The Business Court [8th Division] has denied JetBlue’s special appearance in a contract dispute with Texas-based American Airlines.
American Airlines, Inc. v. JetBlue Airways Corporation (2026 Tex. Bus. 7; February 19, 2025) arose from a contract dispute between two airlines over a 2020 profit-sharing agreement. The airlines entered into the agreement for the purpose of increasing services between Texas and northeastern states and shared profits from certain routes based on each airline’s annual contribution to selected airports. Though the federal government eventually put a stop to the arrangement, it allowed the airlines to settle their obligations to each other for flights flown on or before July 18, 2023. Unable to settle their differences, American sued JetBlue to breach of contract to recover amounts allegedly due under the agreement’s reconciliation and payment process. JetBlue filed a special appearance contesting the court’s specific jurisdiction.
In an opinion by Judge Bullard, the court denied the special appearance. JetBlue argued that it is a nonresident defendant with no principal place of business in Texas and that the alleged breach did not arise out of its contacts with Texas. Applying the purposeful availment test for specific jurisdiction, the court determined that the profit-sharing agreement concerned “JetBlue flight services to and from Texas, including to and from Dallas-Fort Worth, Austin, and Houston,” including JetBlue’s expansion in San Antonio. The company advertised the arrangement, targeting Texans, and during the relevant times flew thousands of Texas flights. JetBlue also had employees staffing Texas airports working from Texas property leased by JetBlue. JetBlue argued that the “focus” of the dispute was in the northeast and that its “Texas contacts amount to a mere 2% of revenue” under the profit-sharing agreement. But, as the court observed, 2% of a lot of money is a lot of money, so the Texas interest “must not be negated or ignored.” Additionally, the court rejected JetBlue’s argument that the New York forum-selection clause and choice-of-law clause outweighed the Texas contacts.
As to the “relatedness” prong of the test, which requires “an affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State and is therefore subject to the State’s regulation,” the court agreed with American that the cost-sharing agreement “increased JetBlue flights to and from, inter alia, Dallas-Fort Worth, Austin, Houston, and enabled JetBlue to expand services to new destinations like San Antonio.” The agreement itself “was negotiated and operated through innumerable electronic, oral, and written communications initiated into [Texas], for the purpose of entering into and operating a joint contractual venture with a business located in [Texas], for the purpose of expanding both parties’ network—including through expanding services to and from Texas and affording greater access to customers traveling to and from Texas.” Moreover, “the lawsuit concerns revenues and profits derived from various [] routes …. derived in part from JetBlue’s new/increased flight paths to Texas, its presence in Texas airports, and its services to Texans.”
Finally, the court concluded that exercising jurisdiction would not offend traditional notions of fair play and substantial justice. American clearly established JetBlue’s substantial contacts to Texas and the relation between the forum and underlying breach of contract action, but JetBlue failed to counter that showing with any viable argument that another forum would have a stronger interest in the litigation than Texas. Jurisdiction was thus proper.
