Case: 23-50004 Document: 00517036288 Page: 1 Date Filed: 01/18/2024
United States Court of Appeals
for the Fifth Circuit
____________
United States Court of Appeals
Fifth Circuit
No. 23-50004
____________ FILED
January 18, 2024
Shambaugh & Son, L.P., Lyle W. Cayce
Clerk
Plaintiff—Appellant,
versus
Steadfast Insurance Company,
Defendant—Appellee.
______________________________
Appeal from the United States District Court
for the Western District of Texas
USDC No. 1:22-CV-135
______________________________
Before Stewart, Dennis, and Wilson, Circuit Judges.
Cory T. Wilson, Circuit Judge:
This is an insurance coverage dispute in which the core issue is
whether the insurer, Steadfast Insurance Company (Steadfast), is subject to
specific personal jurisdiction in Texas. The procurement and enforcement
of the relevant Policies occurred almost entirely in the Northeast, nowhere
near Texas. The district court, on recommendation from the magistrate
judge, dismissed the action for lack of jurisdiction. We affirm because
Steadfast’s attenuated connections to Texas do not give rise to specific
personal jurisdiction there.
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I.
Between 2018 and 2020, Steadfast, an Illinois corporation, issued two
substantially identical liability insurance policies to EMCOR Group, Inc.
(EMCOR), a Connecticut-based corporation and a nonparty to this suit. The
2018–2019 Policy was negotiated in New York, and the 2019–2020 Policy
was negotiated in Massachusetts; both Policies were issued as Connecticut
surplus lines policies. Further, all the individuals directly responsible for
creating the Policies resided in the Northeast. In short, while Steadfast is
licensed to sell insurance in Texas, these Policies were negotiated outside of
Texas by non-Texans. 1
Shambaugh & Son, L.P. (Shambaugh) is a wholly owned indirect
subsidiary of EMCOR and is covered by the terms of EMCOR’s Policies.
Shambaugh maintains locations across the nation, particularly including
Indiana, and is organized as a limited partnership under Texas law. Southstar
Fire Protection Company d/b/a Northstar Fire Protection of Texas, Inc.
(Northstar) is a division of Shambaugh, but it is not a separate named party
in this dispute. Northstar is likewise covered by the Policies, and it maintains
an office in Austin, Texas.
_____________________
1
Based on email exchanges adduced through discovery in a parallel action in
Connecticut, Steadfast’s parent company, Zurich American Insurance Company,
employed a liability director from Addison, Texas, who incidentally reviewed and edited
the 2019–2020 Policy. The emails reflect limited involvement of the Texas-based liability
director and are the subject of several recently filed motions in this court and in the district
court. Because the glancing involvement of a Texas-based liability director is too
attenuated to alter our analysis, we decline Shambaugh’s request to take judicial notice of
its post-appeal filings in the district court, and we deny Shambaugh’s motion for a limited
remand, to supplement the record, and for leave to file a supplemental brief. See, e.g.,
Ecuadorian Plaintiffs v. Chevron Corp., 619 F.3d 373, 379 n.11 (5th Cir. 2010) (denying late
motion to supplement record that was only “tangentially related” to the case).
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On April 11, 2020, Shambaugh was served with a nonparty subpoena
that specifically targeted one of its offices in Indiana. The subpoena
requested discovery from Shambaugh regarding its use of aqueous filmforming foams (AFFF), and it was issued in connection with multidistrict
litigation pending in South Carolina district court. The plaintiffs in the South
Carolina litigation allege that AFFF are carcinogenic. Approximately 216 of
those cases originated in Texas or otherwise involve Texas sites and
plaintiffs. Shambaugh has spent over $1.7 million to date responding to the
subpoena.
After Shambaugh was served with the subpoena, Shambaugh obtained
local counsel in South Carolina, and an EMCOR executive in Connecticut
notified Steadfast of Shambaugh’s intent to seek reimbursement under the
Policies for its discovery expenses. Following that notice, Shambaugh’s and
Steadfast’s lawyers and employees in Rhode Island, New Jersey, California,
and Washington, D.C. corresponded on the matter. No one involved in these
exchanges was based in Texas. Ultimately, Steadfast denied coverage.
Shambaugh sued to recover its discovery expenses in a Texas federal
court, asserting claims for breach of contract, breach of good faith, various
state law violations, and declaratory relief. Steadfast moved to dismiss the
suit for lack of specific personal jurisdiction and for improper venue, or,
alternatively, sought to transfer the suit to a proper venue. The district court
referred the motion to the magistrate judge, who recommended dismissal for
lack of specific personal jurisdiction and, alternatively, dismissal for
improper venue. One day after the magistrate judge issued his report,
Steadfast filed a lawsuit in Connecticut district court seeking declaratory
relief that it is not liable to Shambaugh under the Policies. 2
_____________________
2
Shambaugh has repeatedly moved this court to take judicial notice of the
Connecticut action. We grant Shambaugh’s request and take notice that a parallel case,
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In its objections to the magistrate judge’s report, Shambaugh raised
several arguments for the first time. Regardless, the district court adopted
the magistrate judge’s report and concluded that it could not exercise specific
personal jurisdiction over Steadfast. The district court’s judgment
dismissing the case did not address venue. Shambaugh now appeals.
II.
“Absent any dispute as to the relevant facts, whether personal
jurisdiction can be exercised over a defendant is a question of law and subject
to de novo review.” In re Chinese Manufactured Drywall Prods. Liab. Litig.,
742 F.3d 576, 584 (5th Cir. 2014). “When a court rules on a motion to
dismiss for lack of personal jurisdiction without holding an evidentiary
hearing, it must accept as true the uncontroverted allegations in the
complaint and resolve in favor of the plaintiff any factual conflicts posed by
the affidavits.” Latshaw v. Johnston,
167 F.3d 208, 211 (5th Cir. 1999). In
such a situation, “[t]he plaintiff has the burden to make a prima facie showing
that personal jurisdiction is proper.” Monkton Ins. Servs., Ltd. v. Ritter,
768
F.3d 429, 431 (5th Cir. 2014) (emphasis added); see also E. Concrete Materials,
Inc. v. ACE Am. Ins. Co.,
948 F.3d 289, 295 (5th Cir. 2020) (applying the
same standard of review).
III.
Shambaugh advances six arguments for specific personal jurisdiction
on appeal. Three are forfeited, and the remaining three lack merit.
Accordingly, we affirm the district court’s decision to dismiss this action for
_____________________
Steadfast Insurance Company v. Shambaugh & Son, L.P. et al., case number 3:22-cv-01306-
SRU, has been filed in the United States District Court for the District of Connecticut.
However, that action was filed after the magistrate judge issued his report in this case, and
the district court did not mention the Connecticut action in its decision, so the parallel
Connecticut action has no bearing on the issues before this court.
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lack of specific personal jurisdiction. Based on this determination, we do not
reach Shambaugh’s other arguments regarding venue and transfer.
A.
We begin with forfeiture. 3 Steadfast contends that several of
Shambaugh’s arguments are forfeited because Shambaugh failed to raise
them before the magistrate judge. True enough, this court considers
arguments forfeited if they are not raised before a magistrate judge, even if
they are subsequently raised before the reviewing district court in objections
to the magistrate judge’s report and recommendation. See, e.g., Field v.
Anadarko Petroleum Corp., 35 F.4th 1013, 1019 n.3 (5th Cir. 2022); Cupit v.
Whitley,
28 F.3d 532, 535 (5th Cir. 1994); United States v. Armstrong,
951 F.2d
626, 630 (5th Cir. 1992). Against this principle, we unpack Steadfast’s
forfeiture arguments.
1.
Steadfast asserts that Shambaugh has forfeited four of its arguments,
namely those based on: (1) Steadfast’s alleged Texas state law violations,
(2) the absence of a jurisdiction or venue provision in the Policies, (3) article
21.42 of the Texas Insurance Code, and (4) the nationwide coverage
provisions of the Policies. Steadfast is correct that the first three arguments
were not initially presented to the magistrate judge and are thus forfeited, but
_____________________
3
The parties use the terminology of waiver rather than forfeiture in their briefing.
“The terms waiver and forfeiture—though often used interchangeably by jurists and
litigants—are not synonymous.” Hamer v. Neighborhood Hous. Servs. of Chi., 583 U.S. 17,
20 n.1 (2017). “Whereas forfeiture is the failure to make the timely assertion of a right,
waiver is the ‘intentional relinquishment or abandonment of a known right.’” United States
v. Olano,
507 U.S. 725, 733 (1993) (quoting Johnson v. Zerbst,
304 U.S. 458, 464 (1938)); see
Rollins v. Home Depot USA,
8 F.4th 393, 397 (5th Cir. 2021) (discussing the distinction
between waiver and forfeiture). The issues raised by Steadfast implicate questions of
forfeiture, not waiver.
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Shambaugh is correct that the nationwide coverage argument was raised and
has therefore not been forfeited. We address each argument in turn.
First, Shambaugh contends that by refusing to reimburse its discovery
costs, Steadfast committed various wrongs—such as breach of the duty of
good faith and fair dealing, violation of the Texas Insurance Code, and
violation of the Texas Deceptive Trade Practices Act—that are cognizable
under Texas state law independent of Shambaugh’s breach of contract claim.
And because Steadfast perpetrated these civil violations against Shambaugh
in Texas, Shambaugh reasons that they give rise to specific personal
jurisdiction over the perpetrator, Steadfast.
But this argument appears nowhere in Shambaugh’s briefing before
the magistrate judge; therefore, it is not preserved. Undeterred, Shambaugh
points to this court’s decision in Lampton v. Diaz to contend that forfeiture
should not apply. 639 F.3d 223 (5th Cir. 2011). Lampton stated that forfeiture
“generally will not apply ‘when [an issue] fairly appears in the record as
having been raised or decided.’”
Id. at 227 n.14 (alteration in original)
(quoting 19 James W. Moore et al., Moore’s Federal
Practice § 205.05[1] (3d ed. 2011)). Shambaugh asserts that it fairly
raised its argument about violations of state law before the magistrate judge
because those state law claims appear in its complaint. Shambaugh also
contends that Steadfast’s briefing before the magistrate judge contains a
reply to the argument about violations of state law. Neither the record nor
the law supports Shambaugh’s assertions.
As for the record, Steadfast’s reply brief before the magistrate judge
makes a one-line reference to “which state’s law governs Plaintiff’s tort and
statutory claims.” In context, this choice of law statement is nested within a
broader discussion about forum shopping. While this line might prove that
Steadfast read Shambaugh’s complaint, it is far from a substantive argument
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that “addressed the issue of Shambaugh’s tort claims” as Shambaugh
asserts.
On the law, Lampton specifically notes that forfeiture “exists to
prevent an appellate court from ‘[analyzing] the facts of a particular [issue]
without the benefit of a full record or lower court determination.’” Id.
(citation omitted); cf. Yee v. City of Escondido, Cal., 503 U.S. 519, 538 (1992)
(“Prudence also dictates awaiting a case in which the issue was fully litigated
below, so that we will have the benefit of developed arguments on both sides
and lower court opinions squarely addressing the question.” (citing Lytle v.
Household Mfg., Inc.,
494 U.S. 545, 552 n.3 (1990))). In Lampton, this hurdle
was cleared because the district court addressed the debatably forfeited
arguments in its decision.
639 F.3d at 277 n.14. But here, the district court
did not do so. Instead, Shambaugh contends that its complaint fairly
presented, and thus preserved, the specific personal jurisdiction argument
based on state law that it now seeks to make. Shambaugh is incorrect.
Indeed, if complaint allegations alone prevented subsequent forfeiture, then
it is difficult to imagine when any claim or argument could ever be forfeited.
Because Shambaugh’s specific personal jurisdiction argument based on state
law was not sufficiently raised before the magistrate judge, it is forfeited, and
we do not consider it further.
Shambaugh next asserts that Steadfast should be subject to specific
personal jurisdiction in Texas because Steadfast failed to include a
jurisdiction or venue provision in the Policies that specified, or otherwise
limited, where it could be sued. Notwithstanding the circular nature of this
argument, the trouble is—once again—this argument does not appear in
Shambaugh’s briefing before the magistrate judge.
Arguing against forfeiture, Shambaugh asserts that the Policies were
attached as an exhibit to its complaint. But if including a claim in a complaint
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fails to preserve that claim, as previously discussed, then a fortiori attaching
an exhibit to a pleading does not insulate arguments derived from that exhibit
against forfeiture.
Next, article 21.42 of the Texas Insurance Code requires insurance
contracts payable to citizens or inhabitants of Texas to be governed by Texas
law. Tex. Ins. Code art. 21.42. And as Shambaugh now contends,
Steadfast should be subject to specific personal jurisdiction in Texas because
article 21.42 subjects the Policies to Texas law. However, Shambaugh made
no reference to article 21.42 in its briefing before the magistrate judge, nor
even in its complaint.
Nevertheless, Shambaugh contends that its article 21.42 argument
was incorporated within its broader argument about Steadfast’s minimum
contacts with Texas. Shambaugh further asserts that the magistrate judge
ruled on its article 21.42 argument by ruling on Shambaugh’s minimum
contacts. Despite Shambaugh’s assertion to the contrary, its article 21.42
argument is narrower and conceptually distinct from its other minimum
contacts arguments. Accordingly, the article 21.42 argument is forfeited,
even if its remaining minimum contacts arguments are not.
Finally, Shambaugh contends that the nationwide scope of the Policies
subjects Steadfast to specific personal jurisdiction in any and all of the fifty
states. Steadfast suggests this argument was untimely presented, without
offering any further explanation for its alleged forfeiture. But Shambaugh
raised this point in its briefing before the magistrate judge, and the magistrate
judge substantively decided it. Therefore, unlike the foregoing three issues,
Shambaugh’s nationwide coverage argument is preserved.
2.
More generally, Shambaugh advances two broad rationales against
forfeiture of its unpreserved arguments. First, Shambaugh contends that an
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opposing party cannot be prejudiced by the consideration of otherwise
forfeited arguments when that party has a chance to address those arguments
in briefing on appeal. Second, Shambaugh asserts that purely legal arguments
cannot be forfeited. Neither helps Shambaugh.
Shambaugh’s first contention is based on a misreading of Lampton.
639 F.3d at 227 n.14. True, this court noted in Lampton that “there [was] no
prejudice, because [the appellee] . . . had an opportunity to respond to [an]
argument on appeal.”
Id. But that statement was based on the fact that the
district court in Lampton had already resolved the potentially forfeited
argument.
Id. In that context, it would have been bizarre to deem a portion
of the district court’s decision off-limits for purposes of appeal. By
comparison, the record here is not developed on the forfeited issues that
Shambaugh now seeks to advance. While Shambaugh raised some of its
forfeited arguments in its objections to the magistrate judge’s report, the
district court did not address those new arguments. And though Steadfast
has had the opportunity to respond to Shambaugh’s new arguments on
appeal, that is no sound basis for reviving forfeited issues. Indeed, allowing
forfeited arguments to be cured by appellate briefing would contradict our
well-established precedent on issue preservation, and it would undermine the
core purpose of our forfeiture rules by opening the door for appellate review
of un- or underdeveloped records. See, e.g., Field,
35 F.4th at 1019 n.3; Cupit,
28 F.3d at 535; Armstrong,
951 F.2d at 630. Shambaugh’s reasoning on this
point is, therefore, unpersuasive.
Shambaugh’s second point—that purely legal arguments cannot be
waived—overreads the court’s language in Rollins v. Home Depot USA. 8
F.4th 393, 398–99 (5th Cir. 2021). While in Rollins, we observed that an issue
might be addressed for the first time on appeal if “it is a purely legal matter
and failure to consider the issue will result in a miscarriage of justice,” the
court went on to find “no principled basis for addressing [the] forfeited
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argument” at issue there. Id. at 398 (citation omitted). Same here:
Shambaugh similarly fails to articulate why we should exercise our discretion
to consider its otherwise forfeited legal arguments. Accordingly, Shambaugh
has not met the standard articulated in Rollins, and we decline to reach its
forfeited arguments.
Id. at 398–99.
B.
We now consider the merits of Shambaugh’s preserved arguments for
why Steadfast should be subject to specific personal jurisdiction in Texas.
We conclude they are all unavailing.
1.
“A ‘federal court sitting in diversity may assert jurisdiction if (1) the
state’s long-arm statute’ allows it; and (2) exercising jurisdiction would not
violate the Due Process Clause of the Fourteenth Amendment.” Halliburton
Energy Servs., Inc. v. Ironshore Specialty Ins. Co., 921 F.3d 522, 539 (5th Cir.
2019) (quoting Cycles, Ltd. v. W.J. Digby, Inc.,
889 F.2d 612, 616 (5th Cir.
1989)). “Because the Texas long-arm statute extends to the limits of federal
due process, the two-step inquiry reduces to only the federal due process
analysis.”
Id.
There are two types of personal jurisdiction under federal law: general
and specific. Id. General personal jurisdiction applies “only when a
defendant is ‘essentially at home,’” and any and all claims may be brought
against a defendant wherever it is subject to such jurisdiction. Ford Motor Co.
v. Mont. Eighth Jud. Dist. Ct.,
141 S. Ct. 1017, 1024 (2021) (quoting Goodyear
Dunlop Tires Operations, S. A. v. Brown,
564 U.S. 915, 919 (2011)). By
comparison, specific personal jurisdiction is narrower and attaches only when
there is a sufficient connection between a defendant’s forum-related contacts
and a plaintiff’s causes of action.
Id. at 1024–25. General personal
jurisdiction is not at issue here.
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This circuit applies a three-step test for determining specific personal
jurisdiction:
(1) whether the defendant has minimum contacts with the
forum state, i.e., whether it purposely directed its activities
toward the forum state or purposefully availed itself of the
privileges of conducting activities there; (2) whether the
plaintiff’s cause of action arises out of or results from the
defendant’s forum-related contacts; and (3) whether the
exercise of personal jurisdiction is fair and reasonable.
E. Concrete Materials, 948 F.3d at 296 (quoting Monkton, 768 F.3d at 433).
“If a plaintiff establishes the first two prongs, the burden shifts to the
defendant to show that the exercise of personal jurisdiction would be unfair
or unreasonable.”
Id.
The guiding principle of specific personal jurisdiction is whether “the
defendant’s conduct and connection with the forum State are such that he
should reasonably anticipate being haled into court there.” World-Wide
Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). “The Supreme
Court has long held that ‘an individual’s contract with an out-of-state party
alone [cannot] automatically establish sufficient minimum contacts in the
other party’s home forum.’” Halliburton,
921 F.3d at 544 (emphasis and
alteration original) (citing Burger King Corp. v. Rudzewicz,
471 U.S. 462, 478
(1985)). Further, the Court “long ago rejected the notion that personal
jurisdiction might turn on mechanical tests, or on conceptualistic . . . theories
of the place of contracting or of performance.” Burger King, 471 U.S. at 478–
79 (ellipsis original) (internal quotation marks and citations omitted).
Instead, when specific personal jurisdiction is grounded on contractual
relations, lower courts must evaluate “prior negotiations and contemplated
future consequences, along with the terms of the contract and the parties’
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actual course of dealing” to determine “whether the defendant purposefully
established minimum contacts within the forum.” Id. at 479.
The tangential involvement of multidistrict litigation does not amend
these jurisdictional rules. “Every federal court to have considered the issue
has affirmed that ‘the transferee court can exercise personal jurisdiction to
the same extent that the transferor court could.’” In re Delta Dental Antitrust
Litig., 509 F. Supp. 3d 1377, 1379 (U.S. Jud. Pan. Mult. Lit. 2020) (quoting
In re Auto. Refinishing Paint Antitrust Litig.,
358 F.3d 288, 297 n.11 (3d Cir.
2004)). While no Fifth Circuit case was cited in Delta Dental, we have
previously expressed our agreement with that articulation of the law. See In
re Chinese-Manufactured Drywall Prod. Liab. Litig.,
753 F.3d 521, 529–50 (5th
Cir. 2014) (implicitly following the same rationale).
2.
Shambaugh advances three arguments for why Steadfast’s forum-related contacts warrant specific personal jurisdiction in Texas: (a) that the
Policies themselves give rise to specific personal jurisdiction in Texas;
(b) that the national scope of the Policies gives rise to specific personal
jurisdiction in any state; and (c) that Steadfast is subject to specific personal
jurisdiction in Texas because of its participation in other Texas lawsuits.
Walking through each argument, none proves sufficient.
a.
The facts surrounding the “procurement and enforcement” of the
Policies do not establish specific personal jurisdiction in Texas. E. Concrete
Materials, 948 F.3d at 298. The Policies were issued by Steadfast, an Illinois
corporation, to EMCOR, a Connecticut corporation. The 2018–19 Policy
was negotiated in New York, and the 2019–20 Policy was negotiated in
Massachusetts. The disputed discovery expenses resulted from a subpoena
served in connection with multidistrict litigation pending in South Carolina.
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That subpoena was issued to Shambaugh’s office in Indiana, and Shambaugh
retained counsel in South Carolina to respond to it. From Connecticut,
Shambaugh’s parent EMCOR then notified Steadfast about a potential claim
under the Policies. Following that notice, Shambaugh’s and Steadfast’s
lawyers and employees—all outside of Texas—corresponded on the matter.
Granted, a few facts suggest that specific personal jurisdiction might
be appropriate in Texas. The Policies insure Shambaugh, a Texas resident,
Steadfast is licensed to sell insurance in Texas, and the Policies extend to
cover Northstar, an Austin, Texas “division” of Shambaugh. But these facts
are less relevant than they might appear at first blush. After all, this court has
held that an insurer’s securing an insurance contract with a Texas resident
“does not, on its own, establish minimum contacts between [the insurer] and
Texas.” Halliburton, 921 F.3d at 544. And, “Texas’s decision to regulate
the lines insurance market has nothing to do with [an insurer’s] minimum
contacts with Texas.”
Id.
Further, the Austin address of Northstar establishes an attenuated
connection to Texas at best. That address appears nowhere in the four
corners of the Policies. Northstar’s location is only covered by the 2019–20
Policy because it was mentioned in EMCOR’s application for that Policy,
which was subsequently incorporated by reference. And while business
records from Northstar’s Austin office were turned over as part of
Shambaugh’s response to the subpoena, the subpoena itself does not mention
Northstar, EMCOR’s notice of potential claim to Steadfast does not mention
Northstar, Shambaugh’s complaint does not mention Northstar, and
Northstar is not an independent party in this action. To be sure, the Austin
address makes specific personal jurisdiction somewhat more plausible here
than in Halliburton, where the insurance contract at issue lacked such a
feature. Id. Nevertheless, the many other facts pointing away from Texas
preclude the Policies from being “distinctively Texan” as was the insurance
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contract in Eastern Concrete Materials, where the court found specific
personal jurisdiction proper. 948 F.3d at 298.
For these reasons, the circumstances surrounding the procurement
and enforcement of the Policies do not establish sufficient minimum contacts
to warrant exercising specific personal jurisdiction in this action.
b.
Shambaugh’s nationwide coverage argument is likewise unpersuasive.
According to Shambaugh, “promising to provide nationwide coverage makes
it reasonably foreseeable that the insurer could be haled into any state’s
courts where a covered accident occurred.” But, as Shambaugh concedes,
this court has never espoused such a theory. To the contrary, over twenty
years ago, we held (albeit in an unpublished opinion) that specific personal
jurisdiction could not be secured against an insurer based on “worldwide
coverage language in the policy.” Perez v. Pan Am. Life Ins. Co., No. 96-
20241, 1996 WL 511748, at *2 (5th Cir. Aug. 20, 1996) (unpublished).
This case is no different. Accepting Shambaugh’s argument would
allow for specific personal jurisdiction against nationwide insurers virtually
anywhere. Such “would offend the traditional notions of fair play and
substantial justice” by disregarding decades of well-developed law grounded
in the Due Process Clause. Id.; see U.S. Const. amend. XIV, § 1. It would
also overstep the careful boundaries of specific personal jurisdiction recently
articulated by the Supreme Court in Ford. See 141 S. Ct. at 1024–32
(eschewing a causation requirement for specific personal jurisdiction, while
reiterating the well-established standard for purposeful availment).
Shambaugh offers no viable reason to break such tenuous new ground in this
case; Steadfast is not subject to specific personal jurisdiction in Texas based
on the Policies’ nationwide scope alone.
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c.
Steadfast’s involvement in other Texas lawsuits likewise provides no
basis for specific personal jurisdiction. The mere fact that a defendant has
participated in state court lawsuits in the putative forum, without more,
cannot meet this court’s standard for specific personal jurisdiction.
Halliburton, 921 F.3d at 540–43. But rather than proving up any connection
between Steadfast’s other suits and this one, Shambaugh concedes that they
are not related. Assuming arguendo then that Steadfast’s involvement in
other Texas lawsuits passes the minimum contacts threshold, today’s case
could not “arise out of or relate to” those admittedly unrelated lawsuits.
Ford, 141 S. Ct. at 1025 (quoting Bristol-Myers Squibb Co. v. Superior Ct. of
Cal.,
582 U.S. 255, 262 (2017)). Accordingly, the record before us does not
support a finding that Steadfast is subject to specific personal jurisdiction in
Texas based on its unrelated litigation contacts with that forum.
The possibility of specific personal jurisdiction over Steadfast because
of the underlying AFFF litigation similarly proves insufficient. True enough,
the AFFF litigation is necessarily related to this action because it triggered
the instant dispute over Shambaugh’s discovery expenses. According to
Shambaugh, there were approximately 755 lawsuits consolidated in the
AFFF litigation as of August 2020, and 3,988 lawsuits as of February 2023.
Among these cases, Shambaugh represents that over 200 complaints identify
specific sites in Texas, and 39 AFFF actions were initially filed in the district
court that generated this appeal. Additionally, Shambaugh asserts that its
response to the nonparty subpoena included business records from its
activities in Texas, records that are maintained in Northstar’s Austin office.
However, by the admission of Shambaugh’s own senior vice president, “the
majority of AFFF litigation . . . pertain[s] to the Upper Midwest with respect
to Shambaugh.” Moreover, Shambaugh does not contend, and the record
does not indicate, that Shambaugh or Northstar is party to any of the AFFF
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suits. 4 In short, none of the AFFF actions purport to hold Shambaugh
responsible for any of its conduct, much less any of its conduct in Texas. The
only AFFF connection between Shambaugh and Texas is the fact that
Shambaugh stored some responsive documents in Austin.
And regardless of Shambaugh’s involvement with these AFFF
actions, Steadfast has no discernible connection to the AFFF litigation aside
from its insurance contract with Shambaugh. A plaintiff cannot manufacture
specific personal jurisdiction over a defendant by relying on the plaintiff’s
own conduct. The Supreme Court has been clear that the proper inquiry for
specific personal jurisdiction must consider the defendant’s contacts to
determine whether that defendant could “reasonably anticipate” being haled
into court in the plaintiff’s chosen forum. Ford, 141 S. Ct. at 1027 (quoting
Keeton v. Hustler Mag., Inc.,
465 U.S. 770, 781 (1984)). Steadfast could not
have reasonably anticipated being haled into court in Texas simply because
Shambaugh’s records were kept in an office (in Austin) maintained by a
division (Northstar) of a subsidiary (Shambaugh) belonging to the original
Connecticut-based contracting party (EMCOR).
Steadfast’s contacts with Texas, incident to unrelated litigation or the
AFFF cases arising in Texas, are too attenuated to warrant exercising specific
personal jurisdiction. This conclusion mirrors Halliburton, where the court
held that an out-of-state insurer’s involvement in Texas litigation did not give
rise to specific personal jurisdiction in Texas. 921 F.3d at 540–43.
Accordingly, Steadfast is not subject to specific personal jurisdiction in Texas
_____________________
4
Indeed, part of the reason Steadfast denied insurance coverage to Shambaugh is
that Shambaugh was not a defendant in any AFFF action when it incurred the costs of
responding to the nonparty subpoena.
16
Case: 23-50004 Document: 00517036288 Page: 17 Date Filed: 01/18/2024
No. 23-50004
based on its participation in unrelated Texas lawsuits, or because of the
AFFF litigation.
…
Shambaugh fails to establish that Steadfast has sufficient minimum
contacts with Texas that give rise to, or relate to, this dispute. See Ford, 141
S. Ct. at 1026 (quoting Bristol-Myers Squibb,
582 U.S. at 262). Because
Shambaugh cannot hurdle the first two steps of the specific personal
jurisdiction inquiry, this court need not consider whether the exercise of
specific personal jurisdiction would be fair and reasonable. E. Concrete
Materials, 948 F.3d at 296 (quoting Monkton,
768 F.3d at 433).
IV.
Plaintiffs may “forum-shop” to the extent they may choose the forum
in which they sue. However, that privilege is not absolute, as it has always
been limited by the principles of general and specific personal jurisdiction.
Halliburton, 921 F.3d at 539. Here, Shambaugh has attempted to stretch our
law on specific personal jurisdiction too far by bringing this action—about
two Connecticut surplus lines insurance policies—in Texas, a forum with
scant relation to the issues it seeks to litigate. The inadequacy of
Shambaugh’s chosen forum is made even more apparent by the existence of
the Connecticut action, where the parties are actively litigating their
disagreements over the Policies. This action does not belong in Texas.
Three of Shambaugh’s arguments in favor of specific personal
jurisdiction are forfeited, and the remaining arguments fail on the merits. We
do not reach the questions of improper venue and transfer of venue presented
in this appeal. Because the district court correctly concluded that it lacked
specific personal jurisdiction over Steadfast, its judgment dismissing this
action is AFFIRMED. The pending motions Shambaugh has filed in this
court are DENIED, except as otherwise stated herein.
17
