses and in the interest of justice under 28 U.S.C. § 1404(a). In re Volkswagen, 545 F.3d at 313 & nn. 9 and 10 (citing Humble Oil & Refining Co. v. Bell Marine Service, Inc., 321 F.2d 53, 56 (5th Cir.1963)), cert. denied, 555 U.S. 1172,
The public interest factors include "`(1) the administrative difficulties flowing from court congestion; (2) the local interest in having localized interests decided at home; (3) the familiarity of the forum with the law that will govern the case; and (4) the avoidance of unnecessary problems of conflict of laws [or in] the application of foreign law.'" Id. These factors, while appropriate for most cases, are not exhaustive or exclusive, and none is dispositive. Id.
Under § 1404(a) the court is not authorized to dismiss the case, as it is under 28 U.S.C. § 1406(a). Id. If the transferee court is not clearly more convenient, the court must defer to the plaintiff's choice of venue. In re Volkswagen, 545 F.3d at 315.
Arguing that everything to do with "The Conjuring" occurred in California or North Carolina and that the sole connection with Texas is that Plaintiffs reside here, a fortuitous occurrence, Defendants, supported by Peter Safran's affidavit (Exhibit A), emphasize that they are citizens of California and they do not have any substantial, continuous or systematic contact with Texas for purposes of general jurisdiction. Furthermore they do not do business in Texas, have offices in Texas, own, lease or control any real or personal property in Texas, do not maintain bank accounts in Texas, have not paid any real or personal property taxes in Texas, do not have a telephone listing in Texas, do not have any employees or any agents in Texas, and do not promote or advertise any of their services in Texas. Peter Safran has made four isolated visits to Texas over forty-eight years, each time in response to an invitation.
Nor are Defendants subject to specific personal jurisdiction in Texas because the only connection this case has to Texas is that Plaintiffs reside here. Plaintiffs' allegations of jurisdiction are vague and conclusory. The only allegation potentially related to Texas is that Plaintiffs entered into an oral agreement in Montgomery County, Texas, a legal conclusion with no factual support and which Defendants insist is false; they maintain that the agreement was negotiated while De-Rosa-Grund and Peter Safran were in North Carolina. Plaintiffs do not and cannot identify any specific actions of Defendants that occurred in Texas or that relate to the alleged agreement.
Alternatively, Defendants urge the Court to transfer this case under 28 U.S.C. § 1404(a) to the Central District of California, the judicial district in which they reside and where The Safran Company has its principal place of business. The private interest factors favor transfer of this action: Safran is a resident of that district and The Safran Company's principal place of business is there. Safran's affidavit, Ex. A. There is easy access to sources of proof in California, including a related arbitration between New Line and DeRosa-Grund. Moreover if the case goes to trial experts may be necessary on compensation methods, legal issues, business models and other industry-specific practices unique to the film industry which are more plentiful in California than in Texas. Moreover most, if not all, potential third-party witnesses
Defendants urge that the public factors also support a transfer. Regarding court congestion, the Central District of California has 28 authorised active judgeships, the Southern District of Texas only 19. Furthermore the Southern District of Texas has ten times more vacant judgeships. The Southern District of Texas has almost five times the number of criminal cases, which take precedence, as the Central District of California. Moreover, this case is focused on and will affect the film-making industry, which is centered in the Central District of California. Asserting that this Court will likely decide that California law applies to this action, Defendants urge that transfer is appropriate. Since Plaintiffs seek a declaratory judgment based on a contractual claim, the dispute can be decided in either state.
Insisting Defendants have misrepresented and/or omitted material facts and with a supporting declaration from DeRosa-Grund (# 9-1), Plaintiffs spend a considerable amount of time emphasizing that they reside and work within Texas, including on "The Conjuring," that Defendants were fully aware that they did, that DeRosa-Grund was a "hugely successful motion picture producer" and television producer who had the connections and reputation to find professional writers or studio producers for his projects without the help of Safran, that DeRosa-Grund by himself made the key decisions involving "The Conjuring" and agreements for future projects, that DeRosa-Grund had only been to California three times in the last twelve years, and that "The Conjuring" was not based on "reports" of the Warrens, but on DeRosa-Grund's dealings and discussions over twenty-three years with the Warrens about their case files, including the "Perron Farmhouse" Case File, from which DeRosa-Grund created and wrote the original story and treatment for "The Conjuring."
While these matters may relate to the merits of Plaintiffs' claims, the Court notes that none is relevant to whether this Court has personal jurisdiction over Safran and The Safran Company based on their contacts with Texas. Thus the Court addresses only those claims of Plaintiffs that are material to the issue of personal jurisdiction.
Plaintiffs allege that after Safran learned from Paul Brooks, president of Gold Circle Films,
The key contact of Defendants with Texas claimed by Plaintiffs involves DeRosa-Grund's personal bankruptcy proceedings in 2009 in the United States Bankruptcy Court for the Southern District of Texas, Case Number 4:09-bk-33264, presided over by the Honorable Wesley Steen. To satisfy the demands of potential motion picture studios, including New Line, to make and release "The Conjuring," DeRosa-Grund had to clear the chain of title by obtaining approval of the terms of the agreement with New Line by both the bankruptcy trustee and the bankruptcy court in Texas and by having the bankruptcy trustee, on behalf of the bankruptcy estate, enter into the contract with New Line giving the bankruptcy estate's interest in the life rights of the Warrens in exchange for a payment from New Line to the bankruptcy estate. Plaintiffs insist that "Safran's involvement in the Bankruptcy Court proceeding was not minimal." # 9 at p. 8. They assert that Safran directly
Plaintiffs further assert that Defendants "continuously interact[ed] by telephone and email-over hundreds of times-with Plaintiffs in Texas as part of their co-production activities." # 9 at p. 23.
Should the Court question its personal jurisdiction over Defendants, Plaintiffs request leave to obtain jurisdictional discovery and a continuance of the Court's review of the motion to dismiss.
To Plaintiffs' contention that Defendants are subject to personal jurisdiction because they contracted with and did business with Texas residents, Defendants respond that Plaintiffs' residence in Texas cannot bestow personal jurisdiction over Defendants. It is the latters' purposeful contacts with Texas, not Plaintiffs' that matter. Moreover, as evidenced, Plaintiffs were actively pursuing connections to California for "The Conjuring" before Defendants came along and that whether Defendants may have sent the first email or initiated the first phone call is of no import.
So, too, is DeRosa-Grund's personal bankruptcy insufficient to support personal jurisdiction over Safran and The Safran Company; even a person making a formal appearance in a bankruptcy proceeding does not extend jurisdiction over that individual in later litigation when the appearance is insignificant to the bankruptcy proceedings. Bergenholtz v. Cannata, 200 S.W.3d 287, 295-96 (Tex.App.-Dallas 2006, no pet.) (California attorney made a formal special appearance protesting lack of personal jurisdiction) ("The fact that the bankruptcies were pending in Texas ... was fortuitous rather that the result of [the Defendant's] `purposeful availment' of the benefit of Texas law.").
That Defendants entered into an oral contract with Plaintiffs for future production of other theatrical motion pictures is not sufficient to confer jurisdiction over them because it is Defendants', not Plaintiffs', contacts with Texas that are relevant. Defendants insist that their contacts with Texas were not of the nature and
Finally, Defendants argue that Plaintiffs are not entitled to jurisdictional discovery. They fail to identify any question of fact that could alter the specific jurisdiction analysis, but base their allegations on facts already known to both parties. They also failed to identify any basis for general jurisdiction discovery. Alternatively, contend Defendants, venue should be transferred. The only objection Plaintiffs make is that it would be inconvenient for them to litigate this dispute in California, despite the fact that they are already arbitrating a case against New Line in California and that nearly all of the individuals they name in their response are located in California.
Without requesting leave to file their Surreply, Plaintiffs insist that they have made a colorable case for personal jurisdiction (largely repeating their previous contentions, which the Court does not reiterate) and that the Court "must accept as true the uncontroverted allegations in the complaint and resolve in favor of the plaintiffs any factual conflicts." Lansing Trade Group, 612 F.Supp.2d at 819. They insist that "it is indisputable that: (i) Defendants deliberately sought out Plaintiffs in Texas in order to attempt to convince Plaintiffs to enter into a long-term agreement with Defendants; (ii) Defendants deliberately injected themselves in Mr. DeRosa-Grund's bankruptcy; (iii) Defendants entered into an agreement with Plaintiffs whereby Defendants knew they would be working with Plaintiffs in Texas; Defendants routinely and continuously communicated with Plaintiffs in Texas; and (v) Defendants routinely and continuously communicated with Plaintiffs in Texas concerning critical aspects of their business relationship." # 18 at p. 5. Plaintiffs maintain that they were looking for business relationships throughout the United States and around the world, that they were not shopping the market in California and never traveled to California but remained in Texas, and were not looking to do business
Regarding their request for jurisdictional discovery, Plaintiffs state that they "anticipate[ ] that evidence will be gathered showing that, among other things: (i) Defendants entered into a business relationship and/or agreements with Texas resident and citizen, Armie Hammer, to serve as the lead actor and executive producer in connection with the motion picture titled `Mine'; and (ii) Defendants have other contacts with Texas, including contracts and/or relationships with other Texas residents and citizens, including, but not limited to, Gene William's [sic ] who played a role in Defendants' motion picture titled `The Starving Games.'" # 18 at p. 9.
Finally, Plaintiffs maintain that venue is not proper in California. They conclusorily claim public and private interest factors do not support a change in venue, but do not explain why. As for the arbitration in which Plaintiffs are participating in California, Plaintiffs state they have never conceded personal jurisdiction in that proceeding and are participating only because the arbitrator indicated that they would be defaulted if they do not.
The existence of personal jurisdiction over a defendant is a question of law. In re Chinese-Manufactured Drywall Products Liability Litig., 753 F.3d 521, 528-29 (5th Cir.2014). Because the Court did not hold an evidentiary hearing, Plaintiffs bear the burden of establishing a prima facie case of personal jurisdiction over Defendants. The Court accepts Plaintiffs' uncontroverted allegations as true, but not conclusory assertions without factual support and not necessarily Plaintiffs' interpretation of the law and its application to those alleged facts.
As a threshold matter in the personal jurisdiction analysis, the Court observes that Plaintiffs fail to distinguish between the two Defendants. Indeed they have failed to specify any facts regarding The Safran Company and its contacts with Texas. While Plaintiffs rely heavily on the Deal Memo, the negotiations for which Safran participated in Texas, the Court observes that it is signed in his individual name with no indication in the body or in his signature that he did so on behalf of The Safran Company. # 9, Ex. A to Ex. 4 (Judge Steen's Order). The NOIA between Assignor Evergreen and Assignee The Safran Company provides that any payment to The Safran Company under the Producer Loanout Agreement between New Line and Evergreen with respect to the Warren files project should be paid to The Safran Company at its Los Angeles, California address. # 9, Ex. 6.
Plaintiffs fail to establish a prima facie case of general jurisdiction over Safran and The Safran Company in Texas because they do not show that Defendants' contacts with Texas were continuous, systematic and substantial. Burger King, 471 U.S. at 475, 105 S.Ct. 2174. They fail to controvert Safran's affidavit stating that Defendants had no employees, no agents, no office, no lease or control of any real or personal property in Texas, do not maintain bank accounts in Texas, have not paid any real or personal property taxes in Texas, do not have a telephone listing in Texas, and do not promote or advertise any of their services in Texas. Nor have Plaintiffs provided any other evidence that would demonstrate that Defendants have continuous, systematic or substantial contacts with Texas.
As for specific jurisdiction, the Court has examined Plaintiffs' factual allegations to determine whether the quality, nature, and extent of Defendants' activities
In essence Plaintiffs argue first that Defendants established minimum contacts with Texas by contracting with Texas Plaintiffs, thus satisfying the long-arm statute permitting service of process on nonresidents who have engaged in business in Texas. Tex. Civ. Prac. & Rem. Code § 17.042. Second, they claim that Safran's interjection of himself into DeRosa-Grund's personal bankruptcy proceedings, participation in negotiations resulting in the Deal Memo, and execution of that document in Texas provide sufficient contacts with Texas to support personal jurisdiction over him.
Regarding the contract between Plaintiffs and Defendants, the Court agrees with Defendants that Plaintiffs incorrectly focus on their own contacts with Texas when it is Defendants' contacts that are relevant to the jurisdictional inquiry. Furthermore, as discussed previously, the mere fact that a nonresident defendant enters into a contract with a Texas resident plaintiff does not, by itself, support the exercise of personal jurisdiction by a Texas court over the nonresident. Colwell Realty Investments, Inc. v. Triple T Inns, of Arizona, Inc., 785 F.2d 1330, 1334 (5th Cir.1986); Stuart, 772 F.2d at 1192-93. Nor do communications (including emails and telephone calls) in developing or carrying out the contract constitute adequate purposeful availment of the benefits and protection of Texas law. Holt Oil, 801 F.2d at 778. See SMK Painting Co. v. Flournoy Constr. Co., LLC, No. Civ. A. 3:99-CV-0916-G, 1999 WL 1017779, at *4 (N.D.Tex. Nov. 8, 1999) ("The Fifth Circuit has held that negotiating, executing, and even partially performing an isolated contract with a resident of the forum will not, without more, constitute the minimum contacts necessary to confer jurisdiction."), citing Gundle Lining Constr. Corp. v. Adams County Asphalt, Inc., 85 F.3d 201, 205 (5th Cir.1996), in turn citing Stuart, 772 F.2d at 1193, and Hydrokinetics, Inc. v. Alaska Mechanical, Inc., 700 F.2d 1026, 1029 (5th Cir.1983), cert. denied, 466 U.S. 962, 104 S.Ct. 2180, 80 L.Ed.2d 561 (1984). Defendants' performance or nonperformance of the contract did not take place in Texas. As for Safran's participation in DeRosa-Grund's bankruptcy proceedings, in which he did not make an appearance but only joined in negotiations for the Deal Memo (Ex. A to # 9-5) (another agreement subject to the same standards as the agreement at issue between Plaintiffs and Defendants), the ultimate purpose of the memo was to clear the title by giving the bankruptcy estate's interest in the life rights of the Warrens to New Line for future film project in exchange for a payment from New Line to the bankruptcy estate, in other words, a condition precedent for the movie studio's participation in Plaintiffs' future film projects. The Deal Memo is tangential to the instant suit, especially because Plaintiffs claim that Defendants never provided the promised producer services and thus was not owed money by New Line. Moreover, courts should examine the totality of circumstances to determine if the defendant purposefully availed itself of the forum state or merely engaged in contacts that were random, fortuitous or attenuated in nature. Burger King, 471 U.S. at 475, 105 S.Ct. 2174. The fact that Safran signed the Deal Memo in Texas is an isolated factor in the totality of the facts. In sum, the Court finds that Plaintiffs also fail to establish a prima facie case of specific personal jurisdiction over Safran and The Safran Company. Thus the Court does not
Plaintiffs have asked for a continuance and jurisdictional discovery if the Court finds they have not met their burden of establishing a prima facie case of personal jurisdiction. However, the Court finds they have also not met the standard for such discovery. They have not described what facts they expect to discover and how that information would support jurisdiction, but only vaguely pointed to possible previous agreements with two Texas residents, Armie Hammer and Gene Williams, which and who are unrelated to this litigation. Two isolated agreements with other individual will not suffice to establish general jurisdiction over Safran and The Safran Company. As noted, an out-of-state defendant that merely does business with Texas businesses or customers will not be subject to general jurisdiction if the defendant does not have a lasting presence in Texas. MCI Telecommunications, 197 F.3d at 717. Moreover vague, conclusory assertions that do not indicate the extent or frequency of contacts are insufficient to support general jurisdiction. Johnston, 523 F.3d at 610. For the same reasons that Plaintiffs fail to make a preliminary showing of specific personal jurisdiction over Safran and The Safran Company on their breach of contract cause of action, they fail to do show how they can establish personal jurisdiction over Defendants based on unrelated contracts with Armie Hammer and Gene Williams.
Because the Court concludes that it lacks personal jurisdiction over Safran and The Safran Company, it addresses Defendants' motion to transfer under § 1404(a) as an alternative to dismissal. While Defendants have addressed in detail the public and private factors that support a transfer to the Central District of California, where this suit could have been brought since all the defendants are residents of California, for the convenience of the parties and the witnesses and in the interest of justice, Plaintiffs have merely conclusorily denied them. Thus the Court finds that Defendants have clearly met their burden and that this case should be transferred pursuant to 28 U.S.C. § 1404(a).
Accordingly, finding that Plaintiffs have failed to meet their burden of establishing a prima facie case of personal jurisdiction over Safran and The Safran Company in Texas, the Court
ORDERS that this case is TRANSFERRED pursuant to 28 U.S.C. § 1404(a) to the United States District Court in the Central District of California.
Plaintiffs assert that "[u]nder Texas law, there is an implied covenant of good faith and fair dealing in every contract that neither party will do anything that will injure the right of the other to receive the benefits of the agreement." Orig. Petition, # 1-2 at p. 8. The Court notes that the Texas Supreme Court has declined to imply a general duty of good faith and fair dealing in all contracts. English v. Fischer, 660 S.W.2d 521, 522 (Tex. 1983) (opining that there is no general duty of good faith and fair dealing in ordinary, arms-length commercial transactions). An exception is recognized where the parties have certain "special relationships," e.g., the relationship between an insured and insurer, principal and agent, joint venturers or part-ners, in which case a duty of good faith and fair dealing may arise based on trust or unequal bargaining power. Natividad v. Alexsis, Inc., 875 S.W.2d 695, 697-98 & n. 5 (Tex. 1994), citing Arnold v. Nat'l County Mut. Fire Ins. Co., 725 S.W.2d 165, 167 (Tex.1987).
The panel further opined, id. at 241,
Simply contracting with a Texas resident or communicating with him during the performance of the contract is not sufficient to subject a nonresident to personal jurisdiction in a Texas court. Max Protetch, Inc. v. Herrin, 340 S.W.3d 878, 886 (Tex.App.-Houston [14th Dist.] 2011, no pet.), citing Olympia Capital Assocs., LP v. Jackson, 247 S.W.3d 399, 417 (Tex.App.-Dallas 2008, no pet.), and Credit Commercial de France, S.A. v. Morales, 195 S.W.3d 209, 220-21 (Tex.App.-San Antonio 2006, pet. denied).
In response, Safran wrote,