Petition — Helicopteros Nacionales De Colombia, SA v. Hall
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Supreme Court, U.S.
FILED
No. —— ALEXANDER L. STEVAS
_ SE
IN THE
Supreme Court of the Gnited States
OCTOBER TERM, 1982
HELICOPTEROS NACIONALES DE Co.Lomsia, S.A.,
Petitioner,
Vv.
ELIZABETH HALL, et al.,
Respondents.
PETITION FOR A WRIT OF CERTIORARI
TO THE SUPREME COURT OF TEXAS
THOMAS J. WHALEN
Counsel for the Petitioner
Helicopteros Nacionales
De Colombia, S.A.
1030 15th St., N.W.
Suite 720
Washington, D.C. 20005
(202) 289-0500
A
PRESS OF BYRON S. ADAMS PRINTING, INC., WASHINGTCN, D.C.
IN THE
Supreme Court of the United States
OCTOBER TERM, 1982
No.
HELICOPTEROS NACIONALES De CoLomaia, S.A..
Petitioner,
Vv.
ELIZABETH HALL, ef ai.,
Respondents.
PETITION FOR A WRIT OF CERTIORARI
TO THE SUPREME COURT OF TEXAS
Questions Presented
1. Whether a Texas Court constitutionally may
assert in personam jurisdiction over a nonresident Col-
ombian corporation where the plaintiffs’ wrongful death
actions arose out of a helicopter accident in Peru and
where the Colombian corporation’s sole contacts with
Texas involved equipment purchases from a third party
Texas corporation and a single contract discussion with
decedents’ employer in Texas and where plaintiffs’ causes
of action did not arise out of these contacts.
2. Whether the due process and equal protection
clauses of the Fourteenth Amendment are violated by the
exercise of in personam jurisdiction over a nonresident
ii
alien corporation under circumstances in which a nonresi-
dent United States corporation could not constitutionally
be subjected to jurisdiction. '
' The following persons and entities were parties before the Texas
Supreme Court: Elizabeth Hall, individually and as next friend of
Delbert Hall, a minor; Susan Carol Porton; Harve Porton and Verda
Ola Porton, individually and as next friends of Jeffery Taylor Porton,
a minor; Naomi Lewallen, individually and as next friend of Ginger
Lewallen, a minor; Gary Lewallen; Louise C. Moore (appellants); and
Helicopteros Nacionales de Colombia, S.A. (appellee).
Helicopteros Nacionales de Colombia, S.A. (hereinafter Helicol),
is a Colombian Corporation. Aerovias Nacionales de Colombia
(known as Avianca) owns approximately 94 percent of Helicol’s capit-
al stock. The remainder of its stock is held by Aerovias Corporacion
de Viajes and four South American individuals.
TABLE OF CONTENTS
Page
QUESTIONS PRESENTED ..........cccccccccsscsecvese i
EES EP POL ET POOLEY ETRE EEC TT ETE Ce l
Gs i cue cde aae ease ae peateews aveenes s 2
CONSTITUTIONAL PROVISION INVOLVED ........eeeee05 2
PATERMENT OF THE CAGR occ cc cccccccccec: cascncssan 2
Reasons FOR GRANTING WRIT 2... cccccccesescccecces 6
I.
II.
ITI.
THE DeEcIsION OF THE TEXAS SUPREME CowuRT Con.
FLICTS WITH THE DECISION OF THE CouRT iN PER.
KINS v. BENGUET CONSOLIDATED MINING Co., 342
U.S. 4387 (1952), AND Is Contrary To THE PRINCc!.-
PLES OF IN PERSONAM JURISDICTION OVER NONRESI-
DENT CORPORATE DEFENDANTS LaID Down By THE
Court IN INTERNATIONAL SHOE CoO. v. WASHINGTON,
326 U.S. 310 (1945), AND WorLD-WIDE VOLKSWAGEN
Corp. v. Woopson, 444 U.S. 286 (1980) .........
Tue HoLpinc Or THE Texas SUPREME CouRT THAT
AN ALIEN NONRESIDENT CORPORATION WAS SUBJECT
To THE IN PERSONAM JURISDICTION OF A STATE
Court Because Or Its PuRCHASE OF AMERICAN
Propucts IN THE Forum StaTE Is CoNTRARY TO THE
DECISION OF THE Court IN ROSENBERG BROTHERS &
Co. v. Curtis Brown Co., 260 U.S. 516 (1923), AND
PRESENTS AN IMPORTANT QUESTION HAVING WIDE-
RANGING IMPLICATIONS For UNITED STATES TRADE
IR ee es Sea anhanies heen a6
THE DECISION OF THE TEXAS SUPREME CouRT Con.
FLICTS WITH DEcISIONS OF THE HIGHEST CouRTs OF
SEVERAL STATES AND DEMONSTRATES THE NEED For
FURTHER CLARIFICATION OF FEDERAL DUE PROCESS
As It RELaTEs To JN PERSONAM JURISDICTION OVER
NONRESIDENT CORPORATIONS .......eceeeeseeees
14
iv
Table of Contents Continued
Page
IV. THE PRINCIPLE THAT AN ALIEN NONRESIDENT
CORPORATION Is Not ENTITLED To THE SAME RIGHTS
Or FEDERAL DUE Process AND EQUAL PROTECTION
Or THE Laws As ARE UNITED STATES CORPORATIONS
ON THE QUESTION OF AMENABILITY To Su!T IN STATE
AND FEDERAL COURTS PRESENTS AN IMPORTANT
CONSTITUTIONAL QUESTION WHICH SHOULD BE ReE-
SOLVED By THE Court IN THE INTEREST OF THE
FOREIGN COMMERCE OF THE UNITED STATES ..... 18
DMN, es eda ccs. co uu be hokde ite mb binae ewe ae 20
Vv
TABLE OF AUTHORITIES
CASES: Page
Baxter v. Mouzavires, 434 A.2d 988 (D.C. 1981), cert.
denied, 455 U.S. 1006 (1982) ........ccceceeeees 17
Chelsea House Publishers v. Nicholstone Book a
Inc., 621 S.W.2d 560 (Tenn. 1981), cert. denied, 455
CT OR COD vnndcnccdvacceseauNoewuswmassere 17
Conn v. Whitmore, 9 Utah 2d 250, 342 P.2d 871 (1959) 16
oo v. Chase & Gilbert, Inc., 45 F.2d 139 (2d Cir.
l Pl en cawokerice sue dewsbsasorbekeer shennan
International Shoe Co. v. Washington, 326 U.S. 310
(ERE ceccdvash Cocknncnsseuseesnensken 7, 8, 12, 18
Kulko v. Superior Court, 436 U.S. 84 (1978) .... 7, 11, 18
Lakeside Bridge & Steel Co. v. Mountain State Construc-
tion Co., 597 F.2d 596 (7th Cir. 1979), cert. denied,
AAB'U.S. BOT CRGBD) 6 oacn ct ceccccasccccesecvenss 17
Marshall Egg Transport Co. v. Bender Goodman Co.,
275 Minn. 534, 148 N.W. 2d 161 (1967) .......... i6
Perkins v. Benguet Consolidated Mining Co., 342 U.S.
OT CED code ccunceacuvennuscsucares 7, 9, 10, 12, 13
Plyler v. Doe, 102 S. Ct. 2382 (1982) ........eeeeeees 1?
Ratliff v. Cooper Laboratories, Inc., 444 F.2d 745 (4th
ir.), cert. denied, 404 U.S. 948 (1971) .......... 10
Rosenberg Brothers & Co. v. Curtis Brown Co., 260 U.S.
GRE CISD ik nccpvccs cucvautancevadducousenpens 14, 15
— v. Parke, Davis & Co., 423 F.2d 584 (1st Cir.
DED vebadcunes aneensetecdseveeugspanennonnakun
Shaffer v. Heitner, 433 U.S. 186 (1977) .....- eee eens 8
U-Anchor Advertising, Inc. v. Burt, 553 S.W. 2d 760
Cree STE co cvcovascctcavketseccsnaeeepeanene
World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286
GED CLG eh acavaccecdevancsabeshekenwun (ae me ae
CONSTITUTIONAL PROVISION AND STATUTES:
if Ge OW eb Ren aera 2
, Bie Come bh. > Ts. | Pe ey 2
Tex. Rev. Stat. Ann. art. 2031b (1982) ...........05- 5
vi
Table of Authorities Continued
RULEs:
i cn POE «cccsvicssbecdteeecesvanene 13, 15
OTHER AUTHORITIES:
Restatement (Second) of Conflict of Laws § 47 (1971) . 9
IN THE
Supreme Court of the Gnited States
OCTOBER TERM, 1982
a
HELICOPTEROS NACIONALES DE CoLomsia, S.A.,
Petitioner,
Vv.
ELIZABETH HALL, et al.,
Respondents.
PETITION FOR A WRIT OF CERTIORARI
TO THE SUPREME COURT OF TEXAS
Opinions Below
The final opinion of the Supreme Court of Texas
appears in the appendix to this petition with the concurr-
ing opinion of Justices Campbell and McGee and the dis-
senting opinion of Justice Pope in which Chief Justice
Greenhill and Justice Barron joined. (App. pp. la-14a,
32a-45a). Also appearing in the appendix are the initial
opinion of the Supreme Court of Texas which was with-
drawn on respondents’ motion for reconsideration (App.
pp. 46a-57a), the opinion of the Court of Civil Appeals of
the State of Texas (App. pp. 63a-71a), and the directive of
the trial court, the District Court of Harris County,
Texas, for an order denying petitioner’s motion to dismiss
on grounds of lack of in personam jurisdiction. (App. pp.
72a-73a).
The final opinion of the Supreme Court of Texas is
reported at 638 S.W.2d 870 (Tex. 1982). The opinion of
2
the Court of Civil Appeals is reported at 616 S.W.2d 247
(Tex. Ct. Civ. App. 1981),
Jurisdiction
On October 6, 1982, the Supreme Court of Texas denied
petitioner’s motion for reconsideration of its July 21, 1982
judgment. (App. pp. 74a-75a). The jurisdiction of this
Court is invoked pursuant to 28 U.S.C. § 1257(3) (1982).
Constitutional Provision Involved
Section 1 of the Fourteenth Amendment to the United
States Constitution provides:
All persons born or naturalized in the United States,
and subject to the jurisdiction thereof, are citizens of
the United States and of the State wherein ex d
reside. No State shall make or enforce any law whic
shall abridge the privileges or immunities of citizens
of the United States; nor shall any State deprive any
person of life, liberty, or property, without due proc-
ess of law; nor deny to any person within its jurisdic-
tion the equal protection of the laws.
Statement of the Case
On January 26, 1976, a helicopter owned by Helicopter-
os Nacionales de Colombia, S.A., (hereinafter Helicol),
crashed in Peru, killing respondents’ decedents, employ-
ees of Williams-Sedco-Horn, a joint venture head-
quartered in Oklahoma. Respondents’ decedents were
United States citizens domiciled in states other than
Texas, hired by Williams-Sedco-Horn to provide services
in Peru in furtherance of the joint venture’s contract with
Petro Peru, the Peruvian state-owned oil company, to
construct a pipeline from the jungles of Peru to the Pacific
3
For purposes of its work on the Peruvian pipeline,
Williams-Sedco-Horn formed a consortium under Peru-
vian law operating under the name “Consorcio”. Con-
sorcio designated Lima, Peru, as its legal residence, as
Peruvian law forbade construction of the pipeline by a
non-Peruvian company.
Helicol, a Colombian corporation having its principal
place of business in Bogota, Colombia, is in the business of
providing helicopter transportation in South America to
oil and construction companies. Helicol was initially con-
tacted in South America by a member of Consorcio, Wil-
liams International Sundamerica, Ltd., (hereinafter Wil-
liams), a construction company headquartered in Oklaho-
ma, with which Helicol had previously done business in
South America. Helicol was asked to send an officer to
Tulsa, Oklahoma, to discuss a potential contract for the
performance of services in Peru. After the commence-
ment of a meeting in Tulsa, Helicol’s officer was re-
quested to fly to Houston, Texas, on Williams’ corporate
aircraft to meet with the other members of Consorcio.
Some preliminary contractual discussions occurred at the
Houston meeting. Thereafter, a contract was signed in
Peru on November 11, 1974, by Helicol’s Peruvian lawyer
and by a Peruvian resident representing Consorcio.
Prior to its execution, the contract had been approved
by the Peruvian Air Force, as required by Peruvian law.
It was written in Spanish on official government station-
ery and provided that the residence of all parties to the
contract would be Lima, Peru, and further provided that
controversies arising out of the contract would be sub-
mitted to the jurisdiction of Peruvian courts. It also pro-
vided that Consorcio would make payments to Helicol’s
account with the Bank of America in New York City.
4
The following significant facts are a part of the record in
the courts below:
1. Helicol has never performed any of its business
or helicopter operations in Texas;
2. Helicol has never solicited any business in
Texas; —
3. Helicol has never sold any products that
reached Texas;
4. Helicol has never been authorized to do busi-
ness in Texas and has never had an agent for the
service of process in Texas;
5. Helicol has never recruited employees in
Texas;
5. Helicol has never owned real or personal prop-
erty in Texas and has never had any records or
offices in Texas or representatives based in Texas;
7. The contract between Helicol and Consorcio
was executed in Peru to be performed in Peru;
8. Payment for helicopter services in Peru ren-
dered to Consorcio was made to Helicol, pursuant to
the contract terms, by deposit of funds in a New
York bank specified by Helicol;
9. The = business transactions ever entered
into in Texas by Helicol were the purchase of several
Bell Helicopters and associated equipment which in-
cluded transitional training on the operational char-
acteristics and maintenance requirements of the pur-
chased equipment;
10. The tort causes of action sued upon arose out of
a helicopter accident in Peru;
li. Neither respondents nor respondents’ dece-
dents were or are residents or citizens of Texas.
Respondents filed four wrongful death actions in the
District Court of Harris County, Texas, claiming that
9]
negligence on the part of Helicol proximately caused the
helicopter accident in Peru on January 26, 1976 in which
respondents’ decedents were killed.
Helicol filed special appearances and moved to dismiss
respondents’ actions for lack of in personam jurisdiction.
After an evidentiary hearing, Helicol’s motions were de-
nied (App. pp. 72a-73a), respondents’ actions were con-
solidated for trial and judgment subsequently was en-
tered against Helicol on a jury verdict in favor of respon-
dents.
On January 22, 1981, the Court of Civil Appeals re-
versed the judgment of the trial court and held that the
trial court lacked in personam jurisdiction over Helicol.
(App. pp. 63a-71a)
On February 24, 1982, the Texas Supreme Court
affirmed the decision of the Court of Civil Appeals. The
respondents thereafter moved for reconsideration of the
decision. The Supreme Court of Texas, on July 21, 1982
reversed itself, withdrew its earlier opinion and filed a
second opinion reversing the judgment of the Court of
Civil Appeals and affirming the decision of the trial court.
Justice Campbell filed a concurring opinion in which Jus-
tice McGee joined. Justice Pope filed a dissenting opinion
in which Chief Justice Greenhill and Justice Barrow
joined. Helicol then moved for reconsideration which the
Supreme Court of Texas denied on October 6, 1982, with
three justices dissenting. (App. pp. 74a-75a).
The Supreme Court of Texas, in reaching its decision
that personal jurisdiction could properly be exercised
over Helicol by the Texas trial court, determined that the
Texas long-arm statute, Tex. Rev. Civ. Stat. Ann. art.
2031b (1982) (App. pp. 76a-78a), permitted Texas courts
to exercise jurisdiction to the fullest extent permitted by
6
the Constitution, citing U-Anchor Advertising, Inc. v.
Burt, 553 S.W. ' 760 (Tex. 1977). This determination
was rejected by the dissenting justices, who stated:
“Article 2031b requires a nexus between the helicopter
crash and the contacts relied upon to justify jurisdiction.”
(emphasis in original) (App. p. 33a).
The Texas Supreme Court went on to hold that “Heli-
col’s numerous and substantial contacts do constitute ‘do-
ing business’ in this State and the trial court’s actions do
not offend due process.” (App. p. 7a).
In his concurring opinion (App. p. 10a), Justice Camp-
bell stated that federal due process in respect to in perso-
nam jurisdiction may be applied differently where the
defendant is an alien resident of a foreign country rather
than a United States citizen. (App. p. 10a). See also note 6
infra at p. 18. This rationale was refuted in Helicol’s
motion for reargument and rejected by three of the jus-
tices of the Texas Supreme Court. (App. pp. 44a-45a).
Reasons For Granting Writ
The Supreme Court of Texas incorrectly held that Heli-
col, an alien nonres.dent corporation, was doing business
in Texas because Helicol made equipment purchases in
Texas and had a single contract discussion in Texas and,
therefore, was subject to the jurisdiction of the Texas
courts on a cause of action unrelated to its contacts with
Texas.
-
THE DECISION OF THE TEXAS SUPREME COURT
CONFLICTS WITH THE DECISION OF THE COURT IN
PERKINS v, BENGUET CONSOLIDATED MINING CO., 342
U.S. 437 (1952), AND IS CONTRARY TO THE PRINCIPLES
OF IN PERSONAM JURISDICTION OVER NONRESIDENT
CORPORATE DEFE) VANTS LAID DOWN BY THE COURT
IN INTERNATIONAL SHOE CO. vy, WASHINGTON, 326 U.S,
310 (1945), AND WORLD-WIDE VOLKSWAGEN CORP. v.
WOODSON, 444 U.S. 286 (1980)
The issue in this case is the quality and nature of a
nonresident corporation's activities in a state which, as a
matter of federal due process, will permit that state to
entertain a cause of action against that nonresident
corporation, where the cause of action did not arise from
the corporation's activities in the state,
In reaching its decision, the Texas Supreme Court
violated the teachings of the Court in /nternational Shoe
Co. v. Washington, 326 U.S. 310 (1945), Perkins v, Ben-
guet Consolidated Mining Co., 242 U.S, 487 (1952) and
World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286
(1980). The decision of the Texas Supreme Court was an
unconstitutional exercise of in personam jurisdiction
over Helicol which this Court should reverse and set aside
as was done in Kulko v. Superior Court, 436 U.S, 84
(1978) and World-Wide Volkswagen Corp. v. Woodson,
supra.
In International Shoe Co. v. Washington, 326 U.S 310
(1945), the Court recognized that different due process
considerations are involved where the defendant's activi-
ties in the state are so substantial and continuous as to
constitute residency in the state and, on the other hand,
where the nonresident defendant’s contacts with the
8
state, although incidental, transitory and infrequent,
gave rise to the cause of action.’
International Shoe teaches that while a small number
of contacts between the defendant and the forum state
might be a sufficient basis for the exercise of personal
jurisdiction over a defendant with respect to a cause of
action arising out of a defendant’s activities in the forum
state, a qualitatively different relationship is required
where the cause of action is unrelated to the contacts of
the defendant with the forum state.
{I]t has been generally recognized that the casual
presence of the corporate agent or even his conduct
of single or isolated items of activities in a state in the
corporation’s behalf are not enough to subject it to
suit on causes of action unconnected with the activi-
ties there [citations omitted]. ... To require the
corporation in such circumstances to defend the suit
away from its home or other jurisdiction where it
carries on more substantial activities has been
thought to lay too great and unreasonable a burden
on the corporation to comport with due process.
326 U.S. at 317,
The Texas Supreme Court could not and did not hold
that the cause of action arose from Helicol’s contacts with
Texas. Rather, it held that Helicol’s contacts with the
state were sufficient to permit Texas to exercise in perso-
nam jurisdiction over Helicol even though the cause of
action did not arise from such activities in the state.
* The Court in Shaffer v, Heitner, 433 U.S, 186, 204 (1977), reiter-
ated that a relationship between the forum and the cause of action is
required for the assertion of jurisdiction over a nonresident defend-
ant, stating that “the relationship among the defendant, the forum
and the litigation {is}... the central concern of the inquiry into
personal jurisdiction.”
g
The issue in this case is the same issue that was before
the Court in Perkins v. Benguet Consolidat. 1 Mining
Co., 342 U.S. 487 (1952). As the Court stated the issue in
Perkins:
It remains only to consider, in more detail, the issue
of whether, as a matter of federal due process, the
business done in Ohio by the respondent mining com-
pany was sufficiently substantial and of such a nature
as to permil Ohio to entertain a cause of action
against a foreign corporation, where the cause of
action arose from activities entirely distinct from its
activities in Ohio (emphasis in original).
342 U.S. at 447.
In vacating the decision of the Supreme Court of Ohio
which held that Ohio courts could not exercise in perso-
nam jurisdiction over a Phillipine defendant on a cause of
action arising outside Ohio, the Court, in Perkins,
emphasized that the defendant had moved its operations
to Ohio during World War II and that the president of the
company operated from Ohio, carrying on a “continuous
and systematic” supervision of the company. Thus the
Court concluded that because of the defendant’s sub-
stantial and continuous activities in Ohio, “it would not
violate federal due process for Ohio either to take or
decline jurisdiction of the corporation in this proceeding.”
342 U.S. at 448,
The due process standard the Court established in
Perkins is that with respect to a foreign based cause of
action, the nonresident corporation's activities must at
least be “continuous” and “substantial.” 342 U.S. at 445-
447, See Restatement (Second) of Conflict of Laws § 47
(1971).
The activities or contacts of Helicol in Texas were
neither continuous nor substantial.
10
The Texas court, after reciting Helicol’s “contacts”
with Texas, held that “these contacts constitute sufficient
minimum contacts to find Helicol amenable to the
jurisdiction of the Texas courts.” (App. p. 3a).
The minimum contacts standard the Texas Supreme
Court applied with respect to a cause of action which did
not arise from Helicol’s contacts with the state was con-
trary to the Court’s decision in Perkins, as Justice Pope of
the Texas Supreme Court pointed out in his dissenting
opinion. (App. pp. 43a-44a).’
The Supreme Court of Texas in concluding that Helicol
was “uoing business” in Texas and that Texas courts
could exercise in personam jurisdiction over Helicol
without violating due process relied upon the following:
(a) Purchases by Helicol of helicopters from a
Texas company, Bell Helicopter Company, and cer-
tain transition training given to Helicol employees
incident to its equipment purchases;
(b) Asingle business meeting between a represent-
ative of Helicol and Williams-Sedco-Horn in Hous-
ton, Texas, for the purpose of discussing a potential
contract with Consorcio; and
(ec) The payment of funds to Helicol by drafts drawn
on a Texas bank.
The items listed in the opinion of the Supreme Court of
Texas (App. p. 3a) can be reduced to the contacts listed
above.
As discussed in Point II, infra, purchases in the forum
state as distinct from sales in the forum state do not
‘The decision of the Texas Supreme Court also conflicts with
decisions in the United States Courts of Appeais for the First and
Fourth Circuits, Ratliff v, Cooper Laboratories, Inc., 444 F.2d 745
(4th Cir.), cert, denied, 404 U.S. 948 (1971); Seymour v. Parke, Davis
& Co., 423 F.2d 584 (1st Cir, 1970).
11
constitute doing business in the forum. Similarly, one
discussion of a potential contract by an officer of Helicol in
Texas cannot provide a basis for a finding that Helicol was
“doing business” within the state. One contact cannot
constitute either substantial or continuous activity. Helli-
col did not even solicit this business within the State of
Texas. It was contacted in South America by a member of
Consorcio. Its services were solicited.‘
The Texas Supreme Court also relied upon Helicol’s
receipt of contractual payments drawn on a Texas bank as
a basis for the exercise of in personam jurisdiction.
Drafts forwarded by Consorcio from Texas to Helicol’s
bank in New York for deposit do not constitute payments
made in Texas. For its part, Helicol had no bank account
or representative for receipt of payments within Texas.
Furthermore, the election by Consorcio to draw upon a
Texas bank for the purpose of making payments in New
York was its own. The unilateral act ofa third party or the
other party to the action cannot provide the basis of
personal jurisdiction over a nonresident. See, e.g., World-
Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 296
(1980); Kulko v. Superior Court, 436 U.S. 84 (1978).
In sum, Helicol’s “contacts” with the State of Texas as
described by the Supreme Court of Texas do not con-
stitute “substantial” and “continuous” activity. Perkins
‘ Helicol’s officer testified at the evidentiary hearing held on the
question of personal jurisdiction that he had no intention of traveling
to Texas when he left South America, that he planned to travel only
to Oklahoma pursuant to the request of a member of Cousorcio with
whom Helicol had previously dealt, that once it wa» deemed neces-
sary by the Oklahoma member of Consorcio to travel to Texas, a
corporate aircraft was made available for that purpose, that his wife
remained in Tulsa while he was flown to Houston and that he re-
turned to Oklahoma immediately after the Houston meeting.
12
v. Benguet Consolidated Mining Co., 342 U.S. at 446,
447,
Where, as here, respondents’ cause of action did not
arise from Helicol’s contacts with Texas, Perkins and
International Shoe mandate that there must be sub-
stantial business activity by a nonresident defendant to
satisfy federal due process requirements.
The Texas court ignored the Perkins and International
Shoe standards and its decision is in direct conflict with
those decisions.
World-Wide Volkswagen Corp. v. Woodson, 444 U.S.
286 (1980), is the most recent statement of the Court on
the due process requirements governing the amenability
of a nonresident defendant to suit in a distant forum. In
that case, the cause of action arose from an automobile
accident in Oklahoma and the Court held that,
notwithstanding the accident in the forum state, mini-
mum contacts must also exist between the defendant and
the forum state. 444 U.S. at 292. The Court held that
there were no such contacts between the forum and the
defendant and that the due process clause does not con-
template in personam jurisdiction where the corporate
defendant had “no contacts, ties or relations” with the
forum. Id. at 294 (citing International Shoe, 326 U.S. at
319).
The dissenting Justices in World-Wide Volkswagen
were of the view that the Oklahoma court constitutionally
could exercise in personam jurisdiction because of the
interest of the forum in adjudicating the action which
arose in the forum state. The dissenting Justices agreed
that minimum contacts must exist among the parties, the
contested transaction and the forum state. 444 U.S. at
310-311 (Mr. Justice Brennan, dissenting), 313 (Mr. Jus-
tice Marshall, dissenting), 318 (Mr. Justice Blackmun,
dissenting).
13
World-Wide Volkswagen was a minimum contacts case
dealing with a forum-based cause of action. The Supreme
Court of Texas misread World-Wide Volkswagen by
applying the minimum contacts principles announced in
that case to a case where the cause of action is foreign-
based and where, according to /nternational Shoe and
Perkins, substantial business activity on the part of the
nonresident corporate defendant constitutionally is re-
quired.
The constitutional principle underlying the Court’s
statement in Kulko v. Superior Court, 436 U.S. 84 (1978)
(a custody case involving a natural person as defendant) is
equally applicable to the present case involving an alien
corporate defendant.
To hold such temporary visits [defendant’s visit to
California in 1959 on a three day military stopover on
his way to Korea and a four hour stopover in 1960 on
his return from Korean service] to a State a basis for
the assertion of in personam jurisdiction over unre-
lated actions arising in the future would make a
mockery of the limitations on state jurisdiction im-
posed by the Fourteenth Amendment.
436 U.S. at 93.
The assertion of in personam jurisdiction over Helicol
by Texas courts on the basis of the incidental and in-
frequent contacts described above with respect to a cause
of action unrelated to Texas was an unconstitutionai ex-
ercise of in personam jurisdiction over Helicol in violation
of federal due process and contrary to the decisions of the
Court. World-Wide Volkswagen Corp. v. Woodson, 444
U.S. 286 (1980); Perkins v. Benguet Consolidated Min-
ing Co., 342 U.S. 437 (1952); International Shoe Co. v.
Washington, 326 U.S. 310 (1945); Sup. Ct. R. 17.1(c).
14
II
THE HOLDING OF THE TEXAS SUPREME COURT THAT
AN ALIEN NONRESIDENT CORPORATION WAS SUBJECT
TO THE IN PERSONAM JURISDICTION OF A STATE
COURT BECAUSE OF ITS PURCHASE OF AMERICAN
PRODUCTS IN THE FORUM STATE IS CONTRARY TO
THE DECISION OF THE COURT IN ROSENBERG
BROTHERS & CO. v. CURTIS BROWN CO., 260 U.S. 516
(1923), AND PRESENTS AN IMPORTANT QUESTION
HAVING WIDE-RANGING IMPLICATIONS FOR UNITED
STATES TRADE RELATIONS
In concluding that Helicol was doing business within
the State of Texas, the Supreme Court of Texas relied
heavily upon Helicol’s purchase of equipment from Bell
Helicopter Co., a Texas manufacturer. (App. p. 3a) This
Court expressly has held that purchases by a nonresident
corporation within the forum state are insufficient to
constitute “doing business” for purposes of assessing the
corporation’s amenability to personal jurisdiction.
In Rosenberg Brothers & Co. v. Curtis Brown Co., 260
U.S. 516 (1923), appellant sought a reversal of the lower
court’s holding that purchases within the forum state did
not constitute “presence” for purposes of asserting
jurisdiction over a nonresident defendant. In affirming
the lower court’s decision, the Court stated:
{[Appellee’s] only connection with [the forum]
appears to have been the purchase there from time to
time of a large part of the merchandise to be sold at
its store [in another state] ... The only business
alleged to have been transacted [in the forum]. . .
related to such purchases of goods by officers of a
foreign corporation. Visits on such business, even if
occurring at regular intervals, would not warrant the
inference that the corporation was present within
the State.
260 U.S. at 518. See also Hutchinson v. Chase & Gilbert,
Inc., 45 F.2d 139 (2d Cir. 1930) (L. Hand, J.).
-
15
The decision of the Texas Supreme Court conflicts with
the holding of this Court in Rosenberg.
In addition, as in personam jurisdiction was asserted
over an alien corporation because of its purchase of Amer-
ican products, the decision of the Texas Supreme Court
presents serious problems for nonresident alien pur-
chasers.
Prospective foreign purchasers of American products
may be deterred from buying them if, in so doing, they
may be forced to defend lawsuits in the United States
arising from foreign disputes unrelated to the purchases.
As the holding of the Texas Supreme Court is not only
inconsistent with Rosenberg Brothers & Co., v. Curtis
Brown Co., but also imposes an unnecessary obstacle to
United States trade relations, the Court should grant this
petition for a writ of certiorari to address the question
whether purchases from a forum vendor by a nonresident
purchaser constitute a sufficient basis for the assertion of
in personam jurisdiction over the nonresident purchaser
with respect to a foreign cause of action which does not
arise from such purchases. Sup. Ct. R. 17.1(b), (c).
Ul
THE DECISION OF THE TEXAS SUPREME COURT
CONFLICTS WITH DECISIONS OF THE HIGHEST
COURTS OF SEVERAL STATES AND DEMONSTRATES
THE NEED FOR FURTHER CLARIFICATION OF
FEDERAL DUE PROCESS AS IT RELATES TO IN
PERSONAM JURISDICTION OF NONRESIDENT
CORPORATIONS
The Texas Supreme Court relies heavily, if not entire-
ly, upon purchases made by Helicol in Texas as a basis for
finding that Helicol had numerous and substantial busi-
ness contacts in Texas. This ruling is in conflict with
16
Marshall Egg Transport Co. v. Bender Goodman Co.,
275 Minn. 534, 148 N.W. 2d 161 (1967), and Conn v.
Whitmore, 9 Utah 2d 250, 342 P.2d 871 (1959).
In Marshall Egg, the Supreme Court of Minnesota held
that a series of purchases of eggs in the forum state was
insufficient to support the assertion of in personam
jurisdiction over the out-of-state purchaser. The court
stated:
Plaintiff asserts, however, that because it had had a
series of similar transactions with defendant the lat-
ter should be considered subject to the jurisdiction of
the Minnesota court. The trial court disagreed with
this reasoning and took the position that the question
involved herein should not depend on the quantity of
transactions but rather on the nature of the transac-
tion giving rise to this controversy. We again agree
with the trial court that, under the circumstances
here, where a single transaction would lack the de-
gree of participation necessary to require defend-
ant’s submission to the jurisdiction of this state, such
a deficiency could not be cured merely by repeated
similar transactions.
275 Minn. at 538, 148 N.W.2d at 164.
In Conn, the Supreme Court of Utah, in refusing to
give full faith and credit to an Illinois judgment, held that
where a contract for the purchase of horses was entered
into in Utah, but with inspection and delivery occurring in
Illinois, such did not amount to the transaction of any
business within the forum state (Illinois). Thus, according
to the Utah court, sufficient minimum contacts did not
exist so as to constitutionally allow the forum state (IIli-
nois) to assert jurisdiction over the purchaser.
The Conn court stated: “[T]he correspondence through
the mails between the parties plus the incidental activi-
17
ties of having an agent inspect the horses and taking
delivery in Illinois did not amount to the ‘transaction of
any business’ within the state of Illinois.” 9 Utah 2d at
255, 342 P.2d at 875.
The existence of conflicting state court decisions on the
issue of in personam jurisdiction over nonresident
corporations was noted by Mr. Justice White in his dis-
sent from the denial of a writ of certiorari in Lakeside
Bridge & Steel Co. v. Mountain State Construction Co.,
597 F.2d 596 (7th Cir. 1979, cert. denied, 445 U.S. 907
(1980). Mr. Justice White stated:
The question of personal jurisdiction over a nonresi-
dent corporate defendant based on contractual deal-
ings with a resident plaintiff has deeply divided
federal and state courts [citations omitted]. . . . The
question at issue is one of considerable importance to
contractual dealings with purchasers and sellers lo-
cated in different states. The disarray among federal
and state courts noted above may well have a disrup-
tive effect on commercial relations in which certainty
of result is a prime objective.°
5 In two subsequent denials of petitions for writs of certiorari, Mr
Justice White and Mr. Justice Powell filed similar dissenting opinions
on denials of petitions for writs of certiorari. Chelsea House Pub-
lishers v. Nicholstone Book Bindery, Inc., 621 S.W.2d 560 (Tenn.
1981), cert. denied, 455 U.S. 994 (1982); Baxter v. Mouzavires, 434
A.2d 988 (D.C. 1981), cert. denied, 455 U.S. 1006 (1982).
18
IV
THE PRINCIPLE THAT AN ALIEN NONRESIDENT
CORPORATION IS NOT ENTITLED TO THE SAME
RIGHTS OF FEDERAL DUE PROCESS AND EQUAL
PROTECTION OF THE LAWS AS ARE UNITED STATES
CORPORATIONS ON THE QUESTION OF AMENABILITY
TO SUIT IN STATE AND FEDERAL COURTS PRESENTS
AN IMPORTANT CONSTITUTIONAL QUESTION WHICH
SHOULD BE RESOLVED BY THE COURT IN THE
INTEREST OF TiiE FOREIGN COMMERCE OF THE
UNITED STATES
Although it is difficult to be certain of the complete
rationale of the Texas Supreme Court, the justices who
filed a concurring opinion indicated that the application of
“due process,” with respect to in personam jurisdiction,
is different where the lawsuit is brought by a United
States citizen against an alien defendant, rather than
against another United States citizen.* (App. p. 10a).
As the dissenting justices noted:
A separate concurring opinion filed on rehearing con-
tends that the “long arms” of state jurisdiction
should extend more elastically when reaching for
nonresident defendants who are citizens of other
countries. While this argument may appeal to those
who contend that noncitizens should receive less due
* The concurring justices in their opinion dated July 21, 1982 had
stated that because the jurisdictional issue is between countries,
namely citizens of the United States and a resident of Colombia, “our
‘due process’ application must be broader in scope.” (App. p. 10a) On
September 17, 1982, after Helicol’s motion for rehearing was filed
raising the above issue, the Clerk of the Texas Supreme Court
advised West Publishing Company by letter that the language:
“Therefore, our ‘due process’ application must be broader in scope”
was removed from the opinion and the following language was sub-
stituted: “Therefore, ‘due process’ in this case must be universal in its
application.” (See App. p. 10a)
19
process than United States citizens [citations omit-
ted], it is nevertheless inconsistent with the way due
process has been applied in previous cases. (App. p.
44a).
The issue in this case is whether the alien status of the
defendant is a factor which may be considered by a court
in determining the scope of due process, and, if so,
whether an alien nonresident corporation enjoys less due
process than a United States corporation and may con-
stitutionally be required to defend legal actions in state
courts from which United States corporations would be
immune.
The due process clause of the United States Constitu-
tion refers to “persons,” without distinction as to their
citizenship. Additionally the equal protection clause for-
bids a state to deny to any person within its jurisdiction
the equal protection of the laws.
The Texas Supreme Court appears to have decided
that due process requirements are lessened in the case of
an alien corporation. Even if this were a permissible
construction of the due process clause, it would be imper-
missible under the equal protection clause.
The equal protection clause applies to Helicol’s rights
since, for the purpose of determining the question of in
personam jurisdiction, Helicol had submitted to the
jurisdiction of the Texas courts for the resolution of that
question. Cf. Plyler v. Doe, 102 S.Ct. 2382 (1982).
To the extent that the decision of the Supreme Court of
Texas was based upon a lesser standard of due process
because Helicol was an alien nonresident corporation, the
decision should be reversed and the principle reestab-
lished that alien corporations are entitled to be judged by
the same due process standards as United States corpora-
tions.
20
Any dilution of the mandate of the Fourteenth Amend-
ment concerning equal protection of the laws as it relates
to alien corporations should be examined by the Court
before further confusion ensues. Such dilution will have a
negative effect upon alien nonresidents who conduct any
type of business transactions with United States citizens.
CONCLUSION
For the reasons set forth above, petitioner urges that
this petition for a writ ae Biase
a THOMAS J. WHALEN
Counsel for the Petitioner
Helicopteros Nacionales
De Colombia, S.A.
1030 15th St., N.W.
Suite 720
Washington, D.C. 20005
(202) 289-0500
Dated: January 4, 1983
Of Counsel:
CONDON & FORSYTH
AUSTIN P. MAGNER
CYNTHIA J. LARSEN
CERTIFICATE OF SERVICE
I, Thomas J. Whalen, being over the age of 18 years and
a member of the firm of Condon & Forsyth, hereby certify
that I have this fourth day of January, 1983, served three
copies of the foregoing petition for a writ of certiorari to
the Supreme Court of Texas upon respondents Elizabeth
Hall, et al., the only parties required to be served, by
mailing such copies to their attorney of record in sealed
envelopes, first class postage prepaid, deposited at the
United States Post Office, located at North Capitol and
Massachusetts Avenue, N.E., Washington, D.C., and
addressed as follows:
George Pletcher, Esq.
Helm, Pletcher & Hogan
2800 Two Houston Center
Houston, Texas 77002
, hore hala
Thomas J. W¥alen, Esq,
INDEX TO APPENDIX
Page
Opinion of Supreme Court of Texas on Respondents’ Mo-
tion For Rehearing dated July 21, 1982 ......... la
Concurring Opinion dated July 21, 1982 ........... Sa
Withdrawn Dissenting Opinion dated July 21, 1982 . 15a
Dissenting Opinion dated October 6, 1982.......... 32a
Withdrawn Opinion of the Supreme Court of Texas dated
POT Us GE Noch rspepvesentvenebeannwnna. 46a
Dissenting Opinion dated February 24, 1982 ....... 58a
Opinion of the Court of Civil — of Texas, Houston
(1st Dist.), dated January 22, 1981 .........0005. 63a
Letter from Judge Wyatt Heard of the District Court
Overruling the Special Appearance of Helicol dated
PURE BOOED ceverevccrsacceucscsnaceencae ss 72a
Order of October 6, 1982, Overruling Petitioner’s Motion
for Rehearing before the Supreme Court of the State
Se Corer ashe l a Cinna eunen ay Re oamny es 74a
Tex. Rev. Civ. Stat. Ann. art. 2081b. ........s0c000. 76a
la
IN THE SUPREME COURT OF TEXAS
No, C-243
ELIZABETH HALL, ef al.,
Petitioners,
v,
HELICOPTEROS NACIONALES De CoLomaia, S.A.
(“HELICOL”),
Respondent,
From Harris County First District
ON MOTION FOR REHEARING
Our opinion of February 24, 1942, « withdrawn and this
opinion is substituted therefor.
Elizabeth Hall and the other plaintiffs in the trial court (Hall)
are the survivors of four citizens of the United States killed ina
helicopter crash in Peru while working in that country con-
structing a pipeline, Hal] sued Helicol, the owner and operator
of the helicopter which crashed, in Harris County, Texas, in
four separate causes of action. Helicol entered a special
appearance in each of the actions, to contest the jurisdiction of
the Texas court pursuant to Rule 120a, TEX. R. CIV. P., all of
which were overruled by the respective trial courts. The four
actions were consolidated for trial resulting in a judgment for
Hall. The court of civil appeals reversed the judgment of the
trial court and ordered the case dismissed for lack of jurisdic-
tion, 616 S,W.2d 247, We reverse the judgment of the court of
civil appeals and affirm the judgment of the trial court.
The only issue before us is whether under the facts of this
cause of action, was Helicol arnenable to jurisdiction in Texas.
Therefore, this Court must decide whether the trial court’s
exercise of jurisdiction over Helicol was consistent with the
requirements of due process of law under the Constitution of
the United States.
2a
In 1974, Petro Peru, the Peruvian state owned oil company,
made a contract with Williams-Sedco-Horn,' (referred to as
Consorcio in their contract), a joint venture based in Houston,
Texas, to construct a pipeline from the interior of Peru to the
Pacific Ocean, The defendant, Helicol, was brought into the
project by Williams-Sedco-Horn to provide necessary trans-
portation of workers and supplies, by helicopter, to regions
where there were no roads. Helicol was originally contacted by
a Williams executive who had contracted with Helicol in the
past. In response to that contact, the general manager of
Helicol flew to Oklahoma, and then proceeded to Houston,
Texas to negotiate with the three members of the joint ven-
ture, After reaching agreement on all terms of the contract in
Houston, those terms were related to Helicol’s office in Peru.
The contract in its final form was approved by the Peruvian Air
Force as required by Peruvian law, typed in Spanish and
executed by representatives of all parties in Peru. Helicol did
not maintain an office in Texas, had no designated agent for
service of process in Texas, was not authorized to do business
in Texas, performed no helicopter operations in Texas, and did
not recruit employees in Texas.
The deceased workers here in question, were not Texas
residents, but were al] United States citizens. They were hired
by Williams-Sedeo-Horn, in Houston, Texas, and sent to Peru
to work on the pipeline. The workers were killed in crash of a
Bell helicopter, owned and operated by Helicol in Peru, during
their transportation pursuant to the contract between Helicol
and Williams-Sedeo-Horn.
' Williams-Sedeo-Horn is a joint venture composed of Williams
International Sundamericana, Ltd., a Delaware corporation head-
quartered in Tulsa, Oklahoma, Sedco Construction Corporation, a
Texas corporation, and Horn International, Inc., a Texas corpora-
tion,
3a
In addition to negotiating this contract, Helicol committed
all of the following acts in Texas:
a.
b.
Purchased substantially all of its helicopter fleet in
Fort Worth, Texas;
Did approximately $4,000,000 worth of business in
Fort Worth, Texas, from 1970 through 1976 as pur-
chaser of equipment, parts and services. This con-
sisted of spending an average of $50,000 per month
with Bell Helicopter Company, a Texas corporation;
Negotiated in Houston, Harris County, Texas, witha
Texas resident, which negotiation resulted in the con-
tract to provide the helicopter service involving the
crash leading to this cause of action (previously men-
tioned), and wherein Helicol agreed to obtain liability
insurance payable in American dollars to cover a claim
such as this;
Sent pilots to Fort Worth, ‘Texas to pick up helicop-
ters as they were purchased from Bell Helicopter and
fly them from Fort Worth to Colombia;
Sent maintenance personnel and pilots to Texas to be
trained;
Had employees in Texas on a year-round rotation
basis;
Received roughtly $5,000,000 under the terms and
provisions of the contract in question here which pay-
ments were made from First City National Bank in
Houston, Texas; and
Directed the First City National Bank of Houston,
Texas to make payments to Rocky Mountain Helicop-
ters pursuant to the contract in question. (Involved
— of a large helicopter capable of moving heavier
loads for Williams-Sedco-Horm. )
We hold that these contacts constitute sufficient minimum
contacts to find Helicol amenable to the jurisdiction of the
Texas courts.
In their briefs before this Court, all parties agreed that our
opinion in L’-Anchor Advertising, Inc. v. Burt, 553 S.W.2d 760
(Tex. 1977) controlled the disposition of this case.
da
In U’-Anchor, we stated:
Article 2031b provides that a nonresident entering into a
contract with a Texas resident performable in part by
either party in Texas shall be deemed to be doing business
in Texas... . We agree that in this respect, as well as with
the respect to ‘other acts that —_ constitute doing busi-
ness,’ icle 2031b reaches as far as the federal con-
stitutional requirements of due process will permit. We let
stand the statement in Hoppenfeld v. Crook, 498 S.W.2d
52 (Tex. Civ. App.—Austin 1973, writ refd n.r.e.) ‘that
the reach of Art. 2031b is limited only by the United States
Constitution.’ . .. Furthermore, such a construction is
desirable in that it allows the courts to focus on the con-
stitutional limitations of due process rather than to engage
in technical and abstruse attempts to consistently define
‘doing business.’
In the U-Anchor opinion we specifically adopted the above
language from Hoppenfeld. Also in L’-Anchor, this Court
approved the three-prong test set out in O’Brien v. Lanpar
Company, 399 S.W.2d 340 (Tex. 1966). That three-prong test
is:
(1) the nonresident defendant or foreign corporation
must purposefully do some act or consummate some
transaction in the forum state;
(2) the cause of action must arise from, or be connected
with, such act or transaction; and
(3) the assumption of jurisdiction by the forum state
must not offend traditional notions of fair play and
substantial justice; consideration being given to the
uality, nature, and extent of the activity in the
orum state, the relative convenience of the parties,
the benefits and protection of the laws of the forum
state afforded the respective parties, and the basic
equities of the situation.
The second prong of the O’Brien test requiring that the
cause of action must arise out of the contacts with the forum
state, has been the subject of some controversy ever since the
O'Brien test was adopted. The second prong is useful in any
fact. situation in which a jurisdiction question exists; and is a
oa
necessary requirement where the nonresident defendant only
maintained single or few contacts with the forum. However,
the second prong is unnecessary when the nonresident defend-
ants presence in the forum through numerous contacts is of
such a nature, as in this case, so as to satisfy the demands of the
ultimate test of due process. Accordingly through the statuto-
ry authority of Art. 2031b TEX. REV. CIV. STAT. ANN.
there remains the single inquiry: is the exercise of jurisdiction
consistent with the requirements of due process of law under
the United States Constitution? This inquiry is frequently put
into the following terms: “. . . due process requires only that in
order to subject a defendant to a judgment in personam, if he
be not present within the territory of the forum, he have
certain minimum contacts with it such that the maintenance of
the suit does not offend traditional notions of fair play and
substantial justice.” Jnternational Shoe Co. v. Washington,
326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945), quoting
Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 85 L.Ed.
278 (1940).
The U.S. Supreme Court has broadened the parameters of
due process to allow inquiry into other “relevant factors.”
Recently in World-Wide Volkswagen Corp. v. Woodson, 444
U.S. 286 (1980), the Supreme Court reiterated that the rela-
tionship between the defendant and the forum must be such
that it is “reasonable. . . to require the corporation to defend
the particular suit which is brought there.” Citing, /nterna-
tional Shoe, supra. In looking to this reasonableness, the U.S.
Court stated that the burden on the defeadant:
. . while always a primary concern, will in an ng a a
ate case be considered in light of other relevant factors,
including the forum State’s interest in adjudicating the
dispute, see McGee v. International Life Ins. Co., 355
U.S. 220, 223, 2 L.Ed.2d 2238, 78 S.Ct. 199 (1957); the
plaintiffs interest in obtaining convenient and effective
relief, see Kulko v. California ee Court, [436 U.S.]
at 92, 56 L.Ed.2d 132, 98 S.Ct. 1690, at least when that
interest is not adequately protected by the plaintiff's ve
er to choose the forum, c.f. Shaffer v. Heitner, 433 U.S.
6a
186, 211, n. 37, 53 L.Ed.2d 683, 97 S.Ct. 2569 (1977); the
interstate judicia] system’s interest in obtaining the most
efficient resolution of controversies; and the shared in-
terest of the several States in furthering fundamental
substantive social policies, see Kulko v. California Super-
ior Court, supra, at 93, 98, 56 L.Ed.2d 132, 98 S.Ct. 1690.
Worldwide Volkswagen Corp. v. Woodson, 444 U.S. at 291.
Therefore, our inquiry can go beyond the substantial contacts
which Helico] maintains in Texas, and we may also look to this
State’s interest in adjudicating the dispute; and Hall's interest
in effective and convenient relief.
Texas has an interest in adjudicating this dispute. Hall is not
a Texas resident, but is a citizen of this country. More
importantly, Hall was hired in Houston, Texas, by a Texas
resident. It cannot be questioned that this forum has an in-
terest in protecting the employees of its “residents” (Williams-
Sedco-Horn). This is especially necessary in light of the fact
that Texas is the headquarters of countless international com-
panies, and as a member of the “interstate judicial system,”
this State has an interest in obtaining the most efficient resolu-
tion of controversies and in furthering fundamental substan-
tive social policies. (See above quote, citing Kulko v. Califor-
nia Superior Court, supra.)
Hall has a genuine interest and desire in obtaining con-
venient and effective relief. The U.S. Supreme Court directly
considered the plaintiffs interest involved in McGee v. Inter-
national Life Insurance Co., 355 U.S. 220 (1957). In McGee, a
California resident was suing a Texas insurance company asa -
beneficiary under a life insurance policy. The defendant's only
contact with California had been its mailing of the policy to the
state, and its receipt of premium payments from the decedent.
The U.S. Supreme Court addressed the relative convenience
of the parties and based their decision allowing maintenance of
the suit in California on the State’s interest in providing effec-
tive redress, and the fact that an individual claimant could not
overcome the difficulties of maintaining an action in a foreign
forum “... thus in effect making the company judgment
(a
proof.” 355 U.S. at 223. The Court did recognize the in-
convenience that this worked on the defendant, but based on
the contacts of the defendant, due process would not be
offended. Admittedly this cause does not fall precisely within
the facts of McGee, it does fall within its spirit.
Based on the considerations of the above discussion and
looking to the requirements of the L’-Anchor test, we find that
Helicol’s numerous and substantial contacts do constitute “do-
ing business” in this State and the trial court’s actions do not
offend due process.
The judgment of the court of civil appeals is reversed and the
judgment of the trial court is affirmed.
JAMES P. WALLACE
Justice
Concurring opinion by Justice Campbell in which Justice
McGee joins. Dissenting opinion by Justice Pope in which Chief
Justice Greenhill and Justice Barrow join.
OPINION DELIVERED): July 21, 1982
5a
IN THE SUPREME COURT OF TEXAS
No. C-243
ELIZABETH HALL, et al.,
Petitioners,
Vv.
HELICOPTEROS NACIONALES DE CoLomeia, S.A.
(“HELICOL”),
Respondent.
From Harris County First District
ON MOTION FOR REHEARING
CONCURRING OPINION
I concur with the result of the opinion by Justice Wallace for
these additional reasons.
The issue in World-Wide Volkswagen Corp. v. Woodson, 444
U.S. 286 (1980), was “whether, consistently with the due proc-
ess clause of the Fourteenth Amendment, an Oklahoma court
may exercise in personam jurisdiction over a non-resident
automobile retailer and its wholesale distributor in a products
liability action, when the defendants’ only connection with
Oklahoma is the fact that an automobile sold in New York to
New York residents became involved in an automobile acci-
dent in Oklahoma.” /d. at 287. The question before this Court is
whether, consistently with the due process clause of the Four-
teenth Amendment, a Texas court may exercise in personam
jurisdiction over a non-resident provider of helicopter serv-
ices, when the defendant’s connections with Texas were all of
those listed in the opinion by Justice Wallace.
In World-Wide, there was no evidence that World-Wide or
its retail distributor, Seaway, did any business in Oklahoma,
shipped or sold any products to or in that state, had an agent to
receive process there, or purchased advertisements in any
9a
media calculated to reach Oklahoma. During oral arguments
before the U.S. Supreme Court, plaintiffs attorney conceded
there was no showing that any automobile ever sold by World-
Wide or Seaway had ever entered Oklahoma with the single
exception of the car involved. /d. at 289. Thus, World-Wide
holds that driving a car through a state is not such “minimum
contacts” to give that state jurisdiction in an action against a
New York seller.
In reaching this decision, the U.S. Supreme Court stated:
Petitioners carry on no activity whatsoever in Oklahoma.
a close no sales and perform no services there. They
avail themselves of none of the privileges and benefits of
Oklahoma law. They solicit no business there either
through salespersons or through advertising reasonably
calculated to reach the state. Nor does the record show
that they regularly sell cars at wholesale or retail to Okla-
homa customers or residents or that they indirectly
through others, serve or seek to serve the Oklahoma
market. In short, respondents seek to base jurisdiction on
one isolated occurrence and whatever inferences can be
drawn therefrom: the fortuitous circumstance that a sin-
gle Audi automobile, sold in New York to New York
residents, happened to suffer an accident while passing
through Oklahoma.
444 U.S. at 295.
Applying that same language to the facts of this case, I would
write: Helicol carries on much business in Texas. They close
many purchases of helicopters and spare parts and negotiate
contracts in Texas. They regularly secure the services of Bell
Helicopter in training their pilots and repair technicians. They
solicited business in Texas by sending a representative to
Houston to negotiate with Williams-Sedco-Horn. The record
shows they regularly buy helicopters and spare parts in Texas
and seek Texas services for training their employees. They
directly secure the services of the Texas markets, maintain
employees in Texas on a year-round basis and 26 times sent
officials of their company to Texas. This activity has continued
since 1970. In this multi-million dollar business in Texas, Heli-
10a
col has availed itself of the privileges and benefits of Texas law.
In short, our petitioners seek to base jurisdiction on many
significant contacts in Texas that reflect a continuous general
presence in Texas.
The U.S. Supreme Court, in World-Wide, was addressing
the jurisdictional problem between states. However, we do not
have the same problem as World-Wide. We do not have a
dispute over jurisdiction between coequal sovereigns in a
federal system. We are deciding jurisdiction between coun-
tries; as to citizens of the United States and a resident of
Colombia. Therefore, our “due process” application must be
broader in scope.’
Now, let us look at what World-Wide said about “minimum
contacts” and reasonableness of the “forum” among the states,
and apply those tests to our facts:
The concept of minimum contacts, in turn, can be seen to
perform two related, but distinguishable, functions. It
protects the defendant against the burdens of litigating in
a distant or inconvenient forum. And it acts to ensure that
the States, through their courts, do not reach out beyond
the limits imposed on them by their statutes as coequal
sovereigns in a federal system.
The protection against inconvenient litigation is typical-
ly described in terms of “reasonableness” or “fairness.”
We have said that the defendant's contacts with the forum
State must be such that maintenance of the suit “does not
offend ‘traditional notions of fair play and substantial jus-
tice.’ ” International Shoe Co. v. Washington, [326 U.S.]
at 316, 90 L. Ed. 95, 66 S. Ct. 154, 161 A.L.R. 1057,
‘On September 17, 1982, after Helicol’s motion for rehearing was
filed, the Clerk of the Court advised West Publishing Company by
letter that the language: “Therefore, our ‘due process’ application
must be broader in scope” was removed from the opinion and the
following language was substituted: “Therefore ‘due process’ in this
case must be universal in its application.”
lla
uoting Miliken v. Meyer, 311 U.S. 457, 463, 85 L. Ed.
78, 61 S. Ct. 339, 182 A.L.R. 1357 (1940). The rela-
tionship between the defendant and the forum must be
such that it is ‘reasonable. . . to require the corporation
to defend the particular suit which is brought there.” 326
U.S. at 317, 90 L. Ed. 95, 66S. Ct. 154, 161 A.L.R. 1057.
Implicit in this emphasis on reasonableness is the under-
standing that the burden on the defendant, while always a
rimary concern, will in an appropriate case be considered
in light of other relevant factors, including the forum
State’s interest in adjudicating the dispute, see McGee v.
International Life Ins. Co. 355 U.S. 220, 223, 2 L. Ed. 2d
223, 78S. Ct. 199 (1957); the plaintiff's interest in obtain-
ing convenient and effective relief, see Kulko v. California
Superior Court, [436 U.S.] at 92, 56 L. Ed. 2d 132, 98 S.
Ct. 1690, at least when that interest is not adequately
protected by the plaintiff's power to choose the forum, cf.
haffer v. Heitner, 433 U.S. 186, 211, n. 37, 538 L. Ed. 2d
683, 97 S. Ct. 2569 (1977); the interstate judicial system's
interest in obtaining the most efficient resolution of con-
troversies; and the shared interest of the several States in
furthering fundamental substantive social policies, see
Kulko v. California Supenor Court, [436 U. s Jat 93, 98, 56
L. Ed. 2d 132, 98 S. Ct. 1690.
444 U.S. at 291-92.
The contacts of Helicol in Texas were not “minimal,” they
were “substantial.” It is not unreasonable to require a com-
pany with the expertise in international business, as Helicol, to
defend a suit in a state where it has conducted multi-million
dollars of business. However, it is unreasonable to require the
widows and children seeking relief here to go to a foreign
country to prosecute their action.
This Court has an interest in adjudicating the dispute of
these United States citizens. They do not have the power to
select another state but must be removed to a foreign country,
This Court has an interest in assuring these plaintiffs obtain
convenient and effective relief, at least when that interest is
not adequately protected by the plaintiff's power to choose the
forum country.
12a
“Due process” is not a rigid, unchanging rule that courts
could always determine by an unchanging formula. The con-
cept of “due process” is designed to meet the test of change and
to protect the rights of American citizens in the 1980's, as it did
when the Constitution was written. In World-Wide, it was
stated:
The limits imposed on state jurisdiction by the Due
Process Clause, in its role as a guarantor against in-
convenient litigation, have been substantially relaxed
over the years. As we noted in McGee v. International
Life Ins. Co., supra, at 222-223, 2 L. Ed. 2d 223, 78S. Ct.
199, this trend is largely attributable to a fundamental
transformation in the American economy:
“Today many commercial transactions touch two or
more States and may involve parties separated by the full
continent. With this increasing nationalization of com-
merce has come a great increase in the amount of business
conducted by mail across state lines. At the same time
modern transportation and communication have made it
much less burdensome for a party sued to defend himself
in a State where he engages in economic activity.”
The historical developments noted in McGee, of course,
have only accelerated in the generation since that case was
decided.
444 U.S. at 292-93.
The quote from McGee is as applicable to the facts of this case
as it was to the McGee facts. It could be written: Today many
commercial transactions touch two or more countries and may
involve parties separated by continents or oceans. With this
increasing internationalization of commerce has come a great
increase in the amount of business conducted by mail and
satellite communications across continental lines. At the same
time modern transportation and communication have made it
much less burdensome for a party sued to defend himself in a
country where he engages in economic activity.
The McGee court further stated: “Of course there may be
inconvenience to the insurer if it is held amenable to suit in
California where it had this contract but certainly nothing
l3a
which amounts to a denial of due process.” 355 U.S. at 224. In
my opinion, the inconvenience to Helicol, considering their
substantial contacts in Texas, is certainly nothing which
amounts to a denial of due process.
In Hanson v. Denckla, 357 U.S. 235 (1958), the Supreme
Court, in explaining the requirements of due process, stated:
The unilateral activity of those who claim some rela-
tionship with a non-resident defendant cannot satisfy the
requirement of contact with the forum State. The applica-
tion of that rule will vary with the quality and nature of the
defendant’s activity, but it is essential in each case that
there be some act by which the defendant purposefully
avails itself of the privilege of conducting activities within
the forum State, thus invoking the benefits and protec-
tions of its laws.
[Emphasis added).
357 U.S. at 253.
This Court, in U’-Anchor Advertising, Inc. v. Burt, 553
S.W.2d 760 (Tex. 1977), tested the jurisdiction of Texas courts
over the Oklahoma resident by stating:
[T]he contacts of Burt with Texas are minimal and for-
tuitous, and he cannot be said to have “purposefully”
conducted activities within the State. Burt's contacts with
Texas were not grounded on any expectation or necessity
of invoking the benefits and protections of Texas law, nor
were they designed to result in profit from a business
transaction undertaken in Texas. The contract was soli-
cited, negotiated, and consummated in Oklahoma, and
Burt did nothing to indicate or to support an inference of
any purpose to exercise the privilege of doing business in
Texas. Simply stated, Burt was a passive customer of a
Texas corporation who neither sought, initiated, nor prof-
ited from his single and fortuitous contact with Texas.
553 S.W.2d at 763.
Applying the L’-Anchor test and using the U-Anchor lan-
guage, I find Helicol’s contacts are numerous and not for-
tuitous, as Helicol purposefully conducted activities within the
state. Helicol’s contacts with Texas were grounded on the
l4a
expectation, or necessity, of invoking the benefits and protec-
tions of Texas law; and they were designed to result in profit
from a business transaction undertaken in Texas. The con-
tracts and contacts were solicited or negotiated in Texas and
some consummated in Texas. Helicol’s activities, therefore,
did more than indicate or support an inference of purposefully
exercising the privilege of doing business in Texas. Helicol was
an active customer of Texas corporations and companies who
sought, initiated, and hopefully profited from its many and
purposeful contacts with Texas.
RoBerT M. CAMPBELL
Justice
Justice McGee joins in this concurring opinion.
OPINION DELIVERED: July 21, 1982
IN THE SUPREME COURT OF TEXAS
No. C-243
ELIZABETH HALL, ef ai.,
Petitioners,
HELICOPTEROS NACIONALES De CoLomeia, S.A.
“HELICOL”
Respondent.
From Harris County, First DISTRICT
DISSENTING OPINION
I respectfully dissent. Jurisdiction was originally exercised
in this case over Helicol, a nonresident defendant, on a cause of
action that arose in South America. The suit was brought by
Hall and others, all residents of states other than Texas. In our
original opinion, we held that the exercise of jurisdiction over
Helicol was improper and violated the requirements of due
process. Significant in that holding was the fact that the
underlying cause of action, concerning the crash of a helicopter
in Peru, was unvelaced to Helicol’s contacts with Texas. We
concluded that, absent a showing of the defendant's “general
business presence” in this state, created by “substantial and
continuous activity,” jurisdiction based upon contacts unre-
lated to the cause of action was unconstitutional.
For reasons expressed in our original opinion, and for addi-
tional reasons that have become clear on rehearing, | remain
convinced that jurisdiction should not be exercised in this case,
and that the original opinion shoula be retained as the opinion
of this court. That opinion was at least an attempt to define
standards clarifying the vague and uncertain statutory and
constitutional boundaries of in personam jurisdiction. The
rehearing opinion, on the other hand, ignores the need for
l6a
standards, and will very likely enhance rather than alleviate
the confusion surrounding this difficult area of the law.
Article 2031b and Unrelated Contacts
In our earlier opinion, we stated that article 2031b, the
Texas “long-arm” statute, reaches to the full extent permitted
by the Constitution, authorizing the exercise of jurisdiction
over a nonresident defendant whenever doing so is consistent
with due process. We were concerned with avoiding technical
distinctions as to what is and what is not “doing business.” We
concluded that the “catch-all” language in the statute—
“without including other acts that may constitute doing
business”—extended coverage of the term essentially to all
activity a nonresident might perform in the state, and that the
only remaining determination in jurisdiction cases should be
whether asserting jurisdiction is constitutional. While it still
seems correct to say that the term “doing business” should be
defined broadly, reexamination on rehearing of our original
analysis indicates that it is nevertheless incorrect to conclude
that article 2031b reaches as far as due process permits. As
explained in a series of Federal Fifth Circuit opinions begin-
ning with Prejean v. Sonatrach, Inc., 652 F.2d 1260 (Sth Cir.
1981), due process is broader than statutory boundaries of
jurisdiction in Texas because the Constitution will sometimes
permit a state to assert jurisdiction over a nonresident defend-
ant who has contacts with the state unrelated to the cause of
action being asserted. See Perkins v. Benguet Consolidated
Mining Co., 342 U.S. 437 (1952) (general jurisdiction based
upon “substantial and continuous activity”). Article 2031b, on
the other hand, expressly limits the exercise of personal
jurisdiction to causes of action arising out of activities or
business done within the state. Prejean v. Sonatrach, Inc.,
supra at 1265. See also Jim Fox Enterprises, Inc. v. Air
France, 664 F.2d 62, 63-64 (5th Cir. 1981); Placid Investments,
Ltd. v. Girard Trust Bank, 662 F.2d 1176, 1178 (5th Cir. 1981).
Stated differently, article 2031b requires that there always be
a nexus between the cause of action and the contacts relied
17a
upon to justify jurisdiction, while due process does not always
demand that such a nexus be shown.
The source of the nexus requirement in Texas is the clear
wording of the statute itself. Section 3 of article 2031b pro-
vides:
Any foreign corporation, association, joint stock com-
pany, partnership, or non-resident natural person that
engages in business in this State, irrespective of any Stat-
ute or law respecting designation or maintenance of resi-
dent agents, and does not maintain a place of regular
business in this State or a designated agent upon whom
service may be made upon causes of action arising out of
such business done in this State, the act or acts of engag-
ing in such business within the State shall be deemed
equivalent to an appointment by such foreign corporation,
joint stock company, association, partnership, or nonresi-
dent natural person of the Secretary of State of Texas as
agent upon whom service of process may be made in any
action, suit or proceedings arising out of such business
done in this State, wherein such corporation, joint stock
company, association, partnership, or non-resident natu-
ral person is a party or is to be made a party.
TEX. REV. CIV. STAT. ANN. art. 2031b, § 3 (emphasis
added).’ This statute determines the length that the “long
‘Section 2 of article 2031b also requires a nexus, although this
section was not the basis for exercise of jurisdiction in the present
case. Section 2 provides:
When any foreign corporation, association, joint stock com-
pany, partnership, or non-resident natural person, though not
required by any Statute of this State to designate or maintain an
—. $ engage in business in this State, in any action in
which such corporation, joint stock company, association, part-
nership, or non-resident natural person is a party or is to be
made a party arising out of such business, service may be made
by serving a copy of the process with the person who, at the time
of (he service, is in charge of any business in which the defendant
or defendants are en in this State, provided a copy of such
process, together with notice of such service upon such person in
~
lXa
arms” of Texas jurisdiction may extend. The quoted language
unambiguously confines that reach to suits arising out of con-
tacts with the state.
Nothing in the development of article 2031b indicates that
the nexus requirement should be disregarded. The statute was
enacted in the wake of International Shoe Co. v. Washington,
326 U.S. 310 (1945), which greatly expanded the jurisdictional
potential of the various states. The Supreme Court reasoned in
International Shoe that the exercise of jurisdiction over a
nonresident defendant satisfies due process when the defend-
ant has had “certain minimum contacts ... such that the
maintenance of the suit does not offend ‘traditional notions of
fair play and substantial justice.’ Jd. at 316. This standard
was broader in its effect than the “long-arm’ statutes then
employed in most states, including Texas.‘ Most states, like
Texas, responded to the action of the Supreme Court by enact-
ing new statutes aimed at taking advantage of the expanded
limits of potential jurisdiction. Yet, while the reach of a partic-
ular statute could always be coextensive with constitutional
charge of such business shall forthwith be sent to the defendant
or to the defendants [sic] principal place of business by reg-
istered mail, return receipt requested.
TEX. REV. CIV. STAT. ANN. art. 2031b, § 2 (emphasis added).
* Article 2031b became effective August 10, 1959. Prior to that
time, Texas had no general jurisdictional statute. Instead, jurisdic-
tion was based upon a nonresident moiorist statute, TEX. REV.
CIV. STAT. ANN. art. 2039a, and upon several statutes applying to
nonresidents in specific circumstances, such as TEX. INS. CODE
ANN. arts. 3.65, 3.66, 21.38 §6; TEX. BUS. CORP. ACT ANN.
arts. 2.11, 8.10; TEX. NON-PROFIT CORP. ACT ANN. art. 8.09:
TEX. REY. CIV. STAT. ANN. arts. 2031, 2031a, 2032, 2033, 2033b.
See Thode, In Personam Jurisdiction; Article 2031b, The Texas
“Long Arm” Jurisdiction Statute; And the Appearance to Challenge
Jurisdiction in Texas and Elsewhere, 42 TEXAS L. REV. 279, 304
n. 165 (1964) (hereinafter cited as Thode).
19a
confines outlined by the Supreme Court, states were not com-
pelled to assert jurisdiction that far. See Perkins v. Benguet
Consolidated Mining Co., supra at 440; Prejean v. Sonatrach,
Ine., supra at 1264; Thode, supra at 304. Some states took
advantage of the full range of jurisdiction allowed. See, @.9g.,
FLA. STAT. ANN. § 48.081(5) ( allowing jurisdiction over un-
related causes of action whena foreign corporation has a “busi-
ness office” in the state and engages in the transaction of
business there); WIS. STAT. ANN, § 801.05 1) (jurisdiction
over unrelated causes of action permitted when an individual
carries on “substantial and not isolated activities” in the state).
See also UNIFORM INTERSTATE AND INTERNATION-
AL PROCEDURE ACT § 1.02 (jurisdiction may be asserted
as to unrelated causes of action when a defendant has his
principal place of business in the state). Others wrote more
restrictive statutes. Texas included the requirement that the
jurisdiction be limited to causes of action arising from local
activity.’
‘The nexus requirement of article 2031b was contained in the
original version of the act and has remained there unchanged since
enactment. Comment, The Tezas Long-Arm Statute, Article 2031:
A New Process Is Due, 30 Sw. LJ. 747, 747 (1976). The statute is
thought to have been adapted from the 1947 Vermont “long-arm”
Statute, which also contains a nexus requirement. The pertinent
portion of that statute provides:
If a foreign corporation makes a contract with a resident of
Vermont to be performed in whole or in part by either party in
Vermont, or if such foreign corporation commits a tort in whole
or in part in Vermont against a resident of Vermont, such acts
shall be deemed to be doing business in Vermont. . . and shall be
deemed equivalent to the appointment .. . of the secretary of
state of Vermont... to be its true and lawful attorney upon
whom may be served all lawful process in any actions or proceed-
.
Ings. . . arising from or growing out of such contract or tort. oa
VT. STAT. ANN. title 12, § 855, quoted in Thode, supra at 305 n. 167
(emphasis added). Other statutes adopted with similar provisions
include: ILL. REV. STAT. ch. 110, § 17(1): MD. ANN. CODE,
20a
Jurisdiction statutes stand as expressions of a state's in-
terest, and the limits of that interest, in acquiring jurisdiction
over nonresident defendants.‘ In this way, article 2031b may
Courts and Judicial Proceedings, § 6-103; N.Y. CIV. PRAC. LAW
§ 302; OHIO REV. CODE ANN. § 2307.382. See also Precision
Polymers, Inc. v. Nelson, 512 P.2d 811, 813 (Okla. 1973) (construing
OKLA. STAT. title 12, $§ 187, 1701.03):
Under the above holding if it does not appear from the record
that plaintiff's cause of action arises out of or is based upon the
same acts of defendant alleged to confer jurisdiction in personam
of the defendant, plaintiff may not invoke the provisions of § 147,
supra, to acquire jurisdiction of defendant. This holding is in
harmony with the language of § 187, which limits its application
“to any cause of action arising, or which shall have arisen, from
doing any” of the acts therein enumerated.
The Oklahoma statute requires a nexus notwithstanding the fact that
the act has been construed to extend to constitutional limits. See
Roberts v. Jack Richards Aircraft Co., 536 P.2d 353, 355 (Okla.
1975).
‘The United States Supreme Court has frequently looked to
jurisdiction statutes to determine the extent of a state's expressed
interest in acquiring jurisdiction over a particular lawsuit. In Hanson
v. Denckla, 357 U.S. 235, 252 (1958), the Court distinguished the
previous case of McGee v. International Life Insurance Co., 355 U.S.
220 (1957), by stating:
This case is. . . different from McGee in that there the State had
enacted special legislation (Unauthorized Insurers Process Act)
toe xercise what .\VMeGee called its “manifest interest” in provid-
ing effective redress for citizens who had been injured by
nonresidents engaged in an activity that the State treats as
exceptional and subjects to special regulation. Cf. Travelers
Health Assn. v. Virginia, 339 U.S. 643, 647-49; Doherty & Co. v.
Goodman, 294 U.S. 623, 627; Hess v. Pawloski, 274 U.S. 352.
See also Kulko v. California Superior Court, 436 U.S. 34. 95 (1978)
(“California has not atternpted to assert any particularized interest in
trying such cases in its courts by, ¢.g., enacting a special jurisdiction-
al statute.”); Iowa Electric Light and Power Co. v. Atlas Corp., 603
F.2d 1301 (8th Cir. 1979); Comment, Federalism, Due Process, and
Minimum Contacts: World-Wide Volkswagen Corp. v. Woodson, 30
COLUM. L. REV. 1341, 1345 (1980).
2la
be seen as a reflection of Texas’ interest, as expressed by the
legislature, in assuming jurisdiction over suits arising out of
acts done in this state.’ A desire to gain jurisdiction over
nonresidents for unrelated actions arising from activities out-
side the state is not reflected in the history of the statute or in
the act’s clear and unambiguous wording. Certainly, the legisl-
ature could have drafted the statute in language expressly
extending its effect to the full extent permitted by the Con-
stitution, as it did in TEX. FAM. CODE ANN. § 3.26
(permitting the exercise of jurisdiction over a nonresident
respondent “if there is any basis consistent with the constitu-
tion of this state or the United States for the exercise of the
personal jurisdiction”), or it could have simply left out in the
nexus requirement, as in TEX. BUS. CORP. ACT ANN. art.
8.10 (providing for service of process on foreign corporations
authorized to transact business in the state). Absent such
legislative action, however, we must enforce the clear provi-
sions of article 2031b as presently written. See generally Fox
v. Burgess, 157 Tex. 292, 297, 302 S.W.2d 405, 409 (1957); 2A
‘This is another way of saying that the legislature has expressed
an interest in providing a forum for state residents who are injured
by activities of nonresidents performed within the state’s bound-
aries, and to require that the nonresident bear the costs of injuries
caused by their activities in the state. That these considerations were
factors in the drafting of the provisions of article 2031b is reflected
indirectly in one commentator’s call for legislative action prior to the
enactment of the statute. See Wilson, Jn Personam Jurisdiction
Over Non-Residents: An Invitation and a Proposal, 9 BAYLOR L.
REV. 363 (1957). The proposed draft of a statute included by Profes-
sor Wilson in his article contained a nexus requirement ider.cical to
the one found in article 2031b. This proposed draft is considered by
some to have served as a model for the first five sections of the statute
adopted by the legislature. Thode, supra at 303 n.151,
22a
SUTHERLAND ON STATUTORY CONSTRUCTION
§ 46.04 (4th ed. 1973).’
Those who insist that the nexus requirement in article 2031b
should be ignored rely upon L’-Anchor Advertising, Inc. v.
Burt, 553 S.W.2d 760 (Tex. 1977), cert. denied, 434 U.S. 1063
(1978), as authority for the idea that the statute should extend
to “constitutional limits.” This court used that broad language
in its opinion in L’-Anchor, but it is evident from the facts and
context of that case that the defendant's contacts with Texas
formed the very basis for the cause of action sued upon. There-
fore, the nexus requirement was satisfied and the court did not
need to deal with that issue. Instead, the court examined the
statutory definition of “doing business” located in section 4 of
“It has been contended that the statute, article 2031b. was
originally enacted to extend Texas “long-arm” jurisdiction to the full
limits allowed after International Shoe, and that, if constitutional
limits were actually broader than the legislature then believed, or if
those limits have since been expanded, the statute’s scope should
likewise be enlarged in order to reach to the maximum extent possi-
ble. This argument is defective, however, for several reasons. First,
article 2031p was enacted after Perkins v. Benguet Consolidated
Mining Co., supra, which very clearly stated that states could, in
certain instances, exercise jurisdiction over unrelated causes of ac-
tion. 342 U.S. at 445-47. Second, even assuming that article 2031b
was initially intended to be coextensive with due process, and due
process was at that time believed to always require a nexus, we
cannot assure that the drafters would have extended the statute to
constitutional limits had the true limits been known, or when the
limits were expanded. Perhaps the legislature was willing to extend
article 2031b to constitutional limits only so long as a nexus was
required. Finally, statutes drafted and enacted in other states near
the time that article 2031b was written contained provisions
authorizing the exercise of jurisdiction over unrelated causes of
action in some cases, indicating that at least some legislatures had the
idea that such an exercise of jurisdiction was constitutional. See, ¢.g.,
MD. ANN. CODE, Courts and Judicial Proceedings, § 6-102; WIS.
STAT. ANN. § 801.05(1).
23a
the act and, relying upon the “catchall” language of that sec-
tion, construed the term “doing business” as broadly as the
constitution would permit.’ In a sense, therefore, the court did
extend the statute to constitutional limits by substituting the
constitutional “minimum contacts” standard for the more
restrictive “tort or contract” definition of “doing business.” In
other words, the inquiry in jurisdiction cases after L’-Anchor
became whether a defendant had had “minimum contacts” with
this state, rather than whether he had committed a tort or
entered into a contract here. While this construction expanded
the scope of the statute to constitutional limits in the sense of
section 4, however, it can in no way be seen to have affected the
requirement in sections 2 and 3 that the cause of action “arise
out of” the contacts with the forum.
*The idea that article 2031b should “extend to constitutional lim-
its” seems to have been lifted by the court from the comments of
Professor Thode, supra. Like the court in L’-Anchor, Thode spoke of
expanding the statute in the context of defining “doing business.” He
stated: “[T]he specific language pertaining to contracts and torts is
sufficiently broad to encompass all constitutionally permissible suits
in these two areas of the law.” /d. at 307. Concerning the “catchall”
phrase used by the court in L’-Anchor to accomplish the broadening
of article 2031b to constitutional limits, Thode remarked:
Does article 2031b provide for jurisdiction in the many areas of
law other than tort or contract wherein a lawsuit could arise
against a nonresident defendant’? The answer lies in the fact that
section 4 also includes a catch-all clause... . The wording (of the
clause) is ambi , but the other purpose is clear. The words
“without including other acts that may constitute doing busi-
ness” could be construed to mean that no other acts are to be
included within the jurisdictional reach of article 2031b. But the
obvious meaning, and the one consistent with the whole
of the act, is that this catchall language is intended soenpand the
jurisdictional scope of the sta ‘ute to constitutional limits “with-
out incl other acts” in the s c description of acts that
fall within the purview of the article 2031b.
Id. at 307-08.
24a
It is well established that the threshold inquiry in any in
personam jurisdiction case is whether statutory requirements
have been met. Only if the exercise of jurisdiction in a given
instance is within the scope of statutory authority is the con-
stitutionality of that exercise ever at issue. Prejean v. Sona-
trach, Inc., supra at 1264; Oswalt v. Scripto, Inc., 616 F.2d
191, 196 (5th Cir. 1980); Pizza Inn, Inc. v. Lumar, 513 8.W.2d
251, 253 (Tex. Civ. App.—Eastland 1974, writ refd n.r.e.).
The exercise of jurisdiction over Helicol in this tort action was
heyond the scope of authority defined by article 2031b. The tort
sued upon did not occur in Texas; it occurred in South America,
and arose purely out of Helicol’s transacting business there.
Helicol has had contacts with Texas, but there has been no
allegation or proof that the purchase of helicopters in Fort
Worth or the negotiation of a contract in Houston in any way
caused the crash in Peru. Put simply, the contacts of Helicol
with Texas did not give rise to the cause of action being
asserted, and the nexus requirement contained in article 2031b
has not been met. Absent this statutory authorization,
jurisdiction may not be asserted.
The statement that jurisdiction may not be exercised over
Helicol because the cause of action is not related to the forum
contacts is true regardless of the extent or quality of Helicol’s
unrelated contacts. In Prejean v. Sonatrach, Inc., supra, one
defendant, Beech, had extensive contacts with Texas, all unre-
lated to the cause of action. These contacts were remarkably
similar to Helicol’s activities in Texas, but were much more
extensive. For example, Beech entered into an $11.1 million
subcontract with Bell Helicopter in Fort Worth for the produc-
tion of airframe assemblies, and had produced these for Bell
continuously since 1967 under contracts exceeding $72 million.
Id. at 1270 n.19. In addition, Beech had two employees resid-
ing and conducting business in Texas. A local corporation
wholly owned by the defendant had sold and serviced aircraft
manufactured by Beech. Notwithstanding these contacts,
which quite obviously constituted “doing business” in Texas,
the court concluded that jurisdiction could not be asserted
25a
because the activities were not shown to have the “slightest
causal relationship with the decedent’s wrongful death.” /d. t
1270.
In Jim For Enterprises, Inc. v. Air France, 664 F.2d 63 (5th
Cir. 1981), the defendant, Air France, was doing “a thriving
business in Texas." /d. at 65. It had a ticket office at Houston's
Intercontinental Airport and a district sales office downtown.
It listed six local telephone numbers in the Houston telephone
directory, leased Texas real estate, employed Texas residents,
and paid Texas employment and personal property taxes.
Gross receipts from passenger ticket sales in Texas totalled in
excess of $59 million. Nevertheless, the court in Jim For
recognized that article 2031b requires a nexus between the
cause of action and the contacts with Texas, and that Air
France's contacts, being unrelated to the cause of action, were
insufficient to support jurisdiction.
In another case, Placid Investments, Ltd. v. Girard Trust
Bank, 662 F.2d 1176 (5th Cir. 1981), it was undisputed that the
defendant did business in Texas. As noted by the court, the
defendant maintained bank accounts in Texas, owned Texas
real estate, and received revenue from Texas sources. /d. at
1178. None of these contacts, however, “gave rise” to the cause
of action. As a result, the court concluded, the causal rela-
tionship or nexus requirement in article 2031b was not met,
and jurisdiction could not be asserted.
Put simply, the boundaries of jurisdiction authorized by
article 2031b are more restrictive than those defind by due
process. If the state has an interest in asserting jurisdiction
over suits unrelated to activity performed in the state, the
legislature should act to extend the reach of the statute. Until
the legislature does act, however, we must enforce the clear
provisions of the present statute. Enforcement of that statute
in the present case yields the result that Helicol was not
subject to the jurisdiction of this state on the asserted cause of
action. I would, therefore, affirm the judgment of the court of
civil appeals, as this court did in the first opinion.
26a
Due Process
Because | believe that the requirements of article 2031b
were not met in this case, I would not reach the constitutional
question. Even if article 2031b authorized the exercise of
jurisdiction, however, I would still conclude, as the court con-
cluded in its original opinion, that the exercise of jurisdiction
over Helicol exceeded the limits imposed by due process.
As stated in the initial discussion, the Constitution will
sometimes permit a state to exercise jurisdiction over a
nonresident defendant for causes of action unrelated to the
defendant's contacts with the forum. To state this fact, how-
ever, is to state the exception and not the rule. Generally, a
defendant's contacts with the forum state will only support the
power to adjudicate with respect to issues arising from the
very controversy sued upon. L. D. Reeder Contractors v. Hig-
gins Industries, 265 F.2d 768, 773-75 (9th Cir. 1959); von
Mehren & Trautman, Jurisdiction to Adjudicate: A Suggested
Analysis, 79 HARV. L. REV. 1121, 1136 (1966) (hereinafter
cited as von Mehren & Trautman); RESTATEMENT
(SECOND) OF CONFLICT OF LAWS § 35(1) (1971). Only
when the defendant has established a general business pre-
sence in the state, characterized by “substantial and con-
tinuous activity,” rnay the state assume jurisdiction over the
defendant for unrelated causes of action. Perkins v. Benguet
Consolidated Mining Co., supra at 438, 445, 448; O'Neal v.
Hicks Brokerage Co., 587 F.2d 1266, 1268 (4th Cir. 1976);
Seymour v. Parke, Davis & Co., 423 F.2d 584, 585-86 (1st Cir.
1970); W. H. Elliott & Sons Co. v. Nuodex Products Co., 243
F.2d 116, 122 (1st Cir.), cert. denied, 355 U.S. 823 (1957). See
also R. WEINTRAUB, COMMENTARY ON THE CON-
FLICT OF LAWS 145 (2d ed. 1980); RESTATEMENT
(SECOND) OF CONFLICT OF LAWS § 35(3) (1971)."
“The reason for placing emphasis upon contacts related to the
cause of action has to do with the need to show a state interest in
27a
The term “substantial and continuous activity” has a distinct
meaning when used in the context of due process analysis. It
suggests that the individual or corporate defendant is enough
assuming jurisdiction over the nonresident defendant. As explained
in Curtis Publishing Co. v. Birdsong, 360 F.2d 344, 346-47 (5th Cir.
1966): “There mus* be a rational nexus between the fundamental
events giving rise to the cause of action and the forum State which
gives that State sufficient interest in the litigation before it may
constitutionally compel litigants to defend in a foreign forum.”
The United States Supreme Court had made it clear that a state's
interest in subjecting a nonresident to its judicial jurisdiction is a
fundamental factor to be considered in cases of this kind. In /nterna-
tional Shoe Co. v. Washington, 326 U.S. 310 (1945), the interest of
the state was obvious in that the suit was brought by the state itself,
for unpaid taxes. In McGee v. International Life Insurance Co., 355
U.S. 220, 223 (1957), the validity of the exercise turned upon Califor-
nia’s paramount interest in the litigation. The Court noted the state’s
manifest interest in protecting its residents, stating: “These resi-
dents would be at a severe disadvantage if they were forced to follow
the insurance company to a distant State.” In Hanson v. Denckla, 357
U.S. 235, 251-52 (1958), the Court emphasized the absence of a
substantial state interest, distinguishing McGee. The Court ex-
plained:
The cause of action in this case is not one that arises out of an
act done or transaction consummated in the forum State. In that
ene, it differs from McGee International Life Ins. Co., 355
U.S. 220, and the cases there cited. In McGee, the nonresident
defendant solicited a reinsurance ment with a resident of
California. The offer was accepted in that State, and the in-
surance premiums were mailed from there until the insured’s
death. Noting the interest California has in providing effective
redress for its residents when nonresident insurers refuse to pay
claims on insurance they have solicited in that State, the Court
wee jurisdiction because the suit “was based on a contract
which had substantial connection with that State.” In contrast,
this action involves the validity of an ment that was en-
tered without any connection with the forum State.
Contrary to this court’s conclusion on rehearing that Texas has an
interest in adjudicating this case because the plaintiffs are United
28a
of an “insider” in the forum that he may be safely relegated to
the state’s political processes. Brilmayer, How Contacts
Count: Due Process Limitations on State Court Jurisdiction,
1980 SUP. CT. REV. 77, 87 (1980). Achievement of such a
position obviously requires more of the defendant than “mini-
mum contacts.” Instead, the defendant must establish some
close substantial connection with the state approaching the
relationship between the state and its own residents.’ It was
upon such a basis—the defendant’s operating temporary
corporate headquarters in the forum state—that the Supreme
Court upheld the exercise of jurisdiction over an unrelated
States citizens, cases demonstrate that state interest in litigation is
consistently derived from a state's desire to protect its own citizens
and property and to effectuate its own regulatory policies. See, ¢.g.,
Blount v. Peerless Chemicals, Inc., 316 F.2d 695, 697 (2d Cir.), cert.
denied, 375 U.S. 831 (1963); Compania de Astral v. Boston Metals
Co., 205 Md. 237, 107 A.2d 357 (1954), cert. denied, 348 U.S. 9438
(1955). See also Comment, Federalism, Due Process, and Minimum
Contacts: World-Wide Volkswagen Corp. v. Woodson, 80 COLUM.
L. REV. 1343, 1345 (1980).
* This relationship is most commonly characterized by the fact that
the forum state is the habitual residence, place of incorporation, or
principal place of business for the defendant. See Seymour v. Parke,
Davis & Co., supra at 587: “Ifthe plaintiff has some attachment to the
forum, or if the defendant has adopted the state as one of its major
places of business, we would have no question of the right of the state
to subject the defendant to suit for unconnected causes of action.” See
also Hill, Choice of Law and Jurisdiction in the Supreme Court, 81
COLUM. L. REV. 960 (1981); RESTATEMENT (SECOND) OF
CONFLICT OF LAWS § 35, comment e (1971): “The individual's
activities in the State may . . . be so continuous and substantial as to
justify the exercise of judicial jurisdiction over him as to causes of
action arising from activities in other states. This is particularly
likely to be true in a situation where the individual's principal place of
business is in the State.”
29a
cause of action in Perkins v. Benguet Consolidated Mining
Co., supra."
This court, on rehearing of the present case, would consider
the nexus between the cause of action and the forum contacts a
necessary requirement only in cases involving “single or few”
contacts with the forum state. The court remarks that a nexus
is “unnecessary when the nonresident defendant's presence in
the forum through numerous contacts is of such nature, as in
this case, so as to satisfy the demands of the ultimate test of due
process.” The “ultimate test of due process” then applied by
the court is the “minimum contacts” standard. The error in this
reasoning is that the nexus requirement is satisfied and becom-
es unnecessary not upon a showing of “minimum contacts,” but
upon a demonstration of the defendant’s substantial and con-
tinuous activity in the forum. Absent a showing of such activ-
ity, the nexus requirement becomes a highly significant factor.
Given the additional fact that the forum has no other basis for
establishing its interest in the lawsuit, such as by residence of
the plaintiff, see Ratliff v. Cooper Laboratories, Inc., 444 F.2d
° As stated in von Mehren & Trautman, supra at 1144:
Given the facts of the case, the [Perkins] decision can be re-
ed as approving the forum utilized as a surrogate for the
place of incorporation or head office. Against the backdrop of
increasingly refined thinking about specific jurisdiction to ad-
judicate, and despite the Ohio court’s language on remand, the
Perkins case should be regarded as a decision on its exceptional
facts, not as a significant reaffirmation of obsolescing notions of
general jurisdiction.
See also Seymour v. Parke, Davis & Co., supra at 587 (limiting
Perkins to its facts); Newton, Conflict of Laws, 34 Sw. L.J. 385, 394
(1980) (“The proper characterization of Perkins. . . is that it never
offends traditional notions of fair play and substantial justice for a
defendant to be sued in his own backyard, no matter where the cause
of action arose.”)
30a
745 (4th Cir. 1971), the nexus requirement becomes control-
ling. No state should assume jurisdiction over a case involving
a nonresident plaintiff and defendant when the cause of action
arises out of facts totally unrelated to the forum state.
A separate concurrence filed on rehearing contends that the
“long-arms” of state jurisdiction should extend more elastically
when reaching for nonresident defendants who are citizens of
other countries. While this argument may appeal to those who
contend that noncitizens should receive less due process than
United States citizens, cf. Plyler v. Doe, 50 U.S.L.W. 4650
(1982); Truar v. Raich, 239 U.S. 33 (1915), it is nevertheless
inconsistent with the way due process has been applied in
previous cases. Although such a contention is rarely raised,
cases dealing with jurisdictional issues invariably apply the
same due process standards to citizens and noncitizens alike.
See, e.g., Jim Fox Enterprises v. Air France, 664 F.2d 63 (Sth
Cir. 1981); Prejean v. Sonatrach, Inc., 652 F.2d 1260 (5th Cir.
1981); Hutson v. Fehr Brothers, Inc., 584 F.2d 833 (8th Cir.
1978); Honeywell, Inc. v. Metz Apparatewerke, 509 F.2d 1137
(7th Cir. 1975); Product Promotions, Inc. v. Cousteau, 495
F.2d 483 (5th Cir. 1974); Bryant v. Finnish National Airline,
15 N.Y.2d 426, 208 N.E.2d 439 (1965). See also A. EHRENZ-
WEIG & E. JAYME, PRIVATE INTERNATIONAL LAW
vol. II at 22 (1973) (neither party’s citizenship affects an Amer-
ican court’s jurisdiction).
Except for the purchase of helicopters and spare parts and
the negotiation of a single contract to be performed in South
America, Helicol conducted all of its business outside of the
State of Texas. Nevertheless, the court has concluded that
Helicol is subject to the jurisdiction of Texas courts for suits
arising anywhere in the world. As a result, the court has
established Texas as a “magnet” forum, drawing to its courts
the trial of any lawsuit involving a defendant who has ever done
business in Texas. Texas is now the courthouse for the world. I
must conclude that this result is not only inconsistent with
constitutional standards established in previous cases, but is
3la
detrimental to the “fair and orderly administration of the laws
which it was the purpose of the due process clause to insure.”
International Shoe Co. v. Washington, supra at 39.
JACK PoPE
Justice
Chief Justice Greenhill and Justice Barrow join in this dis-
sent.
OPINION DELIVERED:
July 21, 1982
32a
IN THE SUPREME COURT OF TEXAS
No. C-243
ELIZABETH HALL, et al.,
Petitioners,
Vv.
HELICOPTEROS NACIONALES DE CoLomsia, S.A. (“HELICOL”),
Respondent.
From Harris County, First DISTRICT
DISSENTING OPINION
I respectfully dissent. The former dissenting opinion handed
down July 21, 1982, is withdrawn. The survivors of four
nonresidents who were killed in an airplane crash in the jungles
of Peru, have sued the defendant Helicol in Houston, Texas.
Helicol is a resident corporation of Colombia, South America.
Neither the plaintiffs, the decedents, the defendant, nor the
tort action have any connection with Texas. The court makes
Texas the courthouse for the world, requiring only that the
plaintiff show that the defendant had made purchases of sup-
plies from some unrelated business located in Texas. I disagree
with the court’s opinion, because it is not grounded upon the
correct facts and because our long-arm statute reaches only to
“causes of action arising out of such business done in this
State.” TEX. REV. CIV. STAT. ANN. art. 20310.
The court mistakenly says that Williams-Sedco-Horn, a
Texas joint venture, was the party that contracted with the
Peruvian owned oil company, Petro Peru. The opinion also
says that the defendant Helicol negotiated and made its agree-
ment with Williams-Sedco-Horn in Houston, Texas. The true
facts, as stated by the court of civil appeals are that Williams-
Sedco-Horn was not the party who contracted either with the
33a
Peruvian oil company or with Helicol. The undisputed testi-
mony was that Peru forbade a contract to construct the pipe-
line with any corporation unless it was a Peruvian company.
The contract, written in Spanish and approved by the govern-
ment, was with Peruvian-based Consorcio, not Williams-
Sedco-Horn. The parties to the contract for the helicopters
were Consorcio and Helicol. The court of civil appeals so found
and enforced that finding by its further reference to paragraph
19 of the contract, which states, in tae words of that court,
“that all parties agree that Lima, Peru, is the residence for all
related to the contract and that the parties submitted to the
jurisdiction of Peru.” The court of civil appeals made these
other significant findings:
It [Helicol] does not conduct business, advertise, nor per-
form any helicopter operations in Texas. It has never had
a Texas charter nor has it ever had a contract to perform
any work in Texas. Helicol’s operations are based —v in
South America. It is difficult to conclude that Helicol had
any expectation of availing itself of the benefits and
protections of the law of the state of Texas. We can find no
indication that Helicol intended to make a profit from any
business deal undertaken in Texas. Product Promotions,
Inc. v. Cousteau, 495 F.2d 483 (5th Cir. 1974).
Article 2031b Requires a Nexus to Business Done in This
State.
Article 2031b expressly requires a nexus between the heli-
copter crash and the contacts relied upon to justify jurisdic-
tion. The nexus requirement in Texas is found in the clear
wording of the statute itself. Section 3 of article 2031b pro-
vides:
Any foreign corporation, association, joint stock com-
pany, partnership, or non-resident natural person that
engages in business in this State, irrespective of any Stat-
ute or law respecting designation or maintenance of resi-
dent agents, and does not maintain a place of regular
business in this State or a designated agent upon whom
service may be made upon causes of action arising out of
such business done in this State, the act or acts of engag-
34a
ing in such business within the State shall be deemed
equivalent to an appointment by such forei corporation,
joint stock company, association, partnership, or nonresi-
dent natural person of the Secretary of State of Texas as
agent upon whom service of process may be made in any
action, suit or proceedings arising out of such business
done in this State, wherein such corporation, joint stock
company, association, partnership, or non-resident natu-
ral person is a party or is to to made a party.
TEX. REV. CIV. STAT. ANN. art. 2031b, $3 (emphasis
added). ’
Article 2031b was enacted in the wake of / nternational Shoe
Co. v. Washington, 326 U.S. 310 (1945), which greatly ex-
panded the jurisdictional potential of the various states. The
Supreme Court reasoned in / nternational Shoe that the ex-
ercise of jurisdiction over a nonresident defendant satisfies due
process when the defendant has had “certain minimum con-
tacts. . . such that the maintenance of the suit does not offend
‘traditional notions of fair play and substantial justice.’ "Jd. at
316. This standard was broader in its effect than the “long-
‘Section 2 of article 2031b also requires a nexus, although this
section was not the basis for exercise of jurisdiction in the present
case, Section 2 provides:
When any foreign corporation, association, joint stock com-
pany, + poopie 4 or non-resident natural person, though not
required by any Statute of this State to designate or maintain an
ent, shall engage in business in this State, in any action in
which such corporation, joint stock company, association, part-
nership, or non-resident natural person is a party or is to be
made a party arising out of such business, service may be made
| serving a copy of the process with the person who, at the time
of the service, is in charge of wer tage gy in which the defendant
or defendants are engaged in this State, provided a copy of such
process, together with notice of such service upon such person in
charge of such business shall forthwith be sent to the defendant
or to the defendants (sic) principal place of business by reg-
istered mail, return receipt requested.
TEX. REV. CIV. STAT. ANN. art. 2031b, § 2 (emphasis added).
35a
arm” statutes then employed in most states, including Texas.’
Most states, like Texas, responded to the action of the Su-
preme Court by enacting statutes aimed at taking advantage of
the expanded limits of potential jurisdiction. While the reach of
a particular statute could always be coextensive with con-
stitutional confines outlined by the Supreme Court, states
were not compelled to assert jurisdiction that far. See Perkins
v. Benguet Consolidated Mining Co., 342 U.S. 437, 440 (1952);
Prejean v. Sonatrach, Inc., 652 F.2d 1260, 1264 (5th Cir.
1981). Some states took advantage of the full range of jurisdic-
tion allowed. See, e.g., FLA. STAT. ANN. § 48.081(5) (allow-
ing jurisdiction over unrelated causes of action when a foreign
corporation has a “business office” in the state and engages in
the transaction of business there); WIS. STAT. ANN.
§ 801.05(1) (jurisdiction over unrelated causes of action per-
mitted when an individual carries on “substantial and not iso-
lated activities” in the state). See also UNIFORM IN-
TERSTATE AND INTERNATIONAL PROCEDURE ACT
§ 1.02 (jurisdiction may be asserted as to unrelated causes of
action when a defendant has his principal place of business in
the state). Texas and other states wrote more restrictive stat-
* Article 2031b became effective August 10, 1959. Prior to that
time, Texas had no general jurisdictional statute. Instead, jurisdic-
tion was based upon a nonresident motorist statute, TEX. REV.
CIV. STAT. ANN. art. 20392, and upon several statutes applying to
nonresidents in specific circumstances, such as TEX. INS. CODE
ANN. arts. 3.65, 3.66, 21.38 § 6; TEX. BUS. CORP. ACT ANN.
arts. 2.11, 8.10; TEX. NON-PROFIT CORP. ACT ANN. art. 8.09;
TEX. REV. CIV. STAT. ANN. arts. 2031, 2031a, 2032, 2033, 2033b.
See Thode, In Personam Jurisdiction; Article 2031b, The Texas
“Long Arm” Jurisdiction Statute; And the Appearance to Challenge
Jurisdiction in Texas and Elsewhere, 42 TEXAS L. REV. 279, 304
n.165 (1964) (hereinafter cited as Thode].
36a
utes. Texas included the requirement that the jurisdiction be
limited to causes of action arising from loca! activity.’
‘The nexus requirement of article 2031b was contained in the
original version of the act and has remained there unchanged since
enactment. Comment, The Texas Long-Arm Statute, Article 2031):
A New Process Is Due, 30 Sw. L.J. 747, 747 (1976). The statute is
thought to have been adapted from the 1947 Vermont “long-arm”
statute, which also contains a nexus requirement. The pertinent
portion of that statute provides:
If a foreign corporation makes 4 contract with a resident of
Vermont to be performed in whole or in part by either party in
Vermont, or if such foreign corporation commits a tort in whole
or in part in Vermont against a resident of Vermont, such acts
shall be deemed to be doing business in Vermont. . . and shall be
deemed equivalent to the appointment... of the secretary of
state of Vermont . . . to be its true and lawful attorney upon
whom may be served all lawful process in any actions or proceed-
ings ... arising from or growing out of such contract or tort
VT. STAT. ANN. title 12, § 855, quoted in Thode, supra at 305 n. 167
(emphasis added). Other statutes adopted with similar provisions
include: ILL. REV. STAT. ch. 110, §17(1); MD. ANN. CODE,
Courts and Judicial Proceedings, § 6-103; N.Y. CIV. PRAC. LAW
§ 302; OHIO REV. CODE ANN. § 2307.382. See also Precision
Polymers, Inc. v. Nelson, 512 P.2d 11, $13 (Okla. 1973) (construing
OKLA. STAT. title 12, §§ 187, 1701.03):
Under the above holding if it does not appear from the record
that plaintiff's cause of action arises out of or is based upon the
same acts of defendant alleged to confer jurisdiction in personam
of the defendant, plaintiff may not invoke the provisions of § 187,
supra, to acquire sear of defendant. This holding is in
harmony with the language of § 187, which limits its application
“to any cause of action arising, or which shall have arisen, from
doing any” of the acts therein enumerated.
The Oklahoma statute requires a nexus notwithstanding the fact that
the act has been construed to extend to constitutional limits. See
Roberts v. Jack Richards Aircraft Co., 536 P.2d 353, 355 (Okla.
1975).
37a
Jurisdiction statutes express the limits of a state's interest,
in acquiring jurisdiction over nonresident defendants.‘ Article
2031b limits Texas’ interest, to suits arising out of acts done in
this state.’ A desire to gain jurisdiction over nonresidents for
‘The United States Supreme Court has frequently looked to
jurisdiction statutes to determine the extent of a state's expressed
interest in acquiring jurisdiction over a particular lawsuit. In Hanson
v. Denckla, 357 U.S. 235, 252 (1958), the Court distinguished the
previous case of McGee v. International Life Insurance Co., 355 U.S.
220 (1957), by stating:
This case is. . . different from McGee in that there the State had
enacted special legislation (Unauthorized Insurers Process Act)
to exercise what McGee called its “manifest interest” in provid-
ing effective redress for citizens who had been injured by
nonresidents engaged in an activity that the State treats as
exceptional and subjects to special regulation. Cf. Travelers
Health Assn. v. Virginia, 339 U.S. 643, 647-49; Doherty & Co. v.
Goodman, 294 U.S. 623, 627; Hess v. Pawloski, 274 U.S. 352.
See also Kulko v. California Superior Court, 436 U.S. 84, 98 (1978)
(“California has not attempted to assert any particularized interest in
trying such cases in its courts by, ¢.g., enacting a special jurisdiction-
al statute.”); Iowa Electric Light and Power Co. v. Atlas Corp., 603
F.2d 1301 (&th Cir. 1979); Comment, Federalism, Due Process, and
Minimum Contacts: World-Wide Volkswagen Corp. v. Woodson, 80
COLUM. L. REV. 1341, 1345 (1980).
5 This is another way of saying that the legislature has expressed
an interest in providing a forum for state residents who are injured
by activities of nonresidents performed within the state's bound-
aries, and to require that the nonresident bear the costs of injuries
caused by their activities in the state. That these considerations were
factors in the drafting of the provisions of article 2031b is reflected
indirectly in one commentator’s call for legislative action prior to the
enactment of the statute. See Wilson, Jn Personam Jurisdiction
Over Non-Residents: An Invitation and a Proposal, 9 BAYLOR L.
REV. 363 (1957). The proposed draft of a statute included by Profes-
sor Wilson in his article contained a nexus requirement identical to
the one found in article 2031b. This proposed draft is considered by
some to have served as a model for the first five sections of the statute
adopted by the legislature. Thode, supra at 303 n.151.
38a
unrelated actions arising from activities outside the state is not
reflected in the history of the statute or in the act’s clear and
unambiguous wording. Certainly, the legislature could have
drafted the statute in language expressly extending its effect
to the full extent permitted by the Constitution, as it did in
TEX. FAM. CODE ANN. § 3.26 (permitting the exercise of
jurisdiction over a nonresident respondent “if there is any
basis consistent with the constitution of this state or the
United States for the exercise of the personal jurisdiction”), or
it could have left out the nexus requirement, as in TEX. BUS.
CORP. ACT ANN. art. 8.10 (providing for service of process
on foreign corporations authorized to transact business in the
state). Absent such legislative action, however, we must en-
force the clear provisions of article 2031b as presently written.
See generally For v. Burgess, 157 Tex. 292, 297, 302 S.W.2d
405, 409 (1957); 2A SUTHERLAND ON STATUTORY CON-
STRUCTION § 46.04 (4th ed. 1973).°
*It has been contended that the statute, article 2031b, was
originally enacted to extend Texas “long-arm” jurisdiction to the full
limits allowed after /nternational Shoe, and that, if constitutional
limits were actually broader than the legislature then believed, or if
those limits have since been expanded, the statute's scope should
likewise be enlarged in order to reach to the maximum extent possi-
ble. This argument is defective, however, for several reasons. First,
article 2031b was enacted after Perkins v. Benguet Consolidated
Mining Co., supra, which held that states could, in rare instances,
exercise jurisdiction over unrelated causes of action. 342 U.S. at
445-47. Second, even assuming that article 2031b was initially in-
tended to be coextensive with due process, and due process was at
that time believed to always require a nexus, we cannot assume that
the drafters would have extended the statute to constitutional limits
had the true limits been known, or when the limits were expanded.
Perhaps the legislature was willing to extend article 2031b to con-
stitutional limits only so long as a nexus was required. Finally,
statutes drafted and enacted in other states near the time that article
39a
Two prior opinions by this court hold that the nexus was
required and in both cases, it was present. In O’Brien v.
Lanpar Company, 399 S.W.2d 340, 342 (Tex. 1966), we upheld
an Illinois default judgment against O’Brien, a nonresident
Texas corporation whose president went to Illinois and em-
ployed the plaintiff as its attorney. We then stated this three-
prong requisite for jurisdiction over a nonresident:
*** Such would appear to be: (1) The nonresident
defendant or foreign corporation must purposefully do
some act or consummate some transaction in the forum
state; (2) the cause of action must arise from, or be con-
nected with, such act or transaction; and (3) the assump-
tion of jurisdiction by the forum state must not offend
traditional notions of fair play and substantial justice,
consideration being given to the quality, nature, and ex-
tent of the activity in the forum state, the relative con-
venience of the parties, the benefits and protection of the
laws of the forum state afforded the respective parties,
and the basic equities of the situation.
U’-Anchor Advertising, Inc. v. Burt, 553 S.W.2d 760 (Tex.
1977), was the next time this court wrote on this subject.
U-Anchor, a Texas corporation, solicited a contract with de-
fendant Burt in Oklahoma to place advertising displays at
points along Oklahoma highways. Burt agreed to pay U-
Anchor $80.00 a month for 36 months and to make the pay-
ments at U-Anchor’s office in Amarillo, Texas. We held that
U-Anchor’s cause of action against Burt satisfied the nexus
required of article 2031b. We wrote that it was “connected with
the contractual obligation assumed by Burt and partially per-
formable in Texas.” /d. at 762. We held, however, that Burt
could not be sued in Texas because U-Anchor failed to satisfy
2031b was written contained provisions authorizing the exercise of
jurisdiction over unrelated causes of action in some cases, indicating
that at least some legislatures had the idea that such an exercise of
jurisdiction was constitutional. See, e.g., MD. ANN. CODE, Courts
and Judicial Proceedings, § 6-102; WIS. STAT. ANN. § 801.05(1).
40a
the first and third requirements of O’Brien, supra at 763. As to
the first requirement, we held that Burt's contacts with Texas
were not purposefully conducted activities within Texas. Con-
cerning the third requirement, we held that Burt's mailing of
checks for payment to U-Anchor in Amarillo was a minimal
contact. In contrast with those few contacts, we wrote that the
solicitation, negotiation and consummation of the contract in
Oklahoma showed that Burt might reasonably expect enforce-
ment to be governed by Oklahoma rather than Texas law.
There is more reason here than in L’-Anchor to deny Texas
jurisdiction. The four plaintiffs worked for Consorcio. The
contract fixed jurisdiction in Peru. Billings for work had to be
made by Helicol to Consorcio in Peru. In L’-Anchor, we held
that Burt was no more than a passive customer of a Texas
corporation, in that instance, the very party who was sued. In
this case, however, Helicol has been pulled from Peru to Texas
because it has been a customer of Bell Helicopter in Fort
Worth. It had transactions with a company that in no way was
connected with this litigation. L’-Anchor is no support for the
majority opinion.
The majority opinion disregards the statutory requirement
that suit may be brought against a foreign corporation “upon
causes of action arising out of such business done in this State.”
The construction of article 2031b, here urged, conforms to
that of the Fifth Circuit in several recent decisions. In Prejean
v. Sonatrach, Inc., 652 F.2d 1260 (5th Cir. 1981), one defend-
ant, Beech, had extensive contacts with Texas, all unrelated to
the cause of action. These contacts were similar to Helicol’s
activities in Texas, but were much more extensive. For ex-
ample, Beech entered into an $11.1 million subcontract with
Bell Helicopter in Fort Worth for the production of airframe
assemblies, and had produced these for Bell continuously since
1967 under contracts exceeding $72 million. /d. at 1270 n.19. In
addition, Beech had two employees residing and conducting
business in Texas. A local corporation wholly owned by the
defendant had sold and serviced aircraft manufactured by
4la
Beech. These contacts constituted “doing business” in Texas,
but the court concluded that jurisdiction in Texas could not be
asserted because the activities were unrelated to the cause
sued upon. They did not have the “slightest causal relationship
with the decedent’s wrongful death.” /d. at 1270.
In Jim Fox Enterprises, Inc. v. Air France, 664 F.2d 63 (5th
Cir. 1981), the defendant, Air France, was doing “a thriving
business in Texas.” /d. at 65. It had a ticket office at Houston’s
Intercontinental Airport and a district sales office downtown.
It listed six local telephone numbers in the Houston telephone
directory, leased Texas real estate, employed Texas residents,
and paid Texas employment and personal property taxes.
Gross receipts from passenger ticket sales in Texas totalled in
excess of $59 million. Nevertheless, the court in Jim For
recognized that article 2031b requires a nexus between the
cause of action and the contacts with Texas, and that Air
France’s contacts, being unrelated to the cause of action, were
insufficent to support jurisdiction.
In another case, Placid Investments, Ltd. v. Girard Trust
Bank, 662 F.2d 1176 (5th Cir. 1981), it was undisputed that the
defendant did business in Texas. As noted by the court, the
defendant maintained bank aceounts in Texas, owned Texas
real estate, and received revenue from Texas sources. /d. at
1178. None of these contacts, however, “gave rise” to the cause
of action. As a result, the Fifth Circuit concluded, the causal
relationship or nexus requirement in article 2031b was not
met, and jurisdiction could not be asserted.
Due Process
When a defendant has established a general business pre-
sence in the state, characterized by “substantial and con-
tinuous activity,” that state may take jurisdiction over the
defendant for unrelated causes of action. Perkins v. Benguet
Consolidated Mining Co., supra at 438, 445, 448; O'Neal v.
Hicks Brokerage Co., 587 F.2d 1266, 1268 (4th Cir. 1976);
Seymour v. Parke, Davis & Co., 423 F.2d 584, 585-86 (1st Cir.
1970); W. H. Elliott & Sons Co. v. Nuodex Products Co., 243
42a
F.2d 116, 122 (1st Cir.), cert. denied, 355 U.S. 823 (1957). See
also R. WEINTRAUB, COMMENTARY ON THE CON-
FLICT OF LAWS 145 (2d ed. 1980); RESTATEMENT
(SECOND) OF CONFLICT OF LAWS § 35(3) (1971).’
*The reason for placing emphasis upon contacts related to the
cause of action has to do with the need to show a state interest in
assuming jurisdiction over the nonresident defendant. As explained
in Curtis Publishing Co. v. Birdsong, 360 F.2d 344, 346-47 (5th Cir.
1966): “There must be a rational nexus between the fundamental
events giving rise to the cause of action and the forurn State which
gives that State sufficient interest in the litigation before it may
constitutionally compel litigants to defend in a foreign forum.”
The United States Supreme Court had made it clear that a state’s
interest in subjecting a nonresident to its judicial jurisdiction is a
fundamental factor to be considered in cases of this kind. In /nterna-
tional Shoe Co. v. Washington, 326 U.S. 310 (1945), the interest of
the state was obvious in that the suit was brought by the state itself,
for unpaid taxes. In McGee v. International Life Insurance Co., 355
U.S. 220, 223 (1957), the validity of the exercise turned upon Califor-
nia’s paramount interest in the litigation. The Court noted the state’s
manifest interest in protecting its residents, stating: “These resi-
dents would be at a severe disadvantage if they were forced to follow
the insurance company to a distant State.” In Hanson v. Denckla, 357
U.S. 235, 251-52 (1958), the Court emphasized the absence of a
substantial state interest, distinguishing McGee. The Court ex-
plained:
The cause of action in this cese is not one that arises out of an
act done or transaction consummated in the forum State. In os
ne , it differs from McGee International Life Ins. Co.,
_ 220, and the cases there cited. In McGee, the sD ae
dcheodase solicited a reinsurance ment with a resident of
California. The offer was acce in that State, and the in-
surance premiums were from there until the insured’s
death. Noting the interest California has in a
redress for its residents when nonresident insurers to pay
claims on insurance they have solicited in that State, the Court
= jurisdiction because the suit “was based on a contract
ich had substantial connection with thet that State.” ——
this action involves the —< of an hy ey was en-
tered without any connection with State.
43a
The term “substantial and continuous activity” has a distinct
meaning when used in the context of due process. It suggests
that the individual or corporate defendant is enough of an
“insider” in the forum that he may be safely relegated to the
state’s political processes. Brilmayer, How Contacts Count:
Due Process Limitations on State Court Jurisdiction, 1980
SUP. CT. REV. 77, 87 (1980). Achievement of such a position
requires more of the defendant than “minimum contacts.” In-
stead, the defendant must establish some close substantial
connection with the state approaching the relationship be-
tween the state and its own residents.’ It was upon such
Contrary to this court’s conclusion on rehearing that Texas has an
interest in adjudicating this case because the plaintiffs are United
States citizens, cases demonstrate that state interest in litigation is
consistently derived from a state's desire to protect its own citizens
and property and to effectuate its own regulatory policies. See, ¢.g.,
Blount v. Peerless Chemicals, Inc., 316 F.2d 695, 697 (2d Cir.), cert.
denied, 375 U.S. 831 (1963); Compania de Astral v. Boston Metals
Co., 205 Md. 237, 107 A.2d 357 (1954), cert. denied, 348 U.S. 943
(1955). See also Comment, Federalism, Due Process, and Minimum
Contacts; World-Wide Volkswagen Corp. v. Woodson, 8) COLUM.
L. REV. 1343, 1345 (1980),
* This relationship is most ggmmonly characterized by the fact that
the forum state is the habitual residence, place of incorporation, or
principal place of business for the defendant. See Seymour v. Parke,
Davis & Co., supra at 587: “Ifthe plaintiff has some attachment to the
forum, or if the defendant has adopted the state as one of its major
places of business, we would have no question of the right of the state
to subject the defendant to suit for unconnected causes of action.” See
also Hill, Choice of Law and Jurisdiction in the Supreme Court, 81
COLUM. L. REV. 960 (1981); RESTATEMENT (SECOND) OF
CONFLICT OF LAWS § 35, comment e (1971): “The indiviciual's
activities in the State may. . . be so continuous and substantial as to
justify the exercise of judicial jurisdiction over him as to causes of
action arising from activities in other states. This is
likely to be true in a situation where the individual's principal place of
business is in the State.”
44a
exception to the rule—the defendant’s operating its corporate
headquarters in the forum state—that the United States Su-
preme Court upheld the exercise of jurisdiction over an unre-
lated cause of action in Perkins v. Benguet Consolidated Min-
ing Co., supra.*
The court in this case has applied the “minimum contacts”
standard, The error in this reasoning is that the nexus require-
ment is satisfied and becomes unnecessary, not upon a showing
of “minimum contacts,” but upon a demonstration of the de-
fendant’s substantial and continuous activity in the forum.
Absent a showing of such activity, the nexus requirement
becomes a highly significant factor. Texas should not assume
jurisdiction over this case that involves nonresident plaintiffs
and a nonresident defendant when the cause of action arises
out of facts totally unrelated to the forum state.
A separate concurring opinion filed on rehearing contends
that the “long arms” of state jurisdiction should extend more
elastically when reaching for nonresident defendants who are
citizens of other countries. While this argument may appeal to
those who contend that noncitizens should receive less due
process than United States citizens, cf. Ply/er v. Doe, 50
U.S L.W. 4650 (1982); Truaz v. Raich, 239 U.S. 33 (1915), it is
nevertheless inconsistent with the way due process has been
applied in previous cases. Although such a contention is rarely
raised, cases dealing with jurisdictional issues invariably apply
the same due process standards to citizens and noncitizens
alike. See, e.g., Jim Fox Enterprises v. Air France, 664 F.2d
* See Seymour v. Parke, Davis & Co., supra at 587 (limiting Per-
kina to its facts); Newton, Conflict of Laws, 34 Sw. L.J. 385, 394
(1980) (“The proper characterization of Perkins . . . is that it never
offends traditional notions of fair play and substantial justice for «
defendant to be sued in his own backyard, no matter where the canse
of action arose.”)
45a
63 (5th Cir. 1981); Prejean v. Sonatrach, Inc., 652 F.2d 1260
(5th Cir. 1981); Hutson v. Fehr Brothers, Inc., 584 F.2d 833
(8th Cir. 1978); Honeywell, Inc. v. Metz Apparatewerke, 509
F.2d 1137 (7th Cir. 1975); Product Promotions, Inc. v. Cous-
teau, 495 F.2d 483 (5th Cir. 1974); Bryant v. Finnish National
Airline, 15 N.Y.2d 426, 208 N.E.2d 439 (1965). See also A.
EHRENZWEIG & E. JAYME, PRIVATE INTERNA-
TIONAL LAW vol. II at 22 (1973) (neither party’s citizenship
affects an American court’s jurisdiction).
The court has established Texas as a “magnet” forum, draw-
ing to its courts the trial of any lawsuit involving a defendant
who has ever made purchases in Texas.
I would affirm the court of civil appeals.
JACK PoPE
Justice
Chief Justice Greenhill and Justice Barrow join in this dissent.
OPINION DELIVERED:
October 6, 1982
46a
IN THE SUPREME COURT OF TEXAS
No. C-243
ELIZABETH HALL, et al.,
Petitioners,
Vv.
HELICOPTEROS NACIONALES DE CoLomsia, S.A.
(“HELICOL”),
Respondent.
From Harris County, First District
Elizabeth Hall, along with other survivors of four Americans
who were killed in a helicopter crash in the Amazon jungles of
Peru, sued Helicopteros Nacionales de Colombia, S.A. Plain-
tiffs will hereafter be called Hall and the defendant will be
called Helicol. Helicol is a corporation organized and existing
under the laws of Colombia, with its principal place of business
in Bogota, Colombia. Defendant Helicol, by special appear-
ance, challenged the jurisdiction of the courts of Texas over
Hall’s action. TEX. R. CIV. PRO. 120a. The trial court over-
ruled Helicol’s challenge to the court’s jurisdiction and, upon
trial, granted judgment on a jury verdict finding that Helicol
was negligent. The only points that have been preserved for
this appeal are those that challenge the jurisdiction of the
Texas courts. The court of civil appeals reversed the judgment
of the trial court and ordered the case dismissed for lack of
jurisdiction. 616 S.W.2d 247. We affirm the judgment of the
court of civil appeals.
In 1974, Petro Peru, the Peruvian state owned oil company
made a contract with Consorcio, a joint venture, to construct a
pipeline from the jungles of Peru to the Pacific Ocean. The joint
venturers were Williams International Sundamericana, Ltd.,
a Delaware Corporation with headquarters in Tulsa, Oklaho-
ma; Sedco Construction Corporation, a Texas corporation; and
47a
Horn International, Inc., a Texas corporation. The joint ven-
ture was organized for the sole purpose of performing the
contract in Peru. We shall refer to the joint venture as
Williams-Sedco-Horn, or as Consorcio, the term used in the
Peruvian contract.
The defendant, Helicol, was not a party to that basic con-
tract, but it had a contract with Consorcio to provide helicopter
service for the workers and supplies that had to be transported
to regions where there were no roads. The president of Wil-
liams, the Oklahoma member of the joint venture, had prior
experience with Helicol while building pipelines in Ecuador
and Peru. He called Helicol’s general manager to come to
Tulsa, Oklahoma, to discuss Helicol’s capacity to provide the
necessary equipment. Helicol’s officer and the president of
Williams then flew to Houston where the management com-
mittee for Williams-Sedco-Horn agreed upon the kind of equip-
ment that was needed.
Helicol was able to supply all of the needed equipment and
pilots, except for one larger helicopter that was capable of
lifting heavier loads. That additional helicopter was leased by
Helicol from Rocky Mountain Helicopter out of Provo, Utah.
Helicol and the joint venture consummated and signed their
contract on November 11, 1974. Under the Peruvian law, the
contract had to be approved by the Peruvian Air Force. The
contract was prepared on official government stationery, was
in the Spanish language, and was executed in Peru by Peruvian
citizens who were authorized to act for each party. A Peruvian
resident signed for Williams-Sedco-Horn and Helicol’s Peru-
vian lawyer signed for that firm. The contract stated that the
joint venture would be known as Consorcio and that its legal
residence would be Lima, Peru. The contract provided:
The parties, in common agreement, indicated as residence
for all related to the present contract, the City of Lima and
submit to the jurisdiction of the Judges and courts of
Lima, Peru.
Permits to bring equipment and pilots into Peru depended
upon the prior Peruvian contract. The Peruvian Air Force
4a
made the arrangements for the permits. Consorcio, the joint
venture, agreed in the contract to make its payments to Heli-
col’s account in the Bank of America, 41 Broad Street, New
York. Payments were to be made and were actually made
within thrity days upon invoices from Helicol to Consorcio sent
to Consorcio’s offices in Lima. Helicol agreed that payments
for its lease of the Rocy Mountain Helicopter would be made by
the joint venture’s sending to Roc)xy Mountain a check for
ninety percent and to Helicol a check for ten percent of the
invoice amount for use of the craft. Under this arrangement,
the joint venture sent checks drawn on a Houston bank to
Helicol either in New York or Panama City, Panama, in the
approximate sum of four million dollars. The joint venture sent
an additional one million dollars to Rocky Mountain on the
account of Helicol as payment for the lease. No payments were
made to Helicol at any Texas bank. See generally Products
Promotion, Inc. v. Cousteau, 495 F.2d 483 (5th Cir. 1974).
Those who died in the crash in 1976 were residents of Oklaho-
ma, Illinois, Arizona and Colombia. They were not residents of
Texas. They had been employed by the Housto. , Texas, office
of Williams-Sedco-Horn. The workers were not, of course,
parties to the Helicol contract or the construction contract,
both of which were Peruvian based. Helicol is not a resident of
Texas. Its principal place of business is in Bogota, Colombia.
Its business is that of providing helicopter service to interna-
tional oil and construction companies. It has no designated
agent for service of process in Texas, is not authorized to do
business in Texas, owns no real or personal property in Texas,
has no records, office, representative, or personnel in Texas,
or in the United States, has no bank accounts in Texas, is not
listed in any Texas telephone directories, and has never oper-
ated into or from Texas. It performs no helicopter operations
and does not recruit employees in Texas. Ninety-four percent
of Helicol’s stock is owned by Avianca, the national airline of
Colombia.
The contacts upon which plaintiff Hall reliest give Helicola
presence in Texas for service of process are that Helicol’s
49a
officer came to Texas to discuss its capacity to supply the
helicopter service. Helicol over a period of six years purchased
most of its equipment and supplies from Bell Helicopter in Fort
Worth to the extent of six million dollars. The joint venture
paid from its Houston bank some five million dollars. Helicol by
its contract with Consorcio agreed to carry insurance mea-
sured in United States dollars, and Helicol’s pilots and person-
nel received training in Texas. Notwithstanding this activity,
however, we believe that Helicol’s contacts with Texas were
not sufficient to justify the exercise of jurisdiction.
A determination whether the exercise of jurisdiction over a
nonresident defendant is proper normally involves a two-step
inquiry: (1) whether statutory authority exists for the exercise
of “long-arm” jurisdiction, and (2) whether the jurisdiction, if
authorized, is consistent with the requirements of due process
of law under the United States Constitution. In Texas, the
primary statutory vehicle for exercising “long-arm” jurisdic-
tion is article 2031b, TEX. REV. CIV. STAT. ANN., which
provides:
Sec. 3. Any foreign corporation, association, joint stock
company, partnership, or non-resident natural person
that engages in business in this State, irrespective of any
Statute or law respecting designation or maintenance of
resident agents, and does not maintain a place of regular
business in this State or a designated agent upon whom
service may be made upon causes of action arising out of
such business done in this State, the act or acts ofengaging
in such business within this State shall be deemed equiva-
lent to an appointement by such foreign corporation, joint
stock company, association, partnership, or non-resident
natural person of the Secretary of State of Texas as agent
upon whom service of process may be made in any action,
suit or proceedings arising out of such business done in
this State, wherein such corporation, joint stock company,
association, partnership, or non-resident natural person is
a party or is to be e a party.
Doing business in state; definition
Sec. 4. For the purpose of this Act, and without includ-
ing other acts that may constitute doing business, any
50a
foreign corporation, joint stock company, association,
partnership, or non-resident natural person shall be
deemed doing business in this State by entering into con-
tract by mail or otherwise with a resident of Texas to be
performed in whole or in part by either party in this State,
or the committing of any tort in whole or in part in this
State. The act of recruiting Texas residents, directly or
through an intermediary located in Texas, for employ-
ment inside or outside of Texas shall be deemed doing
business in this State.
There has been some confusion concerning the scope of arti-
cle 2031b. In the present case, the court of civil appeals stated:
“In order to maintain jurisdiction over Helicol, it must be
shown that it either committed a tort in Texas or entered intoa
contract to be performed in whole or in part in Texas.” 616
S.W.2d at 250. Defining the scope of article 2031b in this
manner, however, improperly restricts the definition of “doing
business.” Article 2031b specifies “making a contract” and
“committing a tort,” but does so “without including other acts
that may constitute doing business. . . .” The catchall language
expressed in this definition has been used to expand the scope
of article 2031b to the full extent permitted by the Constitu-
tion, authorizing the exercise of jurisdiction over a nonresident
defendant whenever doing so is consistent with due process.
See U-Anchor Advertising, Inc. v. Burt, 553 S.W.2d 760, 762
(Tex. 1977); Hoppenfeld v. Crook, 498 S.W.2d 52, 56 (Tex. Civ.
App.—Austin 1973, writ refd n.r.e.); Thode, Jn Personam
Jurisdiction; Article 2031b, The Texas “Long Arm” Jurisdic-
tion Statute; and The Appearance to Challenge Jurisdiction in
Texas and Elsewhere, 42 TEXAS L. REV. 279, 307-08 (1964).
Construing the statute in this manner allows courts to avoid
engaging in “technical and abstruse attempts to consistently
define ‘doing business,’ " U’-Anchor Advertising v. Burt, su-
pra, and shifts the focus of the inquiry to the more important
question whether the exercise of jurisdiction comports with
the requirements of due process. Thode, supra at 30”.
Focusing our attention upon due process as applied in the
instant case leads us to conclude that the assertion of Texas
5la
jurisdiction over Helicol, a foreign corporation and nonresi-
dent defendant, was not consistent with due process. As stated
by the United States Supreme Court, the due process clause
operates as a limitation upon the power of states to adjudicate
disputes affecting the rights of nonresident defendants. Ku/ko
v. Superior Court, 436 U.S. 84, 91, 98S. Ct. 1690, 56 L. Ed. 132
(1978). Admittedly, the rules affecting jurisdiction over
nonresidents have been extended far beyond the territorial
notions established in Pennoyer v. Neff, 95 U.S. 714, 24 L. Ed.
565 (1878). In a significant line of cases beginning with /nterna-
tional Shoe Co. v. Washington, 326 U.S. 310, 66S. Ct. 154, 90
L. Ed. 95 (1945), the United States Supreme Court expanded
the power of states to reach beyond state boundaries in the
adjudication of disputes. The general rule in such cases is the
reasonableness or fairness of forcing the defendant to defend
the suit in a distant forum. As stated by the Court in /nterna-
tional Shoe, supra at 316:
[D]ue process requires only that in order to subject a
defendant to a judgment in personam, if he be not present
within the territory of the forum, he have certain mini-
mum contacts with it such that the maintenance of the suit
does not offend “traditional notions of fair play and sub-
stantial justice.
In O’Brien v. Lanpar Co., 399 S.W.2d 340, 342 (Tex. 1966),
this court construed an Illinois statute to determine whether
an Illinois judgment against a defaulting Texas defendant was
valid and entitled to full faith and credit. The question was
whether the Illinois court had in personam jurisdiction over
the Texas resident, and we held that it did. We quoted with
approval from the decision in Tyee Construction Co. v. Dulien
Steel Products, Inc., 62 Wash. 2d 106, 381 P.2d 245, 251 (1963),
in its statement of three basic factors that should coincide if
jurisdiction over a nonresident corporation is to be con-
stitutionally entertained:
(1) The nonresident defendant or foreign corporation must
do some act or consummate some transaction
forum state; (2) the cause of action must arise from,
or be connected with, such act or transaction; and (3) the
52a
assumption of jurisdiction by the forum state must not
offend traditional notions of fair play and substantial jus-
tice, consideration being given to the quality, nature, and
extent of the activity in the forum state, the relative
convenience of the parties, the benefits and protection of
the laws of the forum state afforded the respective par-
ties, and the basic equities of the situation.
The second prong of the O’Brien test, that the cause of action
must arise out of the contacts with the forum state, has been
the topic of some controversy since the test was first adopted.
Some courts and commentators see the requirement as an
overly restrictive construction of the due process clause. See,
e.g., Docutel Corp. v. S.A. Matra, 464 F. Supp. 1209, 1219
(N.D. Tex. 1979); Comment, The Texas Long-arm Statute,
Article 2031b: A New Process Is Due, 30 Sw. L.J. 747, 760
(1976). Contra: see Thode, supra at 303 n.149. The United
States Fifth Circuit has been particularly inclined to find
jurisdiction established by a defendant’s contacts that are un-
related to the plaintiffs cause of action. See Jetco Electronic
Industries v. Gardiner, 473 F.2d 1228 (5th Cir. 1973); Byerly
Aircraft Co. v. Killian, 414 F.2d 591 (5th Cir. 1969).
We recognize that a nexus between the cause of action and
the defendant’s contacts with the forum state is not a rigid due
process requirement. It is, however, a significant factor to be
considered when evaluating the fairness of the exercise of
jurisdiction in a given case. A cause of action asserted against a
nonresident defendant that does not arise out of something
done in the forum state compels proof of more pervasive con-
tacts with the forum than a cause of action that is connected
with the defendant's activities in the state. Cornelison v.
Chaney, 16 Cal. 3d 143, 127 Cal. Rptr. 352, 545 P.2d 264, 266
(1976). See also Vencedor Manufacturing Co., Inc. v. Gougler
Industries, Inc., 557 F.2d 886, 889 (lst Cir. 1977). As the
relationship between the cause of action and the defendant's
purposeful activity in the state grows more tenuous, the plain-
tiff faces an ever-increasing burden of showing contacts with
the forum sufficient to justify the exercise of jurisdiction.
53a
In the present case, the only connection between the
asserted cause of action based upon the crash in Peru and
Helicol’s activity in Texas is a few hours of negotiation with
Williams-Sedco-Horn in Houston. These discussions were
attended by Helicol’s general manager and concerned the busi-
ness venture that provided the eventual setting for the acci-
dent in Peru. No evidence has been presented, however, in-
dicating that the negotiations in any way dealt with the de-
ceased workers or any matters leading or contributing to the
helicopter crash in Peru. As such, a connection between the
cause of action based upon the South American disaster and
Helicol’s activities in Texas is remote and at best coincidental.
Likewise, there is no evidence of a connection between the
cause of action and Helicol’s dealings with Bell Helicopter in
Fort Worth. A lawsuit based upon the use of a defective
helicopter purchased from Bell might have indicated such a
connection. In the present case, however, Hall and the other
plaintiffs offered evidence of Helicol’s negligence due to pilot
error. There was no showing that the negligence extended
beyond the events immediately surrounding the accident.
A contention has also been made that the cause of action was
connected to Helicol’s local activities because the contract be-
tween Helicol and Williams-Sedco-Horn obligated Helicol to
acquire liability insurance payable in American dollars to cover
any claim arising out of performance of the contract, and there-
by created a third party beneficiary contract in favor of the
deceased workers. We do not see, however, how this fact
creates a link between the crash and Helicol’s activities in
Texas sufficient to justify the exercise of jurisdiction. There
has been no allegation or proof that insurance was ever dis-
cussed during negotiations in Texas. The contract containing
the clause was not signed in Texas. The liability coverage was
provided by a foreign insurer, a corporation named Compania
Sebulas. The “beneficiaries” of the contract were not Texas
residents. The fact of insurance coverage is therefore not rele-
vant to the present inquiry.
54a
It has been stated that a nonresident may establish a “gener-
al presence” in a state, and may thereby subject himself to that
state’s jurisdiction even for unrelated causes of action asserted
against him, when his contacts with the state may be described
as “substantial, continuous, and systematic.” See Perkins v.
Benguet Mining Co., 342 U.S. 487, 445-48, 72S. Ct. 413, 96 L.
Ed. 485 (1952). Perkins illustrates the type of activity that has
been held sufficient to justify the exercise of jurisdiction based
upon unrelated contacts with the forum. In Perkins, the corpo-
rate defendant carried out extensive business activities in the
forum state, including banking, correspondence, maintenance
of official records, holding of directors’ meetings, and payment
of employee salaries. These activities were so substantial that
the forum became the temporary headquarters of the corpora-
tion. The exercise of jurisdiction under such circumstances was
thus justified by the fact that the corporate defendant became,
in effect, a resident of the forum. As one commentator has
observed, “The proper characterization of Perkins. . . is that
it never offends traditional notions of fair play and substantial
justice for a defendant to be sued in his own backyard, no
mattter where the cause of action arose.” Newton, Con/lict of
Laws, 34 Sw. L.J. 385, 394 (1980).
In the instant case, Helicol in no way engaged in the “sub-
stantial, continuous, and systematic” activity necessary to
establish a general business presence in Texas consistent with
the holding of Perkins v. Benguet Mining Co., supra. Helicol
directed all of its business activities from its offices in South
America. There is no evidence that it ever performed or sought
to perform any transportation business in this state. While it
did purchase expensive equipment from a Texas business, it
did so only for use outside the state.
The central concern in all jurisdictional disputes is the rela-
tionship between the defendant, the forum, and the litigation.
Shaffer v. Heitner, 433 U.S. 186, 204, 97S. Ct. 2569, 53 L. Ed.
2d 683 (1977). Of these, a connection between the forum and the
litigation is no less important than contacts between the forum
and the defendant. The former relationship is typically estab-
90a
lished by showing the forum’s “interest” in the lawsuit. See
World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292,
100 S. Ct. 559, 62 L. Ed. 2d 490 (1980); Kulko v. Superior
Court, supra at 92; Shaffer v. Heitner, supra at 222 (Brennan,
J., dissenting) (“I believe that our cases fairly establish that
the State’s valid substantive interests are important con-
siderations in assessing whether it constitutionally may claim
jurisdiction over a given cause of action.”). Thus, where any of
the parties to a lawsuit are residents of the forum state,
jurisdiction is supported by that state’s interest in protecting
its citizens, Hess v. Pawloski, 274 U.S. 352, 356, 47S. Ct. 632,
71 L. Ed. 1091 (1927), and in providing those citizens with a
means of obtaining restitution for wrongdoing. McGee v. Inter-
national Life Insurance Co., 355 U.S. 220, 223, 78S. Ct. 199, 2
L. Ed. 2d 223 (1957). Likewise, a state has an interest in
providing a procedure for peaceful resolution of disputes that
arise in whole or in part within that state’s territory or that
affect property located within the state’s boundaries. Shaffer
v. Heitner, supra at 208. Jurisdiction in the forum state could
also be supported in such cases by the likelihood that important
records and witnesses would be located there, McGee, supra at
224; Shaffer v. Heitner, supra at 208, and the probability that
the law of that state would apply to the cause of action. See
Traynor, /s This Conflict Really Necessary’, 37 TEXAS L.
REV. 657, 664 (1959).
The present case reveals no relationship between Texas and
the suit being asserted against Helicol. None of the plaintiffs in
this suit are Texas residents, nor were any of the deceased
workers. All of the events relevant to the cause of action
occurred in South America. The accident was extensively in-
vestigated by South American officials. Most, if not all, of the
evidence and witnesses are located there. We find no cases in
which the exercise of jurisdiction has been upheld on the basis
of such a negligible relationship between the forum and the
lawsuit.' The absence of such a relationship in this case, com-
‘With one exception, all of the recent decisions of the United
States Supreme C ourt in which exercises of in personam jursdiction
56a
bined with the insufficiency of related contacts between Heli-
col and Texas, leads us to conclude that the exercise of jurisdic.
tion by the trial court was inconsistent with constitutional
limitations on state power. Any other rule could permit the
establishment of jurisdiction almost anywhere in the world.
We recognize that the exercise of jurisdiction over nonresi-
dent defendants, as defined and confined by the due process
clause, has undergone considerable liberalization and ex-
pansion during modern times. Notwithstanding this ex-
pansion, however, the recent case of World-Wide Volkswagen
v. Woodson, supra, reflects the view of the United States
Supreme Court that this enlargement of the power of the
states to reach beyond their boundaries is not without limita-
tions. The Court noted in World-Wide:
As technological progress has increased the flow of com-
merce between the States, the need for jurisdiction over
nonresidents has undergone a similar increase. At the
same time, progress in communications and transporta-
tion has male the defense of a suit in a foreign tribunal less
burdensome. In response to these changes, the require-
ments for personal jurisdiction over nonresidents have
evolved from the rigid rule of Pennoyer v. Neff, 95 U.S.
714, to the flexible standard of International Shoe Co. v.
have been upheld have at least involved a cause of action that arose in
the forum state or a plaintiff who was a state resident. See, ¢.g.,
International Shoe Co. v. Washington, supra; McGee v. Internation-
al Life Insurance Co., supra; Traveler's Health Ass'n v. Virginia, 339
U.S. 643, 70 S. Ct. 927, 94 L. Ed. 1154 (1950). The exception is
Perkins v. Benguet Mining Co., supra, in which the exercise of
jurisdiction was justified by “substantial, continuous, and systema-
tic” contacts with the forum, as noted previously.
Even Justice Brennan, who dissented from the Court's denial of
jurisdiction in World-Wide Volkswagen v. Woodson, supra, con-
ceded that he might have reached a different conclusion in that case
had the cause of action not arisen in the forum state. See World-Wide,
supra at 312 n. 20.
57a
Washington, 326 U.S. 310. But it is a mistake to assume
that this trend heralds the eventual demise of all restrict-
son on the personal jurisdiction of state courts. (Citation
omitted.) Those restrictions are more than a guarantee of
immunity from inconvenient or distant litigation. They
are a consequence of territorial limitations on the power of
the respective states.
World-Wide Volkswagen v. Woodson, supra at 294 [quoting .
Hanson v. Denkla, 357 U.S. 235, 250-51, 78 S. Ct. 1228, 2
L.Ed. 2d 1283 (1958)). We believe that the assertion of jurisdic-
tion over Helicol in the present case exceeded the limits of due
process. We therefore affirm the judgment of the court of civil
appeals.
JACK Pope
Justice
Dissenting Opinion by Justice Wallace in which Justices
Spears and Ray join.
OPINION DELIVERED:
February 24, 1982
5a
IN THE SUPREME COURT OF TEXAS
No. C-243
ELIZABETH HALL, et al.,
Petitioners,
Vv.
HELICOPTEROS NACIONALES DE CoLomBIA, S.A.
(“HELICOL”),
Respondent.
From Harris County, First District
DISSENTING OPINION
I respectfully dissent.
In their briefs before this Court both parties agreed that our
opinion in U-Anchor Advertising, Inc. v. Burt, 553 S.W.2d 760
(Tex. 1977), controls the disposition of this case.
In U-Anchor, we stated:
Article 2031b provides that a non-resident entering into a
contract with a Texas resident performable in part by
either party in Texas shall be deemed to be doing business
in Texas. . . We agree that in this respect, as well as with
respect to ‘other acts that may constitute doing business,’
Article 2031b reaches as far as the federal constitutional
requirements of due process will permit. We let stand the
statement in H eld v. Crook, 498 S.W.2d 52 (Tex.
Civ. App.—Austin 1973, writ ref'd n.r.e.) ‘that the reach
of Art. 2031b is limited only by the United States Con-
stitution.’. . . Furthermore, such a construction is desir-
able in that it allows the courts to focus on the con-
stitutional limitations of due process rather than to engage
in technical and abstruse attempts to consistently define
‘doing business.’
In the U-Anchor opinion we specifically adopted the above
language from Hoppenfeld. Also in U-Anchor this Court
59a
approved the three-prong test set out in O’Brien v. Lanpar
Company, 399 S.W.2d 340 (Tex. 1966). That three-prong test
is: (1) the non-resident defendant or foreign corporation must
purposefully do some act or consummate some transaction in
the forum state; (2) the cause of action must arise from, or be
connected with, such act or transaction; and (3) the assumption
of jurisdiction by the forum state must not offend traditional
notions of fair play and substantial justice, consideration being
given to the quality, nature and extent of the activity in the
forum state, the relative convenience of the parties, the bene-
fits and protection of the laws of the forum state afforded the
respective parties, and the basic equities of the situation.
I will discuss the three elements necessary for jurisdiction in
connection with the facts as set out in the majority opinion,
adding some facts omitted in the majority opinion.
It is undisputed that Helicol committed the following acts in
Texas:
a. Purchased substantially all of its helicopter fleet in
Fort Worth, Texas;
b. Did approximately $4,000,000 worth of business in
Fort Worth, Texas, from 1970 through 1976 as pur-
chaser of equipment, parts and services. This con-
sisted of spending an average of $50,000 per month
with Bell Helicopter Company, a Texas resident;
c. Negotiated in Houston, Harris County, Texas, witha
Texas resident which negotiation resulted in the con-
tract to provide the helicopter service involving the
crash leading to this cause of action;
d. Sent pilots to Fort Worth, Texas, to pick up helicop-
ters as they were purchased from Bell Helicopter and
fly them from Fort Worth to Colombia;
e. Sent maintenance personnel and pilots to Texas to be
trained;
f. Had employees in Texas on a year-round basis;
60a
g. Received roughly $5,000,000 under the terms and
provisions of the contract in question here which pay-
ments were made from First City National Bank in
Houston, Texas; and
h. Directed the First City National Bank of Houston,
Texas to make payments to Rocky Mountain Helicop-
ters pursuant to the contract in question.
I do not understand how it could be questioned that the above
acts constituted the doing of a purposeful act or the consumma-
tion of some transaction in Texas sufficient to satisfy the first
U-Anchor test.
Helicol sent its general manager to the State of Texas where
he negotiated a contract with a Texas resident to provide
helicopter service. A provision of that contract required liabil-
ity insurance payable in American dollars to cover a claim such
as this one which arose directly from the performance of the
contract. The three deceased individuals were thus third-party
beneficiaries under the provisions of the contract requiring
liability insurance to cover them while they were being trans-
ported by Helicol. In my opinion the requirement that the
cause of action must arise from or be connected with a purpose-
ful act or transaction is thus m
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