Benson v. Rosenthal

Filing 36

ORDER AND REASONS DENYING 14 Motion to Dismiss for Lack of Jurisdiction. Signed by Judge Jane Triche Milazzo on 7/8/2015. (my)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
THOMAS BENSON, JR.

CIVIL ACTION

VERSUS

NO. 15-782

ROBERT ROSENTHAL

SECTION "H"

ORDER AND REASONS
Before the Court is Defendant's Motion to Dismiss for Lack of Personal
Jurisdiction (R. Doc. 14). For the following reasons, the Motion is DENIED.
BACKGROUND
This is an action for declaratory judgment in which Plaintiff, appearing as
grantor of several trusts, asks this Court to issue a judgment declaring that his
attempt to exchange certain assets held by those trusts for other assets of
equivalent value was effective. Plaintiff is Thomas Benson, the successful and
wealthy owner of the New Orleans Saints and New Orleans Pelicans franchises.
Over the course of several years, Plaintiff established various trusts for the
1

benefit of his daughter Renee Benson and his two grandchildren, Rita Benson
LeBlanc and Ryan LeBlanc. Plaintiff created three trusts in 2009 (the "2009
Trusts),1 three trusts in 2012 (the "2012 Trusts"),2 a Grantor Retained Annuity
Trust in 2012 ("2012 GRAT Trust"),3 and a Grantor Retained Annuity Trust in
2014 ("2014 GRAT Trust").4 Notwithstanding the dispute at issue here, these
trusts hold ownership interests in various entities that in turn own a substantial
amount of Louisiana property, including the New Orleans Saints and Pelicans
franchises, the New Orleans Fox television affiliate, automobile dealerships, and
the Benson Tower and Champions Square development.5 Plaintiff established
these trusts while he was a domiciliary of Texas and asked Defendant Robert
Rosenthal, a Texas lawyer, to serve as trustee.6
In January of 2015, Plaintiff sent correspondence to Defendant, requesting

1

The trusts are the Renee Benson 2009 Irrevocable Trust, the Rita Benson LeBlanc
2009 Irrevocable Trust, and the Ryan LeBlanc 2009 Irrevocable Trust.
2

The trusts are the Renee Benson 2012 Irrevocable Trust, the Rita Benson LeBlanc
2012 Irrevocable Trust, and the Ryan LeBlanc 2012 Irrevocable Trust.
3

The Tom Benson 2012 Grantor Retained Annuity Trust.

4

The Tom Benson 2014 Grantor Retained Annuity Trust.

5

This Court notes that the parties dispute the effectiveness of the exchange attempted
by Plaintiff and therefore likewise dispute whether the trusts at issue still own the assets
affected by the exchange. For simplicity, this Court will refer throughout this order to these
assets as if they are presently owned by the trusts. It expressly notes that this is not intended
as a finding of fact.
6

After filing this lawsuit, Rosenthal resigned as trustee of all of the 2012 Trusts.
Pursuant to Federal Rule of Civil Procedure 25(c), Plaintiff joined an additional trustee, Mary
R. Rowe, who was subsequently appointed as trustee of the 2012 Trusts. Plaintiff correctly
states that a finding of personal jurisdiction over Rosenthal will operate as a finding of
personal jurisdiction over Rowe, as a substituted successor-in-interest. See ALAN WRIGHT &
ARTHUR MILLER, FEDERAL PRACTICE AND PROCEDURE § 1958 (3d ed.).

2

that he exchange the aforementioned trust assets for promissory notes of
equivalent value. Defendant refused to make the exchange, stating that a
unsecured promissory note is "not an appropriate trust investment" and that
Defendant must "make his own independent verification that the assets to be
exchanged are of equivalent value [with the trust assets]."7 Plaintiff has asked
this Court to declare that the exchange was effective pursuant to the terms of
the trusts, that Plaintiff is the lawful owner of the exchanged assets, and that
Defendant must sign various instruments to effectuate the transfer.
Defendant has filed a Motion to Dismiss for Lack of Personal Jurisdiction
pursuant to Federal Rule of Civil Procedure 12(b)(2).
LEGAL STANDARD
"Where a defendant challenges personal jurisdiction, the party seeking to
invoke the power of the court bears the burden of proving that jurisdiction
exists."8

When a court rules on a motion to dismiss for lack of personal

jurisdiction without holding an evidentiary hearing . . . the plaintiff need only
make a prima facie showing of personal jurisdiction.

9

"The allegations of the

complaint, except insofar as controverted by opposing affidavits, must be taken
as true, and all conflicts in the facts must be resolved in favor of the plaintiff[]
for purposes of determining whether a prima facie case for personal jurisdiction

7

R. Doc. 1-47.
Luv N'care, Ltd. v. Insta–Mix, Inc., 438 F.3d 465, 469 (5th Cir. 2006) (citing Wyatt v.
Kaplan, 686 F.2d 276, 280 (5th Cir. 1982)).
9
Guidry v. U.S. Tobacco, Co., Inc., 188 F.3d 619, 625 (5th Cir. 1999).
8

3

has been established."10 "In determining whether personal jurisdiction exists,
the trial court is not restricted to a review of the plaintiff's pleadings."11 The
Court may consider matters outside the complaint, including affidavits,
interrogatories, depositions, or any combination of the recognized methods of
discovery.12
Jurisdiction over a non-resident defendant is proper when (1) the
defendant is amenable to service of process under the long-arm statute of the
forum state, and (2) the exercise of personal jurisdiction is consistent with the
Due Process Clause of the Fourteenth Amendment.13 In the instant case, "these
two inquiries merge into one because Louisiana's long-arm statute permits
service of process coterminous with the scope of the due process clause."14
"The Due Process Clause of the Fourteenth Amendment protects a
corporation, as it does an individual, against being made subject to the binding
judgments of a forum with which it has established no meaningful ‘contacts, ties,
or relations.'"15 A court may exercise personal jurisdiction over a non-resident
defendant when (1) the defendant has purposefully availed itself of the benefits
and protections of the forum state by establishing "minimum contacts" with the
10

Thompson v. Chrysler Motors Corp., 755 F.2d 1162, 1165 (5th Cir. 1985) (citing
DeMelo v. Toche Marine, Inc., 711 F.2d 1260, 1270 (5th Cir. 1983)).
11
Jobe v. ATR Mktg., Inc., 87 F.3d 751, 753 (5th Cir. 1996).
12
Id. (citing Colwell Realty Invs. v. Triple T. Inns of Ariz., 785 F.2d 1330 (5th Cir.
1986)).
13
Dalton v. R&W Marine, Inc., 897 F.2d 1359, 1361 (5th Cir. 1990).
14
Asarco, Inc. v. Glenara, Ltd., 912 F.2d 784, 786 (5th Cir. 1990); see also La. Rev. Stat.
§ 13:3201.
15
Pervasive Software Inc. v. Lexware GMBH & Co. KG, 688 F.2d 214, 220 (5th Cir. 2012)
(quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 319 (1945)).

4

forum state; and (2) exercising personal jurisdiction over the defendant does not
offend "traditional notions of fair play and substantial justice."16
"Minimum contacts" can be established through specific jurisdiction or
general jurisdiction.17 Specific personal jurisdiction exists when a defendant has
purposely directed its activities, or availed itself of the privileges of conducting
its activities, toward the forum state and the controversy arises out of or is
related to those activities.18 General personal jurisdiction exists when the
defendant has engaged in continuous and systematic activities in the forum
state, regardless of whether such activity is related to the plaintiff's cause of
action.19
"If a nonresident defendant has sufficient related or unrelated minimum
contacts with the forum, we must then consider whether the 'fairness' prong of
the jurisdictional inquiry is satisfied."20 The fairness inquiry is determined by
analyzing several factors: (1) the burden upon the nonresident defendant of
litigating in the forum state; (2) the interests of the forum state; (3) the
plaintiff's interest in securing relief; (4) the judicial system's interest in
obtaining an efficient resolution of controversies; and (5) the shared interest of
the states in furthering fundamental substantive social policies.21
16

Latshaw v. Johnston, 167 F.3d 208, 211 (5th Cir. 1999) (quoting Int'l Shoe, 326 U.S.

at 316).

17

Alpine View Co. Ltd. v. Atlas Copco AB, 205 F.3d 208, 215 (5th Cir. 2000).
Burger King Corp. v. Rudzewicz, 471 U.S. 262, 472 (1985).
19
Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415 (1984).
20
Wilson v. Belin, 20 F.3d 644, 647 (5th Cir. 1994) (citing Asahi Metal Indus. Co. v.
Superior Court, 480 U.S. 102, 105 (1987)).
21
Bullion v. Gillespie, 895 F.2d 213, 216 n.5 (5th Cir. 1990) (internal citations omitted).
18

5

LAW AND ANALYSIS
Plaintiff does not make any serious allegations that this Court has general
jurisdiction over Defendant, and indeed, admitted at oral argument that this
case does not present issues of general jurisdiction. Accordingly, this Court will
focus its analysis on specific jurisdiction.
Specific personal jurisdiction exists when a defendant has purposely
directed its activities, or availed itself of the privileges of conducting its
activities, toward the forum state and the controversy arises out of or is related
to those activities. "Although a nonresident's physical presence within the
territorial jurisdiction of the court is not required, the nonresident generally
must have 'certain minimum contacts' . . . such that the maintenance of the suit
does not offend 'traditional notions of fair play and substantial justice.'"22 The
Fifth Circuit has promulgated a three-step analysis for determining whether
contacts are sufficient for specific 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.23
A.

Minimum Contracts

Defendant argues that this Court lacks personal jurisdiction over him
22
23

Walden v. Fiore, 134 S. Ct. 1115, 1121 (2014).
E.g., Bustos v. Lennon, 538 F. App'x 565, 567 (5th Cir. 2013).

6

because he does not have the requisite minimum contacts with the state of
Louisiana. Defendant argues that he is a Texas resident who serves as a trustee
of Texas trusts, which benefit Texas residents. Defendant does not live, work,
or own property in Louisiana. In addition, Defendant points to the following
facts to establish the lack of contact that this matter has with the state of
Louisiana: Plaintiff was a Texas resident at the time the trusts were created; the
trusts were created in Texas; the trusts provide that they are subject to Texas
law; Defendant was appointed and accepted his appointment as trustee in Texas;
the trusts own shares in several Texas companies; Plaintiff's request to exchange
assets was sent to Defendant in Texas; and Defendant rejected the exchange in
Texas.
In response, Plaintiff points in large part to the assets held by the trusts
for which Defendant serves as trustee. The trusts hold interests in entities that
own interests in the Saints, the Pelicans, the Benson Tower development, the
New Orleans Fox television affiliates, and other pieces of immovable property
in Louisiana. In addition, many of the LLCs and corporations in which the
trusts hold interests are Louisiana entities. Plaintiff asserts that Defendant
administered these Louisiana assets as trustee and that it is these assets that
make up the value of the trusts. Plaintiff also alleges that Defendant attended
monthly meetings in Louisiana with the trust beneficiaries to discuss their
future ownership of the Saints and Pelicans franchises. Defendant also
participated in conference calls and executed numerous documents on behalf of
the trusts in connection with various transactions involving Louisiana property.
7

Plaintiff likens Defendant's involvement to that of a business owner
administering his assets from out-of-state.
In addition, Plaintiff contends, through the affidavit of the President of the
New Orleans Saints and Pelicans Dennis Lauscha, that the New Orleans Saints
paid the law firm of which Defendant is a partner a monthly retainer of $20,000,
which increased to $25,000 in October 2014, and that this amount included
payment for Defendant's administration of the trusts. In response to this
contention, Defendant submitted a buzzer-beater, post-hearing memorandum
and affidavit from a partner of the law firm asserting that the firm had "never
billed" Plaintiff or any of his entities for the time that Defendant spent
administering the trusts. It further stated that neither Plaintiff nor any of his
entities have ever paid the law firm for the time Defendant spent administering
the trust. The Court finds that the Defendant's artfully worded affidavit fails
to contradict the affidavit of Mr. Lauscha. Further, Plaintiff responded with
evidence showing that one of Plaintiff's entities paid the law firm an amount
beyond the retainer for services rendered in relation to the Benson Tower, a
trust asset. Notwithstanding the fact that any conflict in the facts must be resolved
in favor of the plaintiff, it is clear to this Court that Defendant's trust

administration services were compensated as part of the retainer paid to the law
firm by the New Orleans Saints. Accordingly, Defendant was paid for his trust
administration by a Louisiana-based sports franchise.
Lastly, Defendant sent notice that he refused to make the exchange at
issue in this case to Plaintiff's attorney in Louisiana. Plaintiff contends that both
8

he and his granddaughter Rita LeBlanc were citizens of Louisiana at the time
that he requested the exchange.

Thus, Defendant's refusal to make the

exchange deprived Plaintiff, a Louisiana citizen, of control and ownership of
Louisiana-based assets.
This Court must now consider whether these contacts are sufficient to
constitute minimum contacts such that jurisdiction can be exercised over
Defendant.

The "minimum contacts" prong is satisfied when a defendant

"purposefully avails itself of the privilege of conducting activities within the
forum state, thus invoking the benefits and protections of its laws."24 The
nonresident defendant's availment must be such that the defendant "should
reasonably anticipate being haled into court" in the forum state.25 This test
"ensures that a defendant will not be haled into a jurisdiction solely as a result
of 'random,' 'fortuitous,' or 'attenuated' contacts, or of the 'unilateral activity of
another party or a third person.'"26
Defendant cites Hanson v. Denckla to support the argument that he does
not have minimum contacts with the forum state.27 In Hanson, the United
States Supreme Court held that a Florida court could not exercise jurisdiction
over a Delaware trustee.28 In that case, the settlor created a trust in Delaware
and chose a Delaware trustee.29 The settlor later moved to Florida where she

24

Burger King, 471 U.S. at 474–75 (citation omitted).
World–Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980).
26
Burger King, 471 U.S. at 475 (citation omitted).
27
Hanson v. Denckla, 357 U.S. 235, 238 (1958).
28
Id. at 256.
29
Id. at 238.
25

9

executed a power of appointment related to the trust and engaged in other
administrative acts.30 The corpus of the trust was composed of securities, which
were never held or administered in Florida.31 The Court found the trustee's
Florida contacts to be insufficient to exercise personal jurisdiction there, noting
that the trust agreement was entered into without any connection with the
forum state and that the first relationship between Florida and the trust
agreement arose when the settlor unilaterally moved to Florida.32
Defendant states that, like the trustee in Hanson, he has no property or
office in Louisiana, and the trusts were executed in Texas while the settlor was
a domiciliary there. Defendant contends therefore that only Benson's unilateral
acts connect Defendant and the trust agreements to Louisiana. The Court
cannot agree with Defendant's latter contention. In this case, unlike in Hanson,
many of the trust assets at issue are located in the forum state. The trusts hold,
and have held since their creation, substantial assets in Louisiana. It cannot,
therefore, be said that the trust agreements have no connection with the forum
state. It was not merely Benson's unilateral decision to move to Louisiana that
gave Defendant and the trust agreements contacts with that state.
In addition, the assets of the trusts at issue here—ownership interests in
closely held companies—differ starkly from the securities held by the trust in
Hanson. At oral argument, Plaintiff's counsel attempted to liken this situation
to a trust holding stock in a publicly traded company, such as Apple, noting that
30

Id. at 239.
Id. at 251.
32
Id. at 252–54.
31

10

such would not subject the trustee to jurisdiction at Apple's headquarters in
California. This Court finds that this analogy misses the point. The ownership
interests held by the trusts at issue here are not securities in publicly traded
companies. The trusts are substantial owners in closely held companies. In fact,
the 2009 Trusts own 100% of the ownership interests of four entities (three of
which are Louisiana LLCs), which in turn own Louisiana property such as the
Benson Tower development in New Orleans.

Accordingly, Hanson is

significantly distinguishable from the case at hand.
This Court is, however, persuaded by the Supreme Court's decision in
Burger King v. Rudzewicz, in which it held that jurisdiction is appropriate over
defendants who reach out beyond their state and "into another by, for example,
entering a contractual relationship that 'envisioned continuing and widereaching contracts' in the forum State."33 In Burger King, the Supreme Court
held that a Florida court had personal jurisdiction over a Michigan franchisee
who entered into a franchise agreement with the Florida-based Burger King
corporation, despite the fact that the franchisee had never even visited Florida.34
The Supreme Court stated that the "franchise dispute grew directly out of 'a
contract which had a substantial connection with that State.'"35 It stated that
the franchisee voluntarily “reach[ed] out beyond” Michigan and negotiated with
a Florida corporation to enter into "a relationship that envisioned continuing and

33

Walden, 134 S. Ct. at 1122 (quoting Burger King, 471 U.S. at 480).
Burger King, 471 U.S. at 487.
35
Id. at 479 (quoting McGee v. International Life Insurance Co., 355 U.S. 220, 223
(1957)).
34

11

wide-reaching contacts with Burger King in Florida."36 In addition, it noted that
the franchisee's breach of the franchise agreement caused "foreseeable injuries
to the corporation in Florida."37 "It is these factors—prior negotiations and
contemplated future consequences, along with the terms of the contract and the
parties' actual course of dealing—that must be evaluated in determining
whether the defendant purposefully established minimum contacts within the
forum.38
This Court holds that, like the defendant in Burger King, Defendant
purposefully availed himself of the benefits of the state of Louisiana by accepting
the position of trustee of the trusts at issue. In the agreements creating the
2012 Trusts and both of the GRAT Trusts, Plaintiff expressly delivered certain
listed property on the day of the trusts' creation to Defendant as trustee. This
property, which was listed in the appendixes of the trust documents, included
units of ownership of Benson Basketball, LLC and/or Benson Football, LLC.
Benson Football, LLC owns the New Orleans Saints franchise, a lease of the
Mercedes-Benz Superdome in New Orleans, and the WVUE television station
in New Orleans. Benson Basketball, LLC owns the New Orleans Pelicans
franchise, a lease of the New Orleans Smoothie King Center, and practice
facilities near New Orleans. Defendant signed each of these trust documents as
trustee and by their terms agreed to "administer" or "manage" the property."39
The initial ownership interests contained in the trusts were specifically listed
36

Id. at 480.
Id. at 479.
38
Id.
39
See R. Docs. 1-6, 1-7, 1-8, 1-9, 1-10.
37

12

and appended to each of these agreements. Accordingly, Defendant accepted the
responsibility of managing trusts that he knew contained ownership interests
in substantial Louisiana property. "It is sufficient for purposes of due process
that the suit was based on a contract which had substantial connection with that
State."40
Further, Defendant should have reasonably expected that his position as
trustee would necessarily entail "continuing and wide-reaching contracts" with
the state of Louisiana. Indeed, Defendant has continued to be connected to the
forum state through his administration of the trusts at issue. Plaintiff submits
numerous documents and consents executed by Defendant in his capacity as
trustee to authorize dealings involving various trust assets. For example, in
2012, Defendant signed a purchase agreement on behalf of the Renee Benson
2009 Irrevocable Trust, in which the trust purchased shares of Benson Football,
LLC—the owner of the New Orleans Saints—from Plaintiff. Additionally,
Defendant attended monthly meetings regarding trust assets in New Orleans
and was compensated for his services by the New Orleans Saints. Defendant
could have foreseen that his failure to perform his duties as trustee in
accordance with the trust agreements would affect both property and people in
Louisiana.

Accordingly, this Court holds that Defendant had sufficient

minimum contacts with the forum state such that this Court can exercise
personal jurisdiction.

40

McGee, 355 U.S. at 223.

13

B. Arising Out Of or Related To
Having determined that Defendant has the requisite minimum contacts
required to exercise personal jurisdiction, this Court must now consider whether
the Plaintiff's cause of action arises out of or results from the Defendant's
forum-related contacts. There are three schools of thought regarding what
"arising out of or related to" means in the context of specific jurisdiction, and the
Fifth Circuit remains a proverbial free agent, having not yet expressly taken a
position. The Supreme Court has likewise declined to define the term.41
Some circuits, the First and Sixth included, use a proximate cause
standard in determining whether a cause of action arises out of the defendant's
contacts with the forum state.42 "Some hold the defendant's contacts must be
the 'legal cause' of the plaintiff's injury."43 This test has been criticized for being
overly restrictive and unnecessarily limiting the ordinary meaning of “arising
out of."44
Other circuits, such as the Ninth, subscribe to a more relaxed test and
require only that the defendant's contacts be a "but for" cause of the plaintiff's
41

Helicopteros Nacionales de Colombia, S.A., 466 U.S. at 416, n.10 ("Absent any briefing
on the issue, we decline to reach the questions (1) whether the terms "arising out of" and
"related to" describe different connections between a cause of action and a defendant's contacts
with a forum, and (2) what sort of tie between a cause of action and a defendant's contacts with
a forum is necessary to a determination that either connection exists.").
42
See Beydoun v. Wataniya Restaurants Holding, Q.S.C., 768 F.3d 499, 507–08 (6th Cir.
2014) ("We disagree because more than mere but-for causation is required to support a finding
of personal jurisdiction. To the contrary, the plaintiff's cause of action must be proximately
caused by the defendant's contacts with the forum state."); Nowak v. Tak How Investments,
Ltd., 94 F.3d 708, 716 (1st Cir. 1996).
43
O'Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 318 (3d Cir. 2007).
44
Shute v. Carnival Cruise Lines, 897 F.2d 377, 385 (9th Cir. 1990) rev'd sub nom.
Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991).

14

harm.45 "[T]he standard is satisfied when the plaintiff's claim would not have
arisen in the absence of the defendant's contacts."46 This test has been criticized
for being overinclusive and lacking a limiting function.47
Finally, still other circuits adhere to a "substantial connection" test for the
determination of relatedness. The question asked in the application of this
standard "is whether the tie between the defendant's contacts and the plaintiff's
claim is close enough to make jurisdiction fair and reasonable."48 The degree of
relatedness required by this sliding scale is inversely proportional to the quality
of the defendant's contacts with the forum.49 For instance:
Where the defendant has had only limited contacts with the state it
may be appropriate to say that he will be subject to suit in that state
only if the plaintiff's injury was proximately caused by those
contacts. Where the defendant's contacts with the jurisdiction that
relate to the cause of action are more substantial, however, it is not
unreasonable to say that the defendant is subject to personal
jurisdiction even though the acts within the state are not the
proximate cause of the plaintiff's injury.50
This approach has been criticized for failing to maintain a distinction between
specific and general jurisdiction.51
While many circuits have expressly adopted some variation of these tests,
45

Id.; Doe v. Am. Nat. Red Cross, 112 F.3d 1048, 1051 (9th Cir. 1997) ("In Shute, this
court explicitly adopted the “but for” test for determining whether a plaintiff's injury arises out
of a defendant's forum-related activities.").
46
O'Connor, 496 F.3d at 319.
47
Id. at 322; Beydoun, 768 F.3d at 508.
48
O'Connor, 496 F.3d at 319.
49
Id. at 320.
50
Chew v. Dietrich, 143 F.3d 24, 29 (2d Cir. 1998).
51
O'Connor, 496 F.3d at 321–22; Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514
F.3d 1063, 1078 (10th Cir. 2008).

15

the Fifth Circuit has not. Many other courts, however, have read the Fifth
Circuit's analyses to infer a preference for the "but for" standard.52 For instance,
many have taken a footnote in Prejean v. Sontrach, Inc.—stating that a tort suit
can arise out of a contract if "the contract is a 'but for' causative factor for the
tort"—as evidence of the circuit's preference.53
This Court agrees that the Fifth Circuit would likely subscribe to a "but
for" analysis and also finds the "but for" test to be the superior analysis. The
"but for" standard ensures that the defendant's contacts with the forum have at
least a minimal link to the plaintiff's cause of action, without requiring that
defendant's contacts directly cause or give rise to the plaintiff's claims.54
Although this standard can be overinclusive, it is limited by the requirement
that the exercise of personal jurisdiction not offend traditional notions of fair
play and substantial justice.55 "If the connection between the defendant's forum
52

See, e.g., Nowak v. Tak How Investments, Ltd., 94 F.3d 708, 714 (1st Cir. 1996); Miller
Yacht Sales, Inc. v. Smith, 384 F.3d 93, 103 (3d Cir. 2004) ("At the other end of the spectrum,
the Courts of Appeals for the Fifth and Ninth Circuits formulate a more expansive
interpretation of “arise out of or relate to,” under which a non-resident defendant's forum
contacts are sufficient if they provide a “but for” cause for plaintiff's injury."); Silver v. Brown,
382 F. App'x 723, 731 (10th Cir. 2010); FMC Int'l A.G. v. ABB Lummus Global, Inc., No.
04-3896, 2005 WL 1745462, at *5 (S.D. Tex. July 22, 2005) ("The Fifth Circuit appears to have
adopted a “but-for” causation test to determine if the contact is sufficiently related to the
plaintiff's cause of action."); Spell v. Willbros USA, Inc., No.07-1509, 2008 WL 2627718, at *3
(S.D. Tex. June 30, 2008); Breathwit Marine Contractors, Ltd. v. Deloach Marine Servs., LLC,
994 F. Supp. 2d 845, 851 (S.D. Tex. 2014).
53
See, e.g., Nowak, 94 F.3d at 714; Spell, 2008 WL 2627718, at *3. But see Oldfield v.
Pueblo De Bahia Lora, S.A., 558 F.3d 1210, 1224 (11th Cir. 2009) ("The Prejean opinion did not
specifically consider relatedness as part of a due process analysis but, instead, addressed the
meaning and application of the Texas long-arm statute.").
54
O'Connor, 496 F.3d at 322.
55
Shute, 897 F.2d at 385.

16

related activities is 'too attenuated,' the exercise of jurisdiction would be
unreasonable, and therefore in violation of due process."56
In Trinity Industries, Inc. v. Myers & Associates, Ltd., the Fifth Circuit
applied a but-for causation standard to facts that are relevant here.57 In Trinity,
Trinity Industries ("Trinity"), a Texas-based corporation, sued its former law
firm Myers & Associates ("Myers"), an Illinois firm, after it allegedly counseled
a Pennsylvania competitor to sue Trinity.58 At the time of the dispute, Myers
had represented Trinity in various patent law matters over the course of eight
years, and it estimated it was handling about 40 matters for Trinity.59
Throughout its representation, Myers communicated with Trinity in Texas
through phone, mail, and occasional meetings in Dallas. Myers billed Trinity in
Texas and was paid from Texas.60 The lower court held that specific jurisdiction
did not exist because the dispute arose out of Myers's contacts with the
competitor in Pennsylvania or Illinois, not its contacts with Trinity in Texas.61
The Fifth Circuit reversed, holding that plaintiff's claims arose out of
defendant's contacts with Texas.62 It stated that: "The essence of Trinity's
complaint is that its own lawyers counseled its competitor in bringing adverse
litigation. There would be no injury or basis for a claim but for the fact that
Myers . . . represented Trinity in Texas before and during their engagement by
56

Id.
Trinity Indus., Inc. v. Myers & Associates, Ltd., 41 F.3d 229 (5th Cir. 1995).
58
Id. at 230.
59
Id. at 230–31.
60
Id. at 231.
61
Id.
62
Id. at 231–32.
57

17

[the competitor]."63
This Court finds that the Trinity analysis suggests a holding in this case
that Plaintiff's cause of action arises out of Defendant's contacts with the forum
state. Indeed, but for Defendant's agreement to serve as the trustee of Plaintiff's
trusts, this dispute would not have occurred. If Defendant had neither agreed
to administer nor actively administered the trusts and their Louisiana assets,
Plaintiff would not be seeking a declaratory judgment against him for his instant
failure to administer the trusts as Plaintiff requested. Plaintiff's cause of action
seeking a judgment forcing Defendant to comply with the trust agreements and
exchange certain Louisiana assets for promissory notes of equivalent value is a
direct result of Defendant's service as trustee. Plaintiff's Complaint specifically
alleges that Defendant's refusal to make the requested exchange is inconsistent
with his previous actions as trustee.

Accordingly, this Court holds that

Plaintiff's cause of action arises out of Defendant's contacts with the forum state.
This Court notes, however, that even if the Fifth Circuit were to favor a
different definition for "arising out of or related to," jurisdiction would still be
appropriate here. These facts meet the "substantial connection" test because
Defendant's contacts with Louisiana are sufficiently closely related to Plaintiff's
cause of action to make jurisdiction reasonable. To be sure, a substantial
amount of the assets held by the trusts at issue are located in Louisiana, the
settlor and one beneficiary are domiciled in Louisiana, many of the assets that
Plaintiff seeks to exchange for promissory notes are located in Louisiana, and
63

Id. (emphasis added).

18

the communications regarding the disputed exchange were sent to and from
Louisiana.
Defendant's contacts with the forum could also be said to be the proximate
cause of the Plaintiff's cause of action. To be sure, the correspondence that
Defendant's counsel sent to Louisiana declining to make the Plaintiff's requested
exchange directly caused the dispute at issue here. The Fifth Circuit has stated
that "[a] single act directed at the forum state can confer personal jurisdiction
so long as that act gives rise to the claim asserted."64
C. Traditional Notions of Fair Play and Substantial Justice
Finally, this Court must consider whether the exercise of jurisdiction over
Defendant would be fair and reasonable.
In determining whether or not exercise of jurisdiction is fair and
reasonable, defendants bear the burden of proof and it is rare to say
the assertion [of jurisdiction] is unfair after minimum contacts have
been shown. In this inquiry we examine five factors: (1) the burden
on the nonresident defendant, (2) the forum state's interests, (3) the
plaintiff's interest in securing relief, (4) the interest of the interstate
judicial system in the efficient administration of justice, and (5) the
shared interest of the several states in furthering fundamental
social policies.65
Plaintiff has shown that Defendant traveled to Louisiana on several occasions
to attend meetings regarding trust assets. He cannot now say that he would be
unduly burdened by traveling here for the purpose of defending himself in this
litigation. In addition, it cannot be disputed that Louisiana, the forum state, has
64
65

E.g., Moncrief Oil Int'l Inc. v. OAO Gazprom, 481 F.3d 309, 311 (5th Cir. 2007).
McFadin v. Gerber, 587 F.3d 753, 759–60 (5th Cir. 2009) (internal quotations

omitted).

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a significant interest in litigating the issues presented in this case—namely, the
ownership of substantial property within its bounds. Accordingly, the exercise
of jurisdiction over Defendant does not violate the traditional notions of fair play
or substantial justice. This Court finds that Plaintiff has established a prima
facie case of personal jurisdiction over Defendant.
CONCLUSION
For the foregoing reasons, this Motion is DENIED.

New Orleans, Louisiana, this 8th day of July, 2015.

___________________________________
JANE TRICHE MILAZZO
UNITED STATES DISTRICT JUDGE

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