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Joshua SILBER, Appellant, v. SHALLOW PRODUCTION SOLUTIONS, INC., Appellee.
This is an appeal from the denial of a special appearance. The underlying case involves a Texas Company that believes its business opportunity to operate in the Toborg oil and gas field in Pecos County was coopted by a competitor. And more particularly, it believes the cooption was aided by its former employee and officer who was hired by—and allegedly divulged confidential information to—the competitor. The only question before us is whether the competitor's president and CEO who lives in California, is subject to the jurisdiction of a Texas Court for several intentional torts.
Based on the allegations—and one view of some disputed evidence—the CEO (1) attended meetings in Texas to learn about the prospects of oil-and-gas production; (2) formed a Texas limited-liability company to acquire contracts, and later property, in the Toborg Field; (3) hired the Texas company's former employee for the specific purpose of working in the Toborg Field; and (4) was informed of the former employee's non-compete contract that would have precluded Silber from hiring him. Because these allegations show some purposeful availment for the privilege of doing business in Texas, and a connection between the Texas contacts and the asserted claims, we affirm the trial court's denial of the special appearance.
I. Factual and Procedural Background
The parties include Appellant Joshua Silber who is a resident of California and CEO and president of Surge Solutions, Inc., a Delaware Corporation. In 2019, Surge Solutions hired Jeffrey Lambert, a former officer and employee of Appellee Shallow Production Services, Inc. (SPS). After Surge Solutions hired Lambert, SPS sent a cease and desist letter to Lambert, alleging that he violated a non-compete clause governing his previous employment contract with SPS. When Lambert kept working for Surge Solutions, SPS sued Lambert for breach of contract and various intentional torts. SPS later amended its petition to add (1) Surge Solutions; (2) Surge Toborg LLC (a subsidiary formed by Surge Solutions to develop and acquire the Toborg Field); (3) Robert Fortenberry (Surge Solution's vice president); and (4) Silber as defendants. Silber filed a special appearance, arguing that SPS's amended petition did not allege specific facts that subjected him to personal jurisdiction in Texas and that he lacked sufficient contacts with Texas to subject him to the trial court's jurisdiction. Following a hearing, the trial court denied Silber's special appearance.
A. SPS's Pleaded Allegations 1
According to SPS's fourth amended petition, it developed a proprietary operating system for producing crude oil from shallow wells. To safeguard its proprietary system, SPS's bylaws bind company directors to non-compete and non-disclosure requirements. In early 2015, SPS approached Dominion Natural Resources to demonstrate its system in an oil and gas field owned by Dominion (the Toborg Field). Dominion expressed an interest in either selling its interest in the field to SPS, or entering a joint venture to develop the field. Starting in 2016, SPS was contracted to operate the Toborg Field. SPS's system increased production from the field, and SPS continued to discuss with Dominion acquisition of the field.
In the fall of 2016, SPS met with Robert Fortenberry, who at the time was employed by Ultimate EOR. The purpose of the meeting was to evaluate the development potential of the Toborg Field. SPS and Ultimate EOR entered into a Non-Disclosure Agreement, so that SPS could share its proprietary information with Fortenberry. SPS was also pursuing the acquisition of an adjacent field owned by Millennium Natural Resources; SPS disclosed that fact to Fortenberry. Fortenberry expressed an interest in participating with SPS in its operations. Their relationship soured, however, when SPS learned that Fortenberry had surreptitiously approached Millennium in an effort acquire the field through another entity.
SPS's petition also details the dealing of its former employee Jeff Lambert and the other defendants in this case. In early 2018, SPS terminated Lambert who was both an employee and a director. While with SPS, Lambert had access to its proprietary information. And in that same time frame, Fortenberry had left Ultimate EOR and co-founded Surge Solutions, Inc. with Joshua Silber. In May 2019, a representative of Dominion instructed SPS to deliver certain equipment to an unnamed contractor in the Toborg Field. SPS soon learned that Lambert and Fortenberry were on site in the Toborg Field. That same month, Lambert emailed SPS that he was in the Pecos County area to pick up his belongings. But SPS learned that Lambert had stayed in Pecos County and “was actively engaged in a drilling program and enhanced recovery operation being conducted by Surge Toborg, LLC, Surge Solutions, Inc., Robert Fortenberry and Joshua Silber” in the Toborg Field.
The petition further alleges that Surge Toborg, Surge Solutions, Fortenberry “and/or Joshua Silber hired” Lambert to exploit SPS's trade secrets and confidential information and “gain an unfair competitive advantage over SPS in Pecos County[.]” Moreover, Lambert was using proprietary knowledge and technologies “at the request of and for the benefit” of the Surge entities, Fortenberry and Silber. Further, Lambert had established a residence in Pecos County. In June 2019, SPS served Lambert with a cease-and-desist letter related to violations of the non-compete and non-disclosure agreements. Despite this, the petition alleges that Lambert remained employed and was exploiting his knowledge of SPS's trade secrets and confidential information to help the Surge entities, Fortenberry, and Silber to develop and acquire the Toborg Field. SPS finally alleges that it lost the opportunity to acquire the Toborg Field.
Based on these factual allegations, the petition asserts claims against Silber for: (1) misappropriation of trade secrets under the Texas Uniform Trade Secrets Act; (2) conversion; (3) tortious interference with contractual relations; (4) tortious interference with prospective relations; and (5) conspiracy.
B. Silber's Special Appearance
Silber filed a special appearance under Tex.R.Civ.P. 120a, urging that he lacked sufficient contacts with Texas to allow the trial court to assert jurisdiction over him. In particular, Silber argued that: (1) because he was not a Texas resident, he was not “at home” in Texas and had not purposefully availed himself of the laws and privileges of Texas; (2) SPS improperly attempted to invoke Texas jurisdiction by imputing the alleged wrongdoing of the other defendants to him; (3) SPS relied on conclusory claims of tortious conduct without alleging specific facts in support of SPS's claims; and (4) the trial court's exercise of jurisdiction over him would offend traditional notions of fair play and substantial justice. Silber filed his own declaration in support of the special appearance, which in part states: (1) he is not a resident or citizen of Texas; (2) he has never performed work in, entered or executed contracts in Texas; (3) he has never conducted any drilling program or enhanced recovery operation in Pecos County; (4) he has never hired any person to perform work in Texas; and (5) he denies committing each of the torts alleged against him. His declaration also states that Lambert is no longer employed by Surge Solutions.
SPS's response to Silber's special appearance argued that: (1) Silber committed tortious interference, trade secret misappropriation, and conspiracy by retaining Lambert to provide services and information in Pecos County, Texas; and (2) Silber regularly recruited Texas residents for employment inside the state. In support of its response, SPS submitted several exhibits that we detail below. But SPS focuses on Surge Solution's internal documents that suggest Silber's awareness of the existence of potential “legal liability” issues that it might face if he hired Lambert, and the fact that Silber did not act to remedy the situation after he spoke to SPS's CEO, Murray Conradie, about the potential legal issues with Lambert's employment.
Following a hearing, the trial court denied Silber's special appearance without entering associated findings of fact or conclusions of law. This appeal follows.
II. Issues on Appeal
Silber raises five issues challenging the trial court's denial of his special appearance: (1) SPS failed to plead specific facts supporting specific jurisdiction over Silber; (2) Silber negated any properly pleaded jurisdictional facts; (3) SPS failed to offer any evidence authorizing specific jurisdiction over Silber; (4) there is no evidence that the trial court's assertion of specific jurisdiction comports with traditional notions of fair play and substantial justice; and (5) the evidence does not support the trial court's implied findings authorizing specific jurisdiction over Silber. We consider these issues together to address the central question of whether SPS sufficiently alleged, and the evidence sufficiently shows, that the trial court has specific jurisdiction over Silber.
III. Standard of Review and Applicable Law
A. Standard of Review
Whether a court has personal jurisdiction over a defendant is a question of law. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002). To resolve the question of law, however, a trial court must frequently resolve questions of fact. American Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 806 (Tex. 2002). When the parties agree on the relevant facts, our review is purely de novo. See id. But if the parties disagree over the facts, we must look to what the trial court found. When, as in this case, a trial court does not issue findings of fact and conclusions of law with its special appearance ruling, we imply all facts necessary to the ruling that are supported by the evidence. Marchand, 83 S.W.3d at 795; In re E.S., 304 S.W.3d 571, 574 (Tex.App.--El Paso 2010, pet. denied). A party can challenge any of the implied findings under traditional legal and factual sufficiency review standards. Roberson v. Robinson, 768 S.W.2d 280, 281 (Tex. 1989).2
B. Personal Jurisdiction
A Texas court may exercise personal jurisdiction over a nonresident defendant doing business in Texas under the Texas long-arm statute. See Tex.Civ.Prac.& Rem.Code Ann. §§ 17.041-17.045. “Doing business in this state” includes a nonresident who “commits a tort in whole or in part in this state.” Id. § 17.042(2). Yet even if a transaction falls within this definition, a court's jurisdiction is also limited by the Due Process Clause of the United States Constitution. Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 575 (Tex. 2007). The Texas long-arm statute extends a Texas court's personal jurisdiction “as far as the federal constitutional requirements of due process will permit” but no further. U-Anchor Advert., Inc. v. Burt, 553 S.W.2d 760, 762 (Tex. 1977) (discussing prior version of Texas long-arm statute). Thus, the contours of federal due process guide our decision here.
Federal due process limits a court's jurisdiction over nonresident defendants unless: (1) the defendant has established minimum contacts with the forum state; and (2) the exercise of jurisdiction comports with traditional notions of fair play and substantial justice. Int'l Shoe Co. v. State of Wash., Off. of Unemployment Comp. and Placement, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945). “As a general rule, the exercise of judicial power is not lawful unless the defendant ‘purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.’ ” J. McIntyre Machinery, Ltd. v. Nicastro, 564 U.S. 873, 877, 131 S.Ct. 2780, 180 L.Ed.2d 765 (2011), quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958); see Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777, 784 (Tex. 2005) (“For half a century, the touchstone of jurisdictional due process has been ‘purposeful availment.’ ”). Due process requires purposeful availment because personal jurisdiction “is premised on notions of implied consent—that by invoking the benefits and protections of a forum's laws, a nonresident consents to suit there.” Michiana, 168 S.W.3d at 785.
Purposeful availment includes deliberately engaging in significant activities within a state or creating continuing obligations with residents of the forum. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475-76, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). It includes seeking profit, benefits, or advantage from the forum. Michiana, 168 S.W.3d at 785. It excludes, however, “random,” “fortuitous,” or “attenuated” contacts or the “unilateral activity of another party or a third person.” Burger King Corp., 471 U.S. at 475, 105 S.Ct. 2174 (citations omitted); Michiana, 168 S.W.3d at 790 (“[M]inimum-contacts analysis focuses solely on the actions and reasonable expectations of the defendant.”). Moreover, a party may purposefully avoid a particular forum by structuring its transactions in such a way as to neither profit from the forum's laws nor subject itself to jurisdiction there. Moki Mac, 221 S.W.3d at 575.
Personal jurisdiction can be either “general” or “specific.” Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-15 n.8, 104 S.Ct. 1868, 80 L.Ed.2d 404 &9 (1984); CSR Ltd. v. Link, 925 S.W.2d 591, 595 (Tex. 1996). General (or all-purpose) jurisdiction describes a defendant with contacts so continuous and systematic “as to render [it] essentially at home in the forum State.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011). No claim is made here that Silber is subject to general jurisdiction in Texas. Thus, the trial court's order must be based on a claim of specific jurisdiction.
A plaintiff asserting that a court has specific jurisdiction over a nonresident defendant must show that its claim arises out of or relates to the defendant's contacts with the forum. Daimler AG v. Bauman, 571 U.S. 117, 127, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014), citing Helicopteros, 466 U.S. at 414, n.8, 104 S.Ct. 1868; see also Moki Mac, 221 S.W.3d at 579 (“The ‘arise from or relate to’ requirement lies at the heart of specific jurisdiction by defining the required nexus between the nonresident defendant, the litigation, and the forum.”). Under the Texas application of that requirement, “for a nonresident defendant's forum contacts to support an exercise of specific jurisdiction, there must be a substantial connection between those contacts and the operative facts of the litigation.” Moki Mac, 221 S.W.3d at 585. Specific jurisdiction is not as exacting as general jurisdiction in that the contacts with the forum state may be more sporadic or isolated so long as the cause of action arises out of those contacts. Spir Star AG v. Kimich, 310 S.W.3d 868, 873 (Tex. 2010).3
When deciding whether a nonresident defendant is subject to jurisdiction, we first determine whether the plaintiff pleaded sufficient jurisdictional facts under the Texas long-arm statute. See Moncrief Oil Int'l Inc. v. OAO Gazprom, 414 S.W.3d 142, 149 (Tex. 2013). “If the plaintiff fails to plead facts bringing the defendant within reach of the long-arm statute (i.e., for a tort claim, that the defendant committed tortious acts in Texas), the defendant need only prove that it does not live in Texas to negate jurisdiction.” Kelly v. Gen. Interior Const., Inc., 301 S.W.3d 653, 658-59 (Tex. 2010). But if that initial burden is met, the burden shifts to the defendant to negate all potential bases for personal jurisdiction the plaintiff pleaded. Id. at 658. A nonresident defendant may negate jurisdiction on either a factual or legal basis. Id. at 659. Factually, the defendant can present evidence that it has no contacts with Texas, effectively disproving the plaintiff's allegations. Id. The plaintiff can then respond with evidence that affirms its allegations. Id. The defendant can then seek to show that even if the plaintiff's alleged facts are true, the evidence legally cannot support jurisdiction. Id.
A. SPS Sufficiently Pleaded Jurisdictional Facts
We first address whether SPS met its initial burden to plead sufficient facts to invoke the Texas long-arm statute. See Moncrief, 414 S.W.3d at 149. In its fourth amended petition, SPS asserted intentional-tort claims against Silber for misappropriation of trade secrets, conversion, tortious interference with contracts, interference with prospective relations, and conspiracy. To be sure, a plaintiff must plead “jurisdictional facts” to clear its initial burden. See Kelly, 301 S.W.3d at 659 (“When the pleading is wholly devoid of jurisdictional facts, the plaintiff should amend the pleading to include the necessary factual allegations[.]”) (emphasis supplied). We have described the burden as “minimal” and like a “notice pleading.” Copeland v. Mayers, No. 08-20-00236-CV, 2022 WL 4364755, at *4 (Tex.App.--El Paso Sept. 21, 2022, no pet. h.) citing Gaddy v. Fenenbock, 652 S.W.3d 860, 871-72 (Tex.App.--El Paso 2022, no pet.).
In support of its claims against Silber, SPS alleged in its amended petition that: (1) after the termination of his employment with SPS, Lambert remained in Pecos County, Texas, and was “actively engaged” in an oil-drilling and recovery operation by Surge Toborg, Surge Solutions, Fortenberry, and Silber; (2) while working with Fortenberry and Silber, Lambert provided SPS's crucial knowledge, information, and technology to Surge Toborg and Surge Solutions, which ultimately resulted in Surge Solutions’ acquisition of the Toborg Field; (3) together with his co-defendants, Silber hired Lambert to exploit his access to and knowledge of SPS's trade secrets and confidential information to gain an unfair competitive advantage over SPS in Pecos County; and (4) by so doing, SPS lost the opportunity to operate or acquire the Toborg Field.
On appeal, Silber argues that SPS failed to allege any specific facts that its claims arise from or relate to Silber's contacts in Texas, and that its allegations are too conclusory to establish that he is subject to personal jurisdiction. Silber contends that SPS's petition “does not allege that [he] traveled to Texas to get trade secrets, recruited or hired Lambert in Texas, or called Texas contacts seeking to obtain SPS trade secrets.” SPS responds that its petition sufficiently invoked the Texas long-arm statute because it alleged that Silber recruited and employed Lambert to work in Texas and induced Lambert to violate his non-compete agreement with SPS through his Texas employment with Surge Solutions.
One of our sister courts analyzed similar arguments in Yujie Ren v. ANU Resources, Inc., 502 S.W.3d 840, 845-47 (Tex.App.--Houston [14th Dist.] 2016, no pet.). In that case, the plaintiff (Anu Resources) was attempting to develop an oil and gas asset that it had identified in West Texas. Id. at 844. Anu Resources entered a memorandum of understanding with Longwoods Resources to bring in investors from China to acquire the property as part of a joint project. Id. After an informational meeting in Texas, one of the potential investors, Ren (a resident of China), then participated in the planning and formation of a separate Texas entity that acquired the oil and gas leases that Anu Resources had been seeking to acquire. Id. at 845. When Anu Resources was cut out of the transaction, it sued Ren. Id. at 845. As here, Ren contended that Anu Resources’ pleading failed to allege sufficient jurisdictional facts to bring him under the long-arm statute. Id. The court disagreed, however, pointing to the pleaded allegations that: (1) Ren did business in Texas and committed a tort arising from his Texas contacts; (2) he was appointed president of the Texas entity that coopted the opportunity; and (3) he signed the agreements to complete the transaction. Id. at 846-47.
Similarly, SPS's amended petition alleges: (1) Silber specifically hired Lambert to work in the Toborg Field, which is located in Pecos County; (2) Silber and others formed Surge Toborg to operate the Toborg Field; and (3) Lambert provided Surge Solutions with SPS's trade secret and confidential information about the Toborg Field to give SPS a competitive advantage. We find these allegations sufficient to allege Silber's commission of one or more intentional torts in Texas (misappropriation of trade secrets, conversion, tortious interference with contracts, interference with prospective relations). As a result, we find that SPS has met its initial burden to allege sufficient facts to bring Silber under the ambit of the Texas long-arm statute.
We overrule Issue One.
B. Silber Failed to Negate all Bases of Personal Jurisdiction
Once SPS adequately pleaded jurisdiction under the long-arm statute, Silber was required to negate each of the bases asserted by SPS in its petition. See Moncrief, 414 S.W.3d at 149. Whether Silber did so turns on the implied findings that the trial would have made based on the extensive evidence submitted by the parties below.
1. Applicable law
When deciding whether a nonresident defendant purposefully availed himself of the privilege of conducting activities in Texas, we consider: (1) the defendant's contacts with the forum, not the unilateral activity of another party; (2) whether the contacts were purposeful rather than random, isolated, or fortuitous; and (3) whether the defendant has sought some benefit, advantage, or profit by availing himself of the jurisdiction. Id. at 151. We also consider whether there is a substantial connection between the defendant's contacts and the operative facts of the litigation. Id. at 156, citing Moki Mac, 221 S.W.3d at 585. This analysis turns on the quality and nature of the contacts, not the quantity. Id. at 151. As a result, a single contact may be sufficient to establish jurisdiction. Id. In sum, the purposeful-availment analysis seeks to determine whether a nonresident defendant's conduct and connection are such that he could reasonably anticipate being haled into court in Texas. Id. at 152.
2. The evidence
Both sides argue extensively from the special appearance record with each putting its respective spin on the evidence. We summarize their evidentiary claims.
a) Silber's perspective
Silber met co-defendant Robert Fortenberry after they attended a meeting in Austin, Texas in May 2018. They partnered together to form Surge Solutions, a Delaware company that focused on enhanced oil recovery. When this case commenced, Silber, a California resident, served as Surge Solutions’ president and CEO. Silber asserts that he focuses on the financial aspects of Surge Solutions and decides on the hiring of new employees and the acquisition of oil-and-gas interests. Fortenberry, who holds degrees in chemical engineering and petroleum engineering, serves as Surge Solutions’ vice president and handles the company's technical operations.
In 2019, Surge Toborg, LLC, (a Texas limited liability company) which is a subsidiary of Surge Solutions, acquired a working interest in the Toborg Field and became its operator. Before it acquired a working interest in the Toborg Field, Surge Solutions hired Lambert as a consultant—Lambert resided in Canada then. Silber spoke to Lambert before Surge Solutions retained him, and Fortenberry subsequently arranged for Lambert to provide his services from Canada. Silber asserts that he did not recruit, solicit, evaluate, or recommend Lambert for employment with Surge Solutions. Instead, Fortenberry recommended Lambert to Silber based on Lambert's industry experience and his familiarity with the Toborg Field. Silber acknowledged that he approved the employment offer to Lambert and signed an offer letter in his capacity as Surge Solutions’ president and CEO. Silber only occasionally spoke to Lambert and did not have any “technical conversations” with him during his employment.
In June 2019, Silber spoke by phone with Murray Conradie, the CEO of SPS. According to Silber's deposition testimony, Conradie “made reference to some issues he had with [Lambert],” but Silber claimed that “to the best of [his] recollection,” Conradie did not mention the existence of Lambert's non-compete clause with SPS that covered the Toborg Field. During the conversation, Silber told Conradie that SPS's dispute with Lambert was “not [his or Surge Solutions’] business.” Silber told Fortenberry about his conversation with Conradie, but he did not speak to Lambert about the issues.
Silber agreed that he later learned of a June 13, 2019, cease-and-desist letter that SPS served on Lambert. Silber recalled that Fortenberry informed him of the letter's existence. Silber was surprised when he learned of the letter, which seemed to be “inconsistent with the information [they] had.” Silber did not directly speak to Lambert or terminate him, but he learned from Fortenberry that Lambert claimed to not possess any document containing a non-compete clause, and Silber understood that Lambert generally denied the existence of the non-compete clause. Lambert was still employed by Surge Solutions in the Toborg Field at the time of Silber's deposition.
b) SPS's case
SPS's response to the special appearance included the declaration of Murry Conradie who developed the following timeline of events. Conradie attached several exhibits to support his chronology, as well as excerpts from Silber's deposition:
3. Silber had purposeful contacts with Texas
Silber argues that he negated the bases of jurisdiction through his declaration attached to his special-appearance briefing, in which he stated, among other things, that: (1) he is not a resident of Texas; (2) he was not an officer of any Texas company; and (3) he had not committed any of the tortious acts in the manner alleged by SPS. First, while Silber is not a Texas resident, it is well-established that “[a]lthough physical presence in the forum is a relevant contact, it is not a prerequisite to jurisdiction[,]” and thus we may look to Silber's other Texas contacts to determine whether jurisdiction is proper. See Cornerstone Healthcare Grp. Holding, Inc. v. Nautic Mgmt. VI, L.P., 493 S.W.3d 65, 71 (Tex. 2016) (citation and internal quotation marks omitted). As for his other contacts, Silber's deposition testimony established that he traveled to Texas and met with Fortenberry and others more than once to consider the possibility of forming an oil-recovery business. He also formed Surge Solutions and Surge Toborg, the latter being a registered Texas limited-liability company, to conduct oil-recovery operations on the Toborg Field—the sole oil-and-gas field operated by Surge Solutions. Silber also hired Lambert to work in the Toborg Field, and based that decision specifically on Lambert's prior knowledge and experience of working in the field. Following Lambert's hiring, Surge Toborg became the operator of the Toborg Field and eventually acquired the oil field.4
SPS also draws our attention to two PowerPoint slides dated February 5, 2019, when Silber was putting together the plan to pursue the Toborg Field. A slide titled “Key Human Resources to Retain (Ordered?)” contains Lambert's name as an individual on the list. The next slide, titled “Jeff Lambert Path Forward Ideas,” contains the statement “Kevin/other atty to ensure we avoid legal liability [with regard to] SPS.” These slides match the narrative that Silber intended to hire Lambert to work in the Toborg Field despite preexisting knowledge of the legal risk from Lambert's previous employment.
Contracting with a Texas resident by itself does not necessarily establish minimum contacts sufficient to support personal jurisdiction. See Burger King Corp., 471 U.S. at 478, 105 S.Ct. 2174; Jay Zabel & Assocs., Ltd. v. Compass Bank, 527 S.W.3d 545, 554 (Tex.App.--Houston [1st Dist.] 2017, no pet.) (merely contracting with a Texas resident does not satisfy the minimum contacts requirement). Even so, we find that Silber's hiring of Lambert to work in Texas to operate or acquire a Texas oil and gas field supports the trial court's implied finding of purposeful availment. By establishing an employment relationship with Lambert, who is alleged to have established a residence in Pecos County, Silber created continuing obligations in the State. Under SPS's theory of the case, the entire point of hiring Lambert was to develop the Toborg Field, which would also create continuing obligations in the State.
In sum, we find that Silber's contacts with Texas were purposeful and substantial because his contacts were aimed at acquiring property and business within the state. The contacts evince a plan to conduct oil-recovery operations on a Texas oil field and eventually acquire it. Moreover, one view of the evidence suggests that Silber was aware of potential legal issues with SPS that could have arisen from hiring Lambert to work in the Toborg Field. Thus, the evidence supports the trial court's implied finding that Silber's contacts with the forum were not fortuitous, isolated, or attenuated, but were rather purposeful and substantial. See Ren, 502 S.W.3d at 850 (holding that a nonresident defendant's contacts with Texas were purposeful where he traveled to Texas to learn about oil and gas prospects, attended meetings associated with investing in Texas property, was an officer of a company formed to acquire the property, and conducted business on behalf of the company in Texas).
4. Silber's benefits, advantages, and profits sought
Based on the above, the evidence also supports a finding that Silber, as president and CEO of Surge Solutions, sought to profit from doing business in Texas through his actions associated with the Toborg Field. See id. (finding it significant that nonresident defendant sought to profit from doing business in Texas by coopting a business opportunity from the plaintiff).
Silber argues at length that his special appearance should have been granted because there is “no proof” that he committed any of the alleged torts in Texas, and that he was merely acting in a representative capacity when he performed any of his acts alleged to support purposeful availment. Yet we are not called on to decide the ultimate merits of SPS's claims; that is for the eventual fact finder. See id. at 851 (“Whether [the defendant] is ultimately liable is not at issue at this stage of the litigation.”); Hoagland v. Butcher, 474 S.W.3d 802, 813 (Tex.App.--Houston [14th Dist.] 2014, no pet.) (“At the jurisdiction phase, we examine business contacts, not what the parties thought or intended, which is the role of the factfinder in assessing the merits of the claims alleged.”).
In sum, the evidence shows that the critical events associated with Silber's contacts were aimed at acquiring the benefit of doing business in Texas through Surge Solutions’ and Surge Toborg's operations in the Toborg Field. We find sufficient evidence to support the trial court's implied finding that Silber purposefully availed himself of the forum. See Moncrief, 414 S.W.3d at 154 (holding that the nonresident defendants’ contacts with Texas were purposeful when the defendants attended two Texas meetings with a Texas corporation and accepted trade secrets created in Texas for a business venture to take place in Texas); see also Ren, 502 S.W.3d at 851 (rejecting the argument that a plaintiff needed to show that a nonresident defendant was acting in his own interest or that he was an alter ego of his employer to show that the defendant sought the benefits of doing business in the forum).
5. Substantial connection between Texas and operative facts
Specific jurisdiction requires a substantial connection between a nonresident defendant's forum contacts and the operative facts of the litigation. Moncrief, 414 S.W.3d at 156. Silber acknowledged in his deposition testimony that he: (1) attended meetings in Texas to learn about the prospects of oil-and-gas production and formed Surge Solutions to engage in such activities; (2) formed Surge Toborg, a Texas limited liability company focused on oil production in the Toborg Field; (3) directed Surge Toborg to acquire a contract to operate the Toborg Field, which later resulted in Surge Toborg acquiring the property; and (4) hired Lambert for the specific purpose of working in the Toborg Field. And SPS alleges that, having prior knowledge of the existence of a non-compete contract between SPS and Lambert, Silber hired Lambert to use his unique knowledge of SPS's trade secrets and operating information, which were created in Texas, to subvert SPS's efforts in the Toborg Field and caused it to suffer damages.
We conclude that there is sufficient evidence to support the trial court's implied finding that there is a substantial connection between Silber's Texas contacts and the operative facts of the litigation. See Ren, 502 S.W.3d at 851 (finding a substantial connection between the nonresident defendant's contacts and the facts of the litigation where the defendant was a potential investor in a Texas property, received confidential information about the project from another company, and then excluded the other company when he participated in purchasing the property).
6. Fiduciary-shield doctrine inapplicable
Silber argues that the “fiduciary-shield doctrine” prevents him from being subject to specific jurisdiction because he conducted business in Texas in his capacity as president and CEO of Surge Solutions, not in his individual capacity. Under the fiduciary-shield doctrine, a nonresident officer or employee cannot be subject to personal jurisdiction when his contacts with the forum were made on behalf of his corporation or employer. See id. at 849, citing Cerbone v. Farb, 225 S.W.3d 764, 769 (Tex.App.--Houston [14th Dist.] 2007, no pet.). Although the Texas Supreme Court has not addressed the matter, several of our sister courts have recognized that the doctrine does not apply to corporate representatives who are alleged to have committed torts or fraudulent acts for which they may be held individually liable. See id.; Stull v. LaPlant, 411 S.W.3d 129, 137-38 (Tex.App.--Dallas 2013, no pet.) overruled on other grounds in Steward Health Care Sys. LLC v. Saidara, 633 S.W.3d 120, 127 (Tex.App.--Dallas 2021, no pet.) (applying fiduciary shield in contract setting, but expressly noting doctrine does not apply to shield a corporate representative who commits a tort or other wrong while engaged in corporate business for which he could be held personally liable); Cagle v. Clark, 401 S.W.3d 379, 390-91 (Tex.App.--Texarkana 2013, no pet.) (the doctrine does not shield a corporate representative from “tortious or fraudulent conduct directed at the forum state for which he may be held personally liable.”); Wadi Petroleum, Inc. v. Miller, No. 13-21-00014-CV, 2021 WL 4466320, at *6 (Tex.App.--Corpus Christi Sept. 30, 2021, pet. filed) (mem. op.) (“Thus, a corporate officer is not protected from the exercise of specific jurisdiction, even if all of his contacts were performed in a corporate capacity, if the officer engaged in tortious or fraudulent conduct directed at the forum state for which he may be held personally liable.”). Our court has made the same observation. Tuscano v. Osterberg, 82 S.W.3d 457, 466-67 (Tex.App.--El Paso 2002, no pet.) (“Nevertheless, a corporate employee is not shielded from personal jurisdiction as to intentional torts for which the employee may be held individually liable.”).
Silber offers no reason for us to apply the doctrine in a different manner than other Texas courts; as such, we decline to do so here.
In sum, we conclude that Silber has failed to negate all potential bases for personal jurisdiction. The evidence supports the trial court's implied findings that: (1) Silber's contacts with Texas were purposeful; (2) Silber sought the benefits and advantages of doing business in Texas; and (3) there is a substantial connection between the facts here and Texas. We conclude that there is legally and factually sufficient evidence to establish that Silber purposefully availed himself of the forum. We overrule issues two, three, and five.
C. Trial Court's Exercise of Jurisdiction was Consistent with Traditional Notions of Fair Play and Substantial Justice
Finally, Silber contends that the trial court's exercise of personal jurisdiction over him offends traditional notions of fair play and substantial justice. Moncrief, 414 S.W.3d at 154; see also Int'l Shoe, 326 U.S. at 316, 66 S.Ct. 154 (discussing second prong of the due process inquiry). “If a nonresident has minimum contacts with the forum, rarely will the exercise of jurisdiction over the nonresident not comport with traditional notions of fair play and substantial justice.” Moncrief, 414 S.W.3d at 154-55, citing Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 338 (Tex. 2009). In making this determination, we consider these factors, when appropriate: (1) the burden on the defendant; (2) the interests of the forum in adjudicating the dispute; (3) the plaintiff's interest in obtaining convenient and effective relief; (4) the judicial system's interest in obtaining the most efficient resolution of controversies; and (5) the shared interest of the several jurisdictions in furthering fundamental substantive social policies. Id. at 155, citing Asahi Metal Indus. Co., Ltd. v. Superior Court of Cal., 480 U.S. 102, 113, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987), and Spir Star AG, 310 S.W.3d at 878. A nonresident defendant has the burden to present “a compelling case that the presence of some consideration would render jurisdiction unreasonable.” Guardian Royal Exch. Assur, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 231 (Tex. 1991), quoting Burger King, 471 U.S. at 477, 105 S.Ct. 2174; see also Ren, 502 S.W.3d at 852.
Silber argues that if he is subjected to personal jurisdiction in Texas, he would be burdened by “substantial” travel and litigation costs, and that he would be forced to take time away from his family and his job in California to defend against this litigation. And although Silber acknowledges the importance of the “interstate judicial system's interest in obtaining efficient resolution of controversies and furthering fundamental and substantive social policies,” Silber further contends that the COVID-19 pandemic would exacerbate the burdens of travel placed on him. Silber also argues that SPS could obtain relief from Silber's co-defendants without seeking relief against him.
Based on the record before us, we find that asserting personal jurisdiction over Silber would not offend traditional notions of fair play and substantial justice. Although we recognize that traveling to Texas from California to defend against SPS's claims might impose a burden on Silber, he offers no evidence that doing so would impose an unreasonable burden, especially considering that he made trips to Texas prior to the commencement of this case. See Ren, 502 S.W.3d at 852 (recognizing that a defendant must show that imposing jurisdiction would pose an “unreasonable” burden on him). As Silber recognizes, Texas has an interest in providing a forum to litigate claims by a Texas company over a Texas oil field. Moreover, because the trial court is already familiar with the parties, their claims, and the operative facts of the case, judicial economy is served by allowing SPS to litigate its claims against Silber in Texas. And we note that Texas has an interest in resolving claims for alleged torts committed in Texas against a Texas entity. See Moncrief, 414 S.W.3d at 155 (recognizing that there is a “serious state interest in adjudicating [a] dispute” involving the alleged commission of a tort in Texas).
For these reasons, we conclude that the trial court's exercise of jurisdiction over Silber would not offend traditional notions of fair play and substantial justice. See Ren, 502 S.W.3d at 852 (holding that a defendant failed to show the unreasonable burden of imposing jurisdiction on him considering, among other things, that the defendant had already traveled to Texas from China more than once, and recognizing that a defendant must show that imposing jurisdiction would pose an “unreasonable” burden) (emphasis in original).
Silber's Issue Four is overruled.
Because the trial court's exercise of personal jurisdiction complied with due process, we conclude that the trial court did not err by denying Silber's special appearance. We affirm the trial court's order denying Silber's special appearance and remand this case to the trial court for further proceedings consistent with this opinion.
2. See City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005) (setting out legal sufficiency standard of review); Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 406-07 (Tex. 1998) (setting out factual sufficiency standard).
3. Specific jurisdiction requires us to analyze jurisdictional contacts on a claim-by-claim basis, but we need not do so if all claims arise from the same forum contacts. See Moncrief Oil Int'l Inc. v. OAO Gazprom, 414 S.W.3d 142, 150-51 (Tex. 2013). Because SPS's claims all arise from the same forum contacts, we need not assess Silber's contacts on a claim-by-claim basis. See id.
4. In support of the notion that he did not intend to submit himself to jurisdiction in Texas, Silber also points to the choice-of-law provision and forum-selection clause in Lambert's employment contract with Surge Solutions, which designates California as the forum for any dispute. Although we do not ignore the existence of a forum-selection clause in determining the purposefulness of Silber's contacts, and while it constitutes some evidence that Silber did not purposefully avail himself of Texas as a forum, the existence of the clause is not controlling. The forum-selection clause operates as Silber's consent to jurisdiction in California, but it does not prevent jurisdiction from being proper in another forum, such as Texas. See Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777, 792-93 (Tex. 2005) (stating that although a forum-selection clause cannot be ignored in a purposeful-contacts analysis, the existence of a clause “does not necessarily indicate [a party has] no minimum contacts anywhere else. Generally, a forum selection clause operates as consent to jurisdiction in one forum, not proof that the Constitution would allow no other.”).
JEFF ALLEY, Justice
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Docket No: No. 08-20-00221-CV
Decided: October 31, 2022
Court: Court of Appeals of Texas, El Paso.
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