Can targeted advertising establish general jurisdiction over a foreign corporation? The Fifth Circuit had not addressed this issue until Frank v. P N K (Lake Charles) L.L.C., No. 18-31060, 2020 WL 288213 (5th Cir. Jan. 21, 2020). But in so doing, the court may have announced a new jurisdictional test with significant ramifications for future cases.
Frank was a wrongful-death lawsuit filed in Texas state court against L’Auberge Hotel & Casino and its marketing division, PNK. Following removal to federal court, the district court granted PNK’s motion to transfer, finding PNK was not subject to general jurisdiction in Texas. The plaintiffs appealed.[1]
The Fifth Circuit began by charting the Supreme Court’s general-jurisdiction decisions in Goodyear,[2] Daimler,[3] and BNSY.[4] For a corporation, the question is whether its “affiliations with the State are so continuous and systematic as to render it essentially at home in the forum State.” A corporation is generally considered “at home” only in its state(s) of incorporation and principal place of business. For PNK, this was Louisiana. So, the question on appeal was whether this was the “exceptional case” where personal jurisdiction could also be exercised in another state.
As summarized by the Fifth Circuit, “PNK’s contacts are comprised of advertising activities (e.g., internet aids, mailers, market research, billboards, TV commercials) and a shuttle service subsidy purely aimed at Texans.” Basically, PNK had “an ongoing promotional campaign . . . intentionally directed at Texas to solicit patrons.” Still, this was not enough to confer general jurisdiction. For the Fifth Circuit, the key issue was that none of PNK’s contacts “approximate physical presence” in Texas. “The most that can be said of PNK is that it does a substantial amount of business with Texans but not in Texas.”
The Fifth Circuit’s focus on “approximate physical presence” raises several key issues. To begin with, what kinds of contacts satisfy this standard? The court may have hinted at a few when it listed the contacts PNK did not have with Texas: “employees or registered agents stationed in Texas; a Texas license or permit; offices, gaming facilities or real estate in Texas; nor does it have a bank account or pay taxes in Texas.” Regardless, it is unclear whether any of these contacts alone—or some combination of them—would confer general jurisdiction.
Another question is whether the “approximate physical presence” test will apply outside of the advertising/solicitation realm. And more broadly, does the test have any relevance for assessing an individual’s (as opposed to a corporation’s) jurisdictional contacts? These questions and others will have to be fleshed out by the district courts.
For more information about this Article, please contact attorneys Philip Dore (pdore@liskow.com) or Cristian Soler (csoler@liskow.com).
[1] The parties agreed specific personal jurisdiction was not at issue.
[2] Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (2011).
[3] Daimler AG v. Bauman, 571 U.S. 117 (2014).
[4] BNSF Ry. Co. v. Tyrrell, 137 S. Ct. 1549 (2017).
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