Personal Jurisdiction in Texas: Texas Courts’ Power Over Non-resident People and Companies Through the Internet and Otherwise
Texas is fortunate enough to possess many qualities that attract a variety of different people and organizations from outside the state to conduct business within Texas. This is largely a good thing, as it helps grow the Texas economy, making life better for Texans and the rest of the nation. However, one inevitable consequence of economic and other exchanges between people is that disputes will arise and will need to be mediated by the court system. Before the courts can intervene, however, their power over the individuals and companies involved must first be established.
This article briefly discusses how civil courts in Texas establish their jurisdiction over non-resident parties involved in a civil suit in Austin or the rest of Texas. If, after reading, you have further questions about court jurisdiction, or anything else related to a civil suit, please do not hesitate to contact Sheehan Law, PLLC.
The Texas Long-Arm Statute
Most people understand that in order to be sued, a person must first be “served” with process regarding that lawsuit. That is, they must be given legally sufficient notice that they are being sued in a court that has jurisdiction over them (at least according to the Plaintiffs initiating that lawsuit). The basic law governing the reach of Texas courts into the rest of the nation is often referred to as “the long-arm statute.”
In reality, this is a series of statutes codified under Chapter 17, Subchapter C of the Texas Civil Practice and Remedies Code , which are supplemented by other more specific long-arm provisions elsewhere in Texas law to be discussed shortly. The general long-arm statute covers the situation where an out-of-state company or business entity (also referred to as a “foreign” entity) is “doing business” in Texas, and is not required by other law to appoint an agent to receive service of process for a lawsuit. In these situations, it is permissible for Texas courts to gain jurisdiction over these foreign entities if the “person in charge” of such a business is served with process.
Section 17.042 of the Civil Practice and Remedies Code states that “[i]n addition to other acts that may constitute doing business, a nonresident does business in this state if the nonresident:
- Contracts by mail or otherwise with a Texas resident and either party is to perform the contract in whole or in part in this state;
- Commits a tort in whole or in part in this state; or
- Recruits Texas residents, directly or through an intermediary located in this state, for employment inside or outside this state.
“Nonresidents” here include individuals not residing in Texas, as well as out-of-state corporations, joint-stock companies, associations, and partnerships. In addition to these specific acts, as stated above, other acts may constitute “doing business” as well; however, how one defines that concept is ultimately restrained by federal constitutional doctrine interpreting what constitutes sufficient due process for the individual or entity being ushered into a Texas court. This determination is made in view of a certain threshold of their “minimum contacts” with the state. Additionally, Subchapter C allows service upon nonresident defendants through the Texas Secretary of State in a number of different situations.
Other Service Statutes
A variety of other long-arm provisions specify procedures for serving other individuals and foreign entities “doing business” in Texas under specific circumstances. This includes the Texas Nonresident Motorist Statute under Section 17.061 et seq. of the Civil Practice and Remedies Code, which covers situations where a nonresident or an agent of a nonresident was operating a motor vehicle involved in a collision in Texas. The Family Code also provides long-arm statutes in cases of suits to end a marriage under Section 6.305, and in suits affecting a parent-child relationship under Section 102.011(b). A number of other statutes scattered throughout Texas law govern procedures for serving individuals and companies, including for the following situations:
- Nonresidents delinquent in paying Texas property taxes
- Out-of-state railroad companies
- Out-of-state insurance companies
- Employers from other states involved in workers’ compensation claims,
- Limited partnerships from other states
- Out-of-state utility companies
- Out-of-state trust companies and banks acting in a fiduciary capacity in Texas probate proceedings
Personal Jurisdiction on the Internet
Whether an individual or entity has established the “minimum contacts” necessary for a Texas court to obtain jurisdiction over them has been the subject of numerous court cases at both the state and federal level in Texas. The courts thus far have established a perhaps deceptively simple distinction between “interactive websites,” through which personal jurisdiction can be established, and “passive websites” only used for advertising where it cannot. Essentially, if you contract with or otherwise voluntarily exchange information with a website based in Texas, you can be held to have minimum contacts with that site sufficient to establish personal jurisdiction over you in Texas. However, if you merely access a website to view its content, it is doubtful that any minimum contacts would be established.
Sheehan Law, PLLC | Austin, TX Civil Attorneys
If you have any further questions about personal jurisdiction and residential standings in Texas, or anything else related to civil law, please do not hesitate to contact the attorneys at Sheehan Law, PLLC for a consultation. You can reach us by phone at (512) 251-4553, or fill out our online contact form with your questions.