The Beaumont Court of Appeals has held that Texas has no jurisdiction over an out-of-state law firm that nationally solicits clients for personal injury and death cases arising from the use of mytragynine, or “Kratom”
Theodore Oshman, Oshman Firm, LLC, and Oshman & Mirisola, LLP v. Richard Wilkison, Individually and On Behalf of the Estate of Cody Wilkison, Deceased (No. 09-23-00201-CV; March 14, 20924) arose from the death of Plaintiff’s son from the toxic effects of Kratom. Plaintiff, a resident of Montgomery County, found the Oshman law firms on the Internet, on which it marketed to people with potential claims against Kratom sellers. One of the Oshman firms is a foreign limited liability company organized in New Jersey, the other a similar entity organized in New York. The defendant Theodore Oshman resides in Florida. In June 2019 Plaintiff completed and submitted a case evaluation form from Defendants’ website. Defendants then asked him to fill out a “Kratom Questionnaire” and a medical release authorization form. Plaintiff further provided the results of decedent’s autopsy showing Kratom as the cause of death. Plaintiff sued Defendants after they allegedly let the statute of limitations expire on his wrongful death claim. Defendants filed a special appearance, which the trial court initially granted. After Plaintiff filed a motion for reconsideration and for new trial, which the trial court granted. Defendants filed an interlocutory appeal.
In an opinion by Justice Johnson, the court of appeals reversed and dismissed the case. The question, of course, was whether Texas could exercise personal jurisdiction over Defendants consistent with due process (minimum contacts + traditional notions of fair play and substantial justice). In order to exercise specific personal jurisdiction (there was no dispute in this case that Texas had general jurisdiction), the court must determine whether “(1) the defendant engages in some act by which it purposefully avails itself of the privilege of conducting activities within the state, and (2) the plaintiff’s claims arise out of or relate to those forum contacts” (citations omitted). This requires a nexus between the defendant, the forum state, and the operative facts of the litigation (citations omitted).
The court first determined that Plaintiff alleged sufficient jurisdictional facts to carry his initial burden to bring Defendants within the reach of Texas’s long-arm statute (i.e., Defendants were “doing business” in Texas). The burden then shifted to Defendants to negate jurisdiction on due process grounds. Defendants produced the affidavit of Theodore Oshman to the effect that Defendants had no registered agents for service of process in Texas, none of its attorneys are licensed to practice in Texas, it has never filed any cases in Texas state or federal courts, and none of the contacts between Plaintiff and Defendants occurred in Texas. Oshman further alleged that he informed Plaintiff in early 2020, well before the expiration of limitations, that Defendants would not accept the case.
Turning to the purposeful availment analysis, the court observed that “[l]egal work performed outside Texas for a Texas resident is not a proper basis for a trial court to exercise personal jurisdiction over the non-resident attorneys who perform the legal work” (citations omitted), including phone calls and other communications. Rather, the non-resident attorneys “must take affirmative action to promote their businesses in the forum state.” In this case, the court went on, “[Plaintiff] presented no contract, fee agreement, invoices, or pleadings evidencing that any of the Defendants agreed to represent [Plaintiff} in any litigation in Texas. In fact, [Plaintiff] concedes that the Defendants did not accept his case.” Where, as here, Plaintiff’s communications with Defendants involved an interactive website, the court noted that in this case, the website was national and not directed at Texas, that it included a disclaimer that use of the site did not create an attorney-client relationship, and that the form Plaintiff submitted expressly did not create an attorney-client relationship, either. Plaintiff further conceded that Defendants never told him that they handled cases in Texas or were licensed here. Though the parties exchanged emails and text messages, that “mere fact” does not support personal jurisdiction.
Finally, the court distinguished this case from LG Chem American, Inc. v. Morgan, 670 S.W.3d 341 (Tex. 2023), in which SCOTX affirmed the denial of a lithium ion battery manufacturer’ special appearance on the basis that the manufacturer did not dispute that it purposefully availed itself of the privilege of doing business in Texas by selling and distributing the allegedly defective battery and that Plaintiff’s product liability claim was “sufficiently related to the manufacturer’s undisputed contacts with Texas to satisfy due process.” This case, however, was not a product liability case and Defendants did not concede purposeful availment but disputed it. There was also no client representation agreement or any other significant contacts with Texas. The court thus held that the evidence did not support jurisdiction.
Justice Johnson’s opinion thoroughly covers the due process jurisprudence involving legal services provided by non-resident lawyers and law firms. Perhaps the biggest takeaway for us is the risk to potential claimants of non-resident firms that solicit cases through national websites or advertising. Even the most knowledgeable lay person is not likely to be schooled in the complexities of jurisdictional analysis and may easily be tripped up, as Plaintiff was here, by the fine print.
